Russell v Department of Natural Resources, Mines and Water
[2010] QLC 92
•30 June 2010
LAND COURT OF QUEENSLAND
CITATION: Russell & Ors v Department of Natural Resources, Mines and Water [2010] QLC 0092 PARTIES: Jack K, Patricia M and Lindsay P Russell
(applicants)v. Chief Executive, Department of Natural Resources, Mines and Water
(respondent)FILE NO: VLA226-06 (formerly RV2006/0226) DIVISION: General Division PROCEEDING: Land Court of Queensland DELIVERED ON: 30 June 2010 DELIVERED AT: Brisbane HEARD AT: Blackall PRESIDENT: Mrs CAC MacDonald ORDER: 1. The appeal is allowed.
2. The unimproved value of Ennis Downs, being Lot 5 on TB 260, Grazing Homestead Perpetual Lease 3/5823A in the Parish of Bexhill is determined at Eight Hundred and Eighty-nine Thousand Dollars ($889,000) as at 1 October 2005.
CATCHWORDS: Unimproved value – grazing property in Tambo Shire – determination of test case – sale used in test case – comparison with Land Court determination – relativity – Valuation of Land Act APPEARANCES: Mr A Boyd, Agent, for the appellants
Mr W Isdale of Crown Law for the respondent
This appeal has been lodged by the appellants Jack K, Patricia M and Lindsay P Russell against a determination of the Chief Executive, Department of Natural Resources and Water under the provisions of the Valuation of Land Act 1944 (the Act), of the unimproved value of the appellants’ property, Ennis Downs, for rental purposes. The unimproved value of Ennis Downs as at 1 October 2005 was issued by the respondent at $1,000,000.
At the hearing of the matter the respondent led evidence to a value of $889,000 ($196/ha). In their Notice of Appeal, the appellants estimated the unimproved value to be $540,000 but led evidence to a value of $174/ha or $790,000 (rounded).
The subject property forms part of an aggregation, Mount Macquarie/Ennis Downs. The aggregation has an area of 12,114.253 ha; the Mount Macquarie component is 7,578.1433 ha and the subject property 4,536.11 ha.
In addition to the subject appeal, the appellants filed appeals against the determinations of the unimproved value of the aggregation and Mount Macquarie as at 1 October 2005. Following a hearing of the appeal in respect of the aggregation, the parties negotiated a settlement and the appeal was determined by consent at $146.11/ha. It appears that the appellants withdrew their appeal against the valuation of Mount Macquarie after it was revised to $117.50/ha. The remaining matter to be dealt with is the valuation of Ennis Downs, the subject of this appeal.
At the hearing of the appeal, Mr Lindsay Russell, who is one of the appellants, gave evidence on behalf of the appellants. Mr PJ Haydon, a registered valuer, employed by the Department of Environment and Resource Management, gave evidence on behalf of the respondent.
Mr Haydon described the subject as situated in the Tambo Shire about 46 kms north-west of Tambo and 56 kms south-east of Blackall. Access is via the bitumen sealed Landsborough Highway other than three kilometres which is formed earth. Access is considered to be above average for the district being mainly all bitumen.
Mr Haydon described the subject country as comprising -
2,021.11 ha (44.5%) brown soil undulating open Mitchell grass downs with buffel grass intrusion.
990 ha (22%) black soil downs – flats outside watercourse. Mainly Mitchell grass.
1,100 ha (24%) developed gidyea scrub with minor brigalow influence. Well established buffel. Some parts require re-pulling due to gidyea and sandalwood regrowth.
25 ha (.5%) remnant scrub.
400 ha (9%) channels and claypans.The appellants relied on a map prepared by another departmental valuer, Mr Mullins, to describe the subject country as -
2,986 ha (66%) downs
1,125 ha (25%) gidyea
425 ha (9%) channels
Although there is no difference between the parties as to the area of downs on the subject, Mr Russell disagreed with Mr Haydon’s description that 44.5% of the subject was brown soil undulating open Mitchell grass downs and 22% black soil downs. In Mr Russell’s opinion, which he sought to support by photographs tendered at the hearing, 75% of the downs were inferior, made up of myall downs, gidyea and stoney downs. 25% of the downs were higher quality but still not in the class of the other downs country in the district. The difference between the parties in their descriptions of the downs country is discussed further below.
The parties have agreed on the carrying capacity of the subject land at 1 sheep to 1.35 ha.
Mr Haydon relied on the following evidence to support his valuation of the subject property -
·The test case determination of Ravensbourne where the unimproved value as at 1 October 2005 was determined at $200/ha. The property has a carrying capacity of 1:1.4 ha and a sheep area value of $280.
·The sale of Minnie Downs. Mr Haydon said that the sale showed $185/ha. The property has a carrying capacity of 1:1.5 ha and a sheep area value of $277.
·A Land Court determination of the unimproved value of Wyanga as at 1 October 2005.[1] The unimproved value of Wyanga was determined at $196/ha. The property has a carrying capacity of 1:1.35 ha and a sheep area value of $265.
[1] Sanderson v Department of natural Resources and Water [2008] QLC 0121.
In Mr Haydon’s opinion the most appropriate comparison for the purpose of valuing the subject property was the determination of the rental value of Wyanga. As well as adjoining one another, Wyanga and Ennis Downs have a similar run of country and break-up of property, he said. He had inspected both parcels and confirmed the similarity of the country on each. Both parcels are similarly watered, have similar access and location and a comparable carrying capacity.
The appellants challenged the subject’s unimproved valuation on a number of grounds. One was the relativity between the aggregation, Mount Macquarie/Ennis Downs, the subject and the other component Mount Macquarie. The appellants appear to have taken the view that the value of the two component parts of the aggregation should equal the value of the total aggregation. On that basis, the appellants submitted, the value of Mount Macquarie at $117.50/ha was too low and accordingly, the valuation placed on Ennis Downs was too high. The appellants relied for this reasoning on a statement made by the Land Court in the matter of Fawckner v Department of Natural Resources and Water[2] where the Court was dealing with an aggregation, Bonnie Downs, which was made up of two component properties. Having determined the unimproved value of the aggregation, the Court stated[3]
“As the two present appeals against the rental valuations are simply smaller components of the Bonnie Downs aggregation, the evidence was concerned largely with how each component related to the determined valuation of the property as a whole”.
[2] [2008] QLC 0107.
[3] At [4].
The appellants referred to the Land Court determination[4] of the 2005 unimproved value of a property called Gillespie at $129.40/ha to demonstrate that the valuation of Mount Macquarie at $117.50/ha was too low. In 2001, the appellants said, the Department had valued Gillespie at $45.24/ha and Mount Macquarie at $44.87/ha - virtually the same levels. If Gillespie and Mount Macquarie were valued at the same amount, $129.40/ha, for the 2005 valuation, the valuation of Ennis Downs would become $788,360 or $173.84/ha which was almost identical with the appellants’ estimate of value of $174/ha.
[4] Walker v Department of Natural Resources and Water [2008] QLC 0082.
In my opinion, the appellants have misunderstood the statement of the Land Court in Fawckner. The Court was not suggesting that the value of each component of an aggregation must add up to the value of the aggregation as a whole. Rather the Court was simply stating that the issue to be determined in that case was the proper relationship between the parts of the aggregation and the aggregation as a whole.
I do not accept that the value of the two component parts of the Mount Macquarie/Ennis Downs aggregation should equal the total value of the aggregation. The Valuation of Land Act requires each property to be valued separately and it is not uncommon that the total value of the smaller parts of an aggregation is higher than the value of the aggregation as a whole. Further, while it appears that the relativity between Mount Macquarie and Gillespie has been altered in the 2005 valuation, the value of neither of those properties is the subject of this appeal and s.33 of the Act has the effect that those valuations are deemed to be correct until proved otherwise. Moreover, it is not appropriate that I should make any comment on the change in relativity as there is no evidence as to any reasons for the change.
The appellants also submitted that the valuation of the subject property was too high because it was out of relativity with a number of other properties in the district – Uanda, Tarves, Evora, Mascot and Alice Downs. Briefly, the appellants compared the various properties with the subject property as follows -
· Uanda is superior to the subject as it comprises 100 % first class downs country, has no gidyea, no channels, is close to town and has bitumen road access. Uanda is valued at $239.50/ha which reflects a sheep area value of $287.40 with a carrying capacity of 1:1.2 ha.
· Tarves is a well shaded mixed Mitchell grass downs block with good gidyea and boree shade and areas of red bloodwood buffel grass downs. Tarves has been valued at $217.65/ha. It has a sheep area value of $261.18 with a carrying capacity of 1:1.2 ha.
· Evora has 80% downs, 16% scrub and 5% desert country. The downs country is far superior to the downs country on Ennis Downs. The value of Evora was determined by consent by the Land Court at $190/ha. The carrying capacity of Evora is 1:1.3 ha which reflects a sheep area value of $247.
· Mascot has 92% downs which are superior to the downs on Ennis Downs. Mascot is situated on the main highway with bitumen road access, it has no myall, stone or claypan country in its downs content. The Land Court determined the value of Mascot at $205/ha. The carrying capacity of Mascot is 1:1.3 ha which gives a sheep area value of $266.50/ha.
· Alice Downs is all first class downs with the exception of a small red knoll.
The appellants’s comparisons between these properties and the subject were made on the basis that the respondent’s valuation was $210/ha for the subject which, the respondent said, gave a sheep area of $283.50. As indicated above, the respondent led evidence at the hearing to a value of $196/ha or a sheep area value of $265. The appellants said that the revised value still showed a lack of relativity between the subject valuation and the values of the properties set out above.
Mr Russell did not consider that the sheep area value of $265 was correct. Alice Downs and Evora were much superior to the subject because the downs country in that area is the best in the shire.
Mr Boyd put it to Mr Haydon that the sheep area value on Ennis Downs was higher than that of Evora which has 80% downs and Mascot with 92% downs. On that basis, the value of Ennis Downs was too high. Mr Haydon’s response was that although he had used the sale of Minnie Downs as the basis for the valuation of Evora and the subject, there were differences between Evora and the subject. They are situated in different localities. Evora is 12,260 ha, whereas the subject is approximately 4,500 ha.
The subject is on the bitumen, Evora is not. While they might be in the same marketplace, he preferred to use a comparison that was closer to hand. He also pointed out that Evora and Mascot were not Court determinations but had been decided by consent and he preferred to base his assessment on the determination in Wyanga.
With the exception of Uanda, all of these comparison properties are at a considerable distance from the subject land namely some 70 to 80 kms. For the purpose of establishing the unimproved value of a property under this Act, it is desirable that comparisons should be made between properties that are as similar as possible to one another in terms of location, country description, attributes, size etc. On the face of it, therefore, I consider that the respondent’s selection of Wyanga as the primary basis for the valuation provides better support for the value of the subject land than the comparison properties selected by the appellants.
However, the appellants submitted that Wyanga was an inappropriate comparison for a number of reasons. Firstly, the appellants said, Wyanga had been valued at a higher rate per hectare than Ennis Downs in 2001. In other words, the respondent had altered the relativity between the subject and Wyanga in the 2005 valuation.
It appears that the relativity between Wyanga and Ennis Downs has been altered in the subject valuation. Mr Haydon said that the relativity of a larger number of properties had changed with the 2005 valuation because a number of inaccuracies in relativity flowing from the 2001 objection process had been corrected and also because, in the 2005 valuation, the impact of the Vegetation Management Act had been taken into account. It is noted from the Land Court decision in Wyanga[5] that there is 386 ha (6%) of remnant scrub on that property compared with 25 ha (.5%) on the subject. Although Mr Haydon did not expressly say so, this may be one reason for the change in relativity. In any event, such a change does not of itself establish that there is an error in the subject valuation.
[5] [2008] QLC 0121 at [5].
The appellants also said that the land description of Wyanga had altered as had the department’s carrying capacity for Wyanga. The carrying capacity was initially 1:1.2. It appears that at the hearing of the Wyanga matter the respondent led evidence to 1:1.3 ha and then it was conceded by the valuer for the respondent that the carrying capacity should be extended to 1:1.35 ha.
Mr Haydon acknowledged that prior to the hearing of the appeal in Wyanga, the carrying capacity on Wyanga was 1:1.3 ha. However the owner gave evidence of an area of light sandstone ridge country in the scrub area. When Mr Haydon became aware of that, he extended the carrying capacity of Wyanga overall from 1:1.3 ha to 1:1.35 ha. Further because the area of 386 ha of remnant scrub on Wyanga has been affected by the Vegetation Management legislation in that it no longer can be developed, Mr Haydon said that he would expect the carrying capacity to go up from 1:1.3 ha.
I have accepted Mr Haydon’s reasons for the changes in the carrying capacity of Wyanga and consider that these changes would also provide some explanation for the alteration in relativity between the subject and Wyanga. Further I do not consider that the appellants have established that any change in the description of Wyanga has any significance as to the matters in issue in this appeal.
The appellants also said that the comparison between the subject and Wyanga failed to take into account the fact that there is a waterworks licence attached to Wyanga and there was no such licence on the subject.
There is no direct evidence as to whether the waterworks licence attached to Wyanga has added value to that property. However in the Land Court decision concerning Wyanga[6] it appears that, although both the owner of the property and Mr Haydon considered that the licence was a positive attribute to the property, it did not provide a reliable water supply. Mr Haydon did not believe that a prudent purchaser would pay a premium for it having regard to its reliability. Therefore no loading was made in the valuation for the existence of the waterworks licence.[7] That being the case, it is not necessary to make any adjustment for the waterworks licence in the comparative assessments of Wyanga and the subject.
[6] Sanderson v Department of Natural Resources and Water [2008] QLC 0121.
[7] At [12] and [13].
Mr Russell considered that the comparison with Wyanga was not appropriate. He was not very familiar with Wyanga although he had been to the house and picked up cattle there. He said that Wyanga and Ennis Downs do not adjoin in the sense that they are side by side but share a common corner post with two other properties. He disagreed with Mr Haydon’s opinion that the subject and Wyanga have a similar run of country. Wyanga has 42% scrub whereas the subject has 24% scrub; Wyanga has 46% downs whereas Ennis Downs has 66.5%. Mr Haydon had estimated the carrying capacity of the downs country on Wyanga at 1:1.3 ha, and the scrub country at 1:1.2 ha which it seems was extended out to 1:1.25 ha.
Although this evidence shows that the scrub country of Wyanga has a superior carrying capacity to the downs country, Mr Haydon said that the costs of developing scrub country must be taken into account when determining unimproved value under the Act. If the scrub and downs country were valued equally in the market place, the unimproved value of the scrub country would be lower than the downs country because the costs of development would be deducted from the sale price to reach the unimproved value. Similarly the running costs of scrub country would be higher.
My conclusion in relation to this issue is that there has been no evidence to persuade me that the differences in the proportion of scrub and downs country are such that Wyanga cannot be used as a comparison for the valuation of the subject. Further, I do not consider that the evidence has established that the valuation of the subject should be altered to take account of those differences.
There was some disagreement between Mr Haydon and Mr Russell as to the extent of stone and myall on Ennis Downs and consequently as to the quality of the downs country. Since Mr Russell is obviously very familiar with his property, I have accepted his evidence that 75% of the downs on the subject is inferior downs country as compared with Uanda, Evora and Mascot. However Mr Russell has agreed that the carrying capacity on the subject property is the same as that on Wyanga, at 1:1.35 ha. That being the case I can see no reason to alter the sheep area value of $265 adopted by Mr Haydon for the subject. Therefore the valuation of Ennis Downs is determined at $196/ha or $889,000.
ORDERS
1.The appeal is allowed.
2.The unimproved value of Ennis Downs, being Lot 5 on TB 260, Grazing Homestead Perpetual Lease 3/5823A in the Parish of Bexhill is determined at Eight Hundred and Eighty-nine Thousand Dollars ($889,000) as at 1 October 2005.
CAC MacDONALD
PRESIDENT OF THE LAND COURT
0
0
0