Bignell v Chief Executive, Department of Natural Resources and Mines

[2001] QLC 122

[2001] QLC 122

 

LAND COURT

BRISBANE

14 NOVEMBER 2001

Re:     AV99-1377

An Appeal against an Unimproved Valuation -
  Valuation of Land Act1944
  Shire of Paroo

BB Bignell

v.

Chief Executive, Department of Natural Resources and Mines

(Hearing at Cunnamulla)

D E C I S I O N

This appeal is against the chief executive's unimproved valuation, as at 1 October 1998, of the properties known as "Widgeegoara" and "Colley's Well". The two blocks are owned by Mr Bignell, are in the same locality, "Colley's Well" being about 7 km easterly of the eastern boundary of "Widgeegoara" and both blocks have been included in the one valuation pursuant to s.34(1)(b) of the Valuation of Land Act.
           "Widgeegoara" is situated 92 km south-east of Cunnamulla via about 50 km of bitumen sealed roads and 42 km of formed earth and gravel roads.  Dry weather access is fair. 
           The real property descriptions are:

Lot 5 on Plan NO38 being GHFL 15/1829, Parish of Widgeegoara, ("Widgeegoara") and Lot 6 on Plan NB10 being GHFL 15/1477, Parish of Macclesfield ("Colley's Well"), both County of Nebine.

The total area of the aggregation is 22,548.065 ha, "Widgeegoara" comprising 14,457.395 ha and "Colley's Well" 8,090.67 ha.

The properties are located within a sub-market area (SMA) identified by the chief executive's valuers for valuation purposes as the Warrego Flood Plain SMA.  For the aggregated properties the single valuation first issued by the chief executive as at the relevant date was in the amount of $285,000 then reduced on objection to $267,500.  A large group of owners of properties within the SMA had been dissatisfied with their valuations after objection decisions and filed appeals in the Land Court.  By agreement, four representative appeals, each relating to properties which had been subject of sales, were heard and decided by the Court (AV99-1413 etc dated 30 March 2001).  Generally in accordance with the decisions in those appeals the chief executive then set about reducing all other valuations within the SMA.  The valuation of the subject aggregation was reduced pursuant to s.68 of the Act to $254,000.  Mr Bignell remained dissatisfied with that valuation and proceeded with the appeal.
           Mr MTJ McManus, a senior valuer employed by the chief executive, was responsible for the valuations within the SMA.  He had prepared a valuation report prior to the hearing and, in accordance with the Land Court Rules 2000 a copy of his evidence had been served on Mr Bignell.  Within that report Mr McManus described the nature of the land as follows:

"8,622 hectares (38%) comprises open and broken brown/grey soil plain with scattered gidyea, coolibah, brigalow and whitewood, 7,146 hectares (32%) comprises brown and red gidyea, sandalwood moderate to thick claypans and frontage, 6,780 hectares (30%) comprises red sandy to sandhills, cypress pine, ironwood, wilga, red soil box, mulga fringes with gidyea and whitewood."

Under the heading of "Carrying Capacity" Mr McManus stated that the owner had advised the Department of Primary Industries assessment was 1 DSE to 2.55 ha (8,842 sheep).  More will be said of that later.
           At the commencement of the hearing the Court was advised that Mr McManus would be leading evidence to a lower valuation figure of $233,000 for reasons which will be discussed later.
           Mr Bignell had prepared a written submission in support of some of the grounds of appeal.  Although his estimate of value in the notice of appeal had been $205,000 he said that the valuation as amended by Mr McManus was now probably "in the ballpark" of a realistic figure, but he wished to proceed with the hearing in order to consider the basis of valuation. 
           Mr Bignell had been concerned that as a result of the two blocks having been "lumped together" for valuation purposes the differing country types and qualities of the two blocks and particularly the "merge country" on the eastern end of "Colley's Well", had been "masked".  As a result of his concerns, Mr McManus had, prior to the hearing, provided him with a copy of a "calculation sheet" which had indicated the department's classification of land types and a valuation apportionment for each block.  That information revealed that an overall value per ha of $11.52 would have been applied to "Widgeegoara" as a separate block and $10.69 per ha to "Colley's Well".  In Mr Bignell's opinion the "Colley's Well"  block would, on those figures, be valued too highly in comparison with "Widgeegoara".  He tendered a property sketch with a "country legend" which had been prepared by a local valuer, Mr A Tannock, many years ago and which had been provided to him when he had acquired the "Colley's Well" property.  He had found the sketch and the designated land classifications to be accurate and that was confirmed in his opinion by the "WARLUS" land classification mapping included in Mr McManus' report.  Mr Bignell described "Colley's Well" as being lighter carrying merge country, with red sandhill, ironbark, wilga, red soil box, gidyea and less open plain country than "Widgeegoara".  He said that in recent years the merge country had seen the encroachment of woody weeds, particularly hop bush and buddah bush to an extent where now some places are inaccessible by motor bike.  Other points which he wished to have noted were that "Colley's Well" access was non-existent, except for a private road which he had built after he purchased the block in 1987.  The block has no artesian bore, stock water being obtained from bore drains from a property a considerable distance to the north. The drains require full-time maintenance and water shortage problems are experienced in summer.
           Mr Bignell had been aware of the decisions in the representative appeals and the sales evidence which had been considered in those matters.  In his opinion "Colley's Well" was similar, if not slightly inferior, to one of the sale properties, "Robina Downs", which had also been one of the representative appeals.  In support of his contention that "Robina Downs" and "Colley's Well" were of similar quality, he quoted the "safe carrying capacity assessment" of "Colley's Well", as conducted by the Queensland Department of Primary Industries in March 1998, as being 1 DSE to 3.1 ha.  The assessment for "Widgeegoara" at the same time had been 1 DSE to 2.6 ha.  The Land Court had determined an unimproved value equating $9.38 per ha for "Robina Downs".  Mr Bignell felt that $9 per ha for "Colley's Well" would represent reasonable relativity not only with "Robina Downs" but also with the value per ha which the chief executive had indicated would have been applied to "Widgeegoara" as a separate block.
           It followed then that if "Widgeegoara" was valued at $11.52 per ha ($166,500) and "Colley's Well" at $9 per ha ($72,820) the total of the individual valuations would be $239,320.  It was explained that immediately to the east of "Widgeegoara" was another block which formed part of the overall family aggregation.  There was then a property owned by others which severed the family aggregation from "Colley's Well".  "Colley's Well" had surveyed, but unformed, access only to its eastern boundary.  Mr Bignell had an informal arrangement with the intervening neighbour which allowed him to construct vehicular access and to move stock over that property.  Nevertheless, he felt that the lack of any formal arrangement and the physical effect of the severance would be a matter of concern to any prudent purchaser of the amalgamated parcels.  He was loath to estimate the effect of the severance in terms of value but recognised that the total of his considered estimates of separate valuations of the two blocks now exceeded the amended valuation of Mr McManus.
           Mr McManus explained that "Widgeegoara" and "Colley's Well" had been amalgamated for valuation purposes in the late 1980s.  Subsequent valuations had been based on factorised adjustments.  The valuation at the subject relevant date had been the result of a factorised increase which had first been reviewed for reasons disclosed at the hearing of the representative appeals.  The factorised increase was further reduced as a result of the decision in those appeals.  The previously established relativity between valuations in the SMA had generally been maintained by the application of the factorised adjustment approach.  The support for the final increase had come from the Court's reviewed analyses of the sales of the properties "Claverton" , "Northam"/"Airlie", "Robina Downs", "Weona", "Huntley"/"Glen Oxford" and "Willacora".  The unimproved values as applied to the sale properties were then "directly compared" with the valuation of the subject land and no disturbance to the previously established relativity had at first been considered warranted.
           However when Mr McManus reviewed the background to the previously existing valuations of the subject amalgamation, he had become concerned that insufficient allowance had been made for matters such as the relatively large size of the amalgamated parcel and the effects of the physical severance of the parcels.
           Mr McManus had no dispute with Mr Bignell that, if "Colley's Well" was required to be valued as a separate parcel, an overall value of $9 per ha would probably be reasonable, based strictly on relativity with "Robina Downs".  However, his overall valuation for the amalgamated lands as amended, reflected $10.33 per ha and he took the stance that such level of value made adequate allowance for all factors associated with size and severance.  He did not wish to express an opinion as to any specific allowance which might have been made for these individual factors, but by extrapolation of factorised adjustments which had been made to the valuation of the amalgamation over the years, he was able to demonstrate that it would have represented a decrease of about 7.4% in the valuation as at 1990. 

Conclusion
           The comment has been made in decisions in other appeals heard at the same sittings that the Court receives little assistance when the weightings which have led to the adoption of an overall rate per ha, on a direct comparison basis, are not disclosed.  The "masking effect" of that methodology, a matter about which Mr Bignell first complained, has at least in this matter, been partially removed. 
           It can be seen that if Mr Bignell's approach was adopted, his estimates of the value of the separate blocks would total in rounded figures $239,500.  That represents about $10.62 per ha overall and, on a broad view, would be seen to be in reasonable relativity with the $10.16 per ha overall applied by the chief executive (after a sale analysis of $11.14 per ha) to the significantly larger "Huntley"/"Glen Oxford".  $10.62 per ha overall would also be seen to represent reasonable relativity with the $10.92 per ha determined by the Court (after a sale analysis of $12.24 per ha) for the smaller and better located "Willacora".  The valuation now sought to be applied by Mr McManus equates $10.33 per ha or about 2.75% less than the combined valuations suggested by Mr Bignell.
           There is no dispute between the parties that there should be some allowance for the uncertainties and inconvenience associated with the physical severance of the two blocks, but the Court was provided with no direct opinion as to the degree of deleterious effect so caused.  It seems to me that on one hand, while there is uncertainty about the informality of the private access arrangement, that access, while it is available overcomes to an extent the lack of constructed public access available to "Colley's Well", as an individual lot.  There are no doubt management difficulties associated with working the severed blocks as one.  However, all things considered, and taking judicial notice of valuation opinions which have been expressed in similar type situations (see for example AV99-1249 - Crook-King v. Chief Executive, Department of Natural Resources - Aramac Shire - 16 October 2000) I am satisfied that an allowance in the range of 2.5% would sufficiently recognise any potential market resistance caused by the severance.
           The amended valuation led by the chief executive in the amount of $233,000 is therefore seen as reasonable.
           While Mr McManus' amended valuation will be adopted this appeal is against the valuation of $254,000, as formally reduced pursuant to s.68 of the Act.

Order
           The appeal is allowed.  The valuation of the chief executive is set aside and the unimproved value of the aggregation determined in the amount of Two Hundred and Thirty-three Thousand Dollars ($233,000) as at 1 October 1998.

RE WENCK
MEMBER OF THE LAND COURT