Hedges v Chief Executive, Department of Natural Resources
[1998] QLC 87
•31 July 1998
|
BRISBANE
31 July 1998
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Shire of Gatton.
(V97-179 and AV97-180).
Nerida June Hedges
v.
Chief Executive, Department of Natural Resources
(Hearing at Gatton)
D E C I S I O N
These are two appeals against unimproved values determined by the respondent Chief Executive in respect of a parcel of rural land in the Iredale District of Gatton Shire, for two valuation periods, as at 1 January 1996 and as at 1 October 1996. The two appeals were heard together.
Introduction
Nerida June Hedges is the owner of two adjoining blocks of land described as Lot 2 on RP 163885 and Lot 2 on RP 32755, Parish of Terry, containing a total area of 43.67 hectares. As at 1 January 1996, the respondent valued the lands as one parcel and determined the unimproved value of that land at $88,000 and as at 1 October 1996, at $84,000. Following unsuccessful objections against both valuations, the owner appealed to the Land Court, advising that her estimate of the unimproved value in each case was $47,500.
The grounds of appeal in each case related to:•the Section 17 "farming" concessional valuation;
•recent sales in the Iredale district;
•relativity with the valuations of neighbouring properties; and
•disabilities of the property.
At the hearing of the appeals, the appellant was represented by her sister, Miss DJ Hedges, who also gave evidence. The respondent was represented by Mr D Wall, while evidence for the respondent was given by Mr DJ O'Connor, a registered valuer employed by the Department of Natural Resources.
The Property
The subject land is situated at Iredale, about 16 km east of Toowoomba and about 5 km south-west of Helidon. It is on the corner of the bitumen sealed Spa Water Road and Gierkes Road, the former road being a dual lane bitumen sealed carriageway while Gierkes Road has a single bitumen seal, but at the date of both valuations was formed gravel. The single lane gravel Friis Road abuts part of the southern boundary of the property. Telephone, electricity, mail and school bus services are available from Spa Water Road. The land is zoned "Rural" under the Shire of Gatton Town Planning Scheme and is used for rural residential purposes and for the breeding and growing of cattle. A single dwelling house is located on the property and, although it comprises two separately surveyed and saleable parcels, it has been valued as a single parcel under the "single dwelling house" provisions of section 17 of the Valuation of Land Act.
The subject land had been part of an aggregation of seven parcels with a total area of 114 hectares held by the Hedges sisters' father until his death in late 1995. The appellant now holds the two subject parcels, while her sister holds the other five.
Mr O'Connor described the land as comprising easy sloping sandstone scrub ridge and gully flat, with good rural views available from the higher slopes along Spa Water Road. In the course of her evidence, Miss Hedges stated that it comprises mainly green panic improved pastures, with about 8 hectares of old cultivation, which is now infested with clockweed.
Miss Hedges explained that the property is situated at the lower end of the valley, with three major water courses merging on the north-east of the property. This results in access and erosion problems after heavy rain. The water in these watercourses is spa water and is not suitable for domestic or irrigation purposes. It is of only marginal quality for stock. She produced an underground water analysis report which indicated that the underground water is also spa water and is of similar quality.
Miss Hedges said that the property is presently carrying 30 head of cattle. However, she conceded that at the relevant dates of the two valuations, her sister was only building up the cattle business and she abandoned the first ground of appeal, that the property should have been valued under the concessional provisions of section 17 of the Act as land used for purposes of "farming".
Miss Hedges explained that a powerline easement ran from east to west across both parcels of land. Although Clause 11 of the easement document restricted some of the uses that can be made of the land, she conceded that the powerline caused no real problem and was not of any great concern. She merely pointed out its presence. Mr O’Connor was of the opinion that it had no adverse effect on the unimproved value and I accept his opinion.
The Appellant's Comparisons
In relation to the ground of appeal concerning sales of properties in the district, Miss Hedges referred to the sale from Lavender to Knight of a 42.325 hectare property, Lot 6, RP 838693, immediately to the north of the subject land. It sold in 1995 for $150,000, with the same access and virtually the same type of country as the subject land. However, it did not suffer from flooding. Miss Hedges went on to say that the improvements on that property included a 5-bedroom brick house, the value of which when removed from the sale price, left very little for unimproved value. That property had been valued by the respondent at $84,000 as at 1 January 1996, and at $80,000 as at 1 October 1996.
Miss Hedges also referred to a 41 hectare block owned by the Fletchers, which had been on the market for some time at $166,000. It was improved with a house, shed, bore and yards and was, she said, an indication of what properties are selling for.
With regard to the ground of appeal relating to relativity, Miss Hedges referred to Lot 117, a 58.02 hectare property on Spa Water Road, which had more cultivation land than the subject land, a very good dam and two bores and hills which were not as steep. It had been valued by the respondent at $85,000 as at 1 October 1996, only $1,000 more than the subject land, but Miss Hedges thought it considerably superior.
Next she referred to a 49.82 hectare property owned by Shepherd, further to the south of Gierkes Road, which she described as having similar country to the subject land, with a very gentle elevated slope at the front but with a very steep pinch at the back of the property. It had been valued by the respondent as at 1 October 1996, at $80,000, which, in her opinion, made the valuation of the subject land seem too high.
With respect to her estimate of unimproved value of $47,500 in each case, Miss Hedges admitted that it was based on the property having a section 17 farming concessional valuation. Since she had abandoned that ground of appeal, she altered her opinion and felt that the unimproved value should be $70,000 to $75,000, based principally on comparison with Knight's property, Lot 6. Therefore, the Knight's property was her principal comparison, both as a sale and for relativity purposes.
The Respondent's Sales for the Valuation as at 1 January 1996
In defending the respondent's valuations of $88,000 as at 1 January 1996, and $84,000 as at 1 October 1996, Mr O'Connor referred to separate sales for the different dates of valuation. To support the $88,000 valuation, Mr O'Connor relied upon four sales of lightly improved land in the immediate vicinity of the subject land. His Sale No. 1 was a property of 32.375 hectares which sold in March 1995 for $60,000, analysed to show an unimproved value of $46,050, and in respect of which the respondent applied an unimproved value of $45,000 as at 1 January 1996. The property is situated in Paroz Road, just to the south of the subject land, and he described it as comprising moderate to steeply sloping sandstone scrub, with limited dry weather access, because of three deep gully crossings across Paroz Road. He said that very elevated house sites were available, but the access to and the lack of water at the elevated area restrict such utilisation. He noted that the property was resold in August 1995 for $70,000.
In comparing the sale to the subject land, Mr O'Connor stated that it is smaller, significantly steeper and with much poorer access. Overall he considered it significantly inferior to the subject land, as indicated by the applied value of $45,000.
Miss Hedges did not take issue with Mr O'Connor's description of the sale. While not disagreeing with Mr O'Connor's comparison, she stated that as it was a lot smaller block, it was hard to really compare it.
Mr O'Connor's Sale No. 2 was a 32.11 hectare parcel which sold in April 1995 for $60,000, analysed to show an unimproved value of $46,730 and in respect of which the respondent had applied an unimproved value of $46,000 as at 1 January 1996. Mr O'Connor described the property as moderate to steeply sloping sandstone scrub, with limited dry-weather access by means of a track off Gierkes Road, with a deep gully crossing to negotiate. It has, he said, very elevated house sites available, however, like Sale No. 1, the access and lack of availability of water restrict the utilisation as such.
Comparing the sale with the subject land, Mr O'Connor stated that it is smaller, significantly steeper and with much poorer access. It had lantana regrowth at the time of sale and Fletchers Road was a poor dry weather track which has since been upgraded. Overall he considered the sale to be significantly inferior to the subject land.
Sale No. 2 is situated adjacent to Sale No. 1 and Miss Hedges considered them to be virtually identical. She pointed out that while access to the more elevated building site was difficult, it had a good flat on the road side of the gully which would provide a perfectly adequate building site.
Mr O'Connor's Sale No. 3 is situated in Herrons Road, has an area of 40.468 hectares, sold in June 1995 for $120,000, and analysed to show an unimproved value of $90,230. The respondent had applied an unimproved value of $75,000 to that land as at 1 January 1996.
Mr O'Connor described the property as mainly cleared forest flat with low rises and with easy scrubby rises on the western and south-eastern sides, having about 10 hectares of flat arable land with limited benefit from frontage to the salty Monkey Waterholes Creek. Its access was by means of a dry weather formed track along Herrons Road, about 600 metres off the bitumen sealed Spa Water Road.
Mr O'Connor considered that the sale had inferior access, availability of services and country type. It also lacked the subject land's elevation and outlook and overall he considered the sale to be inferior.
Miss Hedges disagreed that the sale was inferior to the subject land. She did not agree that the creek water was very salty, saying it was drinkable. Although it was described as forest country, she said its hills were all improved green panic pasture, the same as the subject land.
Mr O'Connor's Sale No. 4 was of a 30.281 hectare parcel situated in Herrons Road, which sold in September 1995 for $70,000, analysed to show an unimproved value of $62,140 and in respect of which the respondent had applied $60,000 as at 1 January 1996. Mr O'Connor described that property as mainly cleared forest flat with minimum benefit from the salty Monkey Waterholes Creek, with a swampy flat influence along the southern boundary. Its access was poor and comprised about 1100 metres of dry weather track off the bitumen sealed Spa Water Road. He noted that the high cost of obtaining power influenced the sale price.
In comparing the sale with the subject property, Mr O'Connor said that the sale had inferior access, availability of services and country type. It also lacked its elevation and outlook and overall he considered the sale to be inferior, mainly due to its poor access and lack of services.
Miss Hedges commented that the property had been a dairy farm prior to the sale and had a lot of cultivation paddocks, which could be either kept as cultivation or put down to improved pastures. She conceded that it had no elevated house site, but it did have power right at Herrons Road. She said that the purchasers access the property with a normal car, but agreed that the track would be inaccessible in wet weather. She seemed to concede that it was not as good as the subject land.
The Respondent's Sales for the Valuation as at 1 October 1996
In defence of the respondent's valuation of $84,000 as at 1 October 1996, Mr O'Connor relied upon four different sales.
His Sale No. 1 is of a 66.368 hectare parcel situated in Fletchers Road, which sold in April 1996, for $67,500, analysed to show an unimproved value of $54,220 and in respect of which the respondent applied $54,000 as at 1 October 1996. Mr O'Connor described that land as moderate to mainly steeply sloping sandstone scrub, with limited dry weather access, having a deep gully crossing to negotiate along Fletchers Road. It has very elevated house sites, but access and the availability of water restrict such utilisation. It comprises good quality scrub grazing land, it is larger, and he thought significantly steeper, with much poorer access and availability of services. Overall he considered the sale to be significantly inferior to the subject property.
Miss Hedges conceded that although larger, it was mountainous and inferior to the subject property.
Mr O'Connor's Sale No. 2 is of a 16.09 hectare property situated in Twidales Road, which sold in August 1996 for $77,500, analysed to show an unimproved value of $74,380 and in respect of which the respondent had applied $65,000 as at 1 October 1996. Mr O'Connor described that land as an easy sloping sandstone forest elevated rural site, with gravel road access, only 500 metres south of the Warrego Highway. Power is available from the northern boundary. It is smaller with inferior access and availability of services. Overall Mr O'Connor considered the sale to be inferior to the subject property.
Miss Hedges thought there was an element of special purpose about that sale. She explained that Robinsons' Circus purchased the property to start a lion park. However, because of protests from the neighbours and the fact that Robinsons' Circus could not guarantee the security of the animals from escape, they were not able to proceed with that venture.
Mr O'Connor's Sale No. 3 is of a larger 129.75 hectare parcel situated off Spa Water Road, which sold in November 1996 for $140,000, analysed to show an unimproved value of $114,000, the figure which the respondent had applied as at 1 October 1996. Mr O'Connor described that property as mainly cleared forest flat, with about 100 hectares of flat, dry arable land, with limited benefit gained from frontage to salty Monkey Waterholes Creek. Access was by means of a dry weather formed track off Spa Water Road, but with the difficulty of negotiating a significant unnamed gully which ran parallel with the southern boundary. The sale is much larger, but had inferior access and availability of services, lacks the elevation and outlook of the subject land, but overall, mainly because it is significantly larger, Mr O'Connor considered it to be superior.
Miss Hedges regarded that property as an excellent cattle property. It had large creek flats, a lot of cultivation and had been used for dairying. It had two large dams, but bad soakage. Because of the difference in their sizes, she was reluctant to make any comparison with the subject land.
Mr O'Connor's Sale No. 4 is of a smaller 11.43 hectare parcel situated in Spa Water Road, which sold in August 1997 for $70,000, analysed to show an unimproved value of $61,450 and in respect of which the respondent had applied $49,500 as at 1 October 1996. Unlike the other sales, it was zoned "Rural Residential", not "Rural", but he considered that to be of no significance. He described it as mainly partly cleared forest slopes, with scrubby influence and narrow frontage to the bitumen sealed Spa Water Road. A gully at the road frontage had to be negotiated to reach possible elevated house sites which would have a rural outlook. It is much smaller than the subject land and has similar access and availability of services, but because it lacked the elevation and outlook and had inferior country type, he considered it to be inferior, mainly due to its size.
Miss Hedges said the sale property was mainly green panic improved pastures with a scrubby influence. She believed that it was purchased by an adjoining owner for access purposes. Therefore, she considered there was an element of special purpose about that sale.
Mr O'Connor explained that from the latter sale and other sales of rural residential lands in the shire, the respondent had come to the conclusion that there had been a reduction of 5 percent in the unimproved value of rural residential lands. He also explained that Gierkes Road had been upgraded to a single bitumen strip, which he called a "dust seal", after the date of the two valuations, but he did not consider that the upgrading had affected the unimproved values. He was of the opinion that the most important factors affecting the value of rural residential land were elevation and views, and good access, whether it be by gravel or bitumen strip road. Also important was availability of services, such as the cost of providing electricity to the site.
The Issues
There are relatively few matters in issue between Miss Hedges and Mr O'Connor in these cases. There is no disagreement about the description of the subject land or its disabilities. Mr O'Connor was well aware of all the matters which Miss Hedges raised. She was also aware of all the sales relied upon by Mr O'Connor to support the valuations.
Having abandoned the first ground of appeal, Miss Hedges relied heavily on the comparison with the property immediately to the north of the subject land, Lot 6, of 42.325 hectares, which sold from Lavender to Knight for $150,000. Mr O’Connor said that it subsequently resold for $230,000. The respondent applied an unimproved value of $84,000 as at 1 January 1996, and $80,000 as at 1 October 1996, compared with $88,000 and $84,000 respectively on the subject land.
Mr O'Connor said that he did not use that sale as a basis of valuation. He preferred to rely on sales of lightly improved land. That sale included a 5-bedroom brick house and other improvements, which, he said, raised the difficulty of accurately determining the added value which those improvements gave to the land. By using vacant or lightly improved sales that problem did not arise, at least not to the same extent.
I am firmly of the opinion that highly improved sales, such as Lot 6, should be avoided. It is well established that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved land. (See the Land Appeal Court in Grahn v. The Valuer-General (1992) 14 QLCR 327 and the cases cited therein.)
Miss Hedges' main argument is that there is no difference between the value of the subject land and the value of Lot 6. However, after considering the whole of the evidence, I am persuaded by the reasoning of Mr O'Connor, particularly the fact that Lot 6 has had three allotments subdivided from its frontage to Spa Water Road and another from its frontage to Herrons Road, leaving it with limited frontages to both roads which, in my view, must affect its unimproved value. For that reason alone I consider it appropriate that Lot 6 is valued somewhat less than the subject property.
In relation to the other ground of appeal raised by Miss Hedges, it is apparent from his evidence that Mr O'Connor was well aware of the problems of the spa water springs and the erosion that results after heavy rain. I am satisfied that he took these matters into account in considering the valuation of the subject land and other properties in the area.
The Burden of Proof
The provisions of the Valuation of Land Act place the burden of proving the grounds of an appeal upon the landowner. Although Miss Hedges has challenged the relativity of values and some of the sales used by the respondent, I have come to the conclusion that Mr O’Connor has adequately answered those challenges. I do not feel that she has discharged the burden of proof. Therefore, the appeals must fail.
Accordingly, the appeals are dismissed and the unimproved values of the subject land as at 1 January 1996 and 1 October 1996 in the sums of $88,000 and $84,000 respectively, are affirmed.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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