Underwood v Chief Executive, Department of Natural Resources
[1998] QLC 3
•30 January 1998
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BRISBANE
30 January 1998
Re: Appeals against Annual Valuations -
Valuation of Land Act 1944 -
Shire of Flinders.
(AV96-644 and AV96-703).
Charles Ian Underwood
v.
Chief Executive, Department of Natural Resources
(Hearing at Hughenden)
D E C I S I O N
These are two appeals by Mr Underwood against the unimproved values determined by the respondent Chief Executive, under the provisions of the Valuation of Land Act 1944 of the unimproved value of his properties in the Hughenden district known as "Sandalwood" and "Aireworth", as at 1 January 1996.
"Sandalwood", or GHPL 23/16203, described as Lots 1/2 on Plan CM 12, Parish of Ensay, containing an area of 16,060 hectares, was valued at $277,500, or $17.28 per hectare. "Aireworth", described as Lot 3 on Registered Plan 880569, Parish of Woodsberry, containing an area of about 5,505 hectares, was valued at $95,000, or $17.26 per hectare.
Mr Underwood objected against those valuations and after being advised by the respondent that his objections had been disallowed, he appealed to the Land Court against the respondent's decisions upon his objections.
Mr Underwood's grounds of appeal are similar in each case. They deal generally with the decline in the stocking rate of the properties because of the deterioration of the open downs country as a result of the prolonged drought; pests; the drop in water level of his bores; the distance of the properties from town; the inappropriateness of the Department's sales; and the lack of interest by prospective purchasers in neighbouring properties when they were offered for sale. Mr Underwood's contended unimproved values were:
"Sandalwood" $139,580, or $8.70 per hectare;
"Aireworth" $55,000, or $10 per hectare.
The two properties are run as one aggregation and used for the grazing of sheep. They are situated approximately 85 and 93 kilometres south of Hughenden, with access by means of the Hughenden-Muttaburra Road, the Hughenden-Stamford Road and the Stamford-Tangorin Road, all of which are earth formed and gravel.
At the hearing of these appeals Mr CI Underwood appeared and gave evidence, while the respondent was represented by Mr R Vize, of counsel. Valuation evidence for the respondent was given by Mr LR Croton, a registered valuer employed by the Department of Natural Resources.
Mr Croton's reports described the two properties thus:"[`Sandalwood'] comprises generally undulating open black soil downs, mainly loose with intersecting firm patches. Coolibah shade on Rockwood Creek. Grasses comprise mainly flinders, mitchell and other annual species. About 24.5% (3930 hectares) flooded country. "
"[`Aireworth'] comprises generally undulating open black soil downs, mainly loose with intersecting firm patches. Coolibah shade on Rockwood Creek. Grasses comprise mainly flinders, mitchell and other annual species. About 24.9% (1370 hectares) flooded country. "
Mr Underwood did not disagree with those descriptions. However, he took issue with Mr Croton's carrying capacity of 1 beast to 13 hectares, saying that there had been deterioration of the mitchell grass pastures as a result of the prolonged drought. What had previously been generally accepted as country with a carrying capacity of 1 sheep to 4 acres, had been reduced to the extent that he was presently stocking at the rate of 1 sheep to 9.5 acres, which he said is the highest sustainable rate that he can run stock. However, Mr Underwood conceded that if there was a return to average seasons and the re-establishment of the mitchell grass, Mr Croton's carrying capacities would be reasonable.
Mr Underwood also took issue with Mr Croton's statement that natural waterholes in the creeks lasted up to nine months, contending that they do not last long in their natural state. However, an enlarged and cleaned-out waterhole on the stock route does last for about nine months. Other water supplies on the subject properties are from equipped bores, with access to a flowing bore on the stock route on the east side of "Sandalwood".
As a basis for his valuations, Mr Croton relied on the analyses of two improved sales. "Lerida", of 12,375.3 hectares, situated some 75 kilometres south of the subject properties, sold in April 1995 for $850,000. It was analysed to show an unimproved value of $18.04 per hectare and, as at 1 January 1996, the respondent applied an unimproved value of $16.16 per hectare.
"Lerida" is situated approximately 189 kilometres north of Longreach via Muttaburra, with approximately 47 kilometres of bitumen road, the remainder being formed earth road. It is also approximately 122 kilometres east of Winton by a similar road. It comprises similar open mitchell grass downs country to the subject lands, but it was agreed by the parties that the downs country on "Lerida" is somewhat firmer and the shade a little better, making it slightly superior. This is reflected in Mr Croton's carrying capacity of 1 beast to 12 hectares. It is watered by one equipped non-flowing artesian bore and reticulation scheme with bore drains and bore drain tanks, two sub-artesian bores and water from a stock route water facility.
The other sale, "Kentle Downs", of 12,594 hectares, is situated some 40 kilometres to the east of the subject lands. It sold in January 1995, for $1,087,000, and analysed to show an unimproved value of $20.25 per hectare. As at 1 January 1996, the respondent applied an unimproved value of $19.50 per hectare to that property.
"Kentle Downs" is situated approximately 100 kilometres south of Hughenden by formed earth and gravel roads. According to Mr Croton, it comprises about 8,816 hectares (70%) of undulating black soil downs and about 3,778 hectares (30%) of gidyea/boree scrub and desert tableland. It is watered by six dams, one bore, one shared bore and two earth tanks. Mr Croton assessed its carrying capacity at 1 beast to 13 hectares, the same as the subject lands.
Mr Underwood conceded that he had not fully inspected either of the sales, but he had driven through them and knew them generally. He did not think that either of those sales was appropriate as a basis of valuation because of the circumstances in which the sales took. He considered that each of the purchasers paid too much in the prevailing economic and climatic conditions. However, his evidence in this regard was hearsay and does not refute the opinions expressed by Mr Croton that the sales were in keeping with the general property market at the time.
In addition, Mr Underwood stressed that the sales were different to the subject lands. "Lerida", although similar mitchell grass downs country, was in the more favoured Muttaburra area. "Kentle Downs" had similar downs country, but 30% of its area was timbered country, which was regarded as much safer country during droughts. Its gidyea country also offered potential for development and the sowing of buffel grass.
Mr Underwood referred to two neighbouring properties, "Barenya" and "Sutton Downs" which had been on the market for some time, but had not sold. He thought that the lack of interest in those properties was an indication of the market for comparable properties. However, whatever the reasons for those neighbouring properties failing to sell, the fact is that they did not sell and do not provide any evidence of value. I must have regard to Mr Croton's sales.
While Mr Croton agreed that "Lerida" was slightly superior to the subject lands and that "Kentle Downs" was superior, he thought both sales provided a good basis for his valuation. He pointed out that the management of the timbered country on "Kentle Downs" was more costly than the management of open downs country. Although he had assessed all the properties on a cattle basis, he said that the unimproved values would not change if they were assessed on a sheep basis.
Mr Croton seemed to be well aware of the matters raised by Mr Underwood and said that he had taken them into account in making his valuations. His method of valuation was to analyse the sales of the two basic properties to unimproved values, then to apply the unimproved values to the subject lands, making allowances for the differences between the sales and subject properties. In the absence of sales of unimproved lands, that method of valuation has been approved by Courts of the highest authority. Mr Croton was correct to rely on those sales.
I have some reservations about the superiority of "Kentle Downs" per hectare to the subject lands. Its description, which includes 30% of gidyea/boree scrub and desert tableland, would seem to indicate a much lower carrying capacity and unimproved value than open mitchell grass downs country. However, I must accept the agreement of both Mr Underwood and Mr Croton that "Kentle Downs" is superior and that such properties with developable gidyea were sought after by purchasers. It may well be that following years of prolonged drought, the advantages of the safer timbered country have outweighed those of the downs. This would accord with Mr Underwood's evidence that
in good seasons there is nothing better than mitchell grass downs country, but that in times of drought, when the mitchell grass is gone, there is nothing left and the downs is like a ploughed field.
One aspect of these cases does give me cause for concern. The sale of "Lerida" which is closest in comparison to the subject lands, analysed to show $18.04 per hectare, but only $16.16 per hectare was applied. Mr Croton said that he was not responsible for that applied value, it had been applied by valuers from Longreach who may have been influenced by other sales.
However, the fact remains that it is the respondent's unimproved value, regardless of which valuer applied the valuation. The respondent has therefore applied an unimproved value of $16.16 per hectare to what is admittedly superior downs country, compared with $17.28 and $17.26 per hectare on the subject lands. This is significant, as the respondent's unimproved values are used not only for local government rating purposes to distribute the rating burden within a local government area, but are also used for rental purposes for leasehold lands. Leasehold landowners, such as the appellant, therefore have an interest in challenging what is obviously incorrect relativity and that challenge is not restricted by shire boundaries.
However, the question remains, whether the unimproved values of the subject lands should be altered or the unimproved value of "Lerida" corrected? The evidence in these cases does not extend to demonstrate that $16.16 per hectare for "Lerida" is incorrect. It may well be that the Longreach valuers had other sales which they preferred, or that perhaps the sale of "Lerida" was indeed somewhat too high. In the absence of such evidence, the statutory presumption contained in Section 33 of the Valuation of Land Act 1944, must apply and the unimproved value of "Lerida" must be assumed to be correct.
However, if "Lerida" is slightly superior to the two subject properties, their unimproved values cannot be correct. The appeals must succeed at least to that extent. Therefore, I propose to reduce the unimproved value of each property to $16 per hectare.
Accordingly, the appeals are allowed, the valuations of the respondent are set aside and the unimproved value of "Sandalwood" (AV96-644) is determined at $256,960 (Two hundred and fifty-six thousand, nine hundred and sixty dollars); and the unimproved value of "Aireworth" (AV96-703) is determined at $88,080 (Eighty-eight thousand and eighty dollars).
(JJ Trickett)
President of the Land Court
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