Goostrey v Chief Executive, Department of Natural Resources
[1997] QLC 32
•21 March 1997
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BRISBANE
21 MARCH 1997
In the matters of appeals against valuations
Valuation of Land Act 1944
Valuation Roll No.: 60099
Date of Valuation: 1 January 1995 (AV95-95)
1 January 1996 (AV96-91)
Local Authority: GCCC-Albert
Norman E and Nola V Goostrey
v.
Chief Executive, Department of Natural Resources
(Hearing at Coolangatta)
D E C I S I O N
This decision relates to appeals lodged by the landholders in respect of valuations made by the respondent Chief Executive pursuant to the provisions of the Valuation of Land Act 1944 (the Act) on land owned by the appellants (the subject land). The Chief Executive valued the subject land as at 1 January 1995 in the amount of $330,000 and as at 1 January 1996 for $390,000. The appellants agree that the Chief Executive’s valuations would apply to the subject land at these dates if I am to find that the land should be valued at its highest and best use as a rural homesite; however, the parties also agree that if I find that the subject land satisfies the definition of “farming” provided by s.17 of the Act then the 1995 valuation would be reduced to $160,000 and the 1996 valuation would become $225,000.
Up until 1 January 1995 the subject land had received the protection of then s.11(1)(vii) of the Act, however, the Chief Executive’s Department has, according to the evidence, been reviewing the classification of lands in the area of the subject land and has reconsidered the question of whether the land should retain a classification of “farming” given the changes in law brought about by the introduction of s.17 of the Act. It follows, from what I have said above, that the issue between the parties is quite simply one of whether the land in question is “farming” land as provided for in s.17. If it is so classified, the land receives the benefit of protection provided by s.17 (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.”
To gain the protection expressed in s.17(1) the use of the land must be such that it satisfies each of the requirements set out in the definition of “farming” provided in s.17(2):
“(a)the business or industry of grazing, dairying, pig farming, poultry farming, viticulture, orcharding, apiculture, horticulture, aquiculture, vegetable growing, the growing of crops of any kind, forestry; or
(b)any other business or industry involving the cultivation of soils, the gathering in of crops or the rearing of livestock;
if the business or industry represents the dominant use of the land, and -
(c)has a significant and substantial commercial purpose or character; and
(d)is engaged in for the purpose of profit on a continuous or repetitive basis.”
Counsel for the Chief Executive, Mr O’Connor, informed the Court that the only issue that the Chief Executive took was the question of whether the business or industry of grazing carried out on the subject land “has a significant and substantial commercial purpose or character”. In short, the Chief Executive concedes that there is a business or industry of grazing carried out on the land; that the grazing activity represents the dominant use of the land; and that the enterprise carried out on the land is engaged in for the purpose of profit on a continuous or repetitive basis.
A brief description of the subject land might be useful at this stage. The land has an area of 88.89 ha and is situated on Currumbin Creek Road, Currumbin Valley, approximately 60 km west of the Pacific Highway turnoff. It abuts the New South Wales border. Currumbin Creek Road is a bitumen sealed road with earth-formed footpaths and access to the property is provided from that road and from Tomewin Road.
Mrs Jennifer Cameron, a registered valuer in the respondent’s employ, gave evidence in support of the respondent’s case and she described the subject land as moderate to steep sloping coastal forest country with approximately one-third cleared to grazing with some regrowth. Access to the property is across Currumbin Creek where the land rises moderately to a level area, then continues rising moderately then steeply to the rear of the property on Tomewin Road. Mrs Cameron tendered aerial photographs supporting her description. Mr Goostrey agreed with the description of the land by Mrs Cameron, excepting that he questioned whether it was only one-third cleared to grazing. I have reviewed the aerial photography supplied in evidence and agree that Mrs Cameron’s estimate appears to be accurate.
Mr and Mrs Goostrey purchased the subject land in 1973 because, in his view, it was big enough to carry around 100 breeders. The property had previously been a dairy and banana farm and was in poor shape, suffering regrowth and weeds and with the improvements being in a very poor state. Over the years the appellants have reconstructed fencing, roads and tracks, have built two sets of yards and have carried out clearing. They have purchased a range of equipment needed to manage the cattle on the property and appear to have a well-equipped facility. In recent years, the Goosterys’ son-in-law, Mr Timothy John Asser, has come to the property during his annual five-week vacation and has helped carry out many of the manual tasks required on the property. In the last three months Mr Asser has worked full-time on the land, since he ceased employment with the New South Wales Government State Rail Authority. Mr Asser gave evidence that he had carried out a range of tasks on the subject land, including clearing of regrowth, repair of fences and the dipping of cattle. All of the work that Mr Asser has carried out over the years has been on a non-paying basis and Mr Asser said that he doubted that the appellants could afford to pay the wages which would otherwise be due.
The subject land has been used as a breeding and fattening property with an average of about 50 breeders and a mixed herd of up to 100. According to Mr Goostrey the income produced from this enterprise was quite adequate during the 1980s and, whilst no detail was forthcoming, he did mention an income of approximately $10,000 in at least one year during that period. The 1990s have not been as kind. Mr Goostrey related how the drought of recent years and the consequent requirement for supplementary feeding and the expense of that, together with the poor prices for cattle, have meant that income has been down during this period. In addition to these problems, the property suffered a loss of 11 female breeders, four calves and experienced about nine stillbirths in 1995 following tick fever, even though cattle were vaccinated and stock were dipped regularly. Naturally it has taken some time to breed up the herd again and at the 1996 relevant date there were about 37 breeders on the land.
Mr Goostrey tendered a statement from his accountants showing that net income from the sale of stock on the land for the 1995-96 financial year resulted in an actual loss of just over $5,000. Fortunately, the Goostreys have investment income from another source. Income, including investment income, for the 1992, 1993, 1994 and 1995 years was provided and, whilst I have no detailed breakdown of years other than the 1996 year, it appears that the net taxable income received by the appellants during those years comes almost exclusively from investments and not from the breeding and fattening of cattle on the subject land.
In fact, Mr Goostrey said that he does not anticipate being able to make a measurable profit out of continuing the type of enterprise now conducted on the land. He has consulted an officer of the Department of Primary Industries who has suggested to him that he change the nature of the enterprise to the production of yearling beef. Mr Goostrey said that yearling stock are presently selling at about $120 per head, but that he expects to achieve an average price of about $210-$250 per head when the market improves and he hopes to sell about 80 head per annum. He has information from the Department of Primary Industries (Brian Richardson, Farm Financial Counsellor) concerning funds which might be available from the Rural Adjustment Scheme which, he hopes, will assist him in increasing the number of breeders on the land. In addition to this source of funds he said that Mr Asser will be providing some financial assistance.
Mr Goostrey said that past expenses in conducting the enterprise on the land has been about $8,000 per annum but, from what I understand, some of this figure may have comprised capital expenditure in addition to a number of items of depreciation which, though certainly relevant for conventional accounting and taxation purposes, may need to be adjusted to reflect a practical business assessment of the activities on the land.
Mr O’Connor referred me to Whackett v. Chief Executive, Department of Lands (unreported 3 November 1995) and to Taylor v. Chief Executive, Department of Lands (1993) 14 QLCR 477. He said that these authorities give guidance as to the matters which may be considered in considering the question of whether the enterprise carried out on the land “has a significant and substantial commercial purpose or character”. He submitted that, having regard to these cases, one should consider the income generated from the breeding and fattening activity; the area of land used and able to be used; the number of livestock carried and able to be carried and turned off; and the plant and improvements on the land. He argued that it is quite clear that the cattle grazing activity carried on the subject land cannot satisfy the requirement of having a significant and substantial commercial purpose or character when one considers these matters. I agree with this submission. Whilst the property appears to be well equipped, the enterprise carried out on it could at best be described as modest.
From the evidence I heard, it is abundantly clear to Mr Goostrey that the business carried out on his land is not sufficiently substantial to survive and to produce an income suitable to his family needs. He has decided, therefore, to embark upon a change in the nature of the enterprise to that of the production of yearling beef, a change whose prospects are not clear to me on the evidence, though his advice appears to be that a profitable outcome should result. I have limited evidence concerning the anticipated business results from the shift to a yearling beef enterprise and no evidence of changes which have been made to allow such an enterprise to replace the breeding and fattening activities carried out on the land in the past.
In the result, I find that the appellants have not demonstrated that the use of the subject land satisfies the definition of “farming” provided by s.17 of the Valuation of Land Act. I acknowledge that this outcome would not be welcomed by the appellants and may, indeed, be perplexing to them given that the activities carried out on their land have all the appearances to them, and perhaps to their friends and family, as being those of a small farm. Indeed, Mr Goostrey said that the State Department of Primary Industries recognises him as a primary producer for its purposes. He also said that because of work commitments on the property he had not been able to take a holiday for some years. I am obliged, however, to apply the law as it is expressed by Parliament in the words contained in s.17 of the Act and those words lead me to the clear conclusion that the valuations placed on the subject land at each relevant date by the Chief Executive should remain undisturbed. The appeals are therefore dismissed and the valuations of the Chief Executive in the amounts of $330,000 as at 1 January 1995 and $390,000 as at 1 January 1996 are affirmed.
RP SCOTT
MEMBER OF THE LAND COURT
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