Greenaway v Department of Natural Resources, Mines and Water

[2006] QLC 54

LAND COURT OF QUEENSLAND

CITATION:	Greenaway v Department of Natural Resources, Mines and Water [2006] QLC 54
PARTIES:	James Wilsby and Catherine Elizabeth Greenaway (appellants)
v.
Chief Executive, Department of Natural Resources, Mines and Water (respondent)
FILE NO:	AV2005/0826
DIVISION:	Land Court of Queensland
PROCEEDING:	Appeal against annual valuation under Valuation of Land Act 1944
DELIVERED ON:	11 September 2006
DELIVERED AT:	Gatton
HEARD AT:	Toogoolawah
MEMBER:	Mr PA Smith
ORDER:	The appeal is dismissed.
CATCHWORDS:	Valuation – Factors in valuation – Farming -Presumption in favour of correctness of valuation – Valuation of Land Act 1944
APPEARANCES:	Mrs C Greenaway for the appellants Mr M Heather, Senior Legal Officer, Department of Natural Resources, Mines and Water for the respondent

Background:

1. This is an appeal by the appellants against a valuation by the respondent, pursuant to the Valuation of Land Act 1944 (the VLA) which valued the appellants’ property situated at the corner of Hecks Road and Barretts Road, Fairney View in the sum of $255,000 as at 1 October 2004.  The appellants contend for a valuation of $130,000 to $160,000.

2. The land has power, telephone and stock water connected.  The area of the land is 22.34 hectares and was originally of regular rectangular shape, from which four 1 hectare allotments have been excised.  By road, Fernvale is located 6 km to the northeast, Lowood is 10 km to the west and Ipswich CBD is 25 km to the south.  The block is gently to moderately sloping, partly intercepted by a gully.  The property has been fully cleared in the past, but much of the land has reverted to scrub cover and various weeds.  The land’s highest elevation is approximately 95 metres above sea level, and at this level there are open rural views to Flinders Peaks in the distant south and wide views of the D’Auguilar Range to the east and north.  The land is zoned "Rural" under the Esk Shire Council’s Planning Scheme, within the "Rural Pursuits Precinct".  Its highest use is rural residential, and no further subdivision is possible.

3. The appellants were represented by Mrs Greenaway, who gave evidence at the hearing.  Mrs Greenaway has no legal or valuation qualifications.  The respondent was represented by Mr M Heather, a senior legal officer employed by the respondent, and relied on evidence of a registered valuer, Mr C Clark.   

Relevant legislative provisions

1. Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land.  Relevantly, s.3(1) of the VLA says as follows:

   "3.(1) For the purposes of this Act –

   'unimproved value' of land means –

   (a)     in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and

   (b)     in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist."

1. I note that the subject land in this matter is improved.  Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land.  An assessment is then undertaken as to the highest and best use of that land.

2. As the President said in Fairfax v Department of Natural Resources and Mines [2005] QLC 0011 at paragraphs 11 and 12:

   "[11]The principles for determination of the 'market value' of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441).

   [12]It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land.  In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:

   'Land in my opinion differs in no way from any other commodity.  It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales.'"

I respectfully agree with these observations.

Presumption of correctness of valuation

1. I now turn to s.33 of the VLA, which states as follows:

   "33.Status of valuation

   Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.

2. This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation at page 56:

   "In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13(7) is rebutted."

It should be noted that s.33 of the VLA is in essentially the same terms as what was then s.13(7) of the Act. 

The issues in the Appeal

1. The appellants lodged their notice of appeal[1] in this matter by post on 7 September 2005 following the respondent’s decision on objection dated 2 August 2005.   The appellants’ grounds of appeal essentially are that the valuation is far in excess of the land’s value; the property does not have a sealed road, kerbing, sewerage or town water; the land cannot be subdivided; land features such as contour, gully and overall size inhibits development; there are no nearby bus or rail services or close hospital; and that 40 acres was recently sold for $240,000 in the Brisbane Valley.  The appellants’ position is also clearly stated from the following quote from ground 11 of the objection:

   "We do not wish to sell our property & can’t cut a parcel of land off to give us funds & we have owned this property for over 33 years.  The valuation puts our only form of income, the aged pension, being cut in half or worse."

   [1] Exhibit 1

2. I accept Mrs Greenaway’s evidence, with respect to each of the disabilities referred to in the grounds of appeal, apart from her valuation evidence which I will deal with separately.  However, that said, I also accept that the appellants appeal grounds have been properly taken into account by Mr Clark in both his oral evidence and his report. 

3. There is no doubt that the appellants, as pensioners who have owned and worked the subject land for decades, find themselves in what they see as a difficult position by the manner in which the valuation may impact their pension entitlements.  However, it is not the role of this Court to determine appeals such as this on any basis outside that of the VLA and decided precedents.  A direct comparison approach has been adopted by the respondent’s valuer to determine the unimproved value of the land.  As is so often the case in matters such as this, the issues basically all come down to market evidence.  This is reflected in the sales evidence set out in Mr Clark’s report.  Mr Clark’s evidence relates to four sales as follows:

Sales	Area Ha	Date of Sale	Analysed U/Value	Applied U/Value 1/10/2004	Comparison
1 Postman’s Track MARBURG	47.6	20/08/2004	$325,500	$260,000 (primary production) $285,000 (notional site)	Superior
2 Tallegalla – Two Tree Hill Road, MINDEN	11.09	31/08/2004	$236,250	$235,000	Inferior
3 Schultzs Road IRONBARK	7.45	17/09/2004	$220,000	$190,000	Inferior
4 Glamorgan Vale Road GLAMORGAN VALE	15.42	13/01/2005	$234,500	$150,000 (primary production) $212,500 (notional site)	Inferior

1. At this point, it is appropriate to deal with one important aspect of Mrs Greenaway’s evidence in support of the grounds of appeal.  She was under the impression that the sales 'cut- off' date for determining the valuation was 30 June, 2004, and that no sales could be considered after 1 October 2004[2]. Mrs Greenway’s position is contrary to the valuation principles set out in previous decisions such as the methodology adopted by the President in Fairfax. Accordingly, Sales 1, 2 3 and 4 are all appropriate sales for the court to consider.

   [2] See transcript, page 7

2. As regards sales evidence, I must commend Mrs Greenaway for the time and effort she has clearly put into preparing her material for the Court.  I should add that the respondent, in reply submissions, contends that Mrs Greenaway’s written submissions should not be considered as they contain a large amount of new 'evidence' and are written in such a way as to make it virtually impossible to separate out submissions from fresh 'evidence'.  I accept in general terms Mr Heather’s submissions in this regard on behalf of the respondent.  However, that said, the thrust of Mrs Greenaway’s submissions, absent the new 'evidence', are clear to me.  Further, having read the entirety of Mrs Greenaway’s submissions, including the new 'evidence', I can say that even with that evidence, my conclusions in this matter would not have altered.

3. As a person without legal or valuation qualifications, Mrs Greenway has presented her sales material in a clear format.  Further, her approach could be considered sensible, with her conclusions logical.  However, as pointed out by Mr Heather, Mrs Greenaway misses many of the fundamental legal and valuation points applicable to cases such as this. 

4. Perhaps the most telling lack of understanding on the part of the appellants relates to the operation of s.17 of the VLA.  Mrs Greenaway clearly sees a distinction between what she calls "farmland" and "residential farmland"[3].  As the appellants do not have a residence as such on the subject land, they in effect seek a "farmland" valuation. 

   [3] see Exhibit 2, page 2

5. Without any doubt, at some time in the past the appellants engaged in farming operations on the land.  However, it is also clear that a number of years ago, due to health and age issues, the appellants reduced operations to a minimal amount. Section 17 of the VLA has specific operation with respect to land used for farming or for a single dwelling house.  As Mr Heather pointed out, the undisputed fact that the land cannot be subdivided results in the land, despite its size, being valued as a single residence block.

6. Should the land nonetheless be treated as for the purposes of farming as the appellants contend?  It certainly would appear to be against the intent of the legislation for landowners to suffer disadvantage in circumstances where they have conducted farming operations for many decades only to have to cease farming due to health issues and old age, yet still wish to retain their "farm" as part of their retirement, conducting lower scale rural pursuits.  In my view, s.17 of the VLA clearly contemplates such a situation.  However, unfortunately for the applicants, by their own evidence the property does not have a gross annual return calculated over a 3 year period of at least $5,000 (VLA s.17 (c)(i)).  Further, there is simply no evidence as to when the property would have last had such a gross annual return.  Further, I would expect that the property, for farming purposes, has in the past had significant "farm improvements"[4].  However, I am only permitted to determine matters such as this on the basis of evidence before me, and not on the basis of a guess or a hunch.  It is a matter for the appellants to provide evidence that s.17 applies.  There simply is none. 

   [4] see s.17(c)(iv) VLA

7. It is appropriate to add that, if the appellants believe that the provisions of s.17 of the VLA apply to them, particularly with respect to the value of farm improvements on the land, they should make an application, supported by relevant material, for the respondent’s departmental officers to consider.

8. I accept the valuation evidence of Mr Clark.  Unfortunately, the appellant’s material does not adequately address valuation methodology or distinguish between properties where, for instance, s.17 applies and those where it does not.   Whilst some points made by the appellants as to the particular aspects of Sales 1 – 4 referred to by Mr Clark are arguable, on the basis of the evidence in its entirety those points are not sufficient to disturb the presumption of correctness.[5]

   [5] see paragraphs 7 and 8 above

9. Having considered all of the evidence before me, and applying the relevant authorities, I am not satisfied that the valuation of $255,000 involves a significant error of fact or was arrived at by a fundamentally flawed method. 

Conclusion

1. For the reasons set out above, I have reached the conclusion that the appellants have failed to establish that the respondent’s assessment of the unimproved value should be reduced to $130,000, or in any amount at all. It follows that the appeal must be dismissed. The valuation of the subject land is accordingly affirmed in the sum of $255,000.

Order

The appeal is dismissed.

P A SMITH

MEMBER OF THE LAND COURT