Armstrong v Chief Executive, Department of Natural Resources
[1998] QLC 152
•4 December 1998
|
BRISBANE
4 December 1998
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 81645
(AV97-438).
Trevor R Armstrong
v.
Chief Executive, Department of Natural Resources
(Hearing at Ipswich)
D E C I S I O N
Background:
This matter deals with two parcels of land located in Ebenezer Road and Armstrong Lane (Lot 35) and Mt Forbes Road (Lot 156), Rosewood. The land is described as Lot 35 on Plan CH 311676, Parish of Jeebropilly, and Lot 156 on Plan CH 3159, Parish of Mutdapilly. There is an Easement “B” on RP 889553 across the south-eastern corner of Lot 156, which is for overhead power transmission line purposes, and is vested in the Queensland Electricity Transmission Corporation. The total area of the two parcels is 95.4 hectares, and the lands are used for the grazing of cattle, and have been valued under section 17 of the Valuation of Land Act as a farming operation. While the two parcels do not adjoin, they have been valued as a single assessment under section 34(1)(b) of the Act.
The lands are located about 3kms south-east of Rosewood, and about 16.5 kms south-west of Ipswich. Access to the northern parcel (Lot 35) is via Ebenezer Road which is bitumen sealed, or from Armstrong Lane which is formed gravel. Access to the southern parcel (Lot 156), is from Mt Forbes Road which is bitumen sealed. Power, telephone, electricity and mail services are available, although not connected to the subject lands. Lot 35 consists of 14 hectares (34%) of melon hole blue gum flats and 27.48ha (66%) low forest ridges with ironbark and shallow soils. Lot 156 consists of easy to undulating sloping forest ridges. As a professional agronomist the appellant notes that the blue gum flats are in fact not suitable for cultivation.
The Chief Executive, Department of Natural Resources, on 3 March 1997, issued a valuation at 1 October 1996 for the subject land at $109,000. Following an objection the Chief Executive confirmed the valuation at $109,000 on 2 October 1997. The appellant has now appealed that figure claiming the valuation should more properly be $91,000.
This matter was heard in conjunction with two other matters - RT and HM Armstrong (AV97-436) and RT Armstrong (AV97-437), and part of the evidence relates to all three appeals. Mr TR Armstrong appeared and gave evidence for the appellant. Mr D O’Connor appeared for the respondent, calling evidence from Mr DR Wall, the Departmental Registered Valuer responsible for the valuation.
The Evidence:
The Nature of the Land -
Mr Armstrong draws comparison between his lands, which he argues are not suitable generally for permanent cultivation, and lands further to the east of the subject lands, which are alluvial flats along Warrill Creek. He notes that the agricultural suitability study of the Moreton Shire by the Queensland Department of Primary Industries, has designated the subject lands as mostly Category C1 (suitable for improved native pastures), and Category C2 (suitable for native pastures only). There is an area of land classed as Category B (suitable for cultivation for pastures, forage and cereals with species tolerant of low plant water capacity soils), through the centre of Lot 35. However, Mr Armstrong argues that the Category C1 soils on the west of Lot 35 have ironbark slopes which would create erosion problems if cleared for cultivation. He argues all of Lot 156 is Category C2, and is suitable only for native pastures.
Another disability of the subject lands which is of concern to Mr Armstrong is the lack of capacity for on-site water storage. He has had to construct special diversion channels to concentrate surface water into his major 10 megalitre dam in the south-western corner of Lot 156. During the recent drought that dam even dried up, inspite of his constructing about 1km of diversion banks to catch run-off from the western side of Mt Forbes Road. He has been unable to pipe water under Mt Forbes Road from the eastern side. He also has constructed a second smaller dam to the east of the major dam in an effort to store more water.
Mr Armstrong argues that even the site of his large dam has problems because of the existence of gravel deposits at shallow depth, which restrict the depth of the dam. Because of the gravel he has had to seal the dam with clay, and its shallow depth increases evaporation. Because of its location on the top of a rise the dam has a small catchment area, hence the diversion banks. He has not proceeded with trying to sink a bore on Lot 156 because of problems encountered by his neighbour.
Mr Armstrong also has problems with water for stock on the northern parcel (Lot 35) where there is a salty stream running through the gully in the centre of the lot. During the recent droughts he had to pipe water from his brother’s property on the lagoon off of the Bremer River to the north. Mr Wall concedes those difficulties and has allowed for them in his valuation.
Mr Armstrong also draws reference to a study of land degradation in the Bremer River catchment, which was prepared by the Department of Primary Industries, and which identifies areas on Lot 35 which are covered by secondary regrowth. In those areas he argues it is necessary to treat the regrowth about every five years in order to maintain the productivity of the land. Such recurring costs he argues further detract from the value of the land, and should be allowed for in the unimproved value. Mr Wall countered that argument by noting that he has allowed for the treatment of timber, including one follow-up reclearing in accordance with the Valuation of Land Act.
In the matter of access to the lands, Mr Wall has noted, and allowed for, local difficulties that have occurred as a consequence of the closure of certain roads in the area as part of the open cut mine and the Ebenezer spur railway line.The Impact of a Powerline -
Mr Armstrong argues that there is an existing overhead 110KV transmission line which passes through the south-eastern corner of Lot 156, and is protected by Easement “B” on RP 889553, for which $5,000 was paid by Powerlink in 1997. In addition there is a proposed additional 500KV transmission line which will run to the south and parallel to the existing transmission line. Negotiations with the electricity authority are proceeding, and a widening of Easement “B” will extend to cover right up to the south-eastern corner of Lot 156. Mr Armstrong argues that uncertainties about the extent of electromagnetic radiation upon health is likely to impact potential purchasers of the land, and that potential impact should also be allowed for in the valuation.
Mr Wall acknowledges the existence of the overhead powerline, but believes the impact upon the land as a farming operation would be minimal. In seeking to allow for any impact of the powerline Mr Wall has sought to compare the lands with other properties in the Ipswich, Gatton and Laidley areas, where there are major overhead power intrusions. He concedes that he was not aware of the proposed additional 500KV powerline, but argues that sales evidence indicates that, for farming purposes, there would appear to be limited impact as a consequence of overhead powerlines. Mr Wall quotes examples which support the current unimproved value of the subject land, and the impact allowed for the powerline.
Mr Wall believes that the current unimproved value makes adequate allowance for the powerline, and suggests that the influence of such a powerline may vary the likely sale price by only 5% to 10% from properties not affected. However, he concedes that impact would tend to be higher where close by residential use is involved. He quotes an example in Kholo where a badly affected 17 hectare property actually reflected only a 6% decline in value as a consequence of about 30% of the area being impacted.Planning Matters -
In seeking guidance from the current planning regime in operation, Mr Armstrong draws attention to the industry feasibility study of the Swanbank and Ebenezer areas, undertaken by consultants for the Moreton Shire Council in December 1992. That study identified the south-western area of some 900 hectares in Ebenezer as the site suitable for a special industries estate, including for example tanneries, wool scouring plants, abattoirs and other noxious industry activities. The report also notes the need for certain environmental studies to determine implications for nearby land uses, which would include the subject lands.
While noting that there was no significant infrastructure constraints at Ebenezer, the study identifies the need for large quantities of treated water, and to dispose of treated effluence. It sees the raw water being available from Warrill Creek and the Bremer River. The infrastructure report identified the need for a sewerage pumping station and rising main to be located on the eastern part of the subject land at Lot 35. The plan saw the implementation of the proposed industrial area to depend upon the availability of land from mining activities staged over the succeeding 20 years. The report also identified the 1:100 flood prediction line which extended from the Bremer River into the centre of Lot 35, parallel in the identified Category B1 soils identified earlier.
Evidence was also supplied of statements by a local alderman in 1992 that, subject to favourable study findings, construction would start within 5 years. While no work has commenced to date, Mr Armstrong argues that the existence of the proposal places uncertainty in the minds of potential purchasers in the area, and consequently must impact the value of the land. The proposal for noxious industries does little, in Mr Armstrong’s opinion, to assist the maintenance of rising values in the area.
Mr Wall acknowledges the existence of the feasibility study, but notes that, before any development can proceed, there must be an intense land care study. However, he notes that under the new Integrated Planning Act now in force, there are no prohibitive uses in any particular area, which provide more flexibility for development purposes.(4) The Impact of Mining -
A major impact in the area is the presence and operations of the Ebenezer open-cut coal mine located about 2.5kms north-east of Lot 35. The mine has also acquired a further lease of land to its south-west, and plans to open fresh mining operations which could extend up to 1.7 kms from Lot 135. Drilling of those expansion areas has already commenced. As the mine moves its excavation activities, Mr Armstrong argues that there is uncertainty in the area about the future extent of mining operations.
Mr Armstrong claims this is further extended by the presence of a plan showing the location of existing underground mining leases, and buffer areas, which extend into the north-western side of Lot 35, and up to the western boundary of Lot 156. Although he has no idea of any intended mining operations in those latter areas, their presence, he argues, creates uncertainty and dissuades potential purchasers, thus impacting the price of the land. He argues that local real estate agents confirm such a scenario, together with any noise from the blasting or dust from the existing open-cut mine.
Another impact of the mining activity is the presence of a large bund used to prevent flooding of the mine operations. However the bund also has the effect of damming any flood waters from the Bremer River, thus exacerbating flooding on land to the west, a matter raised separately in AV97-346.
Mr Wall agrees that there is some impact upon the subject lands, but believes that is not significant and is already reflected in Mr Wall’s Sale 1, which is about the same distance from the mine as the southern subject parcel (Lot 156). In seeking sales for comparison Mr Wall has chosen not to adopt sales purchased by the mine, although he notes that sales to private parties in close proximity to the mine do not reflect any lesser value than those purchased by the mine. Mr Wall also notes that all of the matters raised by Mr Armstrong have been regularly discussed at former objection conferences, and their impacts have been fully considered and allowed for in the valuation.(5) Changes in the Valuation -
Mr Armstrong sought to analyse the trend in unimproved values of properties in the area, focussing on the repeated sales of four lots just west of the southern subject Lot 156. Those four parcels (Lots 158, 159, 170 and 236) were sold in 1987 for $120,000 (analysed at $830 per hectare), and resold in April 1998 for $98,350 (analysed for the 145 hectares @ $680 per hectare). Mr Armstrong argues that resale discloses an actual decline in the value by some 17%, rather than the 20% increase determined by the respondent for the subject lands. The land was purchased for grazing purposes, by an experienced farmer in the area (Dionysius).
Mr Armstrong also argues that press reports in the local Queensland “Times” newspaper indicate that the Mt Forbes area has in fact suffered an overall decline in value for the corresponding period of some 2.13%, also not supporting any increase for the subject as has occurred.
As a means of further analysing the percentage changes in the valuations of the subjects, Mr Armstrong sought to plot the valuation trend from 1979 to 1998, after allowing for inflation, as measured by the Consumer Price Index (CPI) from the Commonwealth Bureau of Statistics. He concludes that, as the value of money has not markedly changed, and sales evidence does not support a rise, then it would appear that the respondent has made an error in his determination.
He also seeks support for such a conclusion from the experience of his brother, who is the owner of two parcels to the north-east of Lot 35 (Lot 1 on RP 176308 and Lot 1 on RP 197469). That parcel of total area 103.8 hectares had its unimproved value reduced on objection from $172,500 to $162,500 on 2 October 1997. He argues that the experience of an experienced real estate agent in the area also supports that conclusion. He believes the trend really should be around 5% rise per year and not 20% per year as determined.
Mr Wall argues that a sale to Dionysius of Lot 258 to the north-east of Lots 158, 159 and 170, in June 1997, was in fact after the relevant date for the valuation (1 October 1996) but claims that there has been no further increase in the values during the period of 1 October 1996 to 1 October 1997, and the sale could be considered in accordance with the principal established in Daandine Pastoral Company v. Commissioner of Land Tax (1943) 7 “The Valuer” 299. He believes the June 1997 sale to Dionysius is more useful than the sale in April 1998 to Dionysius, for the purpose of establishing a value at 1 October 1996.
In respect of the general trend in the Ipswich/Rosewood area during 1996, Mr Wall advises that there had been an increase of 20% in all rural lands. He further advises that there has been some variation in different land classifications in that area, and there had actually been a 10% decrease in the value of rural residential site properties over the same period. In the period 1 October 1996 to 1 October 1997, Mr Wall confirmed that, while there had been a few sales of rural lands that reflected a rise in the values, the overall trend was for the values to be held at the status quo for that period.
In respect of the appellant’s use of the overall averaging of property increases as reported by the newspapers, Mr Wall argues such a process can be very misleading, as to average land for rural, residential, industry, etc., can completely distort any meaningful conclusion. In the matter of why Mr Armstrong’s brother had been afforded a reduction of some $10,000 following his objection, Mr Wall advised that that matter had been finalised entirely upon the facts relevant to that property. In the matter of generally seeking to apply a factorisation approach, Mr Wall discounts such a method in accordance with the findings of the Land Appeal Court in RJ Scougall v. Chief Executive, Department of Natural Resources (AV93-119), 13 September 1996, unreported.(6) Relativity -
Mr Armstrong seeks relativity between the subject lands and lands held by his neighbour (Hopper) to the west and east of the subjects. The Hopper lands total 422.5 hectares, and showed an increase from $335,000 ($793/ha) to $385,000 ($911/ha). The subject lands (95.4 hectares) increase from $91,000 ($958/ha) to $109,000 ($1142/ha). He also draws comparison with the lands held by his brother to the north-east of 103.8 hectares @ $162,500 ($1565/ha). However, Mr Armstrong agrees that for parcels of area totalling 400 hectares, the rate per hectare would be less than for smaller parcels of about 100 hectares.
Mr Wall advises that he has maintained the former relativities prior to the current valuation, but notes that such relativities can be compared only as long as the valuations are soundly based. He seeks support from the Land Appeal Court decision in Fischer v. Valuer-General (1983) 9 QLCR 44, at 46; and in Barnwell v.Valuer-General (1990-91) 13 QLCR 13, at pages 16 and 17. Mr Wall concludes that the many concerns expressed by Mr Armstrong over many years of objections have been addressed, and are fairly represented in the current valuation. Mr Wall agrees, however, that the influence of the mine could be changing the relativities in the areas near the mine, as excavation proceeds. However, he was unsure whether the mine operations had reached that stage yet. (Transcript Page 68).(7) Comparison of Sales -
In support of his estimate of the unimproved value Mr Armstrong provided the following sales:· Sale 1 - (Payne’s Road, Mt Forbes - Lots 158, 159, 170 and 236).
This is a sale Gleedul to Dionysius of area 145 hectares sold after auction for $98,350 on 9 April 1998. While Mr Armstrong was not certain of the details of that sale, Mr Wall confirmed that the sale did go to auction with an original asking price of $110,000. The sale sold after auction, and only included Lots 158 and 159 with a total area of 71.285 hectares for $98,350 ($1,380/ha). The vendor (Gleedul Pty Ltd) sold a lot of land in that area at that time.
· Sale A - (Warrill View Peak Crossing - Peck to Korner).
This is a sale of Lots 1 and 2 on RP 79213, and Lots 14 and 15 on RP 28761 with a total area of 110.78 hectares. The sale sold as two transactions on 19 February 1996 for $900,000, and has more application to the matter in AV97-436 discussed separately.
· Sale B - (Cunningham Highway, Mudtapilly - Guardian Trust Australia to Bradshaw).
This is a sale of Lot 47 on CC141, Lots 48, 53 to 56, and 58 on MAR614, and Lot 3 on RP 110512, having a total area of 181.65 hectares, which sold on 17 June 1997 for $705,000. The details of the sale were not known, but it was concluded by Mr Armstrong that the difference between a former sale of that land in June 1987 for $1.395 million probably related to a former milk entitlement attached to the farm at that time. Mr Armstrong did not analyse the sale in 1997, but noted that it was highly improved as its unimproved value was now $290,000.
· Sale C - (Reilly’s Road, Mt Walker - Lot 6 on CH 3150).
This is a sale Riley to Grassick, of 38.85 hectare parcel sold in September 1997 for $184,000, and has an unimproved value of $95,000 ($2445/ha). The sale backs on to Western Creek.
In respect of comparison with Sale A, Mr Armstrong relies only in a broad sense upon the fact that Sale A in fact demonstrated a value of about one-half of its former value in 1987. He concludes that does not support an increase of 20% as applied to the subject lands. He also compares Sale C to demonstrate that, while Sale C has increased since last sold in 1993, for $150,000, the rise over 4 years was in fact only of the order of 20% (or 5% per year). Mr Armstrong also argues that Sale C is better country than the subject on a per hectare rate, in that it is cultivatable and has an irrigation licence and bores. However Mr Armstrong has not fully analysed Sale C and could provide no further information about the conditions of the sale.
In support of his valuation Mr Wall provided the following sales:
· Sale 1 - (Cob Lane, Rosewood - Lot 258 on RP 904576)
This sale of Cooney to Dionysius has an area of 42.59 hectares, and has a similar zoning as the subject lands. The sale excluded the existing Cooney residence. The sale is located about 1.5 kms west of the subjects, and is described as moderate forest ridges. The sale was purchased by an adjoining owner, and access is only fair to Cob Lane or through the purchaser’s adjoining land. Overall the sale is seen as superior on a per hectare basis due to its smaller size, while location and services are similar. Overall the country type of the subject is seen as superior. Mr Armstrong agrees that the northern aspect of Sale 1 would make it superior.
The sale sold in June 1997 for $115,000 which, after allowing for improvements, was analysed at $79,042 ($1855/ha), and applied at a notional unimproved value of $51,000 ($1200/ha).· Sale 2 - (Lubes Road, Warrill Creek - Lot 81 on CC3477).
This is a sale of Chandler to Burton and has an area of 56.175 hectares, and is also zoned “Rural”. The sale is located about 8 kms east of the subject and has an irregular shape and has frontage to Warrill Creek. The sale comprises 14 hectares (25%) of low-lying blue gum flats, 24 hectares (43%) of easy forest ridge, and 18 hectares (32%) of heavy wet ti-tree country. There is a water licence attached to the sale, but its utility is restricted by the nature of the land. The low-lying areas are subject to flooding. Overall the sale is seen as superior on a per hectare basis, due to superior country and availability of water. There are similar services.
The sale sold in November 1996 for $170,000 which, after allowing for improvements, was analysed at $102,684 ($1828/ha), and applied at $100,000 ($1780/ha).· Sale 3 - (Henrichsen Rd, Mt Walker - Lots 1 & 2 on RP 21535).
This sale of Henrichsen to Christensen has an area of 90.167 hectares and is zoned “Rural”. The sale is moderate to steep basalt country with steep stony country in the western part. Access is by gravel road. Overall the sale is seen as inferior on a per hectare basis, due to inferior country and location. There are similar services. The sale is located about 10kms south of the subjects. The sale sold in March 1996 for $192,000 which, after allowing for improvements, was analysed at $99,851 ($1107/ha), and applied at $85,000 ($940/ha).
· Sale 4 - (Hodges Road - Lot 32 on CH311845).
This sale has an area of 144.47 hectares, is zoned “Rural” and is located about 21kms south-west of the subjects. The sale is moderate to steeply sloping medium to light forest country, with steep gullies and ridges. There is an elevated ridge from the south-west to the north-eastern corners, and access is fair to poor. Overall the sale is seen as inferior on a per hectare basis, due to inferior country, location, access and services and the larger area of the sale.
The sale sold in September 1997 for $170,000 which, after allowing for improvements, was analysed at $105,903 ($733/ha), and applied at $105,000 ($727/ha).In considering his Sale 1, Mr Wall notes that the vendor was in fact anxious to sell, and an additional premium that may have been attached to an adjoining owner sale may have been outweighed by the vendor’s eagerness. However, in applying the sale, Mr Wall sought to be conservative.
In comparing his Sale 2, Mr Wall concedes its ability to be cultivated, and that the land is black alluvial soil, but argues that the sale is restricted due to severe flooding of the bottom area near Warrill Creek, even in moderate rains. Mr Wall also notes that the underground water mains associated with the water licence are actually connected to Lot 82 to the south, and there is no water infrastructure attached to Lot 81. Mr Barton, the purchaser, intends to grow forage for deer farming on the lowlands near Warrill Creek.
In comparing his Sale 3, Mr Wall notes that sale occurred between very experienced parties in that area, and the sale includes very steep land as it is near the top of Mt Walker. In respect of his Sale 4, Mr Wall notes that sale is actually in the Little Liverpool Range area although Mr Armstrong notes that the country is black soils. Mr Armstrong agrees however that Sale 4 is inferior.
In relying upon the statistics of rural properties in the area Mr Wall has also used his experience as a valuer to determine the unimproved value of the subject lands. He believes that in spite of the activities of the mines, there is a premium market for the land in that area for primary production purposes.
In seeking comparison with his Sale 1, Mr Armstrong has concluded that the former closed road to the south of Lots 158 and 159 (Lot 236 on CH3159), was most likely to be held with Lots 158 and 159, rather than with Lot 170 further to the south. Mr Wall had not fully analysed that sale but was fairly convinced that Mr Armstrong’s Sale 1 was in fact only for Lots 158 and 159. On the evidence as it is currently known, the amalgamation of separated parcels such as Lots 170 and 236, would not be inconsistent with other ownerships in the area.
Impact of Land Sustainability Issues -
Mr Armstrong has raised the possibility of maintaining stability of unimproved values as a means of assisting graziers and farmers to maintain the viability of their properties. He provides an outline of a suggested project to be funded by the Commonwealth Natural Heritage Trust during 1999, in order to encourage sustainable management of non-urban lands. However, he concedes that such a strategy would have no impact upon the current State valuation system undertaken under the Valuation of Land Act 1944.
While such an approach may prove to be of value to the on-going management of rural lands, it is not a matter for this Court to consider. However, in noting the issues to be addressed by the potential project, it would appear that the objectives are more closely aligned to land administration policies, where incentives can be provided to rural landowners as part of a Government strategy to encourage sustainability, rather than as a mechanism to seek to influence the normal property market for land. Certainly within the current flexibilities available to local governments, in respect of revenue generation, there is scope for further creativity. However, it is not a matter for this Court to consider or direct in this current matter.The Use of the Land -
It is not a matter of dispute between the parties about the on-going use of the land for “farming” purposes under the Act. Mr Wall agrees that he has not made any allowance as arable lands, and has valued the land under section 17 as for grazing purposes.
Decision:
The Nature of the Land -
I turn first to the nature of the land and note that there is general agreement between the parties in respect of the difficulties associated with the provision of water for stock, and difficulties associated with access to the land, and movement through the area, following the closure of certain roads for mining purposes. I note also that Mr Armstrong has claimed that the lands to the western side of Lot 35 present some problems of erosion if the current ironbark timber was to be cleared for cultivation, a matter not disputed by the respondent.
However, there is a difference between the parties in respect of the impact of treatment of timber upon the land for the purposes of grazing. Mr Armstrong argues that the nature of the regrowth timber on the subjects is such as to require regular treatment about every five years. Mr Wall notes however that, while he has allowed for the costs of timber treatment in his valuation, he has restricted those costs to include only one follow-up of regrowth in accordance with directions given in section 6(1) of the Act, and with court directions.
In seeking guidance on that matter I note that in determining the unimproved value of the land as defined under section 3(1)(b) of the Act, any added value of improvements relating to the land are deducted from the improved value of the land. The meaning of “improvements” under section 6(1) is stated as:“ 6.(1) ‘improvements’ means, in relation to land, improvements thereon or appertaining thereto, whether visible or invisible, and made or acquired by the owner or the owner’s predecessor in title, and includes all such destruction of suckers and seedlings as is incidental to the destruction of timber, and also includes the destruction of other vegetable growths and of animal pests on the land to the extent to which such destruction retains its utility, but does not include the destruction by any person of any such growths or pests which are allowed to establish themselves on the land during the ownership, except to the extent (if at all) to which it restores wholly or partly so much of the utility of a previous improvement in the nature of the destruction of such growths or pests as is, by the subsequent provisions of this definition, deemed to have been lost, and any improvement consisting of the destruction of such growths or pests, by whomsoever the same may be effected, shall be deemed to have lost its utility to the extent to which, after it has been made, other growths or pests (as the case may be) are allowed to establish themselves on the land. ”
The current wording of section 6(1) in respect of the further treatment of timber by the destruction of “suckers and seedlings” was developed in response to the findings of the Full Court of Queensland in the matter of The Valuer-General v. Barton and Elliot Pastoral Company (1958) 15 “The Valuer” 188. In that matter it was argued that the destruction of seedlings should occur when they are “at a stage which is economic to treat”. (Page 191). In the end the Full Court found that there was no evidence to support Sheehy J in his conclusion in the lower court that the cost of destruction of timber “is clearly an improvement and covers the destruction of seedlings where they occur” (15 “The Valuer” 176, at 185). The Legislative Amendment to section 6(1) sought to rectify the situation of timber treatment to allow for sucker and seedling regrowth.
In assessing his estimate of timber treatment Mr Wall has followed a general policy applied by the respondent, but agrees that, where there is evidence of less effective treatment, or where the treatment has in some way been depreciated, then some further allowance can be made. (Transcript Page 59). In that regard I note that, where the land is being used for the purposes of farming, or for pastoral purposes, the High Court of Australia held in Kiddle v. Deputy Federal Commissioner of Land Tax [1919] 27 CLR 316, that the unimproved value of a property as a whole was ascertained by deducting from the improved value the cost of making the improvements (including timber treatment), less some depreciation, and also allowing for the loss of interest on all outlays during the period which must elapse before such outlays become fully productive. Knox CJ went on to say at page 320:“The improvements may be divided into four classes:
(a) fencing, (b) other structural improvements, (c) improvements due to timber treatment, and (d) improvement caused by making ready for the plough land which had undergone timber treatment and by planting willows. With regard to each of these items, it is necessary to find the added value which such improvement gave to the land at the date of valuation irrespective of the cost of the improvement, but not exceeding the amount that should reasonably be involved in bringing the unimproved value of the land to its improved value at the date of assessment. ---- This amount would be found by ascertaining the amount which it would cost to make the improvements in question at the relevant date, including a proper allowance for loss of interest on all outlay during the period which must elapse before such outlay became fully productive, and by deducting from the sum so ascertained a proper allowance for depreciation or partial exhaustion of the improvements.”
The matter of the added value of the improvements was further clarified by the Land Appeal Court in O’Brien Nominee Pty Ltd v. Valuer-General (1979) 6 QLCR 280, at page 284; and the extent to which timber treatment or land clearing should be considered was covered in Manderson and Others v. Valuer-General (1977) 4 QLCR 206. While Manderson dealt with the clearing of land for cultivation purposes (sugar cane), the learned President noted at page 211:
“Over and above such considerations the appropriate allowance for timber treatment or land clearing seldom fails to be a ground pregnant with dispute. Not only, in my experience, is the cost of the operation of land clearing or cultivation as at the relevant date seldom agreed between the parties but also the density and type of timber coverage that has notionally to be restored to achieve the unimproved state of the land is also disputed. The subject cases are no exception. ”
The costs associated with timber treatment for grazing purposes were also considered by the Land Appeal Court in Determination of First Rent Period - Ill-I-Ra Pastoral Development Holding (1979) 6 QLCR 147. In that matter it was upheld that the decision of the learned President in the Land Court below ((1978) 5 QLCR 240) was correct in concluding that the total costs of timber treatment could be treated as an improvement (Page 152). However, the Land Appeal Court said at page 152:
“Thus the cost of sowing the buffel grass ‘by any means whatever’, but not the cost of timber treatment, is properly treated as an improvement. The timber treatment is properly regarded as a development work and as such it forms part of the physical state and condition which comprise the unimproved state at the commencement of the subject lease.”
In the matter of Ill-I-Ra Development Pastoral Holding the Court dealt with the establishment of the first lease rental of a new lease, and the costs associated with clearing and sowing of improved pastures under the former lease. That matter can be distinguished from the present matter in that the then section 242 of the Land Act 1974 enshrined that the timber treatment merges with the land when it is cleared and released by the Crown. Where the land is held as a lease the timber (or forest product) is held in the name of The Crown under section 45 of the Forestry Act 1959; and clearing permits are controlled under sections 264 and 265 of the Land Act 1994. In the current matter the land is held as freehold title, and the timber treatment is a legitimate deduction in determining the unimproved value.
However, in considering the period and frequency of repeated timber treatment, I note that Mr Wall has been guided by the provisions of section 264(2) of the Land Act 1994, which directs that a tree-clearing permit will be issued only for a maximum of five years. I note also that guidance on that matter may be found in the decision of the Land Court in Kammholz and Others v. Valuer-General (1978) 5 QLCR 46, where the learned Member found that the periods for timber treatment should remain at five years. In respect of whether a period or frequency less than that period should be considered the Member found at page 55:“ On the state of the evidence before me, I am not prepared to depart from timber treatment and development periods of 5 years each, and I hold that half of the interest accruing over such periods should be used in analysing the parties’ sales. It is mentioned in passing that, if some future Court is to be persuaded lesser periods are more correct, it is my belief that much stronger corroborative evidence will need to be placed before that Court.”
In the current matter Mr Armstrong has proffered statements that the subject lands required follow-up timber treatment every five years. However, he has not substantiated that the current practice and policy of Mr Wall is inadequate for the subject lands. In considering the timber treatment as part of achieving the productive capacity of the land for grazing purposes, Mr Wall has applied rates consistent across that area, in accordance with his extensive experience as a valuer in that locality. He has also allowed for interest lost in accordance with directions to be found in Appeals against Determination of the Valuer-General - Shire of Esk (1972) 39 CLLR 130, where the President said at page 135:
“The allowance has nothing to do with borrowing money to effect improvements but rather with the loss of earning power of the money necessarily outlaid in buying the ready made improvement and/or property as a working or viable proposition. ”
The Impact of Powerlines -
I move then to the potential impact of the overhead powerline upon the unimproved value of the lands for the purpose of grazing. I note that the Electricity Authority is currently negotiating to duplicate the overhead transmission lines with an increased capacity to 500KV, a matter of which Mr Wall was unaware during his valuation.
However Mr Wall has considered the overall impact of overhead transmission lines upon sales of land for farming uses, and has taken that into consideration. It is his experience that, even when properties are much more severely impacted, the value of the land is only reduced by from 5% to 10%. He concedes that such an impact may be higher for residential purposes, particularly where the uncertainty of potential health problems from electromagnetic radiation may occur.
This matter was discussed in JW and AC Cox v. Chief Executive, Department of Natural Resources (AV97-166), 11 February 1998, unreported, where it was noted that the uncertainty in the minds of potential buyers could influence their perception of a value of a property in the marketplace. The Cox matter dealt with radiation from a transmitting tower upon a residential property on the Toowoomba range, where there had been considerable publicity about potential harmful radiation. That matter can be distinguished in that the current matter relates to the use of the land for farming purposes, and where the powerlines occupy only a small part of one of the parcels in the south-east corner of one parcel.
The impact of powerlines was also considered in R and J Sitte v. Chief Executive, Department of Natural Resources (AV97-246), 17 October 1997, unreported, where any impact as a result of public debate on the issue of radiation, in the absence of clinical evidence, was seen to have a minor impact, in spite of 30% of the area of the subject land being traversed by the powerline. In the light of those decisions, and noting Mr Wall’s use of comparable impacted properties in the area, I believe adequate allowance has been made for any impact from the powerlines.Planning Matters -
In the matter of the existing feasibility study for the development of an industrial estate for noxious industries, I can agree with Mr Armstrong that such proposals may cast doubt in the minds of potential purchasers. However while such studies become an essential part of any forward planning for a local government, and while they may propose a future scenario for development, the studies are at best a pronouncement of possible options. Until such proposals gain official status by inclusion in a formal planning scheme, they have no force in law. It is the Governor in Council which has the ultimate decision in respect of whether a rezoning of land, or whether a draft strategic plan, should become law. (See Osterley Pty Ltd v. Caboolture Shire Council (1996) 2 Qd.R. 34).
As Mr Wall notes, before any such proposal has to become enshrined into a planning scheme, there would need to be further land care studies. While potential purchasers may speculate on a detrimental impact upon the current value of the land for farming purposes, there is also the possibility that other purchasers may also speculate on a potential increase in the value of the land for any industrial uses. Such evidence therefore provides little assistance to me in this matter.
The Impact of Mining -
In the matter of mining it is agreed that Ebenezer Mine has plans to start fresh excavations nearer to the subject lands. However until that occurs, and in the context of an annual valuation process, I see little reason for amending the current valuation for that reason. Likewise, while the existing underground activities are a fact, their influence on the use of the surface of the land for farming purposes would seem to provide little encumbrances farming operations. The impact of the large bund around the mine would also appear to have minimal influence upon the subject land. In seeking comparison with his Sale 1, Mr Wall has selected another property with similar proximity to the mine, and any possible impacts should also be reflected in that sale.Changes in the Valuation -
In seeking to compare changes in the repeated sales of properties in the area, Mr Armstrong has sought to develop an annual trend. However his use of the resale of Lots 158, 159, 170 and 236 in fact would appear to include certain incorrect assumptions which place a question upon his comparisons. Likewise his use of an overall averaging of unimproved values in the Mt Forbes area provides little assistance in view of the wide diversity of land use types included in those figures. In seeking to compare the changes in the valuation of the subject lands over the last 20 years, Mr Armstrong has sought comparison with the CPI figures for Australia during that period. While I am aware that significant changes in the valuations, particularly compared to overall community gross statistics, may often be of concern to appellants in seeking to have confidence that their personal property has been fairly treated in any valuation, they in fact do not prove conclusively that any error has been made in the valuation process. Such rises may, at best, be an indicator to owners that they should further investigate the valuation, but there may be many reasons why a valuation has changed at what would appear to be a rate out of line with some overall statistical percentage.
This matter has been considered many times by the courts, and I note from precedents that a large increase in itself is not evidence of some error in the valuation. I note, for example, in the decision of NR and PG Tow v. The Valuer-General (1978)5 QLCR 378, where the Land Appeal Court said at page 381:“ It follows that a large increase over and above the previous valuation is in itself not a relevant issue provided bona fide sales of comparable parcels support the new valuation. ”
That matter was also considered in CH and BD Henricks v. The Valuer-General (1983) 9 QLCR 59, where in the Full Court of Queensland, Macrossan J. (CJ) said at page 63:
“ The appellants also relied upon a schedule, exhibit 4 in the Land Appeal Court, which showed percentage increases in the value applied by the Valuer-General to a number of selected parcels of land from the date of the preceding valuation up to the March 1979 valuation date. The percentage increase shown in the selected cases was in each instance considerably less than the increase applied to the subject land as between the two valuation dates. The weakness in such a selective comparison is obvious as there could be any number of reasons why blocks in the same valuation area should increase at different rates over a period of five years. ”
As the Full Court said, there could be many reasons why parcels of land can increase at different percentage rates over a period of time. The real test is not the percentage increase in the unimproved value, but a comparison of the subject with sales of comparable sites in the vicinity of the subject at the time of the valuation.
In the matter of seeking to apply a percentage growth trend in the annual valuations, I was directed by Mr Wall to the findings of Scougall (supra). In that matter the Land Appeal Court upheld the decision of the learned Member in the Court below, and said at page 14:“ As the learned Member of the Land Court observed, there is no support in the authorities for the factorisation approach taken by Mr Scougall. Indeed, the authorities point against it, showing that each revaluation must be done with regard to sales evidence. These are not matters of mere mathematical calculation or progression. ”
On the principles espoused in that case, I see little support for Mr Armstrong’s contention that the respondent has made an error in determining the large increase (20%) in the unimproved value.
Relativity -
In seeking guidance for the weight to be applied to relativity between the subject lands and surrounding parcels, I note the findings of Barnwell v. The Valuer-General (13) QLCR 13, where the Land Appeal Court said at page 16:“ We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis. ”
That was also supported in WM and TJ Fischer v. The Valuer-General (1993) 9 QLCR 44, at 46: and also in H and E Grahn v. The Valuer-General (1992-93) 14 QLCR 327. I note also that in being able to rely upon surrounding relativities, the findings of TF and SA Shepherdson v. The Valuer-General (1992-93) 14 QLCR 83 provide guidance where the learned Member said at page 87:
“ Applying to this case the principles of law summarised above, it is desirable that valuations of comparable lands should bear proper relativity. The appellants are entitled to rely on the valuations of properties in the vicinity of the subject land as being correct. ---- Although the comparable sales support a valuation in the order of that assigned to the subject land, it is appropriate that attention be given to obtaining some relativity to blocks in the same category of land. ”
I note also that Mr Wall agrees that the operations of the mine may change relativities of properties near to the mine but that he has no evidence to suggest that is yet occurring. It is not the role of the Court to predict that impact, and there is currently nothing to suggest that the former relativities, as projected by Mr Wall, are incorrect.
Comparison of Sales -
I move then to the key issue which is the comparison of sales of comparable properties. I note that comparison of sales of vacant or lightly improved parcels is the method generally favoured by the courts. (AC and AA Ussher v. The Valuer-General (1986-87) 11 QLCR 169, at 176; WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, at 46; PH Clough v. The Valuer-General (1981-82) 8 QLCR 70, at 76; and NR and PG Tow v. The Valuer-General (1978) 5 QLCR 378.
In seeking comparison with his Sale 1, Mr Armstrong has not only apparently incorrectly analysed that sale to include Lots 170 and 236, but has also applied a sale well after the relevant date of the valuation at 1 October 1996. I note that it is generally held that it is appropriate to compare sales up to the date of issue of the valuation (3 March 1997). That was directed in KP and RD Weisenberger v. The Valuer-General (1978) 5 QLCR 125; and also in RG McMurray v. The Valuer-General (1983) 9 QLCR 35, at 36.
However in comparing his Sale 1 in June 1997, Mr Wall has sought support from Daandine Pastoral Company v. Commissioner of Land Tax (1943) 7 “The Valuer” 299. In that matter Williams J in the High Court of Australia said at page 304:“ Values must be calculated in the light of circumstances which existed on the material date, in this case 30 June, 1939, but subsequent events can be taken into account in order to determine the proper weight to attach to such circumstances. Subsequent sales are just as admissible in evidence as prior sales provided that in all the circumstances they are comparable. If between the material date and the date of the subsequent sale, supervening events occur which alter the conditions previously existing, the subsequent sales would not be comparable and would be useless. ”
Support for the use of subsequent sales is also to be found in McCaffy v. Federal Commissioner of Taxation (1944) 69 CLR 1, at page 16; and also in Federal Commissioner of Taxation v. Harris (1980) 30 ALR 10, at 18. However in Harris, Fisher J noted at page 25 that the subsequent event cannot create an expectation which was not in existence at the relevant date.
The interpretation of that direction for this current matter is that Mr Wall’s Sale 1 can only be used if it supports the general state of the market as remaining consistent from March 1997 to June 1997. By comparison, for Mr Armstrong to seek to use a subsequent sale in April 1998 (Mr Armstrong’s Sale 1), which, by his conclusion shows a fall in the market, would be inconsistent with the precedents. On that basis I reject the use of Mr Armstrong’s Sale 1, but accept Mr Wall’s Sale 1 as a useful comparison.
If I then turn to Mr Armstrong’s Sale A, I note that it has relevance more to appeal AV97-436, and should not be considered in this matter. I note also that Mr Armstrong’s Sale B, as a highly improved sale, has not been fully analysed and compared, other than to show a percentage decrease in the sale price from a former sale of the property. However, the weakness of whether that former sale reflected any additional value of a milk entitlement, makes comparison with that sale of little use. In respect of Mr Armstrong’s Sale C, his main comparison was to demonstrate the percentage change in the sale price, but he argues that sale is better land on an applied per hectare basis ($2,445 per hectare). Mr Wall’s concluded value per hectare for the subject lands ($1,142 per hectare) is not inconsistent with that conclusion.
I turn then to Mr Wall’s sales and note that both parties agree that his Sale 1 is superior on a rate-per-hectare basis. I can accept Mr Wall’s conclusion that any adjoining owner influence in Sale 1 may have been balanced by the anxious nature of the vendor. In summarising his sales, Mr Wall has concluded the following comparisons to the subjects:
| Sale 1 | ($1855 per hectare - 42.59 hectares) | Superior |
| Sale 2 | ($1828 per hectare - 56.175 hectares) | Superior |
| Sale 3 | ($1107 per hectare - 90.167 hectares) | Inferior |
| Sale 4 | ($ 733 per hectare - 144.47 hectares) | Inferior |
In respect of Sales 1 and 2 they are both much smaller than the subject, and Sale 4 is much larger. In respect of Sale 4 I note that Mr Armstrong agrees it is inferior on a rate-per-hectare-basis, and he also has no real objection to Mr Wall’s comparison for Sale 3. On that basis I conclude that the rate per hectare for the subject lands, after allowing for size, lies between $1828 and $1107. There is no evidence to suggest that, on a comparison of sales basis, the figures adopted by Mr Wall are not reasonable.
Summary:
In summarising this matter I believe that Mr Wall has adequately assessed the features of the land, and concluded a reasonable assessment of its unimproved value. I am reminded that under section 33 of the Valuation of Land Act, all unimproved values as determined by the Chief Executive are deemed to be correct unless proved to the contrary. I am also aware that section 45(4) of the Act directs that in any appeal against such a valuation, the burden of proof rests upon the appellant. I am further aware that unless the appellant proves that the Chief Executive has made an error, or applied a wrong principle, then the valuation shall stand. (See Brisbane City Council v. Valuer-General (1977-78) HC 140 CLR 41, at page 56).
Conclusion
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value as determined by the Chief Executive, Department of Natural Resources, in the sum of $109,000 is affirmed.
Member of the Land Court
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