Dillon v Minister for Lands [1992] QLC 352

Re: Determination of Rent to be charged for Special Lease No. 26/48587, Cairns District, during the second rental period Lessee: R G Dillon (Hearing at lnnisfail) DECISION LAND COURT, BRISBANE. 17th December, 1992 Special Lease No. 26/48587 was granted for a period of 30 years from 1st July, 1986, over land described as Lot 262 on Plan NR7547, Parish of Glady, containing about 2.87 hectares. The lease was granted for use for Rural Residential purposes. The land is zoned Rural A and is located about 5 kilometres easterly of the lnnisfail Post Office fronting Flying Fish Point Road adjacent to the Johnstone River. The Crown seeks a rental of $3,000 per annum for the second five year period of the lease. This rent was the assessment of Mr S A Cross, registered valuer with the Department of Lands. In his tendered report he describes the land as comprising "an elevated scrubby forest ridge along the western boundary boasting excellent views of the Johnstone River falling through a cleared depression easterly along the Flying Fish Point Road and to a small hillock bounded by mangrove swamp in the east. The land has esplanade frontage to the Johnstone River and an area of mangrove swamp along the western boundary." [1992] QLC 352 -- 1 of 3 -- 2 Mr Cross valued the land as a rural homesite in the sum of $100,000; His basis for that valuation was a direct comparison with land on the opposite side of the river towards Coquette Point, where there had been some sales activity. The primary basic sale was of a site of 7,712 square metres on 27.8.91 for $86,000 - the land being in virtually unimproved condition. This site had both advantages and disadvantages in comparison with the subject land, but in Mr Cross' opinion was overall inferior. Another site which Mr Cross saw as marginally superior to the subject land, sold for $95,000, but this was much earlier (23.12.88) than the relevant date. Having decided that the subject land had market value of $100,000, Mr Cross saw a rent equivalent to 3% of that value as meeting the criterion of what a bona fide experienced person would be prepared to pay as annual rent. That is the criterion which the legislation requires the Court to consider. Mr Dillon appeared and gave evidence. He was unhappy that he had not been provided with the Crown's basis prior to the hearing so that he might have carried out his own investigations. Nevertheless, he was frank in admitting that, based on that sales evidence, the Crown's assessment of the value of the land was supported. He felt that his own efforts in clearing the subject land and presenting it in its existing condition may have influenced that value. He referred to matters such as the cost outlaid in the connection of electricity and the disability created by the mangrove fringe to the river, and the restricted water access point. He admitted however, that he was unable to prove that the land did not possess the value as assessed. He is also in the process of freeholding the land. -- 2 of 3 -- 3 His primary concerns are the high level of rent in dollar terms, the increase from the previous rent of $840 per annum, and the financial implications of bringing the rent commitment up to date. He disagreed with the proposition that in light of the value of the land, the previous rent might have been unrealistically low. The evidence before the Court brings no quantitative challenge to the Crown valuation of the land. A rent of 3% of the assessed land value has been widely adopted as being a reasonable basis for consideration of realistic rent for special leases although this depends on the circumstances of each individual case. What Mr Dillon says is correct - that in dollar terms the amount sought is significant when the land is used for private residential purpose~_;_ On the other hand, the land obviously provides unusually valuable rural residential features, for which there is a demonstrated market. I find no reason to disturb the Crown's assessment. The rent for the second five year period is determined in the sum of $3000 per annum. (Signed) R. E. Wenck Member of the Land Court -- 3 of 3 --