Cashbourne Pty Ltd v The Valuer-General [1991] QLC 248

Re: Appeals against Annual Valuations of the Valuer-General - City of Logan. AV90-606 to AV90-609. Cashbourne pt_y Ltd V. The Valuer-General DECISION LAND COURT, BRISBANE 24th May, 1991- In the revaluation of the lands in the City of Logan as at 31st March, 1989 (effective 30th June, 1990), the Valuer-General has valued four parcels of land owned by Cashbourne Pty Ltd. The company duly objected to these valuations and the objections were disallowed. The right of appeal against those decisions has come to the Land Court for determination. Particulars of the parcels of land, the valuations applied by the Valuer- General and the valuations finally contended for by the appellant company are as follows: AV90-606 Valuation 127/26127, Lot 48 on RP 93840, parish of Mackenzie - Area 1.666 hectares - Valuer-General's valuation $116,000. Appellant's valuation $82,680. AV90-607 Valuation 127 /26113, Lot 77 on RP 93841, parish of Mackenzie - Area 2.023 hectares - Valuer-General's valuation $110,000. Appellant's valuation $69,540. AV90-608 Valuation 127/26069, Lot 37 on RP 93840, parish of Mackenzie - Area 1.255 hectares - Valuer-General's valuation $163,000. Appellant's valuation $137,900. AV90-609 Valuation 127 /26068, Lot 36 on RP 93840, parish of Mackenzie - Area 1.032 hectares - Valuer-General's valuation $134,000. Appellant's valuation $113,360. All four parcels of land are zoned Rural under the relevant Town Plan gazetted on 17th December, 1988. It is agreed that all of the lands have potential [1991] QLC 248 -- 1 of 5 -- 2 for rezoning for industrial use. The first parcel was unaffected by the 1974 flood while the other parcels were affected by the flood, one wholly and the other twG were covered over about three-quarters of the area. Evidence on behalf of the appellant was given by Mr B.J. Hoare, a director of the appellant company. He says that by a memorandum of about 12th June, 1989, the local authority attected the value of lands suitable for rezoning for industrial use by substantially increasing headworks charges to the extent of 122% for headworks for water and 60% for sewerage headworks. In the result a developer looking at a parcel of land was then faced with an increased expenditure on the development at the rate of $20,000 per hectare because of the increased headworks charges. He says it was not possible to foresee such a dramatic rise in such charges. In dealing with sales which occurred after the charges were imposed, he believes that it was not generally known for some months that the charges had increased so dramatically. His approach to the valuation exercise is to contend that each of the valuations of the Valuer-General should be reduced by $20,000 per hectare to make allowance for the additional charges. Mr Hoare agrees in cross-examination that all of the lands have a potential for use for industrial purposes and in fact Lots 36 and 37 have been rezoned since the date of valuation. He criticises in general terms three sales which have been used as a basis of valuation. He comments that the sale to Hume Doors (Old) Pty Ltd is a sale to an adjoining owner and that the after date sale referred to may have taken place without the purchaser being aware of the increased headworks charges. Evidence for the Valuer-General was given by valuer, Mr G.J. Crane, who has looked at sales to support the values for which he contends. He has a -- 2 of 5 -- 3 sale to Hume Doors of a parcel of 1.828 hectares of land zoned Rural which occurred on 7th March, 1989, which is almost at the date of the valuation. ,-This sold for $200,000 ($109,500 per hectare). He says that this was flooded in the 1974 flood, is located on Mudgee Street which at its frontage has a bitumen strip carriageway and it has the benefit of exposure to the Logan Motorway. His other sale occurred on 23rd July, 1988, when a 6,087 square metre parcel zoned General Industry sold for $200,000 ($325,300 per hectare). This had the advantage of already being zoned for industrial use, has a bitumen road kerb to kerb with concrete kerbing and channelling and concrete strip footpath. It does not have exposure to any through traffic. Having regard to these sales he arrives at a rate per hectare for each of the subject parcels. Mr Crane also lists another sale in Mudgee Street to Tango Gold Pty Ltd of a 6.25 hectare parcel on 25th August, 1989, for $260,000. He says that this was severely flooded in 1974 and is subject to periodic flooding. It has extremely poor exposure with no potential to improve. At this point Mudgee Street is gravel and poorly maintained. This sale parcel is of course larger than the subject lands. He has not investigated the sale but believes that a prudent purchaser on 25th August, 1989, would make proper enquiries as to headwork charges before entering into such a contract. He says it indicates the rate which would be paid for a large parcel of land capable of rezoning. Mr Crane believes that the sales support the level of value contended for. He says that he has made no allowance by way of discounting for increased headwork charges because they were not known at the date of valuation and would not have had an influence on the market. He agrees that the sale to Hume Doors is a sale to an adjoining owner. He believes that having regard to the substantial area of that company's existing land there would be little if any increase in price -- 3 of 5 -- 4 because of that factor. He agrees with Mr Hoare that a prudent purchaser buying these lands would undertake a hypothetical subdivisional exercise and he would include in his calculations the estimated cost of headworks. Under the provisions of the Valuation of Land Act, the Valuer-General is required to determine an unimproved value of land at a certain date. The best test is to look to sales of comparable land at that time and to select sales of unimproved parcels of land if such sales are available. The time honoured test has been expressed in the words of the High Court of Australia in the matter of Spencer v. The Commonwealth (1907) 5 C.L.R. 418 where at page 441, Isaacs J; said: To arrive at the value of the land at that date, we have ... to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood as then appearing to persons best capable of forming an opinion, of a rise or fall for what reasons soever in the amount which one would otherwise be willing to fix as to the value of the property. • It is clear from the evidence here that at the date of this valuation parties to a sale, however prudent, would not have been aware of any intention of the local authority to substantially increase headworks charges. It follows that the sales which have been used for land sold before 31st March, 1989, are a sound basis of valuation. The after date sale referred to by Mr Crane does not really assist as it is not known whether the purchaser was, at the time of purchase, aware of the increases in headworks charges. In this case it is really advancing an argument which might more properly be addressed in considering a valuation of the land after the increased charges came into operation which I assume would be an annual valuation as at 31st March, 1990. I must, however, consider the position as at the relevant date -- 4 of 5 -- 5 here of 31st March, 1989. I have considered the evidence and find that the question of increased headworks charges is not relevant to a valuation as at-31st March, 1989, it at that time being an unknown factor on the value of the land. It is a matter of testing this argument in an appeal against a valuation after the headworks charges were increased. There is no evidence which then has been advanced to discharge the onus, to show that the Valuer-General has erred in the valuations and the appeals must fail. Accordingly Appeals AV90-606, AVS0-607, AV90-608 and AV90-609 are dismissed and the valuation of the Valuer-General in each case is affirmed. (D.J. Barry) President of the Land Court -- 5 of 5 --