Major v Department of Natural Resources
[1999] QLAC 221
•10 December 1999
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Re:Appeal against a decision of the Land Court - Determination of Unimproved Value –
Local Government – Inglewood (AV98-457)
BETWEEN
Lloyd R Major AND
Chief Executive, Department of Natural Resources
Appellant
Respondent
BEFORE THE HONOURABLE MR JUSTICE MUIR, MR NEATE AND MR KEIM
JUDGMENT
Delivered at Brisbane this Tenth day of December 1999
Introduction
The appellant has appealed to the Land Appeal Court against a decision of the Land Court in relation to the annual valuation of his parcel of land near Inglewood as at 1 October 1997.
The respondent Chief Executive assessed the unimproved value of the subject land at that date to be $50,000.00. The Land Court allowed an appeal against that valuation. It set aside the valuation of the Chief Executive and determined the unimproved value of the land to be $45,000.00. In making that determination, the Court found that the land was not used for the purposes of farming as defined in section 17(2) of the Valuation of Land Act 1944 (the “Act”), and that the unimproved site value of the land should be equivalent to that which was shown by the analysis of the sale of adjoining land to Mr and Mrs Lund.
The appellant contends that the Land Court was wrong in deciding that the subject land was not used for the purposes of farming, and that the Court also wrongly decided the value of the land.
The subject land
The subject land is described as Lot 4 RP 156020, Parish of Inglewood, County of Clive. It is about 4 km north of Inglewood, and has an area of 61.7782 ha.
Mr MW Malone, a registered valuer employed by the Department of Natural Resources, described the land as “an elevated easy sloping sandy forest ridge running down onto the southern frontage of Canning Creek”, which has good waterholes. The land has “good rural and creek views”. “Power and Telephone are available to the site”. It has a frontage to Gledson Road, which is of earth and gravel construction, and is off the bitumen sealed Inglewood-Millmerran Road.
Statutory provisions
Central to the resolution of the main issue in this appeal is the operation of section 17 of the Act, the relevant provisions of which state:
“Exclusive use for single dwelling house or farming
17.(1) In making a valuation of the unimproved value of land exclusively used … 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.
(2) In subsection (1) -
…
“farming” means –
(a)the business or industry of grazing, dairying, pig farming, poultry farming, viticulture, orcharding, apiculture, horticulture, aquiculture, vegetable growing, the growing of crops of any kind, forestry; 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 approach in the Land Court
The hearing of the appeal in the Land Court was one of a number of hearings of appeals concerning valuations of land in the Inglewood District. We were told in argument that the appellant’s father, Mr WG Major, who appeared before us, also appeared for his son at first instance and for a number of the other landowners whose appeals were being dealt with at those sittings.1
Since the current respondent was also represented by the one counsel in the various appeals heard at the sittings, some of the evidence and argument in separate but related appeals below appears to have been tacitly and informally “taken as read” when the present case was heard at first instance.2
Although this has led on appeal to one problem of an evidentiary nature (with which we shall deal later in these reasons), it has led to a number of findings on related matters having been incorporated by the learned member at first instance into his findings in the present matter. Neither party has challenged these findings on appeal. The process has also led to the record in the present matter being less detailed than one might have expected if the evidence going to all of the issues in this matter had been adduced in full at first instance.
The relevant findings
The appellant purchased the subject land and adjoining land (Lot 90 MH63 –
43.122 hectares) in 1992. The adjoining land was sold to Mr and Mrs Lund3 in August 1996. That was Sale No. 1 in a schedule of sales provided by Mr Malone4 and appears to have been the principal sale relied upon by him in his valuation evidence to the Land Court.5
See also Reasons for decision at first instance at pages 1 & 2.
See, for example, the exchange between Mr Major, at that point giving evidence, and the Learned Member at Transcript, page 3 (page 12 of the Appeal Record) lines 40 – 60.
Reasons for decision at first instance, page 1.
Appeal record page 41.
See, for example, evidence-in-chief of Mr Malone at page 11 of the transcript.
Mr and Mrs Lund’s land was also the subject of an appeal to the Land Court heard in the same sittings as the present matter.6
Neither the decision in the Lunds’ appeal nor any part of the transcript of evidence in that case was part of the original record of proceedings before us in this matter.
Yet another adjoining block was owned by a Mr Powell.7 A series of agreements
was entered into which resulted in the subject land being used for grazing from time to time by cattle owned by each of one or more of the three landowners. By a gentlemen’s agreement with the appellant, Mr Lund obtained the right to graze cattle on the subject land. The consideration for this right was a fee of $100.00 per month. In turn, there was an agreement between Mr and Mrs Lund on the one hand and Mr Powell on the other. By paying $100.00 per month, Mr Powell was entitled to graze his cattle on the land to which Mr and Mrs Lund have access, namely the Lunds’ land and the subject land. Although the appellant seems to have had no objection to the agreement between the Lunds and Mr Powell, he was not a party to that agreement and there is no direct arrangement between Mr Powell and the appellant.8
The learned member made two findings in the appeal by Mr and Mrs Lund which were accepted by the parties for the purposes of the present appeal. The learned member found that Mr and Mrs Lund’s own grazing activities did not satisfy the requirement of section 17(2)(c) of the Act because they did not constitute a business or industry which has a significant and substantial commercial purpose or character. He also found that the farming activities of Mr Powell (part of which were carried out on Mr and Mrs Lund’s land) did constitute a business or industry which has a significant and substantial commercial purpose or character.9 As a result, it was held that the use of the Lunds’ land satisfied the requirements of section 17 of the Act; that their land
Reasons for decision at first instance, page 1.
Reasons for decision at first instance, page 1.
Reasons for decision at first instance, page 1-2.
The finding with regard to Mr Powell is supported by evidence given in this matter at first instance by Mr Major. See Transcript p. 2 (Appeal Records p. 11) line 50 – Transcript p. 3 (Appeal Records p. 12) line 50.
should be valued as farming land; and that potential uses for other purposes should be disregarded.10
The approach of the learned member in accepting that Mr Powell’s activities take place on the Lunds’ land so as to allow Mr and Mrs Lund to obtain the benefit of section 17 is consistent with authority. In Thomason v Department of Lands11, the Land Appeal Court12 made the following observations:
“The issue here is not whether the appellant is using the land for a business or industry which has a significant and substantial commercial purpose or character. We accept that it is the use of the land for the relevant purposes which is important, rather than the identity of the person or persons using it. So, for example, the person who owns the land and who will gain the benefit of the operation of section 17(1) need not be the person using the land for the relevant purposes (cf BB
Smith v The Valuer General (1983) 9 QLCR 22).”13
There is also authority (in the same decision) that the particular piece of land under consideration need not itself be capable of sustaining on its own the business or industry with a significant and substantial commercial purpose or character. The following two passages14 endorse this approach:
“The issue is whether the subject land, used in conjunction with other land owned by another person as part of a business or industry with a significant and substantial commercial character, can be valued in accordance with section 17(1) of the Act. In our view, it can.”
“The interpretation we have adopted would allow, for example, a person who owns two or more blocks of land and who uses them together to conduct the business of farming to take the benefit of section 17(1). The interpretation would also allow a person to make the land available for use by another person as part of that other person’s business of farming.”
Reasons for decision at first instance, page 4.
(1995) 15 QLCR 286.
Constituted by Ambrose J, Mr Trickett and Mr Neate.
At page 306.
Both from page 307.
As indicated previously, the approach of the learned member in relation to the appeal of Mr and Mrs Lund is consistent with authority and correct. However, in the present matter, the learned member considered that the structure of the agreements or arrangements among the three landowners constituted a distinguishing characteristic and enjoined a different result. It is that conclusion and the analysis which led to it which the appellant calls into question in this appeal.
The learned member formulated his question as follows:
“It is accepted that the subject land is used for ‘the business or industry of grazing’. The relevant question in this matter, is – by whom?”15
After setting out the details of the agreements he concluded:
“It is my view that in this case the use of the appellant’s land for the grazing of some or possibly on occasions even all of the Powell cattle, does not constitute use for purposes of Mr Powell’s farming activities. Instead the appellants’ land is used by the Lunds for purposes of their business activities which include the business of agisting Mr Powell’s cattle. It was found in the Lund appeal that their business activities did not meet the ‘significant and substantial commercial purpose’ test in the section 17(2) definition of ‘farming’ paragraph (c). However, because there was a direct link between the Lunds and Mr Powell, through the agistment agreement, it was found that the Lund land was used by Mr Powell for purposes of farming and should be valued accordingly.”16
The learned member went on17 to make the specific finding that the subject land was not used for the purposes of farming as defined in section 17(2) of the Act.
The use of the subject land
The learned member has found that Mr Powell is sufficiently involved in the running of his own cattle to be properly described as using Mr and Mrs Lund’s land.18
There appears to us to be nothing either in the learned member’s findings or the evidence to which we have been directed to make the grazing of Mr Powell’s
Reasons for decision at first instance, page 3.
Reasons for judgment at first instance, page 4.
Reasons for decision at first instance, at page 6.
cattle on the appellant’s land different in kind to the grazing of the same cattle on the Lunds’ land. If Mr Powell is properly described as using the Lunds’ land, in our view, he is properly described as using the subject land.
In our view, the lack of any contractual arrangement between the appellant and Mr Powell is not significant. Because it is the use of land and not the identity of the user which is significant19, it is the use of the subject land by Mr Powell and not the source of his right to use it which is so important.
Accordingly, we find that, at the relevant date of valuation, the subject land was used for the grazing of cattle and that the owner of some of the cattle was Mr Powell. His grazing enterprise, on the subject land and other land, constituted a business or industry which has a significant and substantial commercial purpose or character.
That finding, however, does not dispose of the appeal.
Contentions of the respondent
As well as seeking to sustain the reasoning of the Land Court on the point just considered, Mr Fisher, who appeared for the respondent, raised two other matters which, he argued, caused the appellant’s case, on the evidence, to fall short of satisfying the requirements of section 17 of the Act.
The first contention was that, even if Mr Powell could be said to be using the land, it was not shown, on the evidence, that Mr Powell’s use was “the dominant use of the land” as required by the definition of “farming” in the section.
The second contention was that the evidence indicated that the use of the land (whether by the appellant, Mr and Mrs Lund, or by Mr Powell) could not be shown to be “continuous or repetitive” as this phrase is used in sub-paragraph (d) of the same definition of “farming”.
The dominant use of the subject land
It was in respect of the first contention by the respondent that the evidentiary point to which we have referred20 arose.
Mr Major advised the Court that there was evidence in the appeal at first instance by Mr and Mrs Lund that bore upon the question whether Mr Powell’s use of the land the subject of the appeal could properly be described as representing the
That is, for the purpose of the Lund appeal.
See Thomason v Chief Executive, Department of Lands (1995) 15 QLCR 286.
Supra, paragraph 9.
dominant use of the land. The Court granted a short adjournment to allow the representatives of the parties to consider the Lund transcript. At the end of that adjournment, Mr Major tendered page 3 of the decision of the Land Court in the Lunds’ appeal. It was agreed by Mr Major and Mr Fisher that the learned member had correctly summarised the evidence (in that appeal) going to the number of head using the land respectively owned by Mr and Mrs Lund and the present appellant. It was agreed by the parties that, if this Court considered it appropriate to receive material supplementing the record before us, it was convenient to do so by receiving the page of the judgment rather than a series of extracts from the transcript. We allowed Mr Major to tender the page in question but reserved our decision on the question whether to admit the further evidence.
Before admitting further evidence, this Court must be satisfied that admission of the evidence is necessary to avoid grave injustice and there is adequate reason that the evidence was not previously given. Alternatively, such evidence may be admitted if the appellant and respondent agree to its admission.21 22 Mr Fisher indicated that the respondent did not consent to our admitting the further evidence.
The appellant has shown adequate reason why the evidence sought to be adduced was not previously given. The matters mentioned in paragraphs 7 and 8 above constitute sufficient reason to satisfy the second of the two elements required for the further evidence to be admitted.
However, we are not satisfied that the admission of the evidence is necessary to avoid grave injustice. The material shows that Mr and Mrs Lund were running six horses, two foals and twelve head of mixed cattle as part of their own operation. The material also shows that Mr Powell had some 25 head of cattle
See section 44(13)(a) of the Land Act 1962 (“the 1962 legislation”). The 1962 legislation was repealed on 1 July 1995, the commencement date of section 524 of the Land Act 1994 (“the 1994 legislation”). The 1994 legislation also provided that certain provisions of the (repealed) 1962 legislation concerning the Land Court and the Land Appeal Court continued. See section 521 of the 1994 legislation. The continued provisions included section 44. In addition, the 1994 legislation amended parts of section 44, in particular for present purposes, by substituting a new section 44(13)(a) and omitting subparagraphs (b), (c) and (d) of section 44(13). See section 525 of and Schedule 3 to the 1994 legislation. While section 521 of the 1994 legislation, which effected the continuation of section 44, was to expire two years after its commencement on 1 July 1997, it continues. This was achieved by section 7 of the Land Amendment Act 1996 which omitted the provision for section 521 of the 1994 legislation to expire.
The criteria are discussed and applied by the Court of Appeal in Marshall v Director-General,
Department of Transport, unreported, 22 October 1999 at para. 6 and following.
being agisted at, presumably, the relevant time. On pure numbers, therefore, Mr Powell had five more animals running across the two blocks of land than did Mr and Mrs Lund.
At the Land Court hearing, Mr Malone gave evidence that he saw no cattle grazing on the subject land when he made his inspection.23 In cross- examination,24 Mr Malone said that the owner (the present appellant) had told him that he had 40 head of his own cattle on the block. Mr Major, then from the bar table, threw some doubt upon whether the 40 head of cattle would have been
the appellant’s cattle or whether that was the total number of stock using the subject land, being stock owned by the appellant, Mr and Mrs Lund and Mr Powell.
In any event, there seems to be no reliable information, even taking into account the proposed further evidence, as to which of the three operations involved the greatest number of stock on the subject land or, for any other reason, can be seen to represent the dominant use of the land.
Because the evidence would make no difference to the matter in respect of which it is sought to be adduced, we are not satisfied that admission of it is necessary to avoid grave injustice. Accordingly, we refuse the application for admission of the further evidence.
There are more fundamental reasons why the admission of the further evidence is not necessary to avoid grave injustice. In our opinion, it is not necessary to count the number of cattle on the appellant’s land to deal with the contention raised by counsel for the respondent.
The requirement of the definition of “farming” under consideration is whether “the business or industry represents the dominant use of the land”. On many occasions, the result of applying section 17 will not be affected by whether one considers the relevant uses as “business” on the one hand or “industry” on the other. If, for example, one use involves the measuring, recording and reporting of rainfall for a fee and the other use involves the growing of pastures and
grazing dairy cattle25, each use constitutes a different business but also
constitutes the carrying on of a different industry.
Transcript, page 12, lines 1 to 12.
Transcript, page 14, lines 40 to 60.
See Thomason v Chief Executive, Department of Lands, (1995) 15 QLCR 286.
In the present case, the appellant, Mr and Mrs Lund, and Mr Powell, as three entities, carry on separate businesses. However, it is quite clear that each business involves the carrying on of the same industry, that is, grazing of livestock.
The definition of “farming” makes it plain that it is sufficient that either a qualifying business or a qualifying industry represent the dominant use of the land. The activities undertaken by each of the users of the subject land qualify as “grazing” as mentioned in subparagraph (a) of the definition of “farming” and, failing that, would qualify as representing any other industry involving “the rearing of livestock” as used in subparagraph (b) of the definition. The land is used for no other purpose than grazing. Accordingly, the industry of grazing represents the dominant, if not the exclusive, use of the land. That much seems to have been conceded by the entry in Mr Malone’s valuation report:
“The property is vacant and used for grazing cattle”.
It also follows that, if the activities, looked at as a whole, constitute the industry of grazing, it is not necessary that each and every business has the “significant and substantial commercial purpose or character” required by subparagraph (c) of the definition. If one of them has a significant and substantial commercial purpose or character, then the industry of grazing considered as a whole has that required purpose or character.
For these reasons, this contention on the part of the respondent must fail.
A continuous or repetitive basis?
The respondent’s contention that the land was not used for grazing on a “continuous or repetitive basis” is based on the results of Mr Malone’s inspection when he did not in fact find any cattle present.26 We are of the view that this argument must also fail.
While “continuous” (as opposed to “continual”)27 suggests an unbroken pattern of use, the words “repetitive” suggest that the use need not be continuous. Indeed, one must stop something, at least notionally, before one can repeat it.
See footnote 24 above.
For example, see Stephen Murray-Smith, Right Words – a Guide to English Usage in Australia, Penguin, 1990, page 97.
It would follow, in our view, that one could cease grazing cattle on a particular area for periods of time (say, because of varying seasonal conditions) and still be using the area on a repetitive basis.
The short answer to the argument on the part of the respondent is that one does not have to have cattle on land all the time to be using the land for grazing. It is inherent in the nature of grazing that cattle will go to different parts of their range at different times of the day, the season, and the year. It is also inherent in the nature of grazing that one is still using land even when it is being rested for regeneration purposes. The flexibility inherent in the meaning of “use” has been recognised on numerous occasions. Perhaps, the locus classicus is the following passage from the judgment of Lord Denning in Newcastle City Council v Royal
Newcastle Hospital28:
“An owner can use land by keeping it in its virgin state for his own special purposes. An owner of a powder magazine or a rifle range uses the land he had acquired nearby for the purpose of ensuring safety even though he never sets foot on it. The owner of an island uses it for the purposes of a bird sanctuary even though he does nothing on it, except prevent people building there or disturbing the birds. In the same way this hospital gets, and purposely gets, fresh air, peace and quiet, which are no mean advantages to it and its patients.”29
Mr Major gave evidence at first instance which described the way in which the three different entities used the land under consideration.30 This evidence was not challenged either here or below. The fact that Mr Malone saw no cattle on a particular visit on one particular day is of no significance. This argument on the part of the respondent must fail.
[1959] AC 248; [1959] 1 All ER 734; (1959) 100 CLR 1.
AC at 255; All ER at 735; CLR at 4.
Transcript, pages 1 to 3; appeal record, pages 10 to 12.
The result of the appeal
For the reasons we have stated the appeal should succeed.
Valuation as farming land
Mr Malone gave evidence that, if the property were to be valued as farming land and applying section 17 of the Act, it would be valued at $11,300.00. This was not contested by the appellant, either at first instance or on appeal. In the circumstances, we have no hesitation in finding that to be the appropriate valuation.
Valuation as a rural homesite
It is not now necessary to determine the second principal argument raised on behalf of the appellant, namely, that, if the appellant was not given the benefit of section 17, the figure of $45,000.00 was too high a valuation for the land as a rural homesite. In case the matter goes further, we shall consider that aspect of the appeal briefly.
The subject land, with the land belonging to Mr and Mrs Lund, was purchased by Mr Major in 1992. Mr Malone valued the subject land at $50,000.00 as at 1 October 1997.
Mr Malone’s schedule of sales31 relied on the sale to Mr and Mrs Lund for
$65,000.00 on 27 August 1996. Mr Malone analysed the unimproved value of the sale land as $46,000.00. The second sale, Mitchell to North Grove Construction, involved land further out of town and was for $35,000.00. Mr Malone analysed the unimproved value applicable to that land as $23,838.00.
It was common ground that, as a homesite, the subject land was preferable to the Lunds’ land. However, Mr and Mrs Lund purchased the land to run stud horses and it seems to be common ground that their property was superior to the subject land from a grazing point of view.
The argument, both at first instance and on appeal, concerned the extent to which different uses contributed to the value of the comparative sales used by Mr Malone and, more particularly, the unimproved value of the subject land as at the relevant date.
At page 41 of the record.
The learned member carefully analysed32 the factors operating in a situation where, with some sales, particular blocks of land might suit particular grazing needs of some buyers and, on other occasions, the highest and best use is unambiguously that of a rural homesite.
He concluded that, had the Lunds’ land been valued as having highest and best use as a rural homesite, including the feature of its development potential for fairly intensive use for rural orientated activities of a farming nature, then he would have accepted Mr Malone’s valuation of $45,000.00 based on the actual sale of that land.
He went on to say with regard to the subject land:
“While I am persuaded that the best ‘site value’ evidence for the subject land is to be derived from the Lund purchase, the marketing history of both blocks indicates to me that there are considerations other than the pure residential use superiority of the subject land, which needs to be considered. On that basis I see no reason to differentiate between the two blocks, once all positive and negative features are weighed.”
Accordingly, the learned member allowed the appeal against the valuation of the Chief Executive and determined the unimproved value of the land to be
$45,000.00.
We are of the view that the learned member properly balanced the various factors and we see no reason to depart from his conclusion.
If we are wrong with regard to the application of section 17 and the land should not be valued as land used for the purposes of farming, ignoring other uses, then we would reach the same conclusion as the learned member.
Findings and Orders
We find that section 17 of the Act is satisfied in respect of the subject land and that the valuation of the unimproved value of the subject land must be made disregarding any enhancement in that value deriving from any potential use of the land for purposes other than farming.
Reasons at first instance pages 5 to 6, record pages 8 to 9.
Applying section 17 of the Act, we find that the unimproved value of the land for the purposes of the Act is $11,300.00. Accordingly, the appeal is allowed and the unimproved value of the subject land is determined at $11,300.00.
MUIR J JUSTICE OF THE SUPREME COURT
GJ NEATE MEMBER OF THE LAND COURT
SJ KEIM MEMBER OF THE LAND COURT
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