Daniels v Chief Executive, Department of Natural Resources

[1998] QLC 21

[1998] QLC 21

 

  LAND COURT

BRISBANE

20 February 1998

Re:     Appeal against Annual Valuation -
Valuation of Land Act 1944 -
  Shire of Cloncurry.
  (AV96-622).

Jeffrey J Daniels and Vivian Daniels
  v.
  Chief Executive, Department of Natural Resources

(Hearing at Mt Isa)

D E C I S I O N

This is an appeal against the unimproved value determined by the respondent Chief Executive for a grazing property known as "Dryburgh" in the Cloncurry area. 
"Dryburgh" comprises Grazing Homestead Perpetual Lease No 13/2053, described as Lot 3 on Plan BD 54, Lots 1 and 2 on Plan BD 103 and Grazing Homestead Perpetual Lease No 13/2065, described as Lot 2 on Plan BD 177, and Permit to Occupy No 13/4850, described as Lot 1 on Plan PER 4850, in the Parishes of Alroy and others. It has an area of about 23,769 hectares. As at 1 January 1996, under the provisions of the Valuation of Land Act 1944, the respondent determined the unimproved value of that land at $270,000. The owners objected against that valuation and, following advice that the valuation had been reduced to $266,000, they appealed to the Land Court advising that their estimate of the unimproved value was $250,000.
           "Dryburgh" is situated approximately 37 kilometres east of Cloncurry with access by means of the bitumen sealed Flinders Highway which provides all-weather access.
           At the hearing of the appeal, Mr JJ Daniels appeared and gave evidence on behalf of the owners, while the respondent was represented by Mrs T Johnson, of counsel.  Valuation evidence on behalf of the respondent was given by Mr LR Croton, a registered valuer employed by the Department of Natural Resources.

Mr Croton's report describes "Dryburgh" thus:

"The property comprises about 11200 ha (49%) open Mitchell grass downs scattered with whitewood, vine tree and gidgee shade;

About 4500 ha (20%) is gidgee and coolibah channels with red gravelly bare patches with dense young seedlings and merging into well grassed, semi-open country on edge of the watercourses;

About 3279 ha (14%) of red gravelly box slopes grassed with buffel, blue, feathertop and kerosene grass.  Timbered with silverleaf box, snappy gum forest with spinifex and patches of gidgee;

About 3600 ha (16%) of red loamy bloodwood and gidgee with buffel flats;

About 400 ha (1%) of granite hills, lightly grassed. "

The permit to occupy contains an area of about 790 hectares and is situated on the stock route, comprising good open brown soil, mitchell grass downs in the east, with lightly shaded whitewood downs intersected with a pebbly gidyea ridge towards the west.  The channels are timbered with gidyea and gum.
           Mr Croton assessed the carrying capacity of "Dryburgh" at 1 beast to 13 hectares, or about 1,816 head.  The property is watered by nine bores, eight equipped and one not equipped, three earth tanks and one small dam.  There is no natural water of any consequence.
           Mr Daniels did not take issue with Mr Croton's description of country on "Dryburgh", but he disagreed with his carrying capacity, stating that he considered the carrying capacity to be 1200 head, which is about 1 beast to 19.8 hectares.  He went on to say that "Dryburgh" is north of the railway line and therefore in ticky country.  Cattle have to be brought back to Cloncurry to dip before proceeding east.
           "Dryburgh" is also affected by mining activity.  The Ernest Henry Mine is on the adjacent property and a series of de-watering bores are proposed.  Mr Daniels said that although no bores have yet been drilled on "Dryburgh", the existing bores are being monitored for loss of supply.  It also appears that even though the mining company has guaranteed to compensate neighbouring land owners for any increased pumping costs, it is of great concern to the owners.
           In addition, since the date of valuation a mine has commenced operating on "Dryburgh" in the granite hills which, Mr Daniels said, has extracted 180,000 tonnes of ore. 
           Mr Daniels said that most of the channels on "Dryburgh" had buffel grass, upon which he felt that there had been too much emphasis.  He said that while it is a quick responding grass, it was gone towards the end of the year.
           The channels are a mixed blessing.  Mr Daniels said that with the right rainfall, when the channels come down there can be a good year.  However, heavy rain earlier in the year had caused tremendous damage to the country and improvements. 
           In support of his valuation of "Dryburgh", Mr Croton referred to two improved sales, "Cairo" and "Split Rock". 
           "Cairo" is situated about 40 kms north-east of McKinlay with access by formed earth and gravel roads, which are not all-weather.  It comprises open undulating brown soil downs with odd whitewood and coolibah along the creeks  There is some pebbly country in the south-west and the property is subject to flooding from the Gilliat channels.  He assessed its carrying capacity as 1 beast to 13 hectares, or 819 head.  It is watered by one flowing artesian bore, two equipped sub-artesian bores, four turkeys nests and three earth tanks.
           Overall, Mr Croton considered that "Dryburgh" was inferior to "Cairo" because of its water.  However, he stated that this is partly offset by "Dryburgh's" superior situation and country type.  "Cairo" is also a split property which causes working difficulties.  He did not think that "Cairo" was more favourably situated to Julia Creek than "Dryburgh" because it had black soil roads to that centre.
           "Split Rock" comprises two pastoral holdings, Bagur and Walkwalo.  It is situated about 140 kms north-west of Mount Isa and about 81 kms east of Camooweal, with access by means of the bitumen sealed Barkly Highway.  "Split Rock" sold in December 1994, for $692,000, and analysed to show an unimproved value of $88,030, or $1.34 per hectare. 
           Mr Croton described the country on "Split Rock" in terms of each of the pastoral holdings.  He said that Bagur consisted of downs country fronting Plain Creek, rising to level to gently undulating gidyea plains and frontage country adjoining the creeks, to snappy gum open forest, with dense lancewood patches (particularly in the eastern sector).  The north-western section consists of broken undulations, intersected by small gullies and watercourses with minimal frontage country and rocky/stony outcrops.
           Walkwalo comprises areas of undulating spinifex ridges broken by numerous gullies in the north and south-western sections.  The balance comprises small areas of plain, gidyea flats and broken gidyea along watercourses.
           Mr Croton assessed the carrying capacity of "Split Rock" at 1 beast to 35 hectares, or 1,874 head.  He regarded "Dryburgh" as far superior.  He did not think that "Split Rock" enjoyed any advantage being situated closer to the Darwin markets.  He had been advised by DPI officers that cattle from "Split Rock" had to be brought back to Mount Isa for inspection before they could proceed to Darwin.
           Mr Croton said that the mining activity on "Dryburgh" is confined to a small portion of freehold land owned by the mining company and has not encroached onto "Dryburgh".  He was told that the mining company had an agreement with Mr Daniels to store ore on the property.  However, Mr Daniels denied that any such agreement existed.  He said that even if the mine was confined to the freehold land, access could be gained only through "Dryburgh" with the resultant dusting of grass, gates being left open and livestock disturbed.
           I turn now to consider the effect of the evidence in this matter. 
           The first issue is that of sales.  Mr Croton has relied on the sales of "Cairo" and "Split Rock".  While "Cairo" would seem to have some comparability to the subject land, it seems to me that the sale of "Split Rock" is so far removed and so different to "Dryburgh", that it is of very limited use as a basis of valuation.
           Mr Daniels felt that "Cairo" had an advantage in being in the tick-free area, whereas "Dryburgh", being north of the railway line is in the ticky area and cattle have to undergo two dippings before they can leave Cloncurry.  While "Cairo" does have the advantage in that regard, Mr Croton was aware of that difficulty and said that he had made allowance for it.
           Mr Daniels also felt that "Cairo" had the advantage of being better located in relation to Julia Creek.  However, I accept Mr Croton's evidence that access to Julia Creek is by blacksoil roads which are often cut by the Gilliat channels, whereas "Dryburgh" is located only 37 kilometres from Cloncurry by a bitumen sealed road.
           In relation to the mining activity on and around "Dryburgh", it would seem from the evidence that this activity occurred after the relevant date, 1 January 1996.  There was virtually no evidence about the extent of any knowledge of the proposed mining activity at the relevant date, or the effect that such knowledge would have upon the mind of a prudent purchaser at that time.  In the absence of such evidence, I do not feel that I can take the mining activity into account.  No doubt, in future valuations the effect of the mining activity on "Dryburgh" as well as that associated with the Ernest Henry Mine, including any dewatering activity, can be properly assessed.
           Mr Daniels' agency company handled the sale of "Cairo".  He made the point that the sale included a significant amount of plant, including an 8-tonne truck, tractors and a grader.  Taking into account that plant, he thought that the sale price was  reasonable.
           Mr Croton said he was well aware of the plant in the sale and had taken that into account in his analysis.  He considered it to be a fairly good purchase at the time.  He agreed that "Cairo" was superior country, but being a split block had working disabilities, requiring two sets of yards and other infrastructure.  Being south of the tick line, cattle proceeding south from "Cairo" did not need to be dipped as required for cattle from "Dryburgh".
           I have carefully considered the evidence in this matter and I have come to the conclusion that the issue largely revolves around the comparison of the subject land with the sale of "Cairo".  Mr Daniels did not really challenge Mr Croton's analysis of the sale or his description of the country.  He could not challenge Mr Croton's carrying capacity because he did not know it well enough.  However, Mr Daniels did challenge Mr Croton's carrying capacity of "Dryburgh".  He considered its carrying capacity to be only 1200 head, or approximately 1 beast to 20 hectares, whereas Mr Croton considered the carrying capacity to be 1 beast to 13 hectares, or 1816 head.
           While it is impossible on the state of the evidence to determine a definitive carrying capacity for "Dryburgh", both Mr Daniels and Mr Croton agree that the country on "Cairo" is superior.  Certainly the description of country contained in Mr Croton's report gives it the advantage in that regard.
           Clearly, "Cairo" also enjoys an advantage as far as water is concerned.  However, these advantages are offset to some extent by the fact that "Cairo" is a split property and does not have bitumen road access.
           Weighing the advantages and disadvantages, Mr Croton concluded that "Cairo" is superior to "Dryburgh" because of its water and its quality of country.  He has applied $11.75 to "Cairo" and $11.19 to "Dryburgh".
           In this case I feel I should give the owners the benefit of any doubt which the evidence has raised.  Certainly I have come to the conclusion that "Dryburgh" is inferior to "Cairo" and while Mr Croton has recognised that fact, I feel that the applied values are somewhat too close.  I feel that the differences would be better recognised if a further allowance was made and the figure of $11.00 per hectare was applied to "Dryburgh".
          Therefore, the appeal is allowed, the valuation of the respondent is set aside and the unimproved value of the subject land as at 1 January 1996, is determined at Two hundred and sixty-one thousand, five hundred dollars ($261,500), or Eleven dollars ($11.00) per hectare.

(JJ Trickett)       
  President of the Land Court