Turner v Department of Natural Resources and Mines
[2003] QLC 78
•31 October 2003
LAND COURT OF QUEENSLAND
CITATION: Turner v Department of Natural Resources and Mines [2003] QLC 0078 PARTIES: Scott Arthur Turner and Megan Ann Turner
(applicants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NOS: AV2002/0559; RV2002/0560; AV2002/0561 and RV2002/0562 DIVISION: Land Court of Queensland PROCEEDING: Appeals against unimproved valuations - Shire of Murweh - Valuation of Land Act 1944 DELIVERED ON: 31 October 2003 DELIVERED AT: Brisbane HEARD AT: Charleville MEMBER Mr RE Wenck ORDERS: 1. Appeals AV2002/0559 and RV2002/0560
These appeals are allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value of Lot 8 on Plan DL496, Parish of Mt Maria, is determined in the amount of Two Hundred Thousand Dollars ($200,000).
2. Appeals AV200/0561 and RV2002/0562
These appeals are allowed. The Chief Executive's valuation as at 1 October 2001 is set aside and the unimproved value of Lots 2 and 6 on Plan MNG42, Parishes of Orkadilla and Wenneba is determined in the amount of Forty-eight Thousand Dollars ($48,000).
CATCHWORDS: Statutory Valuations - Unimproved value - Valuation of Land Act 1944
Valuation - Sub market areas - Sales evidence - Direct comparison
Sub Market Areas - Mass valuation methodology - Sales evidence - Previous valuation - Relativity between valuations
Relativity - Changes within and between sub market areas - Effect of Land Court determinations of representative cases at relevant date of valuationAPPEARANCES: Mr S Turner for the applicants
Mr K Fisher (Crown Law) for the respondent
Background
A number of appeals have been lodged in the Land Court Registry against decisions by the chief executive ("the Department") on objections to valuations within Murweh Shire as at 1 October 2001.
Many of those appellants are being represented by Mr Dominic P Devine of Devine Agribusiness, Charleville. Agreement had been reached between Mr Devine's clients and the Department that representative cases should be heard and determined. An application to adjourn the hearing of those representative cases from the dates originally allocated in early April to dates in late May 2003 was granted. In the interests of better management of the Court's affairs, the earlier sittings at Charleville were not abandoned and several appeals not included within the Devine group were set down instead. The parties to these latter appeals agreed that no determinations should be made until after the decisions in the Devine group representative appeals were delivered. Those decisions were published on 16 September 2003 (Bauer & Ors v Department of Natural Resources and Mines [2003] QLC 64).
Mr Scott Turner conducted the case for the appellants in these matters. His evidence was presented in a detailed manner and his cross-examination of Mr GL Morris, the Department's valuer who took responsibility for the valuations appealed against, was very thorough. The transcript of the proceedings runs to 82 pages.
Nevertheless, as the primary issues in these matters are quite similar to those in the Devine representative cases, the reasons for the determination of those primary issues in will be relatively brief, being largely complementary to those in the representative determinations.
The Appeal Properties
AV2002/0559 and RV2002/0560
These appeals are against the same unimproved valuations amount, the first for rating purposes and the second for rent determinations , for property described as Lot 8 on Plan OL496 being PH10/5149, Red Cap Holding, Parish of Mt Maria, containing 12,500 ha.
This holding is known as Mt Maria North and is located approximately 22.5 km north-east of Morven.
As at 1 October 2001 the unimproved value of the land was assessed by the Department in the amount of $230,000. It is that amount which is appealed against, the owners contending for a valuation of $140,000. At the hearing, Mr Morris led evidence to a valuation of $222,500.
Mr Morris' report contained the following description of the nature of the land:
620 ha(5%) - brigalow scrub
5,595 ha(45%) - mixed scrub
45 ha (0%) - soft mulga
2,222 ha(18%) - soft forest
977 ha(8%) - inferior forest
1,328 ha(11%) - residual and rough
It is observed that the areas do not total 12,500 ha nor do the percentages total 100%. It can only be assumed that a typographical error has excluded a classification comprising 1,713 ha or about 13% of the property.
He described the use of the land as being for cattle breeding and grazing. The carrying capacity was estimated as 1 beast to 9 ha (1,390 head). As I understood Mr Morris' evidence that description of use was intended to reflect the highest and best use of the land from a market point of view. (Mr Turner had questioned the accuracy of the report because in fact sheep were also run on the property.)
Grounds of Appeal
1.Country (land system) classification used for the valuation is incorrect.
2.Relativity to other properties of similar land systems is inconsistent.
3.Property area as mapped/described does not reflect the fenced and usable area of the property.
4.Changing Tree clearing rules are to the detriment of our partly developed lease whilst not affecting fully developed leases used for relativity.
During the hearing Ground 3 was withdrawn by Mr Turner.
AV2002-0561 and RV2002/0562
These appeals are against the same unimproved valuation amounts, for rating and rent purposes for property described as Lots 2 and 6 on Plan MNG42 being Special Lease 10/43057, Parishes of Orkadilla and Wenneba, ("the Forestry lease"), containing 16,200 ha. This lease adjoins the north-western extremity of Mt Maria North.
As at 1 October 2001 the unimproved valuation of the Forestry lease was assessed by the Department in the amount of $53,000. The owners contend for a valuation of $28,800.
Mr Morris' report contained the following description of the nature of the country:
630 ha(4%) - brigalow scrub
1,135 ha(7%) - mixed scrub
2,194 ha (14%) - soft mulga
1,095 ha(7%) - box flats and watercourses
9,989 ha(62%) - inferior forest
1,157 ha(7%) - residual and rough ranges
Mr Morris described the highest and best use of the land as being for cattle breeding and estimated the carrying capacity to be 1 beast to 40 ha (405 head).
Grounds of Appeal
1.Country (land system) classification used for the valuation is incorrect.
2.Relativity to other properties of similar land systems is inconsistent.
3.Adequate consideration has not been given to the more onerous conditions applied to management practices by DPI-forestry/EPA-NPWS eg Tree clearing, fencing, fire management, water improvements etc.
Evidence of Market Value
Mr Turner's evidence was that the appellants had conducted extensive research through the Department and Mr Devine (who had originally acted for them in the objection proceedings).
It was Mr Turner's personal opinion as it had been Mr Devine's, that the 1 October 1998 relativity between valuations of district grazing properties in Murweh Shire had been reasonable and should not have been disturbed as at 1 October 2001. Reference was made to the factual situation that nearby properties (as it happened in the area identified by the Department as the Augathella Merge Sub Market Area (SMA)) had, at 1 October 2001, been valued by the Department 40% higher than the valuations as at 1 October 1998, while the subject valuations appealed against represented a 120% increase. The appellants' estimate of value for the pastoral holding was based on a 40% increase.
Mr Turner's research had indicated that analysed sales of the properties "Gundare" (August 1999), "Caledonia" (July 2001), "Halton" (1999) and "Wyoming" (February 2001) had shown unimproved value increases of 31%; 18%; 14% and 135 respectively above the 1998 valuations of those properties. It was Mr Turner's evidence that the purchasers of those properties had been experienced graziers; the properties were in the same locality; had country types and usage potential comparable to "the properties in the Shires SMA's" and other than for "Caledonia" analyses of the sales were uncomplicated by timber treatment and improvements in general. All of those sales in his opinion were consistent with the market trends and provided appropriate basic evidence to meet the published departmental guidelines for the conduct of unimproved valuations. It was his opinion that there was "no evidence whatsoever to suggest our property has risen 120% since last valuation while all those around us have risen by only 40%".
It was clear from his oral evidence that Mr Turner had little detailed personal knowledge of the sale properties and was relying on the opinions of others in the analyses of the sales.
The facts are that the valuations of all properties within the area identified by the Department as the Eastern Scrub/Cattle SMA which adjoins the eastern boundary of the Shire from near Morven in the south extending northerly into Tambo Shire had been increased by 120% above the 1998 levels while in the Augathella Merge, Morven Downs, and Augathella Downs SMA's increases had been either 40% or 60% in the locality of the subject lands.
Mr Turner had been under the impression that the previous relativity between valuations within the Shire had been based on the "Murweh Shire Cattle Valuation Project" which had been conducted by the Department and completed in 1998 with input from local graziers and other interested parties. However, as I understood the evidence given in the representative cases and partly from Mr Morris in this matter, the function of that valuation project was to establish correct relativity at that time within the specific part of the Shire identified as the Eastern Scrub/Cattle SMA. The establishment of correct relativity is always an important aspect of overall Shire valuations and if, as seems to have been accepted by all, that overall relativity was correct in 1998, that would have been because the market relativity both within and external to the Eastern Scrub/Cattle SMA had been interpreted correctly, at that time.
It is the Department's stance however, that since 1998, while relativity within the Eastern Scrub/Cattle SMA, on its interpretation of the market evidence, had increased in a consistent manner, being 120% above the 1998 levels, that increase had not been consistent in SMA's with differing classes of country. Indeed on the Department's interpretation of the evidence relativity had varied even within the Augathella Merge SMA.
The Court determinations in the representative cases have resulted in reductions to valuations in the Eastern Scrub/Cattle and the Tambo Downs SMA's while the Department's valuations in the Augathella Merge and Augathella Downs SMA's have been affirmed. It was noted that the representative cases were in respect to appeals against the valuations of properties in the Augathella district, rather than, for example, in the Morven locality of the Shire.
The sales of "Gundare" and "Caledonia" were considered in those decisions but not "Halton" or "Wyoming". While those latter sales may arguably have had some bearing on valuations in other SMA's, Mr Morris found them of no assistance for the valuation of the better quality scrub lands within the Eastern Scrub/Cattle SMA. Although Mr Turner was of the belief that market trends extended consistently across SMA's, the overall evidence does not support that opinion. While Mr Turner clearly has a keen interest in market activity, it is not possible to prefer his personal opinion to that of Mr Morris' professional opinion as to which sales evidence should be considered relevant. Furthermore Mr Turner's knowledge of many of the sale properties was quite broad.
The sales on which Mr Morris relied in these matters were primarily of the properties "Cunalama" and "Attica" from within the Eastern Scrub/Cattle SMA. Supporting evidence was obtained from the sales of "Allandale", "Gundare", "Bangor" and "Bundulla". In the representative appeals the Department's analyses of the sales of "Cunalama" and "Allandale" were challenged with some success. The "Cunalama" sale was found to support an application of $28.50/ha or a 100% increase above the 1998 valuation of that property rather than the $30.94/ha or a 120% increase which had been applied by the Department. The sale of "Allandale" had been rejected due to the state of the evidence regarding the value of the livestock included in that sale. Nevertheless, the valuation applied to "Allandale" was not found to have been proved wrong. The Department's analysis of the sale of "Gundare" was accepted (showing $27.27/ha) as was the application of $26.94/ha although that had been seen to reflect a cautious approach when the date of valuation was two years after the date of sale. The thrust of the appellants' case in the representative appeals was, as the appellants' is here, that the previous relativity between the valuation of "Gundare" and other district properties should not have been altered. It was found that the evidence supported the alterations made by the Department. However it was noted that if the altered relativity was proved wrong in hindsight it was unlikely that it was because the valuations appealed against were too high, but instead because a too conservative approach may have been adopted in acceptance of the sale of "Gundare", in particular, as being representative of the market as at the later date of valuation.
In these matters Mr Turner was adamant that the properties "Cunalama" and "Attica" were not within the same locality as the subject properties and had noted that the "Attica" sale had taken place subsequent to the date of valuation. He did not accept that those sales provided any reliable basis of valuation for the subject properties. He expressed a similar opinion with regard to the properties "Bangor" and "Bundulla" as they were located in what he described as a district with a farming influence and in another adjoining Shire. Furthermore it was his observation that those latter sales had not formed the basis of the Department's valuations in the subject SMA.
Mr Morris' professional opinion was that the "Cunalama" sale was capable of comparison with the subject Pastoral Holding as was "Attica" with the Forestry lease and that together the sales had indicated a consistent increase in value since 1998 for the variety of country types from good to inferior quality within the SMA. Although the "Attica" sale had taken place shortly after the date of valuation, it was within the period relevant to the date of valuation. Furthermore the sale had been applied quite conservatively. Mr Morris accepted that "Attica" comprised a mixed leasehold tenure, the majority being special leases over Forestry land, the balance being a Pastoral Holding with less restrictive conditions, but of generally inferior quality country overall. It had been Mr Morris' consistent evidence that the "Bangor" and "Bundulla" sale properties are capable of comparison with the better quality lands in the Eastern Scrub/Cattle SMA. Although those sales were included under a "basic sale" description he agreed that they had not formed part of the original basis in the Murweh Shire valuations. The reason for that was that the evidence from the adjoining Shire had not been considered at the time when the basis for the Murweh Shire valuations was being investigated and established by the Department. However, in his opinion, those sales indicated that a significant increase in value had taken place even since the "Cunalama" sale, and acceptance of that sale as basic evidence confirmed a conservative overall approach had been taken within this particular SMA.
Mr Turner produced correspondence from the Department of Environment and Heritage/Queensland Parks and Wildlife Service which confirmed that as at the date of valuation there had been a longstanding Government proposal for State Forest 11 Orkadilla, over which the subject special lease was held, to be added to the Chesterton Range National Park. The correspondence indicated that this land is listed as an Interim Management Arrangement Area "until the CRA/RFA process is completed ... which effectively means that no interference of any kind (which includes the cutting of fodder trees) is allowed ... Virtually all large-scale disturbance is prohibited under IMA-listed areas." A Tree Clearing Permit to enable the pulling of mulga for drought relief fodder had been sought by the appellants but refused prior to the date of valuation in 2001. Mr Turner was of the opinion that the intention to include this State Forest within the National Park drew much closer attention to the conservation management of the land than would apply to other State Forest special leases. He produced records of stocking rates to show that the special lease had been stocked quite sparingly over many years and then primarily for drought relief.
Mr Morris had not been aware that there had been State interest in the special lease area being added to the National Park. His oral evidence was that even had he been aware of that interest, he would not have seen it as affecting highest and best use. He said the block had been assessed as having use potential limited to the land remaining in its natural state. His estimation of carrying capacity in that natural state had been 1 beast to 40 ha. That estimate had not been challenged by Mr Turner specifically, regardless of the special lease not having been stocked to that equivalent capacity over a long period.
It was Mr Morris' opinion that all special leases over Forestry land including that attaching to "Attica" were restricted to grazing use in a natural or unimproved state. The overall application of unimproved value to "Attica" had equated $3.74/ha but as "Attica" fell within two local government areas that composite valuation involved two valuation periods.
With regard to the Pastoral Holding, Mr Turner was critical of inaccurate land system mapping being included with Mr Morris' report. He included with his tendered material a plan which, in his opinion, was an accurate representation of the land systems on this particular block. Mr Morris agreed that the WARLUS mapping was found on inspection, which had taken place in company with Mr Turner, to have misinterpreted the land systems and in particular the area of brigalow country. Mr Morris said that he was unable to change the WARLUS mapping but, based on his inspection he had reclassified the land decreasing the area of brigalow scrub "from something like 1,600 ha back to 620 odd ha" then increasing the area of "mixed scrub" by the difference. It is not clear why Mr Morris decided to include the inaccurate mapping and not replace it with at least a sketch showing the basis on which the revised classifications of "brigalow" scrub and "mixed" scrub were measured. Mr Turner complained that there was "no way that we can here today validate the data that you've provided." He did not raise the incorrect total area of the written classifications. That error has been observed subsequent to the hearing.
Nevertheless Mr Morris was of the belief that some general agreement had in fact been reached during the inspection and he had calculated the reclassification of the scrub country accordingly. It is to be hoped that the basis on which the areas were calculated has been recorded on the Department's file notes for future reference.
The evidence was that, based on the reclassification of the scrub country the valuation, had also been reviewed. Mr Turner saw the reclassification as a significant amendment but with an insignificant difference being reflected in the revised valuation. Mr Morris' response was that while "brigalow country is valuable ... mixed scrub is also very valuable ... both of them can be developed for scrub potential ... there's only minor differences associated with what the market perceives as their value ..."
This is another example where the difference in valuation might have been explained, for the assistance of the appellants and the Court, by reference to a check by classification of values. Such a check would also have drawn attention to the overall classifications error. That aspect of valuation methodology has been discussed in the representative appeals.
Mr Turner was critical of the accuracy of Mr Morris' report in that there was reference to the existence of 12 earth dams or tanks when in fact there were 13. Another criticism was the inclusion in the report of satellite imagery which reflected the developed condition of the holding at a date subsequent to the date of valuation. Mr Morris said that the specific number of artificial watering points had been, he thought, discussed during the inspection but in any event it was the potential of the country to be artificially watered which was relevant as was the potential of the land to be developed rather than the specific state of development at the date of valuation.
It appears that through Mr Turner's research some anomalies between the subject valuations and those of other nearby lands had been revealed. It was Mr Morris' evidence that the errors which had been revealed, had resulted from the mass valuation computer methodology adopted by the Department. Those specific errors were to be corrected by the issue of amended higher assessments for the actual lands involved.
Findings
In terms of the grounds of appeal my findings are as follows:
Red Cap Holding
1."Country (land system) Classification used for the valuation is incorrect"
This ground was proved to the extent that the classification used for the valuation appealed against was incorrect. The plan submitted by Mr Turner whilst identifying the land classifications and an opinion as to the extent of those classifications, did not contain any estimate as to the areas of each classification.
Mr Morris established through his inspection that the classification adopted for the valuation appealed against required review. Although not accompanied by any mapping identifying the extent of the initial inaccuracy, the amended classification of the scrub country was, on his evidence, as set out in his report. The valuation had been amended accordingly. I am unable to accept on the evidence before the Court that the classification now adopted has been proved wrong, at least with regard to the areas of "brigalow" and "mixed" scrub.
2."Relativity to other properties of similar land systems is incorrect"
It is factual that the previously existing relativities between the valuations of district grazing properties had been altered. There is no dispute that the previously existing relativities were considered to be correct. There is a widely held opinion by appellants generally that the overall relativity should not have been altered while the Department's stance is that the overall market evidence suggests that trends have varied between different land systems.
I have not been persuaded that the sales evidence on which the appellants in these matters rely is, in every case, of properties with "similar land systems". Where there is sales evidence common to both the appellants and the Department, for example of the property "Gundare", the altered relativity has been the result of professional interpretation of market forces. An overall review of the evidence indicates that the Department has attempted to apply the sales evidence to the sale properties and then made direct comparisons between the sale properties and the properties subject of the valuations, and in these cases, the valuations appealed against. Some sales evidence could be interpreted to suggest that the Department's valuations within the Eastern Scrub/Cattle SMA were conservative at the relevant date of valuation and that relativity from one SMA to another may have altered even more significantly than the applications of value have indicated.
Nevertheless, based on professional evidence in the representative cases, the Department's basic unimproved analysis, of the "Cunalama" sale, has been amended with the effect that the Court's determinations result in an increase of 100% above the previous valuation of lands within the Eastern Scrub/Cattle SMA. Based on the mass valuation methodology adopted by the Department, it is equitable that the effect of those determinations flows onto the valuations of the subject properties.
In other words, while in these matters the evidence of the appellants was insufficient to prove the amended valuation of the Department now before the Court to be wrong, the appellants will receive the benefit of evidence provided in the representative cases. That benefit will also flow to the effect of the amended classifications.
3.Not now contended.
4."Changing Tree clearing rules are to the detriment of our partly developed lease whilst not affecting fully developed leases used for relativity."
While unimproved valuations are based on development potential, there was no evidence before the Court that at the date of valuation development of the subject Pastoral Holding, to acceptable district standards, would have been restricted. It is my understanding that one of the criteria adopted for the Murweh Shire Cattle Valuation Project was that carrying capacity estimates were based on potential for development to district average standards. The Department's estimate of carrying capacity was not disputed by Mr Turner.
If, in the future, restriction on development through vegetation management legislation can be shown to affect the market value of any particular property then that will be a valuation consideration relevant at that time.
Special Lease Forestry Land
1."Country (land system) classification used for the valuation is incorrect."
2. "Relativity to other properties of similar land systems is inconsistent."
Grounds 1 and 2 of this appeal are similar to those for the Pastoral Holding appeal.
As I understood his evidence, Mr Turner's criticism of the Department's classification was that the description "inferior forest" was too broad to identify the extreme degree of inferiority of the country generally.
Although this land was used primarily as a drought reserve, Mr Turner did not dispute the Department's estimate of carrying capacity.
3."Adequate consideration has not been given to the more onerous conditions applied to management practices by Department of Primary Industries-forestry/Environmental Protection Agency-NPWS eg Tree clearing, fencing, fire management, water improvements etc."
There was no dispute from the Department that the conditions of the subject special lease are restrictive at least in terms of tree clearing. However the Department does not accept that the conditions are any different or "more onerous" than the conditions attaching to any other special leases over Forestry lands and for example, the "Attica" special leases.
Mr Turner has demonstrated that the State is keen to add this land to the Chesterton Range National Park but it is my understanding that he sees that intention as the reason for the request for the pulling of mulga for drought fodder to have been denied. It may be that pulling of mulga on this land had been allowed in the past, but there was no evidence to that effect. There was also no evidence that the relevant authorities would have allowed pulling of the mulga even had there been no interest in the land being added to the National Park. The correspondence tendered by Mr Turner indicates that such interest has been long-standing and existed at least before the previous (1998) valuation.
On Mr Morris' evidence the land has been valued on the basis that it has no potential for development through tree clearing of any kind. Other than for the global adjustment which I have determined should be the result of the representative appeals, the evidence of Mr Turner would not have proved the Department's basis of valuation wrong.
Valuation Conclusions
Pastoral Holding
It seems to me that if the classification of the scrub country required amendment, that position would also have been relevant as at the date of the previous valuation. That previous valuation was the base for the increased valuation appealed against. The amended valuation may now be taken, in my opinion, to represent a 120% increase above the value which might have applied in 1998 had that earlier valuation been similarly amended.
With specific consideration to a reviewed analysis of the primary "Cunalama" sale, representing a 100% rather than a 120% increase above the 1998 level, and the global effect of that on valuations within the Eastern Scrub/Cattle SMA, I have decided to determine the unimproved value of this land in the amount of $200,000 or $16/ha for both rating and rent purposes.
Special Lease
Based on my findings relevant to the Eastern Scrub/Cattle SMA in the representative appeals, I have decided to determine the unimproved value of this land in the amount of $48,000 rounded from $3/ha.
Orders
1.Appeals AV2002/0559 and RV2002/0560
These appeals are allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value of Lot 8 on Plan DL496, Parish of Mt Maria, is determined in the amount of Two Hundred Thousand Dollars ($200,000).
2.Appeals AV200/0561 and RV2002/0562
These appeals are allowed. The Chief Executive's valuation as at 1 October 2001 is set aside and the unimproved value of Lots 2 and 6 on Plan MNG42, Parishes of Orkadilla and Wenneba is determined in the amount of Forty-eight Thousand Dollars ($48,000).
RE WENCK
MEMBER OF THE LAND COURT
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