Rusk v Chief Executive, Department of Natural Resources
[1997] QLC 87
•6 June 1997
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BRISBANE
6 JUNE 1997
Re: Appeal against valuation -
Valuation of Land Act 1944 -
Shire of Beaudesert (V96-002)
Robert F Rusk and Maureen F Rusk
v.
Chief Executive, Department of Natural Resources
(Hearing at Beaudesert)
D E C I S I O N
Mr and Mrs Rusk are the owners of land described as Lot 12 on Registered Plan 78372, Parish of Wetherin, County of Ward, containing an area of 25.657 ha. As at 1 January 1995 under the provisions of the Valuation of Land Act 1944 (“the Act”), the Chief Executive determined the unimproved value of that land at $130,000. The owners lodged an objection against that valuation and by notification dated 8 December 1995, they were advised that their objection was disallowed. The owners then appealed to the Land Court against the respondent’s decision upon their objection, advising that their estimate of the unimproved value is $50,000.
It emerged in evidence that at the time of the 1995 valuation the land was valued together with Lot 19 on RP 50878 and Lot 11 on RP 50876, with areas of 2.087 ha and 21.112 ha respectively, which were then also held by Mr and Mrs Rusk. The aggregation of approximately 50 ha, was valued by the respondent at $73,000. However, on 14 September 1995, Mr and Mrs Rusk sold Lots 19 and 11 to a Mr Gary Ash for $280,000.
Under the provisions of the Act, the Chief Executive was then required to make interim or split valuations for the two parcels transferred to Mr Ash and a separate valuation for the subject land retained by Mr and Mrs Rusk. Those valuations issued at $140,000 and $130,000 respectively.
Understandably, Mr and Mrs Rusk questioned why the unimproved value of the subject land was determined at $130,000, when the valuation for the aggregation, approximately twice the size, had been valued at $73,000.
At the hearing of the appeal Mr RF Rusk appeared and gave evidence on behalf of the appellants. The respondent was represented by Senior Valuer Mr R Cullen, while valuation evidence for the respondent was given by Mr WJ Crothers, a registered valuer employed by the Department of Natural Resources.
Mr Crothers’ report indicates that the subject land is situated on Illinbah Road, about 15 km from Canungra. Illinbah Road is a narrow bitumen strip roadway providing all-weather access, although local flooding can cause minor delays. Usual rural services including electricity, telephone and mail services, are available to the property. The land is zoned “Rural” under the Town Planning Scheme for the Shire of Beaudesert.
Mr Crothers described the subject land as comprising narrow creek flats rising through moderate scrub slopes (parts steeper) with some easy tops, rising again to steep slopes and escarpment. Mr Rusk did not disagree with that description, although he said that the slopes were steep rather than moderate. He added that an area of some 12 to 15 acres situated at the north-eastern end of the property was inaccessible. He also stated that the land is subject to slip areas, three of them totalling approximately 23 acres.
Mr Rusk said that the owners had wanted to sell the whole aggregation in 1995, but that Mr Ash could afford to purchase Lots 19 and 11 only. Since then they have endeavoured to sell the subject land through agents, Canungra Real Estate, for $125,000. However, they have received no offers. He made the point that the land was for sale as is, cleared and fenced for $125,000, while the respondent had determined the unimproved value at $130,000.
Mr Rusk based his case principally on the relativity of unimproved values applied to other lands in the immediate vicinity. He referred to five properties whose unimproved values were considerably less per ha than those applied to the subject land. Mr Crothers was able to confirm that each of those properties was valued under the concessional provisions of s.17 of the Act, as land used for purposes of “farming”. Mr Rusk challenged those valuations, but Mr Crothers had not inspected those lands and could only give the details contained in Departmental records. Whether those properties were correctly valued remained unresolved.
Mr Crothers was not the valuer who made the valuation on behalf of the respondent. He had taken over the responsibility for defending it when the original valuer was transferred. From researches that he had undertaken, Mr Crothers was able to say that when the subject land was valued with Lots 19 and 11 at $73,000, as at 1 January 1995, the aggregation had been valued under the concessional provisions of s.17 of the Act as land used for “purposes of farming”. Departmental records indicated that when the aggregation was inspected on 28 April 1993, it was running 35 cows, 3 calves and 1 bull. Fourteen calves had been sold that year. After the sale of Lots 19 and 11, the property was again inspected on 13 March 1996, no stock were observed and the yards showed little sign of use.
Mr Crothers inspected the property in company with another valuer on 15 April 1997, when he observed 5 cows and 3 horses. When he again inspected the land on 21 April l997 no stock were observed, only 1 horse in the yard.
Mr Crothers gave his opinion that the subject land would carry approximately 1 beast to 1 ha, or approximately 26 head. He had spoken to the previous valuer who gave the opinion that the land could run more yearlings for a short period of time, but not all year round. In Mr Crothers’ opinion the subject land did not qualify for the s.17 concession. He was therefore of the opinion that it was correctly valued at its highest and best use as a rural residential site at $130,000.
In support of that valuation, Mr Crothers referred to three sales situated somewhat to the north of the subject land. His Sale No. 1 of 22.28 ha, is situated in Little Flying Fox Road and sold in October 1994 for $145,000. That sale was analysed to show an unimproved value of $130,000 and, although it had been amalgamated with other land since sale, Mr Crothers was of the opinion that as a rural residential site it should be valued at $130,000. Mr Crothers considered that land to be comparable to the subject land in size, location and country type, but inferior with regard to water and access. Overall, he considered it to be comparable to the subject land.
Mr Rusk did not know that sale property and was unable to comment, except to say that it was somewhat closer to Canungra than the subject land.
Mr Crothers’ Sales Nos. 2 and 3 are situated in Upper Coomera Road and have areas of 19.57 ha and 20 ha respectively. Those properties sold in October 1994 and June 1995 for $125,000 and $160,000 respectively. They analysed to show unimproved values of $120,500 (to which was applied $120,000) and $146,700 (to which $135,000 would be applied if it was valued as a site).
The land subject of Sale No. 3 had been purchased for the purposes of grazing and, apparently, has been valued as land used for the “purposes of farming” under s.17 of the Act. Having regard to the location, water and country types, Mr Crothers considered that Sale No. 2 was inferior to the subject land, while Sale No. 3 was slightly superior.
Mr Rusk did not know the details of those sales, but had driven past the properties on a number of occasions. He agreed that they were fairly similar to the subject land, although situated closer to Canungra.
Mr Rusk challenged Mr Crothers’ opinion that the subject land had a highest and best use as a rural residential site. He said because of the terrain and the landslips, one would have to be careful about siting a house on the land. Although he agreed that it would be possible to use it as a rural residential site, he said a concrete driveway would be necessary to access the house site, which would be expensive. The flat area was unsuitable as a site for a house because the whole area was subject to flooding. He agreed that the land had pleasant valley views.
The main issue in this case is whether or not the subject land should have been valued under the concessional provisions of s.17 of the Act. That section provides that where land is used for purposes of farming, any enhancement in that value because the land has a potential for some other use, must be disregarded when the valuation is made. “Farming” is defined to mean:
“(a)the business or industry of grazing, dairying, pig farming, poultry farming, viticulture, orcharding, apiculture, horticulture, aquiculture, vegetable growing, the growing of crops of any kind, forestry; or
(b)any other business or industry involving the cultivation of soils, the gathering in of crops or the rearing of livestock;
if the business or industry represents the dominant use of the land, and -
(c)has a significant and substantial commercial purpose or character; and
(d)is engaged in for the purpose of profit on a continuous or repetitive basis.”
From the evidence given by Mr Rusk, it appears that as at the relevant date, 1 January 1995, the aggregation of the subject land and Lots 11 and 19 would have carried between 60 and 70 head. It was the owners’ practice to sell between 20 to 30 calves per year at prices which averaged $130 to $180 per head. Mr Rusk thought that an average gross return would be approximately $6,000 per year. However, he admitted that it was not a profitable business. The running expenses meant that they were just about breaking even.
After the Rusks had sold Lots 19 and 11 to Mr Ash, the subject land was subject of an agistment agreement between the owners and Mr Ash, whereby it was agreed that Mr Ash could run cattle on the subject land at an agistment rate of $1 per head per week. Mr Rusk said that Mr Ash commenced with about 12 head of cattle. He thought that Mr Ash had a total of about 40 head at the date of hearing.
When questioned about Mr Ash’s business of cattle grazing, Mr Rusk said that Mr Ash was introducing a better variety of cattle, mainly Santa Gertrudis, but he did not think that he had sold any. It seems that the cattle are running on Lots 19 and 11 as well as on the subject land.
In Mr Crothers’ opinion, the subject land was not used for “purposes of farming” as it did not comply with the criteria in the definition in s.17. In particular, Mr Crothers did not consider that the business or industry conducted by Mr Ash had a significant and substantial commercial purpose or character or was engaged in for the purpose of profit on a continuous or repetitive basis.
There is no suggestion that the owners are themselves using the land for the purposes of “farming” as defined in s.17. However, in order to qualify for valuation under s.17, it is not necessary that the farming enterprise be conducted by the owners. (See Higbie v. Valuer-General, a judgment of the Land Appeal Court delivered 3 March 1995, not yet reported. If Mr Ash was using the land for “purposes of farming”, then the land should be valued under s.17.
However, there is no direct evidence of Mr Ash’s enterprise. Mr Rusk said that he commenced in a small way and has progressively built up cattle numbers to perhaps 40. He did not think Mr Ash had sold any cattle at that time. That is the totality of the evidence on that point. It is vague and inconclusive and does not satisfy me that the grazing enterprise conducted by Mr Ash complies with the criteria contained in the definition of “farming” in s.17. (For discussion of those criteria, see Thomason v. Chief Executive, Department of Lands and Whackett v. Chief Executive, Department of Lands, judgment of the Land Appeal Court delivered 3 March 1995 not yet reported).
Furthermore, having regard to the evidence of Mr Rusk that when the appellants ran a larger number of cattle on the aggregation, the enterprise was not a profitable business and was just about breaking even. There is simply no evidence that the activities conducted on the subject land would comply with the criteria contained in the definition in s.17. The land therefore must be valued at its highest and best use which, on the evidence, I find to be as a rural residential site.
The question remains as to whether the valuation applied by the Chief Executive of $130,000 is the correct rural residential value as at 1 January 1995. Mr Rusk was of the opinion that it is not, as he has had the property on the market since late 1995 for $125,000 and it has not attracted an offer. However, Mr Rusk has not produced any evidence of sales in the vicinity to support his case, nor has he produced any evidence as to how actively the property has been marketed by the real estate agents.
On the other hand, Mr Crothers has supported the valuation by referring to three comparable sales in the vicinity. That evidence was largely unchallenged and I accept it as evidence of the market for rural residential land at the relevant date.
In the circumstances, I have come to the conclusion that the appellants have not discharged the burden of proving that the valuation applied by the respondent was excessive. Therefore, the appeal must fail.
Accordingly, the appeal is dismissed and the unimproved value determined by the respondent is affirmed.
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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