Ardentallen Pty Ltd & Anor v Chief Executive, Department of Natural Resources [1999] QLC 113

LAND COURT, BRISBANE 19 October 1999 Re: Appeals against Annual Valuations Valuation of Land Act 1944 Valuation Roll Nos: 165, 166 and 3581 Local Government: BCC-Sandgate. (V99-308, AV98-721 and AV98-722). Ardentallen Pty Ltd v. Chief Executive, Department of Natural Resources and (AV98-723) Kenneth M Shaw v. Chief Executive, Department of Natural Resources D E C I S I O N Background: These matters relate to two properties located at 70-74 Rainbow Street (warehouse) and 8 Hancock Street, Sandgate (retail centre). With the consent of the parties the above matters were heard concurrently. The subject lands are described as Lot 1 on Plan S2738 (Auction Perpetual Lease No 16192), and Lots 2 and 3 on Plan S2728 (warehouse site) and Lot 6 on Plan S2788 (Auction Perpetual Lease No 6487), Parish of Nundah (retail centre site). The lands are located about 120 metres west of the Sandgate Post Office, about 17 radial kilometres north-east of the Brisbane GPO, and about 200 metres south-west of Sandgate Business Centre in Brighton Road. Sandgate is a seaside suburb, with Moreton Bay being located about 600 metres to the north-east of the subject land. The key issues in these matters are relativity, the nature of the land, the use of the land, and comparison of sales. The subject lands are both zoned as "Business" under the Town Plan of the Brisbane City Council (the Council), and current at the date of valuation of 1 October 1997. The warehouse site has an area of 1685 square metres and the retail centre has [1999] QLC 113 -- 1 of 16 -- 2 an area of 607 square metres. Both lands are used in conjunction as components of the Jeays Hardware Mitre 10 store. Both Rainbow Street and Hancock Street are full width two-way bitumen sealed roads, with concrete kerb and channelling. Rainbow Street is the main access road to Sandgate, and has moderate to heavy traffic flows. All normal services are available. The warehouse site is used as a trade outlet for the Mitre 10 store, and Lot 1 on Plan S2738 is used as a building supplies yard. On 9 March 1998 the Chief Executive issued a valuation of the retail centre at $100,000. Following an objection the Chief Executive amended that figure, and on 25 August 1998 issued a revised valuation at $85,000. The appellant has now appealed that figure claiming the unimproved value should more properly be $60,700. On 9 March 1998 the Chief Executive issued two separate valuations for the warehouse site for $150,000 (Lots 2 and 3) and $95,000 (Lot 1). The appellant objected both figures, and the Chief Executive issued amended valuations on 25 August 1998 at $142,000 (Lots 2 and 3) and $65,000 (Lot 1). The appellants appealed both those amended valuations, claiming for Lots 2 and 3 (AV98-721 - $100,000) and Lot 1 (AV98-722 - $100,000). Subsequent to those appeals the Chief Executive reviewed the use of the warehouse land and concluded that the two separate valuations could be amalgamated, apparently in view of the removal of a building upon Lot 1. The Chief Executive then issued a single valuation for the warehouse site on 6 October 1998 at $185,000. Following a further objection the Chief Executive issued an amended valuation on 18 May 1999 at $176,000. The appellant has appealed that figure claiming the unimproved value should more properly be $100,000. At the hearings on 3 August 1999 in view of the single amalgamated valuation for the warehouse site, the appellant formally withdrew the two former appeals for AV98-722 (Lot 1) and AV98-721 (Lots 2 and 3). Mr K Shaw appeared and gave evidence for the appellants. Mr AD Grams, Senior Valuer, appeared for the respondent, calling evidence from Mr MW Cowley, the Departmental Registered Valuer accepting responsibility for the valuation. The Evidence: (1) The History of Appeals – The current properties were part of five appeals formerly lodged with the Land Court against the valuations determined on 1 October 1996. Because of the lack of -- 2 of 16 -- 3 jurisdiction only two of those former appeals proceeded to hearing, and a decision was delivered by the Court in respect of Bon Accord Pty Ltd v. Chief Executive, Department of Natural Resources (AV97-382 and AV97-383), 16 June 1998, unreported. It is part of the appellant's claim in the current matter that relativity previously established between the five properties, and subsequently disturbed by the decision of the Land Court, should now be resurrected by reducing the unimproved values of the subject lands in accordance with the amendments now claimed by the appellants. In the former matters the initial valuations determined by the Chief Executive, had apparently been $530,000 (shopping centre site) and $285,000 (car park site). After an objection the Chief Executive had revised those figures to $495,000 (shopping centre site) and $255,000 (car park site), which were the amounts then defended at the appeals. The learned Member determined unimproved values of $380,000 (shopping centre site) and $210,000 (car park site). It is Mr Shaw's argument that the initial unimproved values at 1 October 1996 for the current sites were the warehouse site (Lots 2 and 3 - $150,000; and Lot 1 - $110,000); and the retail centre site (Lot 6 - $100,000). He then argues that, if that relativity was agreed by the Chief Executive at 1 October 1996, then a corresponding relativity should also prevail at the subsequent valuations at 1 October 1997 and 1 October 1998. He notes that following the Land Court decision the values determined by the Court for the Bon Accord Pty Ltd lands had been adopted for both the 1997 and 1998 valuations. Mr Shaw therefore seeks adjustments to the current warehouse site and the retail centre site by 26.32% (compared to the initial unimproved values). Mr Grams argues that the actual reduction in valuations by the Land Court represented only 17% to 18% ($255,000 to $210,000) for the car park site. Mr Shaw also argues that under section 34(1) and (2) of the Act it would have been proper for the Chief Executive to have valued the warehouse land as one single valuation for some 30 years prior to his decision to so amalgamate the valuations on 6 October 1998. Mr Shaw acknowledges that failure to act by the Chief Executive, was in part contributed to by a certain lack of response by the appellant. However he argues that a single valuation for the three parcels (Lots 1, 2 and 3) should have been apparent to an observant Chief Executive because:  the three parcels all adjoin -- 3 of 16 -- 4  all three parcels are owned by the same company  the use of those three parcels has been let to a single user (whose buildings are adapted to single occupation) for nearly all of that time. However Mr Cowley advises that the Departmental record indicated that Lot 1 of the warehouse site was formerly occupied by a building, which had been subsequently removed. As the owner had not notified the Chief Executive of the change in land use, there had been no attempt to review and amalgamate the three lots into one valuation, until the matter had been reviewed on objection. Under the Valuation of Land Act, if there is a separate building on the site, suitable for separate occupation, then the lands are to be valued separately. The current minor buildings that exist on Lot 1 are not seen to be significant enough to justify a separate valuation. Mr Shaw also raised the matter of whether a retaining wall had been effectively allowed for as an improvement, a matter discussed later. (2) The Nature of the Land – (i) The Warehouse Site – The three lots comprising this land have a total frontage to Rainbow Street of 41.96 metres, and a depth of 40.23 metres. The natural topography of Lots 2 and 3 is gently sloping from west to east, while Lot 1 slopes more steeply from west to east, and has been excavated with an old retaining wall (about 60 years of age) along the western boundary. Overall the subject land is relatively low in relation to the surrounding land, which falls generally towards the north-east, where there is a lagoon known as Einbunpin Lagoon, on public lands about 100 metres to the north-east. There is an old drill hall site and a large public car park to the north and east of the lagoon fronting Brighton Road, which is the main commercial centre. A smaller car park is located about 20 metres to the north of the subject land. The main car park is also used by commuters from the nearby Sandgate Railway Station. There is a school to the west of the subject land, and Mr Shaw argues that technical experts have assessed that underground water upon the subject land, either from a natural spring, or from sub-surface runoff, is a constant problem requiring regular maintenance and monitoring. Mr Shaw notes that the building upon the subject land was originally an old iceworks, which is now infested with termites, which would appear to be sustained by the permanent underground water. However, -- 4 of 16 -- 5 while that maintenance is estimated by Mr Shaw to total many thousands of dollars, he has not included those additional costs in his estimate of the unimproved value, seeking only to allow a conservative estimate of improvement costs in his calculations, relying only on relativity with the Bon Accord lands. The subject land currently has physical access towards a pathway to the north, across adjoining Lot 6 (the retail centre), by virtue of the goodwill of Mr KM Shaw. However there is no legal access to that pathway. Access to Lot 1 of the subject land is currently inhibited by traffic bollards, and the steepness of the school land to the west, where a service road exists to the school and a church, which also impedes visibility and exposure of the subject land. Because of those difficulties heavy vehicles seeking to unload or collect materials from the builders' supplies area on Lot 1, are forced to do so via the pathway to the north, or through the building on Lots 2 and 3. Mr Shaw also argues that the current old retaining wall along the western boundary of Lot 1 was originally not allowed for in the initial valuation at $95,000 (Lot 1), or in the amended valuation for Lot 1 at $65,000. In his revised amalgamated valuation for the whole site (Lots 1, 2 and 3) Mr Cowley has now provided for site works (including the retaining wall) at $68,500, a figure consistent with Mr Shaw's technical advice on cost to excavate the land and construct the retaining wall. It is noted that Mr Cowley has been generous in his application of the added value of the site works at $68,500, which provides for no depreciation of the old retaining wall. Discussions about whether the existence of the retaining wall had, or had not, been allowed for in previous valuations, have no impact upon the current matters. However it was noted that a Departmental record indicated in 1970 that an amendment had been made to accommodate the wall following an earlier objection by the appellant. (ii) The Retail Centre – The subject land is an inside regular shaped lot with a frontage to Hancock Street of 15 metres, and a depth of approximately 40 metres. The land has a gentle slope from west to east, and is relatively low in relation to the surrounding area. The subject land also has access to the rear to a four metre wide pathway towards the north, part of which was formerly closed off by road closure in 1973, extending the -- 5 of 16 -- 6 subject land by 68 square metres. The subject land adjoins the warehouse site to the south, and adjoins a private car park site (Bon Accord Pty Ltd) to the north. (iii) The Use of the Land – The existing uses of the land are agreed to be its highest and best use, and both parties agree that the current extent of buildings exceeds the likely site coverage in the event of any rebuilding operations. However in his valuation Mr Cowley has considered the sites as if they were vacant, and makes no allowance under section 3(4) of the Act for any higher use, in order to provide a conservative unimproved value. However Mr Shaw argues that the current valuations make inappropriate allowance for the location of the subject lands, in relation to the general Central Business District, which is on the eastern side of Brighton Road. Mr Shaw draws reference to the lack of any real demand for tenancies in the adjoining Bon Accord building, owned by his company, a matter discussed at some length in the decision of Bon Accord Pty Ltd (AV97-382 and AV97-383). Mr Shaw concedes that both the current subject lands have been occupied by the same single tenant for 30 years (Jeays Hardware), but advises that has only occurred as a result of a close family relationship. Mr KM Shaw Snr married into the Jeay family. Mr K Shaw argues that the current occupation of the subject lands has continued in spite of there being no formal lease agreement, and that could be terminated at any time, but for the goodwill of the parties. Mr Shaw also argues that vacancies continue to be a major problem for the adjoining shopping centre, due to lack of demand. He concedes that Jeays Hardware has continued to operate viably upon the subject lands for many years. However he claims that is as a result of the operations and good reputation of that business, and not as a result of any favourable location of the subject land. Mr Shaw relies upon the former evidence led about the history of the business land in Sandgate, and the variations in demand, at the previous appeal on Bon Accord land for 1 October 1996, which he argues, has not changed over the period of the current matters. The failure to attract a significant anchor tenant in the adjoining shopping centre, also has implications for the demand at the subject lands. Mr Shaw confirms that major vacancies have existed at the shopping centre since 1994, and -- 6 of 16 -- 7 very expensive marketing strategies to seek new tenants have generally proved fruitless. However he concedes that a lease for pharmacy and medical purposes has been arranged, but at drastically subsidised rental rates for the medical facilities. The pharmacy lease occurred as a result of restrictions imposed upon the location of that new pharmacy under the pharmacy laws. Had that not forced the new pharmacy to locate out of Brighton Road, Mr Shaw believes he would not be able to attract the new lessee. In seeking to further clarify his understanding of the demand for business sites in Sandgate, Mr Shaw notes that the impact of a "benefited area levy", imposed by the Council has disproportionate impacts upon the business community. The betterment area levy is a move by Council to seek to overcome the tendency for Sandgate to be bypassed as a shopping centre due to road relocations and other causes. As a result of that levy, to which the appellants must contribute, the Council has spent considerable funds on refurbishing Brighton Road, and the adjoining car park. There has been little spent on refurbishing the area of the subject lands, apparently as the Council hopes that a major private redevelopment might occur. As a consequence of that refurbishment and beautification, there has been some growth in business which is attracted to the attractive landscape and street furniture. However, because of the separation of the subject lands, little of that extra demand filters across to the subject lands. Mr Shaw argues that to compare properties in Brighton Road with the subject lands is not appropriate. Mr Cowley concedes that Brighton Road is more attractive, and has increased patronage to the subject lands. Mr Cowley also concedes that there are existing vacancies in the adjoining Bon Accord Shopping Centre, but believes that may relate more to the exposure of those shops, particularly internal shops. However he concedes he was not aware of the full extent of vacancies at the Bon Accord Shopping Centre. Mr Shaw notes that in 30 years of ownership there has never been an offer to buy the adjoining vacant car park site, suggesting no demand in the locality. In seeking further support for a lack of demand in that locality, Mr Shaw notes that there is an existing single residential dwelling upon the land immediately adjoining the warehouse site in Rainbow Street. There is also another site zoned as "Business" on the southern side of Rainbow Street, which continues to be used as -- 7 of 16 -- 8 residential flats. Both of those lesser uses of the Business land demonstrate, in his opinion, the lack of demand for business purposes. Mr Cowley concedes that the current paucity of sales in the business area indicates a lower level of demand, but attributes that to a lack of willingness by owners to sell, for whatever reason. The value of those sales that do occur, would not appear to reflect any fall in the value of the lands. However Mr Cowley also notes that, while the zoning of the land for business purposes does have an impact upon the value of the land, it does not in itself create the value of the land. Mr Cowley also argues that while "Business" is a higher zoning, there are some uses which are common to both the "Business" and "Light Industrial" zones. He notes that the building supplies use of the warehouse site could also be described as a semi- industrial purpose. Mr Cowley confirmed that he had no regard to any possible use of the subject land for any alternative residential zoning, although it may be a permitted use subject to Council approval. He also notes that there are existing residential uses in the light industrial area at Connaught Street, discussed later, suggesting some lack of demand in that area also. (iv) Relativity – The key issue in the appellants' argument relies upon maintaining the former relativity with the adjoining Bon Accord Shopping Centre and car park sites. The difference between the parties is that Mr Shaw draws comparisons with the initial unimproved values determined by the Chief Executive at 1 October 1996, while Mr Cowley draws relativity between the amended valuations after the objection, which were defended at the Land Court hearing in 1998. Mr Shaw concedes that it is an appropriate method of comparison to seek sales of vacant lands, but argues the sales chosen by the respondent are some distance from the subject lands, compared to the Bon Accord properties which are in the immediate locality, and in fact the car park adjoins the retail centre. For that reason Mr Shaw argues that relativity is the preferred method of concluding the appropriate unimproved values. He also argues that had the Chief Executive strictly followed the decision of the Land Court in the Bon Accord matter, then the valuations of the subject lands should have been automatically reduced as an administrative arrangement, without recourse to appeal. -- 8 of 16 -- 9 In concluding his estimates of the correct unimproved values, Mr Shaw has sought to reduce the values by some 26.32% in line with the reduction by the Land Court for the car park site. After allowing for the difference in size of the various parcels, Mr Shaw reduces the rate per square metre by a further 12% for the larger area of the warehouse site, as a single site, compared to the two separate areas, concluding a base rate of $100 per square metre. From that base rate he then deducts $68,500 for the site works and retaining wall, concluding a figure of $100,000 for the warehouse site, after allowing for the impacts of the Council benefited area levy. In seeking to apportion the benefited area levy between the now four valuations for the warehouse, retail centre, shopping centre and car park, Mr Shaw notes that represents $4,409.16, which is approximately 22% of the general rates due for the lands. He apportions that as a deduction from the calculated unimproved values on a similar proportional basis as the general rates. He notes that the respondent has made no similar deduction for that purpose. While Mr Cowley has relied upon his comparisons with the sales of vacant lands, he notes that a relativity check with the adjoining car park site indicates that the base rate for the car park was $130 per square metre, and for the retail centre at $140 per square metre, suggesting correct relativity. Mr Cowley confirms that a different valuer had undertaken the 1 October 1996 valuations. Mr Cowley advises that he had taken note of the reduction by the Land Court for the adjoining car park land (17% to 18%), and he applied a 15% reduction to the retail centre site, after allowing a reduction following the objection conference, which he believes is now appropriate. (5) Comparison of Sales – Mr Shaw provides no sales for comparison, relying entirely on relativity with adjoining parcels. However he challenges Mr Cowley's sales which he argues are remote, and in fact two of the sales are of differently zoned lands, and the third sale is in the more active Central Business District of Brighton Road. Mr Cowley provides the following sales –  Sale 1 – (141 Connaught Street, Sandgate – Lot 21 on RP 61437) This is a 759 square metre inside parcel of Light Industrial land located in an industrial area about 550 metres west of the subjects. All services are available, the land is level and rectangular in shape, with easy access, of low elevation, and frontage of about 15 metres and depth of 50.3 metres. The sale is smaller, has an inferior -- 9 of 16 -- 10 zoning and location with little exposure, and is seen as inferior overall on a rate per square metre basis. The sale sold in February 1997 for $87,500, which after allowing for improvements and demolition costs was analysed at $89,500 ($118 per square metre), and applied at $78,000 ($103 per square metre).  Sale 2 – (3-7 Second Avenue, Sandgate – Lot 1 on RP 50636) This is a 314 square metre improved corner site, zoned as "Business", with all services available, and located 200 metres east of the subject. It has a moderate elevation, and a frontage of 22.45 metres to Second Avenue, and 24.18 metres to Cliff Street. Existing asbestos shops were subsequently refurbished and the site then resold. There is some exposure to Brighton Road, but access to parking is limited. Overall the sale is superior on a rate per square metre basis. The sale sold in June 1997 for $100,000, which after allowing for improvements, including $25,000 for the existing building, was analysed at $74,500 ($237 per square metre), and applied at $69,000 ($220 per square metre).  Sale 3 – (102 Delta Street, Geebung – Lot 31 on RP 132545) This is a 1012 square metre inside parcel located 1.4km south-west of the subjects. The land is zoned as "General Industry", and has all services available. The sale has easy access, is regularly shaped, and has 22.95 metre frontage and 44.12 metre depth. There is little exposure and a lower zoning, and is seen as inferior on a rate per square metre basis. The sale sold in September 1997 for $140,000, which after allowing for improvements was analysed at $131,500 ($130 per square metre), and applied at $120,000 ($119 per square metre). Decision: (i) The Nature of the Lands – I turn first to the nature of the lands and note that the warehouse site apparently has some sub-surface water problem, which may be a detriment to any future rebuilding program. While there was no evidence of the existence, or need, for piling upon the warehouse site (the building had existed for some 60 years), the proximity of the shopping centre site, and the lagoon nearby, could indicate some unknown problems. On that basis I believe any comparisons on a relativity basis may -- 10 of 16 -- 11 be more appropriate between the warehouse site and the Bon Accord Shopping Centre site, accepting the uncertainty also inherent in the extent of piling necessary on that latter site. In respect of access to the warehouse site I believe the exposure to passing traffic moving easterly would be restricted by the topography, the service road to the school, and the retaining wall. However I believe that in any major redevelopment of that site, the exposure and access could be enhanced by appropriate setback of the buildings. In respect of access from the warehouse site to the pathway towards the north, I note that is entirely at the goodwill of the owner of Lot 6 (Mr Shaw). For that reason little extra weight should be allowed for that additional access, which could be removed at any time. In respect of the site works and the retaining wall I will allow $68,500 for that purpose, although I believe that to be a generous amount in view of the age of the retaining wall, which is likely to have deteriorated over time. On the matter of comparison between the retail centre (Lot 6) and the adjoining Bon Accord car park, I accept Mr Cowley's comparison check as outlined in the Land Court decision of AV97-383. However I note the quite superior frontage to roads and pathway of the car park site, and the more restricted nature of access and exposure to the retail centre site. (ii) The Use of the Land – While the current uses of the two subject lands are taken to be their highest and best use for the current valuation, I believe it would be appropriate to make considerable adjustments for the lesser demand and location of the subject lands, compared to Brighton Road. Mr Cowley agrees with that scenario, but may have underestimated the impact of existing vacancies in the adjoining shopping centre site, and the precariousness of relying upon a family goodwill arrangement, in lieu of a formal lease with the Jeays Hardware business. On the evidence provided, and as discussed in the former appeals, I believe the subject lands have an inferior location, use and demand compared to other "Business" zoned lands in Brighton Street. I accept also that the current uses of some Business lands and some Light Industrial lands for single residential purposes, is probably an overall reflection of the general reduced demand in the Sandgate area and the particular nature of the client base in that locality. On that basis I treat with some caution sales evidence in other localities further removed. -- 11 of 16 -- 12 (iii) Relativity – A key issue is also an appropriate relativity comparison with the adjoining Bon Accord properties. If I compare the two separate valuations for the warehouse site and the shopping centre site, and then the adjoining carpark site and the retail centre site, I find: Site Initial UCV at 1.10.96 Amended UCV after objection 1.10.96 UCV after Land Court decisions UCV now appealed against Shopping Centre (3306m²) $ 160.31/m² $ 149.73/m² $ 114.94/m² $ 114.94/m² Warehouse (1685m²) $ 154.30/m² $ 122.84/m² $ 122.84/m² $ 104.45/m² Relativity 0.96 0.82 1.07 0.91 Car park (1611m²) $ 176.91/m² $ 158.29/m² $ 130.35/m² $ 130.35/m² Retail centre (607m²) $ 164.74/m² $ 140.03/m² $ 140.03/m² $ 107.08/m² Relativity 0.93 0.88 1.07 0.82 (See letter of the Chief Executive of 11 September 1998). On those comparisons I find that in respect of the initial appeals for the two separate parcels of the warehouse site, compared to the shopping centre site, there would have been little difference between the parties on a relativity basis alone. However that is now purely academic in view of the decision to amalgamate the warehouse site into a single valuation at $176,000. In concluding that single valuation Mr Cowley has sought comparisons with sales of comparable lands. He notes however, that had he compared the three individual lots as residential lots, and then allowed for a bulk allowance of up to 10%, he would have determined an unimproved value of about $170,000, which would support the current unimproved value. Mr Cowley bases that conclusion on the unimproved value of the 473 square metre single residential parcel adjoining the warehouse site in Rainbow Street, which has an unimproved value of $62,000. However Mr Cowley seeks no comparison for use on a residential basis. If I consider the relativity between the car park site and the retail centre site, I find that the initial relativity for the 1 October 1996 values is consistent with the current applied values. In noting whether the parcels should now be amended by the same percentage increase as the adjoining Bon Accord lands, I note that there can be many reasons why lands do not change at exactly the same rate over time. That was noted by the -- 12 of 16 -- 13 Full Court of Queensland in C and BD Hendriks v. The Valuer-General (1983) 9 QLCR 59, where Macrossan J (CJ) said at page 63: "The percentage increase shown in the selected cases was in each instance considerably less than the increase applied to the subject land as between the two valuation dates. The weakness in such a selective comparison is obvious as there could be any number of reasons why blocks in the same valuation area should increase at different rates over a period of five years." As the Full Court said there could be many reasons why parcels of land can increase at different percentage rates over a period of time. The real test is not the percentage increase in the unimproved values, but a comparison of the subject with sales of comparable sites in the vicinity of the subject at the time of the valuation. In seeking reliance on relativity I note that the Land Appeal Court directed that, while it is desirable that comparable lands should bear proper relativity, one to another, it is untenable to adopt a value for one parcel on relativity with another which has no sound basis. (R and MM Barnwell v. The Valuer-General (1989) 13 QLCR 13, at 16). It has also been established that whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence. (WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, at 46.) The courts have generally held that where comparable sales are available, they are preferred as the best guide for arriving at unimproved value. (PH Clough v. Valuer-General (1981-82) 8 QLCR 70, at 76.) (iv) Comparison of Sales – I turn then to the comparison of sales of Mr Cowley, and note that he has adopted a sale of Light Industrial land (Sale 1), a sale of land zoned "Business" in the Central Business District of Sandgate (Sale 2), and land zoned as "General Industry" in Geebung (Sale 3). In view of the difference in zoning and locality of Sale 3, I find that sale to be of little assistance in assessing the particular demand characteristics of the subject lands in Sandgate. If I then compare Sale 1, I note that sale to be zoned for a different purpose to the subject land. However in considering the impact of zoning upon the value of land, I note that zoning of the land does not of itself create the value of the land, although it is an important factor to be considered. In a developing community, pressures within society, may lead to changes in the land use, which can be reflected in changes in -- 13 of 16 -- 14 zoning, or other restrictions upon the lands. Where there are insufficient sales of similarly zoned land for comparison, the task of valuing land is made more complex. In the current matter Mr Cowley has sought comparison with his Sale 1 in a Light Industry zoning. The difficulties of comparing sales in a different zoning were analysed in Port Macquarie West Bowling Club Limited v. The Minister (1972-74) 28 LGRA 23, where Else-Mitchell J said at page 24: "There can be little doubt that the task of valuing lands which are subject to restrictions imposed under a prescribed planning scheme ordinance bristles with difficulties if sales data of land subject to similar restrictions are not available for comparison." In that matter the Court was confronted, in the absence of sales of comparable lands for Open Space purposes, with sales for a different purpose, which were then adjusted by the valuers to allow for the difference in zoning. Else-Mitchell J went on to state at page 25: "It appears to me that the board was entitled to take this course in the circumstances of the case, because it was common ground that there were no sales of land similarly zoned and that left little option to the valuers but to use sales of land differently zoned, subject to a deduction for such difference as a basis for determining the value or price of the subject land." The importance of considering the zoning of the subject land was also addressed by the High Court of Australia in Royal Sydney Golf Club v. Federal Commissioner of Taxation [1954-55] 91 CLR 610. Upon further hearing of that matter, the question was examined as to the correct method of considering the likelihood of any relaxation of the current zoning of the land. In determining that matter, as reported in [1954-57] 97 CLR 379, Kitto J said at page 391: "I think the proper course is to inquire first what was the value of the land on the footing that there was no possibility of its ever being turned to other than recreational purposes, and then how much extra should be allowed for such chance as there was of securing permission for residential use at some future time." In the current matter there is no question raised that the zoning of Mr Cowley's Sale 1 was ever likely to be amended; however the principle that it is reasonable to compare lands of different zonings, in the absence of comparable sales of land zoned for Business purposes, is supported by precedents. However it is incumbent upon Mr Cowley to demonstrate the comparability, not only of the actual features of Sale 1, but also its land use for the different zoning purpose. -- 14 of 16 -- 15 In the comparisons offered by Mr Cowley he compares the different plot ratios for developments in the Business zone (100%), and the Light Industrial zone (75%); noting the inferior nature of the latter zone. Mr Cowley concludes that comparable Light Industrial zoned lands sell for less than Business zoned lands, which is reflected in his analyses of that sale. Mr Cowley sees the likely land use in the Light Industry zone to be for a warehousing purpose, while in the Business zone it is likely to be for a retail purpose. In comparing his Sale 2, Mr Cowley acknowledges the superior location of that sale in Second Avenue, and he has also allowed for a depreciated added value of $25,000 that the existing shops brought to that sale. He argues that the carparking is inferior at the sale, which is also a much smaller area, and therefore likely to reflect a higher rate per square metre. Mr Shaw was unable to discredit Mr Cowley's estimate of $220 per square metre for Sale 2, which both parties agree is superior to the subject lands on a rate per square metre basis. I believe the impact of the betterment area levy would also be reflected in Sale 2. Summary: In concluding an estimate of the appropriate rate per square metre for the subject lands, I seek a balance between relativity with the adjoining parcels, and also with Mr Cowley's applied rates for Sales 1 and 2. On the evidence before me I can conclude that the warehouse site rate on a comparison of sales basis lies between $103 per square metre and $220 per square metre; and on a relativity basis lies between $122.84 per square metre and $104.95 per square metre. Similarly the retail centre site rate lies between $103 per square metre and $220 per square metre (comparison of sales); and $140.03 per square metre and $107.08 per square metre (relativity). In the end, noting the difference in exposure of the two parcels, I will allow $125 per square metre (warehouse site), and $120 per square metre (retail centre site). On that basis I conclude a valuation of the retail centre site at $73,000; and the warehouse site at: 1685m² @ $125/m² = $210,625 Less site works (including retaining wall) = $ 68,500 TOTAL = $142,125 Say, $142,000. -- 15 of 16 -- 16 Conclusion: Having considered the whole of the evidence I am persuaded that the appellants have partly proved their cases. The determinations of the Chief Executive are set aside, and the unimproved value of Lot 1 on Plan S2738, Lots 2 and 3 on Plan S2728(V99-308) is determined at One hundred and forty-two thousand dollars ($142,000), and the unimproved value of Lot 6 on Plan S2788 (AV98-723) is determined at Seventy-three thousand dollars ($73,000). Member of the Land Court -- 16 of 16 --