Chief Executive, Department of Natural Resources v Hedges
[1999] QLAC 53
•28 May 1999
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IN THE LAND APPEAL COURT
HELD AT BRISBANE
Re: Appeals against a decision of the Land Court -
Determinations of Unimproved Values -
Shire of Gatton
(V97-181, V97-183, AV97-182, AV97-185, AV97-186 and V98-13)
B E T W E E N
Chief Executive, Department of Natural Resources
Appellant
AND
Debra Julie Hedges
Respondent
J U D G M E N T
Delivered at Brisbane this Twenty-eighth day of May 1999
This is an appeal against the determinations by the Land Court of the following unimproved values:
V97-181 and V97-183 – unimproved value $100,000 as at 1 January 1996; and
V98-13, AV97-182, AV97-185 and AV97-186 - unimproved value $140,000 as at 1 October 1996.
The respective appeal lands, the chief executive's valuations of them and the appellant's estimate of value placed before the Land Court were:
V97-181 (Parcel B) – Lot 1 on RP 62843, Parish of Terry – 18.135 ha – chief executive's valuation $50,000 as at 1 January 1996 – appellant's estimate of value $40,000.
V97-183 (Part Parcel A) – Lot 2 on RP 889166 and Lot 1 on RP 32758, Parish of Terry – 31.98 ha – chief executive's valuation $80,000 as at 1 January 1996 – appellant's estimate of value $46,000.
V98-13 (Parcel A) – Lots 1 and 2 on RP 889166 and Lot 1 on RP 32758, Parish of Terry – 55.46 ha – chief executive's valuation $85,000 as at 1 October 1996 – appellant's estimate of value $60,000.
AV97-182 (Parcel B) – Lot 1 on RP 62843, Parish of Terry – 18.135 ha – chief executive's valuation $47,500 as at 1 October 1996 – appellant's estimate of value $40,000.
AV97-185 (Parcel C) – Lot 1 on RP 163885, Parish of Terry – 16.24 ha – chief executive's valuation $45,000 as at 1 October 1996 – appellant's estimate of value $40,000.
AV97-186 (Parcel D) – Lot 1 on RP 32756, Parish of Terry – 4.047 ha – chief executive's valuation $36,000 as at 1 October 1996 – appellant's estimate of value $25,000.
The appeal parcels are situated in a district known as Iredale located to the south-west of the township of Helidon.
As at 1 January 1996, the respondent (Debra Julie Hedges) owned five surveyed lots. Two of those lots (Part Parcel A – V97-183) adjoined, bounded by Gierkes Road on the east, Friis Road on the north and Paroz Road on the south. There was one lot across Gierkes Road (Parcel B – V97-181) and two lots across Friis Road, but not adjoining one another. At that relevant date, the chief executive had made four separate valuations, the two adjoining lots in Part Parcel A, were included in one valuation and the remaining three lots were separately valued. The record shows that while the respondent had intended to appeal against each of those four valuations, she had inadvertently appealed against only two – Part Parcel A and Parcel B.
Subsequently, the respondent acquired a sixth lot, across Paroz Road, south of Part Parcel A. That lot, Lot 1 on RP889166, had been excised by survey from a larger holding. However, because the lot was below the minimum area permitted under the Shire of Gatton Town Planning Scheme, the subdivision was approved, pursuant to s.5.8(3) of the Local Government (Planning and Environment) Act 1990, on the condition that the land be held in common with Lot 2 on RP 889166 on the northern side of Paroz Road (part of Part Parcel A). Lot 1 is incapable of disposition as an individual lot.
As at 1 October 1996, the chief executive again issued four separate valuations, but, at this relevant date, directed that Lot 1 on RP 889166, although not adjoining and separated by a public road, be included with Lot 2 on RP 889166 and the adjoining Lot 1 on RP 32758 in one valuation. That direction was made having regard to the requirement that Lot 1 on RP 889166 be held in common with Lot 2. Those three surveyed lots in amalgamation made up the whole of Parcel A. The respondent's dwelling was erected on Lot 2 on RP 889166.
Appeals were lodged against each of the four separate valuations as at 1 October 1996 – Parcel A – V98-13; Parcel B – AV97-182; Parcel C – AV97-185 and Parcel D – AV97-186. Parcels C and D are the non-contiguous lots located on the northern side of Friis Road.
The primary thrust of the appeals to the Land Court at both relevant dates was that the several lots were used in conjunction for purposes of "farming" and should be included in one valuation.
Section 34(1) of the Valuation of Land Act 1944 (the Act) provides:"Unless the chief executive otherwise directs, there shall be included in 1 valuation –
(a)several parcels of land which adjoin, and are owned by the same person, and where either no part is leased or all the parcels are let to 1 person;
(b)several parcels of land in the same area which do not adjoin but are worked as 1 holding and used exclusively for the purposes of farming, and are owned by the same person and which, if let, are all let to 1 person."
Section 35(1) of the Act relevantly provides:
"Unless the chief executive otherwise directs –
(c)lands which do not adjoin or which are separated by a public road, or are separately owned, shall be separately valued."
In the Land Court, the learned President found that the use of the several lots in amalgamation for the business of grazing did not meet the "significant and substantial commercial purpose or character" criterion in the definition of "farming" in s.17(2) of the Act, and did not qualify the lands to be valued as being exclusively used for purposes of farming.
Section 17(1) of the Act provides:
"(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made."
The respondent did not challenge the President's findings relative to use for purposes of "farming". Clearly, had the land been so used, and had the chief executive not directed otherwise, the several parcels of land should, pursuant to s.34(1)(b) of the Act, have been included in one valuation.
It is observed that no such provision is included in the Act for non-adjoining lands used exclusively for purposes of a single dwelling house.
The chief executive had valued the two adjoining lots (Part Parcel A) as at 1 January 1996, on the basis that those lots were exclusively used for purposes of a single dwelling house. The evidence at first instance was that any enhancement in value (for that the land has been subdivided by survey) had been disregarded in the chief executive's valuation, pursuant to s.17(1). Then, having directed that Lot 1 on RP 889166 be included with Part Parcel A in one valuation as at 1 October 1996, that one valuation was also made on the basis that the whole of Parcel A was exclusively used for purposes of a single dwelling house.
The President interpreted the reasoning of the chief executive, in applying the concessional single dwelling house valuation to Parcel A, as an acceptance that "in a rural environment, use for purposes of a single dwelling house could be extended to rural residential properties" and "(P)art of rural residential use includes some agricultural or livestock activity, but on a scale smaller than qualifies the land for valuation as used for purposes of 'farming' …".
The President took the view that the chief executive's valuation of Parcel A, as at 1 October 1996, reflected a "combination of the 'otherwise direction' under section 35(1) and a concessional valuation under section 17(1)." However, he was of the opinion that the chief executive "should have gone further and considered whether all the subject lands should have been included in one valuation". He referred to considerations which, in his opinion, should have been regarded by the chief executive as having relevance and which should have influenced a direction to include the several parcels in one valuation, using the discretion provided in s.35(1).
For the reason that the Parcels A, B, C and D were used in conjunction for the same rural residential activities, and because the chief executive had accepted that the running of cattle did not disqualify Parcel A from valuation as being exclusively used for purposes of a single dwelling house, the President found that all parcels, once included in the one valuation, should be valued on the same single dwelling concessional basis.
He saw the same principles applying to the considerations which the chief executive should have taken into account to direct that the two parcels involved in the 1 January 1996 appeals, be included in the one valuation.
Grounds of Appeal
The grounds of appeal as contained within the chief executive's notice of appeal read:
"(a)That the decision of the Land Court was wrong in law and contrary to law;
(b)That the decision of the Land Court was based on incorrect principles and fails to take account of correct principles;
(c)That the decision of the Land Court was against the evidence and the weight of the evidence;
(d)That the learned President was wrong in law in finding that;
(i)the two parcels of land in appeals V97-181 and V97-183 should be included in the one valuation;
(ii)the parcels of land in appeals V98-13, AV97-182, AV97-185 and AV97-186 should be included in one valuation; and be valued under the single-dwelling house provisions of S.(17) of the Valuation of Land Act, 1944;
(e)That the learned President was wrong in law in finding that the chief executive had not properly exercised his powers under S.35 of the Valuation of Land Act 1944."
Submissions
Appellant
The appellant's submissions, on appeal may be summarised as follows. The Land Court erred in altering the valuations made by the chief executive by including the several lots to be valued in one valuation at each relevant date. Should this Court overturn the decision of the Land Court to include the several lots in one valuation, then it is argued that the original unimproved value assessments by the chief executive should be upheld on the basis that the only registered valuer called in evidence was Daniel James O'Connor (an employee of the chief executive), who supported his valuation by analysed sales evidence. The one additional sale introduced in evidence by the respondent was of a block larger than any of the subject parcels and did not support the unimproved value under challenge. The evidence given by Mr O'Connor at first instance concerning comparable sales evidence and that the valuations under appeal were not lacking in relativity with valuations of other comparable properties in the area, was either not challenged or not rebutted by any of Miss Hedges' evidence.
There is no evidence of any decision having been taken by the chief executive (or his delegate) whether or not to "otherwise direct" under s.35(1)(b), that Parcels B, C and D be valued separately. He says no such decision was necessary and it was wrong for the Land Court to have assumed that such a decision was taken and then to conclude that the chief executive had failed to take relevant factors into account. Those parcels were required to be valued separately pursuant to s.35(1)(b). Conversely, while Lot 1 on RP 889166 was also required to be valued separately, unless the chief executive otherwise directed, that direction had been given for the reason that Lot 1 on RP 889166 and Lot 2 on RP 889166 on the opposite side of the road, could not be transferred except in amalgamation. That restriction on transfer and the reason for the "otherwise direction" relevant to Lot 1 on RP 889166 and Parcel A had no relevance to Parcels B, C or D.
The power to "otherwise direct" is limited to the chief executive or his delegate, neither of whom is obligated to give such a direction. The Land Court was wrong in assuming that a direction should have been made or was made erroneously when there was no evidence as to the giving of a direction. Further, the Court itself did not have the power to otherwise direct.
Respondent
The respondent submits that the decision of the Land Court was in accordance with the law, based on correct principle and in accordance with the evidence and the weight of evidence.
With regard to the evidence of value, the respondent argues that there is no requirement that all evidence be expert evidence and the Court can take into account all evidence before it. Sales evidence had not been ignored by the respondent in her evidence in the Land Court. She had given her opinion as to the comparability of her land and the sale lands used as basic evidence by the appellant for the valuations appealed against. The respondent had submitted details of one sale which she says was of land comparable in many respects and that evidence should have been taken into consideration by the chief executive.
The respondent submits that the basis on which the President had made his decision was correct not only in quantum, based on all the evidence, but also in law.
The respondent argues in support of the President's reasoning that the chief executive was required to consider the use of several parcels as an amalgamated site for the purpose of deciding qualification for concessional valuation, pursuant to s.17(1), first for use as "farming", which was decided by the chief executive in the negative. There was however, no "automatic exemption" for use as a single dwelling. The single dwelling concessional valuation was applied to part of the aggregation. However when the direction to include in one valuation Lot 1 on RP 889166, the result of which was to apply the single dwelling concession to that land as well, the respondent submits that regardless of the reasons for that direction, the chief executive erroneously excluded from consideration relevant factors regarding the common use of the balance of the holding. Once a direction is given and there is evidence that the direction failed to embrace relevant considerations, as the respondent argues is the case in this matter, then it is submitted that the direction is reviewable. The relevant considerations which the chief executive is alleged to have failed to consider, were those to which the President had made reference and which had led him to his decision.
Findings
Although the methodology employed is not clear, there is no dispute that, pursuant to s.35(1)(b) of the Act, the chief executive used his discretion to include in one valuation the three lots which make up Parcel A, two of those lots being separated from the third by a public road. The reason for that direction is patently logical and, understandably, the respondent does not question that reasoning. There was no evidence before the Land Court and it follows, before this Court, that the chief executive had directed that Parcels B, C and D not be included in one valuation together with Parcel A. There was no reason why such a direction should have been given. Section 35(1)(b) requires each of those parcels to be valued separately, unless the chief executive otherwise directs.
We therefore agree with the chief executive's submission that the power to direct if he wishes to use that discretion, lies with the chief executive or his delegate. If he merely fails to give a direction the matter rests there. If he gives a direction and the reasons for that direction are exposed, that direction is open to review as was found by the majority of this Court in Beanland v. The Valuer-General (1990) 13 QLCR 113.
It is our finding that the chief executive was not required under the Act, to include in one valuation, several parcels of land which do not adjoin but are used, other than for purposes of farming, as one holding, and on which is erected a single dwelling-house.
The chief executive had the discretion to direct that Parcels A, B, C and D be included in one valuation but there was no evidence before us to suggest that in failing to so direct the chief executive had turned his mind to the question of whether a direction ought be made. It follows that there was no evidence of either a direction or decision not to direct on erroneous grounds.
As a consequence we find that the parcels in Appeals V97-181 and V97-183 should have been valued separately as at 1 January 1996 and that the parcels in Appeals V98-13, AV97-182, AV97-185 and AV97-186 should have been valued separately as at 1 October 1996.
We have examined the rural site sales evidence relied upon by Mr O'Connor and find, on the basis of his evidence, that it supports the level of values under appeal before the Land Court. The respondent has not provided any relativity evidence which persuades us to reject in whole or in part the chief executive's sales evidence. The best basis for the assessment of unimproved value is obtained from sales of vacant or lightly improved comparable lands. See WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44. The use of the principle of relativity, to the exclusion of sales evidence, is erroneous. A review of Mr O'Connor's sales analyses indicates that the properties used by him as comparable sales are all relatively lightly improved. We do not find of use the evidence provided by the sale relied on by the respondent.
In these circumstances, the chief executive's valuations of each of the several parcels as individual rural residential sites, are not excessive or unreasonable.
Each appeal is allowed, the determinations of the Land Court are set aside, and the following determinations are made:
Appeal Reference V97-181 -
Lot 1 on RP 62843, Parish of Terry - unimproved value $50,000 as at 1 January 1996.
Appeal Reference V97-183 -
Lot 2 on RP 889166 and Lot 1 on RP 32758, Parish of Terry - unimproved value $80,000, as at 1 January 1996.
Appeal Reference V98-13 -
Lots 1 and 2 on RP 889166 and Lot 1 on RP 32758, Parish of Terry - unimproved value $85,000 as at 1 October 1996.
Appeal Reference AV97-182 -
Lot 1 on RP 62843, Parish of Terry - unimproved value $47,500 as at 1 October 1996.
Appeal Reference AV97-185 -
Lot 1 on RP 163885, Parish of Terry - unimproved value $45,000 as at 1 October 1996.
Appeal Reference AV97-186 -
Lot 1 on RP 32756, Parish of Terry - unimproved value $36,000 as at 1 October 1996.
(Muir J)
JUSTICE OF THE SUPREME COURT
(RE Wenck)
MEMBER OF THE LAND COURT(CH Carter)
MEMBER OF THE LAND COURT
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