Channer v The Valuer-General [1990] QLC 250

Re: Appeal against determination of the Valuer-General - Cairns City Council AV90-345. Donald Juli an Channer v. The Valuer-General DECISI O N LAND COURT, BRISBANE. 23rd November, 1990. This appeal is against the determination of the Valuer-General of the unimproved value of an area of land situated within the Airport complex at Cairns and used for aircraft hanger and associated facilities. The relevant land comprises part of Lot 1 on RP 736303, parish of Cairns, and contains an area of 2169 square metres. The land is leased from the Cairns Port Authority. For the purposes of the Annual Valuation of the area as at 31st March, 1989, the Valuer-General has valued the site at $200,000, which in the valuation tendered by Mr P.F. Goodman-Jones, District Valuer, is a sum derived as follows:- 2169 square metres @ $100 per square metre = less 900 cubic metres fill at $15 per cubic metre = $216900 $ 13500 $203400 Mr Goodman-Jones based the valuation on sales and compared the subject land directly with sales of three industrial lots - one in Anderson Street Cairns (Sl) - one in Newell Street, Cairns (S2) - and one at Edmonton (S3). The appellant, in his notice of appeal stated that in his opinion the value of the land was $130,000 but in the hearing of the appeal contended that the value should be in the order of $53,000. This estimate was derived by applying a figure of $100 per [1990] QLC 250 -- 1 of 5 -- 2 square metre to the total area less a sum for filling (the sum allowed by Mr Goodman- J ones) the sum of $18,800 being the cost of surfacing an apron area and by allowing for additional building costs (estimated at 20% above normal costs) involved in constructing the facility to certain cyclone prevention standards. He was of the view that the market value of the land was affected in that usage was limited to the purpose for which the land is used, whereas the sales used by Mr Goodman-Jones for the purposes of comparison had available to those lands by virtue of their zoning a choice of a number of uses. The subject land is zoned "Special Purpose" which as I understand the evidence is the zoning of the whole airport. The use of the land is restricted to aircraft hanger and associated facilities (light aircraft). The area leased is 2169 square metres. Under the terms of the lease an area of 673 square metres was required to be surfaced and kept clear at all times. The balance of the area (1496 square metres) is available for development. Within that area a hanger is constructed covering 914 square metres. The particular use is of an industrial nature and to that extent has a relationship with land where the highest and best use is also of an industrial nature. The difference lies in the opinion of Mr Channer in the fact, which would appear to me is open to consideration through the relevant zonings, that the usage of the subject land is limited to aircraft services and allied industries and is therefore not as valuable as lands within an industrial or light industrial zoning under which a choice of a number of uses is permitted. The captive market, if I could call it that, possessed by the subject land is not seen by Mr Channer as enhancing value, rather he sees it as one depreciating value. I come then to the sales forming the basis of the valuation of Mr Goodman- J ones. -- 2 of 5 -- 3 Sale 1 - Anderson Street - comprised the sale of 1214 square metres of land zoned Light Industrial. The consideration paid was $360,000. The land for the purposes of the current annual valuation is valued at $330,000 or $272 per square metre. Anderson Street is described by Mr Goodman-Jones as an arterial road servicing the western suburbs of Cairns. Properties fronting the road have good exposure for commercial uses. It is agreed between he and Mr Channer that this property is far superior to the subject land. Sale 2 - Newell Street - comprises an area of 2006 square metres situated about 3.6 km south-west of the Post Office and within the main industrial area of the City. This land is zoned Noxious Industry but it is agreed that under this zoning land may be used for light industrial purposes . This land sold for $250,000 in a cleared state and is valued at $245,000 or $122 per square metre. The block is much larger than sale 1 and also much larger than Sale 3. This factor in the opinion of Mr Goodman-Jones is one for consideration in reflecting upon the relativity between the sales. Sale 3 - is of land zoned light industrial and situated 9.5 km south of the City in an area which it appears is just coming alive industrially and designed in the opinion of Mr Channer to service developments which are expected to take place south of the City. The parcel containing 1200 square metres sold for $132,000 in a cleared state and is valued at $120,000 or $100 per square metre. This site is seen by Mr Goodman-Jones as being inferior to the subject land by virtue of its location. In his opinion the sale represents the bottom end of the market and as such is a fair basis in valuing the subject land with its restrictions. Were he to rely entirely on this sale he would value the subject land, assuming it possessed a comparable area to the sale, at $125 per square metre. Because of size he -- 3 of 5 -- 4 would adopt a value of $100 per square metre. Mr Goodman-Jones recognises the limitations placed on the apron area. He sees some affinity between this area and areas used for carparking in the development of industrial blocks. He accordingly advanced a check method of valuation by applying a value per square metre to 1469 square metres of $125 per square metre (comparable area with S3) plus half that value to the apron area less fill with brought up a sum of the order of $200,000. The evidence has identified a number of matters which require consideration in comparing the subject land with the sale lands. Firstly there is an affinity in use which leads me to conclude that Mr Goodman-Jones is correct when he says that the value can be based on sales of light industrial blocks. Secondly developments for those uses under Council Ordinances are limited by site coverage and there is generally a provision for carparking. The carparking area is seen as necessary for the successful use of the relevant lands and as having a value equivalent to the area housing the premises. It is agreed that standards of construction, subject to satisfaction of the minimum standards required by the Council, are at the option of the developer. It is submitted that in the subject case the appellant had no choice in the matter, but given a choice the prudent developer would, in my opinion, have opted for the higher standard. The development of the apron area in the subject case is of a higher standard than is required for carparking associated with light industrial uses. The area would appear to serve no useful purpose other than perhaps enabling access to be got to the site by aircraft. The value of this apron area, in my opinion, is the one drawing the major distinction between the subject land and the sale lands and would have value but not to the extent suggested. If the area within the lease which is capable of development (1469 square metres) is compared with S3 - the bottom end of the market -- 4 of 5 -- I ' 5 -which seems reasonable in the circumstances I agree with Mr Goodman-Jones that the area could sensibly be valued at a rate of $125 per square metre. The apron area I would value at 10% of this value. The calculation thus becomes- 1469 square metre @ $125 per square metre $183,625 apron 10% 18,362 less fill $13,500 or $185,000 in round figures. $201,987 13,500 $188,487 Accordingly the appeal is allowed the determination of the Valuer-General is set aside and the unimproved value of the subject land is determined in the sum of $185,000. (D.M. White) Member of the Land Court. -- 5 of 5 --