Street v Department of Natural Resources and Mines
[2003] QLC 25
•17 April 2003
LAND COURT OF QUEENSLAND
CITATION: Street & Anor v Department of Natural Resources and Mines [2003] QLC 0025
PARTIES: William and Karen Street
(applicants)
vChief Executive, Department of Natural Resources and Mines
(respondent)
FILE NO: AV2001/0327
DIVISION: Land Court of Queensland
PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944
DELIVERED ON: 17 April 2003
DELIVERED AT: Brisbane
HEARD AT: Brisbane
MEMBER: Dr NG Divett
ORDER: The appeal is upheld. The valuation as determined by the Chief Executive is set aside, and the unimproved value of Lot 21 on RP 127282 is determined in the sum of Three Hundred and Eighty Thousand Dollars ($380,000).
CATCHWORDS: Valuations – particular properties – heritage listed – impact upon use – comparison with State Heritage Listing and Local Authority on National Estate listing.
Valuations – factors in valuation – restrictions on use – heritage listing – reduction in value allowed.
Statutory valuations – Valuation of Land Act 1944 – s.17 residential use – comparative sales – type of sales used.
COUNSEL: Mr K Fisher of Crown Law
APPEARANCES: Mr W Street for the appellants
Mr K Fisher for the respondent
Background:
This matter relates to land at 40 Dorchester Street, South Brisbane, and described as Lot 21 on RP 127282, Parish of South Brisbane. The subject land has an area of 1,378 m² and is located about 1.5 kilometres south of the Brisbane CBD. The land is zoned Residential BR4 under the Town Plan of the Brisbane City Council (the Council) of 1987, effective at the date of valuation of 1 October 2000. Dorchester Street is bitumen sealed with concrete kerbing and channeling. All normal utility services are available. The key issues are changes in the valuation, relativity, the use of the land, heritage impacts, nature of the land and comparison of sales.
On 26 February 2001 the Chief Executive issued a valuation of the subject land at $420,000. Following an objection the Chief Executive confirmed that figure on 12 June 2001. The appellants have now appealed claiming the unimproved value should more properly be $330,000. An unsuccessful Court supervised preliminary conference was held on 30 January 2002, and the matter proceeded to hearing on 21 August 2002. At the hearing Mr Street was granted leave to amend his estimate of the valuation to $297,000.
William D Street appeared and gave evidence for the appellants. Mr K Fisher, Counsel of Crown Law appeared for the respondent, calling evidence from Arend Boudewyn Van Hees, the departmental registered valuer responsible for determining the valuation.
This is one of three matters in Dorchester Street heard consecutively, each of which has generally common features, except for differences imposed by heritage restrictions. One is impacted by “character housing” constraints; the second by “national heritage” classification constraints; and the third by heritage classification under the State Heritage Legislation. The decisions on each of these matters were deferred pending completion of all three matters, in order to ensure a consistent overall approach to the valuations. The three decisions also provide guidance in respect of the varying level of heritage impacts in an otherwise consistent market situation. With the agreement of the parties, a site inspection of all three matters was undertaken.
The Nature of the Land –
The subject land is a rectangular parcel on the northern side of Dorchester Street, which runs parallel to Vulture Street and joins Stephens Road to the east and Gladstone Road to the west. The land is below street level with a slight fall towards the north to the rear. There are views of the Brisbane CBD towards the north, but the appellants argue that those views are inferior to views from Lots immediately to the west of the subject land (34 Dorchester Street) due to the lower elevation (about 5 metres) of the subject land (see Exhibit 3), and the obstruction of the adjoining Serbian Church and Church Hall immediately to the north of the subject land. Mr Street notes that because of the heritage nature of both the subject building and the Serbian Church buildings the views are permanently obstructed. Mr Street further argues that views of the CBD are progressively being obstructed by major developments at South Bank.
Further detriment to the subject land is seen in the close proximity (about 80 metres) of the close by Somerville House school pool and sporting complex. Mr Street argues that complex, and the adjoining Serbian Church, and its adjoining “Blind Hall” are used for major functions and sporting events which create considerable noise intrusion into the amenity of the subject land, often extending well into the early hours of the morning. Mr Street further notes that parking by City and South Bank commuters also impacts Dorchester Street; which is also further congested by parents using the Stephens Road entrance to the school for picking up and dropping off students. At the date of valuation “all day” parking was a problem in Dorchester Street. The noise intrusions are further impacted both day and night by emergency/rescue helicopters at the nearby Mater Hospital. Mr Street provides photographs of all of the above. (Exhibit 2, Appendix 1). Mr Van Hees does not challenge the above intrusions.
The adjoining land to the east of the subject land, located at the corner of Stephens Road and Dorchester Street, is currently vacant, and is often used for dumping purposes by the public. That vacant site is currently approved for a three-level child care centre.
Changes in the Valuation -
In seeking support that the valuation of the subject land is incorrect, Mr Street notes that percentage changes for various parcels in Dorchester Street have increased inconsistently. He notes that while lands on the southern side of Dorchester Street have not increased since the last valuation, parcels on the northern side have increased considerably. Mr Street advises that parcels on the northern side, excluding five parcels – three of which are registered flats at 14, 26 and 28 Dorchester Street, have demonstrated an average of 12.74% increase, while the subject land increased by 40%. Mr Street argues that the five parcels at 14, 26, 28, 38 and 40 Dorchester Street have all increased disproportionately.
While Mr Street accepts that the properties with City views on the northern side of Dorchester Street may increase at a rate faster than parcels without views, he argues that increase should not exceed the average of 12.74% at the most. He also notes that increases for single resident properties on the northern side reflect an increase of 10.26%. Mr Street also questions why 30 Dorchester Street had been maintained at $240,000 (0%). Mr Van Hees advises that was an error which has subsequently been amended to $300,000 (25%). He advises that where errors in the valuations are found the relativities are then adjusted.
Changes in Relativity -
Mr Street advises that there had been an agreed relativity between the subject land and other parcels to its west on the northern side of Dorchester Street. He advises that had been agreed with the respondent Department after an objection conference in 1999, and had been maintained at the 2000 revaluation. However he notes that for some inexplicable reason those relationships had now been abandoned by the respondent. Mr Street further advises that the previous relativities had been on a full understanding of the restrictions on changes and development imposed by the Brisbane City Council, which had identified the subject land as containing a “significant property”.
Mr Van Hees advises that the market for lands with City views had increased dramatically in recent years. He argues that the impact of heritage listing in the market place now reflects a lower percentage than that which had previously applied in 1999.
Mr Street draws particular attention to the former agreed relativity compared with 34 Dorchester Street. He notes that it is a comparable size parcel, is unencumbered by any heritage restrictions like the subject land, is higher in elevation with currently superior views of the CBD, and is vacant land with potential for subdivision. Mr Van Hees notes that 34 Dorchester Street (1,255 m²) is smaller in size than the subject land (1,378 m²). Mr Van Hees also notes that the excellent views from 34 Dorchester Street may be blocked in the future by developments immediately to its north. While Mr Van Hees may have noted that future development to the north of 34 Dorchester Street may block those uninterrupted views of the City CBD, that would be a matter for consideration in the valuation of that property at that time. At the relevant date the views from 34 Dorchester Street are uninterrupted. Mr Street notes that in 1998 the subject land had a value of $207,500 which represented 66% of the value of 34 Dorchester Street at $315,000. In the 1999 valuation the relativity of the subject land ($300,000) had initially been assessed at 95% of the value of 34 Dorchester Street. Following an objection conference that value had been reassessed at 76% ($240,000) of the value of 34 Dorchester Street, which had then been maintained for the 2000 revaluation. However he advises that has now been changed again to reflect 95% of the current valuation of 34 Dorchester Street.
Mr Street argues that such variations in relativity are inconsistent with the Chief Executive’s own land planning guidelines of 17 April 1998, which promotes maintaining relativity between individual assessable properties (Chapter G11 paragraph 1.1.3).
Mr Street further argues that the current valuation of the subject land at $420,000 is inconsistent with riverfront lands at 33 Brisbane Corso, Fairfield. He advises that parcel has an area of 956 m² and is valued at $423,000; while another at 73 Brisbane Corso of 913 m² has a value of $400,000. He argues 40 Dorchester Street is significantly inferior to those parcels. He also draws comparisons with properties with City views on the northern side of Dornoch Terrace, Highgate Hill. He argues those properties enjoy superior City views, and were only increased on average at 5.2% in the current valuation.
The Use of the Land –
Mr Street argues that the respondent would appear to have failed to recognize the impact of s.17(1) of the Act, which requires the subject land to be valued as a single unit dwelling site, ignoring any enhancement in value associated with any potential for subdivision or any other purpose. He notes that the properties to the west of the subject land, which have all experienced major increases in value markedly above the average increase, are not used for single unit dwelling purposes. Mr Street concedes that inner City lands with the potential for unit development are experiencing larger increases in value above the average for other developments. Mr Street argues that Mr Van Hees has failed to apply any allowance for the application of s.17 to the subject land. Mr Van Hees rejects that conclusion and advises that he had valued the subject land as a single residence site under s.17(1), and made no allowance for any subdivisional potential.
Mr Street refers to Mr Van Hees’ statement in his valuation report at page 5, where Mr Van Hees explains why he has ignored sales of larger residential parcels, which were subsequently developed for multi-unit development purposes. It is Mr Street’s understanding that Mr Van Hees has misdirected himself by referring only to sales of small single unit residential sites for comparison purposes. Mr Street argues that if the logic of Mr Van Hees was to be followed, then it would be inevitable to conclude that only parcels with heritage restrictions should be used for comparison purposes. The smaller developed residential sales could potentially also be demolished, a freedom not available to the subject land. Mr Street concedes that there is a paucity of sales of properties with heritage restrictions in the area.
In seeking to ascertain some measurement of the added value that subdivisional potential might bring to land, Mr Street proposes a before and after analysis of such sales. It is his understanding that such an appraisal would reveal the profit potential inherent in the subdivision potential in the land, a factor expressly to be ignored under s.17 of the Act as it relates to the subject land.
To explain that principle he notes the following examples of land at 29 Whynot Street, West End, which is zoned for multi-unit purposes, based upon 1 October 2000 values, and then subdivided and resold within 9 months of the initial sale of the property. The original land area 1,037 m² sold in January 1998 for $440,000; and part of that land (528 m²) resold in July 2001 for $300,000. Mr Street seeks comparisons of the unimproved values applied to those lands as follows:
Before Subdivision After Subdivision Original Area
Sale Price Unimproved Value New Area Unimproved Value 1,037 m² $440,000 $268,000 (1.10.1999)
528 m² $230,000
(1.10.2000)
Mr Street concludes that as the subdivided property represents about 50% of the original area of the land, then a combined unimproved value of $460,000 for the two parcels reveals the added value that subdivision potentially adds to a parcel of land. However Mr Street provides no further analysis of that method, and provides no evidence of matters such as contributions required by Council, developers profit and risk allowance, or cost of subdivision. It is noted that the original sale of 29 Whynot Street was adopted by Mr Van Hees in the Toomey matter heard consecutively with the current matter.
To further demonstrate the value of realizing subdivisional potential, at the request of the appellant, Mr Van Hees provides details of the original valuation of the old boarding house on 19 Abingdon Street, Woolloongabba, which subsequently had burnt down prior to the redevelopment. As a single parcel of 1,214 m² (Lots 4, 5 and 6), the previous unimproved value was $300,000 at 1 October 1999, and as three separately developed surveyed parcels the total unimproved value became $390,000. Mr Street notes a similar outcome at 34 Dorchester Street where prior to further subdivision that parcel of 1,255 m² had an unimproved value of $450,000; while after subdivision each of the 421 m² had been valued at $340,000, or a total of $1,020,000. Mr Street argues those examples demonstrate his thesis that subdivisional potential in those inner City areas is a key factor in the market value of the land. While not explaining any reasons for why any potential for subdivision might be included in a value of a parcel, Mr Van Hees argues that a factor of about 5% might be relevant. However he advises that is not a precise figure, and it is influenced by market forces. Mr Van Hees advises that due to the dramatic increase in demand for residential sites in inner areas, sites for large single residence sites are comparable in value to sites for multi-unit purposes. For that reason, and in order to ensure that only truly single residence sales are compared with the subject land, Mr Van Hees has restricted his comparisons to only small lots.
Impact of Heritage Restrictions -
Mr Street argues that the subject land is a Place of Heritage Significance designated under the town planning legislation of the Brisbane City Council, and effective at the relevant date of valuation. Mr Van Hees confirms that in a letter from the Brisbane City Council of 23 December 1994. In that respect Mr Street provides a map (Exhibit 3) defining the subject land, the adjoining land at 38 Dorchester Street (Nimmo) to the west, and the adjoining Serbian Church buildings to the north as places of heritage significance. Mr Street notes that while the local government (the Council) heritage listing (Places of Heritage Significance) and the Commonwealth Government heritage listing (National Estate Register) are not specifically mentioned in the Queensland Heritage Act 1992, their restrictions on the use and development of land are similar to the State legislation. Accordingly he claims such listing must have significant adverse impact on the use of the land, and therefore upon the value of the land.
Mr Van Hees argues that the heritage listing of the subject land is not as onerous as those imposed upon the adjoining parcel at 38 Dorchester Street (Nimmo), which is restricted under Queensland Heritage Act 1992. While Mr Street does not draw direct comparisons with the Nimmo property on the basis of heritage restrictions, he argues that the subject land is impacted to some extent by heritage constraints, which should be reflected in the valuation. Mr Van Hees gave evidence that after being valued at $440,000, he had allowed for a reduction in the valuation of the subject land of 5% to reflect the impact of heritage restrictions, after considerations of other heritage properties in selected suburbs. He notes the Nimmo property has been valued initially at $465,000, and then a 10% reduction for heritage impacts applied.
Mr Van Hees advises that the maximum allowance that he has provided for residential heritage properties was 10%, with some heritage properties even demonstrating no reduction from general market values. In fact a selected few properties demonstrated a premium because of their heritage nature. Mr Van Hees advises that the maximum allowance provided for the Council’s Places of Significance was only 5%, which he had then applied to the subject land, and then rounded that figure up to $420,000.
Mr Street now argues that, while the relativity between 34 and 40 Dorchester Street was finally agreed after objection in 1999 at 76% of the value of 34 Dorchester Street, in his opinion, over time, the heritage impacts had now increased. He argues that the previous reduction of 24% from the 34 Dorchester Street value reflected both the heritage impacts and the inferior nature of the subject land. He now argues that the heritage impacts have increased to the extent that the total differential should reflect the former relativity in 1998 of a reduction of 34% (or 0.66 of 34 Dorchester Street).
To support his conclusion Mr Street relies upon decisions of this Court in Herbert v Chief Executive, Department of Natural Resources (AV98-288), 6 August 1999, unreported, and Conias v Chief Executive, Department of Natural Resources (AV97-336), 8 October 1998 unreported; and also in the decision of the Land Appeal Court in Roberts v Chief Executive, Department of Natural Resources (V96-791), 12 August 1998 unreported. Based upon those decisions Mr Street concludes that the “heritage blighting” must be taken into account when ascertaining the value of the land. In summarising his estimate of the unimproved value of the subject land Mr Street concludes that an accurate assessment of $297,000 better reflects the true relativity with other properties in Dorchester Street, recognizing the s.17 implications as a single residence site, and the heritage restrictions upon the value of the land. Mr Street bases that revised estimate upon the agreed relativity with 34 Dorchester Street in 1998 (0.66) updated to align with the current unimproved value of 34 Dorchester Street ($450,000). Mr Street further argues that because of the limitations upon further development of the subject land because of the heritage impacts, that impact was likely to be greater than previously agreed.
Comparison of Sales –
In his comparison with sales evidence at 33 and 73 Brisbane Corso, 122 and 146 Dornoch Terrace, Highgate Hill, and 29 Whynot Street, West End, Mr Street provides sales data records from the RP Data property system and the respondent’s own data system (Appendices 5 to 7). He provides no detailed explanation of his comparisons other than as outlined in paragraphs [14] and [18]. However it is clear that each of those sales has subsequently been redeveloped as a new dwelling, an option not available on the subject land. (see Exhibit 2, Appendix 8).
Mr Van Hees advises that the reason why he had not directly applied the sales of large single residence sites at 146 and 122 Dornoch Terrace, Highgate Hill, and 29 Whynot Street, West End, was because there had been a two year delay between the purchase of the 146 Dornoch Terrace site in 1998 and the demolition of the old dwelling upon it in 2000; and the other sale was a family sale. During the two year delay at 146 Dornoch Terrace the family had resided in the old dwelling, which had in fact been listed as “character housing”, yet approval for demolition had been approved by the Council. Mr Van Hees clearly distinguishes between “character” housing and “heritage” housing.
Mr Van Hees further advises that had he sought comparisons with heritage sales say in the Hamilton area, those values would have reflected far higher prices than the current approach adopted. He argues that the heritage sales in Hamilton reflect the premium positions of those old properties and the scarcity of their availability. He believes there is a strong demand for heritage properties in the market at present.
In support of his valuation Mr Van Hees advises that he is not aware of any sales in the South Brisbane area of vacant residential lands with City views. He has therefore sought comparisons with three sales without City views, and applied a premium for City views based upon comparisons in other inner City areas. Mr Van Hees’ prime comparisons are with the following sales of vacant residential lands.
·Sale 1 – (43 Turin Street, West End – Lot 23 on RP 11208). This is a 266 m² residential BR3 property located about 1.4 kilometres west of the subject land. The sale is seen as far inferior to the subject land due to its smaller size, narrow street access, inferior location and lack of any City views. The sale sold in February 2000 for $160,500, was analysed at $160,000, and applied at $145,000.
·Sale 2 – (39 Jones Street, Highgate Hill – Lot 41 on RP 896776). This is a 399 m² residential BR3 parcel located about 0.9 kilometres south-west of the subject land. This is also seen as far inferior due to the narrow street access, smaller size, inferior location and no City views. There is also an electricity transformer site adjoining the sale. The sale sold in January 1999 for $128,500, and was analysed at $128,000 and applied at $132,000.
[32]
·Sale 3 – (19 Abindgon Street, Woolloongabba – Lot 5 on RP 12248). This is a 405 m² inner residential parcel located about 1.1 kilometres south-east of the subject land. The sale is seen as inferior due to the narrow access street, inferior location, smaller size and lack of City views. The sale sold in May 2000 for $172,500, and was analysed at $172,000, and applied at $155,000.
To moderate his basic sales comparisons in order to provide an estimate of the premium attaching to City views, Mr Van Hees considers vacant land sales in New Farm and Paddington, both inner suburbs with similar “character” housing environment.
Sale Date Area Sale Price Unimproved Value Comments 6 Ellis Street, New Farm
98 Annie Street, New Farm
63 Morton Street, Paddington
38 Armstrong Terrace, Paddington
May 2002
October 2000
February 200
June 2002
278 m²
253 m²
400 m²
405 m²
$300,500
$155,000
$240,000
$164,000
$275,000
$150,000
$205,000
$147,000
Has City views
No City views
Partial City views
No City views
From those limited analyses it has been concluded that lands with City views, compared to similar lands without City views, contain premiums representing approximately 83% (New Farm) and 40% (Paddington). Mr Van Hees then allows for the much larger size of the subject land, and its heritage impacts, concluding an unimproved value of $420,000. However Mr Van Hees provides no specific details of how he assessed the heritage impacts.
Mr Street rejects the direct use the three sales in Turin Street, Jones Street and Abingdon Street as he notes that each of those sales has been the product of subdivision of larger lots, and new dwellings have subsequently been constructed on each site. (Appendices 7 and 8). It is noted that the original dwelling on 43 Turin Street was moved to allow for a new dwelling to be constructed on the balance of the original parcel. It is also noted that subdivision of the 29 Whynot Street property also revealed a significant benefit to the original purchaser as a consequence of that subdivision. (see paragraph [18]).
To summarize his arguments Mr Street argues that the general pattern for inner City lands with City views reflects a trend for purchasers to buy a larger parcel, and then seek to recover part of their initial costs by subdividing a smaller parcel for resale. The owner then builds upon the remaining balance of the original purchase, or refurbishes an older dwelling if that dwelling cannot be replaced. He argues that flexibility is not available on the subject land due to the restrictive nature of the heritage classification.
Mr Street agrees with Mr Van Hees that old “character” housing sales in that area tend to reflect similar prices to similar vacant land. However he argues that really reflects the market’s appreciation that those old houses can be removed. Mr Street does not disagree that, over time, due to the scarcity of similar old heritage properties, the market may begin to place a premium upon the heritage properties. However he argues that is not the situation in the current market.
Mr Van Hees argues that the traditional “character housing” nature of the area, in his opinion, is attributing to the attractiveness of the inner City suburbs such as Highgate Hill. Adopting that strategy Mr Van Hees argues that the impact of heritage constraints is not of itself a major impediment to increasing values in the area. Mr Street rejects that conclusion, noting the recent predominance in Kangaroo Point, Highgate Hill and Hamilton of redevelopments of old large building sites which have occurred. He notes that the capability to acquire and redevelop such sites is the major attraction. He argues that where heritage constraints prevents such capitalization of the redevelopment potential, then that should be reflected in the valuation of the land. For example Mr Street notes that he is unable to add a second storey to capitalize on the potential of the good views of the CBD. He bases that opinion upon advice from the Council when he objected to the significant heritage classification imposed by the Council after he had undertaken major repairs to restore the original character of the old building. His advice from the Council was that his extensive refurbishments should be maintained in the current form.
Decision:
Changes in the Valuations –
I note Mr Street’s concern that the variations in the percentage increases reflected in the unimproved values of various parcels in Dorchester Street, suggest to him that errors have occurred in those valuations. While I am aware that such percentage rises in values are often of concern to appellants in seeking to have confidence that their personal property has been fairly treated in any valuation, they in fact do not prove conclusively that any error has been made in the valuation process. Such rises may, at best, be an indicator to owners that they should further investigate the valuation. But there may be many reasons why a valuation has changed at what would appear to be a rate out of line with some overall statistical percentage.
This matter has been considered many times by the Court, and I note from precedent that a large increase in itself is not evident of some error in the valuation. I note, for example, in the decision of NR and PG Tow v Valuer-General (1978) 5 QLCR 378, where the Land Appeal Court said at page 381:
“It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation.”
That matter was also considered in CH and BD Henricks v The Valuer-General (1983) 9 QLCR 59, where in the Full Court of Queensland, Macrossan J (CJ) said at page 63:
“The percentage increase shown in the selected case was in each instance considerably less than the increase applied to the subject land as between the two valuation dates. The weakness in such a selective comparison is obvious as there could be any number of reasons why blocks in the same valuation area should increase at different rates over a period of five years.”
As the Full Court said, there could be many reasons why parcels of land can increase at different percentage rates over a period of time. The real test is not the percentage increase in the unimproved values, but a comparison of the subject land with sales of comparable sites in the vicinity of the subject land at the time of the valuation.
Changes in the Relativity -
The principle of relativity has long been addressed by the Courts, and was discussed in ACF and Shirleys Limited v Valuer-General (1978) 5 QLCR 370, where the Land Appeal Court said at page 375:
“We agree with Counsel for the appellant company that relativity between valuations is a desirable principle which should be observed to ensure an equitable distribution of the rating burden. However, in our opinion, it is difficult, if not impossible, to extend the principle beyond relativity as between lands with a similar highest and best use or land types with some common nexus.”
The matter of maintaining relativity was also discussed in Gibson Investments Pty Ltd v The Valuer-General (1978) 5 QLCR 223, where the Land Appeal Court said at page 230:
“It has been stressed on many occasions that reasonable property to property relativity within shires, is highly desirable to ensure an equitable distribution of the incidence of rating. … However, this is feasible only if the relevant dates of valuation are close in point of time and there have been no intervening circumstances affecting the market place.”
It is also noted that relativity between parcels in an unimproved sense may change from time to time. For example, in JD Lindenmayer v Valuer-General (1974) 1 QLCR 273, the President noted at page 276:
“I am, of course, not bound by any past relativity whether it be established by the Land Court or otherwise. It is well recognised that relativity between blocks in an unimproved sense may change from assessment period to assessment period.”
That was also followed in R and MM Barnwell v Valuer-General (1990-91) 13 QLCR 13, where the Land Appeal Court said at page 17:
“It has been well recognised over the years that previously established relativity in unimproved values can and does change from valuation to valuation. If there was no justification for change in relativity, the valuer’s task would be very simple in that all that would be required to establish value would be accomplished by the use of an adjusting formula. This, of course, is undesirable.”
In the current matter, while the previous understanding between the parties had been based upon knowledge of the impositions imposed upon the subject land as a consequence of the “heritage” restrictions extant in the planning legislation, Mr Van Hees now argues that the perception of such constraints in the market place has now altered. It is his evidence that due to the increased demand for properties with City views, and the relative scarcity of such sites, the market place now reflects values for heritage sites at prices little different to unencumbered lands. In view of such changes, any variations in the relativities along the northern side of Dorchester Street, should be seen in the perspective of the evidence of sales.
In seeking relativity between the subject land and riverfront lands in Fairfield and Yeronga, I note that, while those other lands also reflect prime residential locations, they do actually reflect a different property market segment. The guidelines of the Chief Executive in explaining his valuation process, emphasizes that the aim of the process is to relate the unimproved values determined to the market place. I get little assistance from the Fairfield and Yeronga properties.
The Use of the Land –
A key issue for the appellant is his understanding of the application of s.17 of the Valuation of Land Act, and how it has been applied to the subject land. Mr Street argues that, if the potential increase in value that might accrue from future subdivision is to be fully ignored in drawing comparisons with comparable sales, then Mr Van Hees should reject sales of smaller lots, which have only been obtained by exercising the potential to subdivide the land. Mr Street contends that Mr Van Hees has misdirected himself in respect of s.17 by using only sales of such small lots.
In seeking to explain his concerns Mr Street uses a “before and after” approach on examples at 29 Whynot Street, West End, 19 Abingdon Street, Woolloongabba, and 34 Dorchester Street, Highgate Hill, which appear to demonstrate his argument of the added value of subdivisional potential which must be ignored under s.17. On the basis of allocated unimproved values, Mr Street’s comparisons suggest increases after subdivision:
Parcel Area Unimproved values Increase
Before
After 29 Whynot Street 1,037 m² $268,000 (1.10.98) $460,000 (1.10.00) 72% 19 Abingdon Street 1,215 m² $300,000 (1.10.99) $460,000
(1.10.99)53% 34 Dorchester Street 1,255 m² $450,000
(1.10.00)$1,020,000
(1.10.01)127%
However as noted previously that broad approach suffers from several inconsistencies. Firstly the increases shown do not allow for any of the costs of approvals to subdivide or actual factors inherent in the subdivision. The figures supplied also do not reflect unimproved values at a consistent date of valuation. While they certainly demonstrate that land after subdivision has a value greater than before subdivision, that generally reflects the process of urban development. The question to be asked is really whether any potential for subdivision of the subject land itself has been contained in the valuation.
In order to understand the meaning of s.17 I turn to the legislation which relevantly states:
“17.(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made.”
Mr Van Hees advises that he ignored any sales of larger lots where an old building has been demolished and new multi-units is proposed. He thus seeks to restrict his sales comparisons to parcels only where a “single dwelling house” is proposed. However Mr Van Hees further notes that the current market tends to reflect little difference in sale price between large sites for single residences or those for multi-unit purposes. On that basis Mr Van Hees has not transgressed the purpose of s.17 in selecting his sales evidence.
The test then of Mr Street’s hypothesis, that sales of smaller lots which have been subdivided should not be compared under the constraints of s.17, lies in an assessment of the market place. What we have to assume then is the scenario that given the availability of those smaller parcels, and also the subject land, what price would a willing, but not over-anxious purchaser, be prepared to pay for the larger subject land for use as a “single dwelling home site”. Such a scenario makes no allowance for any preconception of any potential to further subdivide the subject land. Indeed, while the subsequent subdivision of 34 Dorchester Street occurred after the relevant date of 1 October 2000, and is not a matter for consideration in this matter, its much higher resale value indicates that the subject land as a subdividable parcel would have had a much higher value than that currently appealed. On that basis I believe that Mr Van Hees was not incorrect in his approach of ignoring the impact of s.17 upon the current valuation.
Comparison of Sales –
I turn then to the comparisons of sales applied, and note firstly the sales at 122 and 146 Dornoch Terrace, Highgate Hill, and 29 Whynot Street, West End. I note also that Mr Van Hees had rejected those sales due to the delayed demolition by two years between the sale and further redevelopment at 146 Dornoch Terrace, and also the inter-family nature of the 29 Whynot Street sale. In respect of his decision not to translate sales of “heritage” listed properties from the prestigious suburb of Hamilton, I can only concur that such a comparison would need to have allowed for the difference between the submarket sectors. However that is not a matter for me to consider in this matter.
While he has rejected the sale at 146 Dornoch Terrace, I note that Mr Van Hees might get some comfort from the subsequent demolition of the old “Character building” residence on that property, as he distinguishes “Character” housing from “heritage” housing. However it may also be that the delay of two years between the sale and the subsequent demolition may have reflected an extensive period of negotiation with the Council in gaining approval for the redevelopment to proceed, because of the planning constraint. That would not be uncommon in such circumstances. If that scenario was correct then such a delay is a matter that should be allowed for in analyzing such a sale. While such speculation is not for me to consider, I note also that any conclusion from that sale that “character housing” can be readily removed is also not conclusive.
However while neither Mr Street or Mr Van Hees have fully analysed those two sales at 122 and 146 Dornoch Terrace, their relatively consistent respective sale prices at $260,00 for vacant land in 1999, and $250,000 for an improved site in 1998, which was subsequently demolished in 2000 at a further cost of about $5,000, suggests a level of value not inconsistent with Mr Van Hees’ inferior sales in that locality at 43 Turin Street ($160,500) and 39 Jones Street ($128,500). There is nothing in those further sales to upset Mr Van Hees’ concluded unimproved value of the subject land.
In comparing the three sales adopted by Mr Van Hees I note that none of those properties have any city CBD views, a matter apparently highly prized in the market place. On that basis what Mr Van Hees is seeking to do is firstly appraise the subject land on the basis of its general location and amenity, and when to apply a premium for the addition of the city views of the subject land.
It is agreed by both parties that the three sales are all considerably inferior in general location and amenity, with perhaps Sale 3 (19 Abingdon Street) being the most comparable sale. Sale 3 has some views available towards the north, but certainly cannot see the CBD buildings. On that basis, without allowing for the benefits of city CBD views, but allowing 5% for the disability of “heritage” listing, it is agreed that the unimproved value of the subject land is considerably more than $155,000.
If I then consider what might be the impact of city views upon the valuation, I note Mr Van Hees’ comments that the closer, or more intimate views of the CBD from the inner suburbs, such as New Farm and Highgate Hill, are likely to be more attractive in the market place. On the evidence provided then a premium of up to 83% might be added for the additional advantage of having city views at the subject land. Now while there is no further quantification of those comparisons, Mr Van Hees concludes an unimproved value of the subject land at $420,000.
In respect of the agreed general trend for sales of “old character houses” in that locality to reflect similar prices as vacant land sales of similar areas, I agree with Mr Street that possibly reflects the market’s consideration on such sites that the dwelling could be removed, and further subdivision be able to proceed. Such a scenario would suggest that land values in that locality, due to the high demand by purchasers, could reflect values approaching a pro rata basis. If I applied such a pro rata basis to the comparison with Sale 3 (19 Abindgon Street) at 405 m², I could conclude an unimproved value for the subject land (1,378 m²) at about $450,000. That is not inconsistent with the combined unimproved values of Lots 4, 5 and 6 at 19 Abingdon Street ($460,000). However such an approach makes no allowance for the added advantage of the city views at the subject land or its heritage impact. Such speculation adds little to the appellant’s argument, as generally smaller sites tend to reflect a higher rate per square metre than larger sites.
Impact of Heritage Constraints -
I turn then to the potential impact of “heritage” listing upon the unimproved value of the subject land. I note that the subject land at the relevant date is declared a “place of heritage significance” under s.22 of the Town Plan for the City of Brisbane (1987). It is argued by the appellant that the effect of the heritage restrictions imposed under that town plan are similar to those enshrined in the National Trust Register; and while not specifically mentioned in the Queensland Heritage Act 1992, have similar restrictions in respect of the use of the land.
The Brisbane City Council planning policy 22.01 provides guidance in respect of the implementation of the heritage conservation of significant buildings; and planning policy 22.02 covers the renovations of heritage buildings. Both policies seek guidance from “The Australian ICOMOS Charter for the Conservation of Places of Cultural Significance (The Burrow Charter)”. Consent agreement to development is at the discretion of the Council. The “Burrow Charter Guidelines to Conservation Policy” sets out among others procedures for undertaking the task of conservation. Appeals against decisions of the local government are to the Planning and Environment Court.
If I consider then the “Register of National Estate” I note that was initially established under s.22 of the Australian Heritage Commission Act 1975, to maintain a record of places including places of cultural environment that have aesthetic, historic, scientific or social significance. (s.4(1)). The purpose of the Register includes the encouragement of public interest in historic places and to conserve, improve and present the National Estate. (s.7). Any protection of the National Estate is provided under the Environment Protection (Impact of Proposals) Act 1974-75, (s.30).
The Environment Protection (Impact of Proposals) Act 1974 (the EP(IP) Act) was subsequently repealed by the Environmental Reform (Consequential Provisions) Act 1999; where schedule 3 of that Act also removed the previous responsibility of the Australian Heritage Commission to inform the relevant Minister on a matter of the National Estate (old section 28). The reference to the “Minister” relates to the relevant Commonwealth minister at the time. (Acts Interpretation Act 1901 s.19.) The EP(IP) Act and other relevant Acts, were replaced with a new Act, the Environment Protection and Biodiversity Conservation Act 1999. Actions to now preserve places of historical significance are affected under the latter legislation.
The purpose of the EP(IP) Act was specifically to ensure that matters affecting the environment to a significant extent were fully examined in considering proposals or works on behalf of the Australian Government and its agency. The thrust of both the Australian Heritage Act 1975 and the EP(IP) Act were of a persuasive nature rather than any restrictive impact upon the general community.
Under the Environment Protection and Biodiversity Conservation Act 1999 there are powers to control and manage the development of properties which have been included in the World Heritage List as a declared World Heritage property (s.320). However registration as a significant property on the Register of the National Estate does not constitute recognition as a World Heritage property.
By contrast the Queensland Heritage Act 1992 established a Heritage Register under s.20(1) of that Act. If a place is entered into the Heritage Register, such action must be recorded in the records of the Registrar of Titles under s.31(1). Once recorded in the Heritage Register a person can only carry out development on that site with the approval of the Heritage Council, under a maximum penalty of 17,000 penalty units (currently $1,275,000). When the Heritage Council has delegated authority to a local government, then the local government may approve development of the registered place, otherwise approval can only be gained from the Heritage Council. Where the development would have a substantial effect then public notification of the development is to proceed (s.34(3)). Where an appellant is dissatisfied with the decision of the local government then a review by the Heritage Council may proceed, and eventually an appeal to the Planning and Environment Court under s.36(6).
In respect of when a place is listed either on the National Estate Register, or the Queensland Heritage Register, there is some relief provided to owners in respect of tax incentives upon repairs and maintenance, and possibly some reduced rates in land taxes. However those are not matters for consideration in the current matters.
The matter for consideration is whether the more onerous procedures for implementing development of listed “heritage buildings” has any adverse impact upon the value of that land. It is agreed that demolition of such a building is not possible, and that any major development that changes the character of the building would be unlikely to be approved. While Mr Street agrees that market forces may eventually drive up the value of an old heritage property, as a result of normal economic supply and demand inter-relations, he argues that would not appear as yet to be the market place reflection. It could also be argued that in such cases it is not the actual listing of the heritage building which attracts any premium, but rather the actual quality of the old building itself. Mr Street would always see the actual impacts of the listing of the site as a disability in the market place.
In terms of the extent of any disability as a consequence of listing as a “heritage” property, Mr Van Hees has allowed a reduction of 5% for listing under the Town Plan. Mr Street contested that allowance noting that this Court and the Land Appeal Court have made provisions in the matters of Herbert (24%); Conias (17.5%); and Roberts (10%).
A consideration of the relevant heritage impacts as they relate to properties in Dorchester Street, reveals that impacts upon individual properties may vary in their intensity. On the lower level of impact are those older dwellings which have been classified as “character housing” under the Town Plan. At the higher levels of impact are those that are specifically identified as places of heritage in the Queensland Heritage Act 1992. Between those levels of impact, in my opinion, lie those properties which have been specifically identified as a place of historical significance, for whatever reason, such as listing on the National Estate. Controls upon development of the subject land are therefore only exercised under the provisions of the Brisbane Town Plan. That may include where appropriate, development proposals under Section 1 of Part 1 of Schedule 8 of the Integrated Planning Act 1997. Under that provision any building works which are not self-assessable development or exempt development, as specified under Schedule 10 of that Act, are determined to be “assessable” developments. Any proposal to impact “a place of heritage significance” under the Town Plan would be taken to represent an assessable development proposal, and the Council may require the development to meet certain criteria.
In exercising its discretion on any application to develop such a place of significance, the Council would, in my opinion, be reasonably required to consider such matters as those identified in the National Estate listing. It would also be bound by its policies in respect of heritage buildings. The power for a local council to consider wider issues when determining whether demolition of an old building of historic and aesthetic interest should be allowed, were also addressed in Robt Nettleford Pty Ltd v Hobart City Council (2001) 117 LGERA 342. In deciding that the Council was permitted to take into account general statements of objections beyond the mere “listing” of a historic building, in the Supreme Court, Slicer J said at page 362:
“The respondent and the Tribunal were permitted to take into account general statements of objective and have recourse to principles stated by Parliament in their consideration of the application for demolition. The power of the respondent was not confined to a “listed” building. The Tribunal was entitled to pay regard to opinion evidence given on the issue of historic significance in resolving the competing values and interests involved in the planning appeal.”
In reviewing previous considerations of such heritage type impacts, I am directed to the findings of this Court in Herbert (supra), where the impact of a conservation agreement was seen to constitute an impediment to the market value of the land. In that matter a 7.05 hectare property, most of which was encumbered by a conservation agreement under the National Conservation Act 1992, was found to have restrictions preventing further subdivision. It was found that only an area of 1,495 m² could be developed with a residence and/or shed. The President found that such restrictions would reduce the price that a prudent purchaser was likely to pay, compared to a similar property where there was no such restriction and obligations.
In the circumstances of that matter the President agreed that the conservation restrictions did not prohibit all activities, but that activities which were ecologically sensitive, and did not endanger the area, could proceed. In the end the President allowed a reduction in the valuation proposed by the Chief Executive of 24%, reflecting a figure which would be more than that applied to a small rural residential site in the area, but less than the values applied to larger properties also valued under s.17 of the Act. The figure applied ($60,000) was not seen to demonstrate any percentage reduction for that impact, but rather a value determined in light of other submarket forces.
In the matter of Conias (supra) the Learned Member followed directions of the Land Appeal Court in Roberts, and considered the impact of a statement by the heritage unit of the Brisbane City Council (the Council). The dwelling was an old 1880’s building (Carfin) which was noted by the heritage unit as being of local heritage significance and which was listed as such in the Council’s formal listing as a Category 1 property. Such a category denotes that such a building was unlikely to be removed or demolished. However it was noted that “Carfin” had been the subject of major modifications over time, including extensions as a nursing home. The dwelling was not listed as a heritage place by either the Australian or Queensland Governments. In the context of the current matter there would be some analogy with the subject land.
In his analysis of the Conias matter the Learned Member considered the significant cost of repairs and maintenance of “Carfin”, noting their considerable scope beyond that which might be associated with a comparable size modern structure. The Member agreed that listing of a property under the Queensland Heritage Act 1992 seems more onerous than listing upon the Council’s Heritage Register; although the latter does have a deleterious effect on the value of the property (page 13). While the Member had some reservations about the accuracy of the supplied maintenance cost, in light of the lack of any other evidence, he considered the comparative annual maintenance cost differentials, which he then capitalized at 10% to arrive at a capitalized loss in the value of “Carfin” property. The Member identified the property to include the land, the “Carfin” house and the ground improvements.
By then comparing the agreed unimproved value of the land without any heritage restriction, to the assessed market value of the property, the Member apportioned the loss in capital value of the property as a result of heritage impacts. That resulted in a figure which, on the specific details of that case, reflected a loss of 16.5% of the unaffected land value. The Member distinguished the guidance determined by the Land Appeal Court in Roberts at 10%, as he found that he had “sufficiently substantive evidence upon which to form a finding” (page 15). In rounding off his unimproved value he allowed a diminution factor of 17.5%. In the current matter I do not have the same level of details of specific costs related to the subject land, and I find Conias only provides broad guidance in respect of expansion of the Roberts principle that heritage listing, in the absence of evidence to the contrary, should reflect some diminution in value from what might exist in the absence of such listing, as a result of the probable effect of loss of freedom of choice in the use and quiet enjoyment of the land context of “Warringa”. (page 10).
Another matter to which I am referred is the matter of Cooke v Chief Executive, Department of Natural Resources (1998) 19 QLCR 258. In that matter the Learned Member also considered that the diminution in the value of that heritage listed property “Breffney”, as a consequence of its heritage listing, was absorbed into the total value of the whole of the property, including the land, building and gardens. An apportionment of those capitalized losses in the value of this property, reflected a diminution factor of 25% (page 266). In the Cooke matter, the property “Breffney and gardens” was noted in the Australian Heritage Register.
The Member also noted in Cooke that being noted in the Australian Heritage Register was recognition of its heritage value, but is not a land management decision requiring the owner to change the way he manages or disposes of the property. (page 261). That is consistent with my findings outlined in paragraph [66]. Because of a detailed lack of comparative differential costs associated with the subject matter, I find Cooke also to be only broad support for the Roberts principle.
In the matter of Roberts, the Land Appeal Court identified the difficulties of quantifying any impact of heritage listing, where there was inadequate market evidence. The Land Appeal Court concluded that in such circumstances there was some logic that an imposition upon the use of a property was likely to have some impact upon its value in a free market situation. The Court went on to say at page 9:
“We’re not able to accept, however, that there is logic in the opinion that two hypothetically different comparable residential properties, located in the same environment, one with a heritage listing, and the restrictions on freedom of use and private enjoyment which that entails, would be seen as equally desirable in the market place as the other, which could be used and privately enjoyed free of bureaucratic interference and direction.
The difficulty is of course the assessment of what the difference in value might be, in the absence of convincing market evidence. A further difficulty is recognised in apportioning loss in value to a heritage listed improved property, between land and improvements.”
[82}In the current matter neither party provides sales evidence of heritage listed properties to support their conclusions of the quantification of any heritage disability. Mr Street relies upon percentage allowances approved by this Court and the Land Appeal Court in the circumstances of those matters. Mr Van Hees argues that it is current departmental policy, based upon a wider analysis of the market, for any heritage allowance to vary between zero and 10%, depending upon the type of impact imposed by the listing. However he provides no examples to demonstrate that current policy.
The problem for both parties is that the history of heritage considerations has demonstrated that the percentage impacts, if any, vary from property to property. It is also noted that the valuation approach for each heritage listed property should be one which considers the specific legal impacts of the actual heritage listing of that property. That was concluded in Shara Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 340, where the Learned Member said at page 349:
“It seems to me that what the Court was saying was that one must look at the property in question and the impact of the legal consequences of the heritage listing on that property. A generalised approach is not appropriate. This is further demonstrated in the matter The Proprietors Gataker Place Building Units v. Chief Executive, Department of Lands (unreported) 19 August 1994 where the learned President found that the existing use of the site which was subject to heritage listing was the highest and best use. In the circumstances there was no decrease in value on account of the heritage listing.”
However it is clear that an historic listing should be considered when determining the site value of a property. I note for instance that was found to be the matter for consideration in the Supreme Court of South Australia (Land and Valuation Division) wherein McEwin and Ors v Valuer-General (1993) 80 LGERA 12, Mullighan J said at page 18:
“True it is the building that has the heritage significance, and not the unimproved land per se, but it would be unreal to ignore the significance of the restrictions caused by the heritage listing when assessing the site value. In view of those restrictions the land will never be come vacant land, unless there is some unforeseen disaster which must be ignored for present purposes, and cannot be developed inconsistently with the heritage significance. Consequently, the restrictions caused by the heritage listing must be considered when determining the site value.”
The guidance provided by Mullighan J in McEwin, in my opinion, does in fact highlight an issue affecting the market value of the subject land. As Mullighan J noted the subject land will never be vacant in its current state. The consequences of such a limitation means that Mr Street is unable to seek to overcome the current restriction upon the partially obscured CBD views by the roofline of the adjoining Serbian Church and Hall. He is unable enhance his current view by building another level beyond his current ground level elevation. Clearly from the recent changes in the unimproved values of land on the northern side of Dorchester Street, the presence of CBD views is highly prized. The relatively stable values on the southern side of Dorchester Street, without direct CBD views, bears testimony to the market’s assessment of the views. The southern side properties have all the benefits of location, but no CBD views. Because of the historic nature of the Serbian Church and Hall, those buildings are also likely to remain in their current condition.
In seeking some quantification of the overall impact of the partial obstruction of the CBD views from the subject land, I note the comparison with unobstructed views from 34 Dorchester Street (Exhibit 2, Appendix 2). I note also that Mr Van Hees has investigated the potential enhancement that City views may bring to a centrally located property, compared to a similar property without City views (paragraph [33]. His studies reveal that the presence of partial City views could add an additional premium of 40% above the value of those similar parcels without City views. However the Paddington example of Mr Van Hees provides guidance only in respect of partial views where the development of that parcel could maximize the extent of the partial views. In the current matter Mr Street has little scope to change the existing views around the roofline of the Serbian building.
Considerations of the highest and best use of the particular heritage listed property should also place emphasis upon the impact of the legal consequences of the heritage listing upon the use of the property. That was emphasized in Shara Pty Ltd (supra).
In the current matter the highest and best use of the subject land is for its current use as a single unit residence. The benefit of City views is seen as a significant advantage in the market place, but where such City views are partially restricted, then the premium for City views would be partly reduced. In seeking direct comparisons with Mr Van Hees’ sale at 63 Morton Street, Paddington (paragraph [33]), I note that those partial views are not specifically quantified as to the extent of partial views of the City centre. While the field inspection provides a background to my understanding of the impact of views, I am also aware that it is not the role of the Court to form views which were not based upon the evidence provided. (Melwood Units Pty Ltd v Commissioner of Main Roads, (1976) 3 QLCR 209, per Dunn J at page 228.
In his assessment of the comparison of the City centre views from 63 Morton Street, compared to the lack of views from 38 Armstrong Terrace, Paddington, Mr Van Hees was also likely to have made allowance for the lower topography of 38 Armstrong Terrace as well as its more restricted access. In reality he provides those comparisons to demonstrate that merely lots of similar size with partial City views are more expensive than lots without views. Any true comparison must also make allowance for any difference in aspect, breezes, topography, access and general locality. By that assessment the impact of partial City views at 63 Morton Street, Paddington, was likely to be something less than 40%.
In considering the physical intrusion of the Serbian Church roofline into the existing views from the subject land, I rely mainly upon the photograph of the City views in Appendix 2 (Exhibit 2). Mr Street explained that the photography was taken from the existing level of the open verandah at the rear of the subject land. Any difference in elevation could reduce or improve the impact of the views. Certainly without the impact of the Serbian Church roofline the City views would be very attractive, as demonstrated by the views at 34 Dorchester Street. The subject land is also at a slightly lower elevation than 34 Dorchester Street.
On balance I believe that the partial views from 63 Morton Street, Paddington were likely to be less expansive than those from the subject land, in spite of the intrusion from the Serbian Church roofline. Certainly they are more removed from the City centre. In applying an adjustment to the unimproved value of the subject land to reflect both the restrictions on development as a consequence of its heritage character, and also the partial restriction imposed upon the City views, it is important to ensure that those restrictions are not allowed for cumulatively. While there is a correlation between the heritage restrictions and the partial reduction in views, the second matter is just a factor to which Mr Street is subjected in any attempt to further develop the property. On balance I believe a generous allowance for heritage impacts would also provide for the partial reduction in City views.
However as I have no definite details to particularly quantify the heritage impacts at the subject lands, I believe its real impact must be viewed in the context of how the heritage restrictions impairs the benefits of the subject land. In my opinion its greatest impact is to prevent the appellants from overcoming the intrusion into the views of the city CBD by the Serbian church and hall. Mr Street’s advice is that he cannot develop upwards to overcome those intruding rooflines, and their continued existence will be maintained as they are also heritage protected. On balance the current restricted views are superior to the partial views from 63 Morton Street, Paddington (40%), but inferior to the more expansive views of the city CBD from 6 Elliott Street, New Farm (83%). I will adopt a premium of 60% for the subject land for the benefit of the city CBD views, compared to a similar lot in that location without city views.
If I then analyze the impact of views at 34 Dorchester Street at $450,000, and allow a premium of 80% for the unobstructed views at that parcel, I could conclude that a similar property in that location without city CBD views could have an unimproved value of $250,000. If I then add a 60% premium for the more obstructed views of the subject land, I could conclude an unimproved value for the subject land at $400,000. But the subject land is slightly lower in elevation and also has the heritage restrictions on freedom to redevelop the property. I believe the partial loss of views of the city CBD are directly linked to the lower elevation of the subject land, and I make no further allowance for that slightly inferior topography.
Summary:
In summarizing this matter I am then left with 34 Dorchester Street, which has the advantage of a slightly higher elevation and unobstructed City views, although slightly smaller, and which has an unimproved value of $450,000 at the relevant date. In his assessment of the additional premium that attaches to land with wide inner City views compared to those with partial City views, Mr Van Hees advises that the latter have a smaller added value because of their more restricted views. As the market evidence would indicate the presence of City views is a key factor impacting the price paid, on that basis I believe the subject land would have a lesser value than 34 Dorchester Street, even without any further impact from the heritage implications. On balance I believe Mr Van Hees’ estimate of $420,000 might reflect a slightly high relativity with 34 Dorchester Street merely as a comparable site.
If I then seek to allow some further impact for the heritage restrictions imposed upon the subject land, I am led to a value less than $400,000. It is agreed that the heritage impacts imposed upon the adjoining Nimmo property as a consequence of its listing under the Queensland Heritage Act, are more onerous than those existing upon the subject land. If I then separately consider the heritage restrictions on the subject land, beyond those that restrict the capacity to improve the city CBD views, I find those are no more intrusive than any allowance made by a prudent purchaser for uncertainties associated with the planning controls, similar to the “character housing” provision. If I follow generally the principles outlined in Roberts, in the absence of evidence to the contrary, I will allow for some disability for restrictions on the freedom of the owner to develop the property other than for the impacts of the Serbian church hall. On that basis I will allow then a further 5% for that disability, concluding an unimproved value of the subject land at $380,000.
Conclusion:
Having considered the whole of the evidence I am partly persuaded that the appellants have proved their case. The appeal is upheld. The valuation as determined by the Chief Executive is set aside, and the unimproved value of Lot 21 on RP 127282 is determined in the sum of Three Hundred and Eighty Thousand Dollars ($380,000).
NG DIVETT
MEMBER OF THE LAND COURT
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