Russell v Department of Natural Resources and Water

[2008] QLC 83

LAND COURT OF QUEENSLAND

CITATION:	Russell v Department of Natural Resources and Water [2008] QLC 0083
PARTIES:	Jack K, Patricia M and Lindsay P Russell (appellants)
v.
Chief Executive, Department of Natural Resources and Water (respondent)
FILE NO:	AV2006/0377
DIVISION:	Land Court of Queensland – General Division
PROCEEDING:	An appeal against an annual valuation
DELIVERED ON:	7 May 2008
DELIVERED AT:	Brisbane
HEARD AT:	Blackall
MEMBER:	Mr JJ Trickett, President
ORDER:	The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of "Duck Creek" as at 1 October 2005 is determined at Seven Hundred and Twenty Thousand Dollars ($720,000)
CATCHWORDS:	Unimproved value – grazing property at Blackall – comparison with determinations of test cases – sales relied upon in the test cases – classification of country - carrying capacity – sheep area values – disabilities - Valuation of Land Act 1944
APPEARANCES:	Mr A Boyd, agent, for the appellants Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent

1. This is an appeal by landowners in the Shire of Blackall against the unimproved value applied to their land by the Chief Executive, Department of Natural Resources and Water (the Department) under the provisions of the Valuation of Land Act 1944 (the Act).

Background

1. The Russells are the owners of a grazing property known as "Duck Creek", containing an area of 5,014.257 ha, situated about 50 km south-east of Blackall.  As at 1 October 2005, the respondent applied an unimproved value of $770,000, or $153.57/ha, to that property.  The owners appealed to the Land Court against that valuation, stating that their estimate of the unimproved value is $350,000. 

2. The appeal was lodged on their behalf by their agent, Mr A Boyd.  The grounds of appeal are wide-ranging but general in nature, essentially contending that the unimproved value is excessive because of the failure by the Department to take into account and make proper allowance for various matters, or to apply the correct principles of valuation. 

3. This case was tried by the fast-track process, following the determination of agreed test cases in the Shires of Blackall and Tambo.  The parties agreed that the remaining appeals be determined by confining the evidence to comparisons with the decisions in those cases and to the sales relied upon in arriving at those determinations.  However, evidence of the differences between individual properties was also heard. 

Mr Russell's Evidence

1. Evidence on behalf of the appellants was given by Mr Lindsay Russell, one of the owners.  In his written statement, Mr Russell made comparisons with the valuations applied to other properties owned by the Russell family and to neighbouring properties. 

2. Mr Russell classified the country on "Duck Creek" as follows:

   1,000 ha (20%) downs, part of which is lighter carrying;
   2,500 ha (50%) gidyea, of which 2,000 ha is developed, including 1,000 ha of regrowth and 500 ha virgin;
   800 ha (16%) channels, subject to flooding; and
   714 ha (14%) claypans.

   Mr Russell estimated the carrying capacity of "Duck Creek" as 1 sheep to 1.55 ha, prior to the restrictions imposed by the vegetation management legislation.

3. Taking into account the 500 ha of virgin scrub, together with heavy regrowth and the flooded areas, Mr Russell estimates the carrying capacity after the vegetation management legislation restrictions at between 1 sheep to 1.6 ha and 1 sheep to 1.7 ha. 

4. In Mr Russell's opinion, the soil types on "Duck Creek" comprise 25% black soil, 25% light clay, 20% claypan, 20% gidyea stone ridges and 10% channels.  He noted that the Department had classified the channels and claypans together in one category.  In his opinion, they should be classified separately, as the claypans have no carrying capacity and therefore no value. 

1. According to Mr Russell, there are three types of scrub on "Duck Creek"; good, fair and poor.  Only the good scrub (25%) would compare with that on "Ravensbourne" or "Eastwood", while the fair scrub (40%) was on lighter soil country, with buffel grass more scattered.  Photographs of the poor scrub (35%) show large bare areas with little grass.

2. Furthermore, the Department appeared to make no allowance for regrowth areas which, he contended, were out of hand on "Duck Creek", with expensive blade-ploughing the only possible solution.

Mr Haydon's Evidence

1. Evidence for the Department was given by registered valuer, Mr P Haydon, who explained that he had classified the country on "Duck Creek" by utilising the WARLUS land system mapping, regional eco-system mapping and satellite imagery.  The various areas had been measured using a computer based measuring system.

2. Mr Haydon classified the property as follows:

   620 ha (12%) downs, carrying capacity 1 sheep to 1.3 ha;
   2,260 ha (45%) scrub, developed carrying capacity 1 sheep to 1.3 ha;
   520 ha (10%) downs, carrying capacity 1 sheep to 1.6 ha;
   90 ha (2%) forest, carrying capacity 1 sheep to 1.6 ha; and
   1,524 ha (30%) channels, carrying capacity 1 sheep to 2 ha.

   Mr Haydon assessed the carrying capacity of "Duck Creek" at 1 sheep to 1.5 ha, or 3,342 sheep. 

3. Mr Haydon considered that the property had been fully developed and had measured the non-remnant (developed scrub) area from the regional eco-system mapping at 2,205 ha.  He conceded that the property suffered from access problems associated with the flooding of MacFarlane Creek. 

4. Mr Haydon agreed that some of the downs would have a lighter carrying capacity.  He conceded that Mr Russell would know the quality of the scrub from working the land, but he thought that the developed carrying capacity of 1 sheep to 1.3 ha was appropriate, compared with his carrying capacity of 1 sheep to 1.4 ha on the scrub on "Mt Macquarie" and "Romulus", which included hard scrub immediately adjoining the ranges.  There was no such range country on "Duck Creek".  Furthermore, Mr Haydon felt that there was no necessity to separate the channels and claypan areas as they had traditionally been classified together. 

The Issues

1. There was little disagreement about the area of downs country.  While Mr Russell had a somewhat larger area of gidyea country, they were reasonably close in their assessment of the area that had been developed.  However, they disagreed as to the quality of the developed scrub.  Mr Russell contended that only 25% of the scrub could be categorised as comparing with that on the "Eastwood" sale, which he assumed to be similar to the scrub on "Ennis Downs".  The balance of the scrub, he said, ranged from fair to poor, with a lighter response of buffel grass and considerable regrowth. 

2. Mr Russell took issue with the Department's inclusion of the claypan areas with the channels at 1 sheep to 2 ha.  He tendered photographs of claypan areas along MacFarlane Creek which also show clearly on the satellite map.  According to Mr Russell, these claypan areas grow only a little short-term grass and for nine months of the year have no coverage at all.  In Mr Russell's view, the claypan areas should be separated from the more productive channels.

3. Mr Russell estimates that there are 500 ha of virgin scrub on "Duck Creek" which can no longer be cleared because of the vegetation management legislation.  Mr Haydon does not deny that there are remnant areas, but he had included those as shade lines or shade clumps, for which no allowance had been made. 

Conclusion

1. I accept Mr Russell's evidence that the developed scrub is not all of the quality of the "Eastwood" scrub.  However, in my view, the weight of the evidence is that it is not of such poor quality as the hard scrub adjoining the mulga tableland ridges on properties such as "Mt Macquarie" and "Romulus".  I accept that there are large areas of claypans along MacFarlane Creek which have little productivity.  Mr Haydon explained that it was difficult to separate the claypan country from the channel country. While I acknowledge those difficulties, in my view, the less productive claypan areas should be taken into account. 

2. Furthermore, I accept Mr Russell's assessment of 500 ha of remnant scrub, which has not been taken into account by Mr Haydon.  However, in view of my ruling that shade lines and shade clumps should be included in the area of remnant scrub which is now unable to be developed because of the restrictions of the vegetation management legislation, the less productive carrying capacity of that area must be considered. 

3. Without making findings of the carrying capacities of those individual classifications, I am of the view that for purposes of comparison on the evidence in this case, Mr Haydon's carrying capacity should be extended to 1 sheep to 1.6 ha, or 3,134 sheep.  While I have no doubt that Mr Russell would be able to maintain a higher carrying capacity on the developed scrub country, he can do so only by very expensive blade-ploughing.  I have taken that into account in the sheep area value. 

4. "Duck Creek" is not far from the test case "Ravensbourne".  It is a little further removed from the other test case "Minnie Downs".  The two sales referred to in the determination of the unimproved value of "Ravensbourne" were "Eastwood", a largely developed scrub property and "Mineeda", a property consisting largely of downs country. 

5. The respective details of those properties are set out below:

   ·"Ravensbourne", 8,777 ha, determined by the Court at $200/ha, or $1,755,000. 

   Carrying capacity 1 sheep to 1.4  ha, or 6,269 sheep at a sheep area value of $280, $1,755,000.

   ·"Minnie Downs", 22,177 ha, determined by the Court at $185/ha, or $4,100,000. 

   Carrying capacity 1 sheep to 1.5 ha, or 14,785 sheep at a sheep area value of $277, $4,100,000.

·The sale property "Eastwood", 10,097 ha, applied value $178/ha, or $1,800,000. 

Carrying capacity 1 sheep to 1.3 ha, or 7,767 sheep at a sheep area value of $232, $1,800,000.

·The sale property "Mineeda", 13,057 ha, applied value $222.50/ha, or $2,900,000. 

Carrying capacity 1 sheep to 1.3 ha, or 10,044 sheep at a sheep area value of $289, $2,900,000.

1. Mr Haydon reasoned that "Duck Creek" was most comparable to the sale "Eastwood", because of the development costs associated with the large area of scrub.  He reasoned that "Eastwood" had a higher proportion of developed scrub country and is larger, while "Duck Creek" had a somewhat inferior carrying capacity and had access and flooding problems.  He adopted a sheep area value of $230, compared with the sheep area value for "Eastwood" of $232. 

2. According to Mr Russell, at the time of the previous valuation, "Mt Macquarie" had been valued at a slightly higher rate per ha than "Duck Creek".  However, in the 2005 valuation, the difference between the two had been extended, as "Mt Macquarie" was valued at $165.10/ha, while "Duck Creek" was valued at $153.50/ha. 

3. Mr Haydon conceded that the relativity of those values appeared to be a problem.  That seemed to imply that based on sheep area values, the valuation of "Mt Macquarie" was too high.  However, following the hearing of the "Mt Macquarie" case, the unimproved value was determined by consent at $1,770,000, or $146.11/ha.

4. I agree with Mr Haydon that the sale "Eastwood" is the best comparison with "Duck Creek".  Having regard to the varying proportions of country types, a sheep area value of $230 appears to be appropriate.  With the adjustment of carrying capacity to 1 sheep to 1.6 ha, that would equate to 3,134 sheep.  Adopting a sheep area value of $230, that amounts to an unimproved value of $720,820.  I propose to adopt an unimproved value of $720,000, or $143.60/ha.

Order

The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of "Duck Creek" as at 1 October 2005 is determined at Seven Hundred and Twenty Thousand Dollars ($720,000).

PRESIDENT OF THE LAND COURT