O'Sullivan v Chief Executive, Department of Natural Resources and Mines
[2001] QLC 120
•14 November 2001
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BRISBANE
14 NOVEMBER 2001
Re: AV99-1408
An Appeal against an Unimproved Valuation -
Valuation of Land Act1944
Shire of Paroo
AJ & M O'Sullivan
v.
Chief Executive, Department of Natural Resources and Mines
(Hearing at Cunnamulla)
D E C I S I O N
This appeal is against the chief executive's unimproved valuation, as at 1 October 1998, of the property known as "Thurulgoona", which is located about 90 km south-east of Cunnamulla.
The real property description is:Lot 4 on Plan KU67 being GHPL 15/1685 and Lot 5 on Plan KU58 being TL 209262, Parish of Thurrulgoonia, County of Kungie.
The total area of the property is 18,631.322 ha.
"Thurulgoona" is located within a sub-market area (SMA) identified by the chief executive's valuers, for valuation purposes, as the Warrego Flood Plain SMA. The chief executive first issued a valuation as at the relevant date, in the amount of $177,500. Consequent upon an objection to that valuation and a review of all valuations within the SMA, the valuation was reduced to $165,000. A large group of owners of property within the SMA remained dissatisfied with the reviewed level of value and filed appeals in the Land Court against their valuations. By agreement, four representative appeals, each relating to properties which had been subject of sales, were heard and decided by the Court (AV99-1413 etc. dated 30 March, 2001). As a result, all valuations within the SMA were further reduced by the chief executive. The valuation of "Thurulgoona" was reduced pursuant to s.68 of the Valuation of Land Act to $156,000. The appeal is against that reduced valuation.
In the notice of appeal, the owners' estimate of unimproved value was $120,000. Mr O'Sullivan attended the hearing and gave oral evidence in support of a written submission. His working knowledge of "Thurulgoona" extends back to 1966. Mr O'Sullivan had initially been concerned about the level of increase above the previous valuation (as at 1.1.96) and the fact that previous relativities of valuations throughout the Shire had been disturbed with a resultant shift in the burden of local government rating. However in this matter he concentrated on factors which, in his opinion, "affect the relativity between the subject, 'Thurulgoona', and other properties in the Paroo Shire and in particular those within the Warrego Flood Plain grouping."
The valuation appealed against was made by Mr MTJ McManus, a senior valuer employed by the chief executive. He had been the departmental valuer involved in the representative appeals. In this matter he relied primarily on the sales evidence which had been considered by the Court in those representative appeals. His tendered valuation report contained a schedule of those sales, being of the properties "Claverton”, "Northam"/"Airlie", "Robina Downs", "Weona", "Huntley"/"Glen Oxford" and "Willacora", together with his individual comparisons of those sale properties with "Thurulgoona". Mr McManus had inspected the property in 1996. Relevant details as contained in his report are as follows:"Access and Roads: The property is accessed via about 64 kilometres bitumen sealed Mitchell Highway (dual carriageway), about 26 kilometres of the Thurulgoona Road which is formed earth.
Access to the property is considered fair.
Services:
Rural power, telephone and a twice-weekly mail service are available to the subject land.
Nature of Land:
Land classification of the property comprises:1,680 hectares (9%) Mitchell grass plain, 2,330 hectares (13%) occasionally flooded coolibah, 6,210 hectares (33%) rarely flooded coolibah, 2,060 hectares (11%) scalded plain with lighter gidyea and box, 3,912 (21%) sandy pine, ironwood, box sandalwood and gidyea fringes, 2,440 (13%) spinifex.
Use:
The property is used for sheep breeding and woolgrowing and limited cattle breeding.
Carrying Capacity:
From departmental records:
1990 Rental Assessment
1 DSE to 2.8 hectares (6,654 sheep)
Departmental original records
1 DSE to 2.43 hectares (7,667 sheep)"Mr O'Sullivan was in "reasonable agreement" with the land classifications detailed by Mr McManus, agreed with the use as stated and accepted that "carrying capacity estimates and practice are generally consistent with the DNR's at approximately 1 DSE to 2.8 hectares or 6,654 sheep. DPI's Carrying Capacity Project arrived at a figure of 1 to 3 hectares or 6,214 sheep. Property is presently carrying 5,870 sheep" while the stocking rate varied widely depending on the seasons.
Mr O'Sullivan identified several factors which in his experience affected the productive potential of "Thurulgoona". He was concerned that in recent years for either man-made or natural reasons, the degree of flooding on "Thurulgoona", which is east of the Warrego River, had diminished so significantly both in terms of beneficial effect and regularity that the grazing condition of the once regularly flooded country had deteriorated. "Thurulgoona" was known, according to him from CSIRO climatic studies, to suffer from erratic and irregular rainfall and climatic conditions had been subject to change over the years. Such changes, in his opinion, had been a factor in the establishment of poisonous and noxious woody weeds including an "explosion" of false sandalwood. Since about 1980 Pimelea had become established, first on the better country but subsequently throughout. Significant cattle losses are now suffered each year. While Mr O'Sullivan is well aware that the incidence of Pimelea is widespread he is concerned that the local strain on "Thurulgoona" appears to be a particularly toxic variety. Apart from the specific management difficulties for "Thurulgoona" cattle, a potential source of agistment income, in good seasons, from outside cattle is denied. Another widespread weed, Spiny Emex, has also flourished on "Thurulgoona" despite costly attempts to control it. Eperythrozoon-Ovis, a ground resident blood parasite organism appeared on "Thurulgoona" in the late 1980's and according to Mr O'Sullivan is now at a chronic level, causing severe losses in young sheep, losses in wool production, weight loss and reduced lambing percentages. According to him, the disease is not widespread in the district.
Mr O'Sullivan mentioned that "Thurulgoona" was advantaged by an excellent flowing artesian bore which had been renovated and partially controlled prior to government funding becoming available. However he was disappointed that an application for modification of the licence to allow some pasture irrigation had not as yet been approved. In a similar vein, a "blanket" Native Title claim had delayed an application to freehold the term lease included in the valuation.
Mr O'Sullivan agreed that "Thurulgoona" enjoyed excellent road access although there was a downside to that as well. The main road through the property passed within close proximity to the homestead and associated buildings and as traffic density increased so did the incidence of pilfering, stock theft, road kills and general disturbance to stock and the lambing ewes.
Mr O'Sullivan was of the opinion that "Thurulgoona" had been over valued for the last 50 years because of a misconception as to its true productive potential. Before the final resumptions for closer settlement through land ballots, his inquiries had indicated that the original pastoral company lessee, (Squatting Investment Company), had not been prepared to outlay capital for further necessary infrastructure development and the "Thurulgoona" country had been managed with a policy of very low stocking rates. Consequently, at the time when the last blocks were balloted, following excellent seasons, the condition of the country and the native pastures and herbage were so attractive as to give a false impression as to the long-term potentialities of the land.
Mr O'Sullivan was concerned that some valuation anomalies existed in the locality of "Thurulgoona" and generally throughout the Warrego Flood Plain. In his opinion some valuations were too high, possibly because of the complacency of some owners, while other valuations were too low. He was of the opinion that there was a greater degree of superiority between several of the sale properties, particularly "Claverton", "Willacora" and "Huntley"/"Glen Oxford", as compared with "Thurulgoona", than was suggested in Mr McManus' report or as reflected in the valuation appealed against. In his opinion each of those properties, as well as "Robina Downs" enjoyed more reliable rainfall and superior pastures.
Mr O'Sullivan saw it as crucial that in any comparison process, the 2,440 ha of spinifex country be excluded and recognised as having no value. Again, the particular variety of spinifex on "Thurulgoona" (extending into some of the immediately adjoining properties but not to the same extent and then unique to the Warrego Flood Plain) was unlike other varieties of spinifex in other localities. This type had no grazing value for sheep and was of very limited grazing value for cattle and horses and then only when it was in seed. All efforts which had been made to utilise the spinifex country or to bring it into any form of productive use had failed. The area harboured pest animals and posed a significant fire hazard and as far as Mr O'Sullivan was concerned it presented nothing but a management problem.
In Mr O'Sullivan's opinion, the best relativity comparison with "Thurulgoona" was the southerly adjoining property "Bluegrass". That property was valued by the chief executive at $8.80/ha a figure which he accepted as being reasonable and directly comparable with the approximate area of 16,150 ha of "Thurulgoona" once the spinifex country was excluded. That indicated to him a total valuation of $142,120 (16,150 ha @ $8.80/ha), or $7.63/ha over the total area of 18,631 ha.
On the other hand Mr McManus did not accept that the spinifex country should be regarded as having no value although suggesting that any added value would be of a quite nominal nature. He had not approached the valuation on a piecemeal classification basis instead directly comparing the overall rate per ha with that shown by the sales evidence and the valuations applied to other properties. I have commented in other decisions as to the lack of assistance the Court receives in considering these types of valuations when there is no disclosed evidence as to the checks and balances which would be expected to have been employed in a true "direct comparison" exercise. Where differing proportions of land classifications and in some cases entirely different land classifications exist, quite apart from the other factors affecting value, the accuracy which may be achieved in making "like with like" comparisons on an overall rate per ha basis, in the absence of some form of disclosed weighting process, must be questionable. In fact, it is quite clear that in most cases the pre-existing relativities of valuations are adopted as the base for adjustments on the factorised methodology which the chief executive, understandably, has found necessary in the production of mass valuations. It could not be said that Mr McManus had not given close consideration to the question of relativity of valuations relevant to that of "Thurulgoona". In addition to the comparisons made with the sale properties, he included a comprehensive schedule containing the department's classifications of country types on a wide selection of properties in the general locality. It is also obvious from the evidence of both Mr O'Sullivan and Mr McManus that, as a result of objections to earlier valuations, and an application for conversion of tenure of the main "Thurulgoona" lease, the property has been the subject of several inspections in recent times by various valuers. Mr O'Sullivan was confident after one fairly recent inspection that he spoke about, which the inspecting officer had been convinced that the extent of poisonous and noxious weed infestation was more extensive than had been previously recognised by the Department. However, despite Mr O'Sullivan's expectations, that perceived admission had not been reflected in the subsequent valuation. Mr McManus had inspected the property in 1996 in connection with the conversion of tenure application. He had been aware that a review of land classifications of "Thurulgoona" had taken place as a result of a valuation objection, in 1993. He agreed with that reviewed land classification. It had resulted in a reduced valuation at that earlier time. Specific consideration had then also been given to the extent and effect of the spinifex country and the relativity of the "Thurulgoona" valuation with the valuations of other properties, in particular that of "Padua Park" which adjoins to the south-east (and which adjoins the sale property "Huntley /"Glen Oxford" to the west).
Conclusions
There were few positive features of "Thurulgoona" which emerged from Mr O'Sullivan's evidence. I am left in no doubt that the negative features and their increasing deleterious effect on the productive capacity of the property are of great concern to him. Understandably he has concentrated on those negative factors in arriving at his honestly held belief that the chief executive's unimproved valuation remains too high. He saw support for that conclusion in his comparison with the sales evidence. It is seen again as his honestly held belief that "Thurulgoona" has some negative features such as climatic conditions, a particularly poisonous strain of Pimelea, and the existence of E-Ovis, which if not peculiar to "Thurulgoona" at least sets that property apart from most on the Warrego Flood Plain.
The question is whether the valuation appealed against first sits within reasonable relativity with the valuations now applied to the sale properties, after the analyses of those sales have been closely examined as they were, in the representative cases. It seems to me that the individual sales of "Huntley"/"Glen Oxford" and "Willacora", and the values now applied to those properties together with "Robina Downs" provide the evidence most relevant to the decision in this matter. Even if the spinifex country on "Thurulgoona" was excluded completely, and I am not convinced that any country has nil market value in the overall scheme of things, the valuation appealed against, on a balance area of 16,191 ha (which is my calculation after inclusion of the term lease) would reflect $9.63/ha. The valuations now applied to the much larger "Huntley"/"Glen Oxford", "Willacora" which is of comparable area and "Robina Downs" which is smaller in area, are $10.16/ha, $10.92/ha and $9.28/ha respectively.
I am unable to accept that the 16,191 ha of "Thurulgoona" excluding the spinifex country could be valued at any less than the value applied to "Robina Downs" overall, but realistically, a little more, when all other factors are considered. It follows that the basis of comparison adopted by Mr O'Sullivan, ie the value applied to "Bluegrass", would be prima facie too low. When the actual classification of country on "Bluegrass", as adopted by the department is considered (6% Mitchell grass plain, 32% grey brown coolibah, river creeks and channels, 38% red sandy plains and 24% sandy pine) as compared with the classification of the balance 16,191 ha of "Thurulgoona" excluding the spinifex, I am unable to accept Mr O'Sullivan's contention that "Bluegrass" is directly comparable.
In the end result and after giving consideration to Mr McManus' views as to the nominal value which might be applied to the spinifex country, I have not been persuaded that the existing relativity between the valuations of "Thurulgoona", the sale properties and others in the general locality should be disturbed.
Order
The appeal is dismissed and the valuation of the chief executive affirmed.
RE WENCK
MEMBER OF THE LAND COURT
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