Plant v Minister for Lands

[1994] QLC 27

[1994] QLC 27

 

  LAND COURT

BRISBANE

9TH JUNE  1994

Re:     Determination of unimproved value
  for purposes of conversion of tenure
  Grazing Homestead Perpetual Lease No. 16/10661,
  Dalby District

Lessee:        Malcolm Reginald Plant

(Hearing at Dalby)

D E C I S I O N

Under the provisions of Section 139 of the Land Act 1962, Mr Malcolm Reginald Plant, the lessee of Grazing Homestead Perpetual Lease No. 16/10661, Dalby District, made application to the Minister for Lands for the conversion of tenure of this lease to freeholding tenure. The Minister received this application for conversion of tenure on 29th October, 1992, and under the provisions of the Land Act that date becomes the date upon which the unimproved value is required to be determined.
           Grazing Homestead Perpetual Lease No. 16/10661, Dalby District, is in respect of the land described as Lot 40 on Plan PG386, Parish of Inglestone, containing an area of 669.5954 hectares.  This property is situated about 49 kilometres south-west of Meandarra and access is by means of 10 kilometres of formed earth and gravel road, then bitumen road to Meandarra.
           The land comprises about 70 hectares (10%) of brigalow, belah and wilga scrub of fairly good quality in the south-west corner; about 527 hectares (79%) of undulating mixed brigalow and belah scrub and box, sandalwood and wilga forest of mainly lighter soils, but with area of gum-top box, myall and yapunyah; and about 72 hectares (11%) of low ridge with broad-leaf ironbark, box, wilga and sandalwood, along the northern boundary.  The property has been developed, with about 460 hectares pulled.  About 100 hectares of this has been selectively stickraked, with about another 200 hectares of the developed country in good order, while the remainder has been left as shade.  The soils are mainly reddish to reddish-brown, sandy loams with areas of grey-brown, clayey and clay loams.  The property is used for the breeding and fattening of beef cattle.
           Mr M R Plant appeared and gave evidence, while evidence for the Crown was given by Mr B J Duff, registered valuer employed by the Department of Lands.
           There was little disagreement between the two witnesses about the description of the country, but Mr Plant disagreed with Mr Duff's statement that the present water supply, which comprises two equipped dams and one small unequipped dam, is sufficient for the property.  During the recent drought from April 1993, the water on this block had run out completely for a period of about six months.  This leads Mr Plant to the conclusion that the dams are unreliable and that bore water is a necessity.  He had tried to sink a series of shallow bores from 90 to 100 feet deep along the creek but without success.  He said that the old dam leaks badly and the new one has a very small catchment.  However, there is no better dam site available. 
           Mr Plant said that the property does not have all-weather access, as there was only about half a kilometre of gravel road, and 9½ kilometres of black soil road which becomes impassable after about 30 points of rain.
           Mr Plant also took issue with Mr Duff's assessment of carrying capacity at one beast to 5 hectares of 133 head.  He said that in an average season he had never been able to run more than 100 head of cows on the property for a year.  He admitted that he had 130 head of steers on the property at present, but said that was only because he had planted forage sorghum in the area that had been stickraked.
           As a basis for his valuation of $40,000, Mr Duff referred to the sales of two properties.  The first sale is of a property called "Old Bombine", Agricultural Farm 16/10502B, with an area of 1,707.621 hectares, situated approximately 13 kilometres north-west of the subject land.  This property is located approximately 35 kilometres south-west of Glenmorgan and about 50 kilometres south-west of Meandarra.  All-weather access is by 14 kilometres of formed gravel road, then bitumen road to Meandarra. 
           "Old Bombine" sold in December 1991 for $500,000 and Mr Duff analysed this sale to show an unimproved value of $89,530 or $52.41 per hectare.  For comparison purposes he adopted $52 per hectare.  This property comprises 850 hectares of box, belah, wilga, myall and sandalwood, with areas of brigalow and belah scrub, to which Mr Duff apportioned $70 per hectare, and 858 hectares of red soil box and sandalwood, with some broad-leaf ironbark, to which he apportioned $35 per hectare.  He considers its carrying capacity to be one beast to 6 hectares or 284 head.
           Mr Duff's second basis is the sale of "Coomrith" with an area of 3,684.029 hectares, which is a Grazing Homestead Freeholding Lease.  It is situated approximately 8 kilometres north-west of the subject land, 30 kilometres south of Glenmorgan and 43 kilometres south-west of Meandarra.  Access is all-weather by 7 kilometres of formed gravel road, then bitumen road to Meandarra.  It is watered by earth tanks and bores.
           "Coomrith" sold in October 1991 for $750,000 and Mr Duff analysed the sale to show $61 per hectare, but has adopted a rate of $55 per hectare.  It   comprises 3,684 hectares of undulating box, wilga, sandalwood and gum forest country with areas of mixed brigalow and belah scrub and other marginal scrub areas in the western section.  Mr Duff attributes $55 per hectare to this country.
           Mr Duff considered that the scrub country on the subject land is superior to that on either of the sales.  However, he made allowance for the subject land's inferior access, in classifying the areas as follows:

70 hectares brigalow, belah and wilga scrub
           @ $100 per hectare  $ 7,000

527.595 hectares of undulating scrub and forest
           @ $60 per hectare  $31,655

72 hectares of low broad-leaf ironbark, etc., ridge
           @ $25 per hectare  $ 1,800

$40,455

Adopt $40,000 or approximately $60 per hectare.

Mr Plant considers that both basic properties sold at unrealistic prices.  He said that "Coomrith" was sold during very bad drought but the former owner had stocked it very lightly.  The purchasers already had cattle there on agistment and had nowhere to go as they needed the feed.  He thought that the "Old Bombine" sale was particularly dear, as it had sold with feed in the form of a failed wheat crop.  He considered that the wheat crop had a value of $20 an acre.  Mr Plant said that "Old Bombine" had been purchased by a retired cane farmer who did not understand the country.  He went on to say that while the sale properties were watered by dams at the time of sale, the purchasers have successfully sunk shallow bores on both of them.  They now have superior water to the subject land.
           Mr Plant also mentioned the sale of "Strathalbum" in the late 1980s, with plenty of feed, to purchasers in need of grass.  It sold then for $150 an acre and has recently been resold for $115 an acre.  Unfortunately, Mr Plant did not know any more details about this sale, as he had been told of it by the local Primac agent.  However, he said that he did not think that valuations should be based on sales, as there had been many properties put up for auction and not sold.  He thought that values were declining and expressed the view that an unimproved value of $30,000 would be reasonable for the conversion of tenure of the subject land.
Mr Duff said that he had spoken to the purchaser of "Old Bombine" and was informed that the wheat crop had been harvested before the sale and that only stubble was left for feed. However, he agreed that what Mr Plant said about the sale of "Coomrith" is correct. In Mr Duff's opinion the values in Tara Shire have not changed. He said that he inspected a number of sales for the 1992 annual valuation and a somewhat similar number for that in 1993. He said that he had valued the subject land at $60,000 for the purposes of the Valuation of Land Act, but following an inspection for the present purpose, he had formed the opinion that a reasonable unimproved value was $40,000.
           I have carefully weighed the evidence in this case and have come to the conclusion that, although Mr Plant considers that $30,000 is a reasonable unimproved value, he has not been able to provide a basis for this opinion.  On the other hand, Mr Duff has approached the valuation in the traditional manner and has analysed the sales of two comparable properties.  Although Mr Plant thinks that there were unusual circumstances surrounding both these sales which made them somewhat high, Mr Duff does not consider them to be out of line with other sales in the area.  His application of values from these sales to the subject land appears reasonable. 
           There is also a considerable difference in its area of 670 hectares compared with "Old Bombine" at 1,708 hectares and "Coomrith" at 3,684 hectares.  In accordance with the well-established principles of valuation, it is only to be expected that a property of the size of the subject land would, all other things being equal, attract a higher rate per hectare than larger areas of similar land.  Therefore, the rate of $60 per hectare overall on the subject land seems appropriate and I intend to adopt it.
           Accordingly, the unimproved value for the purposes of conversion of tenure of Grazing Homestead Perpetual Lease No. 16/10661, Dalby District, is determined at $40,000.

J J TRICKETT
  MEMBER OF THE LAND COURT