Wanless v Chief Executive, Department of Lands
[1996] QLC 110
•16 August 1996
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BRISBANE
16 AUGUST 1996
Re: AV95-155 -
An appeal against an unimproved valuation under
the provisions of the Valuation of Land Act 1944
Local Government: Maryborough
L.D. and L. Wanless
v.
Chief Executive, Department of Lands
(Hearing at Maryborough)
D E C I S I O N
The grounds of this appeal relate primarily to the perceived effect on the unimproved valuation of the land caused by the existence of a Heritage Listing under the Queensland Heritage Act 1992. The land is located at 344 Kent Street, corner of Bazaar Street, in the central business district of Maryborough and is zoned “Central Business”. Accommodated on the land is the Royal Hotel which was erected in 1901.
At the outset, Mr Wanless made application for an adjournment of the hearing. The ground for that application was that an appeal against a successful application for Council consent to establish a two cinema complex within the building had been filed in the Planning and Environment Court. As Mr Wanless understood the situation, the hearing of the appeal (by an objector to the application) was imminent.
Mr Wanless indicated that if the Planning and Environment Court appeal was unsuccessful as he anticipated, then this appeal under the Valuation of Land Act would be withdrawn. However, if the Planning and Environment Court appeal was successful, it would be seen as necessary to proceed with the subject appeal.
Because of the late advice of the application for adjournment, the Department had prepared for the hearing, was legally represented and ready to proceed. Some costs would have been thrown away as the result of an adjournment. Mr Wanless was informed that the Department, for that reason, objected to the adjournment being granted but, if its objection was overruled, would seek the costs thrown away. Mr Wanless decided to withdraw the application for the adjournment and conducted the case without legal or valuation assistance.
The valuation appealed against was in the amount of $310,000. The appellants’ estimate of value in the Notice of Appeal was “nil”. However, it was Mr Wanless’ evidence that if the cinema proposal could not proceed then he was at a loss to know how the existing building could be economically used to support an unimproved valuation greater than $155,000. Mr Wanless spoke of the significant expenditure which had been outlaid on the property since its acquisition particularly in the provision of a restaurant. However, the lack of custom which had been experienced indicated a culture in the city which resisted patronage of such redevelopment. From his experience, Maryborough was a city where, regardless of the “Heritage City” promotion, no commercial advantage had been experienced through the heritage listing of the Royal Hotel. While he recognised the building as being one of the better heritage style structures in the city, it was his experience that the heritage factor “did not bring one dollar through the door”. It was not that he was inexperienced in the development of heritage property, having successfully been involved in a heritage listed hotel in Rockhampton.
It was Mr Wanless’ evidence that while commercial proposals for use of the building in association with the hotel, had not been withheld by the heritage listing, the building itself denied implementation of some proposals. For example, there had been approval both from the Heritage Council and Local Government for strata titled subdivision of the building. However it was his evidence that this proposal could not be effectively fire rated in the absence of particular fire wall construction which the Heritage Council would not approve.
Use of the building as it existed at the date of valuation included licensed bar areas, nightclub, family restaurant, shop premises on the Kent Street frontage and accommodation units/rooms on the first floor.
The Department’s valuation was made by Mr B.W. Gaskell. His basis of valuation was that the highest and best use of the land was as zoned for commercial purposes but he recognised that a deleterious effect resulted from the heritage listing. In his opinion the land provided a well located prominent corner site. The building permitted a variety of commercial uses and he held the view that “it had been shown that the building can be adapted to a number of commercial usages other than Hotel purposes”. He saw such adaption of use to such other commercial activities as being of a similar nature to those carried out in non-heritage listed properties. In his opinion, commercial development potential in the Maryborough CBD was limited to one storey above ground. The upper level usage of many of the older buildings indicated to him that little commercial demand existed for other than ground floor space.
Mr Gaskell’s base commercial value for the site was derived from the evidence provided by five sales, as set out in his tendered report, a copy of which was provided to Mr Wanless. None of the sales evidence or its comparability with the subject land, on an unfettered unimproved basis, was challenged. On that sales evidence, with due allowances for the advantages of corner location and rear access (Horsburgh Lane), Mr Gaskell valued the site before consideration of the heritage listing, in the amount of $385,000. He then deducted from that amount an allowance of 20% to reflect the perceived constraints caused by the heritage listing. As I understood his evidence, that allowance had first been applied to the valuation of the subject property by the Department when consideration of the effects of heritage listing on various properties throughout the State had been necessitated by the judgment of the Land Appeal Court in Ballow Chambers Limited v. Valuer-General (1992-93) 14 QLCR 422 where at p.436 the Court found:
“ ... the heritage listing of ‘Ballow Chambers’ imposes constraints upon the use and development of the subject land which must be taken into account when valuing that land for its highest and best use, even though its improvements must be assumed not to exist at the valuation date.”
Although the original 20% allowance was not the result of his own deliberations, it is clear from Mr Gaskell’s report that he holds the opinion that such an allowance is totally adequate for he states:
“The effect of Heritage listing on the subject site is considered minimal with due allowance having been given to the site.
.The property is located on a prominent corner position in Maryborough CBD.
.The nature of the building allows adaptation to other usages.
.Heritage listing does not limit the use of the Royal Hotel to Hotel purposes only.
.The highest and best use of the site without Heritage listing would be a building similar to the present building.”
Mr Wanless as an investor and property developer, disagrees with the final point and the general positive philosophy as demonstrated by Mr Gaskell towards the operation and effects of the particular legislation.
What is clear to me is that the constraints caused to any site by the existence of the particular structure which resulted in the heritage listing need to be addressed individually in the valuation exercise under the Valuation of Land Act. For example, the granting of approval by the Heritage Council to strata subdivision, a factor which appears to have been seen by Mr Gaskell as a positive feature, is of no real consequence if alteration of the structure to allow Local Government standards to be met would not then be approved, as Mr Wanless states.
Nevertheless, it seems to me that in the circumstances of this particular matter, at least as the facts stood at the relevant date of valuation, a deleterious heritage listing effect greater than 20% has not been proved. The building as it stood was capable of the various existing commercial uses as well as being capable of partial further conversion to cinema use. The positive effect of that latter approval is, in fairness, recognised by the appellants. If, for reasons related to the heritage listing, the appeal against the approval for such development is successful, then that would be another factor which may be seen to have relevance to the heritage listing - but the cumulative degree of effect would still need to be argued at a subsequent date of valuation.
As the matter stood at the relevant date of valuation - 1 January 1995 - the appeal is dismissed and the valuation of the chief executive affirmed.
RE WENCK
MEMBER OF THE LAND COURT
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