Hannah v Chief Executive, Department of Lands

[1995] QLC 146

[1995] QLC 146

 

  LAND COURT

BRISBANE

27 October 1995

Re:     Appeal against annual valuation
Valuation of Land Act 1944.
  Shire of Balonne.
  (AV94-304).

Denis B Hannah and Glenys M Hannah
  v.
  Chief Executive, Department of Lands

(Hearing at St George)

D E C I S I O N

Mr and Mrs Hannah are the owners of land described as Lot 5 on Plan BEL5380 and Lot 1 on Plan PER7020, and Permit to Occupy No 39/7020, Parish of Wagaily, containing an area of 65 hectares. Under the provisions of the Valuation of Land Act 1944, the respondent determined the unimproved value of that land as at 30 June 1993, at $18,000. Mr and Mrs Hannah objected against that valuation and subsequently were advised that their objection had been allowed and the valuation altered to $14,500. The owners then appealed to the Land Court against that decision on their objection, advising that in their opinion the unimproved value of the land is $5,000.
           The subject land is situated about 14 kilometres by road from St. George, with access by means of 3 kilometres of bitumen sealed road and about 11 kilometres of formed earth and gravel road.  It is zoned "Rural" and power and telephone services are connected, however there are no mail or school bus services to the property.  It is separated by the road reserve from the Balonne River and the owners have an irrigation licence for a 150mm pump in the Balonne River and a 65 megalitre water allocation. 
           At the hearing, both Mr and Mrs Hannah gave evidence, while evidence for the respondent was given by Mr PJ Haydon, a registered valuer employed by the Department of Lands.
           There were a number of matters in issue between the owners and Mr Haydon.  Mr and Mrs Hannah contended that their road is the worst in the Shire, being a deep rutted dirt track which, in places, meanders between box trees.  On the other hand, while Mr Haydon conceded that the road was not good and was not regularly maintained, he thought that it was no worse than a number of other earth and gravel roads in the Shire.
           Mr Haydon described the land as being generally level forest, originally timbered with box, sandalwood and leopardwood, with an area of about 12 hectares of heavier-type country on the western end.  He stated that the majority of the soils are tight and are difficult to work for agricultural purposes.
           On the other hand, Mr Hannah said that except for about 40 acres (16 hectares) of useful black soil on the western side of the property, the remainder is sodic soil which has an excessive sodium content, which has the effect of causing the soil to set like stone once it has rained or is flood irrigated.  He said that if a plant had not emerged when this effect occurs, it cannot break the surface, and forms a zigzag stem against the crust and dies.  If a plant has emerged, the crusting and sealing of the surface prevents the plant from getting oxygen. 
           Mr Hannah said that he had been advised by the DPI that the effect can be remedied with massive amounts of gypsum, about 6 tonnes to the acre, but the costs make this prohibitive, especially in the current economic state of the industry.  He said that they had tried to grow barley, wheat, oats, canary, rye grass, sorghum and dolichos lablab but with only limited success as these crops never covered their costs.
           Mr Hannah went on to say that although they hold a 65 megalitre irrigation licence, in recent years the supply of water has proved to be unreliable.  He said the Beardmore Dam was dry for a period of approximately six months and even when there was water the percentage of the allocation was variable.  With the supply being so unreliable, it was not worth spending a lot of money to establish a crop and then let it die because there was no water available.
           Mr Hannah made the point that the property is not a cotton block.  It does not have the area or water allocation necessary.  It is also too small for grazing purposes, as it is not possible to run sufficient stock to be viable.  In his opinion, the highest and best use of the land is as a hobby farm, but he thought there was no demand for it as such because of the access.
           The owners use the land to run a few head of stock and as a place to live. They said they would like to sell it, but that was difficult because of the soil quality and the road.  The only advantage was that their children are able to attend High School in St George.  The children walk one-quarter of a mile to the river, then row across the river and walk another half a mile to a neighbour's property on the other side, from where they catch a school bus to St. George.  Access to that side of the river is by means of the bitumen sealed highway.
           Mr Haydon explained that he was not the valuer originally responsible for the valuation.  When that valuer left the Department, Mr Haydon took over the responsibility, inspected the subject land and the sales and agreed with the adjusted valuation of $14,500.
           The valuation was arrived at as follows:

65 ha @ $270 per ha   $17,550
           Less working problems 10%  $ 1,755

$15,795

Less access 7½%  $ 1,185

$14,610

Adopt $14,500 or approximately $225 per hectare.

In support of the valuation, Mr Haydon referred to the sales of two properties situated on the Mitchell/St George Road, somewhat closer to St George.  Sale No. 1, with an area of 390.4ha was sold in May 1992 for $85,000, which analysed to an unimproved value of $50,090, and an unimproved value of $47,000, or $120 per hectare, was applied as at 30 June 1993.
           Mr Haydon described that land as being fair forest country, near level belah, box, sandalwood with generally light red soils to the west and heavier melonhole country to the east.  The only water supply was from a dam on the property and it had no irrigation potential.  However, it had bitumen road frontage.
           Mr Haydon considered the subject land to be superior in value per hectare because it was smaller, had the water allocation and irrigation potential.
           Sale No. 2 is situated adjacent to Sale No. 1, has an area of 268.2 hectares, and sold in June 1992 for $66,270 which analysed to show an unimproved value of $35,910, and an unimproved value of $35,000, or $130 per hectare, was applied as at 30 June 1993.
           Mr Haydon described this land also as being fair forest, level to near level sandy red soil to the west, with heavier melonhole soils to the east.  It was originally timbered with belah, box, sandalwood and the odd wilga.  The only water supply was from a dam on the property and it had no irrigation potential.
           Mr Haydon considered the subject land to be superior to this sale for similar reasons to those for Sale No. 1.
           Mr Hannah knew these sale properties and while he agreed that the valuer's description was fairly accurate, he disagreed with his comparisons.  He did not think that either sale could be used as a comparable basis for the valuation.  He said that he felt Mr Haydon was emphasising the water and irrigation potential of the subject land.  He made the point that in recent years the water allocation on the subject was exactly the same as the sales and that was nil.  He said that the sales would have similar rainfall to St George, which was 5 inches per annum more than the subject land.  They also had much superior access.
           Mr Haydon thought that the sales had no potential for irrigation or for agriculture.  He regarded them as being purely grazing blocks with some limited cropping potential.  In this respect he thought they were inferior to the subject land.  The sales showed respectively $120 per hectare and $130 per hectare, but the subject land was much smaller.  While he agreed that it had no potential for grapes and no potential for cotton, he thought that it had some potential for fodder cropping.
           Mr Haydon said that in his opinion the heavier soil on the subject land would be better to irrigate, but he did not consider it was out of the question to water the harder country.  While he admitted that he was not familiar with the sodic-type country, he believed that it was possible to grow crops at certain times.  He had therefore considered the whole of the area for the purpose of crop-assisted grazing, suggesting that crops such as sorghum could be grown.  He said that the water allocation and the access to water on the subject land made the big difference.

Mr Haydon said that values of approximately $1,000 per hectare were applied to irrigation cotton land and values up to $1,500 per hectare were applied to grape growing properties with potential.  He was therefore comfortable with the applied value of $270 per hectare to the subject land, with the allowances made for access and for working problems.
           It emerged in evidence that Mr and Mrs Hannah were concerned that the valuation of the subject land had increased substantially, while the values for all other lands in the area had been either rewritten or reduced.  Mr Haydon explained that the valuations of grazing land in the area had generally been reduced but at varying percentages, depending on their situation and the sales in the area.  He said that over the years the valuations of small areas close to St George had got out of relativity.  He said that on this occasion the valuer had attempted to correct this situation and changed the old relativity as a consequence.  He said there was no standard increase for such properties and a number of valuations had increased significantly.
           Mr Hannah thought that the only other small primary production properties were on the other side of the river, which had soft sandy soil, bitumen road with access to the school bus.
           In this case, a small area of 65 hectares situated close to St George with a 65 megalitre water allocation from the Balonne River has been valued at $14,500.  While this does not seem to be a large valuation, there are difficulties with the property, both in terms of soil quality and access.
           Mr Haydon had the unenviable task of taking over a valuation made by another valuer.  He has looked at the sales and the subject land and has formed the opinion that in the circumstances the valuation was fair and reasonable.  However, Mr Haydon frankly admits that he has not had much experience with sodic soil.  He agrees that the highest and best use of the land is as a rural homesite, but has valued the land as if it was used for the business of "farming".  He said that if he had to value the land as a rural homesite, he would have applied approximately $40,000.  However, I was given no basis for this opinion whatsoever.
           Mr and Mrs Hannah, the owners of the subject land, consider that there is no market for the land as a rural homesite because of the poor access.  The access deters prospective purchasers.  Rather than drive their children to school at St George, they row across the Balonne River to catch the school bus on the other side.  This would seem to indicate that the subject land does not have great value as a rural homesite.
           As agricultural land, the subject land has the advantage of a water allocation, but not the area of arable country which would make best use of the water allocation.  Mr Hannah said that because the sodic soil will not absorb moisture, it was possible to grow a crop there with great difficulty, but there was no economic return on the money invested.  I accept Mr Hannah's evidence that the sodic soil is not suitable for agriculture.
           In the circumstances, weighing the whole of the evidence, I think that an adjustment should be made to the valuation.  While there is not sufficient reliable sales evidence to come to a conclusion with any great confidence, I have decided to adopt a value of $200 per hectare for the subject land.  This calculates to $13,000.
           Accordingly, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the subject land is determined at Thirteen thousand dollars ($13,000).

Member of the Land Court