Hoppitt v Chief Executive, Department of Lands
[1996] QLC 71
•31 May 1996
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BRISBANE
31 MAY 1996
Re: V95-102 and AV95-503 -
Appeals against determinations of unimproved value -
Valuation of Land Act 1944
Local Authority: Warwick
F.C. and G.M. Hoppitt
v.
Chief Executive, Department of Lands
(Hearing at Warwick)
D E C I S I O N
These two appeals are against the unimproved valuations of the same land, as determined by the Department of Lands, the first (V95-102) $42,500 as at 30 June 1993 and the second (AV95-503) $49,000 as at 1 January 1995.
The land is described as Lots 43 and 44 on Registered Plan 21743, Parish of Gilbert, County of Merivale, containing 141.2 ha. It is situated about 9 km north-east of the township of Yangan and 28 km east of Warwick.
Mr and Mrs Hoppitt’s estimate of unimproved value at both dates is $20,000. The grounds of appeal are that the land is overvalued in comparison with adjoining and nearby properties and should be valued on the basis that it is “used for primary production not just rural homesite”.
Mr Hoppitt attended the hearing and presented a submission in support of the grounds of appeal. In terms of overvaluation he referred to the lack of natural surface or underground water; limited area (approximately 5 ha) of arable land and the generally hilly to mountainous contour; difficult access from the land to the nearest formed public road; lack of electricity supply; lack of telephone connection; mail service disability; poor television reception.
The appellants had purchased the land about five years ago when it apparently was in a run-down condition (from a grazing point of view). Mr Hoppitt clearly has set out to use the land not just as a rural homesite but for grazing activities. His intentions to build up a full herd have been denied by the drought conditions which have prevailed over a long period, to the degree that he was forced to destock the property in 1995 due to lack of water. A clearing programme had been delayed by fire restrictions. Mr Hoppitt has “constructed a stockyard (20-30 head), crush, loading ramp, water troughs with gravity fed spring water, rationalised paddock fencing and completed necessary perimeter fences, cleared some areas for grazing and built a large gully dam with a pump, tank and additional watering troughs”.
By genuinely using his land for grazing purposes, Mr Hoppitt is convinced that the unimproved valuation should be assessed on a similar basis to that applied to surrounding lands. A map was tendered showing the valuations to which he referred. Mr Hoppitt is frustrated by the lack of clear or consistent guidelines available to demonstrate why his land should or should not qualify to be valued as being used for a viable grazing operation. He would see it as unfair if any decision to deny his land the concessional valuation related to the consequences of the drought. He would also see it as unfair if the land qualified only if it was shown to be making a profit when that was not possible during the subject re-establishment period.
Evidence for the Department was given by Mr A.B. Cowley, registered valuer. Both valuations had been based on the property being used as one large rural homesite. Mr Cowley described the land as “moderate sloping ridges timbered with gum and gumtop box with narrower easier sections” with generally southerly aspect and good rural views.
The 30 June 1993 valuation was seen to be supported by two sales. One was a sale of a 22.6 ha site in Stephens Road, Swan Creek, showing an analysed unimproved value of $39,500 in May 1992. The other was of a 17.26 ha site in Top Swanfels Road, Swanfels, in October 1992, showing an analysed unimproved value of $32,800. Both sites were considered inferior in comparison with the subject land (valuation $42,500).
Sales used in the 1 January 1995 valuation ($49,000) were of a 40 ha site in Watts Road, Killarney, showing an unimproved value of $48,200 in April 1994 and a 9.126 ha site in Top Swanfels Road, Swanfels, showing $28,000 in July 1994.
Although the sales were not directly comparable, each of them being much smaller in area, Mr Cowley was confident that he had made sufficient allowance for the specific disabilities of the subject land including the access. There was some dispute between Mr Hoppitt and Mr Cowley as to the actual route of the access track through the land of a neighbour. This dispute remained unresolved. Suffice to say that the final access to the property is accepted as being through private property and of inferior physical nature, not all weather and detracting from the unimproved value of the land in comparison with each of the sales.
Mr Cowley’s evidence was that the nature of the land was such as to restrict the grazing potential under average seasons on natural pastures to about 1 beast to 4 ha and to a maximum of 50 head with improvement to pastures. In his opinion, to carry a herd greater than 50 head would necessitate the buying-in of feed. In his opinion the use which the appellants had made of the property in the periods relevant to the subject valuations, regardless of the drought conditions which had prevailed, did not constitute use for the purpose of farming as provided in s.17 of the Valuation of Land Act 1944.
Mr Hoppitt was somewhat critical of the extent of Mr Cowley’s inspection of the land and then his description of it. In Mr Hoppitt’s opinion a description of “hilly to mountainous” was more accurate. However, in his opinion, regardless of his description of the property, the land when fully improved had the potential to fatten 150 to 160 head of cattle although he was hoping to achieve on the average 100 to 120 head. He said it was “DPI classified” as capable of carrying 100 head. If the recently constructed gully dam is not successful in holding water then he conservatively estimated the carrying capacity as being 80 head. As at June 1993 there had been about 30 head of store cattle on the property but it had been largely destocked in early 1995. Since the rain in late 1995 some 45 steers and heifers were being grazed on the land. Mr Hoppitt provided photographic evidence as to the nature of the land and an aerial photograph was tendered by the respondent.
Section 17(1) of the Valuation of Land Act 1944 provides as follows:“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.”
Then in subsection (2) - “farming” means -
“(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.”
I accept that the appellants are engaging in the activity of grazing beef cattle on the land. If Mr Hoppitt’s verbal estimates of carrying capacity and income production were realistic then there would be seen to be no reason why the land might not be used for purposes of “farming” as defined in the Act. The business of grazing should not, in my opinion, be interpreted so narrowly as to disqualify such a business in times of drought or adversity.
I am not however, convinced that in fact the quality of the land of the appellants is such as to permit Mr Hoppitt’s estimates of carrying capacity or even potential carrying capacity to be realised.
On the nature of the land as described, I prefer Mr Cowley’s evidence as to sustainable carrying capacity. On that basis, the significance and substantiality of the business falls into serious question. The appellants are clearly actively engaged in capital expenditure for the grazing activity conducted but the case presented to the Court was not directed at proving that a business was being conducted, even in the face of adverse seasons. For example, there were no financial records presented nor any cogent financial budget or business plan. I was not left with the impression that the property was acquired in the first place for the purpose of farming as defined. If it was, then there was evidently considerable speculation involved, particularly with regard to the productive capacity of the land and the ability to provide sufficient stock water.
It is not unrealistic that the appellants would feel disadvantaged should other lands in the area be enjoying concessional valuations in the absence of “farming” use (as defined). The Court is not, of course, inquiring whether or not other lands are being used for the purposes of farming - it is dealing with the subject matter on the facts before it.
I have decided that the appellants have not shown that the land is being used for the purposes of farming in terms of the Valuation of Land Act and the burden of proof is upon them so to do.
It remains to be decided if the concessional valuation as a large rural homesite is excessive. Mr Hoppitt suggested that if his land was not valued as being used for the business of grazing, then it should be valued in the amount of $25,635. This was calculated on a base valuation of $20,000 effective in 1989, factored through on a calculation consistent with the information which he had obtained relevant to subsequent Glengallen Shire revaluations. His base figure was however incorrect. It should have been $41,000 which amount, when factored through to the 1993 valuation (effective 1994), resulted in an amount of $59,000. This in fact had been the valuation before objection. It was based on a bulk valuation of the two titles. Then when it was established that the land accommodated a single dwelling house, the concessional residential valuation under s.17(1) of the Act was applied and the two titles were valued as one large site in the reduced amount of $42,500.
Mr Hoppitt offered no sales evidence to support any alternative opinion of value and was unable to make any cogent comparison of the subject land with the sale sites used by Mr Cowley. I am satisfied on the evidence that Mr Cowley has taken the disabilities of the subject land into consideration in his valuations.
Accordingly the valuations of the Department have not been shown to be wrong or unreasonable. They are as Mr Hoppitt claims clearly out of relativity with valuations of surrounding lands which have been made on the basis of use for the purpose of farming. However, the legislature provides for that situation to occur in terms of s.17 of the Act.
The appeals are disallowed and the valuations of the chief executive affirmed.
RE WENCK
MEMBER OF THE LAND COURT
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