Dreamworld Production Pty Ltd v The Valuer-General [1990] QLC 235

JJ ~·, ''l :, Re: Appeals against determinations of the Valuer-General, Albert Shire. A V90-212 & AV90-213. Dreamworld Production Pcy: Ltd v. The Valuer-General (Hearing at Southport) DECISION LAND COURT, BRISBANE. 21st December, 1990. As at 31st March, 1989, the Valuer-General carried out the annual revaluation of Albert Shire. Details of these two appeals which were heard together are as follows: A V90-212 - Lots 1 and 2 on RP 186505, Parish of Coomera, County of Ward, containing an area of 10.02 hectares - Valuer-General's unimproved valuation - $1,000,000 - appellant's estimate - $601,000. AV90-213 - Lots 1 to 3 on RP 138841; Lot 3 on RP 15230; Lot 4 on RP 49251 and Lot 1 on Plan WD5140, Parish of Coomera, County of Ward - containing an area of 75.92 hectares - Valuer-General's unimproved valuation - $6,800,000 - appellant's estimate - $4,900,000. The lands are located on either side of Dreamworld Parkway at Coomera. AV90-212 is zoned "Special Facilities - Theme Park", adjoins the Pacific Highway and is used in part as the carparking facility of the Dreamworld Theme Park which is located on part of AV90-213. The majority of AV90-213 is zoned "Special Facilities - Theme Park" with the balance "Future Urban". This latter larger parcel is bounded by Dreamworld Parkway, Foxwells Road and Beattie Road. Services including town water, sewerage, electricity and telephone are available. [1990] QLC 235 -- 1 of 7 -- 2 At the outset, counsel for the appellant company advised that valuation evidence would be led to a lower amount than the estimate contained in the notices of appeal, through registered valuer Mr B.B. Kelaher. His assessment of unimproved value for both parcels was at the average rate of $30,000 per hectare, rounded to $300,000 for AV90-212 and $2,280,000 for A V90-213. Mr Kelaher, as I understood his evidence, looks at both parcels each as part of the overall integrated Dreamworld complex. The smaller parcel provides the necessary carparking area then the larger parcel accommodates the business operation with the structural and amusement park improvements on about one third - the balance area either unused or of an open space nature. Mr Kelaher's approach to the valuation of the property as an integrated parcel accords with market reality as developed, but Section 15(1)(b) of the Valuation of Land Act of 1944_(as amended) requires the land, being separated by a public road, to be valued as separate parcels, unless the Valuer-General had otherwise directed. It will be seen later that the question arises as to whether the separate valuations should reflect an apportionment of the overall value of the total holding, which is Mr Kelaher's approach, or of the individual parcels as distinct and separate entities. Mr Kelaher describes the land, in total, as being "mostly slightly above the Pacific Highway and level with other roads. It is fairly level with a major creek and swamp in the centre of the main property ... ". It "has a major frontage to the Pacific Highway, Pacific Highway access roads plus frontages to Foxwells and Beattie Roads. Good access." It is his opinion that the highest and best use of all of the land is for a tourist amusement park, even if some is only held for future expansion. He has researched sales evidence throughout the locality at about the date of valuation, of "similar land with the same or similar zonings" and submits the sales of ten properties with varying degrees of comparability, which led him to the conclusion that the subject -- 2 of 7 -- 3 parcels possessed unimproved value, at the relevant date, of $30,000 per hectare average. A schedule was provided with the details of these sales and individual comparisons with the subject. He then looked at the relativity between the Valuer- General's application of value to the sale properties and found an acceptable degree of relativity, except for the application to the subject. A second schedule of two sales was provided for the specific purpose of comparison of the Valuer-General's valuations on these properties with the subject valuations. The second property on this schedule was also included in the first schedule and Mr Kelaher saw this as his closest comparison. It also formed part of the Valuer-General's basic evidence. This sale property of 90.94 hectares on the western frontage of the Pacific Highway at Kingsholme some 10 km towards Brisbane from Dreamworld, sold in October 1988 for $29,500 per hectare and at 31st March, 1989, the Valuer-General applied this figure. The first property on the second schedule referred to as the "Trikon" site of 386.6 hectares, "next door to Dreamworld commencing on the opposite side of Foxwell Road and extending north" had sold in August 1987 for $20,500 per hectare, and was valued by the Valuer-General as at 31st March, 1989, at $30,000 per hectare. Mr Kelaher agreed with the Valuer- General's application of value to this property, because of the rising market from the date of sale. Regardless of a railway severance or particularly the much larger size, he felt the subject lands should carry the same value. Mr Kelaher then completed his researched evidence by providing a third schedule with details of four "non-comparable" sales, three of which had Pacific Highway location ranging from Beenleigh to Nerang. While for various reasons the properties were not capable, in Mr Kelaher's opinion, of cogent comparison, the purpose of this third schedule was to complete the overall sales picture and to ensure there could ''be no suggestion that they would give an indication of value of more than -- 3 of 7 -- ( 4 $30,000 per hectare average for the subject properties." Evidence for the Valuer-General was given by Mr R.J. Scougall, registered valuer. He had been guided in his valuation opinions by the Albert Shire 1988 Strategic Plan. He saw the smaller "carpark" parcel (AV90-212), as having a highest and best use related to some special business purpose. The larger parcel (AV90-213) was shown on the strategic plan as "urban residential" but importantly, in his mind, the plan indicated a regional business centre in this immediate but not "site-specific" locality. It was common knowledge at the relevant date of valuation that a new rail corridor was to be provided cutting the north-eastern comer of the subject larger parcel and he saw this corridor as assisting in increasing the scope for greater than pure future residential use on the subject. Mr Scougall saw the availability of water and sewerage services to the subject lands as important, but had made no enquiry as to the adequacy of the existing services in relation to the future potential as reflected in the strategic plan. (Mr Kelaher saw the existing services as adequate for the present usage but thought the Council would seek upgraded external works if the intensity of development was to be increased.) Mr Scougall's basis for valuation of the smaller parcel was established from the evidence of three sales as follows: (1) a 20.63 hectare Pacific Highway site with Logan River frontage at Beenleigh, sold October 1988 for $1,000,000. This site he describes as "larger area inferior location access topography. Overall comparable to subject." He explained that the sale showed $48,500 per hectare, and he applied $100,000 per hectare to the subject, but the total sale price and the total valuation on the subject were comparable. Mr Kelaher had included this sale in his third schedule of non-comparable properties. It was a site subject to severe flooding and had been rezoned to allow a mostly water sport orientated development. (2) a 6.673 hectare site at Carnarvon Court, Oxenford, with frontage to the Pacific Highway, zoned "Special Facilities (Caravan Park, Motel and Accommodation Units)" sold September 1987 for $1,075,000 (approximately $160,000 per hectare). A valuation of $1,300,000 -- 4 of 7 -- 5 $195,000 per hectare) had been applied as at 31st March, 1989, after town planning consent for a unit development had been obtained. It was described as "smaller area, slightly inferior location, access, early sale, superior zone." As a site Mr Scougall saw it as superior to the subject. (3) a 3.04 hectare site at Millaroo Drive and Pacific Highway, Gaven, sold January 1989 for $600,000 ($197,500 per hectare) with an applied valued of $577,000 ($190,000 hectare). It is described as "smaller area, inferior location, services." As a total overall site comparison Mr Scougall saw it as inferior to the subject. It was zoned "Rural B" but had "light industrial" rezoning potential. Mr Scougall's basis for the valuation of the larger parcel was obtained from five sales as follows:- (1) 89.68 hectares, Stanmore Road and Pacific Highway, Yatala, zoned "Special Facilities - Lion Park" sold November, 1988 for $4,500,000 (approx. $50,000 per hectare). Subsequent application for rezoning to light industry. This was Mr Kelaher's Sale 10 - Schedule 1. (2) 90.94 hectares, Pacific Highway, Kingsholme zoned "Future Urban", sold October 1988 for $2,700,000 (approx. $30,000 per hectare). This was Mr Kelaher's Sale 1 - Schedule 1. He said that it was subsequently zoned "Special Facilities - Golf Course, driving range, pro shop, licenced area, dining and health facilities." (3) 79.31 hectares, Pacific Highway, Oxenford, zoned Pt "Rural A", Pt "Residential A", Pt "Future Urban", sold July 1988 for $3,600,000 (approx. $45,000 per hectare). Subsequently rezoned Pt "Special Facilities", Pt "Local Business" and Pt "Special Residential". This was Mr Kelaher's Sale 6 - Schedule 1. (4) 111.7 hectares, Napper Road, Labrador, zoned "Rural", sold September 1988 for $5,353,000 ($48,000 per hectare). This was Mr Kelaher's Sale 9 - Schedule 1. (5) 185 hectares, Oxenford - Coomera Road, Maudsland, zoned "Rural B", sold December, 1988 for $8,900,000 ($48,000 per hectare). The comparisons between the sale properties and the subject were provided in schedule form. It is clear that Mr Scougall sees each of the sale properties as inferior to the subject, particularly in terms of location. Although Mr Scougall's first four sales were each contained in Mr Kelaher's schedule of ten sales, there is virtually no common ground between the valuers as to comparison of the evidence with the subject. I see problems with the approach of both valuers. Mr Kelaher does not agree that the subject land should be looked at in a notional unimproved state, because he -- 5 of 7 -- 6 says to do that the demolition cost of the existing structures would need to be considered. Again, in a practical sense that may be so, but Mr Kelaher has had long experience with the Valuer-General's Department himself and should be aware of the definition of unimproved value in terms of Section 12(1)(b) of the Valuation of Land Act. He naturally agrees that availability of services is a consideration, but in many of his comparisons disregards the availability to the subject lands, of water and sewerage. He agrees that at some significant cost, access arrangements to Dreamworld have been provided but this does not appear to be reflected in his comparisons. As an example, Mr Kelaher sees the Pacific Highway, Kingsholme sale property as being very similar to the subject. On the evidence, it has a clearly inferior location relative to potential, available access and services. Mr Scougall on the other hand has, on the evidence, been strongly influenced by a perceived potential for future development but, with the larger parcel, has not, in my opinion, been able to even closely support his valuation by sales evidence. It is not seen as unrealistic to be guided by the perception of future potential as indicated by a strategic plan but that potential should also be expressed in the market place in terms of value. A professional opinion as to effect of potential is provided, but there has been no research, for example, as to whether existing service infrastructure is adequate or into the time frame in which use, higher and better than that provided by existing zoning and infrastructure, might take place. This matter deals with a valuation for revenue gathering purposes and the opportunity exists for regular review. A conservative approach is considered warranted where uncertain future potential forms the basis of the assessment. On the evidence before me, while it is not ideal, I am satisfied that the Valuer- General's approach to the smaller parcel is supported and regardless of Mr Kelaher's -- 6 of 7 -- .. 7 assertion that an average value over the total holding should be found, this appeal will be dismissed. However on the larger parcel and on the totality of both Mr Kelaher's and Mr Scougall's basic evidence, I am of the opinion that the appellant has carried the burden of proving that the Valuer-General's valuation is excessive. After consideration of both existing zoning and future potential, the evidence indicates to me that the unimproved value should be in excess of $50,000 per hectare but not as high as $70,000 per hectare. While it may appear convenient when the two opposing valuations are considered, I will adopt a value of $60,000 per hectare for the larger parcel. In summary, appeal AV90-212 is dismissed and the Valuer-General's determination affirmed. Appeal AV90-213 is allowed, the determination of the Valuer- General is set aside and the unimproved value determined in the rounded sum of $4,600,000. ...,.__ (R.E. Wenck) Member of the Land Court. -- 7 of 7 --