Jeffries v Chief Executive Department of Natural Resource and Mines

[2004] QLC 25

LAND COURT OF QUEENSLAND

CITATION:	Jeffries v Chief Executive   Department of Natural Resource and Mines   [2004] QLC 0025
PARTIES:	Dulcie B Jeffries (applicant)
v.
Chief Executive, Department of Natural Resources and Mines (respondent)
FILE NO:	AV2002/0428
DIVISION:	Land Court of Queensland
PROCEEDING:	An Appeal against an Unimproved Valuation - Shire of Inglewood
DELIVERED ON:	2 April 2004
DELIVERED AT:	Brisbane
HEARD AT:	Inglewood
MEMBER	Mr RE Wenck
ORDER:	The appeal is dismissed and the unimproved valuation made by the chief executive in the amount of Eleven Thousand Dollars ($11,000) as at 1 October 2001 is affirmed.
CATCHWORDS:	Statutory Valuation - Unimproved valuation - Valuation of Land Act 1944 Valuation - Separate parcel within a family owned aggregation - No formed access or services connected - Effect on land used for the purposes of farming as defined in s.17 of the Act Valuation - Sales evidence - Relativity between valuations Sales Evidence - Comparability with land subject of valuation Relativity - Correct relativity desirable - Valuation basis not to exclude relevant sales evidence
APPEARANCES:	Mr WG Major as agent for applicant Mr K Fisher, Crown Law, for respondent

1. As at 1 October 2001 the chief executive made an unimproved valuation in the amount of $13,000, of land described as Lot 155 on CVE48, Parish of Texas, containing 441.2 ha. The land is situated about 26 km south of Inglewood, off the Beebo 17 Mile Road. The owner objected to the valuation and subsequently appealed against the chief executive's decision on the objection. Prior to the appeal being heard by the Court, the chief executive reduced the valuation to $11,000 in terms of s.68 of the Valuation of Land Act 1944 (the Act).  The owner did not accept the valuation of $11,000 and that is the amount now appealed against.

2. The single ground of appeal was - "Not all relevant factors taken into consideration."  The owner's estimate of the unimproved value in the notice of appeal was $1,323.  Other appeals had been lodged by the applicant's husband Mr WC Jeffries against valuations of other properties within the family owned aggregation of lands.  As it happened, when those appeals were called on for hearing the question arose as to the jurisdiction of the Court to hear and determine the appeals.  After hearing the oral submissions the Court ordered that those particular appeals be struck out for want of jurisdiction.

3. Subsequent to an earlier directions hearing it was ordered that expert witness statements/reports be filed and served 21 days prior to the date of the hearing and, as the Court had been advised that the applicant would not be engaging an expert, it was further ordered that the applicant's outline of evidence and responses to expert statements/reports be filed and served seven days prior to the hearing.

4. Valuation reports relative to the several appeals were prepared by Mr DP Coe, Registered Valuer and a Senior Valuer employed by the chief executive and duly filed and served in compliance with the order.  The applicant advised that Mr WG Major had been appointed to act as her agent and Mr Major's response in terms of compliance with the Court's order was that the appeal properties were valued much higher than any of the adjoining properties and were inferior to all of the adjoining properties.

5. The thrust of Mr Major's case was that the whole of the Jeffries' family aggregation was significantly over-valued and the various valuations appealed against, including the valuation subject of this appeal, did not bear proper relativity with valuations of neighbouring properties.  He proceeded to give both oral and written evidence as to the valuations which he said had been applied by the chief executive to lands owned by neighbours and his opinion as to the inferior nature of the subject land in comparison.

6. Mr Fisher for the respondent objected to Mr Major leading this type of relativity evidence when the alleged incorrect relativity had not been particularised either as a ground of appeal or in the outline of evidence and response which the applicant had been ordered to file and serve.  It was Mr Fisher's submission and one with which I agree, that the respondent should have been placed in a position through the applicant's outline of evidence as ordered, to consider the allegation of incorrect relativity on a particularised basis. 

7. Although the weight which could be given to this now particularised evidence was seen as a relevant factor, Mr Major having outlined and brought to the attention of the respondent the broad nature of the evidence upon which he intended to rely, was given leave to proceed with the more particularised evidence.

8. As it happened Mr Coe had prepared his case on the basis that he might be required to defend the various valuations of the component parts of the adjoining family aggregation of lands.  He had been primarily concerned with the broad nature of the overall aggregation rather than specific details of the component parts, when he had carried out his inspection in company with Mr Jeffries.  Although Mr Coe had some general knowledge of the locality he had not inspected, for valuation purposes, any of the neighbouring properties about which Mr Major had given evidence as to relativity comparisons.  As I understood his position, even had those properties with which Mr Major drew comparisons been properly identified prior to the hearing, Mr Coe would not have had sufficient time to conduct detailed inspections or make inquiries other than into the historical departmental file records. 

9. It was Mr Coe's evidence that the relevant sales evidence had been interpreted as supporting, as at 1 October 2001, an increase of 10% above the previously existing unimproved values applied to the Shire's rural lands.  As I understood the evidence, that increase had been applied consistently with the previously existing relativity between valuations not having been disturbed.  Furthermore, the previous relativity between valuations of the subject land and the overall aggregation and those of neighbouring properties had been consistently maintained over the period relating to a number of revaluations.  However, as a result of the appeals against the various valuations of the aggregation lands, Mr Coe had given specific consideration to the comparability of those lands with the available sales evidence and had formed the opinion that a reduction in the valuation of the subject land together with the valuations of other parts of the family aggregation was indeed warranted.  Again, as I understood the evidence, those reductions had not been made on the basis of any specific consideration having been given to the question of relativity with the valuations of the neighbouring lands.

10. Mr Major's opinion is that the lands within the aggregation including the subject land, are generally so inferior in quality to the neighbour's lands that a further significant reduction is warranted.

11. Mr Major had researched, apparently from Council records, the valuations applied by the chief executive to six neighbouring properties.  Two of those were Forestry Leases and two others had a Forest Lease component.  Based on the valuations said to have been applied to the Forest Leases, he analysed the freehold component of the valuations applied to those with a Forest Lease component.  In summary his evidence was as follows:

    1."Tandara" - described as overall much superior - total area 1,741 ha, freehold component 760 ha - total valuation $14,000, his analysis of freehold component

    
    

    $9,500 or $12.50/ha.

2."Savins" - described as much superior with arable potential - 444.3 ha - valuation $6,600 or $15/ha.

3."Wrights" - described as having "everything going for it" and "an ideal small property" with double creek frontage, loam flats and a "lot of cultivation" - 711 ha - valuation $14,600 or $10.50/ha.

4."Majors" - described as "so superior it cannot be compared", long creek frontage, watered mostly by permanent holes in creek, large percentage of creek flats "of which a lot is cultivation" - total area 2,397 ha, freehold component 1,227 ha - total valuation $39,500, his analysis of freehold component $34,250 or $27.90/ha.  Mr Major tendered photographs indicating the nature of the country on part of this property.

1. In comparison with these neighbouring lands Mr Major described the Jeffries' aggregation as comprising the watershed between Brush and Magees Creeks, with very little creek frontage, no decent waterholes, watered entirely by dams which fill with silt requiring frequent desilting, 90% of the country rock (blue metal) and steep hills, the balance sand and sandstone growing speargrass and wattle, with no potential other than poor quality wool-growing country which is hard to muster, difficult and expensive to fence and manage.  Mr Major tendered various photographs taken from selected positions on or near the subject land showing the rocky nature of parts and the sandier speargrass country with regrowth.

2. In Mr Major's opinion the correct relativity between the subject land and the comparison properties would result in a valuation of $8/ha overall which he would round to $3,500.  It was that valuation which he sought to have the Court determine.

3. Mr Coe's valuation of $11,000 was rounded from $25/ha.  He described the nature of the land as consisting of "traprock and sandy speargrass country" and "predominantly used for grazing purposes".  He did not accept that the subject block as part of the overall family aggregation was 90% rocky or that the rocky gravelly areas which Mr Major adamantly described as blue metal rock, could not be broadly described as traprock country.  He tendered a Department of Primary Industries' soil map which was said to identify "The Granite and Traprock Area of South East Queensland" and which included part of the subject block within the identified area.  Under cross-examination he agreed that the subject land was used solely for sheep grazing and the speargrass was a disability for wool-growing use, adding to the management problems and expenses associated with the block which included fencing difficulties and erosion control.

4. Mr Coe described services "available to the area" as including telephone, electricity, mail delivery and school bus.  Mr Major argued that if the subject land was to be valued as a "stand-alone" block then those services and the access were not necessarily "available" due to the prohibitive cost of providing access and connecting to those services.

5. Mr Coe had valued the land pursuant to s.17 of the Act as he considered its use as part of the family aggregation to be for the "purposes of farming".  He agreed that as a stand-alone rural site the cost of providing services would be a market consideration.  However, as I understood his evidence, use for the purposes of farming (as defined in the Act) was reliant on its association with other lands and in this case the balance of the aggregation which as a whole was provided with access and the services which were available to the area.

6. The rate per ha adopted by Mr Coe was based on two sales.  The first was of a 2,070 ha parcel in Snake Ridge Road, about 60 km east of Inglewood.  The sale took place in April 2000 to show on Mr Coe's analysis, an unimproved value of $33.75/ha.  A valuation of $31.40/ha had been applied as at 1 October 2001.  His report indicated that the country was all traprock and in his oral evidence Mr Coe made mention of an area of about 400 ha comprising very steep undeveloped country inferior in his opinion to any of the subject land.  However on an overall comparison, despite its much larger area, he considered the sale land to be superior on a rate per ha basis.

7. Mr Coe offered the opinion that the closer proximity of the subject property to the local centre of Inglewood and its various amenities was a positive feature in comparison with the Snake Ridge sale land.  Mr Major was strongly of the opinion that its location 60 km east of Inglewood and as a consequence much closer to the major centre of Warwick and also to Stanthorpe and Brisbane was a distinct advantage enjoyed by the sale land.  There is seen to be logic in both arguments but I am not persuaded that the location of the sale property would be a matter of such marketplace significance that it would cause the evidence of value provided by the sale to be disregarded in this matter.

8. Mr Coe's second sale was of a small parcel of 123.3 ha located 11 km north of Texas in an agreed superior location compared with that of the subject land.  It also had superior bitumen sealed access.  The sale land also had the advantage of superior quality soils and creek flats over 15% of its area while its balance area rose to traprock forest.  The sale land has the benefit of a water licence for the irrigation of 8 ha.  This property sold in April 2000 for $203,000 showing an analysed unimproved value of $16,502 and a valuation of $15,600 or $126.50/ha had been applied.

9. Mr Major was critical of Mr Coe's use of this sale due to the obvious significant superiority of the land overall.  Mr Coe accepted that the creek flats and water licence reflected superiority as was identified in the respective valuations.  However the majority of the land was traprock country and the sale had been one of the basic sales used in the revaluation process reflecting the trend in market values which had been applied and had indicated the level of market value achievable for a superior well-located small parcel.

10. Mr Major was of the opinion that the two sales were of properties so difficult to compare with the subject land that they should be disregarded in this matter.  It is clear that the sales evidence used by Mr Coe is far from ideal for comparison purposes.  However ideal market evidence cannot be manufactured if it is unavailable and difficult as the stand-alone subject valuation task may have been, Mr Coe had, in the revaluation process, investigated all of the relevant market evidence in the Shire valuation and was in a position to use his general knowledge and valuation experience with assistance from the limited sales evidence available in this matter.

11. Mr Major has had a lifetime of experience in this locality and despite no formal valuation qualifications is clearly well aware of the nature and productive capacity and development potentialities of the various land classifications.  While the relativity argument he had put forward is deficient in terms of standard of proof, I am able to accept that there has existed and probably still remains some degree of incorrect relativity between valuations of lands in this specific locality.  As an example, if Mr Major's evidence as to the valuation figure applied to the "Savins" property is correct, then, on his description of the "Savins" land which is of about the same size as the subject block, there is strong support for his argument that relativity between that valuation and the valuation of the subject land is incorrect.  The other examples given by him could well lead to the same conclusion. 

12. That does not prove however that the valuation now appealed against is incorrect.  It may be that, for whatever reason, the valuations of some of the comparison properties are too low. 

13. The difficulty which the applicant faced in this matter is that it was necessary not only to show that relativity between the valuation of the subject land and other lands was wrong, but relativity was wrong because the subject valuation itself was wrong.  I have not been persuaded that the burden of proving the grounds of appeal have been met.  The fact that the subject land is lacking in direct access and is not connected to the services within the locality would clearly have a negative effect of some magnitude had the land been valued as a rural homesite rather than as land used exclusively for purposes of farming.  If its use was, in reality, restricted to the purposes of farming as defined, its market value would not be seen to be so significantly affected through the immediate lack of services.  Despite the inferior nature of the country overall even as a stand-alone block, the land has potential for use in conjunction with other lands which are serviced as it is currently, and a market would exist accordingly.  It is noted that while the block is relatively small in comparison, the value/ha ascribed to it by Mr Coe is no greater than that ascribed to the much larger adjoining area (exceeding 3,000 ha) in the name of Mr WC Jeffries.  Mr Major of course challenges the correctness of that valuation but again on relativity grounds.

14. On the question of relativity, the Land Appeal Court said in Grahn v Valuer-General (1992-1993) 14 QLCR 327 at 328:

    "It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based.  It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis."

Then later at 328:

"Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence …"

1. Although it is strongly recommended that the relativity issue arguments of Mr Major be considered by the chief executive, and particularly at the time of the next revaluation, the result of such consideration could possibly adversely affect neighbouring properties rather than beneficially affecting the Jeffries' valuations, other than for achievement of a more equitable distribution of Council rates.  In the meantime, I have not been persuaded that the applicant has shown that the valuation now appealed against is necessarily wrong based on sales evidence, even if that sales evidence is not seen to be ideal.

Order

The appeal is dismissed and the unimproved valuation of the chief executive in the amount of Eleven Thousand Dollars ($11,000) as at 1 October 2001 is affirmed.

RE WENCK

MEMBER OF THE LAND COURT