The Proprietors 'Cypress Gardens Waters 1' v Chief Executive, Department of Natural Resources
[1997] QLC 180
•21 November 1997
|
BRISBANE
21 November 1997
Re: Appeal against Annual Valuation
Valuation of Land Act 1944
Valuation Roll No: 32374/10000
Local Government: GCCC-Albert
(AV96-476/477).
The Proprietors "Cypress Gardens Waters 1"
v.
Chief Executive, Department of Natural Resources
(Hearing at Coolangatta)
D E C I S I O N
Background:
These appeals relate to a property located at Cypress Gardens Retirement Community, Gooding Drive, Clear Island Waters, Gold Coast, and described as Lots 1 to 30 on Building Unit Plan 103041, over Lot 1 on Mixed Stratum Plan 103115, Parish of Gilston. The subject is part of the Cypress Gardens Retirement Community, and covers the land between RL9.6 metres and RL-7.72 metres. The subject has an area of 1.079 hectares and is zoned as "Special Use - Retirement Community and Nursing Home", under the Town Planning Scheme of the Gold Coast City Council effective at the dates of valuation at 1 January 1995 (AV96-476) and 1 January 1996 (AV96-477). Cypress Gardens Waters 1 is contained within Precinct 4 of the Cypress Gardens Mixed Use Development Scheme approved on 20 June 1995 under the Mixed Use Development Act 1993.
The key issues relate to the comparison of comparable sales, cost of development, cost of services, and the impact of headwork charges.
The land is situated on the southern side of the Nerang-Broadbeach Road, approximately 3.5 kms west of the Broadbeach Waters Post Office, and about 6 kms north of Robina Town Centre. The subject adjoins Boobegan Creek along its south-eastern boundary, and is the eastern part of a mixed use, multiple-staged development known as "Cypress Gardens Retirement Community and Nursing Centre". The Merimac State High School and Primary School are located within a 2.5 km radius, and the "Pacific Fair" regional shopping centre is about 3 kms to the east. The Surfers Paradise Golf Course is within walking distance to the east, and several other golf courses are within a 2 km radius.
The subject is accessed by Lady Cilento Drive, a private road within the overall development, and eventually to Gooding Drive (formerly the Gold Coast-Springbrook Road), and Nerang-Broadbeach Roads. All carriageways are bitumen sealed. Electricity, town water and telephone are available to the site, as is also access to a sewerage rising main via private sewerage pumping stations throughout the site. The land is irregular in shape and in its natural state was mainly low-lying swamp in the north-east corner. The subject area was originally an "ox bow" that required unsuitable tidal material to be excavated and replaced with suitable sand borrowed elsewhere from the creek on the site.
The Chief Executive, Department of Natural Resources, issued valuations at $1,460,000 on 24 June 1996, for both 1 January 1995 and 1 January 1996. The appellants objected to those valuations claiming values of $250,000 in each matter.
Following the objections the Chief Executive confirmed the valuations at $1,460,000 on 2 September 1996. The appellant has now appealed those decisions claiming the proper valuation should properly be $650,000 in each case. By agreement with the parties the two matters were dealt with concurrently. Mr BG Ashcroft, General Manager of the Property Division of Tricare Pty Ltd, assisted by Mr HJ Jewell, Registered Valuer, appeared for the appellant, both giving evidence. Mr B O'Connor appeared for the respondent, calling evidence from Mr MW Cowley, the Departmental Valuer now accepting responsibility for the valuation. The original valuer who determined the valuation was no longer available, and Mr Cowley had re-assessed the valuation and now submitted fresh appraisals at $1,300,000 for both 1 January 1995 and 1 January 1996.
Evidence:
Mr Ashcroft provided an overview of the total Cypress Gardens mixed use development of 42.7 hectares in order to explain how the current Cypress Gardens Waters 1 (1.079 hectares) fitted into the total complex. The subject of this case is part of Precinct 4, which is primarily intended for accommodation buildings, permitted uses of which include:
display home, dwelling houses, duplex dwelling, accommodation units, lake, landscaping, park, private recreation, thoroughfare, vehicle parking and caretaker's residence.
There are 30 independent living units developed upon the subject area of 1.079 hectares.
The development of the total complex has involved filling which has mainly been borrowed from within the 42.7 hectares from a waterway and a borrow pit, which has subsequently been converted into an engineered lake. Some imported fill has had to be brought onto the site from external sources in order to meet the material quality requirements for road base construction of the internal roads. The costs of dredging fill from the waterway was estimated at $4.50 per cubic metre paid as a surcharge to Department of Harbours and Marine, and sand from the borrow pit at $10 per cubic metre, purportedly based upon figures previously agreed with the respondent. The cost of the imported material from external sources was estimated to cost between $12 and $13.50 per cubic metre. It was agreed by both parties that the volume of sand fill for the subject was 29,700 cubic metres, and that the road construction quantities of the internal roads to the common property involve:
Road Construction
12% of 450 lin.m.
Fill beneath the Road
12% of 24750m3
It was agreed by the parties that the 12% of costs related to the subject area as a proportion of the total development. However, Mr Ashcroft felt the 12% of the fill beneath the road at 24750 cubic metres appeared to be low, but he was not able to substantiate that claim.
In respect of the stratum apportionment of the gross land value it was also agreed that Lot 1 of MSP 103115 was entitled to 1,216 voting entitlements, and Lots 2 and 3 of MSP 103115 were each entitled to one entitlement each. Under the Mixed Use Development Act 1993, and the Management Statement related to the Plan, the valuation is apportioned in accordance with the lot entitlements. On this basis, Lot 1 was valued at 99.84% of the subject valuation. It was explained to the Court that the purpose of Lots 2 and 3 on MSP 103115 were to provide a future mechanism for the appellants, should they chose, to develop the subject if a building goes beyond its reasonable life. They could then construct a building in that place, but it can only occupy the envelope shown on the Stratum Plan.
In respect of the costs of development of the subject, Mr Ashcroft advised that filling of the site from the waterway and the internal borrow pit occurred concurrently from both sources on approximately a 50/50 basis. For this reason he had adopted the figure of $7.25 per cubic metre as an estimate based upon a mean between the $4.50 and $10 per cubic metre rates.
Mr Cowley however argues that he believes that fill obtained from the borrow pit (the engineered lake) on the total area would not have cost any more than that pumped from the waterway at $4.50 per cubic metre. That site was not a great distance from the subject land and costs should have been similar. However, it was noted that the fill from the waterway was pumped to the subject land, while fill borrowed from the engineered lake area was removed by excavation and transported by truck to the subject area, and then consolidated. Mr Cowley could offer no comment upon the relative costs of pumping and trucking sand fill as he had no records of those costs. He had adopted the figures prepared by the previous valuer for the objection conference, but could provide no explanation why there was no comment on the Departmental file rejecting the $10 per cubic metre for fill from the borrowed area.
In the matter of the additional imported fill, Mr Ashcroft confirmed that it was fully imported as the local sand was unsuitable for road-base material. Mr Jewell estimated that at the date of valuation, imported fill would have cost $15 per cubic metre. Mr Ashcroft advised that at the time of construction between 1987 and 1995 the actual costs were between $12 and $13.50 per cubic metre. Mr Cowley agreed that if external fill was required for road purposes, then the costs would be greater than the costs of obtaining fill from the site. He also agreed that the road would require a different composition of fill to the rest of the site. The filling operation apparently occurred about 1992.
Agreement for the development of the overall mixed uses site was signed by the Albert Shire Council and Tricare on 4 September 1987. Apparently the filling and development of the subject occurred from that date until the sealing of the Plan of Survey on MSP 103115 on 24 July 1995.
In respect of the shared costs of the development of the revetment wall along the common community property shown as Lot 5 on MSP 103098, it was also agreed by the parties that the total cost of the wall involved the revetment, excavation, rock pitching and some element of dredging in order to build the wall. The agreed total cost was $130,000, of which 12% is apportioned to the subject and is agreed at $17,000.
To support his valuation Mr Jewell draws comparison with the following sales:•Sale 1 - (Paradise Springs Avenue - Lot 145 on RP880434).
This is a 1.497 hectare site located about 2.5 kms south of the subject. It is an elevated site not requiring fill, with open views across Paradise Springs Golf Course. The sale is close to Robina Town Centre regional shopping complex and is to be developed with 49 residential accommodation units, providing 306 square metres and $39,796 cost per unit site. The sale sold on 14 June 1996 for $1,950,000, or $130 per square metre. The Chief Executive has applied an unimproved value of $1,250,000 for the sale or $83 per square metre and $25,510 per unit site cost.
The sale is seen as much superior to the subject, which requires massive fill and other works.
•Sale 2 - (Glenside Drive - Lot 833 on RP 226749).
This is a 2.836 hectare elevated site, located 3.3 kms south of the subject, does not require fill, and has views to Robina Town Centre regional shopping complex. The sale is to be developed into 93 residential accommodation units, providing 305 square metres and $30,108 cost per unit site. The Chief Executive has applied an unimproved value to the sale of $2,100,000, or $74 per square metre and $22,580 per unit site. The sale sold for $2,800,000 on 30 June 1997, at a unit rate of $99 per square metre.
The sale is seen as superior in location, topography and aspect than the subject which requires massive filling and other works.
Mr Jewell also draws relativity with:
•Site 3 - (Thorngate and Glenside Drives - Lot 950 on RP 803884).
This is a 4.09 hectare elevated site, not requiring fill, with open views to the adjacent Robina Town Centre regional shopping complex. The property is located about 3.3 kms south of the subject. The Chief Executive has applied an unimproved value of $3,400,000 or $83 per square metre to Site 3.
The site is much superior in location, topography and aspect than the subject.
•Site 4 - Rhode Island.
Mr Jewell also compared relativity between the subject and the "Rhode Island" property which is south-east of the subject, and has north-easterly views across the adjoining Surfers Paradise Golf Club. This is a 14.74 hectare site which has been developed into 172 strata title residential accommodation units and 20 small group title development parcels. The Chief Executive has provided an unimproved value of $7,600,000 for the sale, or $52 per square metre or $44,486 cost per unit site of average 857 square metres including common areas. Mr Jewell suggests that Rhode Island property has superior access to the subject.
In drawing comparison with his Sale 1, Mr Jewell acknowledges that the sale occurred after the relevant date for the 1 January 1996 valuation. He further acknowledges that when the Chief Executive determined the unimproved value at $83 per square metre he would not have been aware of Sale 1 at $130 per square metre. Mr Cowley notes that this higher unit rate for Sale 1 is likely to impact the subsequent valuation of Sale 1 as at 1 October 1996. Mr Jewell has not been able to ascertain the full details of his Sale 1 from the parties, and concedes that the price may have included headworks charges as well as just the land value.
In comparing his Sale 2, he also acknowledges that the sale had occurred on 30 June 1997, about 18 months after the latest date of valuation of 1 January 1996. He claims that in hindsight this indicates that the market has perhaps improved, and sought to draw a lower figure for the subject by comparison after allowing for a rise in the market to 30 June 1997. He also acknowledges that his Sale 2 was for an area twice the size of the subject, but claims the difference in size should not be significant on a rate-per-square-metre basis. He agrees that the adjacent proximity to the Robina regional shopping complex provided a strong attraction for a retirement village complex. Mr Jewell agrees that his sites 3 and 4 were provided to compare relativity and not for any comparison of sales purposes. He argues that the type of development and usage are similar to the subject and, while larger in area, the difference in size is "not vastly different". He argues that while Site 3 has no water frontage, he believes that is not relevant as the water frontage provides no benefit to the subject. While 16 of the 30 units on the subject have an aspect over water, he argues the water frontage is merely a cleaned out creek and not anything of beauty.
To support his determination, Mr Cowley draws comparison with the following sales:•Sale 1 - (7 Oakmont Street, Robina - Lot 4 on RP 868072)
This is a 3.093 hectare site which is located approximately 5 kms south of the subject. The sale is zoned as Residential A, is irregular in shape with a moderate slope towards the north-east. It is elevated with views across the adjoining Robina Woods Golf Club. Electricity, water supply, sewerage and telephone are available, and there is easy access to Oakmont Street. The sale is seen as inferior to the subject on a rate per square metre basis because of the larger area of the sale, and its lower density zoning. The sale ("The Pavilions") has been developed at a density of 13 units per hectare.
The sale sold in January 1994 for $3,125,000, which after allowing for improvements provided an analysed value of $3,115,000, or $101 per square metre, and an applied unimproved value of $2,900,000, or $94 per square metre.
•Sale 2 - (1 Santa Cruz Boulevard, Clear Island Waters - Lot 397 on RP 224353)
This is a 1.115 hectare site, located approximately 1.2 kms south-east of the subject. The sale is zoned as Residential B, and has easy access to the bitumen sealed Santa Cruz Boulevard. Electricity, water supply, sewerage and telephone are available. The sale is regular in shape, near level and low in elevation requiring filling in order to develop 41 group title units (Santa Cruz Gardens). The subject is considered to be substantially superior to the sale on a rate-per-square-metre basis, due to the water frontage of the subject to Boobegan Creek.
The sale sold in January 1993, for $1,050,000 and after allowing for improvements was analysed at $917,000, or $82 per square metre, and an applied unimproved value of $840,000, or $75 per square metre.
•Sale 3 - (Templestowe Court, Robina - Lot 835 on RP 837914).
This is a 3,877 square metre site located approximately 3.5 kms south of the subject. The sale is an irregular shaped site with a moderate to steep slope from north to south, with a southern frontage to West Lake and an adjoining park. The sale is zoned as Special Residential and has been developed and sold as 9 house and land packages, and later onsold at an average area of 431 square metres for $252,000. Electricity, water supply, sewerage and telephone are available, and there is easy access to Templestowe Court which is bitumen sealed with concrete kerbing and channelling. The sale is seen as superior to the subject on a rate-per-square-metre basis because of the smaller area of the sale.
The sale sold in May 1993 for $681,000, which after allowing for improvements provided an analysed value of $659,000 or $170 per square metre and an applied value of $600,000, or $155 per square metre.
In comparing those sales with the subject, Mr Jewell argues that Mr Cowley has overvalued the subject in view of the major fill required, and the subject's location facing commercial development. Mr Cowley had determined the gross land value at $115 per square metre, from which he then deducted the following development costs:
•Fill (to a depth of 2.75 metres)
29700m3 @ $4.50 per m3 = $133,650
•Apportionment of Common Property Site Works:
Road Construction
12% of 450 lin.m. @ $150 per lin.m. = $ 8,100
Fill Beneath Road
12% of 24750 m3 at $4.50 per m3 = $ 13,365
Revetment Wall
12% of $130,000 = $ 17,000
(agreed by the parties)
Total Development Costs = $172,115
In making further adjustments to the interim valuation, Mr Cowley then added the costs of headworks charges to provide water supply and sewerage services externally to service the subject. These he claims are charges linked to the development of the land, although their actual quantum is determined from a schedule of charges adopted by the Albert Shire Council, which are based upon the future use and number of buildings upon the land. These charges are added to the unimproved value once the BUP or GTP plan is registered. A similar practice is followed with conventional subdivisions. Mr Cowley estimated the headwork charges at $224,787. Mr Cowley therefore determined his valuation at:
Gross Land Value (Stratum Apportionment)
99.84% of 10790m2 @ $115 per m2 = $1,238,865
Less Development Costs = $ 172,115
Add Headworks charges = $ 224,787
Therefore, unimproved value = $1,291,537
In adopting his valuation, Mr Cowley has sought to compare the subject with the sales on a "like with like" basis. For this reason he compared the subject as a "filled site" as his Sales 1 and 3 required no filling, while Sale 2 needed to be filled.
In comparing the subject with his Sale 1, Mr Cowley allowed for the larger area of the sale, and its lower density as Residential A zoning for approved development units. In comparing the subject with his Sale 2, he allowed for the impact of water frontage upon the subject as Sale 2 has no water frontage. He also noted that Sale 2 was set back from Bermuda Street with the improvements apparently designed to minimise any impact from passing traffic noise. In respect of his Sale 3, he noted that was a smaller site and was in globo land for future conventional residential development of 9 houses, which consequently reflected a higher per square metre rate than the subject.
In seeking to assist the Court in understanding the nature of the property market during the period of the valuation, Mr Cowley provided a graph of the average sale prices of vacant residential lots in the locality of Clear Island Waters between 1992 and 1996. (Exhibit 9). The graph showed the average sale prices have steadily risen from $130,000 (1992) to $230,000 (1995), and since fluctuated between approximately $220,000 and $190,000 until the end of 1996. This reduction since 1995 was attributed by Mr Cowley to a reduction in the average size of lots now being developed. However, while noting the steady rise in the average sales, Mr Cowley has merely adopted the sales evidence at the date of the sale. He saw the evidence of the graph as merely demonstrating that the sales evidence adopted was at least fair to the appellant, and that his sales evidence had not selectively chosen higher sales prices out of step with the market trends. Mr Jewell challenged the relevance of comparing sales of residential lots with sales of sites for development, in view of the long lead times, and therefore risk factors, inherent in the latter.
In the matter of the provision of sewerage services to the subject, Mr Cowley had noted the existence of the 30 unit development, and had assumed that sewerage services were available to the subject. Mr Jewell advised that in order to provide the sewerage service, the appellant had been required to provide a pumping station as part of the development costs of the 30 lots. Mr Cowley agreed that if the pumping station was external to the site, the provision of sewerage services as assumed would be correct. However, if the pumping station was on the subject then he would need to adjust his valuation to allow for those costs. This follows the requirements of the Valuation of Land Act and the Mixed Uses Development Act which require the parcel to be valued as a single parcel, considering the surrounding development to be in place.
In considering further the matter of the sewerage pumping station, a statement was supplied by the appellant that the costs of installation and upgrade involve:•Initial installation $ 48,000
•Upgrade 1995 $ 6,221
•Upgrade 1996 $ 3,155
Because of misplacement of official records by the Gold Coast City Council plumbing and drainage service branch, the appellant supplied details from its own records of Construction Drawing No 80303-202-2, which showed the location of the pump site. This was then translated onto a map of the property boundaries of the subject by the respondent. The pumping station was found to lie some 180 metres west of the subject, but within the area of the balance of the Cypress Gardens Retirement Community and Nursing Centre.
In view of the previously established agreement that the subject represented only 12% of the total development, the respondent claims that pro rata allowances of $5,760 (1 January 1995) and $6,507 (1 January 1996) should be provided for in the valuations. The appellant argues that the purpose of installing the sewerage pumping station was principally to service the future independent unit development, and therefore the full cost of the facility should be allowed against the subject.
There was no evidence provided in respect of the current use of the remainder of the total area of development outside the subject area. While the sewerage pumping station is external to the subject, it is within the total area of the overall development, and was developed principally to service future units within the overall Cypress Gardens Complex. As such I see it as a reasonable cost of development for the overall retirement community and nursing centre, and an apportionment of 12% as proposed by the respondent would seem reasonable. From the evidence of aerial photographs of the area provided to the Court, it would appear that other units in adjoining areas are also utilising the sewerage pumping station.
In the relative quantum of the valuation, I believe the cost of $5,760 should be allowed for the valuation of 1 January 1995, and $6,507 for the valuation of 1 January 1996.
Determination of the Valuation:
Both parties have quite properly sought to compare the subject with sales in the vicinity on a "like with like" basis, with all external infrastructure in place. The respondent has sought to compare the subject on a filled and developed basis as a site upon which to build, thus also allowing for the development costs involved in the revetment wall, the costs of building the road, and filling of the subject. The appellant has compared the subject, only considering filling generally, with similar sales of land, and adopting an unimproved rate of $60 per square metre. I note that Mr Cowley's gross land value determination at $115 per square metre was assessed from his sales as follows:Sale Area Fill Needed Applied rate Comparison of
per m2 rate per m2
Sale 1 3.093ha No $ 94.00 Inferior as larger
and less density
Sale 2 1.115ha Yes $ 75.00 Inferior as no
water frontage
Sale 3 3877m2 No $ 155.00 Superior as
smaller
By comparison, Mr Jewell has considered his sales:
Sale Area Fill Needed Applied rate Comparison of
per m2 rate per m2
Sale 1 1.497ha No $ 130.00 Much superior as
no fill needed
Sale 2 2.836ha No $ 99.00 Superior as no
filling needed
In seeking to compare like with like, if I adopt Mr Jewell's approach I must make some further allowance for the difference between his two sales as land not requiring filling, and the subject, which it is agreed, required major filling. I also note that his Sale 2 (2.836ha) has some similarity per unit rate at $99 per square metre with Mr Cowley's Sale 1 (3.093ha) at a unit rate of $94 per square metre. Neither of those sales require major filling. Mr Cowley's Sale 1 has a development density of 13 units per hectare while Mr Jewell's Sale 2 has a development density of 32 units per hectare. I also note that Sale 1 (Cowley's) and Sale 2 (Jewell) are both nearly three times the size of the subject, and therefore likely to attract a less rate per square metre.
I also note that Mr Jewell's sales occurred on 14 June 1996 (Sale 1) and 30 June 1997 (Sale 2), the latter occurring well after the date of issue of 24 June 1996. For this reason I place lesser emphasis on Mr Jewell's Sale 2. In coming to this conclusion I note precedent in RG McMurray v. The Valuer-General (1983)(LAC) 9 QLCR 35, where the Land Appeal Court said at p. 36:"As is stated in the decision handed down by the learned President, the Land Court, and on appeal the Land Appeal Court, can only consider the primary production activities carried on on the land between the date of valuation (31 March, 1980) and the date of issue of the valuation (12 February, 1981). We are unable to have regard to anything that has occurred since that date. "
This principle was also followed in KP and RD Weisenberger v. The Valuer-General (1978) 5 QLCR 125, where the President said at page 127:
"I agree with the submission of Mr Butler, Counsel for the Valuer-General, that my jurisdiction in so far as circumstances relating to the subject valuation are concerned does not extend in point of time to uses beyond 28th October 1976 the date of issue of the valuation. "
In seeking also to compare like with like I note that Mr Cowley's Sale 2 has no water frontage, unlike the subject which provides a view over water for 16 of the 30 units on the subject. I take Mr Jewell's advice that it would be difficult to describe Boobegan Creek as a "real thing of beauty", but it is nevertheless well established that people appear to place some premium upon having a view across water, and in particular to have direct access to the water. From the aerial photograph provided as evidence by Mr Jewell, the location adjoining the water would appear to provide a pleasing aspect to the subject. For this reason I would tend to agree with Mr Cowley that his Sale 2 is clearly inferior to the subject, and it also required filling.
In seeking comparison with Mr Cowley's Sale 3, I note it is less than half the area of the subject and its rate per square metre would be correspondingly higher than the subject. In comparing Mr Jewell's Sale 1 I note it is similar in size, but required no filling and is therefore superior. I note also that Mr Cowley is seeking to compare the subject as a filled site, and Mr Jewell's Sale 1 is probably superior mainly because of its closer proximity to Robina Shopping Centre. In summary, I feel the value as a filled site is less than $130 per square metre but likely to be more than $94 per square metre.
It is also noted however that it is unclear whether Mr Jewell's Sale 1 at $130 per square metre may also have included some headworks charges. On this basis I believe Mr Cowley's starting point as a filled site at $115 per square metre has not been discredited.
Relativity:
In seeking to compare relativity between the subject and Mr Jewell's Sites 3 and 4, I note that Site 3 (4.09ha) and Site 4 (14.74ha) are both much larger than the subject. Site 3 has an applied unimproved value of $83 per square metre, and Site 4 has an applied unimproved value of $52 per square metre. Neither comparison assists me greatly on any direct comparison basis, mainly because of the large difference in size between the properties. I also note that Site 3 has no water frontage which I believe would impact the valuation.
Valuation of the Stratum Lots:
I note that Mr Cowley has adopted the direction of the Mixed Use Development Act 1993 where in valuing Stratum Lots, Section 132(1) states:
"132.(1) In valuing land comprised in a stratum plan, the chief executive (valuations) must follow the following steps-
(a)the land comprised in the stratum plan must be first valued as though the land were unimproved and a single parcel of land in a single ownership even though the land may consist of 1 or more stratum lots;
(b)The unimproved value of the land in the stratum plan must then be apportioned between the stratum lots in the stratum plan according to the unimproved value proportions allocated in the management statement. "
In interpreting the proportions allocated to each stratum lot, Mr Cowley has adopted the voting entitlements noted on the rear of Survey Plan MCP 103098. Both parties agree this practice is the correct interpretation of the intentions of the "management statement" as required under the Act. Mr Cowley's adoption of the stratum apportionment of the subject as 1216 entitlements of a total of 1218 entitlements or 99.84% is correct.
Costs of Development:
Following further discussion it is now agreed by the parties that the costs related to the portion of the revetment wall for the subject was $17,000. It is also agreed that the portion of road construction costs related to the subject was $8,100, and the volume of fill to the site was 29,700 cubic metres. While Mr Ashcroft felt that the total fill beneath the road was more than 27,450 cubic metres, in view of any lack of evidence to the contrary I will adopt that figure. Matters still in dispute in respect of the fill relate to the unit rate to apply to the filling of the site, and the unit rate to apply to the filling under the road.
Filling of the Site:
Mr Cowley has applied a uniform rate of extraction and compaction for the fill at $4.50 per cubic metre. He based this on the understanding that the fill was extracted from the creek by pumping the sand into the subject area, and paying royalties to the Department of Harbours and Marine. He also claims that where part of the fill was acquired from the engineered lake area, the cost should be the same within the overall development area.
As noted earlier however the method of extraction and transporting the fill were different for the two extraction sites. The dredging and pumping operation tends to be less reliant on physical intervention by operators, than the bulldozing and trucking from the engineered lake. I find it difficult to accept that costs would be the same, and I accept Mr Ashcroft's advice that the costs of obtaining fill from the engineered lake was $10 per cubic metre. Accepting Mr Ashcroft's advice that fill from the two sources was obtained on a 50-50 basis, I accept an overall fill rate for the site at $7.25 per cubic metre.
I note Mr Jewell's opinion that as the fill was no longer available for extraction from the two "on site" areas as at the dates of valuation, therefore he concludes the requires fill should be determined at the current rate of transporting external fill at $15 per cubic metre. In this matter I agree with Mr O'Connor who felt that such an approach was "rather a circular argument".
I note in this respect that the method previously adopted by this Court has determined the costs to apply for fill to be assessed as costs on the contractor's price applicable for the whole area. See Valuer-General v. Alfred Grant Estates (Surfers Paradise) Pty Ltd (1966) 33 CLLR 1 at p. 6.
The inference from that principle is that it is also proper therefore to assume that the fill should be determined as if it were obtained from the creek and the engineered lake, even though such could not actually occur as at the date of valuation. The proper course would be to adopt the source and the cost of the contractor's costs, and update the costs to the date of valuation. I am therefore unable to accept Mr Jewell's opinion in respect of estimating the costs at the current rate of $15 per cubic metre.
In arriving at this view I note in particular the findings of the Land Appeal Court in Valuer-General v. Alfred Grant Estates supra, which said at page 8:
"It would not seem reasonable to us, in calculating the cost to a subdivider of developing one residential site, the development of which involved filling and top-dressing, carried out as part of a scheme of development, to envisage that site alone as unfilled while all around it were filled sites, and to base costs of filling the block upon bringing plant and equipment and labour specially to that site for the sole purpose of filling it and then departing. If it is unreasonable in the case of a small unit, it seems equally unreasonable in the case of a larger area such as we are dealing with here. Accordingly, we think the cost of filling and top-dressing the appeal land should be based on actual cost which in this case showed no variation between the date when the work was done and the relevant date. "
This was also followed in AMP Society v. Chief Executive, Department of Lands (AV93-333), 20 May 1994, unreported, at page 16, where the learned Member noted:
"I can only assume that, as opposed to the facts relevant to the Alfred Grant matter, the contractor's costs here would have varied, not only by inflationary forces, but the requirement now for the payment of royalty to conduct such a pump filling operation. I will therefore allow the filling costs as assessed by Mr Crawford on the engineering advice he obtained. "
As the filling operations on the subject occurred in 1992, it is appropriate to update those actual costs by a suitable factor to the relevant dates of valuation. Using industry indices provided by the "Building Price Indices for Civil Works" for Queensland, the following indices are noted:
•1992- 99.87
•December Quarter 1994 - 113.16
•Multiplying factor
1992 to 1 January 1995 - 1.13307
•Updated costs per cubic metre
for fill = $8.21
• Costs of filling the subject to 1 January 1995
29,700m3 x $8.21 = $243,837
As the Chief Executive has maintained the same valuation for both 1 January 1995 and 1 January 1996, I will adopt the same updated costs for both valuations.
Filling under the Road:
In respect of the fill below the road it is noted that the parties agree that, as sand fill from the creek and engineered lake was unsuitable, it was necessary to import fill from external sources. It is also agreed that such fill under the road would require a different composition to the other fill over the subject. On this basis I accept Mr Ashcroft's advice that imported fill for the road cost varied between $12 and $13.50, and adopt $12 per cubic metre at 1992.
If then updated to the date of the valuations, I note that costs would be $12 x 1.13288 = $13.60 per cubic metre. The cost of fill under the road to 1 January 1995 is: 12% x 24,750m3 by $13.60 per m3 = $40,392.
The Impact of Headworks:
The requirement of the Albert Shire Council for contributions to headwork charges is defined in the Albert Shire Planning Scheme for water supply and sewerage services under Section 16.13.2:
"16.13.2 In the case of every application made for approval to subdivide an allotment to which this section applies, the application shall not be approved except subject to the following conditions, .... namely:
(3)that the applicant shall contribute towards the cost of the provision of a water supply service to the said land (other than by reticulation) by way of paying to the Council a contribution towards the costs (whether incurred before or after the making of the application) in connection with the construction of water supply headworks and water supply works external; and
(4)That the applicant shall contribute towards the cost of the provision of a sewerage service to the said land (other than by reticulation) by way of paying to the Council a contribution towards the costs (whether incurred before or after the making of the application) in connection with the construction of sewerage headworks and sewerage works external. "
Clearly the headwork charges relate to works external to the subject, and as such are charges required in order to ensure that an effective water supply and sewerage infrastructure is available to service the subject. In respect of whether the headwork charges relate to the land or the buildings erected upon the land, I turn to Section 16.13.5 of the Scheme which says:
"16.13.5 Where the Council has imposed as a condition of approval that the applicant shall contribute towards the cost of the provision of water supply and the cost of provision of sewerage as herein before provided, the Council shall not endorse its approval under seal of any plan of survey of subdivision intended for registration by the Registrar of Titles to which such condition of approval applies, until the applicant shall have complied with such condition in the manner hereinbefore provided. "
That direction relates to the sealing of the plan of survey of the land, which therefore links the requirements for contributing towards headworks as a condition of the subdivision of the land. In seeking to ascertain the quantum of those charges it is also noted that the Council links the contribution to the proposed type and quantity of buildings to be erected upon the subject, through a Council by-law as shown in Mr Cowley's submission (Appendix 8).
In considering the impact of such a by-law I note there is some parallel with the decision of the Land Appeal Court in The Valuer-General ats Queensland Club (1990-91) 13 QLCR 207, where the Land Appeal Court dismissed the appeal and upheld the decision of the learned President in the Land Court, who said at 13 QLCR at page 205:"I have considered all of the evidence and I find that in arriving at an unimproved value of the subject land, regard must be had to all of the relevant provisions of the Town Plan including the provisions of Section 22. While the intent of Section 22 may well be to conserve buildings which become part of the Heritage of the City of Brisbane, Section 22(8) places a restriction on how a person may use the land upon which the historic building is erected and the restriction runs with the land whether the historic building remains or not. "
The intent in that case was that while the actual historic preservation restriction related to the building upon the land, the provision of the Town Plan restricted how a person may use the land. In the current case, while the quantum of the headworks charges is determined in accordance with the use and quantity of buildings to be constructed upon the subject, the actual headworks requirements under the Town Plan relate to the future use of the land.
In order to understand whether the headworks charges which relate to services external to the land, should be added to the value of the land, as suggested by Mr Cowley, I turn to the Land Appeal Court in PH Clough v. The Valuer-General
(1981-82) 8 QLCR 70 where the Land Appeal Court found at page 75:"We think it beyond doubt that what has to be valued is the subject parcel of land viewed as if the improvements thereon, visible or invisible, never existed but that otherwise the parcel was situated in the community (and environment) with the amenities and facilities that had grown up around it as at date of valuation. "
This was also followed in State Government Insurance Office v. The Valuer-General (1980-81) 7 QLCR 171, at page 180. The matter of the impact of headwork charges upon the valuation was also discussed in Riverside Drive Estate Pty Ltd v. The Valuer-General (1988-89) 12 QLCR 165. This was a matter involving an in globo value of subdivided lots in the City of Thuringowa. In that case the respondent argued at page 169:
"The Valuer-General accordingly submits that it is appropriate to add to the valuation of land the contributions made for headworks charges and approval costs especially as the evidence is that land in respect of which the charges have been paid would fetch more in the market place than neighbouring land for which they have not been paid and as such add to the unimproved value of the land. "
The appellant in that case argued that anything that is external to the subdivided area should be excluded from the valuation. He also argued that it is at least not clear whether such external charges should be applied to the valuation and, as a matter of statutory interpretation, where ambiguity or lack of clarity exists, the matter should be construed in favour of the appellant. The learned Member considered the matter of clarity of the intentions and found at page 169:
"Having considered the submissions on the matter, and giving Section 11D(i) of the Act its plain and natural meaning, I am of the opinion that it is appropriate for the Valuer-General to add to the englobo value of the land the contributions made by the owner of the subdivided land for headworks charges and approvals. They certainly add to the value of the land and can be distinguished from works carried out by the owner of the land which cause enhancement in the value of the subdivided land, which has to be disregarded. "
The impact of headworks charges was again discussed at some length in Galli Developments (Queensland) Pty Ltd v. Chief Executive, Department of Natural Resources (V95-05/6 and AV95-306) 23 May 1996, unreported. The learned Member at page 18 noted that headworks charges had been levied by the old Gold Coast City Council in two stages. The first component at the time of rezoning, and the second component at the time of sealing of the survey plan, and were calculated having regard to the type of allotments produced. There was some difficulty in determining the actual quantum of the headworks charges, arising from a lack of detail supplied to the Court on the method of calculating the charges. However the learned Member summarised his opinion on that matter by noting at page 22:
"I will adopt $45,000 as being the headworks allowance which would be added to the raw land value for each valuation.
The allowance for headworks should be based, as I have said, on what the purchaser will save or not have to spend in purchasing a parcel of land in respect of which headworks charges have already been paid. "
The same principle was also followed in Kern Land Pty Ltd v. The Valuer-General (V91-706) 23 April 1993, unreported, where the learned President said at page 13:
"I am in agreement with the conclusion reached by the learned Member in the Riverside Drive Estate case and find that in this matter the Valuer-General has applied the section of the Act correctly. I agree with the conclusion reached by the learned Member when he said:
`I am of the opinion that it is appropriate for the Valuer-General to add to the in globo value of the land the contributions made by the owner of the subdivided land for headworks charges and approvals. They certainly add to the value of the land and can be distinguished from works carried out by the owner of the land which causes enhancement in the value of the subdivided land which has to be disregarded.' "
While those matters dealt with residential subdivided land, I believe the principle is also applicable to land developed for either group title or mixed stratum plan purposes.
In the matter of the subject land, the external services in the community surrounding the subject as at the date of valuation are taken to include the infrastructure to support the subdivision of the subject. Such infrastructure is reflected in the headworks charges applicable under the Council by-law. Accordingly, the charges to support such headworks are a matter which should be considered as part of the value of the subject, and therefore added to the unimproved value as determined by Mr Cowley. In arriving at the quantum of those headwork charges the only figures are those supplied by Mr Cowley at $224,787 which, in the absence of any evidence to the contrary, I accept for the purpose of determining the unimproved value.
Findings:
As required under Section 33 of the Valuation of Land Act, the onus of proof rests with the appellant. I find that the appellant has not established that the Chief Executive's estimate of quantities are incorrect, however the appropriate rates per cubic metre should be amended as noted. The unimproved value should be determined at 1 January 1995, as follows:
Gross land value (stratum apportionment)
99.84% x 10790m2 @ $115/m2 = $1,238,865
Less
Development costs
Filling of site = $243,837
Filling under road = $ 40,392
Revetment wall = $ 17,000
Proportion of
road construction = $ 8,100
Internal sewerage
pumping station = $ 5,760
Total costs of
Development = $315,089Balance = $ 923,776
Plus
Headwork charges = $224,787
Nett Unimproved
Value = $1,148,563Adopt = $1,148,000
Conclusion:
Having considered the whole of the evidence my decision is as follows:
AV96-476 -The appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of Lots 1 to 30 on BUP 103041, over Lot 1 on MSP 103115 is determined at One million, one hundred and forty-eight thousand dollars ($1,148,000).
AV96-477 -The appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of Lots 1 to 30 on BUP 103041, over Lot 1 on MSP 103115 is determined at One million, one hundred and forty-eight thousand dollars ($1,148,000).
(NG Divett)
Member of the Land Court
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