Comino & Ors v The Valuer-General [1990] QLC 297

..·. - " / :, .~• ... _,·;·. :: \. ~-:.~, \ IAND COURT, BRISBANE. 11th May, 1990. L---- ··- - ·-, -~- -· Re: Appeals against determinations of the Valuer-General City of Redcliffe. (AV89-402, 403, 404, 405, 407, 408, 409 & 410) M, Qunino and Others v. The Valuer-General DECISION (Hearing at Redcliffe) . .··_. ~'~ r:. .,.. .....,, _:'fr~~ {/ ..- These are appeals against the Valuer-General's determinations of the unimproved value of eight (8) parcels of land spread throughout the retail centre of Redcliffe in Redcliffe Parade and Sutton Street. The relevant date of valuation is 31st March, 1988. Details of the individual appeals, all in the parish of Redcliffe, are as follows:- AY89-402- AJ/89-403- AJl89-404- AJ/89-405 - appellants M. Comino, B. Conomos, V. Stratigos, S. Castrisos and Stephen Comino - property situated at Redcliffe Parade and Sutton Stree4 being Subdivisions 475, 476, 495 and 496 of Portion 193, containing 1619 square metres - unimproved value $1,000,000- appellants' estimate $494,000. appellant T. G. Castrisos - property situated at Sutton Street being Lot 7 on RP 130023, containing 382 square metres - unimproved value $140,000 - appellants estimate $105,000. appellants N.C., C.N., G.N. and P.N. Athousis - property situated Redcliffe Parade and Sutton Street being Lot 3 on RP 54672, containing 653 square metres, unimproved value $410,000 - appellants' estimate $194,000. appellants N. and C. Athousis and S Comino as Trustee for The Nicholas Athousis Family Trust - property situated at Redcliffe Parade and Sutton Stree4 being Lot 2 on RP 30409 and Lot 2 on RP 40132 containing 976 square metres, unimproved value $470,000 - appellants' estimate $281,000 [1990] QLC 297 -- 1 of 33 -- , - page 2 - AJ/89-4Ul - appellants NA. and E. Tzimas - property situated Sutton Street, being Lot 18 on RP 212471, containing 742 square metres - unimproved value $242,500- appellants' estimate $194,000. AV89-408 - appellants G. Kallos, J. Toumpas and C Toumpas as Trustees, Phamp Pty Ltd, P. Kallas, M. Kallas, H. Feros, C. Toumpas, E. Landy, A.L. Londy, J. Toumpas - property situated Sutton Street, being Lot 2 on RP 72002, containing 766 square metres - unimproved value $385,000 - appellants' estimate $350,000. AV89-4(JI) - appellants G. Kallos, J. Toumpas and C Toumpas as Trustees, Phamp Pty Ltd, P. Ka/los, M. Kallos, H. Peros, C. Toumpas, E. Landy, A.L. Landy, J. Toumpas - property situated Redcliffe Parade and Sutton Street, being Lot 1 on RP 72002, containing 1781 square metres - unimproved value $980,000 - appellants' estimate $600,000. AV89-410 - appellants E. and P.H. Cassimatis - property situated Redcliffe Parade and Sutton Street, and being Subdivisions 482 and 489 Portion 193, containing 809 square metres - unimproved value $510,000 - appellants' estimate $360,000. The lands were used for shopping and associated purposes and according to the Valuer-General were zoned, at the relevant date, "General Business B", with the exception of AV89-407 which is said to be "Special Business B". By consent the appeals were heard together. At the conclusion of the hearing I was invited by the parties to view, at my convenience, the properties subject of the appeals, the sale properties and the retail centre of Redcliffe and Kippa Ring generally. A view has been taken as requested and has been of assistance. Counsel for the appellants called a number of witnesses including a town planner, a businessman/shop tenant, a quantity surveyor, a real estate agent, one of the appellants, then a valuer and two instructing solicitors. Apart from the valuation related evidence the thrust of the appellants' case was that business activity in Redcliffe retail centre was weak and had been at and prior to the relevant date. The appellants say the Redcliffe centre suffered from the competition provided by the shopping centre developments at Kippa Ring both existing and planned at the relevant date, as well as the limitation on carparking, in terms of numbers, permitted time in some areas, then location of car parking facilities. The overall retail demand in the Redcliffe centre they say resulted in a significant number of shops being vacant and difficult to let, with landlords in some cases being unable to -- 2 of 33 -- - Page 3 - pass on to tenants rental increases as provided for in lease documentation. Mr P.D. Day, LL.B., Dip. TCP., FRAP!, Certified Town Planner (Qld and NSW Local Government Acts) provided a report with the title "Town Planning Assessment - Central Redcliffe and Kippa Ring", the intent of which was to compare the status and significance of those two centres and the likely course of future development. Mr Day states that the growth rate of Redcliffe in relation to the Brisbane area has been declining and that in the inter-censal period 1981-1986 was only half that of the Brisbane Statistical Division as a whole. He says that Kippa Ring has expanded to a stage where it has established primacy over the Redcliffe CBD by offering comprehensive one-stop shopping facilities, coupled with ample off-street parking, and is approaching regional status. . Mr Day says that the growth of Kippa Ring conforms with the Redcliffe City Council's 1986 Strategic Plan which envisages Kippa Ring as the city's major commercial and shopping centre whereas the CBD is categorised as a "suburban" centre. He suggests that after consideration of the low population growth rate coupled with the planned and now current expansion of Kippa Ring, there is little potential for further retail expansion in the locality. He goes on to say that in keeping with a 1988 Development Control Plan for the area the Council has made effort to improve the image of the CBD, including amongst other things the creation of the Sutton Street Mall. The Plan for the CBD he says appears to reflect concern on the part of the Council for the CBD's future. In his report reference is made to this concern being also apparent from the Council's action in commissioning a study by Pak Poy and Kneebone Pty Ltd. Mr Day says the resultant 1989 report confirms the primacy of Kippa Ring as a retail centre and estimates a short fall of some 400 car parking spaces in the CBD area (especially for short-term parking). Mr Day says thatwhile Council has created the pedestrian mall in a small section of Sutton Street the mall is slightly disadvantaged by its slope and is not apparent to casual and holiday visitors normally traversing the Redcliffe Parade waterfront. In summary, he is of the opinion that -- 3 of 33 -- - Page 4 - "shopping and commercial development in Redcliffe is decidedly skewed towards Kippa Ring" and that the "increasing commercial dominance of Kippa Ring would appear to be irreversible and indeed is in accor~ with planning policies adopted by the City Council". He sees the best prospects of the CBD as requiring the fostering of a distinctive tourism-related orientation and a revival of Redcliffe's holiday centre image. Under cross-examination Mr Day agreed Redcliffe was no different to many other cities throughout the country in being confronted with the emergence of regional shopping centres. One of the differences he sees however is that in Redcliffe, Kippa Ring is acknowledged in the 1986 Strategic Plan as the dominant retail and commercial centre of Redcliffe. While he agreed in response to interviews conducted as part of this study, an impression was given that people did not particularly like Kippa Ring, Mr Day stressed that the majority of people interviewed actually shopped there, the main attractions being the greater variety and the larger size of the shops and the availability of parking. Mr M.R. Juster, a retired pastry cook and managing director of Mahl Cakeshops Pty Ltd, a lessee of premises in the Redcliffe CBD, gave evidence that he started his business in 1947 then provided some details of the performance of that business since 1971. The details provided to the Court showed a comparison of trading figures from year to year expressed in percentage increase or decrease terms. In immediately previous financial years takings increased 11.6% from 1985 to 1986, 5.9% from 1986 to 1987 then to June, 1988 1.75%. Mr Juster believes that the single biggest factor that affected trading in the Redcliffe CBD was the commencement of Kippa Ring shopping centre as far back as 1975 aggravated by a lack of parking. He believed his rental which was disclosed as being $289.69 per square metre per annum for the year commencing 1st January, 1988 for a Redcliffe Parade frontage shop of 48 square metres was fair, particularly .as he was not called upon to pay his share in rate increases although as he understood it, the lease provided for such payment. He felt that the -- 4 of 33 -- - Page 5 - Redcliffe CBD suffered by lack of consolidated management and promotion due to individual ownership of the various properties as compared to Kippa Ring where there was effective management. Mr Juster had been on the Executive of the local Chamber of Commerce during the continuing debate which had taken place prior to Redcliffe City Council taking the decision to construct· the Mall. He believed that had the Chamber of Commerce not supported the proposal to locate the Mall in Sutton Street rather than Redcliffe Parade, then the Council's attitude would have been that there would be no Mall at all. He also was under the impression that parking was to be a consideration of the Council at the time of the construction of the Mall. A later witness was Mr N.A Tzimas a restauranteur by occupation, one I of the appellants, as an owner with his wife of property which had recently been developed as Fountain Court, in Sutton Street, in close proximity to the south of the Mall. Mr Tzimas is President of the Redcliffe Chamber of Commerce and also a member of the Mall Management Committee. He describes the Mall as a disaster, and supports Mr Juster's opinion of the Council's attitude if Sutton Street had not been acceptable. As, in his opinion the CBD was in decline, he agreed that the Sutton Street Mall location should have been better than the alternative nothing at all, provided the Mall was well designed and the proposal for the provision of parking was implemented. He says that the Mall was not professionally designed, the additional parking was not provided and from a retail point of view nothing has changed with similar numbers of shop vacancies after its construction as before. Mr Tzimas explained that the site of Fountain Court, an above average quality arcade of shops, had been purchased with a substantial house on it, he thought in January, 1985. Then he "made the mistake to take the house down". The land remained vacant until 1988 when with the knowledge of the Mall and additional parking proposals, the decision was taken to carry out the development. He says in hindsight he should never have removed the house and should not have built the shops which cost somewhere around $600,000, completed in late 1988. -- 5 of 33 -- - Page 6 - Despite wide advertisement and promotion he found it "impossible" to get tenants. Several shops within the development are in fact leased, but Mr Tzimas has had to finance occupiers into two shops with no rental return in the hope that leases would be taken out. Against original intentions Mr Tzimas occupies part of the development with cafe premises. One shop, as I understtPJ.d his evidence, still remains vacant and the return from the development after outgoings, but excluding repairs and depreciation are currently about $25,000 per annum. Mr Tzimas was asked of his knowledge of a property in Sutton Street which was purchased by the Redcliffe City Council - the sale being used as evidence by the Valuer-General. He said that he knew at the time of purchase there was a substantial residential building on the land and that building had been taken down and a road constructed over the site. Mr Tzimas is adamant that one of the problems associated with lack of customers using the area is the parking situation. He was in possession of the Pak Poy and Kneebone Pty Ltd report referred to by Mr Day and photocopied extracts were tendered to the Court. The report had become public only very recently prior to the hearing, but had been commissioned, according to Mr Tzimas, some twelve (12) months earlier. The extracts from the report which were highlighted by Mr Tzimas were as follows:- On Page 51- On Pages 57 and 58 - "These calculations indicate that there is a shortfall of 432 car parking spaces in the northern portion of the study area at present. it should be realised that this additional parking will also cater for an increase in patronage at the centre resulting from the removal of the peak-hour parking shortage." "Nevertheless the projections highlight that even when the cu"ent shortfall is resolved Council must ensure that such a situation of severe undersupply does not occur again." · Another witness called by the appellants was a local real estate agent, Mr N.G. Tyler who has long agency experience in Redcliffe and its CBD. He was involved in the initial promotion of Fountain Court and confirmed the difficulties involved in -- 6 of 33 -- .. - Page 7 - finding tenants. He said that in the total CBD area including the fringe retail areas southerly of the Mall there were at the time of hearing twenty-two (22) vacant shop premises and apparently this had varied up to about twenty-seven (27) from around the relevant date in March, 1988 to the present time. Mr Tyler informed the Court as to his knowledge of rental negotiations of a newsagency in Redcliffe Parade which was one· of the sale properties used by the Valuer-General and also some details leading to the purchase and sale of property in Sutton Street by Mr ·and Mrs Sadona, the purchase being another transaction basic to the Valuer-General's Sutton Street valuations. Mr Tyler offered the opinion that one of the problems associated with parking in Redcliffe was that customers were loathe to walk distances which might seem reasonable in cities but not in country towns. Evidence given for the appellants by Mr M.N.R. Davies, a quantity surveyor, related to reports he had prepared as to the replacement costs of several Redcliffe CBD properties. These costings were used as part of the basis of the v~uations prepared by the appellants' valuer. Mr Davies gave some evidence as to his opinion of the replacement cost of the refurbished Sadona building. He also offered the opinion that at the relevant date of valuation the cost of construction of single storied shops, bare of fittings, airconditioning and floor coverings, or as he described it the shell of such a building, would be approximately $400 per · square metre. The valuation evidence for the appellants was given by Mr C.W. Allard, FAIV, a registered valuer in private practice. Separate valuation reports were tendered for each of the appeal properties. Broadly Mr Allard holds the opinion that the Redcliffe CBD retail area is suffering from the competition provided by Kippa Ring with its convenient parking and undercover shopping in the one combined commercial development. He says that the construction of the Sutton Street Mall has not influenced greater demand in the CBD and that there are many vacancies particularly.in newer establishments where asking rentals are not economically affordable "in terms of the -- 7 of 33 -- - Page 8 - ability of an establishing business to trade". In his assessments Mr Allard said he adopted firstly the recognised approach of analysis of those sales which he considered relevant, then with regard to the suitably improved properties he carried out a check by establishing the improved market value by capitalization of rental return as was provided to him, then deducting the added value of the improvements. Where the information haq. been provided to him by the quantity surveyor as to the estimated replacement value of the improvements he adopted that estimate as his base replacement value. He then calculated the added value of improyements by depreciating the replacement value for factors such as age, condition and obsolescence. He endeavoured to relate his depreciation factor to the market by comparing the actual rentals obtained for the individual premises with a range of optimum achievable rentals for similar permitted uses in modem or brand-new buildings with comparable location. He recognises that his methodology could be prone to error and that the assessment of added value of improvements is fraught with danger, but in the absence of vacant land sales, found the necessity to carry out this check exercise. He took comfort in that his assessed capital values of the several improved properties involved in these proceedings were related to the real market place through actual rentals and realistic adopted yields, or capitalization rates. While Mr Allard took further comfort in that his analytic starting point, the replacement value of the building, had been estimated by a quantity surveyor, the question of highest and best economical use of the properties, a necessary valuation consideration, was not a matter which could be addressed by the quantity surveyor. Mr Allard's sales analyses and individual valuations will be dealt with later. Mr J A Cassimatis, solicitor, was called to give evidence in connection with rental schedules for properties owned by his clients, as was Mr S. Camino also a solicitor representing several of the appellants. This evidence was helpful in clarifying the detail relative to the date of commencement of some of the rent levels which had either been referred to by earlier witnesses or had formed part of the Valuer-General's -- 8 of 33 -- - Page 9 - exercise. One witness was called for the Valuer-General, Mr P.D. Grennan, FAIV, the registered valuer responsible for the valuations appealed against. Mr Grennan had carried out the valuation of the total Redcliffe CBD area and had also been responsible for the valuation of the area one year previous to the current relevant date. It was Mr Grennan's opinion based on his interpretation of sales evidence that values in the 1986 period had slumped in the Redcliffe CBD as had been reflected in the previous valuation but then recovered during 1987 with that recovery sustained by sales evidence subsequent to the date. Mr Grennan felt that the Redcliffe CBD was not disadvantaged to any greater extent than the central retail areas of other provincial cities throughout the State where large neighbourhood shopping centres have been established. It was his opinion that while Kippa Ring did provide competition to the Redcliffe CBD the poor layout of Kippa Ring and its split ownership and management mitigated against the effect of the competition at the relevant date. With regard to the parking situation he did not see Redcliffe disadvantaged as compared to other provincial cities and indeed saw the parking facilities and lack of metered parking in Redcliffe as being superior to most other provincial CBD localities. He had no real dispute with the evidence provided by the appellants' quantity surveyor, where he had personal knowledge of the specified buildings, but felt that with regard to the building purchased by Westpac, being the only sale property common to both parties, that Mr Davies was unable to provide a reasonable replacement cost as he had not inspected the building at the time of the earlier Sadona purchase and it had been substantially refurbished since. He did not see the vacancy factor in the immediate locality of the appeal properties, particularly the street or Mall frontages, as being particularly high although he agreed that he may not have been fully cognisant of the extent of shop vacancies in the arcade locations. He had been aware of a number of vacancies in the area south of Baker Street but unrelated to the appeals in question and in explanation saw that locality as having -- 9 of 33 -- , - Page 10 - become fringe retail. Mr Grennan felt that the Mall should not be regarded as a disaster as it had not been given sufficient time for reasonable consideration of its future prospects. He felt some of the witnesses for the appellants were endeavouring to paint pictures of doom and gloom which he did not think was the real situation, particularly with regard to the level of property values. He agreed that he had paid at best ''very minor" weight to the comments of some landlords as to their decisions in 1987 not to apply rental increases and also some of the rental information obtained from the tenants as part of his valuation exercise had been proven to be inaccurate, even though he had used his best endeavours to obtain the correct information. Mr Grennan's primary basis for his valuations in the prime retail locations was three (3) sale transactions at the noJ1hem end of Redcliffe Parade, two of which he consolidated as one, then the sale common to the parties, the Sadona purchase, for Sutton Street. He then obtained further support for the secondary locations, from one vacant sale in Redcliffe Parade south of Baker Street and two older sales of what he considered to be vacant property on the western frontages of Sutton Street. His evidence is that, as he had found a significant increase in the level of values between the two annual valuations, particularly in the prime Redcliffe Parade section, he had been required to show, in addition to the sales evidence, that a notional development exercise also supported his valuations. While the evidence of the witnesses other than the valuers has been helpful in my understanding of the overall situation and the concerns of property owners and tenants within the Redcliffe CBD, in the end result the question of value will be reflected by the nature of property sales evidence within that location. The sales evidence used by the respective valuers is now dealt with as follows:- In his original reports Mr Allard relied on the analyses of three (3) sales, all fronting Sutton Street at Nos 161, 114 and 143. A fourth sale was -- 10 of 33 -- • - Page 11 - introduced during the hearing. Mr Allard's sale 1 - 161, Sutton Street - Lot 1 on RP 210694 - 1037 square metres - Sports Build Pty Ltd to H. and F. Demos - 25th August, 1987 - $480,000 - improved with a new (up to 1 year old) single level building of 424 square metres, partially vacant at the date of sale. I Mr Allard analyses this sale by deducting selling costs, a profit/riskallowance, improvements (the recent construction costs of which had been established) interest on construction costs and land (at 15%) then site acquisition costs, leaving what he says is the unimproved value of $223,920. The method employed by Mr Allard is a feasibility exercise which I find is inappropriate once the improvements have been constructed and the development sold. I accept that this exercise may be an appropriate check method for land which is vacant and considerations of highest and best economical development are being addressed. Once the development has occurred, however, the purpose of the sale analysis is to establish the land content within that sale. The risk has already been taken by the developer and the profit on the actual development exercise been either made or lost at the time of sale. Mr Allard's evidence is that one tenancy area was vacant at the time of sale, with leases providing rental income to the lessor of $43,456 per annum apparently in place. Mr Allard saw a let-'up period of 1 year for the vacant shop,, where the evidence suggests it still remains vacant, well over 2 years after the relevant sale. The Valuer-General argues that in assessing the added value of the building, an interest allowance of 15 % at the time was too high. Mr Allard says that 15% was not the cost of borrowing money at that time, but the opportunity costs to an investor, at somewhere between gilt-edged security and development finance. I accept the Valuer-General's argument that long term bond rates are appropriate. when considering, for this -- 11 of 33 -- - Page 12 - purpose, the opportunity cost of money to a developer, on the assumption that borrowing is not necessary. Mr Grennan when commenting on Mr Allard's use of this sale said that he had analysed the sale but thought that the transaction "hadn't picked up with the market at that time". He had been given to understand that the vendors ''were pressed and anxious to sell". He was however unable to provide any cogent evidence as to the circumstances of the vendor. He thought the sale may have been low due to the relatively small site coverage of the development, but his reasoning for this opinion, particularly in view of the demonstrated remaining vacancy situation (of which he had been unaware) was not convincing. The record shows that Mr Grennan's analysis of this sale indicated a land content unimproved on his basis of analysis of $285,499. His valuation of that property at 31st March, 1987 had been $25~,000 then as at 31st March, 1988 was $335,000. It is unfortunate that if there was a better reason for discarding this sale than appears in the evidence, full details of the enquiry and analysis of the sale were not provided to the Court by the Valuer- General. It is a sale within a time frame considered acceptable by Mr Grennan in establishing his basis. It will be seen later that the Valuer- General's basis for Sutton Street in reality, relies on one improved sale the analysis of which was seriously contested. Mr Allard's Sale 2 - 114 Sutton Street - Subdivision 1 of Resubdivision 1 of Subdivision 54 ofPortion 193 - 607 square metres - (parties not stated) - 24th December, 1986 - $200, 000- a single level brick building of 502 square metres occupied by purchaser- analysed to show an unimproved value of $85,795. While he says that this sale showed the bottom of the range of indicated values, Mr Allard's application of value to nearby appeal properties does not indicate that this sale is of assistance in establishing -- 12 of 33 -- - Page 13 - market value at the relevant date. Mr Grennan was aware of the sale and said that his analysis of it would provide an even lower rinimproved value than that of Mr Allard. Mr Allard's Sak 3 - 143 Sutton Street- Lot 4 on RP 130023 - 374 square metres - Redcliffe Cre__dit Union to G. and M. Sadona - 13th June, 1987 - $300,000 - described by Mr Allard as single level commercial premises of approximately 400 square metres about 10 to 15years of age with partial upper level amenities area -purchased with vacant possession - resold 11th May, 1988 to Westpac Properties Limited for $440,000 Mr Allard analyses the first sale by deducting the value of improvements as $210,000 to show a land content of $90,000. He bases his valuation of the building on a replacement cost of ·$750 per square metre depreciated 30%. Mr Allard said that his replacement cost accepted the building design as being typical of banking premises. The Cordells Building Cost indicator at that time for banking pi:emises was $750 per square metre. He had not inspected the premises prior to recent refurbishment for Westpac but was aware that previously it had been airconditioned and used by a Credit Union for a banking-type operation for which it had been fitted out. Mr Allard places no relevance on the resale to Westpac because his enquiry indicated that in excess of market was paid due to immediate requirements by the bank for space. This is the only sale common to the basis of both parties. Mr Grennan analyses the sale to show an unimproved value of $145,795. His valuation of the building is based on a replacement cost at the date of sale of $350 per square metre to which he adds the costs of plans and supervision, rates, land tax and interest on construction and holding costs, then depreciates the result by 16%. He describes the building as mainly single storey cavity brick with amenities block on first -- 13 of 33 -- - Page 14 - floor level at rear, built in 1974 and in good condition except for the airconditioning system which he says had nil value. A plan of the building was tendered. Mr Grennan had relied on this plan to calculate a total floor area of 425 square metres. The plan showed that the building was originally constructed as a basic but airconditioned retail store with frontage display windows in 1974. The plan had an attachment which showed a proposal to convert the original structure into two shop tenancies in the 1979/1980 period. The evidence is however, that the Redcliffe Credit Union purchased the property in 1980. Any renovations or fit-out then effected is unclear, but there seems to be no dispute that the Redcli:ffe Credit Union occupied the premises for its purposes until about the time of sale. Mr Grennan said that he looked at the property some time after the date of sale and "it appeared like there was a counter and some cubicles along one side, they looked like little interview areas. It certainly wasn't suitable for a bank and that would have been the only part of the internal building that I would say would have been adjusted from when it was used" - "as a dr~pery". Referring to the airconditioning he said - "its shown on the plan but it was totally under-specified and useless at the time of sale, certainly not used by the new purchasers. I gave nothing for that, it just couldn't be used and to rent premises with airconditioning may well have been harder to get your money in this town than it is normally. Most premises are just non-airconditioned or with fans and they are supplied by the tenants." U:rider cross-examination Mr Grennan was criticised for not having produced the building plans for comment by the expert quantity surveyor Mr Davies. This witness had not seen the building in its original state but had given the opinion that, as refurbished and fitted-out for banking premises, its replacement cost would be in the -- 14 of 33 -- .. - Page 15 - vicinity of $1100 per square metre. This evidence was unchallenged. Mr Grennan and Mr Davies were in general agreement as to the cost of basic shells, of single storied brick unairconditioned buildings, at least as at March, 1988, but it may have been helpful for Mr Davies to view the plans and comment accordingly. As it happened however, the internal condition and fit-out of this building became even less clear when under further cross-examination, Mr Grennan advised that his information relative to the airconditioning came from a Council officer (whose personal knowledge or expertise relative to the efficiency or condition of the plant was unable to be tested). When asked whether the airconditioning was adequate for the Credit Union, Mr Grennan advised that he had made no enquiries other than of the Council officer and in fact had never been inside the building. To a question about internal inspection his reply was "No, it was empty and-locked and I didn't inspect the internal part other than through the plate glass at the front where I looked through. I have the plan and I often find they are more reliable than anything else." While the evidence overall does not lead me to accept that the building should have been treated as banking premises, I am not convinced that Mr Grennan was as informed as he might have been as to the adequacy or suitability of the premises at the date of sale for higher use than the shell valuation applied to the building. Sufficient doubt has been cast on the nature of these premises for neither the sale analyses of Mr Allard or Mr Grennan to be adopted. The subsequent sale to Westpac is of no assistance as neither valuer is prepared to use it other than for information and comment purposes. Further doubt is cast on the Valuer-General's analysis of the first sale when it is revealed that the site in practice occupies a comer -- 15 of 33 -- f _t - Page 16 - position - property on the northern side of it is now being constructed as a fully serviced access road to a rear carparking facility, although apparently still held in fee-simple by the Redcliffe City Council. If reduced to an unimproved state, it is hard to accept that regardless of the adjoining land not being dedicated as road, an informed market would not add some premium because of the surrounding developing status, and the resultant prominent exposure afforded the site. Mr A/lard's Sale 4 - Redcliffe Parade and Sutton Street - Subdivision 1 of Resubdivision 5 of Subdivision 58 of Portion 193 - 675 square metres - (parties not stated) - 2nd October, 1986 - . $321,300 - described as single level brick shop premises of 651 square metres gross floor area - analysed to show a land content of $184,590. Mr Allard's enquiry indicated to him that this was a genuine sale and reflected the market at the date of sale. Mr Grennan advised that he had analysed the sale for the previous valuation, had found a land content of $197,580 and had at that time used the sale as a basis. It was described by him as a liquidation sale, and it was his opinion that it reflected the lower levels of value which applied in 1986. While Mr Allard sees this sale again as demonstrating the range of values, his application of values to the appeal blocks indicates that he has placed no significant weight on the sale. Mr Grennan's Sale 1 and 2 - 171/177 Redcliffe Parade (1) (2) Resubdivision 3 Subdivisions 484 and 487 of Portion 193 - 405 square metres-12th October, 1987 - $470,000-Lunka Pty Ltd to R. Neeter Administrators Pty Ltd and S. Briggs Administrators Pty Ltd. Subdivision 2 Resubdivision 2 Subdivisions 484/487 Po11io'l 193 - 314 square metres - 12th October, 1987 - $385,000- Conomos to R. Neeter Administrators Pty Ltd and S. Briggs Administrators Pty Ltd. As a consolidated sale of 719 square metres for $855,000 Mr Grennan described the property as being improved with cavity brick shops -- 16 of 33 -- - Page 17 - built 1950/1955, sold with sound tenancies at competitive rentals. The site has rear laneway access located near the northern extremity of the ocean esplanade central business area. He analyses the consolidated sale by valuing the improvements (on a depreciated replacement value basis, including plans and supervision, a one year holding period and 6 month development period, rates and land tax and interest at 13 %) at $182,398, including clearing, leaving an unimproved land content of $672,602. To conform to the standard depth basis which was used for relativity purposes and with consideration to the rear access advantage, Mr Grennan sees this sale as equating a level of value of $30,853 per lineal metre of street frontage exclusive of rear access. Mr Grennan's replacement values of the two buildings before depreciation as at October, 1987 were $60,200 and $113,600 respectively. Mr Davies estimates as at March, 1988 were $69,000 and $111,000 respectively. Mr Grennan's evidence is that he has closely monitored commercial building costs over the period in question. Where he has specific knowledge of buildings his shell replacement valuations are considered accurate and his evidence is accepted on that basis. As to the circumstances of this sale he had made telephonic contact with a Mr Richards representing the purchasers from Melbourne. He could not recall the status of Mr Richard's representation. He was informed that the purchasers were aware of the proposed Mall levy, the sale was considered by the purchasers to represent fair market value, there had been no intention to redevelop in the short term nor had there been intention to change the rental level at that time. Mr Grennan understood the purchasers to be investors in commercial property in Melbourne, that this and another nearby property (his sale 3) had been advertised -- 17 of 33 -- - Page 18 - nationally and that the purchasers had negotiated successfully to reduce the asking price of the property to show, by their calculations, a 10% return. On Mr Grennan's detailed calculations the indicated return was 9.3% which he says supports the information that he was provided with by Mr Richards. Because of building site coverage he says he applied the sale with some caution using an averaged $27,296 per lineal metre as compared to the analysed figure of $30,853 per lineal metre. Mr Grennan's Sale 3 - 157 Redcliffe Parade - Conomos to Karsipet Pty Ltd as Trustee for the De Winter Family Trust - Lot 481 on RP 30401 -405 square metres - 4th December, 1987 -$550, 000- single storey cavity brick concrete block and asbestos cement shops, in good condition at the time of sale and tenanted. Mr Grennan analyses the sale to comprise improvements of $112,136 leaving an unimproved land content of $437,864. This site equates the adopted standard depth and the sale shows $36,489 per lineal metre. There is in this instance some significant discrepancy between the quantity surveyor's estimate of replacement cost at $134,000 and that of Mr Grennan at $112,800. Mr Grennan's valuation is based on actual floor area and construction material while Mr Davies is based on estimated floor area and not necessarily the same construction methods. On the evidence Mr Grennan's valuation of replacement cost is accepted. Mr Grennan advised that he had not been able personally to speak to the purchasers, his request having been declined. He was aware from his conversation with Mr Richards (sales 1 and 2) that the purchaser Mr De Winter had inspected the property in company with the purchasers of sales 1 and 2, and it was Mr Grennan's understanding that this property was also acquired to show a return of 10% on the purchasers calculations. Mr Grennan's formal calculations show a return of 9.5% however it became evident that he had mistakenly used the rental return subsequent to June, 1988 instead of the actual rental at the date of sales. -- 18 of 33 -- \ - Page 19 - The actual rental would have, it appears, reduced the initial return on investment quite significantly. Mr Grennan says that because of site coverage of the existing building he applied this sale with even more caution than sales 1 and 2. With regard to Mr Grennan's sales 1, 2 and 3, Mr Allard is very critical of their use as· a basis. He suggests that the purchasers were not at arms length (not from the vendor but from each other), the first purchaser was uninformed in the local market place, had no knowledge of the proposed Mall levy and this lack of knowledge flowed onto the second purchaser who was a friend of the first. Mr Allard had made direct telephonic contact with Mr Briggs a principal in the first purchase and Mr De Winter. He said it had come to his knowledge that the newsagency tenancy rental in the first sale had increased significantly at about the time of the sale. (An inference had been developed by the appellants that the newsagency rental may have been unrealistic due to the methods employed in forcing a new lease at a significantly increased rental some months before the sale. While the evidence is that pressure was brought to bear on the tenant, the rental under the new lease does not .appear on the evidence to be unrealistic.) Mr Allard's final criticism was that the Valuer- General had not in any event used ·the sales properly because of his application of lower levels. The evidence of the valuers is in conflict with regard to the weight which should be placed on these sales. Mr Grennan's enquiry was restricted to a representative of one of the parties, while Mr Allard had based his opinion on direct contact with a principal in each transaction. I have doubts whether the. purchasers were fully informed relative to the proposed Mall levy. Mr Grennan's contact said there had been no -- 19 of 33 -- J - Page 20 - intention to change the rental basis at the time of purchase while the quite significant Mall levy was passed onto the tenants when it was assessed within the short period of the date of purchase. There is possibility that coming from Melbourne, and operating in a different investment market that the purchasers were not fully informed in the local market. The yield on the second purchase at the time of sale was significantly less than the criterion Mr Grennan was told was the basis of purchase. I do not accept that the relationship between the purchasers provides any reason for discarding the sales. However, although the sales are his primary basis Mr Grennan already sees reason to treat both sales with caution, particularly the later sale, due to the effect of site coverage. Doubt has now been cast on the purchasers' local knowledge, particularly with regard to the Mall levy which was locally well known to be imminent. This levy either had to be passed on to the lessees in terms of the condition of the lease, as apparently occurred, or borne by the lessor with the ·effect of lessening the investment yield. It is noted that these properties reasonably fall within the investment category and later comment will be made relevant to dissection of sales of such property. Mr Grennan's sale 4 - Redcliffe Parade - Kalokerinos to Frandey Pty Ltd - Subdivision 1 Resubdivision3 Subdivision 49 Portion 193 - 147 square 7!1etres - 26th August, 1987 - $80,000 - vacant land - nan-ow frontage esplanade site with shallow depth and rear access, analysed to show $13,947 per lineal metre adjusted to adopted standard site. Mr Grennan applied $10,300 per equivalent standard lineal metre to this site with the comment that the sale should be treated with caution due to carparking concessions on redevelopment. This sale was included by Mr Grennan to indicate the range of values, the location of the site not having comparable usage potential -- 20 of 33 -- - Page 21 - to the appeal lands. Mr Grennan's sale 5 - Sutton Street - Redcliffe Credit Union to Sadona. This is the only common sale - see comments in relation to Mr Allard's Sale 3. Mr Grennan's sale 6 - Sutton Street - Althousis and Comino to Redcliffe City Council - Lots 5 and 6 on RP 130023 - 756 square metres - May 1986 - $210,00. Mr Grennan describes this site as being vacant land and after allowing for clearing, analysed the sale to show an unimproved value of $209,500 or $9,523 per lineal metre. Mr Grennan said that he thought this site had been vacant at the date of sale, based on his enquiries but accepted the evidence that there was a residential building on the land at the time of sale. As with his following sale, the existence of even a substantial residential building would not have altered his analysis as the improvements did not represent the highest and best use of the site. He said that there could have been a cost involved in demolition but usually the salvage sale equated such cost. The description of the sale was inaccurate and while the sale could well have represented land value only, or even higher value if demolition costs were involved, it may also have been reduced somewhat if there was a surplus from the sale of the building. In any event the circumstances of the sale, the land being acquired for road purposes, clouds the issue to a degree as to it representing an open market transaction. Mr Grennan uses this sale because the 1986 date was :in a period of depressed values and he says this supports his application of higher levels. of value in 1988. I find the sale of no assistance in the circumstances, and make further comment when dealing with the next sale. Mr Grennan's Sale 7 - Sutton Street - Houghton to Tzimas - Lots 2 and 3 on RP 130023 - 741 square metres - December, 1984 - $200,000 - again described as vacant land and analysed to show a land content of $199,500. -- 21 of 33 -- . t -- 22 of 33 -- - Page 22 - This is one of the appeal properties and again the evidence shows that it was not vacant but purchased with a dwelling described by the appellant Mr Tzimas as being substantial. He was however able to inform the Court that the building was demolished apparently with no surplus from salvage. The difficulty with this sale is its date over three years prior to the relevant date, over which period a somewhat volatile market by Mr Grennan's interpretation existed. Mr Grennan is of the opinion however that the market in 1988 had improved overall which was evidenced by his valuation of this land at $242,500. The only real assistance I might obtain from this sale would be to confirm my opinion as to the lack of assistance given by the previous sale at a higher price at a date when values were said to have fallen below the 1984 levels. I have dealt with the sales evidence at length, because while ideally the best evidence would be provided by vacant or lightly improved property, there is no such sale which I find of assistance. The analysis of improved sales is, as Mr Allard readily admits, "fraught with danger". One sale which might have been of assistance, at least in establishing fair Sutton Street values, after the preceding comments on the sales, is Mr Allard's sale 1, but then I cannot accept Mr Allard's method of analysis as being correct. While I am unable to accept on the evidence that Mr Grennan's sales 1, 2 and 3 comply in every respect with the criteria laid down in Spencer v. The Commonwealth ( 1907) 5 C.L.R., these sales, in combination with his sale 4, do provide indication of a relatively buoyant market at least for the Redcliffe Parade frontage lands as compared to 1986 levels used as a basis for the 1987 valuations. It then becomes necessary to look at the alternative bases offered by the valuers. Mr Allard's capitalization approach is an acceptable method of establishing the -- 23 of 33 -- - Page 23 - improved capital value of investment property, but it relies heavily on the starting point of establishing that existing income is in fact fair market rental, and then that the adopted capitalization rate is related to the market (which was in question). Minor adjustment to either income or yield can significantly alter the nett result, as was demonstrated. In valuation of the improvements Mr Allard has endeavoured to , establish added value by comparing existing rental with rental value for new premises and there is some merit in his approach. The wide range of possible depreciation in individual cases illustr.ates the variance however which could result in dissection of the assessed improved value into a land component. The use, without questioning the economic viability of every building, of actual replacement cost in the depreciation exercise could also lead to grave error in the end result. Although the method of assessing the improved value then deducting the value of the improvements, on those properties where a reasonable standard of improvement existed, was put forward by Mr Allard as a check on the primary basis, it appeared within the actual valuation reports to be a primary method with the result either apportioned or checked by reference to the Sutton Street sales. The method of firstly ascertaining the improved value was discussed in Clough v. The Valuer-General (1981) 8 Q.L.C.R 70 where the Land Appeal Court said at p. 76. ''In Tooheys' case and lowett's case the method of ascertaining the improved value of the subject property and deducting the value of the improvements therefrom was adversely criticised. While in some cases it may be appropriate to adopt the method, it seems to us that in the majority of cases it introduces additional items to value each of which can be the subject of a difference of opinion and thus increase the work load of the valuer and the Courts but also the difficulties and uncertainties of arriving at a reasonably co"ect unimproved value." In this particular case the state of the sales evidence is such that there was seen by the valuers to be the need to look at the secondary methods employed~ When Mr Allard's assessments are looked at closely, one of the weaknesses of the method is shown when rather wide variances occur in some of the assessments. It has not, in my opinion, allowed Mr Allard to provide the overall reasonable relativity -- 24 of 33 -- ,,.. - Page 24 - necessary from property to property. I point specifically as an example, to Mr Allards apportionment of the Redcliffe Parade component in Appeals AV89-402 and A V89- 404 situated at Nos 133 and 155 respectively. The first is apportioned as $19,590 per lineal metre or $584 per square metre and the second several lots to the north in slightly better location, as $23,614 per lineal metre or $704 per square metre. It is my opinion, for several reasons, that Mr Grennan's relativity is realistic and in comparison his values are $26,500 per lineal metre ($788 per square metre) and $27,500 per lineal metre ($818 per square metre). I find the principle involved in the secondary approach taken by Mr Grennan more acceptable in terms of the statutory requirement of assumption that the improvements did not exist. He selects a hypothetical vacant site and then proceeds to notionally develop it, which is a realistic proposition in terms of a market approach. The exercise has however demonstrated one of the problems which I believe needs to be addressed if sales of improved properties are to be the primary basis of valuation. This is the potential difference between a property with vacant possession, as opposed to one with a strong tenancy position particularly in a locality where rental strength is at question. Mr Grennan says in his evidence that tenants "would be queuing up" to get into his notional developments at the rental structure he has allowed. This anticipated demand together with the time he has allowed to plan and construct the notional development suggest to him that there is no attendant' risk to the developer. If the exercise is examined, its intent is to establish the price at which a site may be purchased (logically by a developer) to be on-sold after development, either with vacant possession or in tenanted condition, as an investment property. The exercise of necessity accepts that the hypothetical property is fully tenanted, and Mr Grennan sees little risk of vacancies. The rental structure adopted is said to be market rental. It is found however, in dealing with, as an example, Mr Grennan's exercise Hl, that none of the equivalent market rents adopted are the result of new leases. One is based on a rental -- 25 of 33 -- - Page 25 - achieved through conditions imposed by lease and includes a previously non-existent Mall levy, the rental effects of which had not been tested in the market place. The second is based on a rental which did not come into force until after the relevant date. The third is on a much larger tenancy where it has been necessary to apportion a rental to a basement area. This is the tenancy where the evidence is that pressure had been brought to bear on the existing tenant. It is noted also that the notional tenancy areas are large by average shop standards. The need for tenants to be now more than ever careful to restrict tenancy space to reasonable requirements was portrayed in Mr Juster's evidence. The rent level as used in the exercise was not disputed by Mr Allard, but to suggest that a developer, basing his opinion on the same information, would not see any risk or require profit on his outlay, is not seen to be consistent with commercial reality. In his notional exercise, Mr Grennan makes no allowance for other than the costs of development which, as I understand his evidence, he sees as conforming with either his or the Valuer-General's interpretation of the definition of "the value of improvements" under Section 12 (2) (b) of the Valuation of Land Act, and particularly the proviso to the first paragraph. If as a check the notional development on a hypothetical site needs to be carried out to test market reality, the exercise in my opinion needs to be unfettered by even the suggestion of repugnancy to Section 12 (1)(b) or 12 (2)(b) of the Act. The land value to a developer will result after consideration of costs of on-sale of the completed development, the costs and potential delays in letting-up, reasonable allowance for profit and risk of realising the fully let position at the assessed rental and at the estimated development cost, particularly as holding costs are based on the acceptable assumption for statutory purposes that funds are being diverted from long term bond investment, then finally the costs of acquiring the site. Mr Grennan admitted under cross-examination that if these various allowances were taken into consideration his exercises would not support his assumption -- 26 of 33 -- - Page 26 - of the land content, but said he had been conservative in his adopted criteria. The exercises carried out I find of no assistance except to confirm that if they are meant to interpret the market as they should, then the end product has by summation lesser value than in a fully le't condition assessed by capitalization of rental. Now this leads to the question of statutory definition in dealing with the analysis of actual, as apposed to notional, sales of improved property. Section 12 (l)(b) of the Valuation of Land Act refers to the definition of unimproved value in relation to improved land, the first paragraph dealing with an assumption that the improvements do not exist. Then there is provision in the second paragraph which reads as follows:- (2)(b) reads:- ''Provided further that the unimproved value shall in no case be less. that the sum that would be obtained by deducting the value of improvements from the improved value at the time as at which the value is required to be ascertained for the purposes of this Act" Turning then to the definition of the value of improvements, Section 12 " "The value of improvements" means, in relation to land, the added value which the improvements give to land at the time at which. the value is required to. ascertained for the purposes of this Act, i"espective of the cost of the improvements, including in such added value the value of any hotel license the value of which has been included in the improved value; Provided that the added value shall in no case exceed the amount that should reasonably be involved in effecting, .at the time as at which the value is required to be ascertained for the purposes of this Act, improvements of a nature and efficiency equivalent to the existing improvements." It is Mr Allard's evidence that the market value of an investment property can vary significantly depending on the status of its occupancy, the quality of the lessee or lessees, the level of rental, term of the lease or leases and the lease conditions generally. I accept that evidence as logical and that for example, a property leased for a reasonable lease period to a quality tenant at market rental with regular rental reviews would be more attractive in the ifivestment market place than a similar propefo/ untenanted to be sold with vacant possession, where risks and delays and costs could be involved in obtaining a tenant of similar quality under similar lease conditions. Conversely a property encumbered by a lease unfavourable in the market place, would -- 27 of 33 -- - Page 27 - logically sell at a price less than its vacant possession value. The statutory definition of unimproved value in relation to improved property, seems to me to adequately provide for improvements to be valued on a depreciated replacement value basis with regard to analysis of sale of improved property sold with ''vacant possession" or alternatively the added value basis where property is sold at a price reflecting the deleterious effect of a lease encumbrance. However, if tenancy occupation in a specific case had an enhancing effect on a property's sale price, interpretation of Section 12 (2){b) could require on analysis of the sale, the enhancing effect to flow directly to unimproved value of the land. It follows then that sales of two otherwise similar improved properties, one with vacant possession and the second enhanced by leases attractive in the investment market place, would show otherwise illogical variation in the unimproved land value as defined. If, as an example the hypothetical property in Mr Grennan's exercise Hl was sold under the summation basis which I see as the vacant possession situation, the unimproved land value is indicated as $330,000. If it is sold in the fully tenanted situation, accepting the same criteria as Mr Grennan, the improved market value increases by $47,570 and the analysed unimproved value increases by approximately $42,500. The evidence of Mr Grennan is that the Valuer-General is well aware of forces which might affect the improved market value of property. Several times he made reference to repugnancy to Section 12 (2){b) of the Act which could be caused by recognition of some of these forces as attaching to the value of improvements.. He referred to the need for flexible attitudes to be adopted for cognisance to be taken of any inflexibility in interpretation of statutory definition. Section 12 (2) (a) of the Act defines improved value as follows - " "Improved value" means, in relation to land, the capital sum which the fee- simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require;" It sees to me that the difficulty referred to here might have been overcome by insertion between "if offered for sale" and "on such reasonable terms" the -- 28 of 33 -- - Page 28 - words ''with vacant possession". Failing any such amendment or interpretation it may be expected that interpretation of terminology such as "improvements of a nature and efficiency·equivalent to the existing improvements" will eventually need to be tested. . It is noted also in the Clough case mentioned earlier, that in reference to the matter Brisbane City Council v. The Valuer-General for the State of Queensland (1977 - 1978) 140 C.L.R 41, the learned Judge in that matter Gibbs J, as he then was, had referred to part of what Griffith C.J. said in a passage in Morrison v. Federal Commissioner of Land Tax (1914) 17 C.L.R 498 at P 503 as follows:- '!Any operation of man on the land which has the effect of enhancing its value comes within the definition of 'improvement' " Direct challenge to interpretation has not been made in this matter, although the question of fair interpretation of improved sales evidence and methodology employed in notional development has raised the issue. In summary the state of the sales evidence is such that a clear picture has not emerged. I am not prepared to discard completely the effect of the evidence of Mr Grennan's Sales 1, 2, 3 and 4, yet I am of the opinion that sufficient doubt has been placed on the Sales 1, 2 and 3 for a more cautious approach to be taken than did Mr Grennan. If, as was stated by · Mr Grennan, sales subsequent to the relevant date support his valuations in this matter then those sales will no doubt form a subsequent basis. As I cannot accept that his notional development check is in full accord with market analysis practice, I find further reason for •a more cautious approach at the relevant date. I feel on the state of the evidence that Mr Grennan's sale 5 has not been dealt with fairly by either valuer and I am not influenced to adopt Mr Grennan's so called vacant sales in Sutton Street as evidence of value at the relevant date. It is my opinion that Mr Allard's sale 1 should have played a more effective role in an understanding of the state of the market, but again the evidence in that regard was of little assistance. I am unable to accept the 1986 sales used by Mr Allard as being reflective of the market at the relevant date. -- 29 of 33 -- J - Page 29 - In the end result I accept the general relativity pattern adopted by Mr Grennan as well as his treatment of standard depth and adjustments thereto, effect of shape and the need to establish an effective frontage, effect of matters such as rear access and the various easements. However, with regard to value I see the necessity as at the relevant date to reduce the applied maximum values from $27,500 per lineal metre to $24,000 in Redcliffe Parade, $15,000 per lineal metre to $12,500 on the eastern frontage of Sutton Street and from $12,000 per lineal metre to $10,000 on the western frontage of Sutton Street. The valuations for the appellants and the Valuer-General, and my calculations and decisions are set out as follows:- Appeal AV89402 - Appellants - Redcliffe Parade $19,590 per lineal metre Sutton Street $9,200 per lineal metre Valuer-General - Redcliffe Parade 24.1 metres@ $26,500 Sutton Street 24.1 metres@ $15,000 Plus drainage easement 25% of 2.4 metres @ $26,500 25% of 2.4 metres @ $15,000 Total $695,000 Total $1,025,050 Adopt $1,000,000 Decision Redcliffe Parade 24.1 metres@ $23,000$554,300 Sutton Street 24.1 metres @ $12,500 $301,250 Appeal AV89-403 Appellants Plus drainage easement 25% of 2.4 metres @ $23,000 25% of 2.4 metres @ $12,500 Sutton Street 10.062 metres@ $11,827 Valuer-General - Sutton Street 10 metres @ $12,000 Depth factor 1.06 Rear access 1.1 $ 13,800 $ zsoo Total $876,850 Adopt $875,000 Adopt $119,000 Adopt $140,000 -- 30 of 33 -- " Decision AppeaIAV89-404 Appellants Valuer-General - Decision Appeal AJ/89-405 Appellants Valuer-General - Decision AppealAV89-4ffl Appellants Valuer-General - Decision - Page 30 - 10 metres@ $10,000 per lineal metre $100,000 Depth factor 1.06 $106,000 Rear access 1.1 $116,600 Redclijfe Parade $23,614 per lineal metre Sutton Street $9,240 per lineal metre Adopt $117,000 Adopt $320,000 Redclijfe Parade 9.7 metres@ $27,500 Sutton Street 9.7 metres @ $15,000 Adopt $410,000 Redclijfe Parade 9.7 metres @$24,000 $232,800 Sutton Street 9.7 metres @ $12,500 $121,250 Total $354,050 Adopt $355,000 Redclijfe Parade $13,753 per lineal metre Sutton Street $7,000 per lineal metre Redclijfe Parade 12 metres@ $19,500 4.5 metres @ $19,500 plus depth factor 1.08 Sutton Street 12 metres@ $12,000 Adopt $311,000 Adopt $470,000 Redclijfe Parade 12 metres@ $16,000$192,000 4.5 metres@ $16,000 plus depth factor 1.08 Sutton Street 12 metres @ $9,500 Sutton Street $9,500 per lineal metre $77,760 $114,000 Total $383,760 Adopt $385,000 Adopt $191,000 Sutton Street 20 metres@ $11,000 per lineal metre Depth factor 1.05 Rear access 1.05 Adopt $242,500 Sutton Street 20 metres @ $9,000 per lineal metre $180,000 Depth factor 1.05 $189,000 Rear access 1.05 $198,450 -- 31 of 33 -- AppealAV89-408 Appellants Valuer-General - Decision Appeal AV89-4(Jl) Appellants Valuer-General - Decision Appeal AV89-410 Appellants - Page 31 - Adopt $200,000 Sutton Street $488.25 per square metre Adopt $374,000 Sutton Street $500 per square metre Adopt $385,000 Sutton Street $490 per square metre $375,340 Redcliffe Parade 30.175 metres @ $24,523 per actual frontage Adopt $375,000 $740,000 The valuation report then adopts $675,000 adjusted during the hearing to $650,000 Redcliffe Parade 34 metres effective frontage @ $25,000 per lineal metre Depth factor 1.17 Rear access 1.05 Less drainage easement 2.4 metres x $25,000 X J.17 X 1.05 X 25% Total $1,025,797 Adopt 1781 square metres @ $560 per square metre Less easement Redcliffe Parade adopt 34 metres @ $21,500 Depth factor 1.17 Rear access 1.05 Less easement 2.4 x $21,500 x 1.17 x25% $ 997,360 $ 18.428 Total $978,932 Adopt $980,000 $731,000 $855,270 $898,033 $15.847 Total $882,186 Adopt $880,000 Redcliffe Parade@ $23,679 per lineal metre Sutton Street @ $8,881 per lineal metre Adopt $393,000 With adjustment to non-recoverable outgoings during the hearing, the valuation would have been adjusted to $374,000. It was also contended that reciprocal access easements over this and adjoining land would have a deleterious effect on this property, although not specifically quantified. -- 32 of 33 -- - Page 32 - Valuer-General - Redcliffe Parade 12 metres@ $27,500 per lineal metre Sutton Street 12 metres @ $15,000 per lineal metre Decision Total $510,000 The Valuer-General argued that the effect of the easement encumbrance is offset by the redprocal easement benefit Redcliffe Parade 12 metres @ $24,000 per lineal metre $288,000 Sutton Street 12 metres @ $12,500 perlineal metre $150. 000 Total $438,000 The Valuer-General's approach to the easement encumbrance and benefit is accepted. Adopt $440,000 In summary all appeals are allowed, the Valuer-General's valuations are set aside and the unimproved values of the appeal lands are determined as follows:- AV89-402 ························-··· $875,000 A V89-403 ............................. $117,000 A V89-404 ............................. $355,000 AV89-405 ·······················-···· $385,000 A V89-407 ·······················-··- $200,000 AV89408 ............................. $375,000 AV89-409 ............................. $880,000 AV89-410 ............................. $440,000 (Signed) R.E. Wenck. ·-Member of the Tand Court -- 33 of 33 --