Vanyield Pty Ltd v Department of Natural Resources and Mines
[2005] QLC 56
•25 November 2005
LAND COURT OF QUEENSLAND
CITATION: Vanyield Pty Ltd v Department of Natural Resources and Mines [2005] QLC 0056 PARTIES: Vanyield Pty Ltd
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2004/0136 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 25 November 2005 DELIVERED AT: Brisbane HEARD AT: Mackay MEMBER Mrs CAC MacDonald ORDER: 1. The appeal is dismissed.
2. The unimproved value of Lot 2 on SP 167892, Parish of Bassett, County of Carlisle as at 1 October 2001, as determined by the Chief Executive in the sum of Three hundred and Eighty-Five Thousand Dollars ($385,000), is affirmed.
CATCHWORDS: Evidence – admissibility – valuer for appellant also director of appellant Company – need to declare interest at outset – effect on weight of evidence – no prohibition on giving evidence.
Valuation – unimproved value – development works external to subject land – no evidence of similar costs with basic sales – external development costs not deducted for unimproved land.
Valuation – unimproved value – use of sales – relativity with applied values of comparable lands – no evidence or link between sales and relativity – sales evidence preferred.APPEARANCES Mr M McGrath, Solicitor, of McKays Solicitors, for the appellant
Mr MC Heather, Senior Legal Officer, Department of Natural Resources and Mines, for the respondent
This is an appeal under the provisions of the Valuation of Land Act 1944 (the Act) against a determination by the Chief Executive, Department of Natural Resources and Mines (the respondent) of the unimproved value of certain land owned by the appellant, Vanyield Pty Ltd, at $385,000 as at 1 October 2001.
The notice of appeal filed in this Court estimated the unimproved value of the land at the relevant date to be $170,000 but at the hearing of the appeal the appellant contended for a value of $109,000.
The grounds of appeal were that –
· The valuation does not have sufficient regard to the disabilities of this site in the unimproved state, including restrictions for filling, flood plains and the amount of fill.
· The valuation is incorrect on a relativity basis, with regard to the value applied to other similar land in the area.
· The valuation is wrong in law and in fact.
At the hearing of the appeal, the appellant was represented by Mr M McGrath, Solicitor, of McKays Solicitors. The respondent was represented by Mr MC Heather, a Senior Legal Officer of the Department of Natural Resources and Mines.
Evidence was given on behalf of the appellant by Mr JD Dodds, a certified practising valuer. Ms LJ Creber, a registered valuer employed by the respondent, gave evidence on behalf of the respondent.
Mr Dodds gave evidence on behalf of the appellant apparently as an independent expert in that immediately after he was sworn in, he listed his qualifications and experience in the valuation profession and a report compiled by him was tendered. The report expressed his opinion as to the value of the subject land as at the relevant date. Subsequently, it emerged from Mr Dodds' evidence under cross examination that he was a director, the secretary and a shareholder of the appellant company as at the date of valuation and the date of the hearing. He was, therefore, directly interested in the outcome of these proceedings. That interest should have been disclosed at the outset by Mr Dodds without the need for cross-examination. The existence of that interest may affect the weight given to his evidence, although it does not render the evidence inadmissible (FGT Custodians Pty Ltd v Fagenblat [2003] VSCA 33). Although Mr Heather expressly stated that the respondent did not submit that Mr Dodds' evidence was tainted by his interest in the appellant company, Mr Dodds cannot escape criticism for his failure to disclose his interest voluntarily.
The subject property is an irregular shaped parcel of 3.3953 hectares of low lying land situated on the fringe of the Mt Pleasant/Greenfields commercial precinct in North Mackay, about 3.5 kms north-west of the Mackay City Post Office. The precinct extends from the intersection of the Bruce Highway with Sams Road to the east and Heaths Road to the west. The subject land is bounded by Gooseponds Creek to the north, Willetts Road to the east, Sams Road to the south and an adjoining property to the west. Sams Road is a sub-arterial road which, in the vicinity of the subject, intersects Willetts Road and runs west to the Bruce Highway which lies to the west of the subject land. Willetts Road is a minor connector road intersecting Sams Road at the south-eastern corner of the subject land. Although the subject property has frontages to Sams Road (approximately 285 metres) and Willetts Road (approximately 238 metres), the only access to it is from Willetts Road.
The property is burdened by a registered easement in gross, for drainage purposes, in favour of the Council of the Shire of Pioneer. The easement, which is nine metres wide, runs north-south through the centre of the property allowing drainage from Sams Road to Gooseponds Creek.
Electricity, reticulated water, sewerage and telephone services were available for connection to the property as at the date of valuation.
The land was zoned Local Business and Open Space under the Mackay City Council Town Planning Scheme of 21 May 1999 and was designated Commercial and Open Space and Recreation under the Strategic Plan of the same date.
As at the date of valuation a Development Approval issued by the Mackay City Council was in place which authorised the creation of two lots for Showroom General land use, one lot for Parkland use and a Road Reserve on the subject land. For this purpose, the property was notionally divided into four areas –
AreaZoning Use Area (m2)
ALocal Business Showroom General 1,695
BLocal Business Showroom General 4,407
COpen Space Road 7,511
DOpen Space Public Open Space 2.035 hectares
The Development Approval was subject to a condition that access be provided from Willetts Road. A nominal 26 metre wide Road Reserve was to extend across the rear (northern side) of Lot A to provide access to the western boundary of Lot B, including an 8 metre wide bitumen carriageway. The owners were also required to contribute $62,400 for the upgrading of the intersection of Sams and Willetts Roads.
Valuations
Respondent's Valuation
The respondent's valuation was struck by direct comparison with sales of three properties in the vicinity of the subject land. The comparison was made between the sales and the commercially useable area of the subject land (that is, Areas A and B) and an additional amount added for the balance area.
The valuation was calculated as follows:
Area A – 1,695 m² @ $75/m² $127,125
Area B – 4,407 m² @ $75/m² $330,525
$457,650
Less an allowance to Area B for the required
internal road – 4,407 m² @ $20/m² $88,140
Add value of balance area $15,000
$384,510
Adopt$385,000
The appellant did not challenge the respondent's valuer's analysis of the 3 sales but did challenge their comparability with the subject's Areas A and B. The appellant also contended that the balance area of land was of no value because of the constraints on its use imposed by the Development Approval.
Sale 1
This property is located on the western side of Willetts Road, south of Sams Road and also, therefore, south of the subject. Direct access to the sale property is available from Willetts Road. Ms Creber described the property as a regular inside allotment of 2,176 square metres providing a near level site with one metre of fill over the entire site. There is an easement along the southern boundary.
The property sold on 18 December 2000 for $308,250 ex GST. Ms Creber analysed the sale to $273,250 ($126 per square metre) after deducting $35,000 for the value of improvements. She applied a value of $245,000 ($113 per square metre).
Ms Creber said that the sale is larger than Area A but smaller than Area B of the subject. The sale required less fill than the subject. Although the sale has inferior exposure as compared with the subject, she considered the sale to be better quality land and to be overall superior to both Areas A and B of the subject.
Sale 2
This property is also located on the western side of Willetts Road and is immediately adjacent to the southern boundary of Sale 1. Ms Creber described the sale as a regular shaped inside allotment of 2,284 square metres, being a more level site with one metre of fill over the entire site. There is an easement along the northern boundary.
The property sold on 18 December 2000 for $324,750 ex GST. Ms Creber deducted $35,000 for the value of improvements and analysed the sale to an unimproved value of $289,750 ($127 per square metre). She applied a value of $255,000 ($112 per square metre).
Ms Creber said that the sale is larger than Area A of the subject but smaller than Area B. It required less fill than the subject. Although the sale has inferior exposure as compared with the subject, she considered the sale to be better quality land and to be overall superior to Areas A and B.
Sale 3
This property is situated at Discovery Lane in close proximity to Sales 1 and 2. It has direct access to Discovery Lane. Ms Creber described the sale as a near regular shaped inside allotment of 1,861 square metres being a level site with 1.5 metres of fill over the entire site.
The property sold on 9 April 2001 for $279,150 ex GST. Ms Creber deducted $50,000 for the value of improvements in analysing the sale to $229,150 ($123 per square metre). She applied a value of $215,000 or $116 per square metre.
Ms Creber said that the sale is slightly larger than Area A but smaller than Area B. It required less fill than the subject. She considered that the sale had slightly superior exposure to the Bruce Highway than the subject, but inferior exposure to Sams Road. The sale was better quality land and was, overall, superior to Areas A and B of the subject.
Application of Sales Evidence
Because Ms Creber considered that Areas A and B were inferior to all the sales, she adopted a rate of $75 per square metre for each of those Areas to allow for the disabilities of the subject. She also took into account the better visibility of the subject to the Bruce Highway as compared with the sales.
The rate of $75 per square metre was adopted for the following reasons. From the sales evidence, Mr Creber assumed a comparable rate of $125 per square metre. She then deducted
· $15 per square metre to allow for extra fill required on the subject as compared with the sales
· 10% to allow for the subject's proximity to a creek prone to flooding
· 10% to allow for the fact that the only permitted access to the subject was from Willetts Road
· 10% for access and shape disabilities
Appellant's Valuation
The appellant submitted that this was a case where it was appropriate to determine the unimproved value of the subject land on a relativity basis, that is by comparison with the unimproved value of other properties as determined by the respondent as at 1 October 2001.
Mr Dodds gave evidence as to the unimproved value of three commercial properties in the vicinity of the subject land as determined by the Department of Natural Resources and Mines as at 1 October 2001. He considered that the best way to assess the unimproved value of the subject land was by comparison of Areas A and B of the subject with the three sites, making allowances for the differences in the sites as compared with Areas A and B and also making an allowance for the abnormal development costs of the subject.
Comparison 1
This property (3,607 square metres) is located at the south-western corner of Sams and Willetts Roads, opposite Area A of the subject. The unimproved value as at 31 October 2001 was $325,000 ($90 per square metre).
Comparison 2
This property (5,790 square metres) is located at the south-eastern corner of the intersection of the Bruce Highway and Sams Road, opposite Area B of the subject. The unimproved value as at 1 October 2001 was $400,000 ($69 per square metre).
Comparison 3
This property (1,861 square metres) is the same property as the respondent's Sale 3. The unimproved value as at 1 October 2001 was $215,000 ($116 per square metre).
Mr Dodds identified the following differences between Areas A and B of the subject and the three Comparison sites:
· All the Comparison properties required some fill, but generally less than Areas A and B.
· The commercial area to the south of Sams Road is generally superior to the location of the subject because of the greater concentration of commercial allotments/developments in the area south of Sams road and its proximity to the proposed Mater Hospital site.
· The Comparison allotments have superior access, particularly Comparison 1 which is a corner site with extensive frontages to Willetts Road and Discovery Lane.
· Areas A and B are adjacent to a flood prone creek and are generally at a level one metre below Comparisons 1 and 3.
· Area A of the subject has a similar area to Comparison 3, and Area B has a similar area to Comparisons 1 and 3.
· Areas A and B of the subject are irregular in shape which restricts development potential.
· Area A is similar to but has slightly inferior exposure to Comparison 1. Area B has similar exposure to Comparison 3 and similar but inferior exposure to Comparison 2.
On this basis, Mr Dodds calculated the value of the subject, leaving aside his allowance for the abnormal development costs, as follows:
Area A
1,695 m² @ $100/m² from assessed rates $169,500
for Comparisons 1 and 3
Less
Allowance for extra fill @ $15/m² $25,425
Allowance for further disabilities
compared with Comparisons 1 and 3
@ $30/m²$50,850 $76,275
$93,225
Area B
4,407 m² @ $80/m² - from
assessed rates for Comparison 2 $352,560
Less
Allowances for extra fill @ $10/m² $44,070
Allowance for disabilities @ $25/m² $110,175 $154,245
$198,315
Mr Dodds then deducted an allowance of $231,200 for what he described as the abnormal costs of development associated with the subject site resulting from the conditions imposed in the Development Approval. (The details of this claim are set out at [66] below.) He calculated the unimproved value as follows -
Unimproved value assessment
Area A$93,225
Area B$198,315
$291,540
Less:Development costs $231,200
$60,340
Mr Dodds said that the unimproved value of the subject site had originally been determined by the respondent at $109,000 as at 1 October 2001. Three years later the respondent had revalued the land (as at 1 October 2001) to $385,000 which is the valuation under appeal. Although Mr Dodds' valuation based on relativity valued the subject at $60,340, he was content to contend for the figure of $109,000 as the unimproved value of the land.
Application of relativity evidence
Mr Dodds said that he had assumed that the unimproved values of his three comparison properties had been established by the market evidence generally, and in particular by relying on Ms Creber's Sales 1, 2 and 3. In his opinion, an analysis of the comparison properties as compared with the sales properties indicated that an allowance had been made by the respondent in the rate per square metre applied to larger properties as compared with smaller ones. Thus a rate of $90 per square metre was applied to Comparison 1 which has an area of 3,670 square metres. As that site had better exposure than Sales 1 and 2 where values of $113 and $112 per square metre had been applied, the only reason that he could see that would explain the lower rate of $90 per square metre applied to Comparison 1 was the larger area of that site. Similarly, a rate of $69 per square metre had been applied to Comparison 2 which has an area of 5,790 square metres. Comparison 2 is directly opposite [in fact it adjoins] Sale 3 (where $116 per square metres was applied) and although both have Bruce Highway exposure Mr Dodds considered that Comparison 2 had superior exposure. His opinion was that an allowance had also been made for size in determining the unimproved value of Comparison 2.
By way of contrast, Ms Creber had applied the same rate - $125 reduced to $75 per square metre for disabilities – to both Areas A and B, although Area A had an area of 1,695 square metres and Area B was 4,407 square metres in area.
Mr Dodds also pointed out that in applying the sale prices in the determination of the unimproved value of the sale properties, Ms Creber had allowed a discount in the order of 10%. No such discount had been applied to the subject land.
Ms Creber said that the two major features which she had taken into account in valuing Areas A and B were their size and visibility and proximity to the Bruce Highway. Area B was larger than Area A, which would normally indicate a lower rate per square metre. However Area B had superior visibility to the Bruce Highway which was important for a commercial site. Considering these two matters together, she considered the two areas were of similar value per square metre.
Conclusions
Valuation Methodology
The authorities are clear that the best basis for the assessment of the unimproved value of land is the use of sales of vacant or lightly improved parcels of land (Fischer v Valuer-General (1983) 9 QLCR 44 at 46; Grahn v Valuer-General (1992-93) 14 QLCR 327 at 328). They also recognize that it is desirable that valuations of comparable lands made for the purposes of the Act should have proper relativity to one another so long as the valuations are soundly based. However, it is untenable to adopt a value for one parcel on relativity with another which has no sound basis (Barnwell v Valuer-General (1990-91) 13 QLCR 13 at 16; Grahn at 328).
The evidence as to the comparability of the comparison properties with the sales properties was sparse. Mr Dodds compared the properties on the basis of their exposure (as set out at [35] above) but there was no other evidence as to the comparative features of the properties, other than their respective sizes. The evidence did not establish that the difference in size of Comparisons 1 and 2 on the one hand and Sales 1, 2 and 3 on the other accounted for the difference in the unimproved values.
Further, in relation to Area A, Mr Dodd's calculations were not supported by his reasoning concerning the effect of size on the value of a property expressed as a rate per square metre. In adopting a rate of $100 per square metre as the starting point for his valuation of Area A, he relied on the unimproved values of Comparisons 1 and 3 although he also said that that rate was supported by Ms Creber's sales evidence. Area A is 1695 square metres, whereas Comparisons 1 and 3 are 3,607 square metres and 1861 square metres respectively. If Mr Dodds were to apply his reasoning consistently, it would be inappropriate to rely on Comparison 1 for the purpose of valuing Area A.
In those circumstances I do not consider that the appellant has discharged the burden of proof imposed by s.45(4) of the Act. Ms Creber had good reasons for adopting the same rate per square metre for Areas A and B of the subject and the appellant has not established that the respondent acted on a wrong principle or made a serious error of fact or that the valuation was made by a method which was fundamentally erroneous (Brisbane City Council v The Valuer-General (1978) 140 CLR 41 at 56, 57; Grahn at 328).
It follows that I consider that the valuation should be carried out by comparison with the respondent's Sales 1, 2 and 3 with appropriate adjustments for the differences in the properties.
Sales Evidence
The starting point of Ms Creber's valuation was the adoption of $125 per square metre, relying on her analysis of the sales evidence. She then reduced that amount to $75 per square metre to allow for the various disabilities of the subject land as compared with the sales. The allowances were:
$15/m² - extra fill
10% - proximity to a creek prone to flooding
10%- sole access from Willetts Road
10% - access and shape
Mr Dodds criticised the adoption of $125 per square metre as the starting point for Ms Creber's analysis, saying that she had not allowed a discount in her application of the sales evidence to the subject whereas she had done so in applying that evidence to determine the unimproved value of the sales property.
It appears that there may be a departmental practice of applying a ten per cent discount in determining the unimproved value of a sale property itself but there was no evidence that the respondent applies such a discount when the sale is used for the purpose of establishing the unimproved value of another property. If there were a universal departmental practice to apply a discount when applying sales evidence to other properties, failure to apply the discount to some properties may be inequitable and may lead to discrepancies in relativities. However, that is not the case here. I consider that the application of $125 as the starting point for the valuation of Areas A and B of the subject property was justified by the sales evidence.
Mr Dodds did not take issue with Ms Creber's deductions of 10% each for the subject's disabilities of proximity to a flood prone creek, limited access from Willetts Road and other access and shape disabilities. However, he considered that Ms Creber had made no allowance for the general superiority of the commercial area to the south of Sams Road nor its superior exposure as compared with the subject because the subject in its filled state lies about one metre lower than those properties. Mr Dodds also submitted that Ms Creber had not made sufficient allowance for the amount of fill required on the subject nor for what he described as the abnormal costs of development associated with the subject site.
Mr Dodds said that he considered that the area to the south of Sams Road was commercially superior to the area where the subject is located. There was a greater concentration of available commercial land south of Sams Road. At the date of valuation there was a partly constructed, untenanted building on the subject land, and there was a motor showroom on the corner of the Bruce Highway and Sams Road at the end of Discovery Lane. There was no other development in the vicinity although it was well known that the Mater Hospital would be relocated to the area south of Sams Road. Mr Dodds said that originally the unimproved value for the subject at the relevant date was $109,000 but three years later the respondent had reassessed the value as at that date at $385,000. He suggested that the change in valuation had been triggered by a road alignment and that the new valuation was struck with the benefit of hindsight and taking into account the considerable development that had occurred in the general area in the interim period.
Mr Dodds said that there is a greater concentration of commercial development south of Sams Road as a result of the construction of the new Mater Hospital in that area. By comparison, the subject land was 'stuck out on its own'. Only 10% of the building on the appellant's property was leased until late 2004. As at the date of the hearing 75% of the appellant's building was leased whereas every property on the southern side of Sams Road had been let. There has been considerable development on the southern side of Sams Road. By contrast, the appellant had not seen fit to develop the second site on the subject because there was no demand for its property.
It is noted that Ms Creber's evidence established that the reason for the revaluation of the subject was not the road realignment referred to by Mr Dodds but that the original valuation had been made on the basis that the property was zoned Rural whereas, at the date of valuation, it was zoned Commercial.
Ms Creber said that at the date of valuation commercial development was proposed in the general area of Sams Road across Heaths Road (to the west) and she considered that a reasonable assumption would have been, as at that date, that the development would be of similar standard through the whole area.
Section 3 of the Act provides inter alia, that '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;"
As Isaacs J said in Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 441, it must be assumed that the prudent vendor and purchaser are persons who are willing to trade but who are
"… perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
The date at which the value of the subject is to be ascertained is the date of valuation. In order to ascertain that value it is necessary to ascertain what an appropriately informed person would have known on that date. Mahoney J said in Housing Commission of New South Wales v Falconer [1981] NSWLR 547 at 576:
"Such persons are to be taken to know what an appropriately informed person would know on that date. That being the principle, it follows that such persons (and the court, as determining what they would have done) cannot be seen as knowing more. The price which such persons would accept at that date will be affected by the uncertainties as at that date, as to, for example, the future demand for land at the relevant time, future decisions of zoning authorities, and the like. Those uncertainties and the effect of them on the postulated vendor and purchaser help to determine what price will be found acceptable. In that regard, therefore, evidence of what subsequently has occurred in relation to such matters may not ordinarily be referred to."
Mr Dodds acknowledged the applicability of that principle in the course of his evidence. I consider that the evidence as to the subsequent flourishing commercial development to the south of Sams Road cannot be used as proof that, as at the date of valuation, properties in that area would attract a higher price than the subject. The evidence which can be relied on was that, as at the date of valuation, Mr Dodds considered that the area to the south of Sams Road was commercially superior to the area where the subject is located whereas Ms Creber considered that a reasonable assumption was that the development would be of a similar standard throughout the area. Again, I do not consider that the appellant has adduced sufficient evidence to discharge the onus of proof that it bears, and I have therefore accepted Ms Creber's opinion in relation to this aspect of the matter.
Other Allowances
Exposure
Mr Dodds said that even after it had been filled, the subject land was approximately one metre lower than the property south of Sams Road. This impacted adversely on the subject.
Ms Creber said, and I accept, that she had taken into account the fact that the area south of Sams Road is somewhat superior in its levels, as compared with the subject. She had allowed for that disability in the 10% discount for access and shape of the subject.
There is no evidence to establish that there has not been sufficient allowance for this difference between the sales and the subject, and therefore, no further allowance should be made.
Mr Dodds also said that although Area B currently had exposure to the corner of Sams Road and the Bruce Highway, that exposure would be reduced considerably in the future because local authority consent had now been given for the adjoining property to be filled and developed. As at the date of valuation, no development application had been made but Mr Dodds considered that a reasonable purchaser would have anticipated that one would eventuate in the not too distant future.
Ms Creber's evidence was that the subject land, at the date of valuation, reasonable visibility to the south-western portion from the Bruce Highway, particularly when the sugar cane on the adjoining land had been harvested.
In making adjustments in the comparisons between the sales properties and the subject, Ms Creber expressly referred to the issue of exposure. She was clearly aware that that was a relevant issue in the valuation of the subject property. I do not consider that it has been established that she has not given appropriate weight to this factor.
Fill
There was no issue that, as at the date of valuation, there was a considerable quantity of fill on the subject land and that the fill was an improvement.
The comparative sales on which Ms Creber relied were also filled properties, although her evidence indicated that Areas A and B of the subject were filled to a depth of 2.5 metres compared with 1.5 metres on the sales properties. Ms Creber's report says that she allowed $15 per square metre for the fill on Areas A and B. However her oral evidence, which is confirmed by her calculations, was that she allowed $15 per cubic metre. Her total allowance for fill was $228,825, being 6,102 square metres filled to a depth of 2.5 metres at $15 per cubic metre.
Mr Dodds initially estimated an amount of $207,060 for fill being 10,353 cubic metres at $20 per cubic metre. However, in his valuation based on relativity he claimed a total of $69,495 for extra fill as compared with the properties south of Sams Road.
The effect of the sales evidence was to establish the value of the subject property, filled, as at the date of valuation. That land is to be valued as if it were unimproved that is, by making an allowance for the value of the fill on the subject as at that date. Ms Creber's estimate that Areas A and B were filled to a depth of 2.5 metres appears to be reasonable as does her calculation that the total allowance for fill should be $228,825. I consider that amount should be allowed for fill.
Abnormal development costs
Mr Dodds sought an allowance of $231,200 for the abnormal development costs of the subject land as follows:
Site works on streets and external roads $91,000
Stormwater drainage $14,000
Sewerage reticulation $15,000
Water$9,300
Services/electricity/telecommunications $21,800
External road contributions $62,400
Engineering services $17,700
The amounts claimed were calculated by using the costs of developing the land, excluding fill, as estimated by Ullman and Nolan, Consulting Engineers, adjusted by Mr Dodds to allow for the development costs of normal commercial sites in the area and upgraded by CPI to reflect the costs as at the date of valuation.
The valuation methodology adopted by Ms Creber, which I have accepted, sought to establish the unimproved value of Areas A and B of the subject land as though they were separate parcels of land, by comparison with sales of similar properties in the area. It appears that access and normal services were available to the sale properties at the time of sale so that the prices obtained reflect the value of such properties with access and services available to the boundary of the properties. Application of that sales evidence to the subject indicates the values of Areas A and B with those services in place to the boundaries of those parts of the subject property. In so far as Areas A and B did not have the same features as the sales properties as at the date of valuation, adjustments should be made to allow for the differences.
There was no evidence to establish that the amount of $62,400 claimed by Mr Dodds for external road contributions was in any way connected with the need to establish a proper base for comparison of the subject with the sales properties. That claim is, therefore, not allowed.
The claim of $17,700 for engineering services appears, from Annexure E to Mr Dodds report, to be for planning designs and estimates, design and construction supervision, geotechnical and survey cadastral. These costs appear to be related to the general development of the site and again, the need for such an adjustment, as compared with the sale properties, is unsubstantiated.
I will deal with the costs associated with the internal road below. Those costs, as claimed by the appellant, are $91,000 for site works on streets and $14,000 for stormwater drainage.
The remaining amounts claimed by the appellant were for sewerage reticulation, water, and services/electricity/telecommunications. Mr Dodds said that it was necessary to bring these services across the subject land to Areas A and B to put those areas in a comparable position with the sales properties.
The costs claimed were general development costs. There was no specific evidence as to the services available to the boundaries of Areas A and B at the relevant date. The evidence did not indicate precisely the location of these works. If any of the works were on Areas A and B they should not be allowed as they would constitute improvements to these areas. In so far as the claims related to works outside those areas but elsewhere on the subject land, there was no explanation as to why it was necessary to take the services across the subject land, rather than connecting them to the mains immediately outside each of Areas A and B. It has not been established therefore that it was necessary to carry out these works to put Areas A and B into a comparable position with the sales properties. These costs are not allowed.
There remains the issue of an allowance for the internal road, construction of which was a condition of the Development Approval. The road provides access to Area B of the subject. Ms Creber deducted $88,140 (4,407 square metres at $20 per square metre) for the costs of this road. That figure was calculated by relying on Rawlinsons. She allowed $45,000 for the costs of an eight metre wide road and an additional $43,000 to cover the costs of overruns. This amounted to $20 per square metre deducted from the value of Area B.
Mr Dodds claimed an allowance of $91,000 for the internal road as part of his total claim of $231,200 for abnormal costs of development. Mr Dodds' road costs were described in his report as "site works on streets and external roads". He said in oral evidence, and I accept, that that description was a typing error and that this item should read "streets and external roads", or "works on streets and external roads" and that there was no claim for site works included. The engineer's estimate for the street works, including external street works was $111,000. Mr Dodds said that he had indexed that to $129,500 [as at the date of valuation] and had discounted that amount back to $91,000 in order to have some comparison with normal street works for a normal commercial site.
Given that both Ms Creber's and Mr Dodds' calculations are broadbrush and that there is relatively little difference between them, I can see no reason to prefer Mr Dodds' evidence. That being so, Ms Creber's allowance should stand.
Mr Dodds also claimed $14,000 for stormwater drainage which were costs, he said, that were associated with the construction of the road. Annexure E to Mr Dodds' report indicates that the amount of $14,000 is made up of $13,000 for stormwater drainage (surface drainage) and $1,000 for stormwater management. There is no indication in Annexure E that these costs are associated specifically with the internal road. I am not prepared to allow this amount.
Value of balance area
Ms Creber valued the balance area of the subject land (i.e. the land outside Areas A and B) at $15,000. The balance area consists of Area C (7,511 square metres) which, under the Development Approval, was to be used for Road purposes and Area D (2.035 hectares) to be reserved as Public Open Space.
Mr Dodds said that those areas are floodplains lying within the reclamation limits of the Pioneer River Improvement Trust for Gooseponds Creek and are subject to periodic flooding during extreme weather conditions. They cannot be filled or developed. He did not consider they added any value to the subject land. In fact the owner is obliged to mow the area and keep it as parkland for the public to use. He rejected Mr Heather's suggestion that Area C would have some value because it was to be used for access to Area B. Similarly, he did not consider that Area D added any aesthetic or other value, such as providing a flood buffer, for Areas A and B if it were assumed that the subject land was unimproved. Nor was it likely that it could be returned to its former use as cane land.
Ms Creber has attributed a nominal value to the balance lands. I do not consider that Mr Dodds has rebutted the presumption that that aspect of the valuation is correct. The availability of Area C for use as an access road to Area B in itself indicates that Area C is of value, and it is also likely that Area D adds aesthetic value and operates as a useful buffer zone to Areas A and B.
ORDER
1.The appeal is dismissed.
2.The unimproved value of Lot 2 on SP 167892, Parish of Bassett, County of Carlisle as at 1 October 2001, as determined by the Chief Executive in the sum of Three hundred and Eighty-Five Thousand Dollars ($385,000,) is affirmed.
CAC MacDONALD
MEMBER OF THE LAND COURT
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