Lewis Baba v. Chief Executive, Department of Natural Resources
[1996] QLAC 129
•27 September 1996
LAND COURT BRISBANE
[1996] QLAC 129
27 SEPTEMBER 1996
Re:Appeal against Annual Valuation Valuation of Land Act 1944 Shire of Kingaroy (AV95-546)
Lewis Baba v.
Chief Executive, Department of Natural Resources
(Hearing at Kingaroy) D E C I S I O N
Mr Baba is the owner of land described as Lot 1 on Registered Plan 44816, Parish of Burrandowan, County of Boondooma, containing an area of 44.91 ha. Under the provisions of the Valuation of Land Act 1944, as at 1 January 1995 the respondent determined the unimproved value of that land at $39,500. An objection against that valuation resulted in a reduction of the valuation to $36,000.
Mr Baba appealed to the Land Court against the respondent’s decision upon his objection, advising that his estimate of the unimproved value was $4,794. The grounds of appeal referred to:
·the agreed exchange price for the land compared with the unimproved value;
·a comparison of the unimproved value with those applied to similar land used for similar purposes;
·the unimproved value was not a proportion of the unimproved value previously applied to the aggregation of which the subject land formed part;
·the use of the subject land for agistment grazing purposes in conjunction with a larger parcel adjacent to it.
At the hearing of the appeal Mr L Baba appeared and gave evidence. The respondent was represented by Senior Valuer, Mr M Hoare, while evidence was given by Mr AG Clift, a registered valuer employed by the Department of Natural Resources.
The subject land is situated approximately 20 km south-west of the Town of Kumbia, with access by means of the single lane bitumen sealed Niagara Road and by earth track through the adjoining property to the south, part of which is fenced into the subject land. There is an unformed road on the unfenced eastern boundary of the subject land. Electricity and telephone services are available to the property, which is zoned “Rural A” under the Town Planning Scheme for the Shire of Kingaroy.
Mr Baba did not disagree with Mr Clift’s description of the subject land which was as follows:
“ The land consists of an elevated property of good quality forest country
with a mixed topography varying from a higher ridge on the western side falling
in easy to moderate slopes (part broken in nature) to a narrow flat on the eastern side. The country consists of brown forest loams with some rock outcrops. Original vegetation was most likely comprised of ironbark, gum, some apple and odd kurrajong trees.
The property had been improved by being treated out with some scattered timber remaining and also some standing dead timber. The property has an outlook over adjacent rural properties.
There is no natural permanent or artificial water on the subject land.”
Mr Baba gave evidence that he acquired the subject land from Howard Hall Pty Ltd on 14 February 1993, as part of a transaction which involved the exchange of a house at Slacks Creek, plus an additional $10,000, the total consideration shown to be $65,000. Mr Baba expressed the view that $65,000 may have been a reasonable price at the time, but he admitted that he had little knowledge of real estate. He said that he purchased the property with the intention of growing fruit cropping trees of some nature and some timber trees which would show a return over a period of time. However, he has not yet commenced this venture. He expected that in the future he would live on the property, but that was not his main motivation for purchasing it.
At the time of purchase, the only improvements were boundary fencing on three boundaries (the southern fence being on the road boundary rather than on the property boundary) and clearing. The eastern boundary was not fenced on either side of a gazetted but unformed road.
Mr Baba explained that he had seen the subject land advertised in “The Courier-Mail” for sale by Howard Hall Pty Ltd. He had come and looked at the land and was attracted to the area by the locality and the climate, and because he felt that the rates would not be as high as on a city block. He had inquired at the Council and been assured that the rates would be approximately $60 per annum.
It seems that this reasoning was based on the fact that some time previously the subject land had been part of an aggregation held by Graham M and Kathryn A Kruger, comprising five separately surveyed parcels with a total area of 273.984 ha. The respondent had valued that land as one parcel at 31 March 1992 at $61,000, which attracted general rates (without discount) of $1,281 for the year ending 30 June 1993.
At some time subsequent to that date, it appears the aggregation was purchased by Howard Hall Pty Ltd and that the individual parcels were sold separately to various purchasers. It was Mr Baba’s contention that the valuation of the subject land should be an apportionment of the valuation of the aggregation at $61,000.
Mr Baba also contended that the unimproved value of the subject land was out of relativity with the valuations applied to the other parts of the aggregation. He tendered rate notices to show that as at 1 January 1995 the respondent had valued the land owned by Elaine Shearn (Lot 2 on Plan BO 441) of 118.376 ha at $31,500, land owned by GM and CM Large
(Lot 4 on Plan BO 441) of 12.096 ha at $20,000, and land owned by KB and GL Keogh (Lot 5 on Plan BO 502) of 37.965 ha at $22,000. He felt that the valuation of the subject land at
$36,000 for 44.91 ha was out of relativity.
In relation to his other ground of appeal, Mr Baba tendered a copy of what purported to be an agreement dated 16 July 1993 between himself and his neighbour to the west, Mr Max Eden, allowing Mr Eden to use the subject land for agistment purposes , in the words of the document, “grazing of his own stock namely cattle as he requires and when it is suitable for his use as a primary producer”. There was no monetary consideration for this agreement, but it appears that Mr Eden allows Mr Baba to use some of his domestic facilities from time to time.
Mr Baba was unaware of how frequently Mr Eden used the subject land for grazing purposes. However, such use must be intermittent as there is no water on the subject land and Mr Eden’s cattle must be returned to his home property to water. In addition, as there is no eastern boundary fence, it is necessary for someone to remain with the cattle to prevent them from straying onto the land to the east owned by Elaine Shearn. There is also evidence that at other times stock belonging to a Mr Woolford stray onto the subject land from the land owned by Mrs Shearn.
On the basis of this evidence, Mr Baba claimed that the subject land was used for purposes of grazing and therefore entitled to a concessional valuation under the provisions of
s.17of the Valuation of Land Act 1944.
Mr Clift explained that he considered the highest and best use of the subject land to be as a rural residential property and he valued it accordingly. He said that he had little regard to the sale of the subject land, because it involved an exchange for a house in Brisbane. However, he thought that any analysis of that sale would well support the valuation of $36,000. He also had little regard to the sales of the surrounding properties as he said that most of them involved exchanges of some kind. Therefore, he had to go further afield to find sales of comparable size to support the level of value applied to the subject land.
In support of his valuation, Mr Clift relied upon two sales. The first was in respect of an area of 39.83 ha situated on the Mannuem Mail Route Road, approximately 25 km south-west of Kingaroy. That property sold in August 1993 for $65,000, analysed to show an unimproved value of $30,400 and as at the relevant date the respondent had applied an unimproved value of
$28,000.
Mr Clift described that property as comprising easy sloping cleared sandy granite forest. Access was by means of a bitumen strip road and 2 km of formed decomposed granite road, with similar services to the subject land. It was zoned “Rural B”.
By way of comparison, he said it was slightly smaller than the subject property, with inferior access, country quality and location. Overall he considered it to be inferior to the subject land.
Mr Clift’s second sale had an area of 69.1 ha and was situated on Deep Creek Road, approximately 13 km west of Kingaroy. That property sold in October 1993 for $80,000 and
analysed to show an unimproved value of $44,000. The respondent had applied an unimproved value of $42,000 as at the relevant date.
Mr Clift described that property as comprising easy sloping forest, with bitumen strip access and similar services to the subject land. It was zoned “Rural A”. By way of comparison, he said it was larger than the subject property, with better location, similar access, and slightly inferior country quality. Overall he considered it to be superior to the subject property.
Mr Clift went on to explain that the Kruger aggregation had been valued in 1992 under the concessional provisions of s.17 of the Valuation of Land Act as land used for “farming”. In addition, the lands owned by Keogh and Shearn had also been valued in 1995 under the same concessional provisions. However, the land owned by Large had been valued on a similar basis to the subject land and Mr Clift considered that the valuations were in proper relativity. Mr Clift said that the evidence produced by Mr Baba was the first that he had seen of use of the subject land for grazing purposes. However, he was still of the opinion that it did not qualify for a concessional valuation under the provisions of s.17 of the Valuation of Land Act.
It is now necessary to consider whether Mr Baba has proved his grounds of appeal. First, despite Mr Baba’s expectations of the rating of the subject land, the respondent could not value that land by simply apportioning the value previously applied to the Kruger aggregation. The provisions of the Valuation of Land Act 1944 require the respondent to value the subject land at its unimproved market value as at the date of valuation. At that time the land existed as a separate entity of approximately 45 ha and must be valued as such.
Mr Baba did not know the sales referred to by Mr Clift to support the valuation. He expressed the opinion that he did not think that sales were a reliable guide to the unimproved value of land.
It is well established that the best evidence of unimproved market value is obtained by comparison with sales of unimproved or lightly improved land (Grahn v. The Valuer-General (1992) 14 QLCR 327). There is simply no authority for the proposition advanced by Mr Baba. Mr Baba’s grounds of appeal also questioned the unimproved value of $36,000 compared with the agreed exchange price of the land. However, the circumstances of the transaction are such that it should not be relied on as a basis for determining the unimproved value. In any case, Mr Clift thought that any analysis of the transaction would support the
unimproved value.
Mr Baba has also contended that the unimproved value of the subject land is out of relativity with those applied to other lands. While prima facie there does appear to be merit in Mr Baba’s contention, particularly with regard to lands owned by Shearn and Keogh, the evidence given by Mr Clift indicates that those lands were valued on a different basis to the subject land under the concessional provisions of s.17 of the Act. On the other hand, there does not appear to be any lack of relativity with the unimproved value applied to the property owned by Large.
The remaining matter for consideration is whether the subject land should also have
been valued under the concessional provisions of s.17 of the Act, as land used for purposes of “farming”.
Section 17 of the Act provides a statutory exception to the principle that all lands must be valued at their unimproved market value. Subsection (1) of s.17 provides that where land is exclusively used for purposes of “farming” any enhancement in that value for potential use for any other purpose must be disregarded.
Thedefinition of “farming” is contained in ss.(2) of s.17 as follows: “(a) the business or industry of grazing, ... or
(b)any other business or industry involving the cultivation of soils, the gathering in of crops or the rearing of livestock;
if the business or industry represents the dominant use of the land, and -
(c)has a significant and substantial commercial purpose or character; and
(d)is engaged in for the purpose of profit on a continuous or repetitive basis.”
The leading authorities on s.17 of the Valuation of Land Act 1944 are Whackett v. Chief Executive, Department of Lands and Thomason v. Chief Executive, Department of Lands, judgments of the Land Appeal Court delivered 3 March 1994. In a judgment of the same Court delivered on the same day (Chief Executive, Department of Lands v. Higbie), it was established that the definition of “farming” contained in ss.(2) can be satisfied where the relevant use of the subject land is carried on by someone other than the appellant. However, it is clear from those authorities that to satisfy the definition of “farming”, much more would be required than the occasional use of the land by the adjoining farmer for the short-term grazing of an indeterminate number of cattle. It also seems that such use was not exclusive, as there is evidence of the land being open to straying stock from the property to the east.
After considering the whole of the evidence and the authorities in relation to s.17 of the Act, I have no hesitation in concluding that the subject land is not exclusively used for purposes of “farming” as defined.
There is a statutory presumption contained in s.33 of the Act that the valuation applied by the respondent is deemed to be correct until proven otherwise. The High Court of Australia considered this matter in Brisbane City Council v. The Valuer-General (1978) 140 CLR 41. In that case the High Court found at pp.56-57 that if it is shown that:
·in making the valuation the Chief Executive acted upon a wrong principle, or
·made a serious error of fact, or
·the valuation was made by a method fundamentally erroneous,
the presumption created by s.33 is rebutted.
In the present case, in view of the findings above, it cannot be said that the Chief
Executive acted upon a wrong principle or made a serious error of fact, or that the valuation was made by a method fundamentally erroneous. Therefore, the appellant has failed to rebut the statutory presumption that the valuation is correct and the appeal must be dismissed.
Accordingly, the appeal is dismissed and the valuation of the Chief Executive in the sum of Thirty-six Thousand Dollars ($36,000) is affirmed.
JJ TRICKETT PRESIDENT OF THE LAND COURT
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