Keough & Wirth v Department of Natural Resources and Mines
[2004] QLC 101
•18 November 2004
LAND COURT OF QUEENSLAND
CITATION: Keough & Wirth v Department of Natural Resources and Mines [2004] QLC 0101 PARTIES: Henry W Keough and Hazel G Wirth
(appellants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NOS: RV2002/0818, 0819, 0820, 0821, 0822, 0823 and 0824 DIVISION: Land Court of Queensland PROCEEDING: Appeals against Unimproved Valuations - Valuation of Land Act 1944 - Shire of Longreach DELIVERED ON: 18 November 2004 DELIVERED AT: Brisbane HEARD AT: Longreach MEMBER: Mr RE Wenck ORDERS: RV2002/0818 - "Stroud" and "Spring Hill"
The appeal is allowed. The valuation made by the chief executive is set aside and the unimproved value for lease rent assessment as at 1 October 2001 determined in the amount of One Hundred and Forty-three Thousand Dollars ($143,000).RV2002/0819 - "Boonamerrie"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value of the land for lease rent assessment as at 1 October 2001 determined in the amount of Two Hundred and Seven Thousand Five Hundred Dollars ($207,500).Appeal RV2002/0820 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).RV2002/0821 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).RV2002/0822 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).RV2002/0823 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).RV2002/0824 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).CATCHWORDS: Statutory Valuations - Unimproved value - Valuation of Land Act 1944
Sales Evidence - Market trends - Comparability of sale lands with land subject of valuation - Beast area values
Relativity - Carrying capacity estimates - Adult equivalent or mixed herd basisAPPEARANCES: Mr J Hill (Solicitor) for the appellants
Mr DJ Lang (Crown Law) for the respondentSOLICITORS: John Hill and Staff for the appellants
Crown Solicitor, Crown Law, for the respondent
Background
These appeals are against the unimproved valuations of a number of leasehold parcels which are run as an aggregation, but which are required to be valued separately for the purposes of assessment of rent. The relevant date of valuation was 1 October 2001.
The evidence before the Court was that, as a consequence of objections against various valuations as originally issued, the chief executive ("the Department") decided to include previously separately valued parcels in one valuation for rating purposes. A further objection lodged against that single valuation had not been decided prior to these appeals being heard. Although there are additional matters to be considered in the single assessment for rating purposes, it is envisaged that the determinations of the separate appeals will have some bearing on the valuation of the aggregated parcel.
The aggregated property is known as "Boonamerrie" (RV2002/0819) which is the main lease, together with "Stroud" and "Spring Hill", two severed blocks in one lease (RV2002/0818) and "Weeumbah West" of five small blocks in separate leases (RV2002/0820, 0821, 0822, 0823 and 0824).
"Boonamerrie" is located 83 km south-west of Longreach on the Toobrac-Tocal Road, or alternatively 107 km via the Longreach-Silsoe Road. Access is by way of 23 km of bitumen with the balance earth formation. The district is serviced with power and telephone.
The valuations appealed against were made by Mr Robert R Taylor, a senior valuer with the Department stationed in Longreach.
Evidence in support of the appeals was given by Mr Henry Keough, who together with his partner, acquired "Boonamerrie" about nine years prior to the date of valuation, then the other blocks some months later. Mr Keough has extensive rural development, management and marketing experience.
The grounds of appeal in each Notice of Appeal were as follows:
"No or insufficient allowances made for disabilities associated with the land; lack of parity with valuations of other land in the area; reliance on previous inappropriate valuations; little or no recognition of true financial return from the land."
The appeals were heard together, with much of the evidence overlapping between the various leases. One of the common disabilities for which allowance was made in the Department's valuations was related to inadequate stock water and, where relevant, the encroachment in recent years of gidyea seedling growth. The appellants also drew attention to infestation of the timbered areas with caustic vine and other areas with pimelea, both of which can be poisonous to stock.
The Individual Appeals
RV2002/0818 - "Stroud" and "Spring Hill"
Real Property Description: Lot 1 on MV26 and Lot 7 on M22813:GHPL29/11338, Parish of Targarien and Woomerie.
Area:13,260.74 ha
Valuation appealed against: $147,000 - Evidence led to a valuation of $143,000.
Owner's Estimate of Value: $110,250 (Notice of Appeal) - evidence led to a valuation of $85,800.
Nature of Country:
By Mr Taylor:
4,183 ha (31%) fair quality downs, of whitewood, boree, sandalwood and odd gidyea.
2,830 ha (22%) channels, mostly heavily flooded channels of the Thomson River.
1,620 ha (12%) gidyea scrub with thick gidyea seedling growth.
4,628 ha (35%) hard toprock hillsLots 1 and 7 are severed by the "Boonamerrie" lease. The mapping included with Mr Taylor's report, indicates that Lot 1 ("Stroud") comprises all downs and channel country. This block has the Thomson River frontage. Mapping tendered by Mr Keough identifies Lot 1 as containing an area of about 5,983 ha.
Lot 7 ("Spring Hill") of 7,278 ha approximately is identified in Mr Taylor's mapping and overall classification as containing a relatively small area of "light carrying downs" and creek channel country (predominantly in the extreme north-eastern end), the balance being the area of gidyea scrub and hard toprock hills, interspersed with spinifex country containing small areas of gidyea.
Mr Keough did not challenge Mr Taylor's classification of country. He pointed out however that the Thomson River frontage did not contain permanent water and it had been found necessary to sink a deep bore (as I understood it in the nearby "Weeumbah West" aggregation) to provide adequate stock water for the overall property. He made reference to the corrosive nature of flood waters out of the river which resulted in fencing wire within the channel area having a very limited life.
It was Mr Keough's evidence that no stock, apart from odd strays had been grazed on Lot 7 since it was acquired by the appellants, due to its severe erosion degradation and difficult access. He accepts that it would have originally grown pasture, but, as a result of past over-stocking and/or its occupation by large numbers of kangaroos, possibly attracted by artificial watering points, it is now beyond practical remediation. He does not consider the gidyea country as being capable of economic development and seedling gidyea infestation is rapidly spreading throughout. The small area of light carrying downs and channels in the eastern end is not utilised due to management difficulties. The type of spinifex which grows on the country identified in Mr Taylor's mapping within the toprock hills classification was described by Mr Keough as "giant" or "desert" spinifex which can only be managed by fire but then capable of providing only very limited and occasional grazing benefit. Photographs were tendered depicting the degraded nature of the country on this lease. Mr Taylor agreed that while they were said to have been taken at random points, the photographs were representative of the degraded nature of the country at those points at the time of his inspection.
Carrying Capacity:
Mr Taylor estimated the carrying capacity as being one beast to 20 ha overall or approximately 650 head. He said the departmental estimates were made on a mixed herd basis.
Mr Keough was of the opinion that such an estimate was not realistic or sustainable. In his opinion the "Stroud" block could sustain in average seasons, one beast to between 14 ha and 15 ha but suggested a safe carrying capacity of 390 head (one beast to 15.3 ha). As I understood his evidence the carrying capacity estimate was related to adult cattle. However, he was adamant that the "Spring Hill" component of the lease had no practical potential to carry any stock in its degraded condition and with its difficult access from the "Stroud" block.
A total of 390 adult head would equate one beast to 34 ha overall in comparison with Mr Taylor's estimate of one beast to 20 ha. However, it seems that Mr Taylor would have decreased his estimate to about 455 head or one beast to about 29 ha if he had adopted an "adult equivalent" rather than a "mixed herd" estimate. It was Mr Taylor's evidence that, in conversion of carrying capacity estimates from Dry Sheep Equivalent (DSE) to cattle, the Department adopted a factor of 7 DSE to one beast "mixed herd" cattle, or "about" 10 DSE to one beast adult cattle equivalent.
Overall Evidence of Value
Mr Taylor stated that there were no sales of property "which are comparable to the subject". However, the sales which were "used to establish a value for the subject property" were of the properties "Tandarra", "Booloo", ""Weeumbah" and "Thurles Park". Brief details of those sales are as follows:
"Tandarra" - 21,238 ha - carrying capacity one sheep to 1.7 ha overall - sold 30 January 2001 to show an analysed unimproved value of $27.81/ha, which equated a 53% increase above the previous valuation applied as at 1 October 1998, applied valuation 1 October 2001 $27.19/ha (equivalent to an unimproved sheep area value (SAV) of $46.23 or a beast area value (BAV), mixed herd, of $323.61) - a 50% increase above the 1998 valuation.
"Booloo" - 13,813 ha - carrying capacity one sheep to 1.5 ha - sold 4 November 1999 to show an analysed unimproved value of $35.62/ha, an increase of 67% above the 1998 valuation, applied valuation $32/ha (SAV $48 or BAV $336) - increase of 50%.
"Weeumbah" - 6,441 ha - carrying capacity one sheep to 1.6 ha - sold 21 January 2001 to show an analysed unimproved value of $37.10/ha, an increase of 65% above the 1998 valuation, applied valuation $33.69/ha (SAV $53.9, BAV $377.32) - increase of 50%.
"Thurles Park" - 34,400 ha - carrying capacity one sheep to 3.5 ha - sold 14 May 2001 to show an analysed unimproved value of $2.70/ha, an increase of 60% above the 1998 valuation, applied valuation $2.53/ha (SAV $8.85, BAV $61.95) - increase of 50%.
The country classifications of each of these sale properties were included in Mr Taylor's report. In comparison with the subject block and generally the aggregation overall Mr Taylor stated as follows:
"Tandarra" - "Superior access, location and country type. It is much superior overall."
"Booloo" - "Superior in country type, location and carrying capacity and is superior overall."
"Weeumbah" - "Superior ... in location, country type and access. It is superior to the subject overall."
"Thurles Park" - "Inferior ... in location, rainfall and country type and has marginally inferior access. It is larger and is noticeably inferior overall."
Mr Taylor's valuation of the subject lease was calculated as follows:
13,261 ha @ $11.50 $152,501
Less severance 2.5% $3,812
Less water availability 2.5% $3,812
Less gidyea encroachment ("Spring Hill")
50% of total $1,900
Balance $142,971 (sic)
Adopt $143,000 "It was Mr Taylor's evidence that an error had been made when the decision on objection issued in the amount of $147,000, (the amount appealed against) instead of $143,000.
Included in Mr Taylor's evidence, as it had been in appeals heard by the Court at the same sittings, against a number of valuations in the district, was a "Market Summary for the revaluation of the Longreach District - Western Downs Country". In that report the computer-assisted valuation methodology and the reasons for its adoption were discussed. In summary the Department selects the sales within the valuation period which are considered most relevant within various sub-market areas (SMAs). The sales are analysed to show the movement, if any, from the previous departmental valuation of those specific sale properties. If the adopted sales evidence indicates a consistent trend in comparison with the previous valuation, that trend is then applied in a blanket factorised manner to the previous valuations of lands within the various SMAs. Critical to this methodology is the departmental assumption that over a long period of regular revaluations, relativity between valuations of lands within the various SMAs is correct. Where incorrect relativities are identified, individual valuation considerations are then applied.
It was Mr Taylor's evidence, within the market summary report, that in the Longreach District unprecedented sales volume had occurred in the period from 1 October 1998 to 1 October 2001, with the majority of purchasers continuing to come from a cattle grazing background.
In the Longreach Shire and some adjacent areas, the Department had decided that in all classes of country, a factorised increase of 1.5 or 50% above the 1998 valuation, was supported by the most reliable sales evidence. There were some sales considered "low" particularly in the earlier part of the three year period and some which were considered "high" and out of line with the general trend over the period. The sales which supported the 50% increase were considered to reflect a conservative interpretation of the overall evidence and were adopted as basic evidence for the valuation.
There was criticism by the appellants of the use of each of the four sales for the valuations of the "Boonamerrie" aggregation. Mr Keough had been on "Tandarra" but had not inspected it closely. From that which he had seen, he did not accept that "Tandarra" was capable of cogent comparison with the subject lands. "Booloo", was also considered far superior and with permanent natural water. It had been sold to two neighbours and later split between the two. The adjoining owner factor was considered to disqualify the "Booloo" sale from reflecting open market value. "Weeumbah", although in the same locality as the subject lands was considered by Mr Keough to be significantly superior with better open country, easier management potential, better external access and superior natural water, including an irrigation licence. Mr Keough had no knowledge of "Thurles Park" as it was outside the locality of the subject lands.
Mr Taylor did not disagree with Mr Keough's general comments with regard to the nature of the country and location of "Tandarra", "Booloo" and "Weeumbah", although in his opinion each of the sales, including "Thurles Park", reflected a conservative interpretation of the market trend since the previous valuation. He was aware that "Booloo" had been sold to neighbouring sheep graziers, but in his opinion as the market was being driven by cattle graziers, the two neighbours had done nothing more than compete in an open market. The sale although conservatively applied, supported the identified trend and was not considered to be out of line with market expectations. He had not paid specific attention to whether any irrigation licence had passed with the sale of "Weeumbah", but in his experience such licences carried little or no added value in this locality. Again the sale of "Weeumbah" was conservatively applied. The sale of "Thurles Park" was included as basic evidence because it reflected the same increasing trend as indicated by the other sales, but in its case for significantly inferior country overall and in an inferior location.
It is clear that the sales evidence in isolation does not provide an ideal basis for the valuation of the "Boonamerrie" aggregation. There were sales generally within the earlier part of the valuation period, including a sale of the neighbouring "Tocal", which were considered by the Department to be low and out of line with the overall market. There were also sales, much closer to the date of valuation which were regarded by the Department as high and again not a reliable basis for a valuation intended for revenue-gathering purposes, at least until the higher levels indicated could be shown to have been sustained.
Despite some valid criticism of the use of the basic sales, I am satisfied that if previous relativities between valuations were fair in this locality, an increase of 50% above the level which had been applied in 1998 was justified as representing a conservative interpretation of the overall market.
The appellants' view, through Mr Keough, was that the major problem with the Department's methodology was that the previous valuations of the subject properties as at 1998 and even at earlier dates were excessive and that the application of a standardised increase perpetuated the error.
Mr Keough's experience over a long period in other localities had been that when the purchase price of a property was being apportioned, it was generally safe to adopt the departmental estimate of unimproved value as the land value. Apparently he had adopted that apportionment approach when "Boonamerrie" had been purchased. However on reflection he believed that had the sale price of "Boonamerrie" been properly apportioned, it would have been shown that he had paid nothing for the land but only the reasonable value of the improvements and other items included in the sale. He had bought the property at the time for the available grass, when the vendor company was in receivership. At that time the "Boonamerrie" lease block had been valued by the Department at $132,000. He had requested a thorough inspection by a departmental officer without success. Then, as at 1 January 1996 the valuation had been increased to $177,500. He "realised, at the time, this was wrong, as no properties to my knowledge in this vicinity, were changing hands, there was no confidence in wool, and cattle were worse." He "was involved with seasonal and usual problems associated with a new property, so could not find the time to appeal ..." The information tendered by Mr Keough indicated that the valuation of "Boonamerrie" was first increased from $177,500 to $265,000 as at 1 October 2001 (the standard 50% increase) but then reduced, it is assumed on objection, to $250,000.
While the acquisition and valuation history as described by Mr Keough is more relevant to the valuation of the "Boonamerrie" lease, it is also relevant, in Mr Keough's opinion, to the valuation of the subject "Stroud"/"Spring Hill" lease. It is Mr Keough's opinion that the "Boonamerrie" valuation needs to be compared with that of the adjoining property "Tocal". The original "Tocal" holding had been, at some time in the past, subdivided into the balance area as it now exists and "Boonamerrie". Mr Keough believes that when that subdivision took place, the surveyors would have been instructed to create two blocks of approximately the same productive capacity. "Boonamerrie" is larger in size than "Tocal" (25,965 ha compared to 22,992 ha). In Mr Keough's opinion that reflects the overall inferiority of the country on "Boonamerrie", in comparison with "Tocal". Added to its inferiority in his opinion is the awkward "L" shape requiring additional fencing and causing management disabilities, in comparison with the more regularly shaped "Tocal".
"Tocal" was sold on 30 November 1999 to show an analysed unimproved value of $5/ha overall with an historical departmental estimate of carrying capacity of one sheep to 2.2 ha (or on Mr Taylor's conversion rate one beast to about 15.4 ha). The sale indicated a decrease of 34.28% compared to its 1998 valuation. The sale was one of those rejected by the Department as it was considered to be out of line with the overall market trend.
The evidence was that the Department's valuation as originally issued for "Tocal" was in the amount of $262,500, representing the standard 50% increase over its valuation of $175,000 as at 1 October 1998. However that valuation was reduced on objection to $195,000 or about $8.50/ha, eventually an increase of about 11.4%.
In comparison "Boonamerrie's" valuation was increased from $177,500 first to $265,000 then reduced to $250,000 while Mr Taylor has now led evidence to a valuation of $242,500, after allowances for gidyea encroachment and the water disability. That equates about $9.34/ha overall.
Mr Taylor's evidence was that he had been informed by the owner of "Tocal" that its carrying capacity ranged between 500-600 head in poor seasons, up to 900 head maximum in good seasons. The departmental historical estimate of carrying capacity of one sheep to 2.2 ha would have resulted in about 1,492 head of cattle on a mixed herd basis. Mr Taylor said that as a result of the objection against "Tocal's" valuation, the carrying capacity estimate had been reduced from "about 1,300 head" down to "about 1,100 head". That would equate one beast to about 21 ha and a BAV of $177.27 on the reduced valuation of $195,000.
Mr Keough's evidence was that the sustainable carrying capacity of the individual "Boonamerrie" lease does not exceed 850 head, the majority of the herd being run on the better country. The historical departmental estimate had been one beast to about 18 ha or 1,450 head. Mr Taylor reduced the estimate to one beast to 20 ha, or on his calculations, 1,284 head, again presumably on a mixed herd basis. The "Boonamerrie" valuation of $242,500 to which evidence was led, equates a BAV of $188.86.
It can be seen that the historical relativity between "Tocal" and "Boonamerrie" which had resulted in original 2001 valuations of $11.42/ha for "Tocal" and $10.20/ha for "Boonamerrie" has been reversed to $8.50/ha for "Tocal" and $9.34/ha for "Boonamerrie".
Contrary to the historical relativity and the opinion of Mr Keough, Mr Taylor was of the opinion that despite the Thomson River frontage of "Tocal", the better country on "Boonamerrie" was "better than the better country on "Tocal" where there was much more Bull Mitchell grass in the downs country. He thought that a reduction of the degree applied to the "Tocal" valuation was not warranted for "Boonamerrie".
While the "Boonamerrie" valuation is seen to have overall relevance, it will be specifically dealt with later.
The relevance of the valuation of "Boonamerrie" from Mr Keough's point of view is that, in his opinion, the carrying capacity of the subject "Stroud" block is 390 head. In comparison with the BAV reflected by the Department's reduced valuation of "Tocal" ($177.27) he would apply $220 to the 390 head capacity of "Stroud", as a stand-alone block. That would produce a valuation of $85,800, placing no value on the "Spring Hill" component of the subject lease.
Mr Taylor's carrying capacity estimate for the overall area contained in both "Stroud" and "Spring Hill" is one beast to 20 ha (650 head). He did not lead evidence as to the break-up between the two blocks. It is observed that from the valuation of $147,000 appealed against the resultant BAV for 650 head is near the same as that adopted by Mr Keough for "Stroud" alone. It is clear from his evidence however, that Mr Taylor does not accept that in the valuation exercise, "Spring Hill" should be regarded as having no value.
The evidence suggests that there was no disagreement between the carrying capacity estimates of Mr Taylor for the "Weeumbah West" aggregation of leases, where he suggested one beast to between 14 ha and 15 ha. Mr Keough says that "Stroud" as a stand-alone block is very similar overall to that of "Weeumbah West" and Mr Taylor's mapping classifications tend to support that opinion. However, to add some confusion to what appears to be agreement between the parties is that Mr Taylor's carrying capacity estimate for "Weeumbah West" was said to have been made on a mixed herd basis, with greater numbers of cattle than adult equivalents, which apparently was the basis for Mr Keough's estimate. It could well be that, in aggregation, the several small blocks which go to make up "Weeumbah West" would carry more cattle of mixed herd composition than suggested by Mr Taylor, if Mr Keough's estimate was correct and based on adult equivalents.
Putting that aside, and turning to the sales evidence, the "Weeumbah" sale, on the eastern frontage of the Thomson River is the best comparison with "Stroud" as a stand-alone block, in terms of size and general albeit, superior, location. It contains an area of 6,441 ha and the departmental estimate of carrying capacity is one beast to 11 ha. It has, apparently, superior natural water (with an irrigation licence) and on a carrying capacity basis is said by the Department to be superior to the individual "Weeumbah West" blocks, and as a consequence to "Stroud". It appears that a loading for the small size of the "Weeumbah West" blocks had been applied by the Department to the individual valuations. The differential in valuation before the water disability allowance for those blocks was an application of $33.16/ha to the "Weeumbah" sale property and about $30/ha to the "Weeumbah West" blocks. The BAV applied to "Weeumbah" was $377.32.
It would seem therefore that despite the suggested differences in quality of country, if a carrying capacity of say 412 head, mixed herd, or one beast to 14.5 ha for "Stroud" was to be accepted, the valuation applied to "Weeumbah" based on its sale, could be argued to support a valuation for "Stroud", as a stand-alone block, not far short of Mr Taylor's total valuation of both "Stroud" and "Spring Hill". Such an analysis would indicate that neither "Stroud" nor the total lease area including "Spring Hill" has been valued excessively.
There is dispute about the adoption of the "Weeumbah" sale as a basis for valuation but it is observed that the sales evidence was applied conservatively to "Weeumbah" itself, when the analysis suggested a 65% increase above its 1998 valuation and a 50% increase was applied. When the valuation applied to "Weeumbah" is reduced to a direct comparison with "Stroud" alone, it seems to me that Mr Keough's calculation based on a BAV of $220 has no evidential market support and his assessment has not been proved realistic.
Finding
While there are obvious difficulties associated with the valuation of the aggregated lease area including the severed parcel, and the usage potential of the "Spring Hill" block is at best, severely restricted, I have not been persuaded that, on a considered analysis, the valuation amount to which Mr Taylor led evidence has been proved wrong. Nevertheless that valuation is less than the amount appealed against and the appeal will be allowed accordingly.
Order
RV2002/0818 - "Stroud" and "Spring Hill"
The appeal is allowed. The valuation made by the chief executive is set aside and the unimproved value for lease rent assessment as at 1 October 2001 determined in the amount of One Hundred and Forty-three Thousand Dollars ($143,000).
RV2002/0819 - "Boonamerrie"
Real Property Description: Lot 4952 on PH203:PPH29/4952, Parish of Kalkigoo.
Area:25,964.699 ha
Valuation appealed against: $250,000 - Evidence led to a valuation of $242,500
Owner's Estimate of Value: $187,500 (Notice of Appeal) - evidence led to a valuation of $146,550
Nature of Country:
By Mr Taylor:
4,590 ha (18%) fair quality downs, mostly well shaded with 530 ha open.
2,030 ha (22%) (sic 8%) channels, with about 2/3 including thick gidyea throughout.
5,450 ha (12%) (sic 21%) gidyea scrub varying from medium timbered to lighter red soil semi open, to part scalded gidyea.
13,894 ha (35%) (sic 53%) inferior forest of mostly mulga.
Mr Keough did not contest the actual classification, although he said the plan included in Mr Taylor's report did not identify the extent of the growth of gidyea seedlings including its encroachment into the downs country. Mr Taylor did not deny Mr Keough's allegation that the mulga had been described in the departmental file as both "broad leaf" and "narrow leaf". In Mr Keough's opinion, the narrow leaf was not mulga but "slender wattle" as identified at p.75 of the Department of Primary Industries' publication "Plant Identification in the Arid Zone" by Jenny Milson, with comments including - "It does not appear to be eaten by stock." Mr Keough had not had what he believed to be the slender wattle specifically identified but thought that a false impression would be given of the drought fodder potential of the block if slender wattle was incorrectly described as mulga. Mr Taylor's evidence was that he could not be certain that he saw narrow-leaf mulga on "Boonamerrie" and accepted that the species referred to by Mr Keough could have been slender wattle.
Carrying Capacity:
By Mr Taylor:
One beast to 20 ha or 1,284 beasts approximately - decreased from one beast to 18 ha (1,450 beasts approximately) on a mixed herd basis.
Mr Keough's opinion was that the sustainable carrying capacity of this block would not exceed 850 head or one beast to 30 ha. He conceded that he might be regarded as conservative in his stocking rates but was strongly of the opinion that conservatism was necessary if the country was not to become degraded in the same manner as the "Spring Hill" block.
It seems likely that the major difference of opinion would relate to the potential of the inferior country and the revised estimate of Mr Taylor in comparison with the estimate of one beast to about 21 ha for the property "Tocal", discussed in the previous matter. Certainly it seems that Mr Taylor's revised estimate still remains high in comparison with "Tocal".
Overall Evidence of Value
Mr Taylor's valuation was first calculated as follows:
25,965 ha @ $10.20 $265,000
Allow for gidyea encroachment: value at
25,965 ha @ $9.90 $257,903 (sic $257,053)
Less water disability 2.5% $6,426
$250,627Mr Taylor amended this figure to $242,500 but did not provide the component parts of the valuation.
As for the valuation of "Stroud" and "Spring Hill", the sales of "Tandarra", "Booloo", "Weeumbah" and "Thurles Park" were adopted by Mr Taylor as supporting the valuation appealed against. The criticism of the use of those sales by Mr Keough was discussed earlier.
I have accepted that those sales supported the increase of 50% above the 1998 valuations of the specific sale properties. However by reducing the 2001 valuation of both "Boonamerrie" and "Tocal", the Department, through Mr Taylor, accepted that the previously existing relativity between the valuation of those properties and the valuations of the sale properties required correction. That was achieved through adjustment of the carrying capacities of both "Tocal" and "Boonamerrie". It is not clear however why the historical relativity between the carrying capacities of "Tocal" and "Boonamerrie" were altered so significantly with the resultant alteration of relativity between the valuations of those two properties.
That is largely the basis of the appellants' case. They say that if the previous relativity was to have been altered, it should have gone the other way with "Boonamerrie" being valued overall at less than "Tocal" rather than at a slightly higher amount as had existed historically. The appellants say that at least the same BAV as applied to "Tocal" should be applied to "Boonamerrie" and that the carrying capacity of "Boonamerrie" should be brought back into line as well.
There seems to be logic in the appellants' approach. Even if the BAV of $177.27 which is reflected in the reduced valuation of "Tocal" was applied to Mr Taylor's 1,284 head carrying capacity assessment of "Boonamerrie", a valuation of about $227,500 rather than $242,500 would result. The appellants say that a carrying capacity of 850 head should be adopted, but again that would appear to be on an adult equivalent basis.
Bearing in mind historical relativities between the carrying capacity estimates of "Tocal" and "Boonamerrie" I have been persuaded that Mr Taylor's reduced estimate of one beast to 20 ha for "Boonamerrie" is still excessive even if he is correct in his opinion that on an overall basis "Boonamerrie" is superior to "Tocal". For the purpose of the exercise I will base my considerations on a carrying capacity reduced to one beast to 22 ha or 1,180 head on a mixed herd basis.
Findings
There is no evidence as to the basis for the valuation of "Tocal", other than its reduced carrying capacity. Adopting the $177.27 BAV applied to "Tocal", a valuation of about $209,000 would result for "Boonamerrie", based on a carrying capacity of 1,180 head.
It is clear that the sales evidence used by Mr Taylor is difficult to compare with "Boonamerrie" on an overall basis. It is also clear that the Department has accepted that, while the adopted sales evidence supports the 50% increase above the 1998 valuations of the sale properties, application of that blanket increase to the subject "Boonamerrie" and the adjoining "Tocal" would result in excessive valuations.
While Mr Taylor has used his professional judgment in disturbing previous relativities, including the relativity between "Tocal" and "Boonamerrie", he appears to have been either overly influenced by the carrying capacity estimates of the purchaser of "Tocal", or the sales history of "Tocal" itself, or insufficiently influenced by the estimates of the well-experienced owners of "Boonamerrie" who are the appellants in this matter.
In WM & TJ Fischer v The Valuer-General (1983) 9 QLCR 44 at p.46, the Land Appeal Court said:
"Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence."
However, in this case, the methodology adopted by the Department relies heavily on the principle of relativity and the sales evidence is not of comparable lands. While proof is difficult, I am satisfied on the evidence that real potential exists for Mr Taylor to have erred in his relative carrying capacity estimates between "Tocal" and "Boonamerrie". In the circumstances I have serious reservations about placing reliance on carrying capacity estimates particularly when differing bases (ie mixed herd or adult equivalent) are adopted. I am not prepared to base this determination on the precise previous relativity between "Tocal" and "Boonamerrie" or on BAV methodology. However I will lean to Mr Taylor's opinion that the overall valuation of the larger in size "Boonamerrie", should be greater than that of "Tocal". I will adopt a valuation of $8/ha overall, to include the disability allowances suggested by Mr Taylor. That results in an amount of $207,720 which is rounded to $207,500.
Order
RV2002/0819 - "Boonamerrie"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value of the land for lease rent assessment as at 1 October 2001 determined in the amount of Two Hundred and Seven Thousand Five Hundred Dollars ($207,500).
RV2002/0820 - Part of "Weeumbah West"
Real Property Description: Lot 29 on M22814:GHPL29/10966, Parish of Lovat.
Area:1,030.734 ha
Valuation appealed against: $28,700
Owner's Estimate of Value: $21,525 (Notice of Appeal)
Nature of Country
By Mr Taylor:
195 ha downs, open to very lightly shaded, with scattered whitewood, boree, sandalwood and odd gidyea.
428 ha lighter brown soil downs, well shaded.
408 ha channels mostly heavily flooded channels of the Thomson River with higher areas of floodplain.
Carrying Capacity
By Mr Taylor - One beast to 15 ha or 70 head (approximately)
Mr Keough accepted Mr Taylor's estimate except for the actual calculation.
Evidence of Value
Mr Taylor valued the land as follows:
1,031 ha @ $28.60 $29,500
Less water disability 2.5% $737
Balance $28,762
Adopt $28,700
Mr Taylor relied on the sales of "Tandarra", "Booloo" and "Weeumbah", the details of which have earlier been discussed. Each sale property was much larger in area and overall superior to the subject block but supported the increase of 50% above the 1998 valuation.
It would appear that the Department's valuations of this and the other small leasehold blocks forming part of the "Weeumbah West" aggregation have had some premium included due to their small size. They are valued separately in this instance, because each is separately leased. Whatever was the purpose of their original survey and there was some conjecture about that, it is difficult to accept that a market would now exist for blocks of this size in this locality which would attract any identifiable premium above the grazing value as part of a larger amalgamation.
It is well established that under normal market conditions the larger pool of purchasers able to afford a smaller rural property has an inflationary effect on pro-rata value. However where there is no proved demand for very small blocks such as the subject the probable buyer would be an adjoining owner who might be expected to pay some premium only if the acquisition provided some identifiable benefit to the adjoining land. As unimproved land no such benefit is seen to exist in these instances.
There is no sales evidence of blocks of this size but if the grazing quality of each was compared to that of the "Weeumbah" sale property which is probably the most comparable overall, a pro-rata value in excess of $25/ha is seen to be difficult to justify.
I see merit in Mr Keough's approach in apportioning the worth of each block based on its grazing capabilities as part of the overall "Weeumbah West" aggregation.
Finding
There are differences in the classification of each of these small individual blocks and minor differences on some in the calculation of number of cattle capable of being carried. However I think for practical purposes an apportioned value of $25,000 for each block to include the water disability allowed by Mr Taylor, would not be offensive to a practical market approach.
Order
Appeal RV2002/0820 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).
RV2002/0821 - Part of "Weeumbah West"
Real Property Description: Lot 27 on M22814:GHPL29/10977, Parish of Lovat.
Area:1,032.353 ha
Valuation appealed against: $30,000
Owner's Estimate of Value: $22,500 (Notice of Appeal)
Nature of Country:
By Mr Taylor:
217 ha downs, open to very lightly shaded, with scattered whitewood, boree, sandalwood and odd gidyea.
725 ha lighter brown soil downs, well shaded.
90 ha channels mostly heavily flooded channels of the Thomson River with higher areas of floodplain.
Carrying Capacity:
By Mr Taylor - One beast to 14 ha or 75 head (approximately).
Evidence of Value
Mr Taylor valued the land as follows:
1,031 ha @ $30 $31,000
Less water disability 2.5% $775
Balance $30,225
Adopt $30,000
The reasons for the finding in appeal RV2002/0820 are also applicable to this appeal.
Order
RV2002/0821 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).
RV2002/0822 - Part of "Weeumbah West"
Real Property Description: Lot 26 on M22814:GHPL29/10976, Parish of Lovat.
Area:1,035.995 ha
Valuation appealed against: $30,000
Owner's Estimate of Value: $22,500 (Notice of Appeal)
Nature of Country:
By Mr Taylor:
295 ha downs, open to very lightly shaded, with scattered whitewood, boree, sandalwood and odd gidyea.
666 ha lighter brown soil downs, well shaded.
75 ha channels. Mostly heavily flooded channels of the Thomson River, with higher areas of floodplain.
Carrying Capacity:
By Mr Taylor - One beast to 14 ha or 75 head (approximately).
Evidence of Value
Mr Taylor valued the land as follows:
1,036 ha @ $29.90 $31,000
Less water disability 2.5% $775
Balance $30,225
Adopt $30,000
The reasons for the finding in appeal RV2001/0820 are also applicable to this appeal.
Order
RV2002/0822 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).
RV2002/0823 - Part of "Weeumbah West"
Real Property Description: Lot 30 on M22814:GHPL29/11235, Parish of Lovat.
Area:1,035.995 ha
Valuation appealed against: $30,000
Owner's Estimate of Value: $22,500 (Notice of Appeal)
Nature of Country:
By Mr Taylor:
380 ha downs, open to very lightly shaded, with scattered whitewood, boree, sandalwood and odd gidyea.
70 ha lighter brown soil downs, well shaded.
586 ha channels. Mostly heavily flooded channels of the Thomson River, with higher areas of floodplain.
Carrying Capacity:
By Mr Taylor - One beast to 15 ha or 70 head (approximately).
Evidence of Value
Mr Taylor valued the land as follows:
1,036 ha @ $29.90 $31,000
Less water disability 2.5% $775
Balance $30,225
Adopt $30,000
The reasons for the finding in appeal RV2002/0820 are also applicable to this appeal.
Order
RV2002/0823 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).
RV2002/0824 - Part of "Weeumbah West"
Real Property Description: Lot 28 on M22814:GHPL29/10965, Parish of Lovat.
Area:1,032.758 ha
Valuation appealed against: $30,000
Owner's Estimate of Value: $22,500 (Notice of Appeal)
Nature of Country:
By Mr Taylor:
489 ha downs, open to very lightly shaded, with scattered whitewood, boree, sandalwood and odd gidyea.
300 ha lighter brown soil downs, well shaded.
244 ha channels. Mostly heavily flooded channels of the Thomson River, with higher areas of floodplain.
Carrying Capacity:
By Mr Taylor - One beast to 14 ha or 75 head (approximately).
Evidence of Value
Mr Taylor valued the land as follows:
1,033 ha @ $30 $31,000
Less water disability 2.5% $775
Balance $30,225
Adopt $30,000The reasons for the finding in appeal RV2002/0820 are also applicable to this appeal.
Order
RV2002/0824 - Part of "Weeumbah West"
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value for lease rent assessment purposes as at 1 October 2001 determined in the amount of Twenty-five Thousand Dollars ($25,000).
RE WENCK
MEMBER OF THE LAND COURT
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