Maraun v Chief Executive, Department of Lands

[1996] QLC 79

[1996] QLC 79

 

  LAND COURT

BRISBANE

31 MAY 1996

Re:     AV94-695 -
  An appeal against an unimproved valuation -
Valuation of Land Act 1944 -
  Local Authority: Warwick

Pamela G. Maraun
  v.
  Chief Executive, Department of Lands

(Hearing at Warwick)

D E C I S I O N

As at 30 June 1993, the unimproved value of land described as Lot 2 on Registered Plan 591443, Parish of Glengallan, has been assessed by the Department of Lands, as it then was, in the amount of $62,500.  The land contains an area of 49.59 ha and is situated about 8 km to the north of the City of Warwick, with access via the bitumen sealed Womina Willowvale Road. 
           The Department’s valuation was carried out by Mr A.B. Cowley, registered valuer.  Mr Cowley described the land as being an elevated easy to undulating sloping forest ridge with easterly aspect and extensive rural views.  He says that the land is used as a rural homesite.  He has valued it accordingly.  The basis of valuation was obtained primarily from two sales. 
The first was of a 40.45 ha site to the south-west of Warwick with fair views but in what Mr Cowley described as a locality inferior to that of the subject with immediate access via a “dirt” road.  That land sold in November 1992 for $50,000 with the sale analysed to show an unimproved value of $47,000.  The second sale was of a much smaller 16.19 ha site to the south-east of Warwick, in February 1994 for $38,000.  That land was also considered to be in an inferior location also with inferior access as compared to the subject land.  It was established during the hearing that Mrs Maraun had purchased the subject land in 1988, then vacant, for $80,000. 
           Mrs Maraun’s appeal is based on the fact that “farms” in the immediate locality have been valued at a concessional level of value.  Mrs Maraun said that the land was purchased specifically for the purpose of establishing a business of primary production.  The land was initially used to run some 140 Angora goats for the production of mohair, in connection with which use a shed had been constructed and fencing upgraded or replaced.  A dwelling had been established with electricity and telephone connection together with domestic and stock water provision, further internal fencing and, in addition to an existing 4 ha of cultivation a further area of about 9 ha prepared for cultivation.  However, due to severe drought conditions and lack of feed, the goat herd had to be reduced to a nucleus of breeding dairy goats.  Mrs Maraun said that since the late 1980's prices for mohair had declined significantly and such production was now unprofitable.  Some cattle have been agisted on the land when seasonal conditions permitted.  In Mrs Maraun’s opinion the property was capable of carrying about 60 head of cattle or about 480 sheep on a permanent basis.  Prior to the purchase of the land Mrs Maraun had conducted a grazing operation in New South Wales of similar size and said that it had been self-sufficient.
           However, at the relevant valuation date and since, very little, if any, income had been received from primary production activities on the land.  Mrs Maraun’s evidence is that this is no different a situation than that experienced by other local drought-stricken farmers most of whom have income provided by off-farm employment. 
           In effect, Mrs Maraun wishes her land to be valued on the basis that it has been used and, except for the temporary effects of drought, would continue to be used for the business of primary production.
Critical to Mrs Maraun’s case is the proper interpretation of the meaning of “farming” as provided in s.17 of the Valuation of Land Act 1944 (the Act) - the applicable parts of which are repeated here:

“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 subject land is within a rural community and is of area larger than might be normally seen as constituting a rural homesite.  On Mrs Maraun’s evidence it is not further subdivisible.  However, size and use for grazing, even with crop assistance, does not automatically qualify the land for the concessional valuation.
           Mrs Maraun submits that a grazing operation involving the permanent depasture of the equivalent potential carrying capacity of the near 50 ha of the subject land is a significant and substantial commercial purpose which would be engaged in for the purpose of profit on a continuous and repetitive basis.  However, on Mrs Maraun’s own evidence, the initial goat grazing operation which constituted the use of the property at the date of valuation would not represent a qualifying commercial purpose.  Indeed, for land with area limited to that of the subject property, it should be expected that any grazing business would need to be of a most intensive nature for the “farming” criteria to be met.  Provision of “self sufficiency” for any particular individual owner, does not of itself necessarily satisfy the tests. 
           While interpretation of this particular legislation is not simple, it might be seen as unlikely that an appellant will succeed in proving “farming” use in the absence of historical and financial records or an operative business plan which included financial forecasts and budgetary considerations capable of examination.
           I have not been convinced that the subject land was being used at the relevant date for a purpose of farming as defined or that it is likely to be accepted as being so used in the absence of proof of the business aspect of the operation.    Even then, the business use needs to be shown as the “dominant” use and as having a “significant and substantial commercial purpose or character”.
The task of the Court is to consider any appeal on the merits of the case. Those merits do not include consideration of the qualifying use circumstances of other lands which are valued . whether properly so or not, in terms of the provisions of s.17 of the Act.
           Mr Cowley’s professional valuation evidence, together with the evidence of the original purchase price of the subject land by Mrs Maraun, indicates that, if unimproved, the land was worth the amount of the valuation at the relevant date. 
           The appeal is dismissed and the valuation of the chief executive affirmed.

RE WENCK
  MEMBER OF THE LAND COURT