Forster v Minister for Lands

[1995] QLC 77

[1995] QLC 77

 

  LAND COURT

BRISBANE

30 AUGUST 1995

Re:     Determination of unimproved value under
the Land Act for conversion of tenure -
  GHPL 11/618, Charters Towers.
  Lessees:      Thomas Robert Forster and Anne Forster

(Hearing at Charters Towers)

D E C I S I O N

The Minister referred to the Court the matter of determination of the unimproved value of the above lease, being of land described as Lot 38 on Plan DV 386 and Lots 39 and 44 on Plan DV 37, Parish of Southern Cross, County of Davenport, containing about 474.719 hectares.
           An application for conversion of the tenure was received by the Department of Lands on 29th April, 1991, and that is the relevant date of valuation.  The Crown's estimate of the unimproved value is $70,000.  The lessees' estimate is $55,000.
           The property, known as "Kapunda" is situated about 16 kilometres west of Charters Towers via the Flinders Highway.  Access is gained off the highway to a laneway through a small area of about 4.5 hectares north of the Great Northern Railway.  This area was severed from the main body of the property by a diversion of the original railway, many years ago.  Access to the land south of the railway is from the laneway over a level crossing.
           The land is described as comprising "poorly structured and infertile soils, susceptible to understorey regrowth".  It accommodates a dwelling, sheds and yards and is watered by an equipped bore and dam.  The land has been partially improved by pulling and establishment of improved pasture and is used for grazing of cattle.  The estimated fully developed potential carrying capacity is one beast to 6 hectares.
           It can been seen that this small area of poor quality land does not, as a separate entity, provide in this locality, anything more than a site for rural residential use, the rural component being limited to the grazing of about 80 cattle.
           This is where the difference in valuation approach emerged.  Mr S.B. Gilbert, a registered valuer employed by the Department of Lands, valued the land as a rural-residential site.  This is not an uncommon use for land in proximity to Charters Towers.  It is generally recognised that grazing values for small holdings are dominated by the demand and consequent market for residential orientated use.  Mr Gilbert provided two sales of such sites.  One of 84 hectares at about the relevant date sold to show an analysed unimproved value of $27,650.  It was considered to be significantly inferior to the subject land, but Mr Gilbert recognised that the subject land, as surveyed, had the potential for immediate sale in two parcels.  The second sale was of a site of 338 hectares, showing an analysed unimproved value of $71,257.  While it was smaller in area than the subject land it was slightly superior in country type and location.
           Mr Forster attended the hearing.  The property had been purchased in 1989 and he and his wife retired there from a western grazing property.  A lot of capital had been expended in clearing wattle and planting improved pasture.  The country is very deficient in phosphorous and large quantities of superphosphate are required to establish pasture.  It was, and is, the lessees' intention to establish a limousin stud, which might complement other family grazing interests.  Mr Forster stressed that there was no intention for the land to be sold in separate parcels. 
           Mr Forster relates value to a unit of area basis.  He referred to the sale of an adjoining property of about 1,225 hectares in 1992 for about $120 per hectare improved, with a Department of Lands' valuation of about $70 per hectare unimproved.  This country was in his opinion very similar to the subject.  He cannot understand then how the Department can value the subject land at an acreage rate more than double the unimproved value of that adjoining land.  He is also concerned that the valuation includes the severed area on the northern side of the railway which is completely fenced off and in reality unable to be provided with water and useless for grazing.  Reference was also made to the recent sale of a property "Redlands", about 30 kilometres to the west, of about 5,000 hectares, with an unimproved valuation of $29 per hectare.  In his opinion that evidence supports his views as to the unimproved value of "Kapunda". 
           It is understandable that Mr Forster thinks in terms of per acre, or unit of area, values.  However, it is a proved market fact and one which has and must be, recognised by the Courts, that where residential use potential dominates grazing use potential, site values rather than unit of area values, tend to become the market yardstick.  As an example, Mr Gilbert says that the value of the subject property would not decrease by any measurable quantum, even if the severed area north of the railway was removed from the title - 470 hectares would be marketable at the same site value as 475 hectares.  He had not analysed the sale of the adjoining property, but felt that again, the dominant influence there would be a site value rather than a value per hectare.  He relied then on the sale of the smaller 338 hectare site selling for slightly more than the valuation of the subject property.  If that sale had been analysed on a per acre or hectare basis it would have shown a much higher value than had been applied to the subject property.
           This is an example where unit of area values must take a secondary place for comparison and market valuation purposes.  I am satisfied that the valuation applied by Mr Gilbert is fair and reasonable.
           The unimproved value of the subject land is determined on the basis of its site value in the amount of Seventy Thousand Dollars ($70,000).

MEMBER OF THE LAND COURT