Ollenburg v Department of Natural Resources and Mines
[2003] QLC 15
•7 March 2003
LAND COURT OF QUEENSLAND
CITATION: Ollenburg v Department of Natural Resources and Mines
[2003] QLC 0015PARTIES: John F Ollenburg (Jnr) (applicant) v. Chief Executive, Department of Natural Resources and
Mines(respondent) FILE NO: AV2001/0044 DIVISION: Land Court of Queensland PROCEEDING: An Appeal against an Unimproved Valuation of Land in
the Shire of Kilkivan – Valuation of Land Act 1944DELIVERED ON: 7 March 2003 DELIVERED AT: Brisbane HEARD AT: Gympie MEMBER: Mr RE Wenck ORDER: The appeal is disallowed and the valuation of the chief executive in the amount of Two Hundred and fifty-five Thousand Dollars ($255,000) as at 1 October 1999, affirmed. CATCHWORDS: Statutory valuation – Valuation of Land Act 1944 –
Unimproved value.Unimproved value – Relativity of valuations – Burden of
proof of grounds of appeal.Unimproved value – Weed pests – Highway frontage. APPEARANCES: Mr JF Ollenburg, the applicant in person Mr J O'Rourke for the respondent [1] As at 1 October 1999, the respondent made an unimproved valuation of land owned by the applicant, described as Lot 46 Plan MZ1142:SLPF2156; Lot 21 Plan MZ134, Lot 30 Plan MZ735 and Lots 2, 44 Plan MZ942, Parish of Boonimba, containing 3,738 ha.
[2] The valuation which first issued on 27 March 2000 was in the amount of $275,000 and represented a 50% increase above the previous valuation as at 1 October 1997. A general 50% increase had been applied by the chief executive over forest grazing lands in this area of the Shire. On objection, the valuation was reviewed and for reasons associated with allowances which had been made for development costs in sales analyses, the increase in these forest grazing lands was brought back to 40% above the previous valuation. The valuation of the subject property was reduced, on this basis to $255,000. It is that valuation which is now appealed against.
[3] The grounds of the appeal refer to the effects on unimproved value alleged to have been caused by detrimental features of the land and various disabilities such as – changes in the availability of natural water; a dam proposal; the effect of a vegetation management plan; highway frontage and weed infestation.
[4] Mr Ollenburg tendered a statement and gave oral evidence in support of the grounds of appeal.
[5] The valuation appealed against had been made by Mr PJ Haydon, a registered valuer in the employ of the respondent. He was called to give evidence in support of his valuation.
Background to Appeals – Kilkivan Shire
[6] As referred to earlier, the chief executive's unimproved valuations of forest grazing lands in Kilkivan Shire as at 1 October 1999 had initially represented a 50% increase above the level of value which had previously existed. On review, as a result of the high level of objection, the increase was reduced to 40%. The previously existing relativity between valuations had not been disturbed.
[7] A significant number of owners remained dissatisfied with the valuations which had been reviewed as a result of the objections then exercised their right to appeal to this Court. Following negotiations between the parties four appeals were selected as representative of the primary grievances. When those four appeals were heard by the Court the predominant issues were identified as being:
• the extent of the increase over the previously existing valuation; •
the sales evidence which provides the most reliable evidence of market value as at the date of valuation;
• the unimproved value component in that sales evidence; •
the added value of the treatment of the original and regrowth forest timbers on the sale properties.
Another issue which was not necessarily of a representative nature related to the existing
relativity between valuations of various properties.[8] The findings relative to the representative cases were that the relevant sales evidence generally supported the chief executive's valuation, representing the 40% increase; there were no grounds for any general reduction and there were no grounds relating to market evidence which warranted disturbance to the general level of relativity between unimproved valuations of the forest grazing lands throughout the Shire. However, when each individual appeal was determined on its merits, some alterations were found to be warranted in specific cases, for reasons individual to those specific properties.
[9] Subsequent to those unreported decisions being published on 10 May 2002, a number of owners remained reluctant to withdraw their appeals on the allegations that there were disabilities specific to their properties to which the chief executive had not given any or sufficient consideration. The remaining appeals were set down for hearing subsequent to a directions hearing. Further discussions took place between the parties and all but two appeals, one of which is the subject matter, were settled and/or withdrawn.
[10] The matters specific to this appeal and the relevant evidence will be discussed under the following various headings.
Valuation Methodology
[11] Mr Ollenburg was critical of the valuations having been performed at the relevant date in the absence of discussions with owners and specific inspections by the valuer.
[12] In the mass valuation methodology, the chief executive had adopted as a base, the relativity which had previously existed between valuations of the forest grazing lands. That relativity had evolved from past valuation procedures and inspections. Prior to the hearing Mr Haydon inspected the subject property for the purposes of defending the valuation.
Relativity of Valuations
[13] Mr Ollenburg had not addressed the question of the relativity of the valuation appealed against with the valuations applied to the sale properties on the basis of the analyses of those sales, or the valuations applied to other forest grazing lands. His concern was that, in his opinion, the inherent value of the subject land, relative to its inherent value in the past had altered due to decreasing carrying capacity and increasing disabilities.
[14] Mr Haydon was more concerned with the relativity between the relevant date valuation of the subject land and valuations of other lands in the locality which suffered disabilities of either similar or specifically different effect. One of the representative appeal decisions which he saw as relevant was the case of NR & RG Kennedy v Chief Executive, Department of Natural Resources and Mines. In that matter the valuation of an aggregation of similar area to the subject land had been reduced for reasons associated with water problems, an area of unavailable land not specifically identified, and infestation of wiregrass. He did not accept that the subject land suffered disabilities to the same extent or, where it did, that insufficient allowance had been made.
Carrying Capacity
[15] It was Mr Ollenburg's evidence that during the 30-year period since he became involved with the property the carrying capacity had reduced by about 35%. In his opinion this had been the result of droughts, overstocking during droughts, decline in the quality of natural pasture, increase in the density of trees and a decrease in natural water in the gullies and waterholes.
[16] Mr Haydon had made no specific estimate of the carrying capacity potential of the land at the date of valuation but did not challenge Mr Ollenburg's evidence in that regard. In his opinion the problems facing the subject land were consistent with the forest grazing lands generally.
Natural Water
[17] Mr Haydon was of the opinion that the water supplies currently available had not altered since the date of the previous valuation and "the same permanent and artificial water is available". His report contained the following:
"The subject land is artificially watered by gully dams. Underground water is available but salty. Permanent water is available in Boonara Creek and holes in an annerbranch (sic) off Boonara Creek. It is considered that the parcel is adequately watered in normal seasons."
In contrast the supplies available to the relevant part of the Kennedy aggregation had been
found by the Court to have declined in the relevant period.
Main Road Frontage
[18] The subject property is severed by the busy Burnett Highway. Mr Ollenburg had once believed that highway frontage was an asset but that belief had now reversed. One of his primary concerns related to weeds introduced by vehicles from infested localities through seeds in soil being deposited on the road, particularly after rain, then finding their way into drains and the adjoining land. He accepted that this problem could occur on lesser- used roads, but not to the same extent as was his experience with the highway. Another significant problem was caused by fires emanating from the road and often deliberately lit, destroying large areas of pasture with consequent associated stock losses and management costs. He is also concerned with the quantity of rubbish, particularly drink cans and bottles, which he finds necessary to remove from the road reserve from time to time.
[19] From a working disability perspective Mr Ollenburg has found a significant increase over the years in the traffic-related difficulty of moving stock from one side of the highway to the other.
[20] Mr Haydon, in his oral evidence, accepted that highway frontage brings with it problems associated with weeds, fire and rubbish but he saw that as still being balanced by a market perception that advantages of highway exposure and access outweigh the disadvantages. It had been his experience that one of the complaints raised by a number of Kilkivan Shire landowners was the perceived disability of location removed from highway frontages and bitumen roads. He had not seen any market evidence to suggest that highway frontage had a detrimental effect on value of grazing properties at the relevant date.
[21] In this case as was set out in his valuation report, an allowance of 2.5% had been made in acceptance of the fact that a working difficulty existed associated with the long main road severance of the aggregation.
| Weeds | |
| [22] | The problem weeds to which Mr Ollenburg made reference included wiregrass, parthenium, African Lovegrass and Giant Rats Tail, the latter two in particular associated with the main road. He said that he had spent considerable sums on attempts to eradicate or manage infestations introduced from external sources. Parthenium had been introduced from upstream properties through a creek flood then spread by cattle into pastures in a significant number of locations which he has staked for identification and regular spraying maintenance. |
| [23] | Mr Haydon accepted that parthenium had been introduced from properties well upstream on one occasion but he saw that as an isolated occurrence. His inquiries suggested that other properties upstream had not been affected. Mr Ollenburg suspected that the source of the parthenium had been upstream feedlot operations. He was adamant that parthenium had now become established on other upstream properties and in his opinion, the risk of further outbreaks was significant. |
| [24] | Mr Ollenburg was of the opinion that the spread of wiregrass was one of the factors affecting the carrying capacity of the subject land including the better quality land on the western severance. As wiregrass spread had been one of the factors considered in the Kennedy appeal, he was of the opinion that it should also be a consideration here. He was not aware whether it was regarded as a district problem. |
| [25] | Mr Haydon's oral evidence relative to wiregrass spread was that he had given specific consideration to the question as it might affect unimproved value. He had expected that the wiregrass might be getting a little worse on the eastern side of the highway but had been surprised to learn that it was becoming an increasing problem on the better quality eastern severance as well. With that being the case he had formed the opinion that wiregrass infestation is getting worse throughout the whole South Burnett district. He had made no specific allowance in this matter because he did not accept that the infestation, was as it was in the Kennedy matter, more serious than in other locations. |
| [26] | With regard to African Lovegrass and Giant Rats Tail, Mr Haydon was aware from his inspections that these weed outbreaks were common in the locality but under reasonable management control. However in areas east of Kilkivan Giant Rats Tail in particular has emerged as a major problem on some properties, with identifiable deleterious effect on value. |
| [27] | Mr Ollenburg's concern is that the weed infestation problem even if it is one facing the locality in general is not sufficiently understood or considered in the valuation process. |
The Barambah Creek Dam Proposal
[28] Mr Ollenburg was concerned regarding the public knowledge of government interest in the construction of a dam on Barambah Creek. If such a project went ahead, dam waters would back up into Boonara Creek and inundate the majority of the alluvial flats on the subject property reducing, in Mr Ollenburg's opinion 50% of the productivity of the whole property. In his opinion such a possibility has a significant deleterious effect on the market value of his land. Mr Haydon accepted that if there was some certainty that a dam project would proceed in the foreseeable future there could be buyer resistance for affected properties. When he became aware of Mr Ollenburg's concerns, he made inquiries of the relevant section of the department and was informed that a Barambah Creek proposal was one of 30 or 40 water storages that had been mooted for future consideration throughout Queensland. However the Barambah Creek proposal was not included in the 10-year forward planning and "more than likely" not in the next 20 or 30 years, "if ever". He was aware that one property which would be affected if the proposal ever became reality had been sold since the date of valuation but he had been unable to establish if the dam proposal had any effect on the sale price. Mr Ollenburg was able to inform the Court that not only had there been the sale of that property but then a resale very shortly thereafter. He had not made any specific inquiry as to the circumstances of the sales.
Vegetation Management Plan
[29] Mr Ollenburg had believed that about 50% of the property was "now classed as Dominant and not to be cleared".
[30] While Mr Haydon's valuation had been reduced to a hectarage rate overall, included in his report was a classification of the nature of the land and the values applied to those classifications. The classification is set out with the applied values indicated as follows:
About 230 ha (6%) heavier blue gum, broad-leaf iron bark, apple flats being Boonara Creek frontages. This land is suitable for pasture development - $300 per ha
About 1900 ha (51%) of easy to moderate forest grazing ridges and hills originally timbered with narrow-leaf and broad-leaf ironbark, some spotted gum influence and bloodwood. Stony grey and brown soils. This area is suitable for tordoning only – applied value $85 per ha.
About 1350 ha (36%) of moderate to steep forest ridges and hills timbered with narrow-leaf ironbark, bloodwood and spotted gum. This area is very stony and has limited development potential – applied value $22.50 per ha.
The balance area of 258 ha (7%), steep unavailable scrub and forest located in
the southern/central part of the aggregation – nil value.
[31] Included in his report was a copy of the Vegetation Management Plan which had been referred to by Mr Ollenburg. The oral evidence of Mr Haydon was that the plan indicated an area of vegetation classified as "endangered" where development was prohibited. However that area was identified in the final classification of land type as being unavailable and carrying no value.
[32] Other areas of the land were identified on the plan as carrying vegetation "of concern" with limited development potential. Those areas were identified by Mr Haydon as corresponding generally with his third land classification which he considered to be inherently poor country unsuited to economic development of the existing vegetation.
[33] In Mr Haydon's opinion the Vegetation Management Plan did nothing more than confirm the land classifications which had been historically recognised by the department.
[34] Although Mr Ollenburg conceded that his original estimate of the area affected by the Vegetation Management Plan had been excessive he argued that, in the absence of that plan, the area "of concern" still had potential for selective tordon treatment with the straighter timber left for later harvesting. He suggested that this land classification would have eventually been improved as time and resources allowed, and that potential was now lost.
| Findings | |
| Valuation Methodology | |
| [35] | In the representative cases the mass valuation methodology adopted by the chief executive was discussed. As found by the Land Appeal Court in Wilson v Chief Executive, Department of Lands (1994-95) 15 QLCR 63 the mass valuation process "does not offend the statute". Mr Haydon inspected the property prior to the hearing and I find that acceptable valuation process has been followed. |
| Relativity of Valuations | |
| [36] | Mr Ollenburg's approach to relativity relates to the declining productivity of the subject land and its increasing disabilities. However, in valuation terms, relativity between valuations is not intended to relate only to the valuation history of the subject land. Instead, it is the relativity between the valuation of the subject land, then the valuations applied to the sale properties and other properties of a comparable nature. |
| [37] | Mr Ollenburg accepted during the course of the hearing that consequent upon the findings in the representative cases, it was necessary for him to show that the disabilities of the subject land set it apart from otherwise comparable forest grazing lands in the locality. The specific disabilities raised will now be dealt with separately. |
| Carrying Capacity | |
| [38] | Mr Ollenburg's evidence is accepted to the effect that the productive capacity of the subject land has decreased over time probably for the reasons given by him. However, I also accept Mr Haydon's evidence that the reasons for declining productivity are generally consistent throughout the locality and there has been no change specific to the subject land which would have altered, at the date of valuation, its previously existing relativity with comparable lands. |
| [39] | I find no reason to alter the valuation of the subject land at the relevant date on the grounds of decreasing productivity. |
| Natural Water | |
| [40] | Similar comments as relate to carrying capacity are applicable under this heading. The decreasing water supply disability on this land is capable of being distinguished from the facts in the Kennedy matter. |
| Main Road Frontage | |
| [41] | The previously existing relativity between the subject valuation and the valuation of other comparable main road frontage lands has been retained. Mr Haydon's evidence as to his interpretation of market perceptions is accepted. |
| Weeds | |
| [42] | In the Kennedy matter, the evidence was that wiregrass infestation was a more serious problem on that property than elsewhere in the Shire. |
| [43] | There is no dispute that the subject property is susceptible to weed invasion. However the evidence before the Court in this matter from Mr Haydon is that this property's weed problems and their management are consistent with the problems experienced in the locality generally. |
| [44] | If the risk of parthenium or any other weed infestation emerges in the future, as predicted by Mr Ollenburg to be a problem more intense on the subject land than elsewhere, then such proved evidence would need to be given weight in the future valuation and appeal process. |
| [45] | I am not persuaded however that in the valuation process at the relevant date, the weed problem has been given no or insufficient consideration. |
| The Barambah Creek Dam Proposal | |
| [46] | Despite the opportunity having arisen, through a sale and resale of a potentially affected property, for evidence to be provided to the Court in support of Mr Ollenburg's argument, if it is correct, that the market for these properties is deleteriously affected, no specific investigation was made by him. It is understandable that he does not wish to become involved in the business of other people but the burden of proving the grounds of appeal is carried by the appellant. |
| [47] | Mr Ollenburg sees it in even stronger terms than "nonsense" for the suggestion to be made that it is too soon and the proposal too uncertain for the market value of potentially affected lands to reflect an identifiable deleterious effect. Nevertheless it is the marketplace which will provide the necessary proof, one way or the other. The regular revaluation process again allows the matter to be reviewed in the future. |
| [48] | I do not accept that deleterious effect on unimproved value has been proved, at the date of valuation, as a direct consequence of the dam proposal. |
| The Vegetation Management Plan | |
| [49] | The evidence is clear that the area of land carrying "endangered" vegetation has been assessed as carrying no value, regardless of the Vegetation Management Plan. |
| [50] | The need to obtain a permit to improve land in the area "of concern" is no doubt seen by some in the marketplace to be another bureaucratic burden. However, in the case of the subject land, the area "of concern" has been valued as land not suitable for other than limited economic development. While Mr Ollenburg agrees that the land is of poor quality he sees some treatment as capable of improving both the available pasture and the usable quality of the remaining timber. |
| [51] | Had the land with vegetation "of concern" been valued on the basis of it having full economic development potential, then the effect of the Vegetation Management Plan would require specific consideration. However I am satisfied that on the basis that the valuation has been made, no further allowance is warranted. |
Conclusions
[52] Section 33 of the Valuation of Land Act 1944 provides as follows:
" 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."
[53] Section 56 of the Act then relevantly provides as follows:
" (1) An appeal shall be instituted by filing in the Land Court registry a notice of appeal.
(2) Such notice shall state the grounds of appeal and the appeal shall
be limited to the grounds so stated, and the burden of proving any andevery such ground shall be upon the owner.
(3) Such notice shall also state the amount which in the opinion of the
appellant should be the valuation of the subject land."
[54] In this case the valuation appealed against is in the amount of $255,000. Mr Ollenburg's estimate of the unimproved value of the land is $150,000.
[55] No cogent basis was provided to support that specific estimate. While there is no doubt that the land suffers from various disabilities, I am unable to find that the valuation has been made on incorrect principles, that regard has not been paid to the effect of disabilities on unimproved value, or that the valuation has been proved wrong.
| Order |
| The appeal is disallowed and the valuation of the chief executive in the amount of Two Hundred and Fifty-five Thousand Dollars ($255,000) as at 1 October 1999 is affirmed. |
RE WENCK
MEMBER OF THE LAND COURT
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