Lansdowne Pastoral Company Pty Ltd v Department of Natural Resources and Water (Pastoral Holding Rental)
[2008] QLC 131
•30 June 2008
LAND COURT OF QUEENSLAND
CITATION: Lansdowne Pastoral Company Pty Ltd v Department of Natural Resources and Water (Pastoral Holding Rental) [2008] QLC 0131 PARTIES: Lansdowne Pastoral Company Pty Ltd
(appellant)v. Chief Executive, Department of Natural Resources and Water
(respondent)FILE NO: RV2006/0687 DIVISION: Land Court of Queensland – General Division PROCEEDING: An appeal against a rental valuation. DELIVERED ON: 30 June 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 "Lansdowne Pastoral Holding" for rental purposes as at 1 October 2005 is determined at Two Million, Three Hundred and Forty-Four Thousand Dollars ($2,344,000). CATCHWORDS: Unimproved value – for rental purposes - grazing property at Tambo – comparison with determinations of selected cases – sales relied upon in the selected cases – other sales evidence - classifications of country - carrying capacity – sheep area values – disabilities and discounts - Valuation of Land Act 1944 APPEARANCES: Mr A Boyd, agent, for the appellant.
Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent.
This is an appeal by a landowner in the then 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 Department) under the provisions of the Valuation of Land Act 1944 (the Act).
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, collectively known as "Lansdowne". However, the property comprises two parts, the northern part, known as "Lansdowne" Head Station, situated approximately 16 km south of Tambo, while the southern part, known as "Lower Lansdowne", is situated approximately 50 km south of Tambo.
"Lower Lansdowne" comprises a mixture of freehold and leasehold land, approximately half of which is the "Lansdowne Pastoral Holding" (the Holding) held under leasehold tenure. The Holding itself comprises two parts, approximate 8 km apart, separated by the freehold component.
The "Lansdowne" aggregation was valued by the Department in one valuation under the provisions of s.34(1)(b) of the Act. An appeal against that valuation to the Land Court by the company has been heard and determined.[1] However, under the provisions of s.35(2) of the Act, a separate valuation was made of all the land in a lease for rental purposes.
[1] Lansdowne Pastoral Co Pty Ltd v Department of Natural Resources and Water [2008] QLC 0130.
The Holding has a total area of 14,147.22 ha, with its northern severance being situated approximately 50 km south of Tambo. As at 1 October 2005, the Department applied an unimproved value of $2,600,000, or $184/ha, to the Holding for rental purposes. The company appealed to the Land Court against that valuation, stating that its estimate of the unimproved value is $1,450,000.
The appeal was lodged on the company's behalf by its agent, Mr A Boyd. The grounds of appeal are wide-ranging but general in nature, essentially contending that the unimproved value is excessive because of the failure by the Department to take into account and make proper allowance for various matters, or to apply the correct principles of valuation.
This was one of a number of cases tried by fast-track hearing, following the determination of selected cases, "Ravensbourne" in the Shire of Blackall, and "Minnie Downs" in the Shire of Tambo[2]. The parties agreed that the remaining appeals be determined by confining the evidence to comparisons with the decisions in those cases and the sales relied upon in arriving at those determinations. However, because of the special circumstances of this appeal, further evidence in relation to other sales and the relativity of valuations of other properties in the southern part of the Shire were also heard. Much of that evidence was common to the evidence heard in the appeal against the valuation of the "Lansdowne" aggregation.
[2] Walker and Anor v Department of Natural Resources and Water [2008] QLC 0008
The Evidence for the Appellant
Evidence for the appellant was given by its manager, Mr C H Turnbull, who is also a director of the company, which conducts a sheep stud operation on the "Lansdowne":
·undulating Mitchell grass downs;
·undulating downs with timber;
·open alluvial country with scalded claypan areas;
·wooded downs; including patches of scrub country; and
·wooded alluvial plains along the Ward River, with claypan areas and braided channels.
However, Mr Turnbull did not provide his estimates of the areas of the different types of country.
Mr Turnbull contends that the Holding should be valued at a lower rate per hectare than the aggregation, for the following reasons:
·The Holding is severely affected by flooding along the Ward River. Both severances of the Holding front the river, but flooding is particularly severe on the northern severance to the west of the river. That severance, comprising Top Ram Paddock and Lower Ram Paddock, is too dangerous for sheep from November to March each year.
·The eastern part of the southern severance contains most of the ashy country on the aggregation. Its qualities are described in the reasons for the decision on the aggregation appeal,[3] but it is sufficient to say here that it is inferior to the better Mitchell grass downs country.
·The Holding is severed, the severances being being approximately 8 km apart and on different sides of the river. The Holding must be valued as a single entity, as if it was held separately to the freehold land on "Lower Lansdowne". If it was held separately, the severance would create severe management problems. That would affect the price that a prudent purchaser would pay for the property and so affect the unimproved value.
3 [2008] QLC 0130.
Mr Turnbull's principal concern is that the Department's valuation does not recognise that there is a lower level of values in the southern part of the Tambo Shire. He referred to the properties "Barwhinnock" and "Langlo Downs", the valuations of which had increased by only 100% and 108% respectively. While Mr Turnbull concedes that the selected case, "Minnie Downs", would affect the valuation of the Head Station, "Barwhinnock" is in close proximity to "Lower Lansdowne" of which the subject land is part.
According to Mr Turnbull, the valuation of the Holding increased by 203%, compared with the various selected cases which have been determined by the Court, resulting in increases from "Minnie Downs" of 168%, "Ravensbourne" of 158% and "Tara"[4] (in Barcaldine Shire) of 150%. In Mr Turnbull's opinion, a reasonable valuation would be an increase of 114%, to $1,840,000, with an allowance of 5% for severance, which would reduce the valuation to $1,748,000. Upon reflection, Mr Turnbull considers that a further 3% should be allowed for the severe flooding on the Holding, which would reduce his contended valuation to $1,695,560, or $119.85/ha.
[4] AB Walker v Department of Natural Resources and Water [2008] QLC 0005
The Evidence for the Department
Evidence for the Department was given by registered valuer, Mr PJ Haydon, who explained that he had valued the Holding by reference to the Department's historical records, with the assistance of the WARLUS land system mapping, regional ecosystem mapping and satellite imagery.
Mr Haydon described the country on the Holding as comprising:
7,055 ha (50%) downs, with a carrying capacity of 1 sheep to 1.2 ha;
3,600 ha (25%) bloodwood/ironbark red soil ridges, with a carrying capacity of 1 sheep to 1.4 ha;
250 ha (2%) remnant scrub, with a carrying capacity of 1.35 ha; and
3,242.22 ha (23%) channels, with a carrying capacity of 1 sheep to 2 ha.
He assessed the carrying capacity of the Holding at 1 sheep to 1.4 ha, or 10,105 sheep.
Mr Haydon dismissed the comparisons made by Mr Turnbull with the sales of "Barwhinnock" and "Langlo Downs". They were, he said, different types of country to the Holding. "Barwhinnock" has poor quality scrub and wooded downs which is inferior to the open downs on the Holding. In his opinion, the sales of "Nive Downs" and "Minnie Downs" were more appropriate comparisons, both of them having similar types of country, although "Nive Downs" has some developed scrub, which accounted for the applied value of $164/ha, compared with the $185/ha determined for "Minnie Downs".
Mr Haydon maintained that the disabilities of severance and flooding had been sufficiently taken into account in his revised valuation of $180/ha. He pointed out that "Nive Downs" was also a severed property, comprising two separated parcels and that was reflected in the applied value of $164/ha.
The Issues
Mr Turnbull did not disagree with Mr Haydon's classification of the country, but he expressed the view that most of what Mr Haydon had classified as channels, was claypan country and could not carry 1 sheep to 2 ha. He agreed with the overall carrying capacity assessed by Mr Haydon of 1 sheep to 1.4 ha. However, it seems to me that while Mr Turnbull runs "Lower Lansdowne" as a whole, he has probably never turned his mind to what he could run on the Holding as a separate entity. He has probably accepted the traditional carrying capacity assessed by the Department.
If the carrying capacity of the "Lansdowne" aggregation is 1 sheep to 1.4 ha, on the evidence of the present case it would be difficult to justify that same carrying capacity on the Holding. The northern severance is badly flooded and the evidence is that the two paddocks there are not stocked for four months of the year. When cross-examined about his carrying capacity of 1 sheep to 1.4 ha on the red soil ridges, Mr Haydon conceded such a carrying capacity might be "a bit tight". Furthermore, having regard to the proportion of ashy country on the east of the southern severance, the carrying capacity of the downs at 1 sheep to 1.2 ha, could also be a bit tight.
However, as the parties have agreed to a carrying capacity of 1 sheep to 1.4 ha, I am reluctant to interfere by imposing some arbitrary carrying capacity for the purpose of this valuation. Instead, I will take those aspects into account by applying a somewhat lower sheep area value.
Conclusion
As in the aggregation appeal, the real issue for the appellant is the percentage increase in the valuation, compared with the percentage increases in the valuations of other properties. However, as I pointed out in that decision, comparisons of percentage increases have little or no validity[5]. I accept Mr Haydon's evidence that "Barwhinnock" is different country and not a suitable comparison for the Holding. Similarly with "Langlo Downs" I also accept that "Nive Downs" and "Minnie Downs" are more appropriate comparisons.
[5] At [37] and [38]
In my reasons for the decision on the valuation of the "Lansdowne" aggregation, by comparison with the sheep area value for "Minnie Downs" at $277 and "Nive Downs" at $230, I determined the sheep area value for the aggregation at $235. However, I took account of the fact that the aggregation comprises an area of almost 63,000 ha, nearly three times the size of "Minnie Downs" and more than 4½ times the size of "Nive Downs". I also took into account the flooding and severance disabilities.
While size is not a factor in the valuation of the Holding, severance and flooding are. The evidence is that the Holding is more severely affected by flooding than the aggregation. It is also somewhat inferior country overall.
Taking all these matters into account, it seems to me that the best comparison is with the value applied to "Nive Downs", the sheep area value of which was assessed by the Department at $230. However, that sheep area value takes into account the cost of developing 4,387 ha of scrub. It would seem appropriate, therefore, that the sheep area value of the Holding be somewhat higher.
Although I do not propose to interfere with the agreed carrying capacity of 1 sheep to 1.4 ha, because of my concerns expressed earlier about the quality of the country, the flooding, ashy country and Mr Haydon's reservations about the carrying capacity on the red soil ridges, I propose to adopt a somewhat lower sheep area value than would otherwise be applied to a property with a carrying capacity of 1 sheep to 1.4 ha. In the circumstances, I propose to adopt a sheep area value of $232/ha, slightly higher than the sheep area value of "Nive Downs".
Therefore, the value of the Holding for rental purposes will be determined at 10,105 sheep at a sheep area value of $232, which amounts to a rounded value of $2,344,000, or approximately $166/ha.
Order
The appeal is allowed, the valuation of the Chief Executive is set aside, and the unimproved value of "Lansdowne Pastoral Holding" for rental purposes as at 1 October 2005 is determined at Two Million, Three Hundred and Forty-Four Thousand Dollars ($2,344,000).
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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