Dempster and Ors v Chief Executive, Department of Lands [1994] QLC 286

[1994] QLC 286 LAND COURT, BRISBANE 12 August, 1994 Re: Appeal against a valuation for rental purposes - RV94-16. C N Dem pster and Ors v. Chief Executive, Department of Lands DECISION (Hearing at Maryborough) This is an appeal against the decision of the Chief Executive, Department of Lands, to determine on objection the unimproved value of Lot 46 on Plan MCH 5105, parish of South Head, for rental purposes in the sum of $65,000. The valuation of the site issued in the sum of $80,000. The appellants are contending for a value of $43,333. This sum was derived by capitalising at 3% a rental of $1300 per annum which was determined by the Court for the second rental period of the lease which commenced on 1 August, 1991. Although no specific sum was stated in the notice of appeal (subsequently filed out of time in answer to a requisition issued by the Registrar), the notice read, as was subsequently confirmed, that the sum contended for by the lessees was that reflected by the rental determination. In the circumstances the appeal proceeded to hearing on its merits. The relevant date for the purposes of this valuation is 31 March 1992. The relevant date for the purpose of the rental determination was 1 August, 1991. The method of deriving a rent by taking 3% of an unimproved capital value is a common method of ascertaining rental for sites suitable for permanent residential use and it is evident in the decision of the Court that the rental then sought of $1950 per annum was based upon 3% of an unimproved capital value of $65,000. On my reading of the decision it is reasonable to infer that the learned Member in fixing a rent of $1300 per annum gave consideration not only to unimproved value but also to the question whether in the circumstances the usual method of3% should apply. On page 5 of the decision he said : -- 1 of 3 -- If 2 Mr O'Connor, counsel for the Crown, submitted that the disabilities of the land as well as · its market feature of island location, have been considered in the assessment of unimproved value. He says it would be akin to 'double-dipping' if some further allowance was to be made through reduction of a somewhat well- established and accepted percentage rental for special leases, including those used for residential purposes. There is substance in this argument, yet, I am not convinced that the limited residential potential of this and similar 'island'leases places the rental assessment on the same basis as other leasehold lands affording permanent residency potential. There is then the admittedly weak evidence available in support of the Crown assessment of unimproved value. " What has to be found under legislation governing this determination is exclusively an unimproved capital value of the site without regard to the impact the determination may have upon rental which is determined by regulation. That is not to say however that unsuitability of land for permanent residential use is to be ignored in ascertaining market value. In the hearing of the matter, Mr CN Dempster, and his father, Mr RK Dempster, gave evidence. Mr BW Gaskell, registered valuer in the employ of the Department of Lands, gave evidence in support of the determined value. The subject site of 4.96 hectares is situated on the northern tip of Moonboom Island in the Great Sandy Strait with access by boat from Maaroom. The leased area was acquired by Mr Dempster Snr years ago as a fishing base. The site is used for weekend/holiday fishing hut purposes. Mr Gaskell sought assistance in . valuing the site from sales at Eurong on Fraser Island and at Poona which is on the mainland. Evidence of value from the appellants included a sale after the relevant date of Fisherman Island for $50,000 (valued for rating purposes at about $80,000) in 1994 and of a "best offer" of $150,000 for the Bandicoot Island lease. These islands are situated north of Maaroom near the mainland and in the opinion of Mr Dempster Snr are within what was once regarded as the delta of the Mary River. Three sales of land on the Esplanade at Maaroom were also considered. These lots reflected sale values of $38,000, $36,000 and $34,000 during the year 1993. This body of evidence was also considered in another case heard at these sittings of Ryland v. Chief Executive, De partment of Lands AV94-299 (Dream Island). In that case I heard evidence from Mr Marshall T Ryland who is a local real estate agent. In this case I have evidence from Mr Dempster Snr who not only is -- 2 of 3 -- 3 an avid angler but has taken an active and advisory role in associated recreational fishing bodies. The evidence of the appellants as to the use of the site, its advantages as a base for recreation, disadvantages of access, etc., was common with that heard from Mr Ryland and no doubt common to such leases within the Great Sandy Strait although relatively speaking each may differ in degree. On the evidence in this case I come to no different conclusion from that I gained previously, that is that the attraction and utility of the sites for the purposes for which they are used would reflect a premium over mainland sites at Maaroom. This in my opinion is confirmed by the after date sale of Fisherman Island. Values of sites on Stewart Island have been fixed in sums of the order of $70,000. The Dream Island site has been determined at $50,000. Although there is evidence in this case that the subject site is inferior to both Dream Island and Stewart Island principally due to access and the nature of the land, it seems to me given that the sites are best suited for limited purposes, differences which dominate are those which are more likely to affect the utility of the sites for that limited purpose and so may be distinguished from say mainland residential sites where aspect and other ancillary matters have a greater degree of importance. In other words for the limited purpose for which these island sites are used I see little difference between them save for Stewart Island which is graced with a sandy beach and thus of more appeal to more people. In considering the evidence and in giving some weight to the opinion of the Court expr~ssed in the rental determination I propose to determine the unimproved value at $50,000. Accordingly, the appeal is allowed, the determination of the Chief Executive is set aside and the unimproved value of the subject land is determined in the sum of Fifty thousand dollars ($50,000). (D.M. White) President of the Land Court -- 3 of 3 --