The Proprietors Voyager Resort Limited v Department of Natural Resources
[1999] QLC 7
•12 February 1999
|
BRISBANE
12 FEBRUARY 1999
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 17205/10000
Local Government: GCCC-Gold Coast
(AV98-129).
The Proprietors Voyager Resort Limited
v.
Chief Executive, Department of Natural Resources
(Hearing at Coolangatta)
D E C I S I O N
Background:
This matter relates to a property located at the corner of Old Burleigh Road and Elizabeth Avenue, Broadbeach, Gold Coast, and described as Lots 1 to 62 on Building Units Plan 6459, Parish of Gilston. The subject has an area of 2,070 m² and is zoned "Resort Residential 2" under the Town Planning Scheme of the Gold Coast City Council of 11 February 1994, and effective at the date of valuation of 1 October 1997. The subject is located about 200 metres south-east of the Broadbeach Post Office, in a tourist-oriented area, adjoining the Oasis-Broadbeach Shopping Centre to its north. The subject is about 150 metres south of the Broadbeach Mall, about 500 metres north-east of the Pacific Fair Regional Shopping Centre, and about 400 metres due east of Jupiters Casino. The key issues are the nature of the land, comparable sales, relativity, the impact of planning and the impact of time sharing arrangements.
The subject is an irregularly shaped corner parcel of low elevation, with an approximate 40 metre frontage to Old Burleigh Road, and 56 metres frontage to Elizabeth Avenue. To the east of the subject is Pratten Park (Park Reserve R990) which adjoins the ocean foreshore. There is good vehicular and pedestrian access to the site from both Old Burleigh Road and Elizabeth Avenue, both of which are bitumen sealed with concrete kerbing and channelling. All services are available, and the subject has good views and aspect towards the ocean front which is about 125 metres to the east. The subject currently has 360° views, particularly from above level 3, below which views are partially obstructed by coastal zone she-oaks behind the ocean beach. The views extend to the south towards Coolangatta, with some minor obstructions from some high-rise buildings.
On 2 March 1998 the Chief Executive, Department of Natural Resources, issued a valuation of the subject at $3,040,000. Following an objection the Chief Executive confirmed that valuation on 15 April 1998. The appellant has now appealed that figure claiming the unimproved value should more properly be $2,600,000. An unsuccessful preliminary conference was held with the parties on 24 September 1998, and the matter was heard on 5 November 1998.
Mr G Heaton, Body Corporate Company Secretary, represented and gave evidence for the appellant. Mrs T Johnson, Crown Law Legal Officer, appeared for the respondent, calling evidence from Mr SRS Montgomery, the departmental registered valuer responsible for determining the valuation.
The Evidence:
(1) The Nature of the Land -
The Voyager Timeshare Resort (Circa 1983) is a 15-storey development comprising 62 units, 60 of which are used for high-rise tourist accommodation, and the remaining two units are used for manager's residence and office.
Mr Heaton argues that the location of the adjoining Oasis Shopping Centre to the north is a distinct detriment to the value of the land. He concedes that such close proximity to shops, the monorail link to the Casino, an international hotel, restaurants and a tavern are all features which provide convenience to residents of the subject. However, he argues that increasing and piercing noise levels over recent years now severely impacts the amenity of the immediate area.
As a result of relaxed trading arrangements for tourist facilities in the restaurants and tavern, there is a constant barrage of noise emanating from those premises until about 5 a.m. in the morning. That noise is further increased by the aggressive loud language of intoxicated patrons as they leave the establishments. Much of this noise is associated with a car park near the Broadbeach Surf Club opposite the subject, on the opposite side of Old Burleigh Road. The erratic driving and "wheel spinning" of patrons' vehicles is often reported by Voyager residents, and complaints have been lodged with the respective authorities. Over 2,000 petitions were lodged by unit owners of Voyager Resort Limited to a Liquor Licensing Commission hearing in February 1998, protesting against the increase in liquor trading hours. The noise is generated from three levels in the tavern site.
Mr Heaton argues that the area of the subject is a special locality (about 400 metres by 300 metres) extending from the Broadbeach Mall in the north to the Broadbeach school site in the south, and from the Gold Coast Highway on the west to the ocean front in the east. Because of the restricted nature of that area, and its strategic location, he argues that some of the rules applying in other market areas do not apply. On this basis he argues that there is really no significant additional value which attaches to the site as a result of its being esplanade fronting or on a corner. Mr Heaton cites that the developer of the "Phoenician" complex in the south-western corner of that special area, in fact chose that site in spite of having to demolish a Woolworths Supermarket, and because of its location on the Gold Coast Highway, rather than any proximity to the ocean frontage. However, he concedes that availability of sites also contributes to site selection.
Mr Montgomery disagrees with that view, and has sought to balance, in his opinion, the respective proximity to the ocean and many of the commercial facilities, against the impact of noise and traffic. He argues that views of the ocean and prevailing offshore breezes also contribute to the attractiveness of the subject.
(2) Planning
Mr Montgomery argues that the current zoning of the subject as "Resort Residential 2" land clearly identifies that land as different to the "Resort Residential 1" land to its south. Under the "Resort Residential 2" zoning of the Town Plan developments with a density of one bedroom per 33 m² are allowed as of right, with an increased density of one bedroom per 25 m² subject to consent of Council. The maximum height of any building in that zone is 15 storeys as of right, and 30 storeys subject to consent of Council. The current building on the subject has 15 storeys, and 62 units (both the maximum as of right permissible).
The subject land is also situated within the tourist accommodation area of the current Strategic Plan of the Council. Such areas are designed to provide for tourists in a holiday atmosphere, and the preferred dominant land use is for multi-unit buildings, international hotels, resort hotels and motels. The subject is covered in Precinct 4 (Gold Coast Highway and Charles Avenue) of Development Control Plan No. 5 – Broadbeach. Intentions under that plan are for the development of accommodation and entertainment and other services for tourists. Development control standards are as outlined above.
By comparison, "Resort Residential 1" zoning is designed to accommodate both tourists and permanent residents, with a preferred dominant land use as multi-unit buildings of varying densities. Non-residential development is limited to local services including entertainment, recreation and services for tourists. The key difference between the two zones is the as of right ability to develop an international hotel facility. However, it is agreed that under the new Integrated Planning Act there is some further flexibility for Council to consider suitable developments, including an international hotel, even in the "Resort Residential 1" zone.
(3) Relativity –
Mr Montgomery argues that in determining the unimproved value of the subject, he has maintained the former relativities with surrounding properties in the Broadbeach, Surfers Paradise and Main Beach areas. Those original relativities were established by a very experienced valuer after a very thorough examination. The relativities have stood the test of time over the last 20 years, and there have been no other appeals against those relativities in the current valuation.
Mr Heaton, by comparison, argues that the per m² values demonstrated by the sales of the respondent, in fact do not represent a fair comparison of those properties. He notes, for example, the following rates:
| Property | Area | Rate per m² | Rate per Bed |
| Sale 1 | 2,155 m² | $1,229 | $40,753 |
| Sale 2 | 1,032 m² | $1,100 | $36,612 |
| Sale 3 | 2,056 m² | $1,027 | $34,040 |
| Sale 4 | 1,548 m² | $969 | $32,608 |
| Sale 5 | 9,073 m² | $1,030 | $34,000 |
| Subject | 2,070 m² | $1,469 | $49,032 |
An analysis of those sales is discussed later. However, Mr Heaton argues that, because of the special nature of that localised area, there is no evidence to support that the subject should have a higher rate per m² than, say, Sale 1 (The Ritz development). Mr Heaton argues that Sale 1 has similar views and proximity to the shops and other facilities at the Oasis Shopping Centre and the Burleigh Beach Mall, but is further removed from the noise intrusions impacting the subject. He also argues that the corner location of the subject brings no special value to the subject.
In seeking further guidance as to whether proximity to the ocean and corner locations do, in fact, impact the value of lands, Mr Montgomery provides the following additional sales of duplex lands to support his conclusions:
Table 1:
| Locality | Address | Location | Sale Price | Loading |
| Mermaid Beach | 17 Hedges Ave | North-east corner lot | $935,000 | Plus 25% |
| 31 Hedges Ave | North-east corner lot | $1,000,000 | Plus 33% | |
| 29 Hedges Ave | Corner lot | $1,050,000 | Plus 40% | |
| 167 Hedges Ave | Inside lot | $750,000 | Nil |
Table 2:
| Locality | Address | Location | Sale Price | Loading |
| Mermaid Beach | 36 Alfred Ave | Inside lot near Highway | $228,000 | Minus 15% |
| 8 Hilda Street | Three lots from Esplanade | $290,000 | Plus 9% | |
| 14 Tamborine Ave | Midway between Esplanade and Highway | $267,000 | Nil | |
| Miami | 6 Marine Pde | Esplanade lot | $560,000 | Plus 100% |
From the above sales Mr Montgomery concludes that when comparing inside lots to esplanade, and direct ocean fronting lands, there is an approximate 100% increase from inside lot values to esplanade lots, and a further 50% increase to ocean-fronting lots. He also seeks support from a sale of a corner lot at 3566 Marine Parade at Main Beach, Southport, which represents $1,585 per m² in May of 1998.
Mr Montgomery concedes that the high-rise development at Main Beach has a higher density, but he argues that the potential is similar when compared to the Mermaid Beach areas. Mr Montgomery concedes that the duplex developments (maximum three storeys) at Mermaid Beach are different to the high-rise developments at Broadbeach, but argues the same trends would also exist at Broadbeach. He confirms also that the Mermaid Beach lots were small, down to areas of some 405 m², and therefore may represent a higher rate per m² because of this smaller size.(4) Comparable Sales -
Mr Heaton provides no sales to support his estimate of the unimproved value, seeking to discredit Mr Montgomery's analysis of his sales. Mr Heaton argues that the sales provided indicate an inflated market which is already showing signs of overheating.To support his valuation, Mr Montgomery provides the following comparable sales:
·Sale 1 – (6-10 Phillip Avenue, Broadbeach – Lots 10 to 12 on B83824 and Lots 1 to 4 on BUP2577). This is an inside lot of area 2,155 m², which is regularly shaped and zoned "Resort Residential 1". Access and services are similar to the subject, and views from Sale 1 are restricted up to level 5 by a building on the esplanade directly to the east. The sale is 100 metres south of the subject. Subsequently the sale has been developed as "The Ritz" multi-unit building of seven storeys comprising 29 units (56 bedrooms). Overall the sale is seen as inferior on a per m² basis due to its lesser views to the east, its inside location, its further distance to the Mall and beach, and its less flexible zoning.
The sale sold as two properties in September and July 1997 for a total of $2,648,950, and was analysed at $1,229 per m² ($40,753 per bedroom). Under its zoning the as of right (AOR) height is 15 storeys, and with consent, 30 storeys. The AOR density is one bedroom per 33 m² (65 beds), and with consent, one bedroom per 25 m² (86 beds).
·Sale 2 – (13-15 Anne Avenue, Broadbeach – Lots 20 to 21 on B83824). This is a 1,032 m² almost square inside parcel zoned "Resort Residential 1", and located 150 metres south-west of the subject. Access and services are similar. The sale has now been developed as "Santa Anne" high-rise development of five storeys. The previous vendor had purchased the land in June 1996 for $760,000. Overall the sale is seen as inferior on a per m² basis due to lesser views, further distance from the ocean and the Mall, and less flexible zoning.
The sale sold in February 1997 for $1,135,000, which was analysed at $1,100 per m² ($36,612 per bedroom). The AOR height is 15 storeys, and with consent, 30 storeys. The AOR density is 33 m² per bedroom (31 beds), and with consent, 25 m² per bedroom (41 beds).
·Sale 3 – (Corner of Surf Parade and Anne Avenue, Broadbeach – Lots 1 to 14 on BUP632). This is a 2,056 m² near rectangular inside parcel, zoned "Resort Residential 1", and located about 200 metres south-west of the subject. Access and services are similar. The sale has now been developed as the "Aruba Surf" low-rise multi units of three storeys in height and marketed as tourist accommodation. Overall the sale is inferior on a rate per m² basis, for similar reasons to Sales 1 and 2.
The sale sold in October 1997 for $2,110,500, and was analysed at $1,026 per m² ($34,040 per bedroom). Its AOR height is similar to Sales 1 and 2, and its AOR density is 62 bedrooms, and 82 bedrooms (with consent).
·Sale 4 – (9-13 Margaret Avenue, Broadbeach – Lots 1 and 2 on BUP3979, and Lots 48 and 50 on B83827). This sale is an inside lot of area 1,548 m², is zoned "Resort Residential 1", and is located about 300 metres south-west of the subject. Access and services are similar. The sale has a southerly aspect towards the Broadbeach State School oval. The sale has since been developed as the "Island Beach" low-rise multi-unit building of three storeys for tourist accommodation. Overall the sale is seen as inferior for similar reasons as the other sales.
The sale was sold in March 1997 for $1,500,000, and was analysed at $969 per m² ($32,608 per bedroom). Its AOR height is similar to the subject, and its density is 46 bedrooms (AOR), and 61 bedrooms (with consent).
·Sale 5 – (2623-2632 Gold Coast Highway, Broadbeach – Lots 7 to 15 and 18 to 23 on B83829). This is an irregular inside lot of area 9,073 m², zoned "Resort Residential 1", and located about 500 metres south-west of the subject. Access is available to the highway, Alexandra Avenue and Surf Parade. Services are similar. The sale is currently vacant and has a westerly aspect to the highway and Pacific Fair. Plans are proposed for a $120,000,000 complex of four towers comprising residential units and a hotel of height from 10 to 20 storeys. A total of 255 hotel suites and 240 residential units are proposed. The sale is inferior on a per m² basis for similar reasons as the other sales.
The sale sold in March 1997 for $9,350,000, and was analysed at $1,030 per m² (AOR $34,000 per bedroom). The former vendor purchased the site in April 1994 for $5,575,000. Under the zoning the height controls are similar to the subject, and the density controls are 275 bedrooms (AOR) and 362 bedrooms (with consent).
(5) Highest and Best Use –
The matter of highest and best use is raised as a key component of the comparisons of sales which rest upon the increased AOR flexibility of the "Resort Residential 2" zoning of the subject. Under that zoning, there is an increased potential to redevelop the subject as an international hotel. Mr Montgomery has valued the subject at the relevant date for its optimum use to be for high-rise tourist accommodation purposes.
Mr Heaton argues that it is not feasible for the respondent to allow for any such higher potential value as a redevelopment for any international hotel, due to the nature of its "time-sharing" ownership. Mr Heaton argues that each of the current 60 units is subject to 51 weekly unit owner arrangements, giving theoretically in excess of 3,000 owners. Some owners have multiple weeks, up to 10 or 12 weeks, in a year.
Many of those owners are now aged people on fixed incomes, and the capacity to get all of those owners to agree on any further redevelopment would be exceedingly difficult. In fact, he argues that at present there are over 200 time-share weeks where the owner cannot even be located. Mr Heaton argues then that, because of the time-sharing nature of Voyager Resort Limited, the additional potential of "Resort Residential 2" cannot be realised, and should not apply to the subject, and it should be valued as if it had a similar zoning to the sales provided.
Decision:
(i)The Nature of the Land –
I turn first to the nature of the land and note that the respondent places considerable weight upon the uninterrupted extent of ocean and coastline views from the subject. While Mr Heaton argues that ocean views in fact tend to be overestimated, that would appear to contradict the history of why people come to the Gold Coast to live or holiday. It is the proximity to, and presence of, the ocean and beaches which gives the region its very attractiveness.
It is agreed that there are many high-rise developments that currently experience 360° views, interrupted only occasionally by other high-rise buildings. However, those uninterrupted views, unless the site has direct ocean or esplanade frontage, are subject to new developments occurring closer to the beaches. The attractiveness of direct aspect to the water has been the very history of the development of the Gold Coast. For this reason I accept Mr Montgomery's conclusion, in respect of views, that the subject has a superior aspect over the sales.
In the matter of the location and proximity to the commercial and hotel areas of the Oasis Shopping Centre and the Mall, I agree that the subject is nearer than say "The Ritz". However, that small closer distance would have little impact, in my opinion, upon the residents of either property. By comparison, however, I feel the very closeness of the subject to the adjoining tavern sites is likely to be a serious problem to the residents in view of the unpleasant noise that emanates from those taverns during the evening hours. Certainly lack of sleep is a serious public health issue, and normally Governments seek to ensure that a sensible curfew exists for adjoining residents. Unfortunately for the residents of the subject, the commercial interests of tourism would appear to have been afforded precedence in this matter. The associated noises from the public car park provide no comfort to the residents of the subject.
While Sale 1 (The Ritz) would also suffer some noise intrusion, its level of discomfort would be less, as noise intensities decline in an exponential manner, decreasing as the square of the distance from the source. On balance, I believe the subject would have greater noise intrusion than any of the sales, except possibly Sale 5, which would be adversely impacted by traffic noise of some 100,000-vehicle movements per day along the Gold Coast Highway.
(ii)Planning Aspects –
There is no doubt that the current zoning of the subject as "Resort Residential 2" provides increased flexibility in respect of a higher use for, say, an international hotel. The Strategic Plan and the Development Control Plan both support that conclusion. Whether an owner of land in the "Resort Residential 1" zone was likely to get comparable consent approval from Council would depend upon the Council's attitude under the Integrated Planning legislation. However, Mr Montgomery's opinion that the AOR conditions of the "Resort Residential 2" zoning provide some additional "potential" for the subject is supportable.
(iii)Relativity –
In considering Mr Heaton's argument that the general pattern of valuations, common in other areas of the Gold Coast, does not occur in the small Broadbeach area, I note Mr Montgomery's evidence. I note also that both parties agree that sales of vacant lands along the esplanade are exceedingly rare. However, for Mr Heaton to rely merely upon a lack of suitable sales in the area, as his reason for claiming uniqueness, does not follow the logic of the property market. The history of the well-established relativities over the last 20 years would appear to suggest that the usual forces have been at play also in that area.
It is a well-established principle that corner locations generally add some additional value to a parcel because of increased access, privacy and views. Mr Montgomery's additional sales at Mermaid Beach would appear to support that conclusion. Likewise, direct access to the ocean front, or esplanade, would tend to increase the rate per m² for such parcels. To argue to the contrary, in the absence of other evidence, would appear inconsistent.
I accept that Mermaid Beach with its smaller size duplex sites, and Main Beach with its higher density high-rise developments, have different characteristics to the Broadbeach area. However, within those separate markets, similar forces are at play with potential purchasers of those sites. The simple statement is that if you want the best site you have to pay more, and buyers tend to be attracted to land on, or with direct aspect to, the ocean front. And they also tend to pay more for corner sites. On the evidence, I accept Mr Montgomery's conclusions.
(iv)Comparable Sales –
On the evidence there is noting to discredit the comparable sales of the respondent. I would tend to feel that Mr Montgomery has perhaps overestimated the benefits of the closer proximity of the subject to the Oasis Shopping Centre and Taverns, and underestimated the impact of noise. However, there was no quantifiable evidence to support a change from the former established relativities adopted by Mr Montgomery.
However, the evidence shows that noise levels have increased in duration (and annoyance) over the last few years since the relaxation of liquor trading hours. Perhaps the time is now due to reconsider the impact of that intrusion upon the value of the subject.
I note, for instance, that relativities are found to alter from time to time as noted in R and MM Barnwell v. The Valuer-General (1990-91) 13 QLCR 13, where the Land Appeal Court said at p.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 a 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."
The matter of change of relativity was also discussed in Gibson Investments Pty Ltd v. The Valuer-General (1978) 5 QLCR 223, where the Land Appeal Court said at p.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."
In respect of the use of sales of vacant comparable lands, Mr Montgomery has adopted the method generally favoured by the Courts. (See PH Clough v. The Valuer-General (1981-82) 8 QLCR 70 at p.76; NR & PG Tow v. The Valuer-General (1978) 5 QLCR 378, at p.381; and R & MM Barnwell v. The Valuer-General (supra) at p.17). Indeed, as noted by Mrs Johnson, the Land Appeal Court in Tow said at p.381:
" Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties."
While Mr Heaton argues that the sales adopted do not support the higher rate per m² applied to the subject, he would seem to ignore the matter of relativity which has been applied to all surrounding parcels. In the matter of relativity, it was noted in Barnwell (supra) at p.16 where the Land Appeal Court said:
" We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear property relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis."
In seeking whether there is a sound basis to the respondent's adoption of the former relativities, I am drawn to the findings of the High Court of Australia in Brisbane City Council v. The Valuer-General (1978) 140 CLR 41, where Gibbs J found at p.56:
" In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong practice, or made a serious error of fact, the presumption created by s.13(7) is rebutted."
The then s.13(7) is now s.33 of the Valuation of Land Act , which directs that any valuation determined by the Chief Executive is deemed to be correct unless proved otherwise. I note also that the onus of proof falls upon the appellant under s.45(4) of the Act. In the current matter the appellant has failed to prove that the former relativity is incorrect, and the appeal should fail on that point. The principle of upholding the former relativity in the face of any evidence to the contrary, was also followed in Hans and Else Grahn v. The Valuer-General (1992-93) 14 QLCR 327 at p.330.
(v)Highest and Best Use –
I move then to the matter of whether it is appropriate to value the subject as having some potential for higher use under its current zoning as "Resort Residential 2". Mr Heaton does not contest that there is some potential for, say, an international hotel under that zoning, but contests whether, because of its "time-sharing" nature, the appellant could ever exercise that potential. While Mr Montgomery has adopted the current use of the subject as its highest and best use for the purpose of the current valuation (transcript p.23), he has drawn comparison with the higher zoning of the subject.
In seeking to understand whether the time-sharing nature of the owners of the subject has any different impact upon the potential to achieve any higher use, I turn to the legislation. I note that s.7 of the Valuation of Land Act defines an owner as a person who "is entitled to receive the rent for the land". As such, the multiple unit owners would collectively meet such criteria.
Further, I note that under s.62 of the Building Units and Group Titles Act 1980, the valuation of a parcel is defined as:
"Valuation of Parcel
62.(1) Where the chief executive (valuations) causes a parcel to be valued under and subject to the Valuation of Land Act 1944, the parcel shall, notwithstanding the provisions of that or any other Act, be valued as a single parcel of land and as if it were owned by a single owner and, for the purposes of any such valuation and all purposes incidental thereto (including objection to and appeal against a valuation) but not otherwise, the parcel and all improvements thereon shall be deemed to be owned by the body corporate and by no other person."
Clearly then for the purpose of the current valuation the "owner" of the subject is deemed to be the body corporate. The role and management duties of the body corporate are set out in Part 4 of that Act. Likewise, it is clear that for the purposes of the Valuation of Land Act, the body corporate, as "owner", has the role of determining the future use of the land, including any possible achievement of any higher value of the land as a consequence of capitalising any higher potential for the land. How it does that is its responsibility. It is therefore not a problem for this Court to take note of the fact that it may be difficult to seek and obtain the approval of all unit holders to a strategy for redevelopment.
In respect of whether it would be impractical for the respondent to assume any possible sale to realise any higher potential, because of the practical difficulties of the body corporate, I note that it is not the role of the valuer to inquire whether there could be a suitable purchaser willing to buy the land. I note, for instance, in Federal Commissioner of Land Tax v. Duncan and Others (1915) 19 CLR 551, Griffiths CJ, when speaking of the valuation, said at p.553:
"The underlying idea is that the land is to be treated as converted into money as on the day as of which the assessment is made, so that a realized capital sum takes the place of the land. That, of course, assumes a hypothetical purchaser. It does not mean that you are to inquire whether there was at that time a purchaser in existence who would have been willing to buy the particular parcel of land."
The fact that a particular owner may not be willing to sell the land cannot affect its market value. The concept of a hypothetical seller who is willing to sell it upon reasonable terms and conditions has to be assumed. (Land Valuation and Compensation in Australia) Rost and Collins 1993, Third Edition, p.102).
The clarification of a hypothetical prudent buyer and seller in Duncan (supra) followed directions found in Spencer v. The Commonwealth [1907] 5 CLR 418, at p.432 (Griffiths CJ), and p.441 (Isaacs J). Likewise, any lack of demand for purchasing the subject for a higher purpose cannot be taken to mean that the land lacks any value. (See Broken Hill Pty Ltd v. Valuer-General NSW (1932) 2 The Valuer 151:
"The fact that there is no demand at any particular date, as has been pointed out, is not the test. You have to assume that there is a hypothetical buyer and you have to assume that there is a vendor, and each is supposed to know the full capabilities of the block of land in question; but if you assume no demand you rather get rid of the hypothetical purchaser. You have to assume the hypothetical purchaser, and, therefore, you have to assume a demand."
Summary
In summary, I find that there is nothing to discredit either the method adopted by the respondent in arriving at his unimproved value, or that he has made an error of fact. His relativity between a corner lot fronting the esplanade (the subject), and an inside lot fronting Phillip Avenue (Sale 1) would appear slightly conservative in comparison to other lands in Mermaid Beach. Such an approach would seem to follow the principle of applying a conservative approach to revenue valuations. (See Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Company of South Australia Limited (1946-47) 74 CLR 358, at pp.373-374). However, I would encourage the respondent in the next valuation to review the current relativity in view of the increasing noise problems for the subject.
Conclusion
Having considered the whole of the evidence, I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value as determined by the Chief Executive in the sum of Three Million and Forty Thousand Dollars ($3,040,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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