Micasea Pty Ltd v Department of Natural Resources and Mines
[2004] QLC 79
•28 September 2004
LAND COURT OF QUEENSLAND
CITATION: Micasea Pty Ltd v Department of Natural Resources and Mines [2004] QLC 0079 PARTIES: Micasea Pty Ltd
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO:
AV2001/0335
DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 28 September 2004 DELIVERED AT: Brisbane HEARD AT: Rockhampton MEMBER Dr NG Divett ORDER: The appeal is dismissed, and the unimproved value of Lot 1 on RP 619734 as determined by the Chief Executive in the sum of Two Hundred and Fifty Thousand Dollars ($250,000) is affirmed. CATCHWORDS: Valuation – Method of valuation – Classification approach – Use of beast area check
Valuation – Statutory valuation – Valuation of Land Act 1944 – Sales evidence – Sales analysis – Applied unimproved valueAPPEARANCES: Mr A Boyd for the appellant
Mr K Fisher, Crown Law for the respondent
Background:
This matter relates to land known as “Carlisle” located on the Dawson Highway about 29 kilometres west of Moura. The subject land has an area of 1,849 hectares, is used for beef cattle grazing, and described as Lot 1 on RP 619734, Parish of Rhydding. The Dawson Highway is bitumen sealed and provides good access to the property, which is zoned Rural under the town plan of the Duaringa Shire, effective at the date of valuation of 1 October 2000. Electricity and mail services are available. The key issues are the nature of the land, changes in relativity and comparison of sales.
On 26 February 2001 the Chief Executive issued a valuation of the subject land at $250,000. Following an objection the Chief Executive confirmed that figure on 1 July 2001. The appellant has now appealed on 25 July 2001 claiming the unimproved value should more properly be $206,350. By letter 17 May 2004 the appellant’s agent, Mr Alister Boyd, sought the leave of the Court to amend the owner’s estimate of the valuation to $237,500. Following the refusal of an application for adjournment on 25 May 2004, the merits of the matter were heard on 1 June 2004.
Alister Forrest McClelland Boyd, agent for the appellant, appeared and gave evidence for the appellant. Mr Boyd had been unable to obtain the services of a registered valuer to provide expert evidence for the appellant, as outlined in paragraph [7] of the decision of this Court in this matter on 25 May 2004. At the hearing Mr Boyd provided a further statement that subsequent to the refusal of the application for adjournment, he had approached a further seven valuers to represent the appellant without any success. On that basis Mr Boyd undertook to provide assistance to the Court in respect of his observations of the property, and the sales evidence of the respondent.
It should be noted that while Mr Boyd does not hold himself out as a valuer, he has many years of experience in representing owners in similar matters extending back to 1965. Mr Boyd has extensive experience in representing owners at objection conferences, and in investigating direction procedures and appeals before this Court. He advises that over those 40 years he has visited properties in Longreach (95%), Barcaldine (100%), Blackall (60%). Mr Boyd has a background in the law, but concedes that he has not done a lot of personal work in the Duaringa Shire, as he normally has a valuer providing evidence in that area. (transcript 23).
Mr K Fisher, Counsel of Crown Law, appeared for the respondent, calling evidence from Mark Sydney Craig, the experienced private registered valuer now supporting the valuation. The valuation was formerly determined by Mr Craig as an employed departmental registered valuer. Mr Craig was the valuer responsible for all of the last four or five revaluations of the Duaringa Shire since 1986.
History of the valuation of Duaringa Shire -
Mr Craig advises that the Duaringa Shire is basically divided into a northern and a southern submarket area. He argues that the northern part had been increased several times from 1992, due to sales evidence in that area. Because of a dearth of sales in the southern part until 1996, the original relativities between the submarket areas prior to 1992 had become distorted. He advises that those two submarket areas are different country types. Following the more recent sales evidence in 2000, the northern part had increased by 10%, while the southern part had increased by 30% to 35%, thus re-establishing the pre-1992 relativities. Mr Craig argues that as a result of those recent increases, the whole of the Duaringa Shire is now in consistent relativity. He argues that the northern part of the Shire is generally inferior country to the southern areas.
In respect of the history of appeals throughout the shire at 1 October 2000, Mr Craig advises that the current matter was the only appeal proceeding to the Court. However he agrees that following the 1 October 1997 revaluation, there had been a large number of objections, which had resulted in a reduction in the unimproved values across the southern part of the Shire. He agrees that as a consequence of those reductions the unimproved value of the subject land in 1997 had been reduced from $227,500 to $187,500 (10%). There was no revaluation between 1997 and 2000.
In respect of the reason for the 10% reduction in values, Mr Craig advises that an original level of values reflecting about a 25% increase in 1997 had been overturned by the departmental delegate due to a perceived lack of sales evidence to support the higher values. Mr Boyd notes a departmental valuation report of 2 February 1998 (Exhibit 3), showing a valuation of the subject land at $227,500 ($125 per hectare), reflecting a 44.4% increase from the previous unimproved value of $157,500 ($85 per hectare). Mr Boyd notes that calculation appears to rely upon a grazing classification approach, showing scrub country at 1.35 beasts per hectare, and the forest country at 1.6 beasts per hectare. Mr Craig argues that was just a check method of confirming the projected values, and that valuation report was not the final values adopted. Mr Craig also notes that the reported figure also included an allowance for the size and access of the subject land, at 3% for access on the gross values based upon the classification levels, plus a further 6% for a size allowance.
Mr Boyd argues that from his experience over many years, he believes that the primary method of valuation in the Shire had been on a land classification approach, rather than direct comparisons with sales evidence. Mr Craig rejects that opinion, arguing that, while a land classification approach had been previously used as a “check” against the direct application of sales evidence, it was never the primary method of valuation. Mr Boyd agrees that the courts now only sanction the classification method as a secondary, or check approach to the valuations.
Change in Valuations –
In adopting his estimate of the unimproved value at $237,500 ($111 per hectare) Mr Boyd notes that is consistent with the 10% increase applied by the respondent to the grazing areas in the northern part of the Shire. However he argues that check on his estimate of the value of the subject land was coincidental, as he had formed his opinion based upon direct comparisons with sales evidence. Mr Craig agrees that the valuation methodology applied in that area is to assess the trend in values from the sales evidence, and provided there is no reason for a shift in relativities between different country types, such as forest or scrub country, then a percentage movement in the market is reflected in the respective unimproved values.
Mr Boyd was unable to comment upon whether all properties in the southern part of the Shire had been farmed to some degree over recent years. However he notes from his recent short field inspection of the area, that there appeared to be much grazing lands in that area. Mr Craig rejects that the subject land is similar to the inferior grazing lands in the northern part of the Shire, which he notes is inferior scrub to the “Bauhinia Downs” area of the subject land. Mr Craig advises that the northern sector lies to the north of the Duaringa to Blackwater Road, with a wedge of scrub in the middle near Woorabinda, and the better country is to the south. He argues that more recent sales in 2003 and 2004 reflect values actually higher than the good country in “Arcadia Valley”.
Mr Craig advises further that since the Australian Food and Fibre Company started disposing of its properties in 2000, several sales have reflected values from $600 per hectare to $700 per hectare, and even on one sale at $800 per hectare.
Nature of the Land –
Mr Craig assesses the subject land as 65% melonholey, brigalow and blackbutt scrub country, with 35% comprising sandy box forest, with sandalwood and blackbutt patches with gum frontages. Mr Boyd does not disagree with that country description. Mr Boyd advises that he also agrees with Mr Craig’s classification of the carrying capacity, which he notes reflects 1,200 hectares (65%) at 1 beast to 3.5 hectares, and the remainder (35%) at 1 beast to 6 hectares, giving a total for the 1,849 hectares of 451 head of cattle, or 1 beast to 4.1 hectares. To support those figures Mr Boyd provides a copy of a without prejudice report faxed to the appellant (Fairfax) on 29 May 1998, (Exhibit 3). (See paragraph [8]).
Mr Boyd argues that while he had visited the subject land in company with the Assistant Manager of the Fairfax Group (Mr Walker), he had done that merely to acquaint himself with Mr Craig’s country assessments. As part of that inspection Mr Boyd provides a sketch map (Exhibit 5) to demonstrate his observations. He notes that the scrub country that is visible from the eastern side boundary, reflected dense brigalow suckers extending to the creek running across the property. He advises further that the forest country, except to the south-east part, appeared to be blade ploughed after an initial pulling of the timber. Mr Boyd queries whether that blade ploughing and original timber treatment costs to control the sucker growth has been adequately allowed for by the respondent. He notes that those costs were necessary in order to achieve the carrying capacity of 1 beast to 4.1 hectare overall. He agrees that all of those treatment costs should have occurred prior to 2000.
In respect of the highest and best use of the subject land of “Carlisle”, Mr Craig sees that as for beef cattle grazing purposes. He argues that “Carlisle” does not have any potential arable country, as the eastern country is ordinary forest country, and the scrub country is heavily melonholed. He agrees with Mr Boyd that blade ploughing is the only development that has occurred. Mr Boyd also agrees that grazing is the highest and best use. Mr Craig further advises that in this “Bauhinia Downs” country, as part of the early timber treatment management, the lands were initially farmed. However most of those early plantings have now disappeared, and the country has returned to grass. Mr Craig notes that such farming for 5 or 6 years is a relatively cheaper way of getting an economic return on the timber treatment on the way to eventual grazing lands.
In respect of the current demands for land in that area, Mr Craig notes that grazing lands have been increasing in value, and are now nearer to farming values. However he agrees that arable lands are still valued at a higher rate than grazing lands, as the former has the potential to be used for either land use. Mr Craig advises that the district standard near “Carlisle” is for grazing purposes.
Comparison of Sales –
As Mr Boyd is not a valuer, he has provided no separate evidence of sale comparisons, but he offers comment in respect of the sales provided by Mr Craig. Mr Craig provides the following sales for direct comparison purposes, all of which are adequately watered:
· Sale 1 – (“Anchor” – Lot 10 on PN 521). This is a 13,800 hectare property located to the north of the subject land, and south-east of Duaringa. The sale has similar services, but inferior access and country. Overall the sale is seen as inferior. The sale sold in July 1999 for $1,500,000, and after allowing for stock and plants, land improvements including timber treatment and interest, was analysed at $409,021 ($29.64 per hectare) and was applied at $345,000 (84%). The sale carries 1 beast to 10.5 hectares overall. The sale is 6% scrub, 32% average forest, 9% fair forest, 22% poor forest and 31% unavailable.
· Sale 2 – (“Hillview West” – Lot 14 on SP 110442). This is a 1,409 hectare property located to the west of the subject land. The sale has similar services, and access, but superior quality land. Overall the sale is seen as superior to the subject land. The sale sold in July 2000 for $840,000, and after allowing for improvements including timber treatment and interest, was analysed at $320,376 ($227.38 per hectare), and applied at $265,000 (83%). The carrying capacity on the grazing areas is 1 beast to 3.7 hectares overall. The land resold in November 2000 for $1,025,000. The sale is 34% arable scrub, 32% good scrub, 21% good forest and 13% poor forest.
· Sale 3 – (“Cowandilla” – Lot 6 on BH 108). This is a 2,759 hectare property located to the west of the subject land. The sale has similar services, but inferior access to the subject land, and has superior quality country. Overall the sale is superior to the subject land. The sale sold in July 2000 for $1,800,000, and after allowing for improvements, including timber treatment and interest, was analysed at $475,483 ($172.34 per hectare), and applied at $470,000 (99%). The sale has a carrying capacity of 1 beast per 3.2 hectares. The land is 84% good scrub and 14% good forest with 2% downs.
· Sale 4 – (“Dandabong” – Lot 9 on BH 97). This is a 3,276 hectare property located to the west of the subject land, and adjoining Sale 2. The sale has similar services and access, but superior quality land. Overall the sale is seen as superior to the subject land. The sale sold in May 2000 for $2,000,000, and after allowing for improvements and crops, including timber treatment and interest, was analysed at $557,989 ($170.36 per hectare) and applied at $495,000 (89%). The sale has a carrying capacity of 1 beast per 3.4 hectares on the grazing land. The sale is 8.5% arable, 67% good scrub and 24.5% good forest.
· Sale 5 – (“Friendly Hills” – Lot 2 on RP 615514). This is a 950 hectare property located south-west of the subject land. The sale has similar services, but inferior access to the subject land, and superior quality country. Overall the sale is superior to the subject land. The sale sold in May 2001 for $600,000, and after allowing for improvements including timber treatment and interest, was analysed at $220,726 ($232.34 per hectare) and applied at $220,000 (100%). The carrying capacity is 1 beast per 2.9 hectares. The land is 61% good scrub and 32% good forest and 7% poor forest.
In respect of the use of the sales Mr Craig argues that Sales 1, 3 and 5 are used for grazing, while Sales 2 and 4 are used for farming and grazing. In his comparisons Mr Craig has estimated the subject land at 1,849 hectares at $135 per hectare or $250,000. Mr Boyd estimates the land at $111.55 per hectare or $237,500.
A key concern of Mr Boyd is his understanding of the application of the agreed beast area classification of the subject land compared to the sales classifications. For example he notes that Sale 3 (Cowandilla) was analysed at $172.34 per hectare with a carrying capacity of 1 beast to 3.2 hectares, giving a beast area value of $550.40. He notes also that Sale 4 (Dandabong) was analysed at $170.33 per hectare with a carrying capacity of 1 beast to 3.4 hectares, or a beast area of value $579.22, and is also seen as superior to the subject land. He notes that a similar beast area calculation reveals a beast area value of $553.50 for the subject land, which is seen as overall inferior to Sale 3. He argues that those direct beast area calculations indicate that the applied rate of $135 per hectare for the subject land is too high. Mr Craig rejects that assumption noting that the carrying capacity is merely a check method of assessment, and actual unimproved values also rely upon other factors such as area, river frontage, access, country type, flooding potential and other disabilities.
Mr Boyd further challenges the comparison with Sale 4 (Dandabong), following his recent discussions with the owner of that sale (Mr Byriel) who indicated that about half of Sale 4 was in fact arable land, and has been sown to sorghum, and is presently sown to wheat. Mr Boyd argues that is inconsistent with Mr Craig’s analysis of 8.5% arable land on Sale 4, noting the allowance by Mr Craig in that sale of $74,800 for crops and stools. Mr Fisher challenges the reliability of such hearsay evidence, noting such an approach was recently criticised by this Court in a hearing at Longreach, which is still to be decided by the Court.
Mr Boyd also concedes that the land use could have changed over the three years since the sale of Dandabong, but he advises that he saw a lot more arable land on 31 May 2004 than indicated by Mr Craig. In summary Mr Boyd argues that both Sales 3 and 4 have more arable land than has been allowed for by Mr Craig. Mr Craig is aware that Mr Byriel farms more land than has been classified as arable, but argues that is inconsistent with district practices.
Another concern for Mr Boyd is the relatively high application made for Sale 3 comparisons. He notes historically over many years, this Court has normally only applied an average of about 89% to analysed sales, in view of any uncertainties where some caution needs to be applied. To support that conclusion Mr Boyd refers to a recent decision of this Court in AJ and JA O’Brien v Department of Natural Resources and Mines (RV2003/0315 & Ors) 9 July 2003, unreported at paragraph [30]. Mr Boyd emphasises that valuation is not an exact science, and basic sales are generally applied at between 85% and 100%. He notes the key Sale 3 (Cowandilla) has been applied at 99%.
Mr Boyd also notes that Mr Craig’s Sale 1 (Anchor) was entirely grazing lands, but he argues that provides no real comparison to the subject land. However he concedes that he could not disagree that many properties in the southern part of the Shire had been partly farmed at some time, and he concedes that he was advised by Mr Walker on his recent inspections, that cropping of small areas in grazing lands was generally not economically favourable to grazing, after allowing for the extra costs.
Mr Boyd could also not comment whether the joint owners of Sale 4 (Dandabong) had different approaches to managing that property. Mr Byriel tends to favour farming, while his joint partner Mr Simmons favours grazing. Overall Mr Craig sees Sale 4 as mainly grazing country as its highest and best use. Mr Boyd could also not disagree that Sale 4 (Dandabong) had badly flood effected lands, particularly to the west, parts of which in the lower areas along Zamia Creek are currently being farmed. Without that flooding the analysed value of Sale 4 would have been higher. (See Exhibit 6 – aerial photographs).
In respect of the Sale 3 (Cowandilla) lands Mr Boyd was unaware also that part of that contract of sale included the commitment to retain large parts of the property (1,400 hectares) to pastures, and there were areas of erosion upon the sale. Mr Craig further explains that while parts of the southern lands in the Shire were formerly farmed, much of those areas had since returned to grazing. Mr Craig also notes that a larger block of similar country type will also sell for a less per hectare rate than a smaller area block. Mr Craig also notes that current carrying capacities are often greater than the actual classification used in the valuations. However he argues that for consistency across the Shire, it is important that he retains the current approach to grazing lands. Mr Craig also notes that if “beast area” comparisons are made between mixed use blocks and straight farming blocks, then inconsistent results can occur.
Decision:
The highest and best use of the land –
Whilst the highest and best use of the subject land is agreed to be for grazing purposes, there is some difference between the parties in respect of the highest and best use of two of the key sale comparisons. Mr Boyd argues that more of Sales 3 and 4 are suitable for arable purposes than does Mr Craig. Now the doctrine of highest and best use means the most advantageous use of the land having regard to planning constraints and all other relevant factors affecting its present and future potential. (Land Acquisition, 4th edition, D Brown, (Butterworth) p.106). That use relates to its market value, and not to any special value to the owner. (Cieslinski v Minister of Works (1978) 20 SASR 55). In the current matter under its current zoning as Rural, either arable or grazing uses are permitted, and the judgment as to whether Sales 3 or 4 are to be assessed as more arable than grazing, depends only upon the nature of the lands, and the broad view of a prudent experienced purchaser in the market place.
Mr Craig agrees that a larger proportion of Sale 4 is currently farmed by Mr Byriel, but he argues that reflects more the special needs of that owner. On a wider consistency basis he has retained the lower classification level of grazing based upon Shire standards for similar country. Mr Craig is also aware of the general history of some farming or grazing lands, which are now returning to grazing use. Mr Boyd cannot discredit that evidence. Upon that basis I accept Mr Craig’s advice, and agree that his classification levels of both Sales 3 and 4 are appropriate.
The method of classification –
I look then at the method of valuing grazing lands on a carrying capacity basis, and note that was seen with some favour by this Court in Appeals against Determination of Valuer-General – Shire of Bendemere (1966) 33 CLLR 61, where the learned Member said at 66:
“He said that he did not pay much attention to carrying capacity, but apparently preferred to value by this classification of country method. I think I would require much more evidence than I have to convince me that purchasers in this area do indeed consciously apply an acreage value to the various types of country and do not have regard to carrying capacity.”
That learned Member had also previously accepted the beast area method in ARP Black and Ors v Valuer-General (1965) 32 CLLR 146, where he said at 160:
“The use of the beast area method enables unimproved value to be deduced from unlikely properties, because it is the value of the area which will carry one beast that is the yardstick. Of course it is still possible for valuers to differ as to sales analyses, as to carrying capacity on both sales and subject properties, and as to improvement values, but these are matters which a court can investigate more easily, more judicially, and more accurately than it can mere guesses.”
However the caution that needs to be exercised when valuing grazing lands was identified in HM Hungerford v Valuer-General (1967) 34 CLLR 278, where the Land Appeal Court said at 281:
“In our opinion, there are many factors to consider when valuing a piece of land and we think it is a mistake for a valuer when valuing land to rely solely on a classification of land into its arable and non-arable parts to which values according to land quality only are applied. Such factors as the adequacy of natural water as compared with the necessity to supply artificial water and factors of access, situation and the number and location of areas of arable land comprising the total amount assessed as arable, must be considered. The classification method cannot be applied rigidly if these factors are to receive due recognition.”
The Land Appeal Court went on to say at 281:
“In localities where farming is well established and arable land has a demonstrable market value, we think the classification method is more applicable than in localities where arable land is best suited for fodder cropping in conjunction with grazing. In any event we stress that although the classification method is of assistance as a guide to valuing, it should not be applied blindly in every case where it is sought to use it.”
The difficulty in making variations in the unimproved value of lands according to the amount of land under cultivation at a particular time was also noted in Settlement Farm Lease No. 2260, Clermont District – Application for Conversion Tenure (1968) 35 CLLR 98. In that matter the Land Appeal Court found at 102:
“The price which experienced and prudent purchasers pay for land on the open market is the guide to land values. Such values necessarily reflect the topography, the climate, the problems, the peculiarities etc of the locality concerned. There may be many factors of differentiation between a subject property and a sale property, but we cannot, unless sales demonstrate it, determine unimproved value by the use a particular owner makes of his property. In other words, unimproved value should not vary according to the amount of land which is under cultivation or intended to be placed under cultivation at any relevant date, for that may be a matter for managerial skill or preference. It is the land with its existing capabilities including its inherent potentialities, advantages and disadvantages that must be valued.”
Further concern in respect of adopting a piecemeal approach to any classification method was emphasised in IK Harrison v The Crown (1971) 38 CLLR 91, where the Land Appeal Court said at 94:
“Perhaps we could sum up our views on the matter of valuing land by classification by saying that to attempt to arrive at the value of a block of land by breaking it up into a number of parts and placing a value per acre on each part as though each part was an entity in itself divorced from its neighbouring parts, usually leads to a fictitious result. Such a method should be used with great caution.”
Criticism of the use of a classification method was also noted in IP Scougall v Valuer-General (1980-81), 7 QLCR 51, where the Land Appeal Court said at 57:
“The classification method of valuing has been criticised as a primary method in several judgments of this Court and the Land Court – vide for example Conversion of Tenure – Settlement Farm Leases – Goondiwindi District – Land Appeal Court – (1967) 34 CLLR 278 at page 281. The method may provide supporting evidence of valuation but direct block to block comparison is generally to be preferred as a primary method. The difficulty of expressing in the classification method appropriate allowances, overall, for differences in situation, access, type of water, varying percentages of component land types and working difficulties is so well known as to need no stressing.”
However it is noted that the classification method has not been disallowed in principle as a method, as noted in PB Cooper and FRG Strickland v The Crown (1984-85) 10 QLCR 23, per the Land Appeal Court at 25. I also note that the matter of carrying capacity of grazing lands was accepted, with some reservation, by the Land Appeal Court in Toolebuc Pastoral Holding – Australian Agricultural Company v The Crown (1979) 6 QLCR 120, where it said at 123:
“Whilst actual numbers carried over a period of time are relevant when considering the ‘average season’ carrying capacity, such numbers are not necessarily the deciding factor. Care must be taken in considering stocking figures to have due regard to seasonal and economic conditions over the period as well as management practices and skills. The court strives to acquire a common yardstick throughout a district namely the number of stock which the hypothetical prudent grazier would reasonably carry on the holding concerned in an average season.
Over the years, the ‘average season’ carrying capacity, especially in the case of leases comprising old developed country, has to a great degree, except in unusual or varying circumstances, become so well established and accepted as to be in the nature of a classification of country.”
The matter of whether “carrying capacity” should be used, rather than comparisons with sales of comparable properties, was also explored by the Land and Environment Court of New South Wales in Nap Nap Station Pty Ltd v Valuer-General (1989) 72 LGRA 275, where Stein J said at 282:
“My above conclusions should not be construed as indicating that carrying capacity concepts have no place in the valuation of rural land. I accept that in suitable cases the carrying capacity or “productive capacity” can be of assistance, particularly as a cross checking tool. I accept Mr Kennett’s evidence that the concept may be a “handy check”. In circumstances where there are no sales of directly comparable properties the concept may be used as the primary approach. However, when comparables are available, as in this case, I do not believe that the approach should be used except as an aid to valuation. …
I find myself in agreement with remarks in a recent decision of Wiradjuri Regional Aboriginal Land Council v Southern Estates Pty Ltd (8 September 1989, unreported), where Hemmings J said:
‘Whilst an exercise based solely upon estimated carrying capacity is an acceptable approach to determine the value of improved grazing land, I have considerable reservations as to its reliability to deduce unimproved land value, or the value of improvements.’”
On the basis of that guidance, I agree with Mr Craig that the use of carrying capacities, land classifications, and beast area figures are really only a final checking procedure. The best method of valuation is by comparison with sales of similar properties.
Comparison of sales -
I consider then the main comparisons of Mr Craig’s sales and find:
Sale Area Analysed rate Use Comparison
per hectare
1 (Anchor)13,800 ha $29.64 Grazing Inferior
2 (Hillview West) 1,409 ha $227.38 Farming and Superior
grazing
3 (Cowandilla) 2,759 ha $172.34 Grazing Superior
4 (Dandabong) 3,276 ha $170.33 Farming and Superior
grazing
5 (Friendly Hills) 950 ha $232.34 Grazing Superior
Subject land 1,849 ha $135 Grazing -
On those comparisons, there is nothing to suggest that Mr Craig has made an error, or followed an incorrect principle. However the considerable difference in size between Sale 1 (13,800 hectares) and the subject land (1,849 hectares) provides some scope for further consideration of the differences of those properties. However I note that the former relativities have been maintained between scrub country and forest country, which would then apply across the southern part of the Shire at a consistent 30% to 35% increase based upon the increases reflected in the sales evidence. Because of the different land types in the northern part of the Shire, I see no reason to support Mr Boyd’s opinion of a 10% increase in the subject land.
The only room for some adjustment to the valuation might then lie in a check for consistency by the carrying capacity approach. Now based upon Mr Boyd’s claim that the beast areas of the subject land are $553.50, and Sale 3 (Cowandilla) $550.40 and Sale 4 (Dandabong) $579.22, the problem with inconsistencies in that approach becomes clear. Mr Craig agrees that if all of the features of each property were similar, then a consistent beast area outcome could be relevant. But it is noted that while each property has adequate water available, there is some difference in the country type, and the access to the lands, and the difference in size. On balance there is nothing to discredit Mr Craig’s conclusions.
Now adopting the advice of one expert witness against the advice of another expert witness has been found to not involve any error of law. (See Electricity Commission of New South Wales v Arrow (1994) 85 LGERA 418, per Kirby P at 419). But in the current matter Mr Craig's is the only expert valuation evidence available to the Court. Now that then contrasts the expert evidence of Mr Craig to the "opinions" evidence of Mr Boyd. It is agreed that Mr Boyd does not hold himself out to be an expert valuer in this matter. However Mr Boyd has sought to provide some doubt about the expert evidence of Mr Craig in respect of his analyses of the two key Sales 3 and 4.
The matter of adversarial evidence was considered by the Queensland Court of Appeal in Reservilt Pty Ltd v Maroochy Shire Council [2002] 123 LGERA 233. In that matter, in the Court below, the Judge had been unable to reach a view as to which opinion was correct, where the two experts on noise had considerably sought to challenge the opinions of the other expert witness. In summarising the role of expert advice and "opinions", Davies JA noted at 237:
"That his Honour was unable to reach any confident view as to which opinion was correct, and consequently had to seek to resolve the matter by applying onus of proof provisions in the Act is not a criticism of his Honour but rather of the adversarial way in which expert evidence continues to be adduced in the Planning and Environment Court. It is inevitable that an applicant, in a system as adversarial as this, will call as an expert only a person whose evidence generally supports the applicant’s case; and conversely that a respondent will call as an expert witness only a person whose evidence generally supports the respondent’s case. Such a system encourages such a witness to express opinions on the question on which he or she is called which are biased in favour of his or her client and to defend those opinions strongly in court thereby decreasing the possibility of the judge arriving at an objectively correct judgment on the question."
Another matter which weighs upon my mind is the power of this Court to probe the accuracy of Mr Craig’s evidence, in the absence of any other expert valuation evidence. That was emphasised by the Land Appeal Court in BT Dillon v Valuer-General (1986-87) 11 QLCR 231, where it said at 233:
"The Legislature has not given this Court any investigatory powers under the Valuation of Land Act. If the Appellant’s case is not strong enough in its own right to establish the values contended for or to disprove the Valuer-General’s values, the Court is not empowered of its own volition to probe the fairness or correctness of the Valuer-General’s values and by this means arrive at its own estimate of value."
In the light of those directions I accept Mr Craig's estimate of the unimproved value at $135 per hectare or $250,000.
Summary:
In summarising this matter I am reminded that under s.33 of the Act, the unimproved value of the Chief Executive is deemed to be correct unless found by evidence to the contrary. The responsibility for proving any error lies with the appellant under s.45(4) of the Act. That has not occurred.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value of Lot 1 on RP 619734 as determined by the Chief Executive in the sum of Two Hundred and Fifty Thousand Dollars ($250,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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