University of Queensland v Department of Resources and Mines
[2003] QLC 22
•28 March 2003
LAND COURT OF QUEENSLAND
CITATION: University of Queensland v Department of Natural Resources and Mines [2003] QLC 0022
PARTIES: University of Queensland
(applicant)
vChief Executive, Department of Natural Resources and Mines
(respondent)
FILE NOS:AV2001/0129, AV2001/0130, AV2001/0448, V2001/0128 and V2001/0558
DIVISION: Land Court of Queensland
PROCEEDING: Appeals against valuations under the Valuation of Land Act 1944
DELIVERED ON: 28 March 2003
DELIVERED AT: Brisbane
HEARD AT: Brisbane
MEMBER: Mrs CAC MacDonald
ORDERS: (i) The appeals are allowed.
(ii)The unimproved value of Lot 382 on SL 6788 and Lot 389 on SL 7528 as at 1 October 1999 and 1 October 2000 is determined at Twenty-Three Million, Five Hundred Thousand Dollars ($23,500,000).
(iii) The unimproved value of Lot 1 on RP 223379, Lot 2 on RP 223382 and Lot 1 on RP 68478 as at 1 October 1999 and 1 October 2000 is determined at Twelve Million, Five Hundred Thousand Dollars ($12,500.000).
CATCHWORDS: Valuation – use of sales – residential redevelopment sales not acceptable where highest and best use is educational/research/public institution purpose – likelihood of change of use remote.
Valuation – town planning restrictions on use - new City Plan not finalised but at advanced stage at date of valuation – to be given considerable weight.
Valuation – use of sales – insufficient satisfactory unimproved sales available – improved sales acceptable even if scope for error in analysis – Maurici applied.
Valuation – heritage listed property – buildings and adjacent land both heritage listed – complementary to each other – valued at same rate.
Valuation – heritage-listed property – highest and best use as educational institution (university) not affected by heritage listing – no discount for listing.
Valuation – allowance of fill – some evidence of excavation site – but no evidence of quantity or possible location on site of resultant spoil – no allowance made.
Valuation – open (green) space areas – such integral part of larger site – improves amenity of larger site and allows more intense development of built up areas – need to allow for such advantages.
COUNSEL: Mr R Needham for the appellant
Mr R Vize of Crown Law for the respondent
SOLICITORS: Corrs Chambers Westgarth for the appellant
Crown Law for the respondent
These five appeals have been brought by the University of Queensland against the determination by the respondent of two annual valuations of two properties owned by the University.
One of the properties consists of two lots, Lot 382 on SL 6788 and Lot 389 on SL 7528, both in the County of Stanley, Parish of Indooroopilly. The registered owner of Lot 382 on SL 6788 is the University of Queensland. The title of that lot is burdened by five registered easements, but the existence of those easements does not appear to have affected the value of the property, as neither valuer took them into account in valuing the property. The registered owner of Lot 389 is the University of Queensland as “trustee for university and college purposes and for no other purposes whatsoever”.
Part of the St Lucia Campus of the University of Queensland is situated on those two lots, which have a total area of 76.75 hectares. The property was referred to as the St Lucia property throughout the hearing. The two lots were valued together, the respondent determining the value of the combined lots to be $34,500,000 as at both relevant dates, namely 1 October 1999 and 1 October 2000. The appellant contends that their total value on both dates is $21,000,000.
The second property consists of three lots being Lot 1 on RP 223379, Lot 2 on RP 223382 and Lot 1 on RP 68478, the total area being 282.2 hectares, all in the County of Stanley, parish of Moggill. Two of the lots are subject to a number of easements and again, they have not been taken into account by the valuers. The University of Queensland is the registered owner of each of these lots.
This property was used for the University Veterinary Science Farm but the University has curtailed that use of recent times. The current use is restricted to grazing, with caretakers in residence. This property was referred to throughout the hearing as the Pinjarra Hills property. The lots were valued as one property by the respondent who determined their combined value at $17,000,000 at the relevant dates, namely 1 October 1999 and 1 October 2000. The appellant contends that their total value on both dates is $8,500,000.
The parties have agreed that the Court’s determination of the value of both sites as at 1 October 1999 will be applied as at 1 October 2000.
The four appeals were heard together. Evidence was given on behalf of the appellant by Mr TJ Rabbitt who is a registered valuer in Queensland, and by Mr GL Vann a town planner. Mr Rabbitt and Mr Vann also tendered written reports. Mr U Singh, a registered valuer employed by the Department of Natural Resources and Mines and Mr NG Maroske, a principal property adviser in the same Department, gave evidence on behalf of the respondent. Mr Singh also tendered a written report.
The appellant was represented by Mr R Needham of Counsel and the respondent by Mr R Vize of Crown Law.
It is convenient to consider the evidence relating to each property separately and to determine their values accordingly.
Legal Principles
For the purposes of an annual valuation of land, the respondent must determine the unimproved value of the land as at the relevant dates. Section 3 of the Valuation of Land Act 1944 provides, so far as is relevant that:
“3.(1) For the purposes of this Act –
‘unimproved value’ of land means –
(a)in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and
(b)in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.
(2) However, the unimproved value shall be in no case be less than the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act.
(3) …
(4) Notwithstanding anything contained in this section, in determining the unimproved value of any land it shall be assumed that –
(a)the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates; and
(b)such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used;
but nothing in this subsection 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 subsection (1) had not been made.
… .”
There was no issue between the parties that both properties are improved and that, therefore, the value of the properties is to be determined pursuant to s.3(1)(b), that is on the assumption that, as at the relevant dates, the improvements did not exist. Further, it was accepted by both parties that the appropriate principles to apply in determining the value were those laid down in Spencer v The Commonwealth of Australia (1907) 5 CLR 418. Both parties valued the subject properties by relying on sales of comparable properties.
The major difference between the parties was the selection of appropriate sales for use as a comparison with the subject properties. There was also some difference between them as to the categorization of the subject land. There were some other more minor matters in issue between the parties which will be discussed where appropriate.
St Lucia Property
The St Lucia property is situated at 342 Carmody Road, St Lucia. It is an irregular shaped undulating site with a long frontage to the Brisbane River. The property lies about 4 radial kilometres south of the Brisbane CBD and is about 7 kilometres by road from the GPO.
The properties the subject of the appeal do not include the whole of the St Lucia campus of the University. Other university land, not the subject of this appeal, adjoins the subject site. Similarly, most of the residential colleges are on land which is not the subject of this appeal. The surrounding suburb of St Lucia is a mixture of multi-unit and single residential dwellings with local shopping available.
The main access to the subject site is via Sir Fred Schonell Drive. Access is also available from Carmody Road, Hawken Drive and Upland Road, and via the Brisbane River. The roads are bitumen sealed, with concrete kerbing and channelling. Reticulated water, sewerage, electricity and telephone cables service the site. Public transport to the site is available on Brisbane City Council buses and ferries.
The St Lucia campus of the University is a well known and unique landmark in Brisbane. Lot 382, which has an area of approximately 74.35 hectares contains most of the main part of the campus. The centre of the University, the Great Court, is located there as are many of the buildings used for teaching and research purposes. In addition, there are ancillary facilities such as shopping, food, entertainment, child care centres, car parking and open space areas located on this lot. The Great Court is situated on a central knoll. The land slopes down from there to the Brisbane River, the lower flatter areas being used predominantly for sporting facilities, car parking and open space activities.
Lot 389, which has an area of approximately 2.44 hectares, is an irregular shape which contains private roadways serving the University, areas of car parking and general open space.
The Great Court complex has been placed on the Queensland Heritage Register because it is a place of cultural heritage significance. The decision of the Heritage Council to list the complex was made on 23 April 1999 and the complex was permanently entered on the register on 8 March 2002. The heritage register describes the Great Court complex as “… the closest and most intact example in Australia of a university set out in accordance with the innovative American collegiate planning principles introduced by Thomas Jefferson in the early 1800’s. The Jeffersonian concept of an academic college is clearly demonstrated in the complex by the large, open central courtyard that is surrounded by interspersed pavilions representing different disciplines, linked together by internal colonnades. From its location on the highest rise of the land overlooking the surrounding campus buildings, the Great Court is regarded as an important visual symbol of and central core to the University of Queensland”. The heritage listing covers those buildings, the courtyard, and the land in front of the Forgan Smith building (the building forming the diameter of the semi circle of buildings surrounding the Great Court) down to an internal road.
Highest and Best Use
As at both valuation dates, 1 October 1999 and 1 October 2000, the 1987 Town Plan for Brisbane was in force. The new Brisbane City Plan came into force on 30 October 2000. Prior to that date, the proposed City Plan was exhibited publicly from March to June 1999. Mr Vann noted that the policy directions and content of the City Plan were well advanced and advertised and were a matter of public knowledge at the time of the earlier valuation. The latter valuation occurred a month prior to the new Plan coming into force. Mr Vann was of the opinion, which I accept, that, for the purpose of these valuations, it is appropriate to examine the provisions of both the Town Plan and the City Plan and that the City Plan should be afforded considerable weight due to its advanced state of preparation at the relevant dates.
Mr Vann explained in some detail, in his written report, the impact on the subject property of the 1987 Town Plan, the amendments to that Plan effected by the new Strategic Plan which came into force on 3 October 1997, and the City Plan 2000.
The site was zoned Special Uses (University) under the 1987 Town Plan. The intent of the zone is that the land be used principally for community facilities or public purposes, including residences. If the land were no longer required for the designated purpose it was to be redeveloped or recycled for another community facility or public purpose. Consideration would only have been given to alternative forms of development if it could have been demonstrated that there was no existing or likely future demand for such use.
The 1997 Strategic Plan controlled the future use of the site and contained the planning principles against which applications for rezoning were considered. Under this Strategic Plan, the St Lucia property was subject to three preferred dominant uses:
-Green Space Area/Green Space Corridor, relating to those parts of the site near the Brisbane River;
-Urban area (the balance of the site); and
-Major Institution or Public Venue.
The Strategic Plan included in the City Plan 2000 provides, in relation to the St Lucia property, for:
-a Green Space corridor along the river and a conservation and recreation area covering the lake and sporting fields near the river;
-symbolic recognition of a Special Purpose Centre (Major Institution or Public Venue); and
-inclusion in the Residential Neighbourhood.
In lieu of zoning, the City Plan provides for the site to be included in an area designated as Special Purpose Centre - SP2 – Major Educational and Research Facility. The City Plan makes no provision for alternative uses because, said Mr Vann, it does not envisage that Centre uses will cease, but plans for their ongoing use and expansion.
Mr Vann said that the clear intent of these planning instruments is to recognize the St Lucia Campus for its University function, to maintain the use of the site for those purposes and to recognize the facility as an important component of the make-up of Brisbane City. Consistently with that, the site has been designated for use for education facilities under the Integrated Planning Act 1997. This designation facilitates development of the site in accordance with the University Site Development Plan without the need for the University to obtain Brisbane City Council approval or comply with Planning Scheme requirements. Development of the site for alternative purposes would require development approval from the Council and any such proposal must be assessed against the Planning Scheme provisions. Each proposal for alternative development would also be constrained by the Green Space provisions of both plans (referred to above), the heritage listing of the Great Court complex and the flooding which affects a large area of the site. Mr Vann concluded that the possibility that the site could be used for other purposes (e.g. residential, commercial) finds no support in the relevant planning documents and must be regarded as speculative.
Given the zoning of the site as at the relevant dates and its proposed classification under the City Plan 2000, Mr Rabbitt determined that the highest and best use of the property was as a university/school/public institutional site. His valuation was made on that basis.
The respondent’s valuer, Mr Singh, noted in his report that the land surrounding the site is developed with student colleges and accommodation, playing fields, car parking structures and areas, a variety of education facilities and vacant sites proposed for UQ/CSIRO research facilities. In those circumstances, Mr Singh said that he considered that the subject land has unique potential for the development of a university and research establishment. Mr Singh also said that he considered that because of the zoning and current use of the land and having regard to s.3(4) of the Act, he considered that the highest and best use of the property is for education/research purposes and that the unimproved value should be determined on that basis.
I have accepted Mr Vann’s evidence, which was not effectively challenged, as to the planning controls and other limitations on the development of the site for any purpose other than as a major educational and research facility. In the light of that evidence and also the evidence given by both valuers as to the highest and best use of the property, I have concluded that the highest and best use of the property is for education/research/public institution purposes. Although the planning controls have been developed on the basis of the current use of the site, those controls should be regarded as still in place if the site is assumed to be unimproved: Queensland Club v Valuer-General (1991) 13 QLCR 207 at 220, Chief Executive, Department of Natural Resources and Mines v QNI Metals Pty Ltd, unreported, Land Appeal Court, 12 September 2002, [14], [15]. There was no evidence indicating that the site could be rezoned for residential or mixed residential purposes, even if it were assumed to be unimproved. Therefore, I consider that the hypothetical prudent purchaser would not purchase the property with a view to developing it for such purposes.
Summation Method
Both valuers approached their valuations of the St Lucia property by dividing the land comprising the property into different categories and attributing different values to each category. There was some difference between them as to the way in which the division should be made, and considerable difference as to the values to be attributed to each category. Mr Rabbitt, for the appellant, categorized and valued each category of the land as follows:
11.33 ha elevated land subject to Heritage Listing ) @ $50/m² = $18,030,000
24.73 haelevated land, undulating in nature )
40.69 ha low lying land, subject to inundation in 1974 @ $7.50/m² = $ 3,051,900
76.75 ha Total $21,081,900
Mr Singh’s analysis was:
4.4 ha prime elevated land clear of heritage listed
structures @ $120/m² = $5,280,000
6.93 haelevated land, affected by heritage listed
buildings @ $60/m² = $4,158,000
28.83 ha @ $70/m² = $20,181,000
11.00 haabove flood but severed by flood land @ $35/m² = $3,850,000
25.59 ha below Q100 flood level @ $5/m² = $1,279,000
76.75 ha Total $34,748,000
The Appellant’s Categories
Mr Rabbitt described the land adjoining the river as originally low lying, swampy river flats, rising to a knoll which is positioned in the central western section of the property. The Great Court and buildings immediately surrounding it are situated on the knoll. The Great Court complex, which includes the Great Court and land immediately to the north of the Forgan Smith building, comprises 11.33 hectares, all of which is subject to Queensland heritage listing.
Mr Rabbitt said that it was evident from an old map of the St Lucia site that the top of the knoll had been removed to level the land, and the spoil used to fill some of the low lying creeks and swamps. He could not calculate the value of those improvements as he did not know, and had no access to records which would establish, what work had been carried out.
Below the 11.33 hectares comprising the Great Court complex, Mr Rabbit said, were 24.73 hectares of elevated undulating land which he considered to be above the Q100 line and which, he thought, were parts of the area most likely to have been filled.
The balance is 40.69 hectares of low lying land which was flooded in 1974.
Mr Rabbitt valued the property on the assumption that it was unimproved and on the basis that the highest and best use of the property was for university/school/public institutional uses. Having said that, as is indicated in the table above, Mr Rabbitt valued the elevated land and the low lying land at different rates. For the elevated land he relied on sales of sites used for educational purposes. The value of the lower lying land is supported by sales of open space/recreation sales. Mr Rabbitt also considered, but, because of their location, did not rely on, sales of some large institutional sites in Brisbane.
The Respondent’s Categories and Conclusions re Categories
Mr Singh’s first two categories, of 4.4 hectares and 6.93 hectares total 11.33 hectares and, together, deal with the same 11.33 hectares that Mr Rabbitt valued at $50 per square metre. Mr Singh said that he had subdivided this area into two parts because he drew a distinction between the value of the 6.93 hectares, which is improved with heritage listed buildings, and the 4.4 hectares, which is the area to the north of the Forgan Smith building which has been largely maintained as green space for vista purposes. Mr Singh described that 4.4 hectares as prime elevated land clear of heritage structures. There are two non-heritage listed buildings on this area of land so the position is that while the whole 4.4 hectares is heritage listed, those buildings are not.
Mr Singh valued the 4.4 hectares at twice the rate of the 6.93 hectares. He acknowledged that the 4.4 hectares is subject to heritage listing, that any development there would require the approval of the Queensland Heritage Council, and that no building would be allowed which would obstruct the vista. He considered, however, that a development such as an underground car park would be possible, and he also said that there were two new potential development sites on the edges of the 4.4 hectares, as indicated on page 13 of the University Site Development Plan (Exhibit 13). He therefore concluded that the 4.4 hectares should be valued at a higher rate than the 6.93 hectares.
I have decided that it is not appropriate to draw a distinction between the two sections of the 11.33 hectare area listed on the heritage register. The 11.33 hectares is listed as one site and the whole of the site is subject to the same restrictions, with the effect that any development requires the approval of the Heritage Council. It is not entirely clear, from the University Site Development Plan, whether the two new development sites referred to by Mr Singh are within the heritage listed area, but assuming that they are, it is noted that the Site Development Plan was developed in 1996 and approved by the University Senate in 1998. The Great Court Complex was provisionally listed in the heritage register in 1999 and permanently listed in 2001. It is reasonable to infer, therefore, that the Site Development Plan does not take into account the consequences of the heritage listing nor the fact that it may no longer be possible to develop the two proposed buildings. Mr Singh’s opinion as to the possibility of developing an underground car park does not justify a differential valuation for this area as there was no evidence to establish that such a development would be permitted or that it was feasible.
As is apparent from the table above, Mr Rabbitt’s second category is 24.73 hectares of elevated undulating land. Mr Singh’s second category is 28.83 hectares of land which is not described in his report, but which, he said in oral evidence, was where most of the research and teaching buildings are located. That area of land, he indicated initially, was not inundated in the 1974 flood level. However, in cross examination Mr Singh subsequently said that 24.73 hectares was the area not inundated in the 1974 flood. The construction of the Wivenhoe Dam since the 1974 flood has had the consequence that it is expected that there will be a reduction in flood levels on the St Lucia property and, as a result, the Q100 line has been redrawn at the estimated lower level. That being the case, it appears that 4.1 hectares (the difference between 28.83 hectares and 24.73 hectares) is probably land which was flooded in 1974 but which now lies above the post-Wivenhoe Q100 line. That land appears to be a narrow snake-like area of land adjoining the 24.73 hectares. My conclusion is, therefore, that as at the dates of valuation, there was no reason to value that 4.1 hectares at a different rate from the 24.73 hectares, as both areas were at those dates above the Q100 line. Therefore this category should consist of 28.83 hectares.
Mr Singh’s third category is an area of 11 hectares which he described as land which will not flood post-Wivenhoe. This land flooded in 1974. Mr Rabbitt did not, in his categorization of the land, draw a distinction between land which had flooded in 1974, and that which is not expected to flood post-Wivenhoe. He said that the reason for this was that the 11 hectares lay completely within the area designated for Green Space conservation and recreation uses in the planning instruments, and as such the 11 hectares should be included with the land lying below the Q100 line. Mr Rabbitt said the land would have to be capable of a higher usage than its current designation, to justify Mr Singh’s valuation of $35 per square metre.
I consider that because the 11 hectares now lies above the Q100 line, a distinction should be drawn between that area of land and the land (25.29 hectares) which remains below the Q100 line. For that reason, I have accepted Mr Singh’s opinion that this land should be placed into a different category from the lowest lying land. The effect on the value of this land of its designation as part of a Green Space area will be discussed later in this decision.
The remaining land consists of 25.59 hectares of low lying land which was flooded in 1974 and remains below the post-Wivenhoe Q100 line.
Fill
One issue that remained unresolved by the evidence was the question of fill. It appeared from the University Site Plan and other evidence before the Court that the top of the knoll (where the Great Court is now located) was removed in order to level that part of the site, and that the spoil may have been used to fill low lying areas of the site. There was no evidence as to where the spoil may have placed. Counsel for the respondent suggested that the placement of the fill may explain the 4.1 hectares difference between Mr Rabbitt and Mr Singh as to the area of the second category of elevated land, and/or their different treatment of the 11 hectares now above the Q100 line. If that were so, the fill should be regarded as an improvement and an appropriate allowance made.
Since there is no evidence as to the quantity or possible location of this fill I cannot see any way in which an allowance can be made for it. It is not clear whether it remains on the site, and if it does, what value it might add to the site.
Sales Evidence
A significant difference between the parties’ valuers was the selection of sale properties for use as a comparison with the subject site. It should be remembered that both valuers were of the opinion that the highest and best use of the subject was for education/research/public institution purposes, and I have accepted that to be the highest and best use of the property. Both valuers acknowledged that the site was unique and therefore difficult to value. Mr Rabbitt relied on sales of sites used for educational purposes in support of his valuation of the elevated land. Mr Singh selected sales of land purchased for redevelopment purposes, particularly residential or residential mixed with other types of development.
The valuers also differed in their treatment of the effects of the heritage listing. Their approaches will be discussed further in the course of considering the sales evidence.
Appellant’s sales relevant to the elevated land
Although Mr Rabbitt drew a distinction, in categorizing the land, between the elevated land subject to heritage restrictions and that which was not, he valued both areas of land (totaling 36.06 hectares) at $50 per square metre. The reason for combining the two areas was that he considered that the heritage restrictions had no effect on the unimproved value of the land. This was because he had valued the land on the basis that, if unimproved, it would be developed for purposes similar to its current use. On that basis, he considered that the heritage restrictions did not adversely affect the type of development that could take place.
Mr Rabbit relied on the sales of six properties to support his valuation of the 36.06 hectares of elevated land at $50 per square metre.
As explained previously, I consider that another 4.1 hectares should be added to this category. In considering Mr Rabbitt’s sales evidence, therefore, I have taken into account my conclusion that the elevated land comprises 40.16 hectares.
Sale No. 1
This property is the Forest Lake College site, situated at College Avenue, Forest Lake. The property is 9.62 hectares in area and sold as vacant land on 27 June 1997 for $2,405,000 or $25 per square metre.
Forest Lake is 9 radial kilometres from the Brisbane CBD, the sale is approximately one quarter the size of the elevated land on the subject, and does not have the benefit of a river frontage. Mr Rabbitt conceded that the sale property was located in an area that is substantially inferior to St Lucia.
In my opinion, the elevated land of the subject is substantially superior to the sale, and that part of the subject should be valued at a rate higher than that established by the sale, despite the larger size of the subject.
Sale No. 2
This site is used for an Islamic School and is situated at Compton Road, Karawatha. The property, which was described as a vacant undulating site at the time of the sale, is 14.17 hectares in area and sold on 23 February 1998 for $660,000 or $4.65 per square metre.
The sale is 18 radial kilometres from the CBD, is about two fifths of the size of the elevated land and does not have the benefit of river frontages. It emerged from evidence given by Mr Maroske that the property was sold by private treaty, pursuant to a Ministerial Direction, by the Department of Education to the Trustees for the Islamic School, who owned property adjoining the sale. The Department of Natural Resources and Mines commissioned a valuation of the property, prior to the sale, and negotiated a sale price based on that valuation.
Although the property was sold by private treaty to an adjoining owner, the price may well reflect market value, given that it was based on an independent valuation. However, the same conclusions must be drawn as were reached in relation to Sale No. 1. The property is substantially inferior to the subject and there is no real comparison between the two properties. For that reason, I consider that the only use that can be made of the sale is that it indicates that the subject should be valued at a price higher than the sale.
Sale No. 3
This property formerly constituted the Kedron Park campus of the Queensland University of Technology. It was sold by open tender to Queensland Emergency Services on 10 April 1997 for $4,875,000. The property is 7.15 hectares in area and at the time of the sale was improved with substantial educational buildings and sporting facilities. Mr Rabbitt described the property as an undulating site with a large section (approximately one third) low lying and subject to local flooding from Kedron Brook. He estimated the depreciated value of the improvements at the time of sale to be $2,325,000, and the value of ground improvements to be $250,000. He therefore analysed the sale to an unimproved value of $2,075,000 or $29 per square metre.
The Kedron Park site is approximately 6 radial kilometres from the CBD. It does not have the benefit of a frontage to the Brisbane River and is approximately one sixth the size of the elevated area of the subject property. It has similar infrastructure to the subject in that it is located in a residential suburb which is made up of multi-unit and residential properties, although road access may be more difficult because the sale is bordered by busy arterial roads. Both properties are subject to flooding.
Of the three sales considered to this point this is the most comparable with the St Lucia property. There are, however, significant differences between the subject and the sale, particularly in relation to their respective sizes, and the superior location of the St Lucia site. In addition, the sale is not ideal as a basis for determining unimproved value, given the extensive improvements to the property. In the absence of sufficient comparable sales of unimproved land, however, it is well recognized that it is legitimate to use sales of improved land, and to determine the unimproved value by deducting the value of the improvements (see, for example Maurici v Chief Commissioner of State Revenue [2003] HCA 8). It is accepted that there is room for error in such an approach, but in the absence of a sufficient number of comparable sales of unimproved land, this sale should be taken into account.
It is to be observed that the rate per square metre achieved in this sale is $29.00. The effect of the appellant’s valuation of the whole of the St Lucia site is that the average value per square metre of the subject is $27.46 per square metre. In my opinion, the subject site is a superior site to the sale particularly because of the subject’s frontage to the Brisbane River, its location in the suburb of St Lucia and the university infrastructure surrounding the St Lucia site. On that basis, one would expect the valuation of the subject to be higher than that of the sale. However the subject is some ten times larger than the sale and there was some suggestion, in the course of the hearing, that the value per square metre of land diminishes as the size of the property increases. While there are many cases where that may be correct, there was no evidence supporting that proposition in relation to a university site. Given the infrastructure needed to support a large modern university (particularly one of the style of the St Lucia campus), the availability of land for sporting and other purposes ancillary to the University’s educational and research role, could well be said to be an important attribute of a site. In the absence of any convincing evidence to the contrary, I do not consider, therefore, that a discount should be applied simply because the subject site is larger than the sale.
Sale No. 4
This property consists of an almost regular shaped site with a two street frontage. At the time of the sale, the site was improved with buildings used for primary schooling. The property is located at 1285 Beaudesert Road, Acacia Ridge. It was sold on 19 February 1998 by the Department of Natural Resources to the Aboriginal and Islander Community Independent School Incorporated for $2,150,000. The property is 2 hectares in area.
Mr Rabbitt described the buildings as being old and in fair condition as at the date of sale. He estimated their replacement cost as at that date at $3,300,000, depreciated that figure by 60% ($1,320,000) and deducted $150,000 for ground improvements. On that basis he determined the unimproved value to be $680,000 or $24.28 per square metre.
Mr Maroske said that this property also was sold by Ministerial Direction. The sale price was reached on the basis that the purchaser had $2,150,000 available by way of grant from the Commonwealth and State Governments, and therefore that was the price at which the property was sold. He said that the Department of Natural Resources did not obtain a valuation for this property. However, Mr Rabbitt said that he had a copy of the respondent’s valuation of this property, which suggested that the sale price represented market value. The effect of this conflict in the evidence is to raise substantial doubt in my mind as to whether the sale reflects market value.
There are obvious problems in using this sale as a basis of comparison with the subject site. The sale property is approximately 13 radial kilometres from the CBD and is situated in an inferior location to the university. It is doubtful whether the sale price represents market value. I do not consider that this sale can be relied on for the purpose of valuing the subject site.
Sale No. 5
This property, which was formerly the site of the Oxley Secondary College, is situated at Seventeen Mile Rocks Road, Oxley. Mr Rabbitt described the property as a 19.26 hectare irregular shaped site which falls from a ridge along Seventeen Mile Rocks Road. The site has been cut and filled into four separate terraced levels. Structural improvements include eight classroom buildings, a library resource building, performing arts centre, administration building, two sporting fields and netball courts. Mr Rabbitt said the property was run down at the date of transfer with an estimated $2,800,000 to be spent on the property to refurbish it.
The property was sold in March 2002 (more than two years after the second valuation date) for $4,200,000. Mr Rabbitt depreciated the improvements to a value of $1,335,648 and reached an unimproved value of $2,863,352 or $14.86 per square metre.
The property was sold by the Department of Education to the Department of Natural Resources. Mr Maroske said that the sale took place as a matter of some urgency because there was a need to set up a headquarters for the Fire Ants Authority, and this site was chosen for that purpose. A market valuation was commissioned by both the vendor and purchaser, the two Departments having previously agreed on the terms of the brief for the valuation. The valuer was directed to value the property as a going concern with no development potential. The reason for the latter qualification was that, although the purchaser had a planning report which suggested that there was potential for some medium density residential housing development, an engineer’s report indicated that there was slippage in the area. In addition there was also a very active community group who, it was anticipated, might oppose a material change of use of the site.
The property is located approximately 12 radial kilometres from the CBD. It has no river influence. The elevated land in the subject site is a little over twice the size of the sale property and is located in a much more desirable area. The sale is inferior to the subject.
Sale No. 6
This property, which is 41.706 hectares in area, is situated at Meadowbrook some 24 radial kilometres from the CBD. It was purchased by Griffith University from the Department of Education who had purchased the property from Suncorp Finance and Insurance with a view to transferring it to the University. Griffith University purchased the site for the purposes of establishing the Logan Campus of the University.
Mr Rabbitt said that the property was sold with a condition which gave the vendor, Suncorp, the right to remove material from the site to form a lake. He reported that the site was apparently contaminated at sale, with the vendor agreeing to pay the costs of the reparation over $65,000 and under $100,000. Costs below $65,000 were the responsibility of the purchaser as were those costs above $100,000. Mr Rabbitt does not appear to have taken any of these matters into account in analyzing the sale price.
The property sold on 6 August 1996 for $4,400,000 or $10.50 per square metre. So far as Mr Rabbitt was aware, the sale represented fair market value. He was not aware of the details of the sale of adjoining land of 42.7 hectares, described as the Kominski Corporation sale, which sold in January 2002 for $2,010,000 or $4.70 per square metre. He was unable therefore to make any comparison between the sale and the Kominski property.
Although the sale is comparable with the elevated land of the subject in terms of size and use, it is inferior to the subject in most other respects. It is located 24 radial kilometres from the CBD. The subject has a much more desirable location by virtue of its situation adjoining the Brisbane River and also because of the high quality residential area in which it is situated and its comparative proximity to the Brisbane CBD. The Meadowbrook site was completely flooded in the 1974 floods. Approximately 20% of the site remains below Q100 (as compared with 33% of the subject site) because extensive fill has been placed on the land for the purpose of developing the site.
Respondent’s sales relevant to the elevated land
Mr Singh distinguished between what he described as (1) prime elevated land clear of heritage listed structures (4.4 hectares) which he valued at $120 per square metre; (2) elevated land affected by heritage listed buildings (6.93 hectares) which he valued at $60 per square metre; and (3) the land where most of the academic buildings are located (28.83 hectares) which he valued at $70 per square metre. Mr Singh used the 4.4 hectares as the base from which the valuations of the other two categories flow. His evidence concerning his Sales 1 to 6 was directed towards establishing a value for that land, which after making some adjustment for zoning, he valued at $120 per square metre. That value makes no allowance for the effects of the heritage listing. He considered that the heritage listing on the 6.93 hectares on which the heritage listed buildings are located adversely affected the unimproved value of that land and he therefore allowed a 50% discount for the 6.93 hectares and valued it at $60 per square metre. He adopted $70 per square metre as the value for the balance of the elevated land being less elevated land than the 4.4 hectares.
Sale No. 1
This is a property at 631 Jesmond Road, Indooroopilly which was sold on 9 October 2000 for $3,300,000. The property comprises 5.87 hectares. At the time of the sale the property was zoned Special Uses – Radio Transmission Station. Mr Singh said that the property was purchased with the intention of developing the site into about thirty residential lots ranging from 900 m² to 3,900 m². The balance of about 1 hectare is to be used as a waterway/wetland area. The terrain has a gentle pull from south to north with a wet depression running from south-west towards the northern boundary. The sale land is one block away from the Brisbane River and has no significant outlook. In Mr Singh’s opinion, the sale land is inferior to the subject land. Mr Singh analyzed the sale to $56.20 per square metre.
Sale No. 2
This site is the former Commonwealth Army Barracks known as the Gona Barracks situated at 7 Ramsgate Street, Kelvin Grove. The property is 6.9715 hectares in area and sold on 30 June 2000 for $6,000,000. Mr Singh analyzed the sale to $7,400,000 after deducting $10,000 for clearing and adding $10,000 for demolition, and a further $1,400,000 for decontaminating the site. The analyzed sale price equates to $106 per square metre. Mr Singh said that the property had been purchased on the basis that it could be developed to a gross floor area of 45%.
At the time of the sale, the property was zoned Special Uses – Defence Force Establishment. Mr Singh said that there were five buildings and a few sheds on the land which were heritage listed. Those buildings are to be incorporated into the overall redevelopment of the site which is to be known as “Kelvin Grove Urban Village”. The site will comprise a QUT student housing precinct, private and non private housing, business and commercial areas. The sale is an example of a case where a change of use of a site zoned “Special uses” has occurred, but, as discussed above, I do not consider that a change of use would be allowed for the St Lucia site.
In Mr Singh’s opinion, the sale land is, overall, inferior to the subject site.
Mr Singh has not allowed any amount for the value of the improvements on the site. It appears that at the time of sale there were “5 buildings and a few sheds” on the site. It is not clear what value, if any, those buildings add to the land. Nor is it clear whether there were any other buildings on the site as at the date of sale, although it may be possible to infer that there were no significant buildings, because Mr Singh allowed $10,000 for demolition and said that the property had been purchased for redevelopment. Similarly, there are difficulties with Mr Singh’s analysis of the effect of the contamination on the site. Contamination is not normally an improvement to a site, and therefore it is not necessary to remove the contamination in order to establish the unimproved value: Raynbird v Valuer-General (1980) 7 QLCR 106 at 109; Marano v The Valuer-General (1978) 5 QLCR 194 at 200. There was no evidence as to the nature and extent of the contamination nor as to whether the contamination constituted an improvement or a worsement, and therefore no evidence as to the way in which a reasonably prudent purchaser would take the contamination into account. On the face of it, I consider that it is unlikely that the allowance should have been made for full decontamination of the site. Given these uncertainties, I consider that I cannot rely on the analysis of this sale. In any event, because of the planning constraints on the St Lucia site, the sale is not comparable with the subject.
Sale No. 3
This property was the site of the former Milton Tennis Courts. It is situated at 56 Lucy Street, Milton Road and Frew Street, Milton, and was sold on 27 May 1999 for $4,450,000, having changed hands three times in the previous two years. Mr Singh analyzed the sale to $4,645,000 or $152.90 per square metre having made allowances for clearing and demolition. The property comprises 3.037 hectares. At the time of the sale it was zoned Sports and Recreation and Inner Residential. It is proposed to develop the site with multiple units and to include a landscaped flood retention area. The number, gross floor area, and configuration of units are still being negotiated with the Brisbane City Council. Mr Singh also advised that the property had been resold in a cleared state to Milton Courts Development Pty Ltd on 3 April 2002 for $5,900,000 ($194.30 per square metre). The purchase price was paid on the basis that the purchaser anticipated a development with a similar gross floor area to the University (about 45%). The University site has the advantage of a river front location as compared with the sale which is located in an urban area, with no real outlook and amenity. However, in Mr Singh’s opinion, the sale land is superior to the subject land because the sale land is closer to the City and its amenities, and also has immediate potential for multi-unit development.
Sale No. 4
This property is situated at 158 Dandenong Street, Mount Ommaney. It was sold on 17 December 1999 for $5,151,000. Mr Singh analyzed the sale to $5,146,000 or $71.90 per square metre. The property is 7.159 hectares in area. At the time of the sale it was zoned Special Uses. It is proposed to develop the land with a nursing home and low density and multi-unit type residences. In Mr Singh’s opinion the sale land is inferior to the subject land because the sale land does not have any river influence. He considered that the sale represented a normal residential level of value in the western suburbs.
Sale No. 5
This property is situated at 18 Brent Street, Alderley and is 3.39 hectares in area. The property was zoned Special Uses – Educational at the time of resale, but the Brisbane City Council had indicated that it would support residential development on the site. It was sold on 26 March 1998 for $3,200,000. Mr Singh analyzed the sale to $3,695,000 or $108.70 per square metre by deducting $5,000 for clearing and adding $500,000 for demolition.
In Mr Singh’s opinion, the sale land is inferior to the subject land.
Conclusion : Elevated Land
As stated above, I have decided that the area to be valued in this category is 40.16 hectares.
Sales Evidence
The difficulties which faced the valuers in selecting sites to be used as a comparison with the elevated land on the subject site are obvious. The appellant selected 4 school sites (Sale Nos. 1, 2, 4 and 5) in support of its valuations. At one level, there is some attraction in selecting such sites because schools, like a university, have education as their primary function. However, there are significant differences between these sales and the elevated land in the St Lucia site. A modern university is a complex institution which engages in research and commercial activities as well as fulfilling its educational role. Further, the size of the university which could be developed on the subject site, assuming it to be unimproved, differs considerably from the size of an average school. There was evidence that there are 30,000 students enrolled at the University of Queensland. While there was no evidence before the Court as to the intensity of development of the school sites, it appears likely that a university site would be developed much more intensively than a school site, both to accommodate the larger number of students and to allow the pursuit of multiple purposes such as education, research and commercial development. In addition ancillary activities such as retail food outlets, child care, and cultural centres need to be housed.
For these reasons, and also because of the geographical differences between these sales and the University, I have placed limited reliance on the appellant’s Sales 1, 2 and 5. I have previously indicated that I do not consider Sale No 4 to be reliable.
That leaves Sales 3 and 6. It is difficult to draw a comparison between Sale 3 and the elevated land at St Lucia because the sale land has not been categorized, and therefore the analyzed price reflects an overall value for the site, rather than supporting what must undoubtedly be a higher price for the elevated land at St Lucia. Sale 6 is similar to the elevated part of the subject in terms of area and proposed use, but dissimilar in most other respects.
Mr Singh said that he had valued the subject for its existing use as a university site with the existing surrounding infrastructure. He had rejected as inappropriate sales of large commercial and industrial research sites, both of which would have lead to a higher valuer than he determined. He approached his valuation by considering residential sales and deducing a value from there. He considered that his valuation was conservative because the university site could be used in a more intensive way than a residential site and for this reason a purchaser would pay more for the site to be used for university purposes, than for residential purposes. In so far as that opinion was based on the assumption that a purchaser wishing to buy the site for university purposes would be competing against purchasers seeking to buy the property for residential purposes, that opinion is not tenable. As I indicated previously, I have accepted the evidence of town planner, Mr Vann, that it is speculative to consider that the site could be used for purposes other than as an education/research/public institution. It follows, therefore, that it is unlikely that there would be purchasers in the market who would wish to buy the site for residential purposes. Similarly the mere fact that the subject site might be capable of more intense development than residential land does not of itself establish that the subject is more valuable than residential land. The subject is not residential land, and is unlikely to become available for such use. Therefore it is not a useful exercise to compare its permissible development on a gross floor area basis with that of residential land. In any event, it was not established that the subject is capable of more intense development than residential land.
Mr Singh also took into account the value of residential sites in the area of the subject compared with similar sites in the vicinity of some of the sales. For example, he said that residential sites of 650 m² to 700 m² in the suburb of Forest Lake (where Mr Rabbitt’s Educational Site Sale 1 is located) sell for $65,000 to $75,000. In St Lucia, non river front residential land achieves $250,000 to $300,000 and a river front site will sell for up to $1,000,000. Mr Singh said that the consequence was that the St Lucia site should be valued at an amount that reflects the higher value of the surrounding area.
I accept that the St Lucia site is located in an area which is superior to that of any of Mr Rabbitt’s sales because St Lucia is closer to the CBD, the general amenity of the surrounding area is superior and the subject has the advantage of a lengthy river frontage. In addition, the subject has specific advantages for use as a university site because it is well served by public transport, and has the benefit of the surrounding university infrastructure. Obviously these factors should be taken into account in determining the value of the subject as compared with the sales. However I do not consider that it is a correct valuation approach to attribute a higher value to a site such as the subject, where the highest and best use is education/research/public institution purposes, simply because the residential properties in the vicinity sell at a higher price than those surrounding a sale property.
It was suggested that another reason that Mr Singh relied on residential sales as the basis for his analysis was that the sales were located in areas more comparable with the subject than the sales chosen by Mr Rabbitt. While the location of sales properties is obviously important in comparing properties, I consider that that factor should not be used in isolation to justify the selection of sales. In principle, sales properties selected for comparison with the subject should be similar in all respects to the subject. It is acknowledged in this case that there are no similar properties to the St Lucia site. The valuers have had to do their best to find comparative sales. However, I do not consider that sales of properties which are used for purposes for which the subject cannot be used provide any comparison with the subject, even though the sales may be located in a similar area to the subject.
The respondent’s valuer relied on sales of sites purchased for redevelopment purposes, in support of his valuation. The sites have been or will be redeveloped for residential or mixed use residential purposes. In my opinion, because of the planning constraints, the possibility of the St Lucia site becoming available for development as a residential site, or mixed use residential site is remote. Similarly the suggestion that the owner may be able to use part of the site for commercial housing purposes was no more than a suggestion. There was no evidence to indicate that such a use is permissible in a site zoned or designated as the subject site is.
For these reasons, I have not accepted the respondent valuer’s choice of sales to support the valuation. I do not consider that the respondent’s sales Nos. 1 and 3 and 5 are of any assistance in valuing the subject site. These properties were sold for redevelopment as residential sites and, as such, are not comparable with the subject. I have previously indicated that I do not consider the analysis of Sale No 2 to be reliable.
Sale No. 4 is of more assistance. The proposal to redevelop the site includes construction of a nursing home as well as residential units. This is a mixed institutional/residential use and reflects to a limited extent, the mix of uses. The uses are, however, very different from the subject and the location and size of the sale are significantly different from the subject. I consider that it is difficult to compare this property, usefully, with the subject.
Effect of heritage listing
Mr Rabbitt did not apply any discount to his valuation to compensate for any adverse effect on the value of the subject caused by the listing of the Great Court Complex on the Queensland Heritage Register. He considered that the listing did not impact adversely on the value of the site while it was used for its current activities of education and research.
In valuing the 6.93 hectares of land “affected by heritage listed buildings”, Mr Singh applied a 50% discount to the value of $120 per square metre which he had determined for the 4.4 hectares of “prime elevated land clear of heritage listed structures”. As discussed previously, I have decided that no distinction should be drawn between these two parts of the heritage listed land.
That leaves the issue of whether any discount should be applied in valuing the 11.33 hectare subject to heritage listing. It appears that Mr Singh’s discount of 50% was applied because his valuation had been made on the basis that if the 4.4 hectares were not heritage listed, that land could be developed more intensively than a residential development. As explained above, I have rejected that approach as inappropriate. The rejection of that approach means that Mr Singh’s reason for allowing a discount of 50% disappears.
Since I have accepted the appellant’s general approach to the valuation, I have accepted also that a discount for heritage listing is not appropriate in this case.
Relativity
The appellant adduced evidence of the respondent’s determination of the unimproved values as at 30 June 2001, of four properties which are in close proximity to the subject and which are used for various university purposes. The relevant details are:
No. Property Real Property Description Area Current Unimproved Value (as at 30/6/01) Rate $/m² 1 355 Sir Fred Schonell Drive St Lucia
Lot 335 SL 3987 5.7 ha $2,850,000 $50/m² 2 324 Sir Fred Schonell Drive St Lucia
Lot 357 SL 5543 5.53 ha $2,765,000 $50/m² 3 28 Walcott Street St Lucia
Lot 367 SL 5786 2.04 ha $1,430,000 $70/m² 4 306 Carmody Road St Lucia
Lot 1 RP 98467 1.416 ha $1,400,000 $98.80/m²
This information was used by the appellant’s valuer to check the unimproved value which he had established from the sales evidence. Mr Rabbitt concluded that the unimproved value of the subject site, as determined by the respondent at $44.95 per square metre was clearly out of line with the surrounding properties. He considered that his valuation of $27.36 per square metre or $21,000,000 showed proper relativity with those properties.
Mr Singh said that he considered that the unimproved values of the first three properties may be incorrect, as the values had been struck in comparison with the University Colleges which were held on a particular type of tenure. He considered that the fourth property was undervalued because it has achieved a GFA of 150% but its current value reflected only $67 per square metre GFA.
These comments reflect the difficulty of comparing the relative values of property as determined under the Valuation of Land Act 1944. While it is desirable that valuations made under the Act should have proper relativity to one another (Grahn v Valuer-General (1992) 14 QLCR 327 at 328), it does not follow that the respondent’s valuation of the subject is incorrect because it might appear to be out of relativity with these four properties. It should also be noted that under s.33 of the Act, the valuations of these four properties are deemed to be correct. In the circumstances, I have placed no reliance on the evidence of the unimproved values of these four properties.
Conclusions
It follows from what I have said that the respondent’s valuation of the elevated land cannot stand. I am left therefore with Mr Rabbitt’s valuation of that land. As indicated above, I consider that the sales evidence on which Mr Rabbitt relied is not ideal, but I accept that there was no better sales evidence available. I consider that the way in which he has approached the valuation is appropriate. The value of $50 per square metre adopted by Mr Rabbitt for the elevated land is much higher than any of the sales he relied on. I consider that the evidence demonstrates that the elevated land should be valued at a higher rate than any of the sales. The difficulty, as Mr Rabbitt said, is to determine just how high that value should be. In the circumstances, I have accepted Mr Rabbitt’s expert opinion that this part of the land should be valued at $50 per square metre. The value of this 40.16 hectares is determined at $20,080,000.
Sale No 4 is a property located at 215 Herron Road, Pullenvale. The site comprises two lots. One lot of 37.11 hectares was sold on 9 May 1997 for $1,150,000. The other lot, of 16.6 hectares, sold on 17 July 1998 for $750,000. The total sale price for 53.77 hectares was therefore $1,900,000. Mr Rabbitt described the site as a large undulating timbered site with city views. High tension power lines traverse the site. The property has been subdivided into eleven allotments of approximately 4 hectares each. Mr Rabbitt analyzed the sale to $3.53 per square metre. Mr Singh said that this sale was in a good location, but was adversely affected by the high tension power lines running through the centre of the site. In his opinion, the sale was inferior to the subject site but the sale could be used as a support sale.
The fifth sale is a property located at 551 Priors Pocket Road, Moggill. That property was sold on 9 February 2001 for $1,300,000. It is 45.18 hectares in area. Mr Rabbitt described the property as consisting of two allotments, one on either side of Priors Pocket Road and with an esplanade river frontage. The property included a man-made lake providing boating access to the river. It is proposed that the property be subdivided into eleven lots. The terrain is gently undulating cleared country. Mr Rabbitt analyzed the sale to $2.87 per square metre. He said that the property was similar to the subject except for the size and inferior location.
Mr Singh described the site as almost flat with a gentle slope falling away from the road to the river. The land was formerly mined for sand but has been rehabilitated and some of the mine areas formed into lakes. It is quite remote from the subject, by road. The nearest bus stop is approximately 5 kilometres from the site and the only shopping centre available locally is at Bellbowrie. Mr Singh did not consider that the sale could be used as a comparison with the subject.
These sales, said Mr Rabbitt, showed rates ranging between $1.60 per square metre and $5.65 per square metre. That range is similar to the range shown in the institutional sales. Sales 1 and 3 of the subdivision sales are larger areas and show $1.60 per square metre and $2.84 per square metre respectively. In his opinion both properties are inferior to the subject in terms of their location. Sale No 5, which shows $2.87 per square metres, is similar to the subject in that it has a Brisbane River frontage. However the sale is significantly smaller than the subject and this factor has to be taken into account in assessing the value of the subject. In his view, this sale was the best of the subdivisional evidence available.
Mr Rabbitt noted that most of the sales occurred some time prior to the valuation dates but he said that there had been little upward movement in large rural en globo parcels between the dates of the sales and dates of valuation.
In Mr Rabbitt’s opinion, Sales 1 and 2 in the Institutional sales, together with the other sales, indicate an upper level of value for the subject of $4 per square metre. He said that no guide is provided for the lower end. In his opinion, the range of value for the subject property is between $2 per square metre and $4 per square metre. He therefore adopted $3 per square metre which amounts to $8,466,000. He adopted $8,500,000 as the value of the subject site.
Mr Singh valued the subject site at $17,000,000 or $6 per square metre.
He relied on one sale in support of this valuation, namely, property situated at 2687 and 2709 Moggill Road, Pinjarra Hills. The property comprised 65.12 hectares of “Particular Development” land. It was sold on 25 June 1998 for $5,350,000. Mr Singh deducted $20,000 for clearing. There was a development approval in place for part of the property which Mr Singh valued at $300,000. He therefore analyzed the sale to $5,030,000 or $7.70 per square metre. Mr Singh described the sale as undulating land with relatively easy slopes and a waterway depression. He said that the land has limited outlook and is adjacent to busy Moggill Road and the CSIRO Energy Research Centre. By way of contrast, the subject land, which is approximately one kilometre away, is in a more desirable, quieter location with a good outlook and extensive river frontage. The sale property is to be subdivided into rural home sites of approximately 4,000 m². In Mr Singh’s opinion the sale land is inferior to the subject land.
Mr Rabbitt said that the history of this property was that it had originally been zoned Future Urban under the 1987 Town Plan. An application was made to the Brisbane City Council in the early 1990’s to subdivide the land into 600 metre residential lots. This application was refused by the Council. An appeal to the Planning and Environment Court failed for a number of reasons including traffic issues, detriment to the amenity of the area and environmental concerns. The Council subsequently agreed to a subdivision of the site into lots ranging from 4,000 m² to 7,000 m², and rezoned the land to “Particular Development”. In Mr Vann’s opinion there would be no hope of obtaining a similar approval for the Pinjarra Hills site because unlike the sale property, the subject was not zoned “Rural Residential”. He also pointed out that any such proposal would almost certainly meet with significant opposition from the local community.
Mr Singh said that he had valued the subject property on the basis that the land could be developed into rural residential sites, or other suitable purposes, after rezoning and obtaining Brisbane City Council approval. He noted that the subject land is located in an area with predominantly rural home sites. In his view most of the land below the Q100 flood level could be incorporated into these sites provided that the building platforms were kept clear of the Q100 flood level, waterway corridors and wetlands.
Conclusion:Pinjarra Hills Property
Mr Vann’s evidence, which again was not effectively challenged, was that the effect of the 2000 City Plan is that the 1 to 2 hectare rural residential zoning has disappeared. The City Council has decided that the minimum size of a subdivision for a property such as the subject is to be 10 hectares. I have accepted that evidence and also Mr Vann’s opinion that a reasonable, informed purchaser of the subject would have taken account of the proposed changes to the City Plan, as at the dates of valuation.
Mr Rabbitt’s Sale 1 is in a category of its own in that it is subject to a Vegetation Protection Order which means that it is necessary to obtain Council approval to clear any vegetation. Sales 2, 3, 4 and 5 of Mr Rabbitt’s subdivisional sales were of land which was to be subdivided into residential lots ranging in size from 4,000 m² to 4 hectares. Sale 3 is closest to the subject in size, but is located at a considerable distance from the subject. That fact, plus the fact that the land was capable of subdivision into 4,000 m² lots means that the sale is of limited assistance in determining the value of the subject. Sales 2, 3 and 5 are approximately the same size as each other, and show sale prices ranging from $2.87 per square metre to $5.65 per square metre. All of these properties are much smaller than the subject and could be subdivided more intensively than the subject.
Mr Singh’s sale, which is located nearer to the subject than any of Mr Rabbitt’s sales, also reflects a price paid for land which was to be subdivided into smaller lots of 4,000 m² to 7,000 m².
All of these sales are at most, a guide to the value of the subject land, and, in my opinion, are of limited assistance in determining the value of that land.
Since there is no sales evidence to demonstrate clearly the value of the subject property, if it were to be purchased for rezoning into 10 hectare lots, I consider that it is preferable to value the property for its current use, namely university/community uses and to make an allowance for the possibility that the land might be successfully rezoned and subdivided into 10 hectare allotments. On this basis, the institutional sales and the sports and recreation sales provide the best basis for valuation. The institutional sales show prices of $4 per square metre and $4.95 per square metre respectively. Sale No 1 is a quite significant area although less than half the size of the subject. However, to be weighed against that is the vastly superior location and zoning of the subject site. In my opinion, this sale indicates a minimum value of $4 per square metre for the subject site.
The Open Space/Recreation site sales were all of areas no more than a tenth the size of the subject. They reflect prices ranging between $4.98 per square metre to $9.13 per square metre. It is, again, difficult to rely on these sales given the differences in zoning, location and size of the sites as compared with the subject.
In the circumstances the conclusion I have reached is that the subject should be valued at more than $4 per square metre. It seems to me that a value of $4.50 per square metre reflects more effectively the superior attributes of the site as compared with the institutional sites. I therefore have determined the value of the property at $4.50 per square metre or $12,699,600 rounded to $12,500,000.
Orders
(i)The appeals are allowed.
(ii)The unimproved value of Lot 382 on SL 6788 and Lot 389 on SL 7528 as at 1 October 1999 and 1 October 2000 is determined at Twenty-Three Million, Five Hundred Thousand Dollars ($23,500,000).
(iii)The unimproved value of Lot 1 on RP 223379, Lot 2 on RP 223382 and Lot 1 on RP 68478 as at 1 October 1999 and 1 October 2000 is determined at Twelve Million, Five Hundred Thousand Dollars ($12,500.000).
CAC MacDONALD
MEMBER OF THE LAND COURT
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