Brimps (Vic) Pty Ltd and Raymond Terrace Motel Pty Ltd v Chief Executive, Department of Natural Resources [1997] QLC 142

LAND COURT BRISBANE 12 SEPTEMBER 1997 Re: AV96-214 An appeal against an unimproved valuation - Valuation of Land Act 1944 - Local Government: Whitsunday Shire Council Brimps (Vic) Pty Ltd and Raymond Terrace Motel Pty Ltd v. Chief Executive, Department of Natural Resources (Hearing at Proserpine) D E C I S I O N As at 1 January 1996 the unimproved valuation of land described as Lot 18 on RP 731431, Parish of Conway, County of Herbert, has been assessed by the Department of Natural Resources in the amount of $300,000 (reduced on objection from $425,000). The land contains an area of 14.21 ha. It is situated at Jubilee Pocket about 4 km easterly of Airlie Beach. The land enjoys a long frontage of about 1 km to the bitumen strip sealed Mandalay Road and is zoned “Rural A”. Through registered valuer Mr B. Conroy, who appeared on their behalf, the owners contend for a valuation of $240,000. Mr Conroy described the land as an irregular shaped site with average depth off Mandalay Road of 170 metres, being elevated above the road “rising steeply from that road to its rear boundary” and “broken by a number of steep gullies and heavily timbered with subtropical rainforest”. Mr Conroy said that from the lower slopes rural views are available but from the higher land there are “very good sea views to the west over Pioneer Bay”. In support of his valuation Mr Conroy provided a schedule of three sales of “development sites”. Details of those sales are as follows: (1) 27.79 ha, zoned “Residential A”, off Shute Harbour Road, sold August 1995 for $695,000. The Department’s valuation was $630,000. There was an approval for a 99-lot residential subdivision. Mr Conroy pointed out that the sale had been effected at public auction by the mortgagee-in-possession. The sale had been extensively advertised and in his opinion the price reflected fair market value. He believed that the Department’s valuation supported that opinion. Over the whole area which was steeper than the subject land but, with in his opinion, superior ocean views, the sale reflected a value of $25,000 per ha. Under cross-examination he agreed that over 50% of the site had slope steeper than one in three and that development costs would “not be [1997] QLC 142 -- 1 of 5 -- 2 cheap”. The subdivisional yield of 99 lots from the proposal as approved was much lighter than would be normally expected for “Residential A” subdivision with slopes less than one in three. Nevertheless, in his opinion, the sale land was superior overall in comparison with the subject land. (2) 58.75 ha zoned “Rural A”, off Jubilee Pocket Road, sold February 1996 for $420,000 or $7,150 per ha. This also was a mortgagee in possession sale, but supported the Department’s valuation of $405,000. Mr Conroy described the land as comprising about 60% of lower level land broken by creeks while the balance included about 15 ha which had no subdivisional potential with the remaining steep elevated ridges difficult to develop. (3) 53.58 ha zoned “Rural A”, off Shute Harbour Road (and adjoining his Sale 1 to the west), sold in August 1996 for $850,000 or $15,900 per ha. The Department’s valuation of that land was $1,500,000. He described the sale land as “an elevated site, mostly sloping to steep country with very good sea views”. Services are available to the boundary of the site. Mr Conroy described the sale land as “inferior to subject”. It was Mr Conroy’s opinion that the highest and best use of the subject land was as a residential subdivision. However at the relevant date he said that such use was approximately 12 months away. In his verbal evidence he indicated that the existence of the rainforest on the land could cause some residential rezoning difficulties. He also referred to impediments to subdivision which might flow from future town planning policies relative to slope, as indicated in a draft town plan. As I understood the evidence, that draft town plan had not been on display at the date of valuation. The Department’s valuation was defended through the evidence of Mr T.C. Mullins, registered valuer. He described the land as rising from the road frontage comprising “25% easy sloping to sloping undulating coastal forest with poor quality grey gravelly deco and 75% sloping to moderately sloping undulating high quality rainforest with good quality red volcanic earths.” The views available were described as “good elevated views which become excellent elevated sea, bay and Airlie views at the 15 metre contour line.” Included in Mr Mullins’ report and of assistance in understanding the evidence relative to topography was aerial photography including contour mapping. Mr Mullins did not agree with Mr Conroy’s description of steepness or the “number of steep gullies”. He produced cross-sections of the slope scaled from the contour mapping in two representative locations, which showed that the slope in those sections did not exceed one in three and generally was less than that incline. The contour mapping indicated only one steep gully intersecting the site from the road frontage towards the rear. -- 2 of 5 -- 3 Mr Mullins saw the long road frontage as a distinctly positive feature in terms of the subdivisional potential of the subject land. It seems that subsequent to the relevant date of valuation, rezoning of the land has been achieved, no doubt assisting Mr Conroy in hindsight as to his estimate of the timing of potential. It also seems that approval has been sought and received for a subdivisional proposal which would produce 16 park residential style lots as a strip development along Mandalay Road with the balance area producing three large rural-residential type lots. In Mr Mullins’ opinion, that potential existed at the date of valuation because such a proposal was complementary to the environmental value of the existing rainforest, which seemed to be recognised as some of the best remaining in the Jubilee Pocket area. His inquiries at the Council indicated to him that external roadwork contribution would be “quite minimal”. Mr Mullins had relied primarily on two sales in arriving at his valuation of $300,000. Details of those sales are as follows: (1) 9.367 ha zoned “Rural A” off Shute Harbour Road at Jubilee Pocket sold in January 1995 for $185,000 unimproved equating $19,750 per ha. The land had no “carriageway access” to Shute Harbour Road which, at the nearest point, was 200 metres distant. The land consisted of about 60% slightly undulating gently sloping coastal forest intersected by several small gullies, the balance area rising gently to a low knoll in the north-western sector. Mr Mullins’ inquiries at the Council indicated that the sale land, as I understood his evidence, had also been rezoned or approved for rezoning to allow subdivision into a mixture or “Residential A” and “Park Residential” style lots. While the density of a development of that nature was more intense than that proposed for the subject land, development costs would be higher to include contribution for the provision of about 1 km of external roadworks from Shute Harbour Road along the full eastern boundary of the property. However, as Mr Mullins saw it, the sale land was zoned at the date of sale the same as the subject land at the date of valuation - “Rural A” - and the subject land was more valuable for reasons including “superior views, land and access and lower subdivisional costs more than offsets the sale’s superior topography for subdivision”. (2) 3.259 ha zoned “Rural Residential” on Shute Harbour Road but a significant distance removed at Cannonvale, sold in August 1995 for $130,000 or near $40,000 per ha. The land comprised low-lying gently sloping mainly coastal forest with no views and gained access off an unformed service road parallel to the main road carriageway. The land adjoined the Council refuse facility, an industrial estate and a caravan park. In comparison, Mr Mullins was of the opinion that the subject land should have a lower value per ha than the sale land “as the subject’s superior views and access is more than offset by the sale’s superior situation and smaller size”. -- 3 of 5 -- 4 Mr Mullins provided a “supplementary sales schedule” containing details of a further five sales, one of which was Mr Conroy’s Sale 1. Mr Mullins’ evidence was that he had not relied on any of the supplementary sales as a basis for his valuation but had offered the totality of the evidence should any of it be seen as relevant. For example, he drew attention to the doubts he had about using a mortgagee-in-possession sale as was Mr Conroy’s Sale 1. As I understood Mr Mullins’ evidence, he had not been responsible for the Department’s valuation on that particular sale land. That valuation was about 10% less than the sale price at near the valuation date but then, the land, in his opinion was extremely difficult to compare because about one-third of its area was too severely sloping for subdivision. I find none of the other information contained in the supplementary sales schedule to be of assistance in this matter. Mr Mullins also had difficulty comparing Mr Conroy’s second sale for reasons associated with the large area of land involved and the proportion of unusable and/or difficult land to develop. Apart from the size of Mr Conroy’s third sale, Mr Mullins suggested that any sales subsequent to the date of valuation could have been tainted by rumours which had commenced to circulate and then the later knowledge (in about mid-1996) of a Council imposed moratorium on dealing with subdivisional applications for certain lands in Jubilee Pocket. Mr Conroy did not accept that Mr Mullins’ Sale 1 was of any real assistance in this matter because in his opinion, the subdivisional potential of that sale land involved development density which was not comparable to that which had been approved for the subject land. Mr Conroy was not convinced either that at the relevant date a potential purchaser of the subject land would have shared Mr Mullins’ confidence that minimal external roadworks contribution could have been expected in any development proposal. As far as Mr Mullins’ second sale was concerned, Mr Conroy informed the Court that, regardless of the less-than-desirable nature of its neighbours, that sale land had been acquired for development of a “four star resort”. It is not uncommon in this locality, because of the diverse nature of in globo land, for the sales evidence to be limited and then often not directly comparable. The valuers and the Court are left to do the best which is possible with the evidence which does exist. Nevertheless, the appellants are faced with the task of proving that the valuation appealed against is wrong or at least in such circumstances, causing sufficient doubt about the veracity of the valuation for the benefit of such doubt to be applied. -- 4 of 5 -- 5 In this case however neither has the valuation been proved wrong nor a sufficient doubt created for the valuation to be disturbed. Mr Mullins’ Sale 1 is accepted as being the best evidence available even if there were circumstances other than its zoning, which would make comparison somewhat difficult. Mr Mullins has conscientiously applied himself to the task of comparing the subject land with the sales evidence and has been able to persuade both himself and the Court that, on a unit of area value basis, the subject land should carry a valuation a little higher than the level of value shown by the sale. I am also satisfied that Mr Mullins’ description of the subject land is somewhat more precise than was that of Mr Conroy. As a consequence, the appeal is dismissed and the valuation of the chief executive affirmed. RE WENCK MEMBER OF THE LAND COURT -- 5 of 5 --