Mitchell v Department of Natural Resources and Water

Case •

[2008] QLC 112

•

30 May 2008

LAND COURT OF QUEENSLAND

CITATION:Mitchell v Department of Natural Resources and Water [2008] QLC 0112

PARTIES:Ian J Mitchell and Pauline J Mitchell

(appellants)

v

Chief Executive, Department of Natural Resources and Water
(respondent)

FILE NOS:AV2006/0184, RV2006/0185, RV2006/0186 and RV2006/0187

DIVISION:Land Court of Queensland – General Division

PROCEEDING:  Appeals against revenue valuations for rating and rental purposes

DELIVERED ON:                  30 May 2008

DELIVERED AT:                   Brisbane

HEARD AT:Winton

MEMBER:Mr JJ Trickett, President

ORDER:1.  In appeal AV2006/0184, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Eyriewald” for rating purposes as at 1 October 2005 is determined at Two Million, Seven Hundred and Nineteen Dollars ($2,719,000).

2.    In appeal RV2006/0185, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of part of “Eyriewald” for rental purposes as at 1 October 2005 is determined at Two Hundred and Twenty-six Thousand Dollars ($226,000).

3.    In appeal RV2006/0186, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of part of “Eyriewald” for rental purposes as at 1 October 2005 is determined at Nine Hundred and Eighteen Dollars ($918,000).

4.    In appeal RV2006/0187, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of part of “Eyriewald” for rental purposes as at 1 October 2005 is determined at One Million, Six Hundred Thousand Dollars ($1,600,000).

CATCHWORDS:                  Unimproved value – grazing property at Winton – comparisons with determinations of selected cases – sales relied upon in the selected cases – classification of country – carrying capacity – sheep area values – disabilities – Valuation of Land Act 1944

APPEARANCES:                  Mr A Boyd, agent, for the appellants

Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent

  1. These are four appeals by landowners in the Shire of Winton against the unimproved values applied to their land for rating and rental purposes by the Chief Executive, Department of Natural Resources and Water (the Department) under the provisions of the Valuation of Land Act 1944 (the Act).

Background

  1. Mr and Mrs Mitchell are the owners of a grazing property known as “Eyriewald”, containing a total area of 24,172 ha, situated approximately 112 km north-east of Winton on the Olio-Muttaburra Road.  As at 1 October 2005, the respondent applied an unimproved value of $2,800,000, or $115.84/ha, to the whole of that property (the “Eyriewald” aggregation) for rating purposes.  The owners appealed against that valuation contending that their estimate of the unimproved value is $1,045,000.

  1. The “Eyriewald” aggregation comprises three parcels, each held under leasehold tenure.  The provisions of the Act require that a separate valuation be made for each leasehold parcel for rental purposes.  Appeals were also lodged against each of those rental valuations.

  1. The appeals were lodged on behalf of the owners by their agent, Mr A Boyd.  The grounds of appeal are wide-ranging but general in nature, essentially contending that the unimproved values are excessive because of the failure by the Department to take into account and make proper allowance for various matters, or to apply the correct principles of valuation. 

  1. These appeals were among a number of cases tried by the fast-track process, following the determination of selected cases “Bonnie Downs”[1] and “Belmont”[2] in the Shire of Winton.  The parties agreed that the remaining appeals be determined by confining the evidence to comparisons with the decisions in those cases and to the sales relied upon in arriving at those determinations.  However, evidence of the differences between individual properties was also heard. 

    [1]     Fawckner v Department of Natural Resources and Water [2008] QLC 0036.

    [2]     Elliott v Department of Natural Resources and Water [2008] QLC 0040.

The evidence for the appellants

  1. Evidence for the appellants was given by Mr RD Fawckner, the owner of the adjoining property “Bonnie Downs”.  Mr Fawckner referred to the fact that following the previous valuations by the Department as at 1 October 2001, the Land Court determined an appeal against the valuation of the “Eyriewald” aggregation at $21.60/ha, only slightly higher than the Court’s determination of the valuation of the “Bonnie Downs” aggregation at $21.40/ha.

  1. Mr Fawckner considered that “Eyriewald” was similar to “Bonnie Downs” and had the same carrying capacity.  The Department has now valued the “Eyriewald” aggregation at $115.84/ha, while the “Bonnie Downs” aggregation had been valued at $120/ha.  However, the Land Court has since determined the valuation of the “Bonnie Downs” aggregation at $110/ha.  Mr Fawckner contends that on a direct comparison basis, the value of $111/ha should be determined for the “Eyriewald” aggregation. 

The evidence for the Department

  1. Evidence for the Department was given by registered valuer, Mr DA Routh, who explained that in assessing the various properties in the area he had relied upon the Department’s historical records, with assistance from the WARLUS land system mapping, regional eco-system mapping and satellite imagery.  From those sources he had classified the country on the “Eyriewald” aggregation as:

    21,261 ha (88%) downs (1-1.6 ha)

    2,910 ha (12%) channels (1-1.6 ha)

    Mr Routh described “Eyriewald” as follows:

    “’Eyriewald’ is described as mainly open undulating brown soil Mitchell grass downs, lightly shaded with Whitewood, Vinetree and some Mimosa and Coolibah along gullies, channels and flats along Culloden Creek.  There are looser brown soils towards the north-east corner.”

  2. In Mr Routh’s opinion, “Eyriewald” is typical of the Corlfield downs country to the east of the Hughenden Road, being predominantly black-soil downs with some creek channels.  He assessed the carrying capacity at 1 sheep to 1.6 ha, or 15,107 sheep.

  1. In defending the Department’s valuation of $115.84/ha for “Eyriewald”, Mr Routh referred to the selected case “Bonnie Downs”, containing an area of 26,080 ha, which the Court determined at $110/ha, and to the selected case “Belmont”, with an area of 18,318 ha, which the Court determined at $105/ha.  However, in his opinion, “Eyriewald” is most aligned to the sale property “Dahlia”.  “Dahlia” has an area of 13,327 ha and is situated several properties removed to the south-west.  As at 1 October 2005, the Department applied an unimproved value of $112.55/ha to “Dahlia”.  It was the key sale for the determination of the selected cases.

The issues

  1. The only real issue in this case is the correct relativity of the valuations of the various properties in this area.  Mr Fawckner contends on behalf of the owners that the value of the “Eyriewald” aggregation should be slightly higher per ha than the valuation of $110/ha determined by the Court for the “Bonnie Downs” aggregation.  They are, after all, the same run of country.  Mr Routh concedes that all the downs properties in the Corfield area are very similar.  He found little reason to make a distinction between them.  However, he made the point that each of them has varying percentages of loose country and channels, and there is a general improvement in the quality of the country from west to east.  His applied values reflect that improvement, generally increasing towards the east.

  1. In my reasons for the determination of the unimproved value of the “Bonnie Downs” aggregation, I expressed the opinion that any comparison based on the carrying capacities of the various properties in the area is misleading.  The Department had “let out” the traditional carrying capacity of the sale property “Dahlia” from 1 sheep to 1.6 ha to 1 sheep to 1.8 ha.  It had similarly “let out” the carrying capacity of the “Bonnie Downs” aggregation from 1 sheep to 1.6 ha to 1 sheep to 1.7 ha.  That was done independently of Mr Routh, but he felt obliged to follow the Department’s carrying capacities.

  1. As I pointed out in that decision, the arbitrary revision of the Department’s traditional carrying capacities on an ad hoc basis has affected any comparison that could be made on a carrying capacity or sheep area basis.  The evidence in these cases is compelling that there is virtually no difference in the carrying capacity per hectare of the properties in the immediate area.  Therefore, as in the “Bonnie Downs” case, I propose to put aside any assessment on a carrying capacity or a sheep area basis and make direct comparisons.

Appeal AV2006/0184

  1. Since the hearing in Winton on 12 May 2008, I have determined the unimproved values of smaller properties to the south of “Eyriewald” at between $112.50/ha and $117.50/ha.  However, in my view, the most relevant comparison is with the selected case, the “Bonnie Downs” aggregation which is of similar size and adjoins “Eyriewald” immediately to the south.  Its unimproved value was determined at $110/ha.  Mr Fawckner, who appeared for the appellants in this case, has an intimate knowledge of both properties and in his opinion, the “Eyriewald” aggregation is slightly better and should have a slightly higher value than the “Bonnie Downs” aggregation.  I accept Mr Fawckner’s opinion.  Therefore, I propose to apply an unimproved value of $112.50/ha to the “Eyriewald” aggregation.  For the 24,172 ha property that amounts to a rounded unimproved value of $2,719,000. 

Appeal RV2006/0187

  1. This appeal is against the valuation of part of the “Eyriewald” aggregation held under grazing homestead perpetual lease tenure, comprising an area of 14,110 ha.  The Valuation of Land Act requires its unimproved value be determined separately. 

  1. This leasehold parcel of “Eyriewald” is, according to Mr Fawckner, known as “Adirel Downs” and is situated immediately to the north of, and separated by the Olio-Muttaburra Road and stock route, from “Corunna” and “Eskdale”.  The evidence is that they are similar type of country.

  1. Mr Routh has classified the country on “Adirel Downs” as:

    12,107 ha (85%) downs (1-1.6 ha)

    2,093 ha (15%) channels (1-1.6 ha)

    Apart from having a slightly larger percentage of channels than the “Eyriewald” aggregation, there seems to be virtually no difference in the country.  Mr Routh has applied $116.94/ha to this part of the property, compared with $115.90/ha to the aggregation.

  1. It appears that Mr Routh has made only a slight adjustment because of the somewhat smaller area of this parcel.  I can see no reason not to make a somewhat similar adjustment for size.

  1. I propose to determine the unimproved value of this part of the “Eyriewald” aggregation at $113.50/ha, which for the 14,110 ha parcel amounts to $1,600,000.

Appeal RV2006/0186

  1. This is an appeal against the unimproved value applied to another leasehold part of the “Eyriewald” aggregation also held under grazing homestead perpetual lease tenure.  This part of the property, of 8,093.713 ha, was valued by the Department at $980,000, or $121/ha. 

  1. Mr Routh classified this property as:

    7,360 ha (91%) downs (1-1.6 ha)
    733.713 ha (9%) channels (1-1.6 ha)

    Apart from a smaller proportion of channels, there does not seem to be any distinction between this parcel and the “Adirel Downs” part of “Eyriewald”.

  1. This part of the property is situated to the west of “Adirel Downs”, immediately to the north of the “Bonnie Downs” leasehold parcel, which was determined by the Court at $112.50/ha. 

  1. For some reason which was not fully explained, but probably because of the smaller area than “Adirel Downs”, Mr Routh has valued this parcel at $121/ha.  I accept that some adjustment should be made for its smaller size compared with the determination of the value of the “Eyriewald” aggregation at $112.50/ha.  However, no evidence has been advanced as to why it should be significantly higher than the unimproved value which I propose to apply to “Adirel Downs”. 

  1. In the circumstances, I intend to apply the same value of $113.50/ha, which for the 8,094 ha parcel amounts when rounded to $918,000. 

Appeal RV2006/0185

  1. This appeal is in respect of a small leasehold parcel of 1,968.164 ha, situated on the western boundary of the “Eyriewald” aggregation.  The Department valued this leasehold parcel at $260,000, or $132/ha. 

  1. Mr Routh classified the country as:

    1,885 ha (96%) downs (1-1.6 ha)
    83.164 ha (4%) channels (1-1.6 ha)

  1. Mr Routh reasoned that a small parcel of land would be attractive to purchasers seeking a lifestyle property who would be prepared to pay more per hectare than for a larger aggregation.

  1. Having regard to the situation of this property, about 112 km north-east of Winton on a black-soil road and even further from Hughenden, I found his reasoning quite unconvincing. 

  1. Making a small adjustment for size, I propose to apply an unimproved value of $115/ha to this parcel of leasehold land.  For the 1,968 ha parcel, that amounts to a rounded unimproved value of $226,000.

Orders

1.In appeal AV2006/0184, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Eyriewald” for rating purposes as at 1 October 2005 is determined at Two Million, Seven Hundred and Nineteen Dollars ($2,719,000).

2.In appeal RV2006/0185, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of part of “Eyriewald” for rental purposes as at 1 October 2005 is determined at Two Hundred and Twenty-six Thousand Dollars ($226,000).

3.In appeal RV2006/0186, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of part of “Eyriewald” for rental purposes as at 1 October 2005 is determined at Nine Hundred and Eighteen Dollars ($918,000).

4.In appeal RV2006/0187, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of part of “Eyriewald” for rental purposes as at 1 October 2005 is determined at One Million, Six Hundred Thousand Dollars ($1,600,000).

JJ TRICKETT
PRESIDENT OF THE LAND COURT


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