Suntower Investments Pty Ltd and Johnston v The Valuer-General
[1990] QLAC 19
•6 July 1990
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BRISBANE,
Re:Appeals against decisions of the Land Court Determinations of unimproved value - Shire of Albert (V89-413 and V89-414)
Suntower Investments Pty Ltd and M.R. Johnston v.
The Valuer-General
J U D G M E N T
The owners of two adjoining properties developed together as the River Gardens Caravan Park, at Nerang-Broadbeach Road, Carrara, appealed to the Land Court following the determinations of the Valuer-General of the unimproved values of the individual parcels as at the 31st March, 1988. The appeals were allowed with the following results:-
V89-413- Valuer-General's determination, $1,550,000 for Lot 2 on RP 116207, Parish of Gilston containing an area of 3.1 hectares - appellant's contended value, $620,000 - Land Court decision,
$1,425,000.
V89-414- Valuer-General's determination, $287,000 for Lot 1 on RP 116207, Parish of Gilston containing an area of 3925 square metres - appellant's contended value $220,000 - Land Court decision,
$242,000.
Appeals were then lodged with this Court against the decisions of the Land Court and the matters come before us by way of rehearing.
Both sites have frontage to the Nerang River, and are zoned "Rural A", with a lawful non-conforming caravan park use existing as at the relevant date. Such use is a prohibited development in the Rural A zone. We are informed that the larger property of 3.1 hectares would be capable as zoned of subdivision into a maximum 3 lots, to average no less than 8000 square metres, with a minimum permitted lot size down to 5000 square metres. Development to the east of the larger site is of standard building allotments, some with river and canal frontage, improved with good quality single residential dwellings. To the west of the main site is the subject smaller site then similar smaller acreage river frontage allotments with predominately quality single residential dwellings.
In the Land Court, evidence was given for the Valuer-General by Mr Raymond John Scougall, a Registered Valuer, to the effect that the properties as zoned possessed base site values of $1,250,000 and $225,000 respectively. These values were based on sales of river front sites of various sizes and zonings together with, in the case of the larger site, a sale of one large non riverfront site which was subsequently rezoned for higher use. The Valuer-General then, on the basis that the caravan park usage was physically more intense than single unit residential, considered that such existing usage was a higher and better use than as zoned and should command a higher value accordingly. Without any reference to the market for caravan park usage, he then proceeded to add a premium to the base site value. The premium included an allowance for water and sewerage headworks charges with which a developer would ordinarily have been faced in obtaining approvals for usage equivalent to that enjoyed by the subject lands. A further arbitrary percentage was also added to the base site
values in recognition of the perceived risks and delays which would ordinarily be experienced in obtaining equivalent approvals.
If the Valuer-General's proposition was correct that the existing use should command higher than the base as zoned site value, his authority to value it accordingly was provided in Section 12 sub-section (1A)(a)&(b) of the Valuation of Land Act 1944 (as amended). There is here the provision "but nothing in this sub-section prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that any improvements referred to in sub-section (1) of this section have not been made."
The appellant's case in the Land Court was also that the highest and best use of the largest site was as a caravan park, but not for the smallest site, which was seen, as an individual property, as being as a river front residential site.
Mr Lawrence John Hamilton, a Registered Valuer in private practice, had given evidence, based on analysed sales of caravan parks, that the largest site possessed value of $620,000 for that purpose. While it was his opinion that this value represented its highest and best use, he had made no attempt to assess an as zoned site value, to check his contention as to highest and best use. He valued the smaller property at $200,000 as a residential site on his interpretation of reasonable relativity with the Valuer-General's assessments of adjoining or nearby river front sites.
Now, in the Land Court the learned Member, having accepted the Valuer- General's evidence as to a base site value in each case, also accepted the proposition that the caravan park use would attract a premium over and above base site value. It was his opinion, however, that such premium should be
restricted to the equivalent headworks charges, resulting in the determinations of $1,425,000 and $242,000 respectively.
It is noted that two of the several grounds of appeal (Grounds 2 and
3) read as follows:-
"2. That the Court's findings that the unimproved value of the parcel at the relevant date as a site was $1,250,000.00 was against the evidence and the weight of evidence and was unreasonable."
"3. That the Court's finding that the addition of a premium for the necessary contribution for headworks charges for water and sewerage for the park and the licensed restaurant was justified was against the evidence and the weight of evidence and was unreasonable."
Further evidence was adduced by the appellants through Mr Hamilton firstly regarding the approach taken by the Valuer-General then to a claimed lack of comparability of sales used by the Valuer-General, and finally to the caravan park sales and basis adopted by the appellants. The Valuer- General chose to rely on the record of the Land Court proceedings.
With regard to V89-413, the larger site, the state of the evidence is that the Valuer-General has provided the only cogent evidence, although not ideally comparable and in part severely criticised by the appellants, of the "as zoned" base site values. He has not however carried out the test of proving, by reference to sales of caravan parks or caravan park sites, that his contention of highest and best use and consequent higher value as a caravan park, is correct.
Conversely, the appellants have provided the only cogent evidence of caravan park sales and analysis of sales in an effort to demonstrate an acceptable land content in a caravan park development. This task was not
made simple by the need to analyse sales of highly improved, and not always ideally comparable property.
This evidence is considered, in our opinion, of sufficient weight to show the Valuer-General's assessment, based on caravan park usage, is not capable of support.
It is also clear that to test an opinion as to highest and best use, consideration needed to be given (by both parties) to both the claimed highest and best use and the alternative use potential. The Valuer-General has failed to support his opinion as to highest and best use, by not providing the necessary market evidence. Similarly the appellant has failed in not investigating or, in our opinion, properly considering the market evidence necessary to establish the value of the larger site as zoned.
We are of the opinion that the process adopted by the Valuer-General is in accord with the proviso to Section 12 sub-section (1A) in that he has had regard to alternative use. He did not however express this level of value so established as an alternative valuation. It is open to this Court, however, in terms of Section 21 (7)(b) of the Valuation of Land Act to find in this case, that the highest and best potential use of this property if unimproved, is not as a caravan park, but on the evidence, as zoned, with any inherent potentialities including use as a single exclusive river front residential site of 3.1 hectares and to strike a value on that basis. We are of the opinion that the learned Member of the Land Court was entitled, on the evidence, to find a site value of $1,250,000.
It follows that, if the caravan park usage does not attract a higher site value then no premium should be added. We accordingly find that the unimproved value of this land should be determined at $1,250,000.
With regard to V89-414, it is the evidence of the appellants that the use of this small site as part of the caravan park is dependent on the adjoining larger site for access, due to the terms of the Council approval. In any event it is not seen as being capable of economic independent use, even if individual access could be provided. The appellants see the only possible purchaser for caravan park use being the owner of the adjoining larger site. For the purpose of establishing its unimproved value as an individual site they argue that any potential for sale to a special
adjoining owner purchaser should be ignored.
It is also our view, for the same reasons as with the larger site that the highest and best use of this property in the open market place is as a river front home site. Viewed in its unimproved state, but in the existing environment, the property must be seen as adjacent to the caravan park on the larger site. Both the Valuer-General and appellants agree that this has a deleterious effect on home site usage. The evidence of the Valuer-General through Mr Scougall was that, as an individual site as zoned, he would assess its value before the consideration of the caravan park adjacency, at
$225,000. A caravan park adjacency factor of approximately 5% or $10,000 was allowed on the site adjoining to the west, reducing its site value from an assessed $230,000 to $220,000. A similar allowance of $10,000 on the subject would reduce its value from $225,000 to $215,000.
Mr Hamilton for the appellants values the site at $200,000 based on his assessment of fair relativity, but it seems to us that his starting point of $220,000 as the Valuer-General's valuation of the adjoining site ignores the fact that the allowance for the caravan park adjacency had already been built into that valuation.
We prefer the Valuer-General's evidence as to base site value adjacent to a caravan park, being $215,000 and the appeal is allowed on that basis.
In summary, we find as follows:-
V89-413- The appeal is allowed, the determination of the Land Court is set aside and the unimproved value of Lot 2 on RP 116207, Parish of Gilston is determined in the sum of $1,250,000.
V89-414- The appeal is allowed, the determination of the Land Court is set aside and the unimproved value of Lot 1 on RP 116207, is determined in the sum of $215,000.
J.
Judge of the Supreme Court
Member of the Land Court
Member of the Land Court
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