Lansdowne Pastoral Company Pty Ltd v Department of Natural Resources and Water

[2008] QLC 142

LAND COURT OF QUEENSLAND

CITATION:Lansdowne Pastoral Company Pty Ltd v Department of Natural Resources and Water (Permit to Occupy Rental) [2008] QLC 0142

PARTIES:Lansdowne Pastoral Company Pty Ltd

(appellant)

v

Chief Executive, Department of Natural Resources and Water
(respondent)

FILE NO:RV2006/0689

DIVISION:Land Court of Queensland – General Division

PROCEEDING:  Appeal against a rental valuation

DELIVERED ON:                  16 July 2008

DELIVERED AT:                   Brisbane

HEARD AT:Blackall

MEMBER:Mr JJ Trickett, President

ORDER:The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the "Lansdowne" Permit to Occupy for rental purposes as at 1 October 2005 is determined at Eighty-seven Thousand Dollars ($87,000).

CATCHWORDS:                  Unimproved value – for rental purposes – 506 ha parcel handy to Tambo – comparison with determinations of selected cases – type of country – part fenced off and unusable – market for small paddock – sheep area values – Valuation of Land Act 1944

APPEARANCES:                  Mr A Boyd, agent, for the appellant

Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent

1. This is an appeal by a landowner in the Shire of Tambo against the unimproved value applied to its land for rental purposes by the Chief Executive, Department of Natural Resources and Water (the respondent) under the provisions of the Valuation of Land Act 1944 (the Act).

Background

1. The Lansdowne Pastoral Company Pty Ltd (the company) is the owner of a grazing property known as “Lansdowne”, containing a total area of 62,933.323 ha.  However, the property comprises two parts, the northern part known as “Lansdowne” Head Station, situated about 16 km south of Tambo, while the southern part, known as “Lower Lansdowne”, is situated approximately 50 km south of Tambo.

2. The company appealed against the valuation of the whole of the property and of various components of it.  The present appeal is against the valuation of a small component of “Lansdowne” Head Station.  On the northern boundary of the property is a Permit to Occupy over an area of 506 ha, situated about 16 km south of Tambo on the bitumen sealed Ward Road.  As at 1 October 2005, the Department applied an unimproved value of $106,000, or $210/ha, to that parcel of land.  The company appealed against that valuation, contending that its estimate of the unimproved value is $57,000.

3. Under the provisions of s. 14 of the Act, the unimproved value of this parcel of land must be determined as if the land is held in fee simple.  However, in determining the unimproved value of land in a permission to occupy under the Land Act 1994, regard must be had and proper allowance made for any restriction or limitation of use, having regard to the purposes and conditions to which that permission to occupy is subject. 

4. Evidence for the company was given by Mr CH Turnbull, the manager of “Lansdowne”.  Mr Turnbull was concerned that the valuation of that small parcel of land had increased by 315% from the previous valuation made as at 1 October 2001.

5. The Permit to Occupy is over an area which seems to have been part of the road, perhaps a road reserve, with the Ward Road inside its eastern boundary.  Mr Turnbull explained that for the sake of safety of stock and of the public, the company had fenced the road on both sides.  An area, which he estimated to be 85 ha, was not usable.  He maintained that the Department had regarded that land as unusable at the time of the last valuation and he was concerned that it had not been taken into account in the valuation under appeal. 

6. Mr Turnbull further explained that the Permit to Occupy is over a stock route.  As it has been fenced, it is regarded as an “exclusion zone”, so that when travelling stock come through that land, the “Lansdowne” stock must be removed.  According to Mr Turnbull, that happens fairly frequently. 

7. Mr Turnbull was aware that the Department had valued the land as a small paddock handy to Tambo.  However, although there is a small dam which lasts for about six months, he thought that it would have little appeal to a prospective purchaser, being situated beside a well trafficked, noisy road, with stock having to be removed each time a travelling mob came through.  In his opinion, a valuation of no more than $67,000 was appropriate.

8. Evidence for the Department was given by registered valuer, Mr PJ Haydon, who described the land as comprising:

   310 ha (61%) downs, with a carrying capacity of 1 sheep to 1.3 ha;
   105 ha (21%) channels, with a carrying capacity of 1 sheep to 2.2 ha;
   91 ha (18%) unavailable.

   He assessed the carrying capacity at 1 sheep to 1.8 ha, or 281 sheep.

9. Mr Haydon was aware that the road had been fenced out of the block, but his estimate of the unusable area was 91 ha.  Notwithstanding that and the limited water supply, he was of the opinion that it would be in demand as a handy paddock close to town.

10. Mr Haydon applied a valuation of $210/ha to the total area, realising that 91 ha could not be used.  However, he maintained that if he applied no value to the 91 ha, he would apply a value of $250/ha to the remaining 415 ha.  His comparison was with the valuation of the $240/ha applied to the nearby property, “Uanda”. 

The Issues

1. The principal issue for the company is the extent of the increase in the unimproved value.  Mr Turnbull contends that the land is of limited use, beside a busy road, with limited water and inconvenience each time travelling stock come through.  In his opinion, it would have little appeal as a separate paddock.  However, it was a useful addition to the “Lansdowne” aggregation.

2. Mr Haydon was of the opinion that being situated only 16 km from town, it would be a handy dealer’s paddock notwithstanding the fenced off area, the limited water supply and the inconvenience of travelling stock.  He contends that the value per ha should be somewhat higher than the $240/ha applied to the most valuable property in the area, “Uanda”.

Conclusion

1. In my view, the area of 91 ha which has been fenced off and cannot be used by the company, should be excluded from the valuation.  The remaining 415 ha appears to be reasonable grazing country.  It no doubt makes a useful adjunct to the “Lansdowne” aggregation, notwithstanding its disadvantages. 

2. In my view, that would be its highest and best use.  Although situated close to Tambo, I accept Mr Turnbull’s opinion that it would have very little appeal, even as a dealer’s paddock. 

3. It seems to be agreed that even if it was held as freehold land, it would not be suitable as a rural site upon which to construct a house.  I accept Mr Turnbull’s evidence that it is a condition of the Permit to Occupy that travelling stock have the right to use the land and that the company’s stock must be removed.  That must be taken into account in making the valuation.

4. The Act requires that the land be valued as a separate entity.  If it was held by a person who had no other nearby land, the inconvenience of de-stocking the property each time travelling stock come through, must detract from its value.  Having regard to Mr Haydon’s evidence, it seems to me that his assessment of $210/ha is appropriate.  However, that should be applied only to the 415 ha which are available for use.  That amounts to a valuation of $87,150.  I propose to apply $87,000.

Order

The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the “Lansdowne” Permit to Occupy for rental purposes as at 1 October 2005 is determined at Eighty-seven Thousand Dollars ($87,000).

JJ TRICKETT
PRESIDENT OF THE LAND COURT