Cavill & Anor v The Valuer-General [1991] QLC 198

Re: Determination of Unimproved Value - City of Townsville - AV91-30 LR and JV Cavill v. The Valuer-General DECISION LAND COURT, BRISBANE. 11th December, 1991 . This appeal is against the determination by the Valuer-General of an unimproved value of $475,000 for Lot 1 on RP 705249, Parish of Magnetic containing an area of 8860 m 2• This is a "Residential D" zoned site situated at 122 S.ooning Street, Nelly Bay, on Magnetic Island. The relevant date for the determination of the unimproved value is 31st March, 1989. The appellants contend within the notice of appeal for an unimproved value of $300,000. Registered valuer Ian Douglas Ivers was called by the appellants. Mr Ivers values the land at $298,000. He says that it is by no means level. There is a large depression through the site which cuts it longitudinally with widths varying from 9 metres to 43 metres and _he suggests the depression reduces the useful total area of the site by about 30%. There are rocky boulder outcrops scattered throughout the parcel particularly in the higher area near the northern boundary. Mr Ivers says that the frontage of the property, which carries water in times of [1991] QLC 198 -- 1 of 5 -- - Page 2 - heavy rain, causes access problems due to water not being able to effectively drain quickly enough from the property through an underground pipe traversing Sooning Street. While views from the property are attainable from various areas of the site, Mr Ivers says that only a small portion could be developed to take advantage of the views economically. With the current zoning, Mr Ivers says the site can carry a total of 53 units with consent from the Townsville City Council. In assessing the property at its highest and best use, he suggests one must look not only at the development constraints on the property but also at the economic viability of such a saturation of units. Due to the nature of the terrain Mr Ivers says that the number of units which could be economically developed on the site would be far less than 53 and in fact would only be about one-third of that number. He suggests that the cost of site preparation, connection of sewer, up-grading of drainage from the site and the integration and refurbishment of the existing units would far outweigh the return than one might expect on such a development and this makes it an uneconomic proposition for development in the current climate. Mr Ivers informed the Court that since the construction of Magnetic Quay Development, which is taking place opposite the subject property, it has lost its amenity as a desirable location for holiday units. Access to the beach has been denied due to· a 2 metre high fence being constructed around the perimeter of the Magnetic Quay site. In addition even if access was available, the beach as it was is no longer ·in existence due to the construction which has taken place opposite the subject property. Again noise and dust pollution has been experienced during the course of the construction and this has affected the desirability of the location and consequently would result in a loss in income from the property in -- 2 of 5 -- - Page 3 - major terms. Mr Ivers says that the now undesirable nature of the location due to placement of the Magnetic Quay development has had a marked effect on the value of the subject land. The property has been injuriously affected by means beyond the control of the registered proprietors and such affection needs consideration when assessing its value as at 31st March, 1989. Mr Ivers sets out some market data in his tendered valuation report. He says that under the "Tourist Facilities" zone the ratio is 1 unit for every 11 o m 2 of land area and under the "Residential D" zone the ratio is 1 unit for every 165 m 2 of land area. Mr Ivers refers to a large volume of sales evidence in his valuation report. He lists for each sale lot the number of units allowable and deduces an analysed unit site value. These range from $1,945/unit to $25,000/unit. The larger sites capable of large scale development have unit site values from $1,954/unit to $7,500/unit. Mr Ivers is of the opinion that the subject site has a unit site value of $5;625 and it is on this basis that he values the land at $298,000. The valuation under appeal was made by registered valuer John Franklin James who describes the land as being level with the street at the frontage and with a medium rise for about 100 metres on the eastern boundary to the base of a steep boulder strewn hill. The base of the hill follows a north-westerly line and bisects the rear boundary about 30 metres from its north-western corner. There is a deep gully beginning at the base of the hill lying at varying distances of 10 - 30 metres from the western boundary. This gully discontinues towards the front of the property. Good bay views are obtained from the site_but Mr James says these will be restricted by the Quay development. Mr James values the land as follows:- -- 3 of 5 -- 6,000 m2 at $65/m2 2,860 m2 at $30/m2 - Page 4 - $390,000 $ 85 ,800 $475,800 Adopt $475,000 Mr James refers in his valuation report to five sales of "residential D" and "Tourist facilities" zoned sites. These sales took place during the period commencing 30th November, 1988 and ending 11th April, 1989. These sites vary in area from 2023 m2 to 8607 m2 and in analysed unimproved value from $48/m2 to $115/m 2 • Perhaps the most relevant of the sales is of Lots 2 and 3 on Plan EP 620 , Parish of Magnetic containing an area of 8607 m 2 on 9th February, 1989 for $390,000. This site is situated adjoining the subject land at 124 Sooning Street and is described by Mr James as comprising approximately 4000 m 2 of low land to medium sloping land with the balance being steep boulders strewn hillside. Mr James analysed this sale to show unimproved values at $62/m2 for the 4000 m2 and $30/m 2 for the remainder of the land. He points out that the site resold on 26th May, 1989 for $690,000. Overall Mr James considered the sale property to be inferior to the subject land. Mr James informed the Court that he preferred to value "Residential D" sites on the island on a per square metre basis rather than on a potential unit value basis. He says that this method gives better relativity and removes the uncertainty associated with the determination of the number of units which could be economically developed on any given site. I must say that I prefer the method of valuation adopted by Mr James as even a relatively -small variation in the esfimated number of units for a particular site means a considerable difference to the unit -- 4 of 5 -- - Page 5 - value obtained from any sale site. It seems on the evidence that the depression which runs through the land has quite a significant influence upon its value as a development site since it virtually traverses the centre of the site. While it may be, as Mr James says, that this depression could be utilised in any development of the site eg for landscaping, there is considerable cost associated with drainage problems in that area. It is apparent that the best sales evidence before the Court is the sale of Lots 2 and 3 on Plan EP 620, Parish of Magnetic. However, this is a sale of two separately surveyed lots and I feel that Mr James has somewhat overvalued the subject land in relation to that sale property. In the circumstances I find that a fair unimproved value for the subject site results from the application of a value of $55/m2 for 6,000 m2 of and $25/ni2 for the remainder. I round off this calculation to an unimproved value of $400,000. If follows therefore that the appeal be allowed, that the determination of the Valuer-General be set aside and that the unimproved value of Lot 1 on RP 705249, Parish of Magnetic be determined in the sum of $400,000. (C.H. Carter) Member o.f the Land Court. -- 5 of 5 --