Champneys v Minister for Lands
[1995] QLC 152
•10 November 1995
|
BRISBANE
10 November 1995
Re: Determination of the Unimproved Value for the
Purposes of Conversion of Tenure -
Grazing Homestead Perpetual Lease No 36/7919,
Roma District.
Lessee: Janice Dorothy Champneys.
(Hearing at Roma)
D E C I S I O N
Mrs JD Champneys is the lessee of Grazing Homestead Perpetual Lease No. 36/7919, Roma District, which contains an area of 811.598 hectares. It is known as "Tylden". Under the provisions of s.139 of the Land Act 1962, Mrs Champneys applied to the Minister for Lands to have the lease converted to a freeholding tenure. The relevant date for this purpose is 7 January 1991.
In accordance with s.140 of the Act, the Minister advised her that his determination of the unimproved value for the purposes of conversion of tenure was $105,000. Mrs Champneys then requested that the unimproved value be determined by the Land Court.
Grazing Homestead Perpetual Lease No. 36/7919, Roma District, is in respect of the land contained in Lot 25 on Plan WV844, Parish of Spowers, County of Waldegrave, containing an area of 811.598 hectares. It is situated about 42 kms south-west of Roma, with access by means of bitumen roads to Roma and Muckadilla.
According to the report tendered on behalf of the Crown, the country consists of 485 hectares of open downs and 326.598 hectares of box and coolibah flats, slopes and ridges. It is used for the purpose of sheep grazing and grain growing. The property is watered by one near-permanent hole in Muckadilla Creek and two unequipped earth tanks.
Mrs JD Champneys appeared and gave evidence. She explained that on an earlier occasion (relevant date 7 February 1987), she had applied for conversion of the tenure of GHPL 36/7919. At that time she was advised that the Minister had determined the unimproved value of the land at $85 per hectare, or $69,000. She did not proceed with the conversion at that time.
Mrs Champneys cannot understand how the unimproved value could have risen by 53% between February 1987 and the relevant date of the present determination, 7 January 1991. She states that she is sure that the value of the property has not risen to that extent in four years.
In support of her argument, Mrs Champneys referred to the unimproved values determined for conversion purposes of two other properties in the area, "Wyoming" and "Utopia". According to figures obtained by Mrs Champneys, "Wyoming", with an area of 2801.94 hectares, had an unimproved value determined for conversion purposes of approximately $48 per hectare in 1986. "Utopia", with an area of 1,214.6 hectares, had an unimproved value of approximately $69 per hectare determined for conversion purposes in 1988.
"Wyoming" consisted of three separate lots and, according to Mrs Champneys, the most comparable was Lot 26, known as "Verala", with an area of 1072.3 hectares, which had an unimproved value determined for conversion purposes in 1986 of about $65 per hectare.
(Later evidence given by Mr Redgen for the Crown was to the effect that "Utopia" had an unimproved value for conversion purposes determined as at 5 July 1988 of $65 per hectare and that the "Verala" block of "Wyoming" was determined for conversion purposes at $60 per hectare as at 10 February 1983).
Mrs Champneys also obtained information from the Bungil Shire Council of the unimproved values applied for local government rating purposes to the subject land and other properties in the area. Mrs Champneys scheduled this information together with the details of what purported to be the freeholding values discussed above. This schedule showed that the "old ucv" per hectare for the subject land was $126.85, for "Verala" $117.55, for the balance two parcels of "Wyoming" $68.60 and $92.14, for two parcels of a property known as "Lorne" $118.85 and $111.87, for a property known as "Amaroo" $128.35, and for a property known as "Ellimatta" $140.15. Under the heading "new ucv", figures are included for the subject land, "Utopia", "Verala", the balance of "Wyoming" and "Lorne" showing unimproved values 10% less than the old values".
The main point made by Mrs Champneys is that the subject land is no better than "Verala". She said that they are virtually the same type of country with the same type of cultivation, the same stony ridges go through each property and they are on the same creek. If anything, she thought that "Verala" would be the more valuable per hectare.
Mrs Champneys knew "Verala" well as she had contract harvested the land at some time previously. Although she thought "Verala" might have a little less stone and a little more cultivation, she thought there was little between the two properties.
It was on the basis of the previous conversion value for "Tylden" and the relationship to the "Verala" conversion value, that Mrs Champneys estimated that the value of the subject land for freeholding purposes should be $69,000, or $85 per hectare. She contended that there was virtually no movement in values between 1987 and 1991. Between the relevant date for the conversion and the date of valuation for the rental valuation of 31 March 1992, she felt that values, if anything, had fallen.
Mrs Champneys would not agree that the subject land was superior to "Verala". She contended that "Utopia" was not as good as "Verala" or the subject land for cultivation. It had been converted to freehold for approximately $70 per hectare in 1988 and she thought that would be "fairly right" if the subject land and "Verala" were both valued at $85 per hectare.
Evidence for the respondent was given by Mr MD Redgen, and Mr TE Herberts, both registered valuers employed by the Department of Lands. Mr Redgen gave evidence principally in support of the rent assessed by the Crown as at 1 January 1990 (the Carter rent), but his evidence also had relevance for other purposes.
Mr Redgen had been in the Roma District since 1985 and had monitored the market over a lengthy period. He said that from 1983, the market showed an upward trend until late 1985 when there was a sharp decline; in 1986 the market remained at the bottom of the trough until the latter part of 1987, when it began to climb; it climbed quite rapidly through 1988 and 1989; and in 1990, while there were not enough sales to say whether the increase had continued, there were enough to show that the market had not decreased from the 1989 level.
Mr Redgen was confident his analysis of the market showed that since the 1987 offer for conversion of the subject land at $69,000, there had been an upward trend in sale prices during 1987, 1988 and 1989.
Mr Herberts valued the subject land at $105,000, or $130 per hectare, as at the relevant date for conversion of 7 January 1991. In arriving at that valuation, he relied upon the sales of two properties in the vicinity of the subject land. Mr Herberts' Sale No. 1 is a property known as "Amaroo", situated on the Warrego Highway, approximately 26 kilometres west of Roma. This property of 3,506 hectares was sold in November 1991 for $1,300,000. This sale analysed to show an unimproved value of $491,482 and an unimproved value of $450,000, or $128 per hectare, was applied for rating purposes as at 31 March 1992.
Mr Herberts described "Amaroo" as comprising 1,170 ha open black soil downs, 240 ha belah, rosewood, whitewood and myall, 440 ha box, belah, sandalwood and wilga and 1,656 ha of box, sandalwood, silver leaf ironbark and pine. Although it is superior in location and country to "Tylden", it is considerably larger and Mr Herberts considered that it had a similar value per hectare.
Mr Herberts' Sale No. 2 is a property known as "Ellimatta", also situated on the Warrego Highway adjoining "Amaroo". This property of 891.9 hectares sold in September 1990 for $420,000 and the sale analysed to show an unimproved value of $153,209. An unimproved value of $125,000, or $140 per hectare was applied for rating purposes as at 31 March 1992.
Mr Herberts described "Ellimatta" as comprising 300 ha of level to undulating broken to semi open downs, and 592 ha of brigalow, belah, box and sandalwood. He reasoned that "Ellimatta" is superior in location and slightly superior in country and is similar in size. Overall he considered it to be slightly superior to "Tylden".
Mr Herberts said that the two sales, "Ellimatta" in September 1990 and "Amaroo" in November 1991, reflected the trend in the market during that period. He felt that the market in 1990 had levelled out after some movement upwards in the previous years, while the sale of "Amaroo", somewhat later, indicated that the market had fallen at that time. He therefore compared "Tylden" principally with "Amaroo" and he felt that the value applied to it reflected the fall in market at the relevant date. Although he thought that "Amaroo" was superior in location and country, it was about four times the size of the subject land. Allowing for this, he considered it to be about the same value per hectare. As far as country was concerned, he thought that the downs on "Amaroo" were superior to that on "Tylden" and the scrub in the balance country on "Amaroo" probably made it superior to the balance country on "Tylden".
"Ellimatta" was considered by Mr Herberts to be slightly superior to the subject land as it was better located and had slightly superior country. However, there was a smaller percentage of downs country on "Ellimatta", so that its development cost was higher.
In answer to Mrs Champneys' argument concerning the comparisons with earlier valuations for conversion purposes, Mr Herberts did not find them to be of any assistance, as the market had changed since their relevant dates. He preferred to rely upon his sales basis, particularly the sale of "Amaroo", which he considered to be a fair sale.
I turn now to consider this evidence, having regard to the statutory requirements and the principles of valuation.
Section 141 of the Land Act provides that for the purpose of conversion of tenure the unimproved value of any land shall be the amount which, in the Court's opinion, experienced persons would be willing to pay for an estate in fee simple in the land, assuming that it was offered for sale on such reasonable terms and conditions as a bona fide seller would require.
Mrs Champneys relied entirely upon the unimproved value applied to the subject land in 1987 for conversion purposes and comparisons with the values applied to other lands for such purposes in 1983 and 1988, and for rating purposes. On the other hand, Mr Herberts relied upon the analysis of sales of two properties in order to arrive at unimproved values which he has then compared with the subject land.
Unfortunately, the conversion determinations relied upon by Mrs Champneys were made some years prior to the relevant date in this case which is 7 January 1991. There is evidence, both from Mr Redgen and from Mr Herberts, that the market for land increased considerably between 1987 and 1991. Although it appears that the market fell between 1990 and 1991, there is no evidence that it fell to the level of 1987 values.
It has been held by Courts of the very highest authority that the most appropriate method of arriving at unimproved values is by comparison with sales of comparable land. This is the method that has been adopted by Mr Herberts in this case. Mrs Champneys was unable to attack the analysis of the two sales submitted by Mr Herberts. In the circumstances therefore, I much prefer the approach adopted by Mr Herberts to that adopted by Mrs Champneys. Mrs Champneys has not demonstrated that the value applied by Mr Herberts is incorrect.
However, for reasons which became apparent in other cases heard at the same hearings, doubts have been raised about comparison with the sale of "Amaroo". I propose, therefore, to make an adjustment of $10 per hectare to Mr Herberts' valuation.
Accordingly, the unimproved value for the purposes of conversion of tenure of Grazing Homestead Perpetual Lease No 36/7919, Roma District, is determined at $120 per hectare, or $97,400.
(JJ Trickett)
Member of the Land Court
0
0
0