Jeffries v Department of Natural Resources and Mines
[2004] QLC 24
•2 April 2004
LAND COURT OF QUEENSLAND
CITATION: Jeffries v Department of Natural Resources and Mines [2004] QLC 0024 PARTIES: William C Jeffries
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO: RV2002/0424 DIVISION: Land Court of Queensland PROCEEDING: An Appeal against an Unimproved Valuation for Rental Purposes - Shire of Inglewood DELIVERED ON: 2 April 2004 DELIVERED AT: Brisbane HEARD AT: Inglewood MEMBER RE Wenck ORDER: The appeal is allowed, the valuation of the chief executive set aside and the unimproved valuation of the land for rental purposes determined in the rounded amount of One Thousand One Hundred Dollars ($1,100) as at 1 October 2001. CATCHWORDS: Statutory Valuation - Valuation of Land Act 1944 - Unimproved valuation for rental purposes - Separate valuation when part of aggregation - Effect of size and limitations on use when separately valued APPEARANCES: Mr WG Major as agent for applicant
Mr K Fisher, Crown Law, for respondent
The background to this appeal is that the land subject of the valuation is leasehold land held in conjunction with and valued for rating purposes with other lands used by the owner for the purposes of farming (sheep grazing - wool growing).
At the relevant date of valuation, 1 October 2001, the separate rating valuation of which the subject land formed part, comprised an area of 3,154.816 ha and was in the amount of $103,000 or $32.65/ha. That valuation was altered when other lands previously separately valued were included to then comprise an area of 3,698.527 ha, in the amount of $118,000 or $31.90/ha. That single valuation was then reduced to $92,000 rounded from $25/ha.
Section 15 of the Valuation of Land Act 1944 (the Act) provides that the value to be used to determine the rent applying to a relevant lease is the unimproved value under the Act. Section 15(3) of the Act provides that if the conditions of the lease are not restricted to farming then s.17(1) does not apply. The Court was not provided with a copy of the lease but was informed that s.17(1) was applicable in this case and the chief executive had valued it accordingly. However pursuant to s.35(1)(c)(iv) of the Act, the land was to be valued separately.
The land involved is described as Lot B CVE540:SL25/49063, containing an area of 42.8 ha. The land is situated about 25 km south of Inglewood.
The valuation appealed against is in the amount of $2,200. The single ground of appeal is "Not all relevant factors taken into account" and the applicant's estimate of unimproved value was $126.
At the commencement of the hearing there was some discussion in relation to the minimum rental payable under the relevant regulation of the Land Act 1994. While it appears that the amount of the valuation appealed against is below the amount which would attract the minimum rent payable in any event, any determination of unimproved value less than the amount appealed against would have no effect on the rental payable. Regardless, the applicant decided to proceed with having the unimproved value determined by the Court. There appeared to be a perception that any finding by the Court which would have reduced the capital value might have had some influence on the chief executive's approach to the overall rating valuation.
The valuation appealed against was made by Mr DP Coe, Registered Valuer employed by the Chief Executive as a Senior Valuer. He described the land as being a former camping and water reserve, being gently sloping sandy forest of box, ironbark and pine, most of the area having been pulled, burnt and raked. The nature of the country as described in the original departmental lease report had been adopted. The valuation was said to have been based on Mr Coe's "general knowledge and valuation experience" with "assistance from the sales contained in the attached schedule". There were two sales included in that schedule.
The first was of a much larger 941.8 ha block, of poor sandy forest situated about 30 km south-east of Inglewood. That land had sold in May 1998 at a price which showed an analysed unimproved value of $18.35/ha and a valuation of $16.35/ha had been applied. The land was described as being of similar country and soil types to the subject land, with inferior access and overall was considered inferior on a rate/ha basis due to size.
The second sale was of a 123.3 ha block 11 km north of Texas, comprising 15% creek flats with a water licence to irrigate 8 ha, the balance of the land rising to traprock forest. That land sold in April 2000 to show an analysed unimproved value of $133.84/ha and a valuation of $126.5 had been applied. The land was described as superior overall on a rate per ha basis due to its superior soil qualities and water allocation.
It was Mr Coe's evidence that the two nominated sales and the sales evidence overall throughout the Shire had been interpreted as supporting an overall increase of 10% above the valuation of the rural lands in the Shire at the previous valuation and with the then existing relativity. After proper investigation, Mr Coe had decided that the valuations of the overall aggregation owned by the applicant and his family had warranted a reduction in values, based on direct comparison with sales evidence. However he had found no basis upon which to disturb the valuation of this small parcel.
Mr Major described the subject triangular shaped parcel as a "dirty little corner" with gravelly soils and no natural water. He saw it as having minimal independent value except for limited grazing use with the applicant's adjoining land. He felt that its leasehold tenure seriously affected its market value but if it was to be valued as a small hypothetically freehold block restricted to grazing use, then a rate of $10 per ha rounded to a total $500 was, in his opinion, an appropriate valuation. It had been his opinion that a valuation of $8 per ha was realistic for the overall aggregation of land held by the owner.
Summary
Pursuant to s.14 of the Act, the land is taken to be granted in fee simple but then in terms of sub-section (5) the unimproved value shall be determined "having regard to and making proper allowance for any restriction or limitation of use having regard to the purpose and conditions to which that … lease is subject."
The subject land is a small area which clearly could not qualify as being used for "the purposes of farming" as defined in s.17 of the Act, except when used in conjunction with other land. On that basis, consideration of matters such as its awkward shape and lack of natural water lose significance, but unless there are special features attaching to the nature of the land, it is seen as unlikely that an adjoining owner would pay any premium for the land simply because it is small in area. Added to that, from a market perspective, is the fact that there is no limitation on the use of the sale properties for non-dominant residential purposes or "farm improvements" as defined, for purposes of farming.
As I understood Mr Coe's evidence, the use of the subject land is limited to the physical activities of grazing exclusive of any right to construct a dwelling or farm buildings. In effect, those limitations are restrictive, even for the use of the land for the purposes of farming.
Regardless of the lack of effect on the rent payable, if the existing rent is the minimum payable in any event, the task of the Court is to find the correct unimproved value of this land, pursuant to the Act.
It is accepted, as argued by Mr Coe, that all other things being equal, a small parcel of land would be expected to command a higher level of pro-rata value on a unit of area basis, than would a larger or in particular a much larger parcel. However, in this case it seems to me that any market advantage attributable to the small area, would be largely negated by the inability of this particular land to be used for the "purposes of farming" as defined in s.17, except in conjunction with a much larger holding of comparable quality land. Even then, there are some limitations on use with regard to provision of structures, which do not apply to land held in fee simple. It seems to me that in cases such as this where limitations on use are a statutory consideration the small size of the parcel should not result in a valuation higher, on a pro-rata basis, than that which would apply to the aggregation to which it attaches in order to qualify to be valued pursuant to s.17.
On that basis the unimproved value of the land for rental purposes will be determined at a valuation rounded from $25 per ha which was the valuation which Mr Coe applied to the adjoining aggregation. That will result in a determination rounded to $1,100.
Order
The appeal is allowed, the valuation of the chief executive set aside and the unimproved value of the land for rental purposes determined in the rounded amount of One Thousand One Hundred ($1,100).
RE WENCK
MEMBER OF THE LAND COURT
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