Maclean v Chief Executive, Department of Natural Resources
[1998] QLC 129
•29 October 1998
|
BRISBANE
29 October 1998
Re: Appeal against Annual Valuation -
Valuation of Land Act 1944 -
Valuation Roll No: 82494 -
Local Government: Ipswich City.
(AV96-483).
Rochlitz J and Alesia C Maclean
v.
Chief Executive, Department of Natural Resources
(Hearing at Ipswich)
D E C I S I O N
Background:
This matter relates to a property located at Germain Road, Ashwell, via Rosewood, and described as Lot 1 on RP 43004, Parish of Grandchester. The subject land (the subject) has an area of 30.453 hectares and is located about 7.5 kms south-west of Marburg, and about 6 kms north-west of Rosewood. The key issues are the nature of the land, changes in the valuation, the method of valuation, relativity, comparison of sales and the use of the land for farming purposes.
The subject has fair access to the northern end of Germain Road, which is formed gravel. Telephone and electricity are connected to the site, and mail and school bus services are available about 400 metres away in Greet Road. The subject is an elevated parcel, with broken plateau areas separated by steeply sloping land which is very difficult to negotiate by vehicle. The soils are black and basaltic in nature, and the land falls steeply to moderately from north to south. There are major outcrops of stony ground, and the vegetation is softwood scrub country. There is a gully running from north to south, which carries fast-flowing water after heavy rains.
The land is zoned “Rural” under the Moreton Shire Town Plan of 23 October 1982, and effective at the date of valuation of 1 January 1996. Moreton Shire has now been amalgamated with the Ipswich City Council, and the former town planning schemes maintain relevance under the new arrangements. The land is used for the breeding of Dexter cattle, and has been valued as “farming” land under section 17 of the Valuation of Land Act.
The Chief Executive, Department of Natural Resources, on 12 February 1996, issued a valuation of the subject at $35,500. Following an objection, the Chief Executive confirmed that figure on 8 August 1996. The appellants have now appealed claiming the unimproved value should more properly be $16,890. During the hearing on 24 July 1998, the Chief Executive led further argument that the subject did not appear to satisfy section 17 of the Act, and that the land should be valued as a rural homesite at an unimproved value of $85,000.
Mr R Maclean appeared and gave evidence for the appellants. Mr D O’Connor appeared for the respondent, calling evidence from Mr DR Wall, the Departmental registered valuer accepting responsibility for the valuation.
The Evidence:
(i) The Nature of the Land -
There is general agreement about the general topography of the land, and that the land is very stony with boulders, and difficult to negotiate with wheeled vehicles. The current dwelling and sheds are constructed on a small area in the south-western corner of the subject at the end of the gravelled Germain Road. Access to the land is only fair, and is considered to be of a lesser quality than for the surrounding parcels to the west and south of the subject. Mr Maclean has personally constructed the gravel road at his own cost since he purchased the land in 1984, and also paid for the extension of power to the site. He gave evidence that his neighbour on property 2 (Downing) declined to share the cost of the road construction, but has continued to use the road subsequently.
There was some difference between the parties in respect of whether the soil was the more friable brown soil or the tighter higher clay content black soils, but generally the parties agreed that the nature of soil was basaltic in composition and displayed high capacity to absorb water which was good for feed for cattle. The stony nature of the land virtually makes it impossible to cultivate the soils, and hence there is no capacity to grow pastures for the cattle. The pockets of mildly sloping plateaux areas are good quality for stock, but the intervening “ravines” make use of those areas very difficult. There is an approximate 3 hectares in the south and 5 hectares in the centre of the subject, which have brigalow scrub and are very stony and are unsuitable for grazing. However, there is more than 8 hectares of steeply sloping country. There is also some rosewood scrub.
Because of the very difficult nature of the land, and access to it, large areas are covered with noxious weeds, cockspur thorn, lantana and caesalpinia. Mr Maclean has employed a test aerial spraying contractor in order to seek to eradicate the pests. He believes that the difficulties with access to, and upon the subject, have been underestimated by the respondent. He admits that there are excellent views of the border area and other lands to the south from the subject, but he claims those views add little to the value of the land for farming purposes.
Since acquiring the subject Mr Maclean has constructed three dams on the property. Two of those have difficulty holding water, and during recent drought conditions have been totally dry. The third dam is less than one-quarter full, and Mr Maclean had to cart water for his stock for a period of 9 months during the former drought. He claims that, because of the absorbent nature of the soil, he gets no runoff from the land into his dams unless he has a fall of some 5 inches (125mm) over a short duration.
He claims that at present, in spite of a reasonable rainfall, the subject teeters on the edge of a drought. He draws comparisons with the better, more cultivatable black soils to the south on the easier slopes, with no stony outcrops, and the stony, sticky and swelling black soils of the subject, which inhibit access when wet, and cause damage to roads and concrete on the subject.
When he acquired the property there was a 5.5 metre deep hand-dug well which was overflowing at that time. He agrees that it was fortunate to find underground water at that depth in scrub country, but he argues that the well has now been dry for the last three years during the drought. He sees the well as an improvement, and therefore should not be included in the unimproved value of the land. He also claims that the sub-surface water was more the result of the changing slope of the terrain, rather than the presence of any sub-surface aquifer layer. Mr Wall was not aware of the extent of water in the well, and had not considered it in his determination. His Departmental records had shown that the well was dry, and any potential enhancement of water from that source would add to the water viability of the parcel, even though the actual well itself would be considered as an improvement. However, Mr Wall agrees that the subject is generally a poorly watered property, compared to the properties to the south, which have both some cultivation areas and dams.(2) Changes in the Market
Mr Maclean has been a long-term resident (20 years) in the locality. From his own experience, and on the advice of two local real estate agents, and a local alderman of Ipswich City Council, he has formed the opinion that valuations in the area over the relevant period have declined. However he provides no evidence to support that conclusion. Because of his concerns that inappropriate increases have been applied to the unimproved value of the subject, he sought comparison of changes in unimproved values in the area.
From the respondent’s own records, he examined unimproved values for 30 properties in the years from 1988-89 to the current 1998-99 values. While he acknowledges that the last two valuations fall outside the relevant period for the current matter, he merely uses a 10 year cycle as a test to allow for the evening-out of inconsistencies.
Based upon those records he concluded comparisons for either farming or dwelling land uses for each year on a rate-per-hectare-basis, noting percentage changes for each parcel for the years 1990-91 to 1998-99, and also an overall percentage change from 1989 to 1998-99. He concludes from that analysis that certain relativities are badly inconsistent, that there would appear to have been some errors in the determination over time, and that the subject has been unfairly treated as a consequence of those changes.
As an example he notes that between 1989 and 1998-99, the subject has increased 367.03%, while the parcel adjoining to the west (Property 2 - Lot 124 on CH311142), has only increased 177.32%. He also notes variations in the lands used for farming at generally between 193% and 337%, and variations in the land used for dwellings between 224% and 754%.
An issue of concern to Mr Maclean is the apparent inconsistency in the way increases have been employed during the intervening years. For example, while generally all unimproved values had risen in 1991-92 by approximately 25% to 26%, the value on Property 2 had reduced by 14.5%. However, on examination it would appear that reduction had been a mathematical error in that one parcel of some $10,000 ($47,000 instead of $57,000). That error had subsequently been carried forward in later alterations such that the unimproved value now appeared to be well out of line with surrounding parcels. Mr Maclean accepts that variations in values can occur, but believes that over a period of 10 years any cyclic peaks or troughs should have been rounded out. Because of those apparent inconsistencies he has little confidence in the reliability of the valuations.
(3) The Method of Valuation -
Mr Maclean argues that when the respondent rounds off unimproved values to the nearest $1,000 increments, a progressive deterioration can occur in the relativities which, in his opinion, should be the same for all lands of similar use and characteristics, over a period of say 10 years.
A major part of Mr Maclean’s argument rests upon a comparison of surrounding lands on a rate-per-hectare-basis. He argues that where lands have comparable land uses, land types and topography, then he believes that the rates per hectare should be comparable. He accepts that there is some allowance in the rate per hectare to be made for larger areas, say comparing 10 hectares and 100 hectares, but he claims that any variation should be marginal, and not of the order of say 50%. In his comparison of surrounding parcels he draws the following comparisons:
TABLE A:
| PROPERTY | AREA (HECTARES) | UNIMPROVED VALUE | RATE PER HA |
| 1. (Subject) | 30.453 | $ 35,500 | $ 1165.7 |
| 2. (Downing) | 122.616 | $ 71,000 | $ 579.0 |
| 3. (Compton) | 38.344 | $ 45,000 | $ 1173.6 |
| 4. (Heit) | 41.52 | $ 37,500 | $ 903.2 |
| 5. (Smith) | 40.469 | $ 66,000 | $ 1630.9 |
| 7. (Sylvester) | 47.172 | $ 60,000 | $ 1271.9 |
| 8. (Chatterton) | 34.374 | $ 52,000 | $ 1512.8 |
| 9. (Krause) | 94.04 | $148,000 | $ 1573.8 |
| 10.(Kerr) | 48.158 | $ 98,000 | $ 2035.0 |
| 11.(Krause) | 40.218 | $ 92,000 | $ 2287.6 |
| 12.(Reinke) | 56.9 | $129,000 | $ 2267.1 |
| 13.(Loveday) | 93.619 | $172,500 | $ 1842.6 |
The remaining parcels are further to the south of those properties.
Mr Maclean accepts that some changes could occur in relativities over time from say the impact of underground mining or soil erosion, but he argues that in the absence of such impacts generally the relativity should remain consistent. He also argues that in assessing the value of property, the unimproved value would be impacted by whether the parcel had a single title deed or several deeds. He notes that Parcels 2, 5, 7, 9, 12 and 13 are all multiple deed properties.
(4) Relativity -
The key issue for Mr Maclean is the matter of inconsistent relativities in the locality. As noted previously he has problems with apparent errors in some parcels, and claims that there is a different market and relativity for lands in the Tallegalla area to the north, and the Rosewood area of the subject.
Mr Maclean draws comparisons with ease of access, easier topography, and lack of stony rock outcrops particularly on Properties 2, 4 and 5, compared to the difficult nature and access of the subject. He acknowledges that when he purchased the subject for $65,000 in 1984, he did so because of its location and cattle carrying capacity, and the presence of the well, and in spite of later having to pay to form the access road, and to bring power to the site.
Mr Maclean relies almost entirely on direct comparisons of relativity with surrounding parcels, and has relied upon the respondent’s determination of adjoining Property 2 (Downing), as his major comparison. He notes that Property 2, which in his opinion is understocked, has a very good carrying capacity as farming land, yet has a rate per hectare of less than half that of the subject (Table A). Mr Wall argues that it is difficult to draw comparisons on a rate per hectare basis between properties as different in size as Property 2 (122.6ha) and the subject (30.453ha). Mr Wall also notes that the northern parts of Property 2 are also very steep.
Mr Wall agrees that relativities with Property 3 appear reasonable, but feels that Property 4 needs to be reviewed at the next valuation. When seeking comparisons between parcels with such diverse sizes as Property 2 and the subject, Mr Wall would be guided by market transactions for each of those sizes. In the event of no comparable sales being available, Mr Wall would then rely upon his experience of some twelve years as a valuer.
(v) Comparison of Sales -
In support of his valuation Mr Wall provided the following sales:· Sale 1 - (Ballins Road, Tallegalla - Lot 2 on RP 35898 and Lot 2 on RP35900).
This is a parcel of two titles of total area of 48.3 hectares, zoned “Rural”, and located approximately 4 kms north of the subject. The sale has easy to moderate slopes, was originally timbered with softwood brigalow scrub, and has good access to Ballins road which is bitumen sealed. Underground water has proved to be available by a bore which was sunk subsequent to the sale (500 gallons per hour). The sale is seen as superior on a rate-per-hectare basis due to superior topography, access and water, and less stone content. The sale has similar services, zoning, locality and country type.
The sale was purchased for the purpose of breeding Red Angus cattle by embryo transfer, and was acquired for $195,000 in November 1995. After allowing for improvements for farming purposes, the sale was analysed at $85,994 ($1780 per hectare), and applied at $71,000 ($1470 per hectare).
· Sale 2 - (Ballins Road, Tallegalla - Lot 581 on CH31645).
This sale adjoins Sale 1, has an area of 40.47 hectares, is zoned “Rural” and has access to Ballins Road which is formed gravel at that location. The sale is seen as having similar location and services, and the sale has moderate to steep slopes. Overall the sale is superior to the subject on a rate-per-hectare basis due to superior topography, slightly better access and less stone content.
The sale included a 2-year interest-free period on the purchase which, for farming purposes, was estimated at $43,389. The sale was subsequently resold at $225,000 (24/5/97). The sale originally sold in June 1995 for $250,000 which, after allowing for improvements for farming, was analysed at $86,004 ($2,125 per hectare), and applied at $75,000 ($1853 per hectare) - notional value as the sale has now been amalgamated with other properties.
· Sale 3 - (Carneys Creek Road, Mt Barney - Lot 59 on RP 893127)
This is a 20.53 hectare parcel, zoned “Rural A” in the Boonah Shire, and located about 70 kms south of the subject. The sale is moderate to steep fair forest country, with fair gravel access. It was purchased by a local farmer to be used with surrounding lands. The sale is inferior to the subject due to its location, country type and services.
The sale sold in July 1995 for $40,000, which after allowing for improvements was analysed at $35,637, and applied at $34,500. Mr Wall provided that sale merely to demonstrate the minimum value of any parcel of this nature.
Evidence was also provided by Mr Wall of the sales of two of the 30 properties supplied by Mr Maclean in his comparison of relativities. Property 30 (Neumann) has an area of 32 hectares and was purchased in March 1996 for $300,000, which was analysed at $4,400 per hectare, and was seen as out of line with the market as a high sale. Property 29 (Anderson) has an area of 32.37 hectares, and was purchased in January 1997 for $190,000. While Mr Wall has not analysed that sale, he feels it appears to be a low sale. Both of those properties are well south of the subject in the Rosewood area.
Mr Wall also argues that there is really only one market for land in that locality, irrespective of whether purchasers buy the land for farming purposes, or as a rural homesite. Because of the competitive nature of the marketplace, both types of users must compete for available parcels of land (see RE and ML Wenck and Others v. Valuer-General (1983) 9 QLCR 214). However, in assessing the unimproved value of the lands for the different land use types under the Valuation of Land Act, Mr Wall adopts different approaches to the analysis of improvements.
Where the land is used for farming purposes, Mr Wall makes allowance for timber treatment costs in order to maximise the farming potential of the land, as well as interest and improvements for farming purposes. When the land is used as a rural homesite he restricts any timber allowance to only assessing the value of timber cleared, as many owners prefer a timbered parcel for homesite purposes.
When pressed for his analysis of Sale 1 as a rural homesite, Mr Wall concluded an unimproved value of $111,000. Based upon a similar comparison for the subject, and noting its excellent views, he concluded an unimproved value of $85,000. Mr Wall also notes that when assessing properties under section 17 of the Act, where those properties have multiple titles, he is required to treat those parcels as a single unit for the valuation.
Mr Maclean argues that there are different markets in the Tallegalla, Calvert and Rosewood areas, and it is incorrect to conclude that Tallegalla and Rosewood are the same locality. The dividing influence, Mr Maclean claims, is The Bluff Range immediately to the north of the subject. As evidence of those differences he draws comparison with the resale of Sale 2 in Tallegalla at $225,000 for 40.47 hectares, compared to the sale of property 29 in Rosewood at $190,000 for 32.37 hectares. However, without any detailed analysis of property 29, that provides little further understanding of his conclusions of the differences in the locality.
(vi) Use for Farming -
While the current appeal was exercised on the basis of the subject being valued under section 17 as farming land, Mr O’Connor pursued an examination of the business activities of the current use of the land. His reasons for so doing rested upon, in his opinion, former difficulties in receiving clear insight into the business activities of the appellant upon the land. The following information assisted Mr O’Connor in getting a clearer appraisal of the appellants’ farming activities. Details were supplied by Mr Maclean to the best of his memory, and without the assistance of any documents, and need to be understood on that basis.
Mr Maclean advises that since he purchased the land in 1984, he initially ran approximately 24 head of beef cattle for commercial sale. With the construction of his dams and other improvements, he built up the herd to 40 head in 1986. He estimates his carrying capacity at that time was 1 beast to 0.7 hectares, including some supplementary feeding. Mr Maclean believes the land could carry 50 head of cattle. Mr Maclean was unable to accurately quantify the supplementary feeding of hay during that period due to major droughts in 1986, 1988 and 1991. However, he noted that during a period of 9 months he had to carry in extra water for his stock in 1988. Mr Maclean made an estimate of supplementary costs during the winter months of some 500 bales of hay @ $2.50 per bale, or $1,250.
He both purchased cattle, and bred his own progeny over a period of some three years from 1984 to 1987. Between 1987 and 1993 he raised commercial cattle. Since 1993 he has slowly transferred to stud stock, initially Santa Gertrudis, then Limousin, and now Dexter cattle, a smaller frame beast. His reasons for changing was the decline in the market value of carcass beef.
Mr Maclean confirmed the following gross returns from cattle sales:
| Year | Gross Income From Cattle | Expenditure |
| 1992-93 | $32,351 | $49,601 |
| 1993-94 | $18,913 (drought) | $43,465 |
| 1994-95 | $31,998 | $55,993 |
In explaining his expenditure costs in 1994-95, Mr Maclean estimates approximately as follows:
· depreciation on assets, plant, equipment, tractors, etc. = $ 15,000
· payment to stud master = $ 5,500
· veterinary fees = $ 3,000
· supplementary feed (including grain) = $ 7,000
· weed eradication = $ 1,500
· average livestock purchases = $ 10,000
In addition to the above there was some further expenditure associated with the rearing and sale of ostriches during that year.
Mr Maclean also advises that currently he has about 30 Dexter cattle (about 15 cows and 15 progeny) upon the subject, and his income over the last few years has averaged about $30,000 per year. He has moved to stud cattle in order to seek to diversify as a farming enterprise, and now trades also in Dexter semen, both for sale and for his own purposes. He estimates an income of $3,000 per year from the sale of semen. He sees the importing of Dexter semen from Canada and Ireland as his contribution to the development of genetic understanding of the Dexter breed in Australia.
Mr Maclean also notes that the value of Dexter cattle has declined since its peak when he commenced with the breed a few years ago. A cow in calf would bring $7,000 a beast a year ago. He also purchases recipient mother cows for implanting with the semen and replaces them if they prove unproductive. Overall he sells about 20 beasts each year. As an average figure Mr Maclean estimates that his yearly figures are income $30,000 gross return, and outlays $22,000.
Mr Maclean argues that he works his land efficiently, and draws comparison with his neighbour who understocks his land (Downing). In the light of the above figures Mr O’Connor argues that, on reflection, he believes that the subject might not qualify under section 17 as a significant and substantial use for farming purposes, and asks that the Court determine on the matter of the appropriate use of the land.
In arriving at that conclusion, Mr O’Connor seeks support in R Chippendale v. Chief Executive, Department of Natural Resources (V95-98) 7 June 1996, unreported; PR and BM Whalen v. Chief Executive, Department of Natural Resources (V95-17), 7 June 1996, unreported; Chief Executive, Department of Lands v. KW Whackett (1994-95) 15 QLCR 311; and GT and BG Taylor v. Chief Executive, Department of Lands [1992-93] 14 QLCR 477.
Mr O’Connor agrees that the Chief Executive, by letter of 16 March 1996, confirmed that the subject was afforded section 17 status, but argues that the letter only noted that status as of that date. As the respondent had no clear picture of the true costs and returns of the subject until this hearing, Mr O’Connor now has some doubt about whether the subject would now qualify for section 17 status.
Mr Wall believes that the subject’s carrying capacity appeared high by general industry standards for that area, but agrees that it could be on the high side of the standard because of its attributes. Mr Wall also feels that the cattle activities upon the subject were in the “grey” area in respect of satisfying section 17.
Mr Maclean notes that the belated decision to review the section 17 status, appears to relate to the current appeal, and agrees that the respondent had spoken about the matter of section 17 on 15 September 1997. Mr Wall confirms that it was his responsibility to review all aspects of a property once an appeal is lodged, to ensure it has been valued on the correct basis.
In response, Mr Maclean argues that it is inappropriate to seek to re-assess a property only one year since it was last examined, as that could lead to inappropriate conclusions as a result of isolated adverse times for farming. He believes it was inappropriate to attempt to amend the farming status of the subject accordingly. Mr Wall argues that as the subject had not been reviewed since amendments to section 17 were introduced in 1991, it was appropriate to review the matter once it was brought to notice, following the appeal. Mr O’Connor cites support for his current request for the Court to review the status in the decision of Muir v. Valuer-General (1977) 4 QLCR 81.
Decision:
(i) The Nature of the Land -
I turn first to the nature of the land and note that there is agreement about the physical character of the land, and the difficulties in traversing across the broken gullies in all but the south-western part. There is also agreement about the heavy infestation by noxious weeds, and the general nature of the soils, and stony content of the subject. Mr Wall has made allowance for those factors in his determination.
There is also agreement about the nature of the access road, but some diversity in respect of the impact of that formed gravel road upon the unimproved value of the subject. Mr Maclean sees it as an improvement as he had to construct it at his own cost, while Mr Wall sees it as external to the subject, and therefore part of the infrastructure of the surrounding area, irrespective of who paid for the road. However, I believe those costs, and Mr Downing’s reluctance to contribute to them, are perhaps at the heart of some of the concerns of the appellants.
In considering the contribution that the formation of the gravel access road makes to the unimproved value of the land, I note that any allowable deduction for improvements to the land must in fact lie upon the land itself, and not be external to it. I note, for instance, the words of Gibbs J. in the High Court decision of Brisbane City Council v. The Valuer-General for the State of Queensland (1977-78) 140 CLR 41, at page 51:
“These provisions .... indicate what tests should be applied in deciding what is an improvement for the purposes of the valuation. In the first place an improvement in relation to land must be ‘thereon or appertaining thereto’. This means that the improvements, if not on the land, must be ‘such as are in the strict legal sense ‘appurtenant’ to the property and incident to its ownership’ (McDonald v. Deputy Federal Commissioner of Land Tax (NSW) (1915) 20 CLR 231 at 234). ”
Gibbs J. also followed the findings in Morrison and others v. Federal Commissioner of Land Tax (1914) 17 CLR 498, where Griffiths CJ said at page 503:
“ Any operation of man on land which has the effect of enhancing its value comes within the definition of ‘improvement’. ”
(See also Tetzner v. Colonial Sugar Refining Company Limited (1958) AC 50).
In the matter of the availability of water to the land, both parties are in general agreement that the subject is a poorly watered property. However, Mr Wall concedes that, having now been appraised of the extent of potential underground water from the well, he would be prepared to review upward his appreciation of the potential water to the site. In the context of the current matter I see nothing in the nature of the land to justify any variation in the unimproved value.
(ii) Changes in the Market -
I can understand Mr Maclean’s concerns that the external indicators may suggest certain changes in the average values of the locality. However, I find little substantiation for those claims in the hearsay evidence of the local real estate agents or the councillor.
Of more persuasion is the documentation of the Departmental records of some 30 properties over an extended period of some ten years. I also understand that the variations in overall changes in relative rates for the parcels is of concern to the appellant. I believe that there has been some mathematical error in some previous year valuations, and at least one of those has been carried forward to the current valuation (Property 2). I agree with Mr Wall that Property 13 should also be reviewed. However, in forming any conclusions in respect of any changes in the valuation, it is important not to adopt a simplistic comparison upon a rate per hectare basis.
(iii) The Method of Valuation -
In seeking direct comparisons between parcels of differing size from say 10 hectares to 100 hectares, Mr Maclean has oversimplified the adoption of a rate per hectare approach. However, excepting the apparent anomalies for Properties 2 and 4 (Table A), the remaining property valuations appear to be reasonable.
In the matter of whether multiple-title deeds should affect the unimproved value of the lands, I note that Mr Wall has followed directions in section 17 which states:
“ 17.(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made. ”
On that basis I see no fault in his approach.
(iv) Relativity -
In this key part of Mr Maclean’s argument the relativities with Properties 2 and 4 would appear to be inconsistent. While the larger area of Property 2 (122 hectares) would impact that rate per hectare, Mr Wall, in the absence of sales of comparable sites, relies upon his experience as a valuer over twelve years. In this regard he relies also on the findings of the Land Appeal Court in King Ranch Pastoral Company Pty Ltd v. The Valuer-General 35 CLLR 255 at page 259 where the Court found:“ In not attempting to do this, Mr Walker adopted a method of valuing based on knowledge and experience rather than one lacking precedent and authority.”
This was further clarified in the wording of the minority decision of that case where the learned Member noted at page 262:
“ In Bingham v. Cumberland County Council (1954) 20 LGR 1 at pages 18 and 19, Sugarman J says, ‘In the absence of sufficient guidance to be had from sales, the valuer may find himself in a position resembling that to which Lord Romer referred in the Raja case (1939) AC at pages 312 and 313, in which he will have no market value to guide him, and he will have to ascertain as best he may from the material before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land.’ The valuer in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant. ”
In seeking to rely upon relativity as his basis for comparison, Mr Maclean acknowledges that it is not appropriate to compare between different land uses. (ACF and Shirleys Limited v. Valuer-General (1978) 5 QLCR 370 at page 375). For that reason he has sought only to compare with lands used for farming purposes. Mr Maclean’s reliance upon the reliability of valuations of adjoining parcels is in line with the findings of this Court in TF and SA Shepherdson v. The Valuer-General (1992-93) 14 QLCR 83, where the learned Member said at page 86:
“ The appellants in this case, while critical of some aspects of the sales evidence, did not seek to destroy its evidentiary value by suggesting that the sales were so widely different in nature and character from the subject site to make them of no real utility in determining the unimproved value of the subject land ... Applying to this case the principles of law summarised above, it is desirable that valuations of comparable lands should bear proper relativity. The appellants are entitled to rely on the valuations of properties in the vicinity of the subject land as being correct. ”
However those findings may be distinguished in this matter as Mr Maclean has sought to discredit the sales of the respondent as not being representative of the Rosewood locality.
Mr Wall argues that relativities in an area in fact change over time. Noting the findings of R and MM Barnwell v. Valuer-General (1990-91) 13 QLCR 13 where the Land Appeal Court said at page 17:
“ It has been well recognised over the years that previously established relativity in unimproved value can and does change from valuation to valuation. If there was no justification for a change in relativity, the valuer’s task would be very simple in that all that would be required to establish value would be accomplished by the use of an adjusting formula. This, of course, is undesirable. ”
In seeking also to rely upon relativity to the exclusion of sales, Mr Maclean has not followed the principle adopted by the Land Appeal Court in WM and TJ Fischer v. Valuer-General (1983) 9 QLCR 44, where the Court found at page 46:
“ It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly-improved parcels. 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. ”
While Mr O’Connor draws support for rejecting a rate per unit area as a method of comparing properties in the findings of the Land Appeal Court in H and E Grahn v. Valuer-General [1992-93] 14 QLCR 327, I note that decision may be distinguished as that matter dealt with a comparison of residential properties on a rate per square metre basis. It has long been held that when comparing residential sites then the appropriate method is on a site-to-site basis (DF and M Ward v. Valuer-General) (1983) 9 QLCR 48, at page 50; and AT Dewer v. Valuer-General (1980-81) 7 QLCR 112, at p.115).
Mr Wall also relies upon the decision of the Land Appeal Court in RJ Scougall v. Chief Executive, Department of Natural Resources, (AV93-119), 13 September 1996, unreported, which found that a uniform factorisation approach (as proposed by Mr Maclean in the current matter) was not appropriate. In the Scougall matter, the appellant argued that the application of a constant percentage increase should have been applied from the 1990 valuation, which was amended after an objection was refused, by a subsequent decision to reduce the valuation under section 21(A) (now section 68).
The Land Appeal Court found at page 14:“ As the learned Member of the Land Court observed, there is no support in the authorities for the factorisation approach taken by Mr Scougall. Indeed, the authorities point against it, showing that each revaluation must be done with regard to sales evidence. These are not matters of mere mathematical calculation or progression.”
On the evidence before me, and accepting that there would appear to be some inconsistencies in Properties 2 and 4, I find nothing to disturb Mr Wall’s assessment of the subject.
(v) Comparison of Sales -
In the absence of analysed sales from the appellant, I am left with the three sales of Mr Wall. I accept that Mr Wall provided his Sale 3 merely to provide an example, in his opinion, of a minimum price for such land. However, he also provided no evidence to substantiate that Sale 3 did in fact represent the bottom end of the market for similar parcels of land. Sale 3 is also in an entirely different local government area, and a different locality, some 70 kms to the south of the subject. On this basis I see little value in its comparison and I will consider it no further.
In considering his Sales 1 and 2, I note that he has assessed those parcels on the basis of farming land at analysed values of Sale 1 ($85,994), and Sale 2 ($86,004). Both sales are seen as superior to the subject. Both sales are larger than the subject, and making some allowance for Mr Maclean’s perceived difference in public perception of the Tallegalla and Rosewood localities, I see no reason for disturbing Mr Wall’s assessment of the subject.
In adopting the principle of comparing sales of lightly improved parcels, Mr Wall has followed the preferred method of determining unimproved value. (PH Clough v. The Valuer-General (1981-82) 8 QLCR 70, at page 76).
(vi) Use for Farming -
And finally I turn to the matter of whether the use of the land should be considered as for farming purposes under section 17 of the Act. I note that in seeking to amend the respondent’s assessment of the subject, Mr O’Connor has sought support in the decision of Muir (supra).
In that matter it was found that the Land Appeal Court and the Land Court were required, under the then provisions of section 21(7)(b) of the Act (now section 66) to reduce or increase the valuation to the extent necessary to determine it correctly. However, in my opinion, Muir can be distinguished from the current matter, as in Muir the Land Appeal Court was dealing with an error on the part of the valuer who had valued the land on an incorrect area basis. There is no such claim in the current matter.
There is more comparability in the findings of the learned Member in Ripley Piggeries Pty Ltd v. Director-General, Department of Lands (AV93-73), 30 September 1993 (unreported). In the Ripley decision the respondent sought during the hearing to have the valuation of the subject amended by the Court to be as a rural residential site, rather than the use for farming purposes as appealed by the appellant. It was therefore proposed to leave it to the Court to decide on the relevant land use.
The Member (now President) found at page 7:
“ If he is of the opinion that a mistake has been made or that circumstances have changed, the correct process is for him to issue an amended valuation under the authority of section 13(2). This would then give the landowner the right to object against that valuation and have his argument heard on his objection. If that was not successful, the land owner could then appeal to the Court and would come before the Court knowing the case which he had to meet.”
In the current matter the circumstances are almost identical, and I would agree with the Member that natural justice would not be served by belatedly amending the former land use from farming to rural residential purposes. In the current matter Mr Maclean came before this Court with the expectation that he would be arguing against a valuation for farming purposes. He did not come equipped to argue the provisions of section 17, although I will admit that, under the pressure of cross-examination, and from memory, he provided quite comprehensive estimates. I make no decision on the future use of the land.
Conclusion:
Having considered all of the evidence I am not persuaded that the appellants have proved that the Chief Executive has made any error or adopted a wrong principle in determining the unimproved value of the land for farming purposes. The appeal is dismissed and the determination of the Chief Executive at $35,500 is affirmed.
(NG Divett)
Member of the Land Court
0
2
0