Purcell v Valuer-General
[2011] QLC 36
•14 June 2011
LAND COURT OF QUEENSLAND
CITATION: Purcell v Valuer-General [2011] QLC 36 PARTIES: William Dunmore and Jill Elizabeth Purcell
(applicants)v. Valuer-General
(respondent)FILE NO: LCA437-10 DIVISION: Land Court of Queensland PROCEEDING: Application for a rehearing DELIVERED ON: 14 June 2011 DELIVERED AT: Brisbane HEARD AT: Roma PRESIDENT: Mrs CAC MacDonald ORDERS: 1. The application for leave to have the valuation appeal reheard by a Member of the Land Court is granted.
2. The rehearing is to be limited to evidence and submissions about relevant sales and the relativity between the subject property and relevant properties in the area.
CATCHWORDS: Application for rehearing - decision of Judicial Registrar - similarities and differences between s.12 and s.31 of the Land Court Act 2000 - conflict between general and specific provisions, specific prevails - basis for leave to rehear under s.31 - application of s.12 authorities - judicial discretion - substantial merits of the case - balancing competing considerations - all relevant circumstances - leave may be granted despite error of party or legal advisers - existence of rights of appeal may not be relevant - possible prejudice to respondent to be considered - leave granted on conditions.
Valuation - Valuation of Land Act 1944 - appeal against unimproved value - comparable sales evidence - relativity evidence - living area.
Bias - apprehended bias - finding of no bias.
APPEARANCES: Mr WD Purcell in person for the applicants
Mr J Tate of Crown Law for the respondent
William Dunmore Purcell and Jill Elizabeth Purcell (the applicants) have brought an application for leave to have a matter reheard. The matter which they wish to have reheard is their appeal to the Land Court, under the provisions of the Valuation of Land Act 1944, against a determination by the Valuer-General (the respondent) of the unimproved value of the appellants' land at $325,000 as at 1 October 2007. The appellants contended that the unimproved value of their land as at that date was $300,000.
The subject property, Bridgeman Downs, is rural grazing land with an area of 5,611 ha located in the now Maranoa Regional Council area. The valuation had originally issued at $345,000. By letter received on 5 June 2009, the Land Court was advised by the respondent that the valuation had been reduced to $325,000 pursuant to s.68 of the Valuation of Land Act. As the appellant did not accept the reduction, $325,000 is deemed to be the valuation appealed against.[1]
[1] Section 68(3) Valuation of Land Act 1944.
The appeal was heard by the Judicial Registrar[2] of the Land Court, who dismissed the appeal and determined the value of the property at the respondent's amended figure of $325,000. The Judicial Registrar gave written reasons for his decision.[3]
[2]A Judicial Registrar is appointed under s.28(1) of the Land Court Act 2000 "to exercise the powers and perform the functions prescribed under the rules". Section 29(1) provides that a Judicial Registrar may hear and decide a matter prescribed under the rules. Section 26(f) of the Land Court Rules 2000 provides that a Judicial Registrar may constitute the Court to hear and decide any matter directed by the President in writing that the President considers appropriate having regard to the nature and complexity of the matter or any special circumstance in relation to the matter. On 15 February 2010, I directed that the Judicial Registrar should hear this appeal.
[3] Purcell v Chief Executive, Department of Environment and Resource Management [2010] QLC 0114.
Legal Principles
The applicants did not expressly identify, in their application for a rehearing, the legislation on which they were relying to make their application. There are two relevant provisions in the Land Court Act 2000 (the Act). Section 12 provides -
"Power to rehear matters
12.(1) A party to a proceeding who is dissatisfied with the Land Court's decision may apply to the court for leave to have the matter reheard.
(2)The application must be made within 42 days after the order containing the decision is made by the court.
(3)If the application is granted, the matter must be reheard, if practicable, by the member who gave the decision on which the rehearing is sought."
Section 31 provides -
"31 Rehearing after judicial registrar's decision
(1)A party to a proceeding who is dissatisfied with a judicial registrar's decision in the proceeding may, with the leave of the Land Court as constituted by a member, have the matter reheard by the court as constituted by a member.
(2)If the court grants leave, it may do so on conditions, including, for example, a condition about -
(a)the evidence to be adduced; or
(b)the submission to be presented; or
(c)the nature of the rehearing."
It is to be observed that although there are some similarities between ss.12 and 31, there are some significant differences.
An important similarity between the two provisions is that in neither s.12 nor s.31 is there any indication of the basis on which an application for leave to have a matter reheard is to be granted or refused.
The differences are -
· Where an application is made under s.12, the application is made "to the Court" for leave to have the matter reheard. The section is silent as to the constitution of the Court for the purpose of determining the application. Accordingly, the application for a rehearing may be dealt with by the Member who had conducted the original proceedings[4] or by another Member.[5] By way of contrast s.31(1) provides that an application for a rehearing after a Judicial Registrar's decision is to be dealt with by the Land Court as constituted by a Member.
· Section 12(3) provides that if the application for leave to rehear is granted, the matter must be reheard, if practicable, by the Member who gave the decision on which the rehearing is sought. This is to be contrasted with s.31(1) which provides that if leave for a rehearing is granted the Court is to be constituted by a Member for the rehearing.
· Section 12(2) provides that an application for leave to have a matter reheard must be made within 42 days after the order containing the decision is made by the Court. There is no time limit in s.31.
· Section 31(2) contemplates that conditions may be attached to any grant of leave to have a matter reheard. While there is no similar provision in s.12, the Court, when operating under s.12, is able to impose conditions on any grant of leave.[6]
[4]See, for example, Townsville City Council v Department of Main Roads [2004] QLC 0017. Although the issue of the constitution of the Court was not expressly considered in that matter, it is noted that the Member who dealt with the application for the rehearing was the Member who had dealt with the original hearing.
[5] Nevis Pty Ltd v Chief Executive, Department of Main Roads (2001-2002) 23 QLCR 192 at [35].
[6] At [79].
Although the applicants did not state whether their application was brought under s.12 or s.31, there is a statement in the originating application (the document which initiated this application) that the applicants were seeking a hearing by a Member of the Land Court. That appears to be a reference to s.31(1) which provides that an applicant for leave to have a matter reheard may, with the leave of a Member, have the matter reheard by the Court as constituted by a Member.
On its face, s.12(1) is couched in sufficiently general terms to be applied to a Judicial Registrar's decision because the section says that a party "who is dissatisfied with the Land Court's decision" may apply for leave to have a matter reheard. Section 29(2) of the Act provides that, when determining a prescribed matter, the Judicial Registrar constitutes and may exercise all the jurisdiction and power of the Land Court. It follows that the Judicial Registrar's decision in this matter was a decision of the Land Court and, therefore, apparently within the purview of s.12(1).
However s.31 is a specific provision dealing with an application for leave to have a matter reheard after a Judicial Registrar's decision. To the extent that there are inconsistencies between s.12 and s.31, I consider that s.31 should apply in accordance with the principle that where there is a conflict between general and specific legislative provisions, the specific prevails, particularly where the conflict arises from different sections in the same Act.[7] The principle is based on the presumed intention of Parliament. Because s.31(1) provides that a Land Court Member is to deal with an application for leave to have a matter reheard and for the Court to be constituted by a Land Court Member for any subsequent rehearing, it is evident that the intention of the legislature is that any rehearing proceedings, after a Judicial Registrar's decision, are to be dealt with by a person other than the Judicial Registrar. Further, that person is to be a Member of the Court and not another Judicial Registrar. By way of contrast, if a rehearing were granted under s.12, the Court would, if practicable, be constituted by the same Member as had heard the matter originally. My conclusion is that this application should be dealt with as an application under s.31.
[7] Smith v The Queen (1994) 181 CLR 338 at 348.
As stated above, neither s.12 nor s.31 gives any indication of the basis on which an application for leave to have a matter reheard should be granted or refused. Both sections were included in the Land Court Act when it was originally enacted. Section 12 had its genesis in s.43 of the Land Act 1962, the legislation which, prior to the introduction of the Land Court Act 2000, established the jurisdiction of the Land Court, although there are differences between the sections.[8] As the position of Judicial Registrar of the Land Court was established for the first time in the Land Court Act 2000, there was no predecessor to s.31 of the Act in the Land Act 1962.
[8] Nevis v Chief Executive, Department of Main Roads (2001-2002) 23 QLCR 192 at [19].
Although there have been a number of decisions interpreting s.12 since its enactment,[9] this Court has not previously considered the basis on which an application under s.31 might be granted.[10] Because ss.12 and 31 are similar in that neither specifies the basis or grounds on which leave to have a rehearing may be granted, I consider that the authorities which have examined the application of s.12(1) may be applied in determining applications under s.31 of the Act. The differences between ss.12 and 31 discussed above do not, in my view, indicate that the Court is to apply a different test in determining an application under s.12 as compared with an application under s.31.
[9]See in particular Nevis Pty Ltd v Chief Executive, Department of Main Roads (2001-2002) 23 QLCR 192; Townsville City Council v Department of Main Roads [2006] 1 Qd R 77.
[10]In Calcifer Industrial Minerals Pty Ltd v Daraleigh Pty Ltd [2010] QLC 0046, the Court considered an application under s.31 of the Land Court Act 2000 for leave to have a matter reheard, where the matter had been originally determined by the Judicial Registrar. The application was refused on the ground the applicant was not a party to the proceedings in which the Judicial Registrar had made the determination. There was no consideration of the basis on which such an application might be granted.
In Nevis Pty Ltd v Chief Executive, Department of Main Roads the Land Appeal Court commented that s.12 is a novel provision. [11] The section was considered in some detail by the Land Appeal Court in that case and also by the Court of Appeal in Townsville City Council v Chief Executive, Department of Main Roads.[12] In the latter, the Court of Appeal recognized that s.12 confers a discretion on the Court which deals with the application for leave, as to whether or not to grant leave, and said[13] -
"The discretion conferred by s 12 of the Act is conferred to avoid an unjust outcome of proceedings before the Land Court and to ensure that the decision of the Land Court reflects the true merits of the case as between the parties. It must be exercised in accordance with that purpose. This is especially so in light of s.7 of the Act which instructs the Land Court to exercise its jurisdiction according to "equity, good conscience and the substantial merits of the case"."
The Court also said that where there is reason to suppose that the outcome of a rehearing may substantially affect the parties in terms of the ultimate result, then the possibility of injustice, in the sense of a decision which does not reflect the substantial merits of the case if leave is not granted, inevitably emerges as a consideration material to the exercise of the discretion conferred by s.12 of the Act.[14]
[11] (2001-2002) 23 QLCR 192 at [19].
[12] [2006] 1 QdR 77.
[13] At [37].
[14] At [44].
The discretion as to whether to grant leave to have a matter reheard is to be exercised by balancing competing considerations, having regard to all the relevant circumstances. Generally speaking the likely impact of the alleged error on the outcome of the case will be a consideration relevant to that balancing exercise.[15] The discretion may be exercised to grant leave for a rehearing even though the misapprehension or error that has occurred in the proceedings may have been due to a mistake on the part of a party or its legal advisers.[16]
[15] At [45].
[16] At [49].
The existence of a right of appeal is not a consideration which is decisive or even always relevant with respect to the grant of leave.[17] Section 12 recognizes the power of the Land Court to ensure, independently of correction on appeal, that its decisions are just.[18]
[17] At [64].
[18] At [65].
Finality in litigation is an important consideration that properly informs the exercise of the Land Court's discretion under s.12. However the desirability of finality cannot control the exercise of the discretion because s.12 recognizes that a further hearing at first instance may be desirable notwithstanding the availability of an appeal. Finality must sometimes give way to achieve a just decision on the substantial merits of the case.[19]
[19] At [66].
Any possible prejudice which might be suffered by the respondent if a rehearing were to occur is also a relevant consideration to be taken into account by the Court in exercising the discretion under s.12.[20]
[20] At [63].
Reasons for decision of Land Court
At the hearing before the Judicial Registrar, Mr WD Purcell appeared and gave evidence on behalf of the appellants. The respondent was represented by Mr J Tate of Crown Law. Evidence was given for the respondent by Mr JE Bomford, a valuer in the employ of the respondent.
The Judicial Registrar began his decision with a brief description of the nature of the proceedings before him and of the subject property, Bridgeman Downs. He identified Bridgeman Downs as lying approximately 80 kms south-west of Roma. The Judicial Registrar then adopted the property description set out in the valuation report tendered by the Chief Executive and observed that the country was currently used for beef cattle breeding and fattening as set out in that report.
The Judicial Registrar identified the landowners' concerns as follows -
1.Relativity with surrounding blocks, particularly with the "Mason" block and the "Eversleigh" block.
2.Improved sales in the area. The Judicial Registrar said that Mr Purcell had led evidence of a number of improved sales which he contended showed that his block was overvalued. However, the Judicial Registrar commented, Mr Purcell had not produced any analysis to reach an unimproved value for the sales.
3.The certain pest problems particularly with weir vine and kangaroos.
4.The vegetation management restrictions applicable to the property should be properly taken into account.
5.The property was said by Mr Purcell to be traditionally a sheep property rather than the classification placed on it by the respondent.
6.Bridge access. The Judicial Registrar noted that Mr Purcell had claimed that a relatively new bridge providing access to the property was too low to avoid flooding on occasions.
7.Water problems. Mr Purcell claimed that because the property was on top of the watershed it did not have the same water advantages as other properties situated in a lower locality.
8.The power line. Mr Purcell had claimed that the property had suffered from certain problems because it was at the end of the power line.
9.The property was smaller than an adequate living area and this factor should be relevant in assessing the valuation.
The Judicial Registrar said that it was not certain how Mr Purcell had derived his figure of $300,000 although Mr Purcell had claimed that a traditional comparison with the Mason block would support his figure.
The Judicial Registrar also summarized the respondent's case. Mr Bomford had reduced the original valuation of $345,000 to $325,000, principally because of the additional weir vine that was apparent on the detailed inspection of the subject property which he had carried out subsequent to the lodging of the appeal.
Mr Bomford's primary method of valuation was comparison with four sales which had occurred in the area in the appropriate timeframe. The Judicial Registrar set out details of Sales 1 and 2. Sale 1, Surprise, had been applied at a value of $88/ha. Sale 2, North Quibet, had been applied at $98/ha. Mr Bomford had assessed both sales as superior to the subject property and had applied a rate of $58/ha to the subject in the amended valuation.
The Judicial Registrar then discussed the issue of relativity with surrounding blocks, noting that Mr Bomford was quite firm that the subject property had been placed in proper relativity with the compared properties. Mr Bomford had also said that the new valuation of the subject property at $325,000 was in historic relativity with the Mason block.
Mr Bomford had also considered that the sales used by Mr Purcell had not been analysed to an unimproved level and at least one of them was, in his opinion, a high sale and not appropriate to be used.
The Judicial Registrar said that Mr Bomford had stated that he was certainly aware of most of the other issues raised by the appellants including the weir vine, the vegetation management and the bridge issues. Mr Bomford had considered that the fact that the subject property was not of a sufficient living area size was not relevant to the current valuation issue. If anything, the smaller area could be assessed on a higher rate per hectare because of the size factor.
Having considered the evidence, the Judicial Registrar commented that there was only a relatively small difference between the two figures submitted to the Court. He concluded that the respondent's figure could be sustained for the following reasons:
· Mr Bomford, a relatively experienced valuer in the area, had inspected the property and presumably was made aware of any problems that he may not have been previously aware of. As a result he had made a reasonably substantial deduction particularly for the weir vine problem.
· The best evidence before the Court was the analysed sales tendered by Mr Bomford. The improved sales evidence relied on by Mr Purcell was only of very general relevance, without further analysis.
· Mr Bomford's relativity map showing applied figures of the subject and the surrounding relativity blocks supported the figure placed on the subject.
· While Mr Bomford did not dispute the specific problems associated with the block, Mr Bomford was aware of those problems and had made proper allowance for them. Although in comparison with surrounding properties such allowances cannot be specific, it was in a valuer's normal professional role to make allowances for such matters.
· The fact that the subject did not constitute a living area was not relevant for present valuation purposes, subject to the observation set out earlier.
Finally the Judicial Registrar concluded that the appellant had not discharged the onus that lay upon the appellant, under s.33 of the Valuation of Land Act 1944, to prove that the Chief Executive was wrong. Accordingly, the appeal was dismissed and the value of the subject property was determined at the amended figure of $325,000.
Parties' submissions
Applicants' submissions
In their application for a rehearing, the applicants said that the Judicial Registrar apparently did not understand the applicants' evidence and also had believed the valuer even when the valuer was incorrect.
The grounds on which the rehearing was sought were that -
· Prior to last hearing unimproved value was reduced to $325,000, no reason given. I read in the Court summary why it was reduced. Makes it hard to defend my side.
· The booklet presented was out of date and incorrect statements made under oath not correct.
· Judicial Registrar is wrong.
· I expected a fair unbiased hearing and didn't receive one.
· Also asked valuer prior to hearing reason for reduction in unimproved value and was told because of anomalies compared to neighbours?
In written submissions forwarded to the Court prior to the hearing of the application, Mr Purcell contended as follows -
· I want to address statements made in the Judicial Registrar's summary, also erroneous statements made under oath by the valuer.
· I will submit photos countering valuer's photos.
· I want to clarify relativity to neighbours and show weakness in the Department's methods of arriving at unimproved values.
· I object to the Court rule where I am to be asked a question by the legal person on the far left and answer the question to the Judicial Registrar on the far right. I was taught to look at the person to whom you are speaking.
· Last hearing I made no objections because I was unaware of my right to do so. In fact there were no objections at all. I now understand that I can stand up and object when leading comments or incorrect statements are made.
· There were five people in the Court apart from myself, all paid for by the Government. That can be overwhelming for a bushman.
· I must say the Judicial Registrar was more than fair to me in Court but does not understand or chose not to place any credence on my evidence.
At the hearing of the application, Mr Purcell submitted that there was a number of errors in the Judicial Registrar's decision -
· The Judicial Registrar had adopted the valuer's estimate of 80 kms as the distance between the subject property and Roma. Mr Purcell said that the correct distance was 90 kms;
· The Judicial Registrar had accepted the valuer's estimate that 69% of the property had been pulled and burnt for grazing purposes. Mr Purcell said that the aerial photograph appended to the valuer's report was out of date and that more than 69% of the subject was pulled as at the date of valuation. Reliance on an out of date photograph brought into doubt the relativities between various properties and the subject.
· Contrary to the valuer's country description, which had been accepted by the Judicial Registrar, there was no sandy country on the subject.
· Mr Purcell challenged the valuer's evidence that the valuation had been reduced because of the weir vine on the subject. Mr Purcell said there was not much weir vine apparent as at the date the valuer inspected the property. Further, Mr Purcell had been told prior to the hearing that the reason for the reduction was that there were anomalies with the neighbours. He had not realised what the reason was until he read the court decision. Consequently he had not been able to prepare adequately for the court hearing.
· The Judicial Registrar had concluded, on the evidence, that the fact that the subject did not constitute a living area was not relevant for present valuation purposes. Mr Purcell submitted that this demonstrated that the Judicial Registrar misunderstood the concept of living area. Mr Purcell said that living area had nothing to do with size but with what a property would run.
· The subject property had been surrendered from another property, Teeswater, in 1969. In 2001 the unimproved value of Teeswater was $12.93/ha and the unimproved value of the subject areas $13.90/ha, a difference of $0.97/ha. In 2007, the unimproved value of Teeswater was $51.25/ha. The unimproved value of the subject was $58/ha, a difference of $6.75/ha. Mr Purcell contended that the 2001 difference in relativity should have been maintained in the 2007 valuation. If that had occurred the subject would be valued at $293,343 or ($52.78/ha). On that basis Mr Purcell had estimated that the unimproved value of the subject should be $300,000 as at the relevant date.
· Access to the subject had become more difficult as the result of the construction of a new bridge on Dunkeld Road which is shorter and lower than the previous bridge. Consequently the road is cut by floods more frequently.
· The subject property is at the end of the power line. The power supply is, consequently, unreliable.
· The subject property is a sheep property not a cattle property.
· The photographs in the valuer's report did not properly represent the subject country and access roads. Mr Purcell tendered a number of photographs to establish this point.
Mr Purcell finalised his submissions by saying that there were two issues which he considered that he had not raised properly at the original hearing - the living area and relativity.
Respondent's submissions
The respondent's written submissions relevantly said that -
· The power of the Court to exercise the discretion under s.12 of the Land Court Act is not at large. The discretion is judicial and must be exercised in accordance with principle.
· The relevant principles are described by Keane JA in Townsville CC & Anor v Department of Main Roads [2006] 1 QdR 77, and more recently as reviewed by this Court in Van Zelderen v Department of Natural Resources and Water [2010] QLC 001.
· In this case -
(a) Mr Purcell was given a wide opportunity to present his case to the Court which included the handing up of a statement/submission without objection;
(b) In cross-examination Mr Purcell was expressly afforded the opportunity of commenting on the valuation report relied upon by the respondent;
(c) Mr Purcell did not present any expert evidence by a registered valuer to counter the evidence offered by the respondent's valuer;
(d) The learned Judicial Registrar afforded Mr Purcell every opportunity to put his case, in accord with the equity and good conscience provisions of the Act;
(e) There was no demonstrable error by the learned Judicial Registrar;
(f) This was not a case where there is an error on the face of the record.
· The contention of the respondent is that there is no satisfactory basis disclosed by Mr Purcell to invoke the discretion conferred under s.12 of the Land Court Act 2000.
Consideration of parties submissions
I have considered the parties oral and written submissions as summarised above, as well as the transcript of the hearing before the Judicial Registrar. It is evident that many of the matters raised by the applicants in the application for a rehearing were raised by the appellants at the original hearing and dealt with by the Judicial Registrar in his decision.
Mr Purcell did not pursue, before me, the allegation of bias against the Judicial Registrar saying that the Judicial Registrar was more than fair to him in Court. The basis of the allegation seems to have been that Mr Purcell believed that more credence had been placed on the valuer's evidence rather than Mr Purcell's. The Judicial Registrar's reasons for decision, including his assessment of the evidence, are considered later in this decision. At this point it is sufficient to say that I do not consider that there is any substance to the allegation of bias.
In general terms, Mr Purcell's submission was that there were a number of errors in the valuer's report and the Judicial Registrar's decision. In addition, there were two issues which, because of his lack of experience, Mr Purcell had not raised properly at the hearing, living area and the relativity between the subject property and the property at Teeswater. The combined effect of the errors and his lack of experience was that he was seeking a rehearing.
It appears that there were some factual errors in the valuer's original report which have found their way into the Judicial Registrar's decision. Those errors were as to the distance of the subject property from Roma and whether there was sandy country on the subject. Although it was unfortunate that these errors occurred, they do not appear to have had any material bearing on the final outcome, and therefore, they do not provide a ground for granting a rehearing.
There was conflicting evidence about other issues such as the impact of the new bridge on the access to the subject property, and the effect of the unreliable power supply to the subject. I am satisfied that the Judicial Registrar considered the evidence before coming to the conclusion that the valuer had made proper allowances for those matters. I can see no reason to grant leave for a rehearing in relation to those matters.
Mr Purcell said that he had not been aware, until after he read the Judicial Registrar's decision, that the reason for the reduction in the original valuation from $345,000 to $325,000 was the prevalence of weir vine on the property. Mr Purcell's point was that he had been unable to prepare properly for the hearing because he had not been given that information. He said that he would not have highlighted the weir vine had he known that he had been given a reduction for it. Mr Purcell also said that there was not much weir vine apparent at the time of the valuer's inspection. However he did not suggest that there should be no reduction for the weir vine. Mr Purcell's purpose in raising that issue seems to have been to establish that it demonstrated that another error had been made by the valuer. However, I do not accept that there has been any error on the part of the valuer in this regard. The valuer was entitled to take into account the impact of the weir vine on the value of the property as assessed by him.
Mr Purcell also challenged the statement by the valuer, which had been accepted by the Judicial Registrar, that the subject was used for cattle breeding and fattening. Mr Purcell said that the property was a sheep property. It had been regarded as a sheep property by the Department of Lands for decades and Mr Purcell could see no reason why that should be changed. The transcript of the original proceedings shows that this issue was canvassed at some length before the Judicial Registrar. There was a conflict in the evidence given by Mr Purcell and the valuer as to the number of cattle on the property as at the date of inspection. The Judicial Registrar has accepted the valuer's evidence. The use made of the property is a question of fact and the Judicial Registrar has made a finding based on the evidence before him. In any event, Mr Purcell did not point to any difference in the valuation which might flow if the property were valued as a sheep property. I can therefore see no reason for granting leave to have a rehearing on this ground.
Mr Purcell submitted that the Judicial Registrar did not understand the concept of a living area. The Judicial Registrar had said that one of the landowners' concerns about the valuation was that the property was smaller than an adequate living area and that this factor should be relevant in assessing the valuation. The Judicial Registrar also referred to the valuer's opinion that the fact that the subject property was not of a sufficient living area size, was not relevant to the current valuation because, if anything, the lower area could be assessed on a higher rate per hectare because of the size factor. Mr Purcell said that living area has nothing to do with the size of a property. He also produced copies of documents prepared by the Lands Department which recognized that the subject property was not a living area.
In my opinion, the question of whether or not a property constitutes a living area is determined primarily by two factors - the carrying capacity per hectare and the area of the property. Therefore, I do not accept Mr Purcell's submission that the size of the property is irrelevant. Moreover, Mr Purcell was unable to point to any evidence that contradicted the valuer's evidence that a smaller property could bring a higher price per hectare than a larger one.
There remains the applicants' challenge to relativity, in particular the relativity between the issued valuation of the subject and the property Teeswater.
The authorities are clear that, for the purpose of determining the unimproved value of land, relativity evidence is not to be used in preference to sales evidence. Thus in Fischer v Valuer-General[21] the Land Appeal Court said -
[21] (1983) 9 QLCR 44 at 46.
"It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels. Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence. Mr Fischer's argument assumes that there has not been any factors which may have had a bearing on the relative market for sites in the St Lucia area over the long period from 1966 to 1979. The best test of value at any particular time is the market for land, and the only sales evidence, albeit perhaps not ideal, is that provided and relied upon by the Valuer-General."
And in Barnwell v Valuer-General the Land Appeal Court said[22] -
"We are conscious that it is desirable that valuations made for the purposes of the Valuation of Land Act of comparable lands should bear proper relativity, one to the other, if the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis."
The Court also said[23]
"It has been well recognised over the years that previously established relativity in unimproved values can and does change from valuation to valuation."
[22] (1990-91) 13 QLCR 13 at 16.
[23] At 17.
Both the appellants and the respondent gave evidence about relevant sales. The sales were of improved properties. The appellants did not attempt to analyse their sales to establish the unimproved value of those properties. The valuer had analysed the sales he relied on. Mr Purcell's explanation for the appellants' lack of analysis of their sales was that he was not prepared to guess at the value of the improvements. He was also sceptical of the valuer's analysis.
The Judicial Registrar found that the best evidence of the unimproved value of the subject was the analysed sales tendered by the valuer.
The valuer's Sale 1 was an improved cattle breeding property (with some opportunity for dryland cropping) of 8,672 ha which sold on 31 May 2006. The improved sale price was $311/ha which the valuer analysed to $96.96/ha. He applied a value of $87.64/ha.
Sale 2 was also an improved cattle breeding property (with some opportunity for dryland cropping) of 8,782 ha. The improved sale price showed $371/ha which the valuer analysed to $100.41/ha unimproved value. He applied a value of $97.93/ha.
Although the appellants did not adduce any effective sales evidence to support their case, it must also be recognized that the respondent's sales evidence is not ideal because the sales were extensively improved, considerably larger than the subject and significantly superior to the subject. The sales were applied at $87.64/ha and $97.93/ha respectively compared to $58/ha applied to the subject. There is a considerable difference between the applied rates of the sales and the subject and it is not evident how the rate applied to the subject was reached.
Since these two sales appear to have been the best sales available to the valuer, he had little alternative but to do the best he could with that evidence. However given the weakness of the sales evidence and the lack of information as to how the rate applied to the subject was reached, I consider that this is a case where relativity with surrounding properties assumes more importance in the valuation exercise. I acknowledge of course that the relativity evidence cannot be used to the exclusion of the sales evidence, nor indeed should it be preferred to the sales evidence.
At the hearing of the application for leave, it became apparent that the applicants had identified two problems with the relativity evidence. One was that the aerial photograph included in the valuer's report was out of date. Mr Tate, for the respondent, took instructions from the valuer during an adjournment and informed the Court that while he had not been able to ascertain when the photograph was taken, he had been instructed that the valuer had relied more heavily on the 2008 regional ecosystem map (also appended to the report) to establish the relativities.
Although the valuer advised Mr Tate that he had relied more on the 2008 regional ecosystem map than the aerial photograph, the two documents are inconsistent and no explanation was offered as to the reason for including an out of date photograph in the report. Indeed it was only when the applicants challenged the relevance of the photograph, in the application for leave, that the Court was made aware of the problem. The valuer had not volunteered that information. Moreover, as Mr Purcell submitted, it is unclear how, if at all, the photograph and the ecosystem map were used to establish the appropriate relativities between the subject and other properties.
The second issue is that, at the hearing before the Judicial Registrar, the appellants challenged the relativities between the subject and Teeswater, from which the subject had been surrendered in 1969, and Eversleigh. The unimproved value of Teeswater was $51.25/ha as at the date of valuation. The valuer said that Teeswater was in historic relativity with the subject in the valuation under appeal. He said that the difference between the two had been approximately 10% in 2001 and 2007. The Judicial Registrar found that the applied figures of the surrounding relativity blocks supported the figure placed on the subject.
Mr Purcell said that in 2001 the unimproved value of Teeswater was $12.93/ha and the unimproved value of Bridgeman Downs was $13.90/ha, which is a difference of $0.97/ha. He submitted that the 2001 relativity between Teeswater and the subject should have been maintained at $0.97/ha in 2007.
Assuming for the moment that it is correct to say that the relative values between the subject and Teeswater should have been maintained between 2001 and 2007, it does not follow that the dollar amount of the difference in value is to be maintained. Rather the correct approach would be to express the difference in percentage terms and, if the same relativity is to be maintained, to retain the same percentage difference. Teeswater was valued at 93.02% of the subject in 2001, a difference of 7.0%. If the same relativity were applied in 2007, the subject would be valued at $55.09/ha. In fact the subject has been valued at $57.92/ha in 2007, that is Teeswater has been valued at 88.48% of the subject, a difference of 11.5%. Thus the relativity between the two properties has changed between 2001 and 2007 by about 4.5%.
While there may be good reasons for the change in relativities between these properties, those reasons were not explained to the Court hearing the appeal. To the contrary, the evidence given by the valuer, at the hearing before the Judicial Registrar, was that the relativity between the two properties had been maintained at about 10% difference.
My conclusion is that the relativity evidence was unsatisfactory in that the aerial photograph used by the valuer was out of date and there was an error in the evidence given by the valuer in relation to the relativity between the subject and Teeswater. It is not clear to me whether, if those matters were corrected, there would be any different outcome to the valuation appeal. However, because the Land Court is required, by s.7(b) of the Land Court Act, to act according to "equity, good conscience and the substantial merits of the case" and to ensure that the decision of the Land Court reflects the true merits of the case,[24] I have decided, on balance, that the errors are such that leave should be granted to have the matter reheard by a Member of the Court.[25]
[24] Townsville City Council v Chief Executive, Department of Main Roads [2006] 1 QdR 77 at [37].
[25] Section 31(1) Land Court Act 2000.
Section 31(2) of the Act provides that if the court grants leave to have a matter reheard it may do so on conditions. I have considered all of the applicants' submissions and, for the reasons set out above, have found that most of the issues raised by the applicants do not warrant a rehearing. However, the relativity issue should be reheard. Because of the importance of sales evidence in a valuation appeal, I do not consider that the relativity evidence should be reheard in isolation from the sales evidence. In those circumstances I consider that the evidence and submissions at the rehearing of the valuation appeal should be confined to the issues of the sales and the relativity between the subject and relevant properties in the area. It is appropriate for the Member who rehears the matter to give directions relating to the rehearing.
ORDERS
1.The application for leave to have the valuation appeal reheard by a Member of the Land Court is granted.
2.The rehearing is to be limited to evidence and submissions about relevant sales and the relativity between the subject property and relevant properties in the area.
C MacDONALD
PRESIDENT OF THE LAND COURT
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