Toohey v Department of Natural Resources and Water
[2007] QLC 7
•21 February 2007
LAND COURT OF QUEENSLAND
CITATION: Toohey & Ors v Department of Natural Resources and Water [2007] QLC 0007 PARTIES: EE, LW, LJ and MS Toohey; EM Furber and MS, MJ, LW, LJ and EE Toohey
(appellants)v. Chief Executive, Department of Natural Resources and Water
(respondent)FILE NOS.: AV2005/0795, RV2005/0796, RV2005/0797, RV2005/0798, AV2005/0799; RV2005/0800, AV2005/0801. DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual valuations under the Valuation of Land Act 1944 DELIVERED ON: 21 February 2007 DELIVERED AT: Brisbane HEARD AT: Atherton MEMBER Mrs CAC MacDonald ORDER: 1. Appeal No. AV2005/0795 is dismissed. The unimproved value of $450,000 for the aggregation of Lot 20 on Plan CD4, Parish of Baroota, being GHPL 18/142; Lot 4662 on Plan PH 1513, Parishes of Ellendale and Tragoon, being Mt Alder PH 18/4662; Lot 3813 on Plan PH 863, Parish of Mopata, being The Dairy Paddock Holding 18/3813; Freehold Lot 12 on Plan GB13, Parish of Mopata; and Freehold Lot 8 on Plan GB 17, Parish of Mopata as at 1 October 2004 is affirmed.
2. Appeal No. RV2005/0796 is dismissed. The unimproved value of $60,000 for Lot 20 on Plan CD4, Parish of Baroota, being GHPL 18/142 (Preston's Paddock) as at 1 October 2004 is affirmed.
3. Appeal No. RV2005/0797 is dismissed. The unimproved value of $340,000 for Lot 4662 on Plan PH 1513, Parishes of Ellendale and Tragoon being Mt Alder PH 18/4662 as at 1 October 2004 is affirmed.
4. Appeal No. RV2005/0798 is allowed. The unimproved value of Lot 3813 on Plan PH 863, Parish of Mopata being The Dairy Paddock Holding 18/3813 as at 1 October 2004 is determined at $73,000.
5. Appeal No. AV2005/0799 is dismissed. The unimproved value of $83,000 for Freehold Lot 12 on Plan GB13, Parish of Mopata and Freehold Lot 8 on Plan GB 17, Parish of Mopata as at 1 October 2004 is affirmed.
6. Appeal Nos. RV2005/0800 and AV2005/0801 are dismissed. The unimproved value of $67,000 for Lot 14 on GB 28, Parish of Mopata being Shrimp Creek PH 18/5365 as at 1 October 2004 is affirmed.
CATCHWORDS: Evidence – Admissibility – whether report of valuer addressed issues not in grounds of appeal – respondent adduced sales evidence – right of appellant to rebut such.
Valuation – Valuation of Land Act – use of sales – premium for smaller sized properties – unacceptable sales – lack of transparency in analysis – method of allowing for disabilities.APPEARANCES: Mr M Toohey for the appellants
Mr P Rabaa of Crown Law for the respondent
The appellants have appealed against determinations made by the respondent, under the Valuation of Land Act 1944, of the unimproved value of various parcels of land as at 1 October 2004. The land is situated near the town of Einasleigh in the Shire of Etheridge and is used for cattle grazing.
There are seven appeals in each of which the appellant says that the unimproved values are too high. The grounds of appeal are identical in some of the appeals and vary in others.
The first appeal concerns five parcels of land in the same ownership, which were combined for the determination of an overall unimproved value for rating purposes -
AreaCE Valuation Appellants' Value
1.Mt Alder aggregation
(AV2005/0795) 8,986.435 ha $450,000 $394, 000
($50.07/ha)($43.85/ha)
Three of the five parcels were also valued separately for rental purposes –
2. Preston's Paddock
(RV2005/0796) 584.80 ha $60,000 $25,637
($102.60/ha) ($43.84/ha)
3.Mt Alder
(RV 2005/0797) 6,600 ha $340,000 $298,000
($51.52/ha)($45.15/ha)
4.The Dairy Paddock
(RV2005/0798) 777 ha $117,000 $34,000
($150.58/ha) ($43.75/ha)
The remaining two lots of the aggregation, which are freehold, were valued together for land tax purposes as a pro rata component of the aggregation -
5. Baldy Knob Paddock and Kershaw's Paddock
(AV2005/0799) 1,024 ha $83,000 $45,000
($81.00/ha)($43.95/ha)
The final two appeals concern a property known as Shrimp Creek which is in different ownership from the properties the subject of the first five appeals. Shrimp Creek was valued for both rental and rating purposes -
6. Shrimp Creek
(RV2005/0800) 3,035 ha $67,000 $20,000
($22.07/ha)($6.59/ha)
7.Shrimp Creek
(AV2005/0801) 3,035 ha $67,000 $20,000
($22.07/ha)($6.59/ha)
Before considering the appeals individually, it is convenient to deal with some issues which apply to all of them.
Valuation Issues
Admissibility of appellant's valuation report
The appellants engaged a valuer, Mr MG Dickenson, to review the valuations issued by the respondent. Mr Dickenson prepared a report which was tendered by the appellants.
Counsel for the respondent, Mr Rabaa, submitted that no part of the report should be admitted into evidence because the report discussed two issues, relativity and sales evidence, which were not raised in the appellants' notices of appeal. Mr Rabaa relied on s.45(4) of the Act which provides, in relation to notices of appeal, that –
"(4) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner."
I accepted the report into evidence provisionally on the basis that I would make a ruling as to its admissibility in the course of this decision.
Neither Mr Dickenson's report nor his oral evidence raised any relativity issue. In any event, all of the notices of appeal, with the exception of the two relating to Shrimp Creek, do raise as an issue the relative valuations of the subject parcels and Stockmans Creek, an adjoining property held by related parties, which is run in conjunction with the subjects. Mr Rabaa's objection on the ground of relativity is, therefore, disallowed.
The appellants were not legally represented at the hearing of these appeals. The Notices of Appeal were signed on their behalf by Mr John Toohey who is the manager of the properties. It is unclear whether the grounds of appeal were drafted by Mr John Toohey or the appellants themselves. In any event they do not appear to have been drafted by a lawyer and the grounds of appeal are not formulated with exact precision. It is apparent from the notices and grounds of appeal that the appellants consider that the respondent's determinations of the unimproved value of their properties as at 1 October 2004 were excessive. In general terms, the grounds of appeal identify a number of disadvantages suffered by each of the properties because, particularly, of their small size, lack of adequate water and access difficulties. The relativity of five of the subject valuations as compared with Stockman Creek is also raised as an issue.
In my opinion the basis of the grounds of appeal is that the appellants consider that their properties are disadvantaged in the market as compared with other properties. Although the appellants have not expressly referred to the sales of other properties, their grounds of appeal necessarily require consideration of their properties in the market place, that is, a comparison of the appellants' properties with properties which have been sold in the open market. Such a comparison is also necessitated by s.3(1)(b) of the Act.
Relevantly, Mr Dickenson said in his report that the respondent's valuer had not given adequate consideration to appropriate sales information, and had not made adequate allowances for the disadvantages of the subject properties when analysing sales that were not directly comparable in size and location. Mr Dickenson also provided details of three sales which he considered to be comparable with the subjects.
I consider that that information is relevant to the issues raised by the grounds of appeal, namely the value of the appellants properties as seen in the market. On that basis I consider that the material relating to sales is admissible.
It is also noted that the respondent has chosen to conduct its case by adducing extensive sales evidence and has thus joined issue with the appellants on the merits of those sales. The appellant is entitled therefore to adduce appropriate sales evidence in response (see State Government Insurance Office (Qld) v Valuer-General (1981) 7 QLCR 171 at 193, 194).
Appellant's valuation
With the exception of Shrimp Creek, Mr Dickenson valued all of the subject properties, including the aggregation, at the same rate, $35.00/ha, because he considered that the properties were similar and had a similar carrying capacity. He valued Shrimp Creek at $10.00/ha. His valuations were based on his sales evidence.
Mr Dickenson's evidence as to the similarity in the quality of all the subject lots (other than Shrimp Creek) was contrary to that given by Mr John Toohey (who gave evidence on behalf of the appellants) and Mr Bermingham (the respondent's valuer), both of whom said that the various properties differed in value because of their different quality. I have accepted the evidence of Mr Toohey and Mr Bermingham in relation to this issue and, therefore, I do not accept Mr Dickenson's opinion as to the value of those properties which are the subject of the first five appeals. Mr Dickenson's evidence concerning Shrimp Creek is considered below.
Appellant's sales
Mr Dickenson relied on three sales to support his valuations.
Stoney Etheridge, which is situated about 10 kms east of Forsayth, is a $17,500 ha property which sold on 7 March 2003 for $340,000. Mr Dickenson said that the sale analysed to $10.00/ha unimproved.
Ooralat is located 50 kms west of Mt Surprise on the Einasleigh River. It is a 14,000 ha property which sold on 20 December 2004 for $1,520,000. Mr Dickenson said that the sale analysed to $40.00/ha.
Elizabeth Creek is located about 45 kms north-west of Mt Surprise on Elizabeth Creek with frontage to the Einasleigh River. It is an 11,700 ha property which sold on 23 November 2004 for $290,000 which, Mr Dickenson said, analysed to $18.00/ha unimproved.
There is a lack of transparency in Mr Dickenson's analysis of the sales, particularly his analysed unimproved figures, as there is no information as to the nature or value of the improvements on the properties. Mr Dickenson admitted under cross-examination that the figures he had put forward as the analysed unimproved values of these sales were based on the amounts which the respondent department had applied to each of these properties as the unimproved value. He said that he had checked the departmental figures and agreed generally with the amounts but he has drawn no distinction between the analysed unimproved values and the applied values of the properties. In view of the lack of information provided by Mr Dickenson in his sales analysis, I consider that I can place little reliance on that part of his evidence.
In any event, even if Mr Dickenson's figures were accepted, I consider that Ooralat is the only sale which provides any reliable evidence relevant to the issues in this matter.
Stoney Etheridge sold in the late 1990s for $340,000 and resold in a rising market in March 2003 (the sale relied on by Mr Dickenson) for the same amount, less the value of plant, machinery and some stock which had been included in the earlier sale price. Mr Bermingham estimated the value of those items at $100,000. Mr Bermingham made enquiries from the vendor in the second sale and was told that he had wanted to leave the property for personal reasons and had sold at below market value. It appears therefore that the vendor was not a prudent vendor and I do not consider that any weight should be given to this sale.
Oorolat was sold slightly after the date of valuation in a rising market. Mr Bermingham had not inspected the sale recently because it sold after date. His previous inspection lead him to believe that Mr Dickenson's estimate of a carrying capacity of 2,000 head or 1 beast to 7 ha was excessive. Mr Bermingham's opinion was that the sale was not nearly as good quality as the subjects. As indicated above, I consider that the sale is relevant to the issues in this matter but in the absence of any proper sales analysis, I cannot apply the sale with any degree of confidence. Moreover, there is no evidence to indicate the extent to which the sale price was affected by the rising market.
Elizabeth Creek is held under an Occupation Licence with a 12 month term. That tenure is not comparable with the tenure of the subjects and therefore I do not consider that the sale should be used to value the subjects.
Respondent's Valuation
Mr Bermingham, the respondent's valuer, valued the subject properties using the comparable sales method. He relied on five sales of improved properties in the Etheridge Shire, analysed each sale to reach an analysed unimproved value and then applied a value to each property to determine the unimproved value for that property.
Mr Bermingham's applied valuations were determined after consideration of other sales evidence. He examined twelve sales in the Etheridge Shire and sales in the adjoining shires of Herberton and Dalrymple with similar land types to those in Etheridge and concluded that the market as a whole indicated that the value of grazing properties had risen by 300% since the previous valuation date, 1 October 2001. 300%, or a factor of 4, was applied to all the grazing properties in the shire to reach the unimproved values for the valuation as at 1 October 2004. Similarly, by reference to the overall sales evidence, Mr Bermingham applied a value to each of the sale properties.
Respondent's Sales
The sales used by Mr Bermingham show the following –
Area Date/Sale Price Analysed Unimproved Applied Value (1/10/2004)
Rosella Plains
81,600 ha 5/6/2002 $6,600,000 $3,135,568 $3,000,000
($38.43/ha) ($36.76/ha)Gilbert River Freehold
64.345 ha 17/7/2002 $80,000 $31,978 $31,000
($496.98/ha) ($481.77/ha)Rycon
16,400 ha 16/9/2002 $1,400,000 $449,802 $415,000
($27.43/ha) ($25.30/ha)Lake Carlo
7,945.598 ha 3/9/2003 $1,400,000 $588,939 $390,000
($74.12/ha) ($49.08/ha)Carpentaria Downs
118,500 ha 10/7/2004 $11,000,000 $7,074,555 $6,700,000
($59.70/ha) ($56.54/ha)Rosella Plains is significantly larger than any of the subject properties. Mr Bermingham selected it as a comparable sale because it is a grazing property adjoining Mt Alder to the east, with some similarity in country to Mt Alder. Rosella Plains is about one third basalt and two thirds granite/forest country. The basalt is on the eastern side of the property, away from Mt Alder. There is reasonable natural water with about 18% of the herd permanently naturally watered. It has a carrying capacity of 1 beast to 17 ha (4,800 head). Rosella Plains has access problems in the wet season, although its access is not so difficult as the access to Mt Alder, is graded more frequently and there are no restrictions on the type of road trains that can be used.
Leaving aside the difference in size between the sale and the subjects (which is discussed below), I consider that the sale is comparable with the subjects in terms of location and use of the property. There is a significant quantity of basalt country on the sale which is superior to the various types of country on the subjects.
The Gilbert River freehold is a small non-grazing property located a long distance away from the subjects. Mr Bermingham acknowledged that the property is in a different submarket from the subjects and said that, in the absence of any sales of smaller properties in the vicinity of the subjects, he had used the sale to demonstrate that there was a market for small properties, with no services, in remote locations.
I do not consider that this property is comparable with the subjects and it should not be used in their valuation.
Rycon is a small, rough block of lesser quality than the subjects, leaving aside Shrimp Creek. About 55% is rough hills and mountains and about 45% good to average granite forest. The overall carrying capacity is 1 beast to 30 hectares (548 head). About 9% of the herd is watered from permanent natural water. In addition, there is, currently, access to good cheap water piped from a neighbouring property. Mr Dickenson considered Rycon to be the only one of Mr Bermingham's sales to be comparable with the subject.
I consider that Rycon is sufficiently comparable with the subjects to enable the sale to be used in the valuation. The property is of lesser quality than all the subject properties other than Shrimp Creek.
Lake Carlo is the only sale of comparable size to the subjects. Mr Bermingham said that this sale supported the subject valuations but it is clear, from his applied value, that he did not consider that the sale was in line with the general market trend. The sale does not assist the appellant's case. The most that can be said is that it indicates that there was a purchaser in the market prepared to pay $74.12/ha for an unimproved property of similar size to the subjects.
Carpentaria Downs is even larger than Rosella Plains. Mr Bermingham described it as a large, good quality property consisting of 86% good quality forest and river frontage, 6% average to poor forest and 8% rough unavailable country. The carrying capacity is 1 beast to 13 hectares (9,115 head). The property has very good natural water with about 27% of the land permanently naturally watered.
Although the sale property is significantly larger than any of the subjects, I consider that it can be used in their valuation. The quality of the country is similar to the subjects with the exception of Shrimp Creek.
Size Premium
The grounds of appeal challenged three aspects of the respondent's valuations – the premiums added for both the small size of the subject lots and water benefit, and the failure to take account properly of the lack of access to the subject properties. In addition particular issues were raised relating to individual subject properties. The allowances for water and lack of access will be discussed in relation to each property.
With the exception of Lake Carlo, Mr Bermingham's sales properties are very different in size from the subjects. Mr Bermingham acknowledged the differences in area but said that there were few sales of smaller properties in the Etheridge Shire in the relevant period.
Mr Bermingham's opinion is that smaller properties such as the subjects would sell at a premium per hectare compared with large grazing properties because there were more people in the market with sufficient funds to buy a smaller property than were able to buy larger properties. Therefore the larger the property the smaller the amount paid per hectare. In comparing the sales with the subjects, Mr Bermingham allowed for the smaller size of the subject lots by applying a "size factor" of between 1.07 and 2.00 to his net valuation in each appeal. The effect of the application of the size factor was to increase the valuation of that property by the factor stated. Mr Bermingham did not consider that the subjects were too remote to attract buyers. They were small and relatively cheap and there would be town buyers interested in buying them to run small numbers of cattle.
In Mr Dickenson's opinion, the market was divided into two categories – larger properties with a carrying capacity in excess of 4,000 head and those which carry 1,000 to 2,000 head. He said that sales of the larger properties should not be used to value the smaller properties because they were different markets. While he agreed that smaller properties generally commanded higher prices per hectare, he thought that was not so relevant to the subject parcels because there was no real market for small blocks in the Einasleigh area. Because of access problems and management difficulties, their only attraction was for adjoining owners who, he said, would not pay a premium over and above the general rates payable in the area.
Mr Dickenson ultimately conceded, however, that a premium was payable for smaller properties, but said that because of their locality, limited access and property type, the subject properties would attract a limited premium only. He said that he had added a premium of $15 per hectare to his valuation of each of the subjects.
As noted above, Mr Dickenson valued all of the subject properties at $35.00/ha which includes the $15 premium for size. That premium therefore represents an added value of 75% which is substantially more than the premiums of 7% applied by Mr Bermingham to the Mt Alder Aggregation and Baldy Knob and Kershaw's and 27% applied to Mt Alder. It is 25% less than the premium of 100% applied by Mr Bermingham to Preston's Paddock, The Dairy and Shrimp Creek.
I indicated above that I did not accept Mr Dickenson's evidence that all the subject properties should be valued at the same rate per hectare. For the same reasons, and in the absence of any explanation from Mr Dickenson as to how he calculated the size premium of $15/ha, I do not accept his evidence that that is an appropriate premium to be applied.
However, I do consider that both Mr Dickenson's and Mr Bermingham's evidence established that a premium should be applied to the subject properties to allow for their smaller size as compared with the sales. The lack of sales of small properties in the locality of the subjects does not demonstrate that there was no market for such properties. Mr Bermingham said, and I accept, that no small properties had been offered for sale during the relevant period and hence there were no sales. Although the subject properties are remote, and there are few services in the nearest town, Einasleigh, it was Mr Bermingham's opinion, backed up by the Gilbert River freehold sale, that there would be buyers if such properties were to be made available for sale. I have accepted that evidence also.
In the absence of appropriate sales of comparable size, I consider that Mr Bermingham has adopted a valid methodology in his application of the sales evidence by adding a premium to allow for the smaller size of the subjects. Mr Bermingham did not explain in detail how he calculated the size factor in relation to each of the subject properties but said that a comparison was made between the various properties and the district standard. I have decided that a size factor is to be applied but I have not accepted Mr Dickenson's evidence as to the appropriate quantum of that factor. The only other evidence as to quantum was Mr Bermingham's which I have accepted.
The Appeals
Two grounds are common to the first five appeals -
· the blocks are run as an aggregation with a combined area of 18,145 ha;
· the subjects were valued at the respective amounts per hectare set out in [3] above; Stockman Creek is valued at $43.84.
No evidence was lead by the appellants to explain or support these grounds and, therefore, I do not consider that they have been established.
My consideration of these appeals has been governed by s.33 and 45(4) of the Act. Section 33 provides that any valuation made by the Chief Executive under the Act shall be deemed to be correct until proved otherwise on appeal. The effect of the section is that there is a presumption that the value shown in each of the valuations is correct. If it is proved that in making the valuation the respondent acted on a wrong principle, or made a serious error of fact, the presumption is rebutted. However, the burden is on the appellants to prove that any such error has been made because s.45(4) of the Act provides that the burden of proving the grounds of appeal is on the owner (Brisbane City Council v The Valuer-General (1978) 140 CLR 41 at 56, 57 per Gibbs J).
The appeals concerning the individual parcels making up the aggregation will be dealt with first.
Preston's Paddock
Preston's Paddock is located about 2.5 kms south of Einasleigh. Mr John Toohey said that access to the property is through an adjoining property, "Narrawa", as there is no formed legal access. There is no natural water on the subject property. Mr Bermingham estimated the carrying capacity at 1 beast to 14 ha or 41 head and Mr Dickenson at 75 head (1 beast to 8 ha).
In summary, the grounds of appeal in relation to this property are that –
· the small size of the lots is a disadvantage because
- there is no economy of scale. For example, it takes no longer to muster and walk 400 head to the yard than it does 100 head; the same plant is required to run a small property as a larger holding; mustering costs are more expensive because of the smaller numbers;
- replacing fencing is expensive. On a larger holding small paddocks would not be fenced;
· none of the small paddocks has any natural water - a well placed dam would water four times the number of cattle than are running there currently;
· there is no Council provided access to any of the small paddocks. There is no access for several months during the wet season, or after a good fall of rain at any time during the year;
· further development is not possible because of the new tree clearing laws. Some areas will no longer be viable.
The appellants estimated, in their Notice of Appeal, that the unimproved value of Preston's Paddock was $25,637 or $43.87/ha.
Mr Bermingham's valuation of $60,000 ($102.60/ha) allowed for deductions of 7% for non District Standard problems, made up of 1% for the property's situation, 5% for working problems because the subject property adjoins the town reserve and 1% for access difficulties. Mr Bermingham also added a premium of 100% to his net valuation to allow for the difference in size between the subject and the sales.
While I accept that there are no economies of scale in running a small grazing property, both valuers said, as discussed above, that a premium would be paid in the market place for smaller properties. Thus it appears that the expenses associated with operating a smaller property do not deter purchasers and therefore, no allowance can be made for that factor. As there is no evidence (other than Mr Dickenson's discussed above) to indicate that there is any error in Mr Bermingham's calculation of a size factor of 100%, I have accepted that figure.
Mr Bermingham made no allowance for the lack of water on Preston's Paddock. His rationale for that was that he had concluded from all the sales he had examined in the Croyden and Etheridge Shires that the market would pay an additional 15% for a property that was fully and permanently naturally watered. If 10% only of the herd could be naturally watered, he would add a water benefit of 1.5%. In a case such as the present, where there was no natural water, he made no positive or negative allowance for lack of water. I have accepted Mr Bermingham's evidence in this regard.
Mr Bermingham has allowed 1% for the access difficulties to Preston's Paddock, again by comparison with the district standard. As there was no evidence that that allowance was insufficient I have accepted Mr Bermingham's allowance.
The appellants also submitted, in their grounds of appeal, that this property is adversely affected by the tree clearing laws with the result that some areas will no longer be viable. There was no evidence given to establish the impact of the tree clearing laws. In general terms, the legislation applies to all properties but its impact varies depending on whether a particular property had been cleared prior to the legislation coming into force. In the absence of any evidence indicating how the subject property is affected in comparison with the sales properties, I do not consider that this ground of appeal has been established.
Overall, I can find no error in the valuation.
Mt Alder
Mt Alder is approximately 8 kms north of Einasleigh. Mr Bermingham described the property as intersected by the Einasleigh-Mt Surprise short cut road which is formed earth, although winding and slow speed with several sandy creek crossings. He also said that the property is cut off from the rest of the aggregation in flood times because the Einasleigh River crossing is low lying sand and subject to long periods of inundation.
Mr John Toohey agreed with Mr Bermingham's description but added that at any time of the year any rains made the road very slippery and impassable. The regulations provide, he said, that only single trailers could be used to take cattle out (as compared with most roads where double and triple trailers can be used), which is a big expense for people living along that road.
Mr Bermingham estimated the overall carrying capacity of the property at 1 beast to 17 ha (389 head). Mr Dickenson's estimated carrying capacity was 640 head (1 beast to 10 ha).
The grounds of appeal are, in summary, that -
· there is no economy of scale;
· the property has poor access -
- the Einasleigh - Mt Surprise Road is impassable after rain;
- the Einasleigh River makes the property inaccessible for several months during the wet season. When the water recedes local graziers have to repair the crossing. The flood gates cannot be repaired in the wet season causing a problem with straying cattle;
· more water is required to utilise more land but there are no dam sites. Most of the dams leak due to the soil type.
The appellants valued the property at $298,000 or $45.15 ha.
Mr Bermingham valued the property at $340,000 ($51.52/ha). His reductions for non District Standard problems were 1% for pests and weeds, 1% for working problems due to the intersecting road and access, and 5% for access difficulties. He added an allowance of 3.85% for permanent natural water and applied a size factor of 1.27.
The observations I made above in relation to the lack of economy of scale on Preston's Paddock apply also to this appeal. There is no reason to reduce the valuation on the basis of this ground of appeal.
The respondent has allowed a 5% reduction for the access difficulties to the subject. I do not consider that the evidence has established a need to make a more substantial allowance.
Mr Bermingham's water benefit of 3.85% was made on the basis that 26% of the herd can be watered at the permanent natural water in the Einasleigh River at the northern end from the junction of Ellendale Creek, and also in Fish Hole. Mr John Toohey said the cattle do not use Fish Hole because there is no access and cattle do not go there, so that the only water is on the northern end of the junction of Ellendale Creek which is in the corner of the paddock. Given that location, 26% of the herd could not be watered there. Mr Toohey also said that the soil types do not allow permanent dams and the cattle rely on a bore in the middle of the property.
I am not satisfied from all of the evidence as to the available water on this property that an error has been made in the calculation of the water benefit allowance on this property. No evidence was given to establish the impact on the value of the property of the lack of dam sites. I have not therefore made any allowance for that.
I consider therefore that the evidence supports the respondent's valuation of this parcel and that there is no basis for altering the valuation.
The Dairy
The Dairy Paddock is located about 2 kms west of Einasleigh. Vehicular access is via an ungazetted earth track through the Einasleigh Town Common. Mr Bermingham considered the access to be poor because a substantial length of the track traverses black soil and is unusable in wet weather. He estimated the carrying capacity at about 1 beast to 11 ha (69 head) and Mr Dickenson at 95 head (1 beast to 8 ha).
The grounds of appeal in relation to this property are the same as those for Preston's Paddock. My conclusions in that appeal concerning those grounds are also applicable to this appeal.
The appellants estimated the value of the Dairy to be $34,000 or $43.75/ha.
Mr Bermingham valued The Dairy at $117,000 or $150.58/ha. His valuation was apportioned as follows –
777 ha @ $80.21/ha $62,327
Less allowances for non District Standard
Problems – Working problems due to adjoining the
Einasleigh Town Common @ 5% - $3,116
Access difficulties @ 1% - $623
Total negative allowances - $3,739
Plus allowances for non District Standard Benefits
Nil $0
Total positive allowances + $0
Nett valuation $58,588
Size factor –
Total herd of 69 head @ size factor of $2.00
Nett valuation x Size factor $117,176
Round to $117,000
($150.58/ha)
($1,656 beast area value)
Mr Bermingham described The Dairy as about 39% (305 ha) of good, open, black soil plain with a carrying capacity of 1 beast to 8 ha. The remainder (472 ha) had a carrying capacity of 1 beast to 15 ha, he said. Mr John Toohey disagreed with Mr Bermingham's estimate of the black soil saying that there was less than half a hectare of black soil in the north east corner of the property. Mr Bermingham acknowledged that he had last visited the property in 1996 and that his figure was based on his notes from that time.
Because of Mr Toohey's knowledge of the property, I have accepted his evidence as to the area of black soil, and, therefore, I consider that the respondent's valuation should be adjusted accordingly. The appropriate way to do this appears to be to treat the whole of the property as having a carrying capacity of 1/15 ha which would mean an overall carrying capacity of 51 head.
Applying the sales evidence, I consider that an initial rate of $50.00/ha should be applied to the subject on the basis that it has a carrying capacity of 1/15 ha. This adjustment does not affect the percentages to be applied to allow for the access, working difficulties and size factor. The valuation becomes -
777 ha @ $50.00/ha $38,850
Less allowances for non District Standard problems –Working problems due to - $1,942
adjoining the Einasleigh Town Common @ 5%Access difficulties @ 1% - $388
Total negative allowances - $2,330
Nett valuation $36,520
Size Factor
Total of 51 head @ size factor of 2.00
Nett valuation x size factor $73,040
Round to $73,000
($93.95/ha)
($1,409 beast area value)This appeal is allowed and the unimproved value is determined at $73,000.
Baldy Knob Paddock and Kershaw's Paddock
These are two separate non-adjoining freehold properties. Kershaw's Paddock is approximately 4.5 kms north-west of Einasleigh and Baldy Knob about 2 kms north-west of the town.
Vehicular access to Baldy Knob is via an ungazetted earth track through the Einasleigh Town Common. Mr Bermingham considered the access to be poor because a substantial length of the track traverses black soil and is unusable in wet weather. Access to Kershaw's is via the same track then through Baldy Knob and another property (owned by third parties), the Best Paddock.
Mr Bermingham estimated the overall carrying capacity of both properties at about 1 beast to 11 ha or 93 head. Mr Dickenson's estimate was 170 head (1 beast to 6 ha).
The grounds of appeal for these properties are the same as those for Preston's Paddock.
The appellants estimated the value of the properties at $45,000 or $43.95/ha.
Because Baldy Knob and Kershaw's were part of an issuing valuation they are not valued as separate properties but as part of the larger aggregation. The same reductions for pests and weeds (1%), working problems due to 5 disjointed blocks (6%) and access difficulties (5%) were applied to the subject as were allowed in valuing the aggregation. Similarly the same water benefit (3.68%) and size factor (1.07) were allowed. In addition a 1% benefit was added for the subject's proximity to the town of Einasleigh. Mr Bermingham's valuation for both properties was $83,000 or $81.00/ha.
Kershaw's Paddock has access to a permanent water supply in the Einasleigh River. Mr John Toohey said that the water on Kershaw's is at the far end of the paddock. The country at that far end is very hard, rocky and barren so cattle do not tend to go there, but stay in the middle of the paddock where the country is better quality. The water is of little value to the owners, he said.
The grounds of appeal referring to the small size of the lots, access and the impact of the tree clearing laws have been discussed in relation to the Preston's Paddock appeal and that discussion is applicable to this appeal. I do not consider that it has been established that Mr Bermingham has made any error in his allowance for water in the valuation of the aggregation and, therefore, in this appeal.
As no error has been established in relation to this valuation, the appeal is dismissed.
Mt Alder aggregation
This appeal concerns an aggregation of the five non-adjoining properties described above – Preston's Paddock, Mt Alder, The Dairy, Baldy Knob and Kershaw's.
Mr Bermingham estimated the carrying capacity of the combined properties at 1 beast to 15 ha (594 head). Mr Dickenson's estimate was 980 head (1 beast to 9 ha).
The appellants valued the aggregation at $394,000 or $44.04/ha.
Mr Bermingham valued the aggregation at $450,000 or $50.07/ha. He deducted allowances of 1% for pests and weeds, 6% for working problems for five non-adjoining properties, 5% for access difficulties and added 3.68% for permanent natural water on the basis that 24% of the herd could be permanently naturally watered. He also applied a size factor of 1.07.
The grounds of appeal for the aggregation are the same as those for Preston's Paddock. I have discussed those grounds above in relation to the Preston's Paddock appeal and there is no need to repeat that discussion as the same reasoning applies to this appeal.
Although the valuation of The Dairy has been altered, that property is a small component of the aggregation (less than 10%) so that the effect of the adjustment on the valuation of the aggregation is minimal. Mr Bermingham valued the aggregation on the basis of a carrying capacity of 1 beast to 15 ha. I have reduced the carrying capacity of The Dairy by 18 which makes the overall carrying capacity of the aggregation about 1 beast to 15.6 ha. I consider it would be artificial to alter the valuation of the aggregation to take into account such a slight variation.
My conclusion is that there has been no error shown in the valuation of the Mt Alder aggregation and the appeal is dismissed.
Shrimp Creek
This property is located about 5.7 kms north-north-west of Einasleigh. Vehicular access is via an ungazetted earth track through the Einasleigh Town Common and then through Baldy Knob, the Best Paddock and Kershaw's. Access is poor, Mr Bermingham said, because a substantial length of the track travels through black soil and is unusable in wet weather. Access is also slowed by basalt rocks particularly through Kershaw's. The only access into the property, Stockman Creek Crossing, is dangerous, extremely difficult and steep, and at best four wheel drive accessible.
Mr Bermingham said that about 45% of the property was usable and he estimated the carrying capacity at 1 to 35 ha (86 head). Mr Dickenson estimated the carrying capacity at 120 head (1 beast to 25ha) on an improved basis. Mr Toohey said that it was difficult to estimate the carrying capacity of Shrimp Creek because cattle won't live there but he thought it might be 10 head. The reference in the Notice of Appeal to a carrying capacity of 87 head was a reference to the department's estimate, he said, not the appellants' estimate. He disagreed with Mr Dickenson's estimate of 120 head.
The grounds of appeal are, in summary, that -
· Shrimp Creek has no access;
· it is very poor quality country with the Newcastle Range running through the middle. Cattle prefer not to use it;
· the property cannot be boundary fenced because of the rugged terrain. The result is that the land has not increased in value;
· most of the block should only be used in conjunction with Mt Alder. It is of little value to the appellants and less value to others;
· the area of the property is 3,035 ha. It has a carrying capacity of 87 head;
· problem country does not increase in value to the same extent as other land.
The appellants estimated the value of the property at $20,000 or $6.59/ha. Mr Dickenson valued the property at $10.00/ha.
Mr Bermingham valued the property at $67,000 or $22.07/ha. He considered that he had made sufficient allowance for the disadvantages of the property. He allowed 50% for the poor access whereas for other properties in the shire the usual allowance for a rough track was 5 to 10%. He allowed another 10% for the mountain range, sour country, mustering problems and fencing difficulties, and an additional 2% for worse than district standard pests. He added allowances of 1% for proximity to Einasleigh, and 15% for permanent natural water. He also added a size factor of 2.00.
There is a permanent spring on the property and it is also bounded by the Einasleigh River. Mr Bermingham added 15% to the nett valuation because the property has a 100% permanent, although brackish, water supply. He said that this was the standard allowance, supported by market evidence, for accessible, permanent, natural water which reflects the advantage such properties have over those that need to put in a bore or a dam.
Mr John Toohey said that the only fencing on the property is at each end. The Newcastle Range and the Einasleigh River lie on either side and the country is so rough and steep it would be highly impractical to fence it. The property's only value, he said, is to run it in conjunction with Mt Alder, across the river. The cattle will cross the river to a small amount of black soil country on the Shrimp Creek holding but they will not live on the rest of the holding which is spewy country. He said that if Shrimp Creek were offered for sale as a separate parcel nobody would buy it because it had no value.
Mr Dickenson said that it was a very rough block, difficult to access, difficult to manage and most comparable with Stoney Etheridge. I have said previously that I do not consider that Stoney Etheridge is a reliable sale. Mr Dickenson considered that Mr Bermingham's allowance of 15% for water was excessive as compared with the rates applied by Mr Bermingham to some of the sales properties and other properties in the area with access to the Einasleigh River. He also thought that the application of a size factor of 100% was excessive and unreasonable because of the nature of the country. In his opinion the property had no appeal to a 'lifestyle' purchaser and its only value was to a neighbouring owner who would not pay much for it in comparison with other country in the vicinity.
It was acknowledged by all the witnesses that Shrimp Creek has significant disadvantages. Mr Bermingham has made substantial allowances for the poor access to Shrimp Creek, and the poor quality of the country. I do not consider that the appellants' evidence has established that those allowances should be increased. Further, it has not been established that the value of property has increased to a lesser extent than the market generally.
Although Mr Dickenson said that the allowance for water was not supported, I consider that Mr Bermingham's evidence established clearly the basis on which he had calculated the water benefit and that evidence was supported by his sales analysis and the allowances he made in respect of the other valuations under appeal. I do not consider that any error has been established in this regard.
In the absence of any proof to the contrary I have also accepted Mr Bermingham's opinion that the market was such that the property would sell to a purchaser looking for a small block to run some cattle.
As I do not consider that the appellants have established any error in the valuations, these appeals are dismissed.
Orders
1.Appeal No. AV2005/0795 is dismissed. The unimproved value of $450,000 for the aggregation of Lot 20 on Plan CD4, Parish of Baroota, being GHPL 18/142; Lot 4662 on Plan PH 1513, Parishes of Ellendale and Tragoon, being Mt Alder PH 18/4662; Lot 3813 on Plan PH 863, Parish of Mopata, being The Dairy Paddock Holding 18/3813; Freehold Lot 12 on Plan GB13, Parish of Mopata; and Freehold Lot 8 on Plan GB 17, Parish of Mopata as at 1 October 2004 is affirmed.
2.Appeal No. RV2005/0796 is dismissed. The unimproved value of $60,000 for Lot 20 on Plan CD4, Parish of Baroota, being GHPL 18/142 (Preston's Paddock) as at 1 October 2004 is affirmed.
3.Appeal No. RV2005/0797 is dismissed. The unimproved value of $340,000 for Lot 4662 on Plan PH 1513, Parishes of Ellendale and Tragoon being Mt Alder PH 18/4662 as at 1 October 2004 is affirmed.
4.Appeal No. RV2005/0798 is allowed. The unimproved value of Lot 3813 on Plan PH 863, Parish of Mopata being The Dairy Paddock Holding 18/3813 as at 1 October 2004 is determined at $73,000.
5.Appeal No. AV2005/0799 is dismissed. The unimproved value of $83,000 for Freehold Lot 12 on Plan GB13, Parish of Mopata and Freehold Lot 8 on Plan GB 17, Parish of Mopata as at 1 October 2004 is affirmed.
6.Appeal Nos. RV2005/0800 and AV2005/0801 are dismissed. The unimproved value of $67,000 for Lot 14 on GB 28, Parish of Mopata being Shrimp Creek PH 18/5365 as at 1 October 2004 is affirmed.
CAC MacDONALD
MEMBER OF THE LAND COURT
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