Medill v Department of Natural Resources, Mines and Water
[2010] QLC 91
•30 June 2010 * This judgment has been amended to replace Order No. 6.
LAND COURT OF QUEENSLAND
* AMENDED JUDGMENT
CITATION: Medill & Anor v Department of Natural Resources, Mines and Water [2010] QLC 0091 PARTIES: Ethel F and William E Medill
(applicants)v. Chief Executive, Department of Natural Resources, Mines and Water
(respondent)FILE NO: VLA326-06, VLA327-06 and VLA328-06 (formerly AV2006/0326, RV2006/0327 and RV2006/0328) DIVISION: General Division PROCEEDING: Land Court of Queensland DELIVERED ON: 30 June 2010
* This judgment has been amended to replace Order No. 6.
DELIVERED AT: Brisbane HEARD AT: Barcaldine PRESIDENT: Mrs CAC MacDonald ORDER:
1. Appeal VLA326-06 is allowed.
2. The unimproved value of the aggregation of Arundel, being Lot 6 on RY 41 : GHPL2/3838 and Lot 7 on RY 41 : GHPL2/3837 in the Parish of Tenterden is determined at One Million, Three Hundred and Sixty Thousand, Five Hundred Dollars ($1,360,500) as at 1 October 2005.
3. Appeal VLA327-06 is allowed.
4. The unimproved value of Lot 7 on RY 41 on GHPL2/3837 is determined at Seven Hundred and Seventeen Thousand, Five Hundred Dollars ($717,500).
5. Appeal VLA328-06 is allowed.
6. The unimproved value of Lot 6 on RY 41 on GHPL2/3838 is determined at Six Hundred and Sixty-Six Thousand, Five Hundred Dollars ($666,500).
CATCHWORDS: Unimproved value – grazing property in Ilfracombe Shire – relativity with valuation of other properties – direct comparison with determinations of test cases – sales relied on in determinations of selected cases – alteration of previous relativities – Valuation of Land Act 1944 APPEARANCES: Mr A Boyd, Agent, for the appellants
Mr W Isdale of Crown Law, for the respondent
These three appeals have been lodged by the appellants (William E and Ethel F Medill) against determinations by the Chief Executive, Department of Natural Resources, Mines and Water under the provisions of the Valuation of Land Act 1944 (the Act), of the unimproved value of their property, Arundel, as at 1 October 2005.
Appeal VLA326-06 concerns the unimproved value of the aggregation of Arundel which has an area of 11,832 ha. The valuation issued at $1,550,000, but at the hearing the respondent led evidence to a value of $1,414,000 or $119.50/ha. In their Notice of Appeal, the appellants estimated the unimproved value of the property at $800,000 but led evidence at the hearing to a value of $115/ha or $1,360,680.
Appeal VLA327-06 deals with the rental valuation of one component of the aggregation being Lot 7 on RY41 on Grazing Homestead Perpetual Lease, GHPL2/3837, having an area of 6,133.82 ha. The appellants led evidence at the hearing to a valuation of $121/ha for this part of the property. The respondent led evidence to $117/ha.
Appeal VLA328-06 deals with the smaller component of the aggregation, Lot 6 on RY41 on GHPL2/3838, having an area of 5,697.771 ha. The respondent led evidence to a value of $121/ha for this part of the aggregation. The appellants led evidence to a value of $117/ha.
Evidence was given at the hearing on behalf of the appellants by Mr DR Medill who is a grandson of the appellants. Evidence was given on behalf of the respondent by Mr PD Schefe who is a registered valuer employed by the Department of Environment and Resource Management.
VLA326-06
There was no difference between the parties as to the description of the subject property. In his written report, Mr Schefe described Arundel as situated in the Ilfracombe Shire about 29 kms east-north-east of Ilfracombe and 45 kms west-north-west of Barcaldine. The aggregation has an area of 11,832 ha, and is 100% open to loose Mitchell grass downs sparsely timbered.
Mr Schefe valued the subject property by direct comparison on a dollar per hectare basis by relying on
·Two Land Court determinations in test cases in the area of the subject land namely Tara (Walker v Department of Natural Resources and Water[1]) and Avro (Medill v Department of Natural Resources and Water[2]);
·Two determined sales - Ashgrove (referred to in Walker v Department of Natural Resources and Water[3]) and Newstead (referred to in Elliott v Department of Natural Resources and Water[4]); and
·A negotiated settlement (Balonne/Byron Park (AV2006/0275)).
[1] [2008] QLC 0005.
[2] [2008] QLC 0206.
[3] [2008] QLC 0005.
[4] [2008] QLC 0009.
Mr Schefe compared the properties as follows –
·Tara: the downs on Arundel appear to be looser than the downs on Tara; both Arundel and Tara have formed earth access; on a dollar per hectare basis, the subject is inferior to Tara. Tara has an area of 7,509.357 ha and its unimproved value as at 1 October 2005 was determined by the Land Court at $140/ha which includes allowances for access, school bus and water. Prior to the allowances, the property was valued at $146/ha
·Avro is a 4,134 ha property. The unimproved value as at 1 October 2005 was determined at $136/ha. Mr Schefe said that the downs on Arundel were looser than the downs on Avro. He considered that the subject was most aligned with Avro with regard to the very open loose nature of the property. Overall, on a dollar per hectare basis, he considered the subject to be inferior to Avro.
·Ashgrove is a sale which was referred to in the determination in Walker vDepartment of Natural Resources and Water[5]. The sale property has an area of 5,514.651 ha and an applied value of $133/ha. Mr Schefe said that by comparison with Ashgrove, Arundel did not appear to have any of the heavily timbered areas of gidyea. The downs on Arundel appeared to be looser than the downs on Ashgrove. Overall the subject was inferior to Ashgrove.
·Newstead is a sale referred to in the determination in Elliott v Department of Natural Resources and Water[6]. The sale property has an area of 12,251.3183 ha and an unimproved value of $151/ha was applied. Mr Schefe said that the downs on Arundel appeared to be looser than the downs on Newstead and that overall, on a dollar per hectare basis, the subject was inferior to Newstead.
·Balonne/Byron Park: this was a negotiated settlement. The property has an area of 14,093 ha and the value was determined by consent at $116.50/ha. By contrast with Balonne/Byron Park, Mr Schefe said that Arundel did not appear to have any areas of gidyea/forest ridges and channels. Arundel had similar formed earth access as that to Balonne/Byron Park and was similar in size to Balonne/Byron Park. Overall, on a dollar per hectare basis, Mr Schefe considered the subject to be superior to Balonne/Byron Park.
[5] [2008] QLC 0005.
[6] [2008] QLC 0009.
Mr Schefe said that the initial valuation of the subject at $131/ha had been arrived at by relying on sales in the Ilfracombe, Aramac and part of the Barcaldine localities. Because a general reduction had been applied in the test case of Little Tara, a reduction had been applied to those properties and, accordingly, to the subject property. The reduction he had applied to the subject was 9.9%. He did not consider that any further reduction was justified because it would destroy the subject’s relativity with the comparison properties.
Mr Schefe had not inspected the subject property because he was under the understanding, as a result of the test case determinations and the fast track process that had been adopted in previous appeals, that there was no need for an inspection. He relied instead on data in departmental files, satellite imagery, vegetation mapping etc. Similarly, Mr Schefe had not inspected any of the comparison properties although he had viewed Balonne from the road.
The fast track process was adopted by the former President of the Court in relation to a number of appeals concerning the 2005 valuation. There appears to have been a genuine misunderstanding by Mr Schefe as to whether or not he was required to inspect the subject property and on that basis no criticism is made of him for failing to inspect the property.
It is to be observed that the parties’ respective valuations are very close – the appellants say that the value of the aggregation is $115/ha whereas the respondent has led evidence to a value of $119.50/ha. The appellants did not adduce any sales evidence in support of their valuation. Their case is that Mr Schefe’s comparisons between the subject property and the comparison properties are flawed because of his inadequate knowledge of the subject land. Further, the carrying capacity attributed by Mr Schefe to the subject land, 1:1.55 ha, is higher than that previously agreed between the appellants and the department at 1:1.6 ha. Consequently, the sheep area value on the subject is out of alignment with the sheep area values on the comparison properties.
The appellants’ evidence was that historically the carrying capacity of Arundel was 1 sheep to 1.5 ha, but that in 2002 an agreement was reached between the departmental valuers and the appellants of a carrying capacity of 1:1.6 ha. Mr Schefe said that there was no record in the departmental files of that change.
Mr Schefe said that he had not relied on carrying capacity or sheep area value in his valuation because relativities in the area had been distorted so that a direct comparison with sheep area values was not applicable. In any event he did not consider that a carrying capacity of 1:1.6 should be applied to the subject because that would be too low when compared with the carrying capacities applied to two properties immediately to the west of the subject namely Tawarra and Currane. At a value of $119.50/ha and using a carrying capacity of 1:1.55 the sheep area value of the subject is $185, which, in Mr Schefe’s opinion is comparable with Ashgrove at $186.
The evidence as to the carrying capacity of the subject is unsatisfactory. The departmental records show a carrying capacity of 1:1.55. The appellants say that that was altered to 1:1.6 by agreement with the department in 2002. Mr Schefe suggested that figure may have resulted from a previous without prejudice settlement negotiation. As there has been no inspection by Mr Schefe of the subject or the comparison properties, I do not consider that there is sufficient evidence to enable me to make a finding as to carrying capacity or sheep area value of the subject. I consider therefore that the valuation should be made on a rate per hectare basis.
With the exception of the Balonne/Byron Park negotiated settlement, all of Mr Schefe’s comparison properties show rates per hectare (ranging from $133/ha to $155/ha) well above the figures contended for by both parties for the subject. This is consistent with Mr Schefe’s assessment that those comparison properties were superior to the subject.
Balonne/Byron Park was determined by consent at $116.50/ha. While Mr Schefe did not say so, I have inferred that he must have considered that property to be more comparable with the subject than any of the other comparison properties, given the similarity of the rate he attributed to the subject ($119.50/ha) with the determination in Balonne/Byron Park. Mr Schefe considered Balonne/Byron Park to be inferior to the subject.
The appellants’ agent, Mr Boyd, submitted that the relativity between the subject and Balonne/Byron Park had been altered in the current valuation because in 2001 Balonne/Byron Park had been valued at a higher rate ($43.29/ha) than the subject ($38.03/ha). While Mr Schefe said that he could not verify those figures, he did not deny that he had altered the relativity since the 2001 valuation. Mr Schefe had not been involved in the 2001 valuation but he said, in general terms, a lot of relativities had changed in the area because of the impact of the Vegetation Management Act 1999 on timbered country. Approximately 40% of Balonne/Byron Park was timbered whereas the subject was open treeless downs. In his opinion therefore the relativity between Arundel and Balonne/Byron Park had changed in the intervening period.
I do not consider that the relativity between the subject and Balonne/Byron Park should have been changed without inspection of both properties. While the fast track process was developed to enable the multiple appeals before the Court to be dealt with in as efficient manner as possible, altering relativities is a significant step and in my view that should not occur unless the valuer undertakes inspections or otherwise verifies his description of the relevant properties.
It was clear from Mr Schefe’s evidence under cross-examination that he had very little knowledge of Balonne/Byron Park. Further he produced no maps or satellite imaging to support his description of the country on Balonne/Byron Park. That being the case, I consider that the previous relativity between the subject and Balonne/Byron Park should be maintained until reliable evidence is available as to whether and to what extent the relativity should be altered. In those circumstances, I have accepted the appellants’ estimate of value of $115/ha for the aggregation. That figure maintains the pre-existing relativity between the subject and Balonne/Byron Park and is otherwise supported by the evidence. The value of the aggregation is $1,360,680 rounded to $1,360,500.
VLA327-06 and VLA328-06
The appellants led evidence to a value of $121/ha for both these parts of the property. The respondent led evidence to a value of $117/ha.
The parties are agreed that the smaller properties should be valued at a higher rate than the aggregation and there is very little difference between them as to the appropriate differential to be applied – the appellants have added $2/ha, the respondent $1.50/ha.
Since I have accepted the appellants’ estimate of value of $115/ha for the aggregation, I consider it appropriate to apply their estimate, $117/ha, to the value of each of the leases.
ORDERS
1. Appeal VLA326-06 is allowed.
2. The unimproved value of the aggregation of Arundel, being Lot 6 on RY 41 : GHPL2/3838 and Lot 7 on RY 41 : GHPL2/3837 in the Parish of Tenterden is determined at One Million, Three Hundred and Sixty Thousand, Five Hundred Dollars ($1,360,500) as at 1 October 2005.
3. Appeal VLA327-06 is allowed.
4. The unimproved value of Lot 7 on RY 41 on GHPL2/3837 is determined at Seven Hundred and Seventeen Thousand, Five Hundred Dollars ($717,500).
5. Appeal VLA328-06 is allowed.
6. The unimproved value of Lot 6 on RY 41 on GHPL2/3838 is determined at Six Hundred and Sixty-Six Thousand, Five Hundred Dollars ($666,500).
CAC MacDONALD
PRESIDENT OF THE LAND COURT
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