Re Sullivan

[1997] QLC 6

[1997] QLC 6

 

LAND COURT

BRISBANE

14 FEBRUARY 1997

Re:   Determination of unimproved value -
                 Conversion of Tenure -
                 Land Act 1962 -
                 GHPL 36/7925, Roma District

Lessees:    J.McA. And V.A. Sullivan

(Hearing at Roma)

D E C I S I O N

Mr and Mrs Sullivan’s application for the conversion of tenure of Grazing Homestead Perpetual Lease No. 36/7925 was received by the Department of Lands, as it was then, on 16 June 1992.  It is at that date when the unimproved value of the land is to be determined.
     The land is described as Lot 36 on Plan WV844, Parish of Spowers, and contains an area of 883.608 ha.  It is situated in the Mt. Abundance locality, about 37 km south-westerly of Roma via 33 km of bitumen and 4 km of formed earth roads. 
     On the description by Mr T.E. Herberts, registered valuer employed by the Department, the country originally comprised 724 ha of brigalow, belah, whitewood and edible scrub with the balance 160 ha being mountain coolibah.  There is no natural water.  Artificial supplies have been provided by two equipped dams, an equipped earth tank, and a quarter share bore.  There is also a capped oil bore.  The block is used for cattle grazing (breeding and fattening) and grain growing, being its highest and best use.
     Mr Herberts’ unimproved valuation was $120 per ha.  That valuation was not accepted by the lessees and the Minister referred the matter to the Court for determination.
     The lessees attended the hearing, seeking to have the unimproved value determined as $102 per ha.  They had found themselves somewhat disadvantaged in having had records relevant to their objection to the valuation destroyed in a house fire.  Nevertheless Mr Sullivan, relying largely on memory, conducted the lessees’ case and provided a written submission to the Court.  The lessees hold the opinion that the Department’s valuation was excessive -

“due mainly to the nature of the Block being originally:

Heavily timbered, very undulating and shallow soils, which all results in high expenses to convert the land to productive agriculture.  By way of extensive contouring (soil conservation) and timber clearing has cost in excess of $250 per hectare.”

They agreed that the land is now very productive due to the extensive improvements including contour banking which has been carried out.  However, in their opinion, the subject land is inferior to surrounding blocks due to underground water being very deep, with the share bore being “5,200 feet deep”.  Mr Sullivan expressed concern that if that bore ever failed it would be uneconomic to replace it.  Of the surface water, only one site was successful.  The earth tank held water temporarily due to unsatisfactory soil structure and a 10,000 cubic yard dam is rarely filled, relying on heavy rain diversion from the contour banks. 
     Mr Sullivan pointed out that a gas pipeline parallels the northern boundary and the constructed trench showed the depth of topsoil “at between nil to half a metre.  There are some stockpiles of rock along the route as evidence of this.”
     Since the date of application drought conditions had affected the productivity of the block.  Furthermore the lessees were concerned that the market value of the land would be affected if a Native Title claim over the locality, including the subject land, lodged subsequent to the freeholding application, was proved to be successful.
     Mr Herberts’ valuation used as a basis, sales of the properties “Amaroo” which is about 26 km west of Roma and “South Westgrove” about 46 km north-west of Injune.
     “Amaroo” of 3,506 ha was sold in November 1991 to show an analysed unimproved value of $140/ha overall.  It was described as comprising 1,170 ha open black soil downs, 240 ha belah, rosewood, whitewood and myall, 440 ha box, belah, sandalwood and wilga and 1,656 ha box, sandalwood, silver-leaf ironbark and pine.  Mr Herberts agreed that as unimproved land the downs country on “Amaroo” was well superior to the subject land classification due to the timber treatment and soil conservation works necessary on the subject.  However, the majority of the balance of “Amaroo” was considered well inferior country.  Overall then, on country type, “Amaroo” was seen by Mr Herberts to be reasonably similar and comparable.  While the large size of “Amaroo” would have had some deleterious effect on value in comparison with the subject, this was considered to be offset by the slightly superior location.  All in all Mr Herberts was confident that he had taken a conservative approach in finding that the sale property was slightly superior overall to the subject. 
     He also agreed that “South Westgrove” was not a good comparison due to its considerably larger size, inferior country, location and access.  That property had sold in April 1992 showing an overall unimproved value of only $55/ha.  It contained 7,010 ha of which 2,400 ha was of undulating brigalow, belah, bottle and some box (but still inferior quality country tothe subject) then 2,700 ha of box, myall, silver-leaf ironbark, belah and sandalwood and 1,910 ha sandy pine, box, bulloak, ironbark, gum and wattle. 
     From a valuation viewpoint, it is understandable that Mr Herberts would have preferred to have had sales evidence at about the relevant date in the Mt Abundance area.  Because that locality was highly regarded however, it was also “tightly held” and sales were not prevalent.  There were none which were relevant to the date of valuation in this matter.  Mr Herberts did not learn anything from Mr Sullivan’s evidence and was confident that the disabilities of which Mr Sullivan spoke were reflected in the valuation which he had applied.
     It should be said there that, quite correctly, Mr Herberts had given no consideration to matters which could not have been capable of prediction at the relevant date - eg length of the effects of drought and the Native Title claim.
     Mr Sullivan held the opinion that the unimproved value should have been determined in comparison with valuations applied to land in the same locality as the subject.  He knew the sale property “Amaroo” quite well and was unable to accept that a property which included such a large area of easily developed and flatter black soil arable downs could realistically be compared with the subject land which had been most expensive to develop.  “South Westgrove” was not particularly well known to Mr Sullivan but again he was unable to accept that cogent comparison with the subject land was possible.
     While Mr Sullivan has a long acquired knowledge of the subject property and its locality, he was unable to produce evidence of value to substantiate the lessees’ estimate of value.  It was his considered opinion that the Department’s valuation offer was 15% too high.  However, his case in the end result, rested on a criticism of Mr Herberts’ basis of valuation rather than offering alternative market-orientated evidence.
     No doubt all parties, including the Court, would have been better able to consider levels of value in Mt Abundance had there been such sales evidence.  Valuation expertise relies on the ability to make comparisons between the property subject of the valuation and the sales evidence, even if that sales evidence is limited and not ideal.  Mr Herberts did the best he could with the evidence available and had the confidence in his opinion to answer the criticisms which were reasonably made and no doubt expected.
     I am not persuaded however that Mr Herberts’ assessment should be disturbed for it should not surprise if, with the passage of time, it was found to be suitably conservative as he said.
     The unimproved value of the land contained in GHPL 36/7925, Roma District, is determined as One Hundred and Twenty Dollars ($120) per ha as at 16 June 1992.

RE WENCK
  MEMBER OF THE LAND COURT