Bahnisch v Chief Executive, Department of Natural Resources
[1997] QLC 112
•25 July 1997
|
BRISBANE
25 July 1997
Re: Appeal against Annual Valuation -
Valuation of Land Act, 1944 -
Valuation Roll No: 3018 -
Local Government: Broadsound
(AV96-377).
RW, PA, NJ and LL Bahnisch
v.
Chief Executive, Department of Natural Resources(Hearing at Rockhampton)
D E C I S I O N
Background:
This matter relates to a property described as "Gibberland" Grazing Homestead Perpetual Lease 4110, being Lot 15 on Plan KL 170 in the Parish of Undercliff. The key issues relate to the comparison of comparable sales, the impact of disabilities, access problems and the availability of future tree clearing development.
The subject is located at the top of the Connors Range on the inland fall of the Dividing Range, about 20 kms west of Carmila and about 122 kilometres south of Mackay. While only a relatively short distance from the coastal areas, the subject is 400 metres in elevation above the coastal cane lands, and is at the head of a very narrow valley, and on the crest of the Range. Access to the subject is poor, being about 8 kms of steep, narrow and winding gravel road on the eastern escarpment of the Connors Range, and then via a single land bitumen sealed road to the Bruce Highway at Carmila.
Access to the subject has been, and continues to be, a major problem. The current road rises 400 metres, and in one section of one kilometre, has a 1 in 4 gradient. The subject comprises about 214 hectares (9%) of natural open creek flats, which are subject to seasonal inundation during heavy rain. A further 946 hectares (41%) is noted as gently sloping to undulating blue gum, mess mate, bloodwood, box and Moreton Bay ash forest; and a further 867 hectares (37%) is seen as sloping to steeply sloping ironbark, gum, bloodwood and mess mate forest. There was some disagreement between the parties in respect of the definition of gently sloping and sloping country. The remaining 303 hectares (13%) was defined as thick coastal scrubby forest by the respondent, and alternatively defined as dry rainforest by the appellant. The total area of the subject is 2,330 hectares.
Water supply is good and consists of natural supplies in tableland and other small creeks. Artificial water is obtained from small excavation holes and from a bore for the house supply.
The land is zoned "Rural A" under the Town Plan for the Shire of Broadsound of 2 June 1984, and effective as at the date of valuation at 1 January 1996. The current grazing of cattle is considered to be its highest and best use.
The Chief Executive, Department of Natural Resources, on 12 February 1996, issued a valuation at $148,000. Following an objection the Chief Executive on 1 August 1996, confirmed the valuation at $148,000. The appellants have appealed that amount claiming that the correct valuation should more properly be $82,000.
Mr RW Bahnisch appeared and gave evidence for the appellants; and Mr John Thomas, Senior Valuer, appeared for the respondent, calling evidence from Mr Owen Leslie Eisenmenger, the Departmental Registered Valuer responsible for the determination of the valuation.
Evidence:
Mr Bahnisch gave evidence that while he agreed with Mr Eisenmenger in respect of the major disabilities of the subject in relation to access, high rainfall and regrowth, and the prevalence of parasites in the wet flats, he believes those impacts, and others, have been inadequately addressed in the valuation. He also sought clarification about the definition of gently sloping, sloping and steeply sloping land, which he felt gave an impression that greater areas were available for development than actually exist.
In the matter of how he defined sloping to steeply sloping land, Mr Eisenmenger suggested that his criteria related to whether the land could be cleared by mechanical methods. The sloping and steeply sloping land (37%) would not lend itself to mechanical clearing. Mr Bahnisch sought clarification as to whether the sloping and steeply sloping criteria related to land which is steeper than 20% gradient, and Mr Eisenmenger agreed that the 37% of the area would all have slopes steeper than 20% gradient. In respect of whether some parts of the gently sloping land (41%) also could exceed 20% gradient, Mr Bahnisch believed that to be so, in view of an independent report provided to him by Mr George Lambert.
Mr Lambert, a Senior Extension Agronomist with the Mackay office of the Department of Primary Industries, had previously mapped the soils of the area. Mr Lambert provided advice to Mr Bahnisch as part of the appellants' documentation for a timber-clearing application lodged about two years ago (Exhibit 2). Accompanying that report was a map showing the potential development areas of "Gibberland", which had been prepared from aerial photographs.
The map and the report indicated that about 600 hectares of the subject (26%) could be safely cleared. The report qualified that estimate by noting that "some small areas of the land that got included would be too steep or too stony". From this advice, Mr Bahnisch concluded that the estimated maximum area suitable for clearing and redevelopment would be approximately 26%. He therefore had some difficulty in reconciling that estimate with Mr Eisenmenger's estimate of open creek flats (9%), plus much of the gently sloping land (41%) and the thick coastal scrub (13%).
In respect of the latter (13%) Mr Bahnisch contended that that area was in fact dry rainforest and would not be allowed to be cleared by the Government, and most likely would be required to be excised as a National Park, should the tree-clearing permit be approved. Mr Bahnisch also proffered the opinion that advice from the District Forrester recently had suggested that, because of the proliferation of woody weed infestation, the subject should either have major clearing or be retained by the Government for National Park purposes.
Mr Eisenmenger agreed that slopes steeper than 20% gradient would not be approved for clearing, but contended that, in his opinion, the areas which had potential for clearing, were in excess of the 26% identified by Mr Lambert. Mr Bahnisch agreed that he would be agreeably satisfied if that did occur, but in view of Mr Lambert's expertise in this matter, expressed some reservation about such an outcome.
In respect of other disabilities on the subject Mr Bahnisch noted that the areas on the wet flats which are subject to parasites, relate to the prevalence of stomach fluke. This is a difficult parasite to manage, which occurs in the water soaks which harbour a snail which is the chain for the stomach fluke. The only remedy is by oral drenching, a very costly process, which also affects the capacity of the cattle to gain weight. Accordingly, Mr Bahnisch removed any young cattle from the area to other brigalow lands. The young heifers, because of the stomach fluke, also have problems in growing into breeders.
Other major problems emanating from the very high rainfall on the subject include the rotting of timber fenceposts, rust intrusion, and problems of hypothermia in the cattle during heavy rains. During one period of 15 days in 1991, they lost two-thirds of their breeding herd from hypothermia. The problem of incursions by wild cattle, causing broken fences, is a constant challenge, and in some areas, because of the difficult nature of the country, some boundaries are not fenced. A further serious problem is the prevalence of major bush fires about every two years as these come up from the cane lands on the coastal strip. Mr Bahnisch also queried the possibility that his areas of blue gum, now being an endangered species, may mitigate against the success of the tree clearing application. The existence of an unsurveyed road (Gibberland Road) passing through the subject provided unimpeded access for the public which was a problem in respect of restricting unauthorised access to "Gibberland".
In support of his valuation Mr Eisenmenger provided the following sales evidence:•Sale 1 - (Bruce Highway, St Lawrence - Lots 1, 3 and 5 on RP863047; Lots 38, 61 and 69 on MC404; and Lot 72 on MUR4047.
This property has an area of 1,080 hectares of gently sloping coastal forest of predominantly ironbark and titree and a further area of 75 hectares of rough hard ridge. The total area is 1,155 hectares and is zoned "Rural A". The sale has a frontage to the bitumen sealed Bruce Highway and has an unnamed formed gravel road along the southern boundary of the property. Access is good. Rural power and radio telephone are available to the sale, which is located about 10 kms from the town of St Lawrence, where there is a Post Office, School, Police Station and Local Store.
The sale only has natural supplies of water in the creeks and gullies, and there is a need for artificial supplies of water also.
The sale is seen as superior country to the subject, has better access, and is nearer to service centres. Access to water is similar to both. Overall the sale is seen as superior to the subject, and sold in March 1995, for $245,000. After allowing for improvements, the sale was analysed at $122,010, or $105.60 per hectare.
•Sale 2 - (Bluewater Pastoral Holding - Lot 9 on MC70).
This property has a total area of 1916.6 hectares, and contains 160 hectares (8%) of gently sloping coastal forest of Ti Tree, Poplar Gum and Ironbark on shallow duplex soils intersected with gullies and creeks. There is a further 600 hectares (32%) of moderately sloping Ironbark and Bloodwood ridges; and 1,156.6 hectares (60%) of steep ridges running back to steep range country most of which is unavailable having exposed rock, Ironbark, Bloodwood, Grasstree and Zamia.
The sale has good access to the bitumen sealed Bruce Highway which severs the property. There is no permanent natural water, but natural supplies occur for short periods following rain in Bluewater and Kangaroo Creeks. Artificial water is by two small dams and a well. There is a need for further artificial supplies. Power, telephone and mail services are available, and the sale is about 12 kms south of the town of Carmila.
The sale has superior access to the subject, but is seen as inferior country because much of the sale is very rough and unsuitable for development. Overall the sale is seen as inferior to the subject. The sale sold in August 1994 for $130,000 which, after allowing for improvements, provided an analysed value of $94,280, or $49.14 per hectare.
•Sale 3 - (Bluewater Pastoral Holding - Lot 9 on MC70)
This is a further sale of Sale 2, and sold in August 1996, for $210,000. After allowing for the increased improvements it was analysed at $126,495, or $66 per hectare.
Mr Eisenmenger noted that because of a paucity of sales in the Connors Range Hinterland, he had been forced to draw his comparison of sales from those on the coastal strip at the foot of the range. He had valued the subject unimproved at $63.50 per hectare, or $148,000. Mr Bahnisch claims such comparison of coastal sales with the subject provides no real comparison of like properties, and the comparison with land on the coast, in near proximity to cane lands, and with better access to service centres by the Bruce Highway, severely disadvantages the subject.
Mr Bahnisch is familiar with the sales and notes that Sale 1 is in fact an amalgamation of seven different lots which would command an increased value because of the capacity to sell parts of the property. He agrees that Sale 1 is superior to the subject, and is nearby to St Lawrence. Likewise with Sale 2, which is on the edge of cane land and therefore liable to be attractive even as a large homesite, Mr Bahnisch claims that Sale 2 does not provide any reasonable comparison with the subject. He accepts that some people who are well experienced in the cattle industry are doing well in the Clareview area through clearing and planting pangola, and he is aware of a property near Sale 2 which supplies him with hay.
Following evidence from Mr Eisenmenger in respect of the extremity of the sugar cane lands, and details of the purchase of Sale 3 (Mr Prescott), Mr Bahnisch conceded that Sale 3 was purchased for the specific intention of grazing by Mr Prescott in order to obtain some cattle country on the coast. Mr Prescott has rural properties near Clermont and is known to Mr Bahnisch as a breeder of very good Brahman cattle, some of which must be produced on Sale 3. In respect of the southern extremity of the sugar cane lands linked to the Plain Creek Mill, Mr Bahnisch agreed that Lots 8, 9, 10 and 11 on RP 62092, situated about 1 km north-east of Sale 3, were the furthest south of the cane lands, mainly controlled by the distance to transport cane to the mill and the fall-off in rainfall. It was also noted that, like the subject, Sale 3 currently has an outstanding tree-clearing application before the Department of Natural Resources.
In respect of all of the disabilities Mr Thomas argues that these have been more than adequately allowed for in the valuation of the subject. There was also no dispute in respect of the difficulties of access or the impacts of pests upon the subject. In accordance with Section 14 of the Valuation of Land Act, the subject, while being leasehold land, has been valued on a freehold basis. It was also noted that Mr Bahnisch provided no separate sales of his own to support his case, but relied on drawing comparison with the disabilities of the subject which he claims far exceed those of any of the sales provided.
Decision:
In considering the nature of the land, I note that the parties have a different understanding of the extent to which any future timber clearing may be allowed as a result of the current application before the Department. Mr Bahnisch believes the maximum area of the subject which could be approved for clearing is about 26%. Mr Eisenmenger believes it could be higher, perhaps to a maximum of creek flats (9%), gentle sloping (41%), and coastal scrub (13%). The map by Mr Lambert purports to show all areas for clearing at less than 20% gradients, which he says was a "pretty good start". While Mr Lambert has previously prepared soil mapping of the area, by his own report the 26% of land suitable for clearing was determined from aerial photographs.
I am of course unsure of the extent of investigation undertaken on land use type by Mr Eisenmenger, and in the absence of any more conclusive statements, must assume it has a similar level of accuracy to that of Mr Lambert's study. On balance, the differing areas would lie in the interpretation of land of lesser slope than 20% gradient, and I would tend to err on the lower estimate, at say about 30% of "clearable" land. In assuming this percentage I have accepted Mr Bahnisch's advice that the thick coastal scrub (13%) could more properly be defined as dry rainforest, and therefore not available for clearing.
In the matter of the disabilities of access, bush fires, parasites, impact of wild cattle, and problems of woody weed infestation, I note that Mr Eisenmenger has acknowledged those problems and sought to provide for those in his valuation. I note also the specific problems of stomach fluke and hypothermia which have on occasions had a severe impact upon the breeding herd.
I have no doubt that Mr Bahnisch is a very experienced grazier who has a very good appreciation of the potential and limitations of his property. Because of its very isolated location, and specific disabilities, there is a particular uniqueness associated with the subject which Mr Thomas summarised by saying "We have another property that is probably unique in nature as compared to the sales". I would agree with his synopsis, and have an understanding of the difficulties confronting Mr Eisenmenger in his valuation.
Unlike the appellants' nearby property at "Ridgeland", a matter recently before this Court, there is no specific areas of the subject which are totally unusable for grazing, and accordingly it would appear to be a reasonable approach for the valuation to be determined on an in globo basis, compared to comparable mixed land use types of country.
In the matter therefore of the comparison of sales of comparable lands, I note the argument by Mr Bahnisch that Sales 1, 2 and 3 are all from a different environment, albeit it currently used for grazing purposes. For this reason I do not accept that any direct comparison of land use is relevant, save in respect of the potential carrying capacity of the properties. In that regard there was no evidence of carrying capacity provided by either party, and I am forced to rely on the rather fragile comparison of land on the coastal areas compared with isolated lands on the western uplands of the Connors Range. Because of the disabilities outlined I will tend therefore to lean towards some reasonable differences between the sales and the subject.
In comparing the areas and unit rates of the properties I note:
Property Area Applied Unit Rate
Sale 1 1155ha $105.60
Sale 2 1916.6 ha $ 49.14 (1994)
Sale 3 1916.6 ha $ 66.00 (1996)
Subject 2330ha $ 63.50
It is noted that the subject is larger than Sale 2 and twice the area of Sale 1. For that reason alone it would be reasonable for the subject to be at a slightly lower unit rate than the sales. In respect of Sale 2, it is noted as inferior because about 60% of Sale 2 comprises steep ridges which are unsuitable for development. However Sale 2 is currently being used by Mr Prescott, an experienced grazier, to fatten good quality Brahman cattle, and over a two year period has been analysed to have increased in unimproved value by $16.86 per hectare. On an in globo basis, I believe the larger percentage of land unsuitable for development on Sale 2 is more than balanced by the closer access to markets, and less disabilities such as pests and woody weed infestations. For these reasons I feel that Sale 2 also would have a superior unit rate to the subject.
In seeking to balance the quantum of the two valuations, I am conscious of precedent in giving any benefit of doubt to the appellants in these matters. In the High Court case, Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Company of South Australia Limited and Others (HC) 74 CLR (1946-47) 358, where Dixon J, at page 373 said:"I have had the advantage of reading the judgment prepared by Williams J and agree in it. I should like, however, to add for myself that there is some difference of purpose in valuing property for revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss, while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While this difference cannot change the test of value, it is not without effect upon a court's attitude in the application of the test. In a case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate. "
However, in examining the suggested unit rate of $39.20 by the appellants, I believe that is not supported by any comparison either on the coast or inland of the Connors Range. While I accept that "Ridgeland" is different country to the subject, the determined rate of $52.50 in that matter is considerably above Mr Bahnisch's estimate of the unimproved valuation. I also believe that the unit rate for the subject should be something less than the unit rates on the coastal strip. In view of the lack of sales in the vicinity on the uplands of the Connors Range, I believe the analogy is more towards the hinterland than the coastal area. On balance I could accept a unit rate of $55 per hectare for the subject as an in globo area.
In the matter of valuing the subject on a freehold basis I turn to the Act and note in section 14:"14(1) For the purpose of deciding the unimproved value of land that is not granted in fee simple, the land is taken to be land granted in fee simple.
For the purpose of deciding the unimproved value -
(a)of land held from the Crown for an estate of leasehold upon a tenure which is subject to any restriction, limitation, or other onerous covenant or condition;
the unimproved value or, as the case requires, the enhancement in the unimproved value of that land shall be ascertained without regard to that restriction, limitation, or, as the case may be, other covenant or condition. "
I accept, therefore, Mr Thomas's advice that the subject was correctly valued as if it was freehold land.
Summary:
The onus of proof under the Valuation of Land Act rests with the appellant under Section 33 which states:
"33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered. "
On the evidence I believe the facts are generally agreed by the parties, and the real difference lies in the relative comparison of the in globo unit rates between the subject and the sales. I believe Mr Bahnisch has partly proved his case in that I believe the direct comparison of the subject with the coastal sales is not appropriate. On balance, the unit rate at $55 per hectare is appropriate, providing an unimproved value for the subject of $128,150, say, $128,000.
Conclusion:
After having considered the whole of the evidence, the appeal is partly allowed, the Chief Executive's valuation is set aside, and the unimproved value of Lot 15 on Plan KL170 is determined at One hundred and twenty-eight thousand dollars ($128,000).
(NG Divett)
Member of the Land Court
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