Gordon J Wyland & Helen M Wyland v. Minister for Natural Resources

[1996] QLC 50

LAND COURT

BRISBANE

26 APRIL 1996

Re:	Determination of unimproved value for purposes
of conversion of tenure.
Special Lease No. 35/37468, Rockhampton District
Lessees:  Gordon J Wyland and Helen M Wyland

(Hearing at Rockhampton)

DECISION ON RE-HEARING

On 26 July 1995 this Court determined the unimproved value of Special Lease No. 35/37468, Rockhampton District, for the purposes of conversion of tenure as at 19 February 1990 at $60,000. The lessees subsequently applied for a re-hearing of the matter under the provisions of s.43 of the Land Act 1962 and their application was heard at Rockhampton on 17 November 1995.

Special Lease No. 35/37468, Rockhampton District, has an area of 202.343 ha and is situated on Atkinson Road at the Eden Bann Road junction, about 19 km north-west of Yaamba and about 54 km from Rockhampton. It is part of an aggregation held by the Wyland family and used for grazing beef cattle.
At the hearing, evidence for the lessees was given by registered valuer, Mr JC Compton, and for the Crown by Mr DW Drew, a registered valuer employed by the Department of Lands. Mr Compton valued the land at $40,500, or $200 per ha, on the basis of its value as cattle grazing land. On the other hand, Mr Drew valued the land at $75,000, on the basis of its value as a rural residential site.
I do not propose to repeat the evidence that led to my determination of the unimproved value at $60,000. It is sufficient for this purpose to say that the issue as to the valuation of the land turned, at least to some extent, on the timing of the upgrading of Atkinson Road as part of the access to the Eden Bann Weir on the Fitzroy River some kilometres to the south-west of the subject land.
Mr Compton was of the opinion that there was no demand for rural residential sites west of Alligator Creek at the relevant date. Mr Drew, however, gave evidence of land situated only slightly to the east of the subject land on Atkinson Road, which had been subdivided and sold by a Mr Goudie in the period between August 1991 and June 1992. It was assumed by both valuers that Atkinson Road had been upgraded at least to the Goudie subdivision by mid-1991.

Although neither valuer could be certain just when Atkinson Road was upgraded, the evidence was such as to persuade me to hold that at the relevant date a prudent purchaser would have been aware that Atkinson Road was to be upgraded to provide access to the Eden Bann Weir.

The application by the appellants for a re-hearing of the matter was granted as they were able to produce evidence to prove that as at the relevant date, no firm decision had been made by the Water Resources Commission as to the site of the weir to supply water to the Stanwell Power Station. That decision was taken in early 1991.

In addition, evidence from Mr Goudie was to the effect that at the time of his application to the Livingstone Shire Council for subdivision of his land on 23 April 1991, he was not aware that Atkinson Road was to be upgraded. He was of the opinion that the subsequent upgrading of the road did not increase the saleability of his subdivided lands. His affidavit stated that, "Many of the people who purchased the lands have purchased them because they wished to have a quiet weekender or a rural homesite where they could live in quiet and secluded circumstances.".
Subsequent to 1991, Mr Goudie subdivided other lands nearby and found that those lands were not easy to sell as rural residential homesites. He felt that there was a limited demand for rural homesites in that locality.
Both Mr Compton and Mr Drew analysed a further sale of a property known as "Pine Hill", situated only slightly to the north-east of the subject land. "Pine Hill" consisted of two lots, Lot 1938 on Plan LBG 40124 and Lot 2095 on Plan LBG 40142, with a combined area
of 441.9 ha. It sold in January 1988 for $92,000 and was analysed by Mr Compton to show an unimproved value of $68,295 and by Mr Drew to show an unimproved value of $75,000.
The valuers agreed that although the sale occurred some two years before the relevant

date, there had been little increase in the market value of land in the area in that period. Mr Drew thought it had sold as a rural residential homesite. The differences in their respective analyses of the sale were largely the result of their different approaches to the highest and best use of the property at the date of sale.
As a small grazing property Mr Compton considered that "Pine Hill" was somewhat

was inferior, because it had a larger area of harder country.

similar to the subject land. It comprised basically similar coastal forest breeding country, but support his apportionment of $20,000 to the 408 ha of Special Lease in his analysis of Sale No. 1 at the previous hearing. However, I did not find that evidence persuasive and prefer not to rely on the sale with such a large Special Lease component.

Mr Drew's analysis of the "Pine Creek" sale was on the basis of its value as a rural

residential site. He reasoned that as the purchasers had bought the property to build a house and live there and the male purchaser works elsewhere in the locality as a miner, he assumed it had been purchased as a rural residential site. He concedes that it is also used for the
running of cattle, although he thinks that only about half the property is usable for grazing.

Mr Drew contended that his analysis of the sale to an unimproved value of $75,000

supported his application of $75,000 to the subject land as a rural residential site, as he opinion. It was now clear that at the relevant date a prudent purchaser would have no knowledge that Atkinson Road would be upgraded. However, Mr Drew felt his valuation was supported by Mr Goudie's evidence that the purchasers of rural homesites had little regard to the condition of roads in setting the prices they were prepared to pay, because other attributes were more important. However, he conceded that he had originally assumed that the upgrading of the road would have increased the saleability of rural residential land.

believed it to be similar to the subject land. He thought that the market for rural residential
land had not changed between the date of sale and the relevant date for the present matter.

Following the original hearing, my determination of unimproved value of the subject

land was based largely on the fact that a prudent purchaser would have been aware that assumed that the upgrading was at least to the Goudie subdivision by that time.

The evidence produced at the re-hearing has clearly shown that at the relevant date

the Water Resources Commission had not finally decided upon the location of a weir to
supply water to the Stanwell Power Station. Therefore a prudent purchaser of the subject
land could have had no knowledge that Atkinson Road was to be the access road to a weir.

Mr Goudie’s evidence indicates that the condition of Atkinson Road played little or

no part in the saleability of his subdivisions. Those subdivisions did not reach the market
until well over 12 months after the relevant date. Mr Goudie felt that there had been a
limited demand for rural residential property in the area then and later.

The evidence regarding the sale of "Pine Hill", being some two years prior to the

relevant date, would normally be of little assistance in arriving at the unimproved value of the
subject land. However, both valuers agreed that there was little increase in the market for
such land between the date of sale and the relevant date, regardless of whether the property
was considered as a small grazing proposition or as a large rural residential site. Therefore, I
am prepared to accept that the sale of "Pine Hill" is an indicator of the unimproved value of

the subject land.

However, the question remains as to whether it should be regarded as a grazing

property or as a rural residential site. If there was only limited demand for rural homesites in Mr Drew assumed that the property had been purchased as a rural residential site because the purchasers have since constructed a home on Lot 1938 and that one of them works off the property. However, there is also evidence that grazing improvements have also been carried out on the land. The fact that it is of relatively small area by no means disqualifies it from being considered as grazing land. There was no evidence of a demand for rural residential sites west of Alligator Creek in 1990, let alone early 1988.
the area in 1991 and 1992, the demand for such land would have been negligible in 1988.

There is another reason why "Pine Hill" should not be regarded as a rural residential

site. As pointed out by Mr A Palmer, Solicitor for the lessees, "Pine Hill" comprises two
separately surveyed lots. There is nothing to prevent the purchasers from selling one of those
titles separately. If there was a demand for rural residential sites in the area in 1988, then
“Pine Hill” should be regarded as potentially two rural residential sites. If Mr Drew’s
reasoning was correct and the price paid for "Pine Hill" was truly reflective of its value as
rural residential land, then the potential for resale of each lot separately means that the sale of
"Pine Hill" is considerably superior to the value of the subject land which as a single lot does
not have that potential.

However, as I have already indicated, I prefer the approach taken by Mr Compton to

regard both the sale and the subject land as small areas of grazing land as there is no evidence at the relevant date that they had potential as rural residential sites. Mr Compton considered that the sale and subject land had similar carrying capacities. However, he conceded that the subject land was superior to the sale because proportionally it had more usable country,
although Mr Compton did not classify the land. If Mr Drew's classification is accepted, then
only approximately half of "Pine Hill" is usable for grazing.

In the circumstances I have come to the conclusion that hectare for hectare the subject

land is somewhat superior as grazing land to "Pine Hill". As mentioned above, a greater
proportion of the subject land is usable for grazing and in addition, it is somewhat smaller,
being approximately half the size. Although "Pine Hill" is situated somewhat closer to the
bitumen sealed Bruce Highway, there is evidence that its access problems in wet weather are
somewhat similar to those of the subject land. Neither access could be regarded as all-
weather.

With such small areas of land, comparisons of beast area values are of little

assistance. It seems to me preferable to compare the properties on a rate per hectare basis. Having regard to the whole of the evidence, I have come to the conclusion that if the "Pine Hill" sale showed Mr Compton approximately $155 per ha, the subject land being generally
better country and smaller would, by direct comparison, have an unimproved value of $250

per ha.

Accordingly, the previous determination of the Land Court is set aside. The

unimproved value of Special Lease No. 35/37468, Rockhampton District, for the purposes of
conversion of tenure is determined at the sum of Fifty Thousand Five Hundred Dollars

($50,500).

JJ TRICKETT
PRESIDENT OF THE LAND COURT