Turner v Department of Natural Resources and Mines
[2003] QLC 76
•31 October 2003
LAND COURT OF QUEENSLAND
CITATION: Turner v Department of Natural Resources and Mines [2003] QLC 0076 PARTIES: Geoffrey D and Patricia L Turner
(applicants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NOS: RV2002/0571 and AV2002/0572 DIVISION: Land Court of Queensland PROCEEDING: Appeals against unimproved valuations - Valuation of Land Act 1944 - Murweh Shire DELIVERED ON: 31 October 2003 DELIVERED AT: Brisbane HEARD AT: Charleville MEMBER Mr RE Wenck ORDER: The appeals are allowed. The chief executive's valuations as at 1 October 2001 are set aside and the unimproved value of the land described as Lot 7 on Plan MNG48, GHPL10/3300, Parish of Mt Maria determined in the amount of Two Hundred and Five Thousand Dollars ($205,000). CATCHWORDS: Statutory Valuations - Unimproved value - Valuation of Land Act 1944
Valuation - Sales evidence - Sub market areas - Mass valuation methodology - 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 G Turner for the applicants
Mr K Fisher, Crown Law, for the respondent
Background
These are two of several Murweh Shire appeals which were heard in Charleville in the week commencing 31 March 2003. The appeals are against the chief executive's unimproved valuations as at 1 October 2001. The parties accepted that the appeals should not be determined until after decisions were delivered on a number of other cases which had been selected by other relevant parties as representative of a group of appeals lodged by Mr Dominic Devine of Devine Agribusiness, Charleville. Those decisions were delivered on 16 September 2003 (Bauer & Ors v Department of Natural Resources and Mines [2003] QLC 0064).
One of the principal issues in the representative cases and in these appeals related to the change in relativity between the chief executive's valuations of district grazing properties which had occurred since the previous date of valuation. The reasons for the findings on relativity issues in the representative cases are of similar force in these appeals and will be dealt with relatively briefly.
The land involved is described as Lot 7 on Plan MNG48 being GHPL10/3300, Parish of Mt Maria, containing 11,900 ha. The property is known as "Mt Maria", and is located about 16.5 km north-easterly of Morven.
As at 1 October 2001 the chief executive made an unimproved valuation of the land, both for rent and rating purposes in the amount of $232,500 ($19.53/ha).
The appellants contend in the notices of appeal for a valuation of $139,500 for both purposes.
Grounds of Appeal
The grounds of appeal as contained in the notices of appeal are -
"Land classifications, valuations relativity tree clearing restrictions".
The Relevant Evidence
Mr Turner conducted the appellants' case and gave evidence in support of a written statement with various attachments.
The appellants had conducted research through the Department and also through Mr Devine's office. Mr Devine had acted for them in the initial objection process. Their views on relativity issues were generally similar to those of Mr Devine as had been expressed in the representative cases and, in the appellants' opinion there was no reliable market evidence to support the valuations appealed against or the alteration of the previously existing relativities between valuations throughout the district.
The valuation of the subject land had increased by 120% above the valuation as at 1 October 1998. Objections against the valuations had been disallowed although valuations of land in other nearby Sub Market Areas (SMA's) as identified by the Department, had first been increased by 100% then reduced on objection to show increases ranging from 40% to 60%. In the appellants' opinion an increase no greater than 40% could be justified for the subject valuation.
They had established, through "without prejudice" discussions with departmental officers, the land classification initially adopted by the Department. It was their opinion that not only had the area of brigalow scrub been over-assessed but the tree clearing restrictions on some areas of the brigalow and mixed scrub country had been ignored in the valuation process.
The appellants had been provided with the valuation report by Mr GL Morris, the chief executive's valuer who took responsibility for the valuation appealed against, a short period before the appeals were set down for hearing. Mr Turner was able to accept that the land classifications as contained in that report had been amended from those on which the valuation appealed against had been based and were now reasonable. His concern was however that the valuation appealed against remained unchanged.
In Mr Morris' report the land had been classified as follows:
25 ha(0%) - downs
1,390 ha(12%) - brigalow scrub: 60% being good scrub country on heavy dark soil with about 40% poorer brigalow scrub on poor shallow soils
5,329 ha (45%) - mixed scrub
721 ha(6%) - soft mulga
1,065 ha(9%) - box watercourse
1,601 ha(13%) - hard mulga
165 ha(1%) - sandy mix box pine
804 ha(7%) - forest
800 ha(7%) - ranges, ridges and tableland
"WARLUS" land system mapping was included with Mr Morris' valuation report but as I understood the evidence, that was the basis of the initial classification which Mr Morris had accepted, after inspection in company with Mr Turner, as incorrectly showing the distinction between some brigalow scrub and mixed scrub areas of vegetation. Mr Morris was unable to alter the WARLUS mapping but provided no alternative sketch to indicate the result of his inspection and the basis of the amended classification.
Mr Morris had considered the highest and best use of the overall property to be "cattle breeding and growing" with a carrying capacity of "1 beast to 8.3 hectares (1,434 head)". As I had understood the evidence given in the representative cases, that carrying capacity would have been consistent with the criteria adopted for the various land classifications throughout the Eastern Scrub/Cattle SMA, in which the subject land is located. In this SMA the Department had, in 1998, completed the "Murweh Cattle Valuation Project". Although Mr Turner was of the belief that the project had been instrumental in establishing relativity between carrying capacity potentialities throughout the Shire, the evidence in the representative cases was that the primary purpose of the project had been limited to establishing correct relativity between carrying capacity potentialities and valuations within the area identified as the Eastern Scrub/Cattle SMA. If the overall relativity between valuations within the wider districts of Murweh Shire had been accepted as being correct as at 1 October 1998, as it seems to have been, that was seen by the Department to have been the result of correct interpretation of the overall market evidence on a direct comparison basis, at that time.
It is the opinion of the Department's valuers that market forces in the period between 1 October 1998 and 1 October 2001 had indicated a change in relativity primarily between the identified SMA's. However, in the case of the Augathella Merge SMA, which has been identified as extending from near Morven in the south to near Tambo in the north there had also been changes within the SMA. More will be said of market evidence later.
Mr Turner challenged Mr Morris' estimate of carrying capacity. In his opinion an estimate conducted by the Department of Primary Industries in association with the "South West Regional Adjustment Project" in periods subsequent to 1995 was realistic. That estimate had been based on "planned development" and had suggested a safe carrying capacity of 1 beast to 11 ha. It was his estimate that even after the development which had taken place leaving about 38% of the property as "remnant vegetation", the number of adult cattle had never exceeded 820 head. It had been his understanding that carrying capacity criteria used in the Murweh Cattle Valuation Project had referred to "adult equivalents". That was also my understanding from the evidence in the representative cases. However in this matter Mr Morris said his estimate of 1 beast to 8.3 ha was intended to represent a "mixed herd" basis. He indicated that a ratio of "adult equivalent" to "mixed herd" was "about 2.5 to 3" which would convert his mixed herd estimate to about 1,195 adult equivalents. Mr Morris' estimate was based on development from unimproved to district standards for good vegetation management and he envisaged that remnant vegetation would comprise between 20% and 30% of original vegetation on that basis. It had been Mr Turner's evidence that provided tree clearing permits could be obtained, there were further areas amounting to between 6% to 8% of the property which were suited for development by clearing and pasture establishment. He agreed that he followed conservative stocking and land management practices but was adamant that the property would not carry an adult beast to 8.3 ha "year in and year out" if established improved pasture was to be maintained in good condition.
Mr Morris was of the opinion that despite the tendered information from Mr Turner indicating that the DPI estimate was "based on planned development", that Department's estimates were normally based on conditions existing at a specific point in time and were not always reflective of the district standard development potential basis on which the valuations were made.
It is not unusual for different management practices to create disagreement as to the safe carrying capacity of grazing lands but the important aspect of the use of carrying capacities for valuation purposes is that in the comparison process consistent criteria must be adopted. As far as can be ascertained, that was achieved as a result of the Murweh Cattle Valuation Project.
Mr Turner was also concerned that vegetated areas for which tree clearing permits had been refused had not been specifically identified in the valuation report and in the valuation amount. Specific mention was made of an area of 320 ha of mainly mixed scrub country which had been "donated" to Greening Australia for environmental purposes and fenced out due to mustering difficulties. There was also a further 350 ha of brigalow which had been classified as "endangered remnant" and unable to be cleared. Mr Morris' response to that concern was that the criteria adopted in the consideration of development potential of the various land classifications in the Eastern Scrub/Cattle SMA had recognised district standards of development for good management practices and that total clearing of any developable land classification was not assumed in the valuation process. The effect of non-specific areas being maintained in natural or unimproved uncleared condition was said to have been therefore built-in to the overall valuation. Mr Morris saw it as unnecessary to identify specific areas which were unavailable for development such as the area donated to Greening Australia or the area of "endangered remnant" vegetation, on the proviso that they did not exceed the criteria adopted.
The evidence before the Court in the representative cases indicated that in the Murweh Cattle Valuation Project the development potential of, for example, brigalow/belah/bottle-tree country was assumed to be restricted to 50% of its area, and 80% of the areas specifically classified as brigalow or mixed scrub classifications.
Another complaint by Mr Turner related to Mr Morris' description of the artificial water on Mt Maria as comprising 11 earth dams and tanks and one shared bore. He said that in fact there were a further two sub-artesian bores and 10.5 km of polythene piping. He also pointed out that the bores were to a greater depth with greater pumping costs than bores on adjoining properties. Mr Morris had not investigated the artificial water situation comparability with adjoining properties and had been unable to agree or disagree with Mr Turner's evidence in this regard. As I understood Mr Morris' overall approach, he was mainly concerned to establish whether there were any impediments to the provision of artificial watering points on the various properties to be valued.
Apart from the overall relativity argument, Mr Turner drew attention to the lack of correct relativity, in his opinion, between the valuation of Mt Maria and some adjoining or nearby properties. It was Mr Morris' evidence in this matter and in an appeal against the valuation of the adjoining Mt Maria North block, that some errors had been confirmed with regard to valuations as issued for some of those nearby properties and that those errors would be corrected. It was Mr Morris' opinion that the subject property was overall superior to the adjoining Mt Maria North and that his reviewed valuation of the latter property was now in correct relativity with the subject valuation. Mr Turner pointed out that those two properties had once formed part of the one holding and had been partitioned as a family arrangement on the agreed basis that the two blocks were of equal value. It was his opinion that they contained similar land types and he did not accept that the subject property was superior overall.
The Sales Evidence
The sales which Mr Turner believed to be relevant were of the properties "Gundare", "Caledonia", "Halton" and "Wyoming". His investigations had indicated that the analyses of those sales which had been conducted by either the Department or Mr Devine indicated increases of 31%, 16%, 14% and 13% respectively above the Department's unimproved valuations of those properties as at 1 October 1998. He had knowledge of the overall nature of the sale properties from past visits and had agisted stock on "Wyoming". Apart from "Caledonia", the sale properties had been lightly improved at the time of sale and in Mr Turner's opinion the levels of value shown had been consistent with his understanding of the trend in the market in the relevant district.
In the representative cases Mr Devine had also relied on the sales of "Gundare" and "Caledonia" from those nominated by Mr Turner, but also the sale of "Cunalama".
Mr Morris relied primarily on the sales of the properties "Cunalama" and "Attica" as the basis for the increased level of value applied consistently throughout the Eastern Scrub/Cattle SMA (an increase of 120% above the level applied in 1998). Reliance was also placed on the sales of "Gundare" which is in the Augathella Merge SMA, "Allandale" in the Morven Downs SMA and "Bangor" and "Bundulla" "just inside Booringa Shire .... at the southern end of Murweh Cattle area".
In the representative cases although Mr Devine had placed reliance on the "Cunalama" sale, its analysis was a matter of dispute. The end result was that the sale had been accepted by the Court as supporting an increase of 100% over the 1998 levels of value rather than the 120% applied by the Department. The "Attica" sale had been difficult to compare with other lands, due to its inferior country but it was accepted as at least indicating a consistent market trend within the Eastern Scrub/Cattle SMA.
Mr Devine had accepted the Department's analysis of the "Gundare" sale in the representative cases. Although it was a sale at a date well before the date of valuation and originally rejected as evidence of value by the Department, it had eventually been adopted as basic evidence of value for the valuation of "Gundare" itself, by both parties, in those representative cases. It was therefore found by the Court to support the Department's stance that the market had not moved consistently between SMA's or even within the Augathella Merge SMA, since 1998.
The sale of "Allandale" had been rejected by the Court as evidence of value in the representative cases as the Department's analysis was unable to be accepted. Nevertheless, the Court did not find that the valuation actually applied to "Allandale" had been proved wrong.
It was Mr Turner's opinion that the sales of "Cunalama" and "Attica" were not relevant to the valuation of the subject land because those sale properties are located in a different and distant location. It is also his opinion that no reliance could be placed on the sales of "Bangor" or "Bundulla" because they are located in an area of higher rainfall with superior development potentialities.
Again in the representative cases it was not accepted by the Court that the sales of "Bangor" or "Bundulla" had provided "basic" evidence of value when the 2002 Murweh Shire valuations were being made by the Department, but those sales had been accepted as supporting a finding that adoption of the "Cunalama" sale as basic evidence reflected a conservative approach by the Department.
The sale of "Caledonia" had been seen by the Court in the representative cases as clear evidence that the previously established relativity between valuations of district grazing lands of various quality had altered since 1998. It may well be that the sales of "Halton" and "Wyoming" are further evidence of that shift in market trends, although Mr Morris' evidence was that the "Halton" sale had been considered by the Department as a "low" sale.
Generally the position is that if the relativity has altered, it would be wrong for the Department to ignore evidence to that effect. One of the reasons for regular revaluations is to establish the trends which have taken place in market levels of value and the overall evidence in these matters indicates that even with some sales on which the appellants wish to rely, the Department has actually adopted that sales evidence in the valuation of the individual sale properties. It is a question then of direct comparison of those sale properties with each property to be valued.
Findings - Grounds of Appeal
1."Incorrect land classifications"
The land classifications have been revised by Mr Morris and are now seen as reasonable by Mr Turner. A similar situation had occurred with regard to the adjoining Mt Maria North block (Redcap Pastoral Holding), and a somewhat similar area of "brigalow" scrub had been removed from that classification into the "mixed scrub" classification. However, in that case Mr Morris had reviewed the initial valuation and decreased it. His evidence was that the subject property is superior to Mt Maria North and the relativity between his valuation is correct. In the circumstances however I am not persuaded that the subject property was not also entitled to a revised valuation based on the amended classification.
2."Valuations relativity"
It seems reasonable, based on the revised land classifications that relativity which previously existed between the valuations of the subject property and Mt Maria North be more closely retained than has occurred. The examples of incorrect relativity between the subject valuation and those of other adjoining or nearby properties has resulted primarily from incorrect valuations having been issued for some specific properties. The Court was informed that amended valuations are being made of those properties.
The wider argument that the previously existing relativities between the valuations of district grazing properties should not have been altered was unsuccessful in the representative cases and that finding would not be disturbed by any evidence which has been given in respect to the subject appeals.
3."Tree clearing restrictions"
While it is factual that tree clearing restrictions have been placed on specific areas of the subject land, the development potential adopted by the Department for valuation purposes assumes that some restrictions would apply within various land classifications. It has not been shown at this time that those assumed restrictions have or will be exceeded.
Valuation Conclusions
I have concluded that the amendment to the Department's land classification should have brought with it an amended valuation of the subject land and that the previous relativity between the valuation of the subject land and Mt Maria North should not have been disturbed to the extent that it has.
It is seen as reasonable that the effect of the reviewed analysis of the "Cunalama" sale as adopted by the Court in the representative cases be applied globally throughout the Eastern Scrub/Cattle SMA and despite no evidence being led in these appeals which would have supported such a conclusion, a valuation representing an increase of 100% above the 1998 level will be adopted together with the effect of the amended classification.
Having given consideration to each of these aspects I will determine the unimproved value of the subject land in the amount of $205,000, rounded from $17.25/ha.
Order
The appeals are allowed. The chief executive's valuations as at 1 October 2001 are set aside and the unimproved value of the land described as Lot 7 on Plan MNG48 GHPL10/33800, Parish of Mt Maria, determined in the amount of Two Hundred and Five Thousand Dollars ($205,000).
RE WENCK
MEMBER OF THE LAND COURT
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