Stewart v Department of Natural Resources and Water

[2010] QLC 58

LAND COURT OF QUEENSLAND

CITATION:

Stewart v Department of Natural Resources and Water [2010] QLC 0058

PARTIES:

Diana Pearl Stewart
(appellant)

v.

Chief Executive, Department of Natural Resources and Water
(respondent)

FILE NOS:

AV2008/0834
RV2008/0835

DIVISION:

Land Court of Queensland

PROCEEDING:

Appeals against annual valuations under Valuation of Land Act 1944

DELIVERED ON:

31 March 2010

DELIVERED AT:

Brisbane

HEARD AT:

Mareeba and Atherton

MEMBER:

Mr PA Smith

ORDERS:

1.    Appeal AV2008/0834 is dismissed.

2.    Appeal RV2008/0835 is allowed, and the valuation of the subject land as at 1 October 2007 is determined in the sum of One Hundred and Fifty Seven Thousand and Five Hundred Dollars ($157,500).

Valuation – Factors in valuation –presumption in favour of correctness of valuation –  Valuation of Land Act 1944 - Vegetation Management Act 1999

APPEARANCES:

Mr A Stewart for his wife, the appellant
Mr G Smith, Principal Lawyer, Department of Environment and Resource Management, for the respondent

Background:

1. This decision relates to two appeals by the appellant Mrs Stewart against valuations by the respondent, pursuant to the Valuation of Land Act 1944 (the VLA) which valued the appellant’s property situated at Peninsula Development Road, Biboohra (“the subject land”) in the sum of $162,500 for both rating and state land rental purposes as at 1 October 2007. Prior to the hearing, the respondent, pursuant to s.68 of the VLA, amended the valuation for rating purposes to $157,500. At the hearing, the respondent lead evidence on the valuation for state land rental purposes to the sum of $157,500. The appellant contends for valuations of $115,000 for both appeals.

The Subject Land

1. The subject land has telephone, overhead power and refuse collection available to it. The area of the land is 83.00 hectares. The property is located about 4 kilometres North-north-west of the village of Biboohra, and 13 kilometres North-north-west of Mareeba.

2. The property is a triangular shaped rural parcel. It is of near level gradient, and during the wet season the bulk of the property becomes quite waterlogged. The land is zoned “Rural” under the former Mareeba Shire Town Plan. The land is used for the grazing of cattle, has been valued as a primary production property.

3. Approximately 17 hectares of the property has been classified as remnant vegetation under the Vegetation Management Act 1999 (“the VMA”). The remainder of the land is classified as ‘marginal arable (dry potential)’[1] the second lowest classification of land types available.

   [1]     See Ex 7, p.5.7.

4. The Real Property Description of the property is Lot 299 on Plan NR7718, Parish of Formartine, County of Nares.

5. As detailed in the evidence,[2] the subject is contained within the Mareeba-Dimbulah Water Supply Scheme (the “MDWSS”), and is contained within the Barron Water Resource Plan (the “WRP”), and the Barron Resource Operations Plan (the “Barron ROP”). The Barron ROP has been finalised following a period of consultation and review that began with the release of the draft ROP in August 2004. The finalised plan implements objectives and outcomes specified in the Water Resource (Barron) Plan 2002.

   [2]     See Ex 7, p.5.1.

6. The relationship between the two plans is set out in the Water Act 2000. The Barron ROP contains arrangements for converting existing water authorisations in the MDWSS to tradeable water allocations; operation of infrastructure and management of water use; and trading of water allocations, and water and ecosystem monitoring.

7. Following the decision of the Court of Appeal in The Chief Executive, Department of Lands v RJ & BH Webster[3] the effect of the Water Resource (Barron) Plan 2002 on statutory valuations is that water no longer attaches to the land, as water is a separate tradeable entity. Water allocations are assets that are separate from land. They have their own title and can be traded as personal property.

   [3] (1994-95) 15 QLCR 394.

The Hearing

1. The appellant was represented by her husband, Mr A Stewart, who also gave evidence at the hearing. Mr Stewart has no legal or valuation qualifications. The respondent was represented by Mr G Smith, a Principal Lawyer employed by the respondent, and relied on evidence of a registered valuer, Mr I Quirk-Anderson.

2. The court had the advantage of viewing the subject property in both the dry and wet seasons.

Relevant legislative provisions

1. Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land.

2. Section 3(1) of the VLA says as follows:

   “3.(1) For the purposes of this Act –
   ‘unimproved value’ of land means –

   (a)     in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and

   (b)     in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.”

1. I note that the subject land in both appeals is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land.

2. As then President Trickett said in Fairfax v Department of Natural Resources and Mines [2005] QLC 0011 at paragraphs 11 and 12:

   “The principles for determination of the 'market value' of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441).

   It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:

   'Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales."”

I respectfully agree with these observations.

Presumption of correctness of valuation

1. I now turn to section 33 of the VLA, which states as follows:

   33      Status of valuation

   Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.

2. This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation at page 56:

   “In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13(7) is rebutted.”

It should be noted that s. 33 of the VLA is in essentially the same terms as what was then s. 13(7) of the Act.

The issues in the Subject Appeal

1. The appellant’s grounds of appeal are as follows:

   (1)The valuation has been based on sale prices and valuations of properties that are not similar to L 299 NR 7718 and therefore should not be used as a comparison for valuation purposes.

   (2)The valuation is excessive and is not fair and equitable when compared to other properties identified as similar properties.

   (3)The valuation has been based on sale prices of other properties that are excessive and do not reflect the true market value.

   (4)The valuation calculation has not incorporated sufficient allowance for;

   (a)limitation of land use due to soil type and potential salinity and,

   (b)limitation of land use due to location of property in relation to access to irrigation water.

The evidence

1. Leaving to one side his evidence in so far as it related to valuation principles and methodology, I accept Mr Stewart’s evidence with respect to each of the disabilities referred to in the grounds of appeal for both properties. However, that said, I also accept that the appellant’s objections have been properly taken into account by Mr Quirk-Anderson in both his oral evidence and his report.

2. It is the role of this Court to determine appeals such as these strictly on the basis of the VLA and decided precedents. A direct comparison approach has been adopted by the respondent’s valuer to determine the unimproved value of both properties. As is so often the case in matters such as this, the issues basically all come down to market evidence. This is reflected in the sales evidence set out in Mr Quirk-Anderson’s report, summarised as follows:

   The Subject sales

Sales	Area Ha	Date of Sale	Sale Price	Analysed Unimproved Value	Comparison
1 Beh Road, PADDYS GREEN	46.22	30/03/2007	$360,500	$203,603 ($4,405/ha)	Sale is superior to the subject.  29.6ha of the sale has been analysed as fair quality arable soil @ $4,633/ha
2 Kennedy Highway, MILLSTREAM	182.4	17/05/2007	$320,000	$283,531 ($1,554/ha)	Sale is superior to the subject.  45.0ha of the sale has been analysed as good forest grazing @ $2,150/ha
3 Weatherby Road, MOUNT MOLLOY	161.3	07/11/2007	$1,700,000	$987,976 ($6,125/ha)	Sale is superior to the subject.  70.0ha of the sale has been analysed as easy to moderate forest grazing @ $5,783/ha
4 Mossman-Mount Molloy Road, JULATTEN	152.9367	29/11/2007	$1,650,000	$856,816 ($5,602/ha)	Sale is superior to the subject.  26.63ha of the sale has been analysed as steep scrub grazing @ $2,669/ha
5 Peninsula Development Road, BIBOOHRA	95.92	30/07/2008	$1,750,000	$566,376 ($5,905/ha)	Sale is superior to the subject.  56.68ha of the sale has been analysed as marginal arable soil @ $4,857/ha

1. I accept the valuation evidence of Mr Quirk-Anderson, and note that his unimproved value of the subject property is $1,900 per hectare, made up of 66 ha marginal arable (dry potential) @ $2,850 per hectare, and 17 ha non-arable balance dry land (dry potential), subject to the VMA, @ $570 per hectare. Whilst some points made by the appellant are well argued and reasoned, I am satisfied that Mr Quirk-Anderson is very well acquainted with the subject property and has taken all relevant points referred to in the appeals into account. On the basis of the evidence in its entirety, Mr Stewart has not produced evidence sufficient to disturb the presumption of correctness.[4]  Whichever way the sales are considered, and even putting to one side sale 5 as being a late sale, the valuation methodology adopted by Mr Quirk-Anderson supports the unimproved values contended for.

   [4]     See paragraphs 17 and 18 above.

2. Having considered all of the evidence before me, and applying the relevant authorities, I am not satisfied that the valuation of $157,500 for AV2008/0834 involves a significant error of fact or was arrived at by a fundamentally flawed method.   

Conclusion

1. As set out above, I have reached the conclusion that the appellant has failed to establish that the respondent’s assessment of the unimproved value for AV2008/0834 should be reduced to $115,000 or in any amount at all. It follows that that appeal must be dismissed. As regards RV2008/0835, the respondent has contended at the hearing for a value below that as originally assessed. Accordingly, for RV2008/0835, the appeal is allowed, and the valuation for the subject land as at 1 October 2007 is determined in the sum of One Hundred and Fifty Seven Thousand and Five Hundred Dollars ($157,500).

Order

1.   Appeal AV2008/0834 is dismissed.

2.   Appeal RV2008/0835 is allowed, and the valuation of the subject land as at 1 October 2007 is determined in the sum of One Hundred and Fifty Seven Thousand and Five Hundred Dollars ($157,500).

PA SMITH

MEMBER OF THE LAND COURT