Richardson v Chief Executive, Department of Natural Resources

[1997] QLC 203

[1997] QLC 203

 

LAND COURT

BRISBANE

18 DECEMBER 1997

Re:     AV96-770

An appeal against an unimproved valuation -

Valuation of Land Act 1944 -

Shire of Blackall

Clement R. and Oriel R Richardson
v.
Chief Executive, Department of Natural Resources

(Hearing at Blackall)

D E C I S I O N

As at 1 January 1996, the unimproved value of an aggregation of country owned by Mr and Mrs Richardson and containing a total area of 27,015.178 ha was assessed by the chief executive in the amount of $187,500, rounded from $7 per ha overall.

The aggregation comprises Lot 2 on Plan EV74, Parish of Evora ("Chippendale" - 1,213.652 ha); Lot 3 on Plan TB5, Parish of Harden ("Allandale" - 6,684.193 ha); Lot 5145 on Plan PH733, PH/3/5145 Lisgool West Holding ("Cutzies" - 7,536.9 ha); Lot 2 on Plan MX40 ("Gum Creek" - 5,846.493 ha) and Lot 3 on Plan MX19, Lot 4 on Plan MX36, Parish of Champion ("Unavale" - 5,733.94 ha).

"Allandale" is the homestead block.  "Cutzies" adjoins to the north-east with "Gum Creek" adjoining "Cutzies" to the north-east and "Unavale" adjoining "Gum Creek" to the north-east.  The distance from the extreme north-east of "Unavale" to the extreme south-west of "Allandale" is about 40 km.  "Chippendale" is then about 15 km north-westerly of the western boundary of "Cutzies".

"Allandale" is about 65 km north-east of Blackall via the Landsborough Highway and Tumbar Road, the access being bitumen sealed for 41 km then of gravel and earth formation.  The Tumbar Road access is often cut when a low-level crossing on Paradise Creek is flooded.  Alternative access to Blackall is available.

The chief executive's valuation was carried out by Mr D.P. Jones, registered valuer.  His classification of the country comprised in the overall aggregation, together with estimated carrying capacity of each class of country was as follows:

(7%) 1,910 ha gidyea scrub (1 beast to 9 ha)

(3%) 900 ha brigalow scrub (1:9)

(25%) 6,750 ha scrubby forest with brigalow and gidyea (1:15)

(37%) 10,000 ha good to fair silverleaf ironbark desert (1:20)

(9%) 2,420 ha sandy desert and scalded brigalow (1:35)

(14%) 3,450 ha poor tableland and heartleaf desert (1:50)

(6%) 1,585.178 ha bendee/lancewood jump-ups (unavailable).

The property is used for cattle breeding and Mr Jones saw potential for some "opportunity fattening".  The carrying capacity potential of the total aggregation was estimated to be one beast to 19 ha on a mixed herd basis, totalling 1,422 head.  Mr Jones described the property as being adequately watered with sub-artesian bores, dams and earth tanks.

In a check valuation approach, Mr Jones had apportioned values of $24/ha to the gidyea scrub, $20/ha brigalow scrub, $11.50/ha scrubby forest, $6 /ha ironbark desert, $3/ha poor desert, $1.75/ha heartleaf desert and no value to the unavailable country.  On that basis a total valuation of $214,763 was found for the total area, being about $7.95/ha overall or about $8.45/ha exclusive of the unavailable country.  Mr Jones accepted that a working difficulty was presented by the shape and partial severance of the aggregation.  In the check valuation approach an allowance of 10% for that disability was made reducing the total from $214,763 to $193,287 or $7.15/ha.  By "direct comparison" with the evidence provided by various sales Mr Jones decided to apply a valuation of $7/ha overall, the result being rounded downwards to an amount of $187,500 which is the valuation subject of the appeal.

In the overall valuation exercise of Mr Jones, he had given consideration to the evidence provided by the sales of the following properties:

(1)"Lochnagar", 13,708 ha - 12 October 1995 - analysed unimproved value $6.18/ha, applied unimproved value $5.54/ha - carrying capacity potential 1 beast to 23 ha or 596 breeding cattle. 

(2)"Forest Hill", 7,405 ha - 10 June 1995 - analysed unimproved value $7.51/ha, applied unimproved value $7.02/ha - carrying capacity potential 1 beast to 22 ha or 337 breeding cattle.

(3)"Anthony South", 8,029 ha - 18 October 1994, analysed unimproved value $6.07/ha, applied unimproved value $5/ha - carrying capacity potential 1 beast  to 25 ha or 321 breeding cattle.

(4)"Mentmore", 4,100 ha - 22 September 1994, analysed unimproved value $24.85/ha, applied unimproved value $23.66/ha - carrying capacity potential 1 beast to 12 ha or 342 cattle, breeding and fattening.

(5)"Ureka", 8,093 ha - 11 November 1994, analysed unimproved value $21.17/ha, applied unimproved value $20.08/ha - carrying capacity potential 1 beast to 13 ha or 623 breeding cattle.

(6)"Oakleigh", 8,091 ha - 22 September 1994, analysed unimproved value $20.64/ha, applied unimproved value $18.42/ha - carrying capacity potential 1 beast to 14 ha or 578 breeding cattle.

(7)"Mulgrave", 18,481 ha - 4 March 1994, analysed unimproved value $25.91/ha, applied unimproved value $23/ha - carrying capacity potential 1 beast to 10 ha or 1,848 cattle, breeding and opportunity fattening.

(8)"Lighthouse", 7,785 ha - 7 September 1995, analysed unimproved value $36.63/ha, applied unimproved value $34.04/ha - carrying capacity potential 1 beast to 8.5 ha or 916 cattle, breeding and fattening.

The appellants' case was conducted by Mr C.R. Richardson who gave evidence in support of the grounds of appeal.  The appellants' estimate of the unimproved value of the aggregation was $88,800 which is about $3.29 per ha overall.  The basis for that estimate was, as I understood Mr Richardson's evidence, related to the initial cost of acquiring the various parts of the aggregation.  The grounds of appeal referred to the position of the property, variations in valuations of other properties, disallowance of a tree clearing application and the worthless nature of the country as unimproved, and lack of proper consideration of the objection to the valuation when an earlier valuation had been successfully contested in the Land Court.  In a decision dated 30 November 1995, the Land Court had determined the unimproved value of the land in the amount of $100,000 as at 31 March 1992.  The evidence was that subsequent valuations in 1993 and 1995 had remained at $100,000 but then increased the valuation to $187,500 at the relevant date.  Mr Richardson took the view that as the country had not altered since the Land Court decision given only about one month before the relevant date, there should also have been no change to the valuation.  Indeed, the Land Court decision had been based on the acceptance of a classification of country on the "Unavale" section which in Mr Richardson's opinion, reflected an over-estimate of the area of brigalow scrub country on that block together with an under-estimate of the area of poor tableland country.  On that basis, Mr Richardson found support for his argument that the Land Court determination remained too high.  (It is observed that the Land Court decision which reduced the chief executive's valuation as at 31 March 1992 from $148,000 to $100,000, contained the comment that the chief executive's classification overall had been adopted "as Mr Richardson had no great disagreement with the description and classification of country".)

Mr Jones had reclassified the country somewhat significantly from the classification which had been adopted by the previous valuer and then followed by the Land Court.  Mr Jones had relied on his personal inspection of the property together with aerial photography and improved measuring techniques. Although Mr Jones found more brigalow scrub, as a specific classification, on "Unavale" than had been suggested by Mr Richardson, Mr Richardson "had no great disagreement with the description and classification of country" as had, this time, been adopted by Mr Jones.  Mr Richardson presented no argument against Mr Jones' estimate of carrying capacity and, although stressing that the aggregation was not used for "opportunity fattening", he did not deny that some fattening use, under different management strategies, might be possible.  Mr Richardson made the point that the nature of the country overall however produced cattle which were of inferior quality - a fact which he said was evidenced by poor prices received for certain offerings at particular cattle sales, details of which were tendered.  Also tendered was information as to the cost of providing block licks for dry feed and young stock supplements, and photographs of various sections of the aggregation.

Mr Richardson was not convinced that the sales evidence presented by Mr Jones was of any assistance in determining the "real" value of the appellants' property.  He had been made aware of the sales evidence prior to the hearing and had carried out some investigations of his own.  He was strongly of the opinion that the value of any land was not necessarily what some people might be prepared to pay for it.  In his opinion "real" value directly related to productive capacity.  Although he accepted that there may be a market in the district for additional areas of country required to supplement existing holdings, he pointed out that many of the sale properties of comparable land were too small in area to carry sufficient cattle to provide a living area.  In his opinion the prices paid for those smaller blocks were influenced by considerations other than their economic potential.  Some of the other sale properties were identified as being clearly of country far superior in quality to the subject aggregation overall.

Mr Richardson, in his relativity approach, concentrated on the history of valuations and alterations to valuations of the properties "Winooka" and "Elsie Hills".  He did not however focus on the comparison of values finally adopted for those properties at the relevant date but rather on the degree of reduction which the owners had achieved and the resultant small percentage increase over the previous valuation.  Although questioned at some length in connection with the relativity between the valuation of the subject lands and the valuations of a number of neighbouring and district properties, Mr Richardson was reluctant to commit himself to an opinion, primarily because he was not prepared to presume that the other valuations referred to were correct.  As far as it might be relevant to the relativity between the valuation applied to the adjoining property "Erne", of 23,331 ha at $6.75 per ha and the $7 per ha applied to the subject property, Mr Richardson found it difficult to make any meaningful comparison due to the differing classifications of country on the two properties.  It is observed that the carrying capacity potential of "Erne" had been assessed by the chief executive as being 1 beast to 24 ha, as opposed to the 1 beast to 19 ha estimate for the subject property.

Mr Richardson raised the flooding of the access road as a matter which had been found not only extremely inconvenient but potentially dangerous.  The particular crossing was recognised by the Council, he said, as a district "black-spot".

Mr Richardson was also concerned with the susceptibility of part of the property to infestation from an adjoining property, with the plant "Mother of Millions", considered by the Department of Natural Resources to be a pest and by the Blackall Shire Council to be a noxious plant.

The evidence given by Mr Jones leaves me in no doubt that he had made himself aware of the various disabilities raised by Mr Richardson as well as the valuation history of the subject property including the result of the previous Land Court hearing.  That decision was made on the evidence before the Court at that time.  Although the decision was not delivered until 30 November 1995, it related to the valuation as at 31 March 1992.  It is understandable that the appellants are concerned with the significant increase in valuation as applied by the chief executive at the relevant date.  Nevertheless, it is not the previous valuation of the property with which this Court must concern itself, but whether the valuation now appealed against is correct.

Much of the sales evidence is of properties with areas much smaller than the subject aggregation.  Of the sale properties, those with the more comparable country to the subject would not have sufficient area, it seems to be agreed, to be regarded as capable of accommodating economically viable independent grazing operations.  There is however clearly a market for such properties either as additional areas to existing holdings or as "starter blocks" which require supplementary off-farm income.  It would seem logical that the market would discount the level of value shown by sales of such small holdings to reflect the significantly greater capital required to purchase the larger aggregated holdings such as the subject.

Criticism of the methodology of apportionment of values to the various classifications of country which may constitute a particular property would be well founded, if adopted as a primary valuation approach.  However, it seems to me, that when classification of country is used to check the overall estimate of productive capacity and market value, then it is a useful valuation tool to support the primary "direct comparison" approach.  In this particular case the check classification methodology of Mr Jones indicated that the levels of value applied to the individual classes of country are discounted in comparison with the levels of value shown by the sales of the small properties and the relevant date valuations applied to those properties.  It is accepted that the primary "direct comparison" approach reflects both a conservative application of value as compared with the sales evidence and recognition of the exposed disabilities of the subject property.

Mr Jones' evidence, both written and oral, demonstrated that consideration has been given to the question of relativity between the valuations of the subject property and adjoining or nearby properties.  If there is any doubt as to equitable relativity of valuation, it is not caused by the subject valuation being too high.

Mr Jones had been aware of the appellants' complaint relevant to an unsatisfied application for a clearing permit on the leasehold "Cutzies" block.  Mr Jones pointed out that the aggregation was freehold except for "Cutzies" and no development restrictions applied to the freehold land.  The position as documented by Mr Jones was that an application for a tree clearing permit for part of "Cutzies" had been made on 17 November 1994.  Mr Richardson had been formally advised by the Department of Lands (as it then was) by letter dated 30 November 1994 that "the sketch provided with your Tree Management Plan is not detailed enough to enable your application to be considered, and is returned for amendment".  The correspondence contained advice as to the nature of information required together with an invitation to make contact if there were further queries.

Mr Richardson's evidence was that he had at some later time in 1995 been verbally advised that he had "missed the boat".  It seems that verbal advice had been an interpretation of  evolving clearing guidelines for leasehold land as they had been understood at the time, but which were later to become less restrictive, at least in the Desert Uplands.  Correspondence was tendered by the chief executive indicating that a preliminary Tree Clearing Policy had been approved by Cabinet on 18 December 1995.  That preliminary policy included "Clearing Standards for Vegetation Types" including those types found in the Desert Uplands within which region the "Cutzies" block was located. 

Regardless of that, Mr Jones' evidence was that the value "apportioned as a check to the silverleaf ironbark desert country reflects no development potential although it would appear it is quickly becoming the district standard to clear it".  In effect, it was Mr Jones' opinion that any problems which had been experienced by the appellants in obtaining a tree clearing permit had no relevance to the level of valuation which was inherently applied to the class of country for which a clearing permit had been sought. 

In conclusion it can be said without doubt that Mr Richardson is an owner with a long, close association and affinity with land in this locality.  He has gained an expert knowledge of its development and productive potential.  However, for his opinion as to the unimproved value of the land to be accepted, there would be the need for evidentiary support from the marketplace itself.  In this matter I am satisfied that the market evidence, for the reasons given, supports instead the professional valuation opinion of Mr Jones.

The appeal is therefore dismissed and the chief executive's unimproved valuation of the land as at 1 January 1996 affirmed.

RE WENCK
  MEMBER OF THE LAND COURT