Kemp v Chief Executive, Department of Lands

[1994] QLC 36

[1994] QLC 36

 

  LAND COURT

BRISBANE

29 JULY 1994

Re:     Appeal against Categorisation of Land
  for Differential General Rating Purposes
  Local Government Act 1936
  Shire of Laidley  (VC94-161)

Alexander GM Kemp and Annelise A Kemp
  v.
  Chief Executive, Department of Lands

(Hearing at Gatton)

D E C I S I O N

This is an appeal against the category in which land was included for the purpose of differential general rating by the Shire of Laidley.  At its budget meeting held on 28th July, 1993, the Council resolved to make and levy differential general rates on the rateable value of rateable land within the Shire of Laidley for the financial year ending 30th June, 1994. 
           In accordance with the provisions of section 27 of the Local Government Act 1936 (the Act), the Council determined the criteria for categorisation of all rateable lands in the Shire into seven categories.  The criteria for five of those categories are not relevant in this matter.  However, the criteria for Category 3 are as follows:

"All rateable lands (except those in Category 7) in the area of the Shire of Laidley which are vacant and vacant in globo rural residential land or used for dwellings or outbuilding on rural residential land and coded with primary land use codes 04 to 06 and 72."

The criteria for Category 5 are:

"All rateable lands (except those in Category 7) in the area of the Shire of Laidley which are used for the business of primary production and are coded with primary land use codes 60 to 71 and 73 to 89."

Mr and Mrs Kemp are the owners of land described as Lot 42 on Plan CC3604, Parish of Mort, situated in the Shire of Laidley. It appears that acting in accordance with the provisions of section 27(1A)(c)(i) of the Act, the Council requested the valuation authority (the Chief Executive, Department of Lands), to identify those lands which are included in each of the categories. Acting under the provisions of section 27A of the Valuation of Land Act 1944, the respondent apparently did so having regard to the criteria adopted by the Council for that purpose. It seems that Mr and Mrs Kemp objected to the inclusion of their land in Category 3, claiming that it should be included in Category 5. I can only assume this sequence of events as the Court has not been provided with the background material. However, no objection was raised by the appellants as to compliance with the proper procedure.
           The respondent disallowed the objection and Mr and Mrs Kemp then appealed to the Land Court against that decision upon their objection, claiming that the land should be included in Category 5.  The facts and circumstances upon which that claim is based are as follows:

"The owners carry on the business of primary production and have done so continuously since acquisition.  The owners are primary producers and the property is their sole source of income currently.  The taxpayers devote their full time to the business and intend to carry it on indefinitely.  Prior to purchase of the property the taxpayers carried on a business of grazing with 949 head of livestock at 30.6.92, reducing to 595 head at 30.6.93."

Mr AGM Kemp appeared and gave evidence on behalf of the owners.  He tendered a detailed statement of evidence which I will summarise briefly.  Mr and Mrs Kemp acquired the property in June 1992 with the intention of operating it as a viable farming business.  The owners had previously conducted a grazing enterprise on a property of 8,800 hectares at Collinsville, which was sold in order to acquire the subject land.  At the time of purchase, the property was being used for grazing and small crops (strawberries).  The former owners had also endeavoured to run a small restaurant from their residence on the property, which was discontinued prior to the purchase by the present owners.
           The property comprises nearly 65 hectares and, apart from the usual residence, sheds and yards, there is an area of approximately 18.18 hectares of prime cultivation and 45 hectares of secondary cultivation.  The owners also maintain a livestock herd, which at 30th June, 1992, comprised 949 head.  These livestock were maintained on the subject land and on agisted properties.  Approximately 80 head were run on the subject land and the remainder on land either in the Laidley area or on agistment at Collinsville.
           During 1992-93, 595 head of cattle were sold for a substantial profit.  Also during that year the strawberry crop which was acquired with the property was written off after substantial losses, due to the abnormal drought which caused the crop to fail.  The strawberry crop has since been ploughed out.
           The owners anticipate that the property will be run at a profit, with the subject land being used to run approximately 80 head of cattle and the remainder of the herd being agisted.  As at 30th June, 1993, the owners held approximately 450 head of cattle, including breeding and store cattle, and at the date of hearing held about 428 head, comprising 300 breeders and 128 other types.  The subject land is also expected to produce quality lucerne crops to fatten cattle prior to sale.  Excess lucerne will be sold.
           The business sold 455 head of cattle at approximately 22 sales in 1992-93 and anticipate a similar number in 1993-94.  It also sold approximately 15 lots of produce in the first three months of 1992-93, despite the abnormal season.  It anticipates selling lucerne hay in the future.  The owners own tractors, plant and equipment necessary for them to carry out an operation of this nature.  It is anticipated that the business will run at a profit, particularly when irrigation water supply is improved.  This business will be the owners' sole source of income.
           Mr Kemp gave evidence of the details of the cattle on agistment, both in the Laidley area and at Turkey Station, Bororen, over the relevant period, which I do not find necessary to detail.  He said the owners would like to purchase more country in the Laidley area.  Meanwhile, they will continue to run breeders on Turkey Station and then bring the young cattle to Laidley.  In the future, the establishment of a feed lot is a possibility.
Evidence on behalf of the respondent was given by Mr Jonathan Millar, registered valuer, employed by the Department of Lands. Mr Millar stated that the land had been assessed on the basis of its highest and best use as a single unit rural residential site and coded 05. At the time he considered the activities carried out on the land in relation to grazing beef cattle did not meet the criteria in the Valuation of Land Act for valuation as land used for the business of farming.
           Mr Millar said that at the time of making his assessment, he had not been able to ascertain the full details of the owners' farming activities.  From the information he had obtained, he was under the impression that the owners had not received any income from the stock running on the subject land.  The property also had water problems.  He was not aware of the details of stock agisted elsewhere, nor of the income which had been received from cattle dealing.  He was not aware that the property was used in conjunction with other lands.
I am convinced that the owners were using the subject land in conjunction with other land for the business of primary production (the words used in Category 5 criteria) and for the purposes of farming (the words used in section 11(9) of the Valuation of Land Act 1944). I am also satisfied that the subject land was being exclusively so used and that it formed an integral part of the overall business operation.
           Therefore, the appeal is allowed, the decision of the Chief Executive is set aside, and the subject land is included in Category 5 for the purposes of the Laidley Shire Council differential general rating scheme.

JJ TRICKETT
  MEMBER OF THE LAND COURT