Northerly Projects Pty Ltd v Valuer-General
[2011] QLC 68
•27 October 2011
LAND COURT OF QUEENSLAND
CITATION: Northerly Projects Pty Ltd v Valuer-General [2011] QLC 68
PARTIES:Northerly Projects Pty Ltd
(Appellant)
v.
Valuer-General
(Respondent)
FILE NO:VLA038-11
DIVISION:General Division
PROCEEDING: Appeal against valuation under the Valuation of Land Act 1944
DELIVERED ON: 27 October 2011
DELIVERED AT: Brisbane
HEARD ON: 13 October 2011
HEARD AT:Brisbane
MEMBER:His Honour Mr WA Isdale
ORDER/S:1. The appeal is allowed.
2.The valuation of the subject land as at 1 October 2004 is determined to be Three Hundred and Forty-five Thousand dollars ($345,000).
3.The date of effect of the valuation is 1 July 2005.
CATCHWORDS: Valuation of Land Act 1944, ss 17, 20
Land Valuation Act 2010, ss 269, 271, 289
Valuation of land – Unimproved value – Land exclusively used for farming
Biggs v Hoddinott [1898] 2 Ch 307 at 320
APPEARANCES: Mr D O’Brien of counsel, instructed by Mr G Skelly, solicitor of Purcell Chadwick & Shelly, Lawyers, for the appellant
Mr RJ Byrnes of counsel, instructed by Ms L Hawkings-Guy, solicitor of Legal Services, Department of Environment and Resource Management, for the respondent
Background
On 16 June 2010 the Director-General of the Department of Environment and Resource Management issued a “Notice of Valuation (other than annual)” to the appellant in respect of land described as Property ID 41009302. The land’s real property description is as follows:
L1 RP157941 and L13 RP157949 and L9 RP157951 and L1 RP166898 Parish of Caboolture.
These four parcels of land have a total area of 18.031 ha. It is apparent that for the purposes of valuation they have been combined and no complaint is made about that.
The valuation was assessed at $560,000. The date of valuation was 1 October 2004 and the date of effect was 30 June 2009.
The appellant has objected and then, dissatisfied with the outcome of its objection, has appealed to this Court.
The Appeal
The process is provided by the Valuation of Land Act 1944 (the Act), which although now repealed continues to apply to this valuation due to the operation of sections 269 and 271 of the Land Valuation Act 2010 since the valuation took effect before 30 June 2011.
By section 289 of the Land Valuation Act 2010, the Valuer-General became the correct respondent to this appeal.
The parties have reached agreement, prior to the hearing, on the quantum of the valuation which both parties contend should be $345,000. It does not appear that an amended valuation has yet issued for that amount and in view of the agreement reached I allow the appeal to this extent and determine the value at $345,000.
The sole remaining matter of contention is the date of effect of the valuation made as at 1 October 2004, the valuation date. The respondent has set the date as 30 June 2009 and the appellant contends for 1 July 2005.
The exhibits before the Court are:
1. The notice of appeal.
2. The parties’ statement of agreed facts.
3. The appellant’s outline of contentions.
4. The respondent’s statement of legal contentions.
5. Statement of Christopher Paul Southwell, financial controller of the appellant.
6.Statement of Damian Peter Jones, specialist co-ordinating valuer, State Valuation Service.
The Evidence
Evidence was given by Mr Christopher Paul Southwell, the financial controller of the group of companies of which the appellant is a part. Mr Southwell confirmed his statement, exhibit 5, and was cross-examined. The cross-examination brought out that there had been delays by the appellant in progressing its ultimately successful request for this land to be valued on a concessional basis provided for in s.17 of the Act, namely that it is exclusively used for the purpose of farming. This results in a significantly reduced unimproved value and could be expected to have the effect of reducing burdens of land tax and local authority rates.
Clearly, these benefits, if they are to extend back to, for instance, 1 July 2005 might be more ample than if limited to commence from 30 June 2009.
The Legislation
The Chief Executive, now Valuer-General, has authority under s.20 of the Act to fix the date from which a valuation has effect. Section 20 provides as follows:
20Chief executive to fix date of effect of valuations or alterations of valuations
(1) The chief executive must fix the date from which a valuation or alteration of a valuation, made by the chief executive, has effect.
(2) Subsection (1) does not apply if the date is fixed under another section of this Act.
(3) The date fixed under subsection (1) may be objected to under part 6 or appealed under part 6A.
(4) A notice of valuation must state the date fixed under subsection (1).
Sub-section 3 of section 20 allows for the present appeal. Significantly, although sub-section 1 provides that the chief executive must fix the date from which the valuation has effect, it says nothing about how that task is to be accomplished or what considerations are to guide it.
Section 55 of the Act permits an unsuccessful objector to appeal to this Court and the appellant has proceeded through the process as required to bring it to this Court. Section 63A of the Act now applies to define the appeal process. It is in the following terms:
63AHearing of appeal
(1) This section applies for the hearing of an appeal under section 55.
(2) The hearing must be limited to the grounds stated in the notice of appeal.
(3) The burden of proving all or any of the grounds is on the appellant.
(4) Subject to subsection (3), the appeal must be by way of rehearing.
The respondent will also have the benefit of s.33 of the Act, which provides:
33Status of valuation
Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.
The Facts
It was not in dispute between the parties that the date of effect of the valuation must be ascertained from the evidence. Mr Southwell’s statement included extensive documentation of the farming activities carried out on the land and none of it was disputed. In addition, the statement of agreed facts, exhibit 2, contains a table of the gross annual income from the farming (grazing) business carried on using the land. It shows the following:
• $10,412.07 for the 2006 financial year;
• $8,042.59 for the 2007 financial year;
• $7,427.22 for the 2008 financial year;
• $6,009.06 for the 2009 financial year;
This was relevant to the chief executive’s consideration, made under s.17 of the Act, of whether to grant the concession applicable to farming use of the land. One of the considerations, contained in s.17(2)(c)(i), was the existence of a substantial commercial purpose or character by having an average gross annual return, calculated over a 3 year period, of at least $5,000. Clearly, this requirement was satisfied in these financial years.It is unnecessary, and not helpful, to examine all of the criteria under s.17 in this appeal as the decision of whether or not s.17 is applicable is not in dispute. The issue is only when the value, set in view of the s.17 concession being applicable, should commence to apply. That will be a matter able to be determined on the evidence.
The Nature of the Valuation
During the hearing of this appeal some consideration was given as to whether the valuation under appeal was an altered valuation under section 28 or 29 of the Act. I am satisfied that the chief executive’s consideration of the appellant’s application for the concession under s.17 resulted in a fresh valuation, not an altered valuation, being issued. The valuation document is headed “Notice of Valuation (other than annual)” and refers to “new valuations” which “replace” the current valuation.
Delays by the Appellant
Counsel for the respondent cross-examined Mr Southwell in regard to the delays which had occurred in relation to the appellant’s prosecution of its application under s.17. It was contended that the appellant had in effect brought on itself the rather protracted consideration of its application and that essentially the date of effect of the valuation reflected those delays.
Mr Southwell explained that the delays were associated with the illness and death of a principal of the business and personal matters occupying the attention of another principal subsequently.
The Date of Effect
In my view, as a matter of construction, the date of effect of the valuation will be the date from which the land use, on the evidence, met the requirements of s.17.
Neither learned counsel nor I was able to find any instance of a dispute of the present nature coming before this Court so the matter is free from authority.[1]
[1] cf. Biggs v Hoddinott [1898] 2 Ch 307 at 320 per Lindley M.R. “Mr Farwell did not attempt to uphold this on any rational principle, but relied on authority.”
On the agreed evidence, the business operated within the financial test of having a substantial commercial purpose or character by having an average gross annual return, calculated over a 3 year period, of at least $5,000[2] from the commencement of the 2006 financial year.
[2] s.17(2)(c)(i).
The remaining relevant part of s.17 is sub-section 2(d) which requires that the farming business “is engaged in for the purpose of profit on a continuous or repetitive basis”.
Some indication of the respondent’s approach to this matter can be found in the report made by Senior Valuer Scott Larking on 31 May 2010.[3] Under the heading “Date of Effect:” Mr Larking wrote, inter alia that:
“The current application was made on 29 January 2010 after a previous application on 29th May 2006 was rejected on the basis of insufficient income and it (had) been carried out in an unbusinesslike fashion with high stock losses. Stock losses in 2006 were 12, 2007 nil, 2008 were 3 and 2009 was 6. Only one loss so far in 2010 to ticks.”
[3] Exhibit DPJ-006 to the Statement of Mr Jones, exhibit 6.
As the business commenced from July 2005[4] it is unsurprising that the application made on 29 May 2006 was unsuccessful on the basis, at least in part, of not having been able to show the average gross annual return over a 3 year period as set out in s.17(2)(c)(i). However, with the effluxion of time it is now established that at least since the 2006 financial year, this condition has been met.
[4] Exhibit 2, Statement of Agreed Facts paragraph 5.
The requirement in s.17(2)(d) is that there be a purpose of profit, there is no necessity that there actually be a profit. For this reason, it is not determinative that the business may have been initially conducted as Mr Larking indicated “in an unbusinesslike fashion with high stock losses”. The evidence indicates that the business was unsurprisingly not instantly started and operated at full pace[5] but to have always been for the purpose of profit on a continuous or repetitive basis.[6]
[5] For example, Exhibit 5, page 164 shows stock watering equipment purchased on 28 October 2005.
[6] As indicated by recurrent expenditure such as livestock feed purchase invoices. See Exhibit 5, at page 150, for example.
The remaining aspect for consideration, if the date of effect is to be 1 July 2005 rather than 1 July 2006 is whether the s.17(2)(c)(i) monetary test was satisfied in the 2005 financial year, for which the Statement of Agreed Facts does not show any figure for gross annual income. I take this to mean that there was none.
The required calculation to answer this question is:
$0 2005 financial year
$10,412.07 2006 financial year
$ 8,042.59 2007 financial year
$18,454.66 ÷ 3= $ 6,151.55 average gross annual return averaged over this 3 year period.
In view of this, it is clear that the appellant satisfied the requirements of s.17 from and including 1 July 2005.
Finding and Conclusion
It follows therefore, that the date of effect of this valuation, made as at 1 October 2004, must be 1 July 2005.
Accordingly, the orders of the Court are:
1. The appeal is allowed.
2. The valuation of the subject land as at 1 October 2004 is determined to be Three Hundred and Forty-five Thousand dollars ($345,000).
3. The date of effect of the valuation is 1 July 2005.
WA ISDALE
MEMBER OF THE LAND COURT
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