Various Appellants v Chief Executive, Department of Natural Resources
[2000] QLC 64
•16 October 2000
|
BRISBANE
16 OCTOBER 2000
Re: Appeals AV99-1190, AV99-1193,
AV99-1249, AV99-1325, AV99-1309,
AV99-1212, AV99-1211, AV99-1213,
AV99-1270, AV99-1247, AV99-1287.
Appeals against unimproved valuations -
Valuation of Land Act 1944.
Local Authorities: Aramac, Barcaldine and
Ilfracombe
Various Appellants
v.
Chief Executive, Department of Natural Resources
D E C I S I O N S
Overview
The Department of Natural Resources carried out an annual valuation of various local government areas as at 1 October, 1998. As part of the valuation process, the Court was informed that in the western grazing districts a number of issues were addressed by the Department "to improve the accuracy and relativity of unimproved land values, while engaging public input through consultation in the form of valuation industry advisory group meetings".
"Sub-market areas" (SMA's) were identified, unconstrained by local government boundaries. One of those market areas was "SMA62 - Barcaldine/Ilfracombe Downs", the northern boundary of which is southerly of the township of Aramac, the eastern boundary easterly of the Aramac-Barcaldine Road, then south-westerly of Barcaldine along the Alice River to include most of Ilfracombe Shire, then as well, some of Longreach Shire in the west. The predominant characteristic of the Barcaldine/Ifracombe Downs SMA was said to be "the open grasslands of Mitchell and Flinders grass species, openly timbered with Boree, Gidgee and other species such as Dead Finish, Leopard wood, Vinetree, Whitewood and Bauhinia. The soil types are flat to gently undulating grey to brown cracking clays, with areas of alluvial plains and claypan along channels." Annual rainfall averages in the range between 400 mm to 510 mm reducing generally from Barcaldine westerly and from south to north.
As a result of the Department's interpretation of the sales evidence, unimproved valuations in SMA 62, as at 1 October 1998. were increased generally by 10% above the previously existing valuation as at 1 January 1996. The exceptions to this generalisation were where a merging influence into adjoining SMA's was an interpreted assessment of the broader market, or where relativity between valuations was seen to have been an issue deserving of specific consideration. It is appropriate to say at this point that the previous relevant date valuation (1.1.96) had, on the evidence, involved a general increase of 35% above the then previously existing valuations in the Barcaldine Shire. A relatively small number of objectors/appellants had achieved significant negotiated reductions (in some instances through Land Court consent determinations) in the 1996 relevant date valuations. However, the valuations of lands whose owners had not objected, had not been reviewed. It followed that previously existing relativity of valuations had been disturbed in the locality where the reductions had been granted. The appellants say that this caused an unfair distribution of the local government-rating burden. This is a logical conclusion if, in any local government area, unimproved valuations are not in correct relativity one to another.
Generally, the thrust of the appellants' cases in these appeals is that the reductions achieved by the objectors to the 1996 valuation were fair and reasonable having resulted through negotiations between the objectors' representative and senior officers of the Department. There is no dispute that the principal reason for the reductions related to a comparison adopted, between the parties then involved, of the one sale property, "Norbert Park" and the properties the valuations of which had been contested. The appellants say that if an increase in values, as at 1 October 1998, was reflected by the sales evidence, and they do not willingly concede that to be the case, then the increase would apply only to those valuations which had been the subject of the negotiated reductions relevant to the 1996 valuation. That reduced level of value should then have been the base, in their opinion, for an overall correction of relativity between valuations.
The major difference between the parties is that the chief executive now says, through his expert valuation witnesses Mr DP Jones and Mr RR Taylor, that, while a general increase in values is shown by the relevant evidence, that increase is over and above the levels of value which had first been applied in 1996. The respondent's valuers say that the level of value which had been shown by the sale of "Norbert Park", with appropriate adjustments to its initial "provisional" analysis, had been more than conservatively applied in 1996. While that particular sale had not been adopted as a basis for the 1998 valuation, its reviewed analysis still supported the level of value applied in 1998. Consequent upon a specific review, the chief executive has clearly accepted the appellant's initial complaint that a relativity problem had been created by the reductions given as a result of the 1996 relevant date objections. Correction of that situation had been achieved, in the respondent's view, by increasing those previously reduced valuations by a factor significantly higher than the general increase applied in this SMA.
That is not the way it should have been achieved, complain the appellants. They see it as incredible that the success obtained by well-reasoned objection argument and proper consideration of that argument by a senior officer of the Department has been cast aside. In the appellants' view, rather than those reduced valuations now being increased out of proportion, all other valuations of comparable country should have been reduced. They see it as nothing more than exposure of a desire by the departmental valuers to achieve maximum levels of value.
The evidence indicates that some 72 objections were lodged against the 1998 valuations in the Barcaldine/Ilfracombe Downs SMA. It seems that all of those objectors were represented in the "without prejudice" objection conferences by Mr A Boyd. Mr Boyd does not hold professional qualifications in the legal or valuation fields, but has long experience in land and valuation related disputations particularly in the western pastoral areas. He had been instrumental in arguing the successful objectors'/appellants' cases against the 1996 valuations of lands in this locality. The evidence was that again, his representations had succeeded in having some 40 of the 72 objections against the 1998 valuations, "settled". Those objectors who have not accepted the chief executive's decision on the objections, including cases where some reduction was allowed, have proceeded to the appeal process.
The grounds of appeal in the matters currently before the Court are wide, yet the primary ground remains that the objection decisions have failed to achieve proper relativity between valuations, in some cases of individual parcels within family aggregations which were not capable of total amalgamation under the Valuation of Land Act 1944.Following a directions hearing, where the submissions of representatives of both the appellants and the chief executive were considered by the learned President of the Court, some 13 appeals were set down for hearings in Longreach in the sittings which eventually commenced on 2 August 2000. While the appeals which were heard and which are now decided as will follow, are not necessarily representative of the totality of the remaining appeals in these shires, it is nevertheless seen by the Court as appropriate for remaining appellants and the chief executive, to closely consider the identified strengths and weaknesses of the evidence presented in these cases.
One outcome of the directions hearing and now in conformity with the Land Court Rules (see Rule 23) which came into effect on 1 July 2000 was that an order was made in relation to the exchange of the evidence to be given by expert witnesses intended to be called by the parties in these cases. It was further ordered that any relevant responses also be exchanged prior to the hearing.
The President had been informed at the directions hearing that one group of appellants whose cases were sought to be set down had intended to instruct a valuer to provide expert opinion. However, the Court is now advised that due to cost considerations no valuer had been engaged by the appellants. Exchanges of the evidence intended to be led did take place, together with exchanges of responses to that evidence.
The written evidence of the appellants comprised the initial statements and the responses. In every case the individual statements had been prepared for the appellants, on their instructions, by Mr Boyd.
At the commencement of the hearing it was agreed between the parties that evidence of a general nature should be given at the outset and that evidence which eventually encompassed the contents of Exhibits 2 to 8, inclusive, would form part of the record for the individual appeals.
One of the appellants, Mr AD Alexander, had been the original spokesman for a group, but not all, of the appellants. He took on the responsibility of presenting that general evidence led by Mr J O'Hanlon, solicitor of Longreach, instructed by Mr Boyd together with various appellants.
Exhibit 3 comprised a general statement (A), a supplementary statement (B), in response to part of the written evidence of the Department's valuers, an individual statement by Mr Alexander of a general nature (C) and a further statement by Mr Alexander with reference to various sales schedules (D).
The contents of Exhibits 3(A) and (B) related to information provided to Mr Alexander by Mr Boyd. Mr Alexander, as chairman of the group of appellants, had maintained close telephonic contact with Mr Boyd during the objection hearings and appeal preparation period. He had been kept fully informed of the basis and thrust of Mr Boyd's arguments and research. However, the statements prepared by Mr Boyd contained copious information which in its written form was often lacking clear relevance and cogency, requiring oral explanation and examination if that information was to be given evidentiary weight. The task given Mr Alexander, and the appellant witnesses in individual cases, in delivering that which was essentially Mr Boyd's evidence or at least information produced in his language, caused considerable difficulties to all involved, including the Court. Cross-examination by Mr K Fisher of Counsel, for the respondent, brought generally unsatisfactory explanation of much of the content of those statements.It is clear that all appellants had full respect for Mr Boyd's expertise and his knowledge of the matters at hand. Their own particular expertise involved primarily the operation of their properties. Whilst they had inherent knowledge of the land, they were the first to admit that they possessed no valuation expertise. It is unfortunate, therefore, that Mr Boyd was not available to be examined on the matters which he saw as relevant and factual, after his close involvement in the "settlement" of many of the objections and to provide his personal opinion as to why relativity issues remained unsettled. His absence was caused, according to Mr Alexander, by the further expense with which the appellants would have been faced. The appellants, it was stated, had already expended "tens of thousands of dollars" in the objection procedures and it seemed to be a general consensus of opinion amongst them that there would have been no reason for the appeals to have proceeded, had the chief executive, through his representatives, corrected alleged defects in relativity, even after the objection procedure.
I will deal with the preliminary evidence as it was presented by the parties, then move to the individual appeals, as annexures to the body of the reasons for decisions.
The Relevance of the Sale of "Norbert Park"
The sale of this property, of 6,472.543 ha in Barcaldine and Aramac Shires, on 16 July 1995, was, on the evidence, the single basis for the Department's valuation of downs country in this locality as at 1 January 1996. The sale had been analysed by the Department, initially, with development interest calculations based on a "provisional" estimate of the relevant Reserve Bank interest rate at the date of sale. It had shown an unimproved value of $30.76/ha. A valuation equivalent to $29.93/ha was applied to "Norbert Park".
According to the chief executive "the whole area comprises Mitchell grass downs country, open with sparse shade and claypan along Saltern Creek and looser areas to the north and west. Some Prickly Acacia on gully in south west and feather top through out."
The Department's estimate of carrying capacity of "Norbert Park", as confirmed by file notes provided by Mr Jones, had been consistently 1 sheep to 1.4 ha since 1960. As at 30 June 1960, the Valuer-General's Department, in its first valuation, of the relevant Shires, under the Valuation of Land Act 1944, had initially adopted a carrying capacity equivalent to 1 sheep to 1.2 ha for this property. This had been the historical estimate adopted by the Lands Department for assessments required under the Land Act. However, after arguments presented to the Valuer-General's Department on objection, the lighter capacity of 1 sheep to 1.4 ha was adopted. Despite subsequent professional valuation argument seeking to establish an even lighter carrying capacity, the estimate of 1 sheep to 1.4 ha has been consistently maintained for valuations under the Valuation of Land Act.
An apparent confusion has developed in terms of an understanding of departmental estimates of carrying capacity since the Lands Department and the Valuer-General's Department were merged in 1991. Officers of the original Departments have, it appears, been loath to accept carrying capacity estimates other than those related to their particular departmental background. For example, those with a Lands Department background would be more likely to still adopt a carrying capacity estimate of 1 sheep to 1.2 ha for "Norbert Park", while for the same property those with a Valuer-General's Department background would maintain a carrying capacity estimate of 1 sheep to 1.4 ha. However, for unimproved valuations under the Valuation of Land Act, the more conservative estimates of the Valuer-General's Department have been consistently maintained for relativity purposes, according to Mr Jones. He provided documentary evidence to show that, even in the past, while the Lands Department had maintained the estimate of 1 sheep to 1.2 ha for "Norbert Park", assessments under the Land Act recognised specific disabilities which had resulted in lower valuations than for other properties with a similar estimate of carrying capacity.
Mr Jones accepts that carrying capacity estimates are one of the criteria which requires consideration in the valuation of grazing lands. However he holds the opinion, particularly where there is a trend for traditional sheep properties to be purchased for conversion to cattle grazing, as is the case in the subject locality, that market value is related more to unit of area based on country type rather than strict sheep area values.
With his Valuer-General's Department background, Mr Jones personally prefers the more conservative carrying capacity estimates which have been maintained for valuations under the Valuation of Land Act. Mr Taylor concurs generally with the valuation philosophies of Mr Jones particularly with regard to valuations being conducted on a direct comparison of country type rather than any strict adherence to sheep area values related to carrying capacity. It is Mr Taylor's experience that graziers have close knowledge of the carrying capacity of their properties as that potential relates to good or conversely bad seasons, but real difficulty in considering the "average season" carrying capacity concept.
When it comes to the differing departmental cultures, both Mr Jones and Mr Taylor agree that provided valuation adjustment is made for like-with-like considerations such as location, access, rainfall, etc., it matters little for relativity purposes whether either the historical Lands Department or the more conservative historical Valuer-General's Department estimate of carrying capacity is adopted, provided one or other is adopted consistently.
Mr Jones is of the opinion that the problem with comparisons made with "Norbert Park" for the 1996 objection reductions occurred because the decision-maker, with a Lands Department background, was influenced by Mr Boyd's arguments to adopt carrying capacity estimates lacking in the historical consistency of either one or the other original Departments.
I am persuaded that such was the case and the foundation of the appellants' relativity arguments as promoted by Mr Boyd where related in these matters to 1996 relevant date "settlements", is flawed.
The appellants say that in relation to the 1996 settlements, it was agreed between Mr Boyd and the Senior Officer decision-maker, that the carrying capacity of "Norbert Park" should be adopted as 1 sheep to 1.3 ha (Lands Department 1 sheep to 1.2 ha - Valuer-General's Department 1 sheep to 1.4 ha). The argument apparently then was accepted that other properties with historical Lands Department carrying capacity estimates of 1:1.2 but with historical Valuer-General's Department estimates of 1:1.3 should be reduced to a level generally comparable to that which had been applied to "Norbert Park". As Mr Jones pointed out, however, those other properties historically estimated by the Valuer-General as having a carrying capacity of 1:1.3 had consistently been considered superior to "Norbert Park". That traditional relativity had been altered by the valuation reductions given through the objection process to those superior properties.
The appellants accept without equivocation, Mr Boyd's advice that the carrying capacity of "Norbert Park" had been "proved" as being 1 sheep to 1.3 ha because that estimate had been accepted by the "senior officer" of the Department. The "senior officer" is not a witness in these proceedings, however, to give his version of relevant considerations while Mr Jones and Mr Taylor are. What has been "proved" is that, if Mr Boyd's advice is correct, the "senior officer" departed from established relativities for valuations under the Valuation of Land Act. It seems to be the case that Mr Boyd's advice to the appellants to the effect that various carrying capacity estimations have been "set in concrete" is a reference to, in most cases, Lands Department estimates, but in others, the more conservative Valuer-General's Department estimates, and then in the case of "Norbert Park", a mixture of both.
For the purpose of relativity considerations in these appeals, I will accept, on the evidence before this Court, that the carrying capacity estimate for "Norbert Park" should be adopted as 1 sheep to 1.4 ha.
There is then some criticism of the analysis of the sale of "Norbert Park" having been reviewed by the Department to show an unimproved value equivalent to $33.18/ha as compared with the earlier "provisional" analysis of $30.76/ha. The reason for that adjustment has been explained. It is accepted that while the chief executive has not included the sale of "Norbert Park" in the 1998 valuation basis, the 1998 valuation of "Norbert Park" at $32/ha (10% higher than the valuation applied in 1996), is supported even by reference to the 1995 sale.
"Principal Sales" Details
Exhibit 7A, titled as above, was tendered through Mr Jones. It was not intended that this document indicate only the basic sales adopted by either Mr Jones or Mr Taylor in the valuations for which they individually took responsibility. Instead the "principal" sales were those which Mr Jones expected to be raised in evidence. That expectation proved to be the case. Certain sales were subject of copious attention in the statements prepared by Mr Boyd. There were somewhat emotive accusations levelled at the valuation methodology of the departmental valuers, largely in connection with what was perceived to be artificial and "ingenious" tampering with historical carrying capacity estimates for some of the sale properties.
After consideration of the contents of, in particular, Exhibits 3A and 3B, it can be seen that the appellants are convinced that alterations to some estimates of carrying capacity have been deliberately effected to show better valuation consistency between mathematical calculations of sheep area values as indicated by the analyses of the sales. For reasons similar to those given in the discussion relating to "Norbert Park", any artificial tampering with historical carrying capacities, at least by the respondent, is not proved. Instead, any perceived inconsistencies as identified for the appellants by Mr Boyd, stem from the cocktail of carrying capacity estimates adopted, over the years, by various persons under various legislation, as well as estimates gleaned from Land Court decisions.
Brief details of the sales as contained in Exhibit 7A, in alphabetical order, will follow. Where relevant, findings applicable to contentious issues are included in this section.
(1) and (2) - "Ascot Downs" -
This property of 10,298.845 ha in Aramac Shire was sold on 23 June 1997 for $800,000 then resold on 30 October 1997 for $825,000. For the purposes of these appeals the sales were analysed jointly by Mr Jones and Mr Taylor to show unimproved values of $33.73 and $35.61/ha respectively.
They described the general nature of the land as being "generally open to lightly shaded black soil Mitchell grass downs tending to be looser on the western side. There is a belt of good boree/gidgee/Coolibah shade on the eastern side along Little Politic Creek."
It is not disputed that after an original inspection by Mr Jones, Mr Taylor and Mr G Naish (a valuer no longer in the employ of the Department), the "Ascot Downs" sales were analysed by Mr Taylor to show $32.16 and $34.59/ha respectively. A copy of a "sales schedule" which had been obtained by Mr Boyd had made reference to the sales as being "basic", indicating that they had formed part of the basis for the annual valuation relevant to these appeals.
However, at the time of these analyses, the departmental valuers had not been aware that included in both sales was a number of stock (sheep). There is dispute now as to the value of those sheep. The appellants sought advice from a Mr Bloodworth, an agent who was involved in both sales. Mr Bloodworth had provided a written personal opinion to Mr Alexander suggesting that the commercial value of the sheep in the first transaction was $40,745 and in the second $59,912.
Mr Jones and Mr Taylor subsequently reviewed the sales analyses and included stock values of $32,060 and $40,701 respectively. At the same time the earlier "provisional" interest rate calculations were amended to a confirmed lower rate. The review of the analyses did not stop there, however. Adjustments were made which resulted in the added values of improvements, in particular structures, being assessed at lower figures. The end result was that the final analyses as provided to the Court, indicated unimproved values in excess of the initial "basic" sale analyses, excluding the stock.
Nevertheless, in the end result, the Department's valuers say that they no longer rely on these sales as basic evidence, primarily because of the difficulties associated with analyses of sales where livestock are included.
The appellants, as might have been expected, are somewhat cynical of the reviewed analyses. They say that if Mr Bloodworth's valuations of the stock were deducted from the initial departmental analyses, on which they are convinced the Department would otherwise have relied, then those sales would not have shown any increase over and above the levels to which the contested 1996 values were reduced.
Another area of disagreement is the Department's estimate of carrying capacity. The Department, Mr Jones says historically, has adopted 1 sheep to 1.4 ha, the same as for "Norbert Park". The appellants agree it is the same as "Norbert Park" but at 1 sheep to 1.3 ha. I accept the Department's estimate of carrying capacity, for relativity considerations.
A valuation of $325,000 ($31.56/ha) was applied to "Ascot Downs" as at 1 October 1998.
While the sale and resale are no longer relied upon by the Department, it is reasonable in my view, for the reviewed analyses to cause some concern. The "review" of the analysed added value of improvements, subsequent to the Department being informed as to the stock component in the sale, raises questions going to the credit of the evidence of the valuers concerned. Nevertheless, the only evidence as to the proper analysis of the sales, particularly the reasons for review, and the reviewed added value of certain improvements, comes from the respondent's valuers.
The removal of these sales from the basic evidence on which the Department relies does not necessarily weaken its case. The absence of any rebuttal evidence as to the value of the components of the sales, other than livestock, does not assist the appellants' case.
"Ashgrove" -
5,514.651 ha in Barcaldine Shire, sold 12 September 1996 for $415,000, analysed by the Department for the purpose of the Court hearing, to show an unimproved value of $42.03/ha. An original analysis had found a slightly lower value for water improvements and an analysed unimproved value of $42.78/ha, as a basic sale.
The Department described the nature of the land as being "generally well shaded gidgee Downs with tight soils between creeks and thicker gidgee in north west corner."
The Department's estimate of carrying capacity is 1 sheep to 1.3 ha. The valuation applied to "Ashgrove" was $210,000 ($38.08/ha).
At page 26 of the appellants' statement (Exhibit 3A) is the following passage:
"It has taken 12 pages in this Statement to address the sale of 'Ashgrove', and that demonstrates the determination of landholders in this area to show that this sale provides no reliable source of evidence of value and that it should be set aside. It does not meet the Spencer Test. It is an excessively high sale. It is not supported by any other 'bona fide' sale and it is completely out of line with the market. It must be discarded."
It is contended by the appellants that the valuation of $34.45/ha applied by the Department to "Ashgrove" in 1996 was "astronomically excessive". Reference was made in the statement to the level of values applied to various properties going back, in some examples, to 1972 as "proof" of that contention.
The appellants question the relevance of the 1996 date of sale. It is said that the sheep area value as indicated by the sale of "Ashgrove" is significantly above sales of properties such as "Norbert Park", "Audreystone", "Ascot Downs", "Honan Downs" and "Hazelwood". The appellants say that "the only possible explanation for their" (the Department's) "action was it presented an opportunity for them to maximise values along and adjacent to rail in this area. By so doing, it has greatly disturbed the relativity that has stood the test of time …"
In their accusations in this matter as to the tampering with carrying capacities the statement contained the following:
"However they had a dilemma, as the analysed value and the sheep area value reflected by the sale of 'Ashgrove' was too high. They could not change the analysed value reflected by the sale, and it is submitted the only way to get around the dilemma was to change the carrying capacities, not only in respect of the sales, but in respect of other lands in the area.", when "carrying capacities have been 'set in concrete' for decades."
Then -
"It is submitted they could not change the carrying capacity of 'Ashgrove', as with such a high analysed value, it had to have a high carrying capacity, and they left it at its correct carrying capacity of 1 sheep to 1.3 ha. However it is submitted they set about effecting changes to all the other sale properties, and in that way they considered they could get the sheep area values closer together."
Sufficient comment has been already made regarding the carrying capacities adopted by the Department. I am not convinced on the appellants' written material, or Mr Alexander's oral evidence, that the sale of "Ashgrove" is one which should be "set aside" as not meeting the "Spencer" test of market value. (See Spencer v. The Commonwealth of Australia (1907) 5 CLR 418, Griffith CJ at p.342 and Isaacs J at p.441).
"Ashgrove" was sold by Westpac Banking Corporation as mortgagee in possession, on Mr Jones' evidence after proper exposure to the market, to experienced local graziers. The criticism of mortgagee-in-possession sales stems usually from the potential for the mortgagee to be seen as over-anxious, which could have the effect of the sale price being low, rather than in excess of, fair market value. While the sale did take place some two years prior to the date of valuation the trend perceived by the Department had continued from the evidence provided by sales in 1996 through to the more buoyant sales activity in 1998.
"Ashgrove" is of relatively small area, with no disagreement between the parties that it would not have the potential to provide, by itself, an economically viable living area. However, there are many individual blocks of generally comparable size in this locality for which a market obviously exists, including a market for such blocks to be added to existing, but not necessarily adjoining aggregations, used for grazing purposes.
Reference was made by the appellants to the presence of Prickly Acacia infestation and the estimated significant cost of its eradication on "Ashgrove". In the appellants' opinion this was a further disability which raised a serious concern as to the validity of the sale price. However, in Mr Jones' opinion, whilst thick in defined areas, the presence of Prickly Acacia was not so severe as to have affected the stocking rate of the block overall.
I have not been convinced that the sale of "Ashgrove" should be set aside as basic evidence of value for comparable blocks, for the reasons put forward by the appellants. There is at least agreement between the parties as to the carrying capacity of this land. That carrying capacity has been historically adopted by the Department.
"Audreystone" -
5,795.361 ha in Barcaldine Shire, sold 19 October 1998 for $516,772, analysed by the Department to show an unimproved valuation of $34.96/ha and adopted as a basic sale.
The Department's estimate of carrying capacity is 1 sheep to 1.4 ha. The applied unimproved valuation which was said to have a "15% allowance for Prickly Acacia built-in" was equivalent to $31.92/ha (an application of 91.3% of the analysed sale price).
The Department describes the general nature of the land as being "mostly open black soil Mitchell grass downs with Shaded Red buffel downs in south and claypan along creek, with thick prickly acacia problem."
This property adjoins "Norbert Park" and again the appellants submit that the carrying capacity should be 1 sheep to 1.3 ha, which was not only the carrying capacity accepted by "senior officers of the Department", but by the owner as well.
The appellants accept that this sale provides basic evidence of value as at the relevant date. As I understand their submission, they accept this evidence because it showed a level of value consistent with the sale of "Norbert Park", in full knowledge of which the senior officer of the Department had allowed, in 1996, significant reductions to the valuations of the various properties the owners of which were represented by Mr Boyd.
There seems no reason to me why the sale of "Audreystone", being accepted by both parties, should not form part of the basis of the 1998 valuation. It should be seen as strong support for the valuation applied at that relevant date to "Audreystone" itself.
It is observed that the appellants' submissions appear not to have given any, or sufficient recognition, to the degree of Prickly Acacia disability which existed on this property, in comparison with other properties included in their relativity examples. As with the property "Norbert Park", I accept the Department's estimate of carrying capacity of "Audreystone" as being 1 sheep to 1.4 ha. I further accept that, had this land not been considered to have had an "out of control" Prickly Acacia problem, a valuation of $37.50/ha would have been applied. Such valuation would have included a "loading" for its location close to Barcaldine.
"Avonslea" -
5,569.379 ha in Barcaldine Shire, sold 9 February 1998 for $550,440, analysed by the Department to show an unimproved value equivalent to $47.44/ha.
The Department described the property as being "a mixed block of well shaded tighter soil Mitchell grass downs and rolling red loamy hills in the north east that are naturally taken over by buffel. Gidgee shade becomes thick in the north west corner."
The Department's estimate of carrying capacity is and has historically been, 1 sheep to 1.3 ha. The unimproved valuation applied is equivalent to $39.05/ha (82.31% of the analysed sale price).
The purchaser, Mrs McGavin, has appealed against this valuation. Her parents own property in close proximity and Mrs McGavin has a management role in the operation of that nearby property. The Department, through Mr Jones, recognises the potential for a premium to have been included in the sale price for the proximity, rather than strict adjacency of "Avonslea" to the family aggregation. However it was Mr Jones' opinion that the physical separation of "Avonslea" from the family aggregation requires "Avonslea" to have independent infrastructure and to be operated as a separate entity. His inquiries indicated to him that as a prudent experienced local grazier, Mrs McGavin had negotiated the purchase over a relatively long period. Nevertheless, the sale was eventually effected when interest was being shown by others. The circumstances were such that the sale was not adopted by the Department as a basic sale but rather a sale which offered support to the level of value shown by the "Ashgrove" sale.
The appellants say, with Mrs McGavin's later support in the individual appeal, that negotiations to purchase the property had commenced a year prior to the actual date of sale, which had been contingent on certain improvements being effected. When those improvements had been completed, negotiations recommenced but by then another nearby owner was also "anxious to acquire the property" when "Much to the delight of the vendors, the price escalated" and Mrs McGavin "paid well above what was intended". The appellants say that "any attempt by the Department to use the sale of 'Avonslea' to 'prop up' the sale of 'Ashgrove' by demonstrating some consistency, must fail".
It is clear that the level of value applied to "Avonslea" is not based on the sale itself. However, the sale in no way damages the evidence provided by the sale of "Ashgrove" which on my appreciation of the overall evidence, requires no "propping up".
"Clarendon/Haroldston"
13,763.561 ha in Blackall Shire, sold for $1,500,000 on 1 September 1998, analysed by the Department to show an unimproved value equivalent to $37.63/ha.
The Department describes the land as comprising "mixed lighter developed buffel grass gidgee scrub (31%), well shaded boree herbage downs (22%), flooded alluvial downs (31%), Mitchell grass shaded downs (9%) and heavily flooded Coolibah channels (7%)."
The Department's estimate of carrying capacity is 1 sheep to 1.4 ha. The application of value represents 84% of the analysed sale price.
It was the appellants' general response to the inclusion of sales in Blackall Shire in this exhibit that until the exchange of reports, those sales had never been put forward by the Department as having any bearing on values in SMA 62.
This sale was included by Mr Jones due to his assessment of the comparability of country type to one of Mrs McGavin's appeal blocks, "Hulton".
Further comment will be made relative to that particular matter.
"Dunrossil"
7,271.392 ha in Blackall Shire, sold 18 March 1999, for $706,000, analysed to show an unimproved value equivalent to $34.18/ha.
The Department describes the land as being "mainly open to lightly shaded Mitchell Grass Downs with scattered Gidgee and Boree before becoming thicker boree (7%) and partly cleared melon holey gidgee (8%) in the north."
The Department's estimate of carrying capacity is 1 sheep to 1.4 ha in the property's natural state, with potential to be increased to 1 sheep to 1.3 ha. The application of value represents 87.5% of the analysed sale price.
Again, the appellants' submission is that any sales in the Blackall Shire are representative of a different market area.
The sale was said by Mr Jones to have been included in the principal sale exhibit, due to the existence of some country type other than pure downs. It has not however been used as basic evidence in these appeals and no further comment is required.
"Hazelwood" -
7,856 ha in Isisford Shire, sold 1 May 1996 for $582,365, analysed to show an unimproved value equivalent to $26.65/ha. The Department's estimate of carrying capacity is 1 sheep to 1.4 ha. The application of $25.08/ha represents 94.1% of the analysed sale price.
The Department described the land as being "generally open to lightly shaded black soil Mitchell grass downs tending to be looser on the western side of the Thompson watershed. There is a patch of good boree shade on the south eastern corner and some boree/coolibah shade on the north western side along 4 Mile Creek."
It was Mr Jones' evidence that this sale was external to SMA 62 in the Longreach Downs SMA 64, and in an area of lower annual rainfall. He said that the sale had indicated support for the previously existing valuation in that SMA and the valuation of "Hazelwood" was rewritten. The sale had not been relied on by the Department in the matters presently before the Court, according to Mr Jones.
The appellants' statement contained the information that the sale was included in a document headed "Sales Schedule - Barcaldine SMA 62" which was provided initially to a valuation advisory group with a notation suggesting that the sale had supported the "Honan Downs" sale and a rewrite of the existing valuation of "Hazelwood". The appellants agree that the sale does support the valuation applied to "Honan Downs" (about $27/ha) but they say both properties have similar carrying capacities of 1 sheep to 1.4 ha.
"Honan Downs" is a sale which will be discussed individually later. However the appellants say that the "Hazelwood" sale was used in certain objection "settlements" on the basis of an "agreed carrying capacity of 1 sheep to 1.4 ha" and it was considered relevant that the sale showed no increase over the 1996 level of applied valuation.
It may well be that in the without prejudice objection conferences the sale of "Hazelwood" was used for the negotiation of settlements of some disputed valuations. However before this Court, apart from the continuing argument with regard to altered carrying capacities, there is no direct evidence which goes to the question of the relativity of "Hazelwood" with "Honan Downs".
Mr Jones says that the sale schedule referred to by the appellants would have been made available as a confidential document to the valuation advisory committee to be used for preliminary discussions before the basis of valuation for 1998 had actually been set. He said that the contents of the schedule were not intended to be used as evidence in Court proceedings and had not been verified as such. He was disappointed that information provided confidentially for preliminary discussion purposes should be used against the Department in these matters.
This sale was raised by the appellants as specific evidence of value in some appeals. The chief executive apparently accepted the sale as basic evidence of value in the Longreach Downs SMA but not for any of the appeals before the Court for lands in SMA 62.
Mr Jones saw more relevance in making comparisons between certain sales in Blackall Shire and some of the appeal blocks. "Hazelwood" in comparison was said to be in a much lower rainfall area.
"Honan Downs" -
7,764.4 ha in Ilfracombe Shire, sold 28 May 1996 for $670,000, analysed to show an unimproved value equivalent to $28.99/ha.
The Department described "Honan Downs" as being "a very mixed block of open to well shaded boree Downs (50%), pebbly Gidgee (20%), creek channels (8%), hard gravely Leopardwood ridges/lighter sandy dead finish (6%) and heavily flooded coolibah river channels (16%)."
The Department's estimate of carrying capacity is 1 sheep to 1.6 ha in its natural state with potential to carry 1 sheep to 1.5 ha. The applied valuation of $27.05/ha represents 93.3% of the sale analysis.
The appellants through Mr Alexander, recognise and accept this sale as basic evidence of value. They say that it was used to settle reduced valuations on adjoining properties. However they say that the carrying capacity was adopted, for settlement purposes, as being 1 sheep to 1.4 ha. They interpret a Land Court decision in a freeholding matter to suggest an even heavier carrying capacity potential. It is suggested that the carrying capacity has now been deliberately extended by the Department to bring the resultant indicated sheep area value closer to the Barcaldine sales and that insufficient consideration has been given by the Department, when comparing relativities of value, to the natural water feature.
Mr Alexander himself had a good knowledge of this property having been the under bidder at an earlier auction. It was his expressed opinion in his general evidence that the original Lands Department estimates of carrying capacity were the standard which had stood the test of time and which were adopted in the marketplace as a guide to value. In his opinion a carrying capacity of 1 sheep to 1.5 ha is not indicative of the quality of "Honan Downs".
Mr Jones' evidence (Exhibit 7E p.16) was that prior to 1981 there were file notations suggesting an adopted carrying capacity of 1 sheep to 1.7 ha but then a note by a Valuation Cadet "that maybe it should be on 1:1.4 the same as blocks to the north. It is this notation that has been incorrectly copied onto some of the Longreach schedules and even the most recent Court schedule for the 'Navarre' appeal of Back's. This has now been corrected and the last definitive inspection for the 1981 general valuation" … "has it as 1:1.5. It was checked by placing 1:1.4 on the Downs and Gidgee components, and a lesser amount on the channels, flooded and lighter ridges to average out at 1:1.5. This sale therefore has a departmental potential carrying capacity of 1 sheep to 1.5 hectares, which has been achieved, by the clearing of some 850 hectares of thicker Gidgee scrub." Mr Jones then went on to address the various disabilities as well as the natural attributes including access to pumping supplies of natural water from a permanent waterhole, in the Barcoo River.
It is clear that several estimates of carrying capacity have appeared on various departmental files for various purposes, over the years. I accept the evidence of Mr Jones that a specific investigation has been carried out in relation to the original Valuer-General's records and that it can be accepted for valuations under the Valuation of Land Act, the potential of "Honan Downs" with some timber treatment has consistently (since 1981) been adopted as 1 sheep to 1.5 ha. For reasons given previously, it is also accepted that, for relativity purposes, there should be a consistent approach to historical carrying capacity estimates unless it can be shown that such historical estimates, in particular instances, do not result in correct relativity. Both Mr Jones and Mr Taylor have inspected "Honan Downs" and are satisfied that as developed to its potential a carrying capacity of 1 sheep to 1.5 ha maintains correct relativity on country type for valuations under the Valuation of Land Act. Both Mr Jones and Mr Taylor agree that the natural surface water on "Honan Downs" is beneficial but have also given consideration to the boundary location of the Barcoo River waterhole in relation to serving the balance of the property and the disability associated with the protection of pumping equipment from river flooding. It is also clear that in the comparison process, factors such as the lower rainfall average experienced south-west of Barcaldine in the "Honan Downs" area, its location and access relative to other properties within the Shire, are matters which have been given consideration in that comparison process.
In the end result, the sale of "Honan Downs" is accepted by both parties as providing sound evidence of market value. The sale analysis is not challenged. However, when it comes to the comparison process, it is inherent in the submissions of the appellants that, in their opinion, "Honan Downs" is superior, through carrying capacity potential, to the Department's estimate. They say a comparison on sheep area values is distorted through the low carrying capacity which has been adopted by the departmental valuers. Both Mr Jones and Mr Taylor say that their use of this and the other basic sales in the district has been on the approach of a direct comparison of country type with due allowance for attributes and disabilities. They say a pure mathematical calculation of sheep area value, even on any consistent estimate of carrying capacity, could provide erroneous relativity results in the absence of like-with-like comparisons embracing all features which affect value.
For consistency of comparison I accept that the departmental estimate of carrying capacity potential (1 sheep to 1.5 ha) should be adopted.
"Illabunda" -
6,013.629 ha in Aramac Shire, sold on 26 April 1996 for $420,000, analysed to show an unimproved value equivalent to $29.03/ha.
The Department describes the property as comprising "generally lightly shaded black soil Mitchell grass downs with scattered red ridges taking to buffel and tending to be more open east of Langharne Creek before rising to thicker boree herbage country and a patch of pulled pebbly gidgee."
The Department's estimate of carrying capacity is 1 sheep to 1.4 ha. The property is now used for cattle breeding. The applied valuation of $27.02/ha represents 93.1% of the sale analysis.
"Illabunda" adjoins part of the aggregation of lands owned by Mr Alexander. He says that he was informed of an "agreement" between the Department and Mr Boyd, that this "high" sale would not be used by the Department as a valuation basis, if the sale of the nearby "Lilydale/Myrtle Farm" to the same purchasers at about the same date, at a much lower level of value, was not used by the objectors.
It was not denied by Mr Taylor or Mr Jones that there was a reference to "Illabunda" being a "high" sale in a schedule produced for a preliminary discussion which had been intended to be confidential, with the valuation advisory group. However, it is said that notation was caused by a transposition into the schedule of the 1995 valuation figure of $115,000, instead of the correct 1996 valuation figure of $155,000 as being the existing valuation at the date of sale. The sale analysis had indicated initially then that an increase of about 60% over the "existing" valuation would be shown and such an increase was well above the perceived market trend. However, when the correct "existing" valuation was inserted into the schedule, it was realised by the Department that, in fact, the sale conformed with the perceived trend. It was then adopted as basic evidence of value.
While it is no doubt unfortunate that the parties appear to have been guided by "provisional" sales analyses, even as late as the objection conference stage, this Court is required to make its decision based on the evidence presented and examined before it. Neither party could be bound by any alleged "agreement" accepted for the purpose of conducting a without prejudice conference. Just as the respondent is entitled to produce relevant evidence to this Court, so are the appellants. Had they, after proper expert investigation and advice decided that the sale, for example, of "Lilydale/Myrtle Farm" supported their case, then they would have been at liberty to introduce that evidence. The exchange of expert evidence prior to a hearing is a safeguard against a party being caught by surprise.
It was brought to the Court's attention that the "Lilydale/Myrtle Farm" property had been resold shortly after the date of valuation, at a much higher price than the sale price in 1996. It was expected that a detailed analysis of that later sale would show a much higher unimproved value than was applied to that property at the date of valuation. The Department had chosen not to use that sale as evidence for the subject relevant date valuation.
The sale of "Illabunda" has been shown on a proper examination of the analysis before the Court, to support the valuation applied to that subject property. The sale will be further discussed in the matters to which it is relevant. However it is submitted by the Department that the sale, which in fact reflected an increase of 4.6% above the existing valuation, had been interpreted as being in conformity with the market trend of decreasing level of values as the lands in SMA 62 merge with those in the SMA to the north of "Illabunda".
It is accepted that the sale of "Illabunda" may be adopted as providing basic evidence of value.
"Lilyveil" -
10,621.481 ha in Blackall Shire, sold for $1,212,000 on 26 June 1998, analysed to show an unimproved value equivalent to $46.54 /ha.
The Department describes the land as comprising "a good mix of well shaded Gidgee and Boree Mitchell grass downs. There is some heavier black soil more open downs in lot 7, and the soils are more reddish, sweeter and pebbly west of Toorina Creek that runs through the centre of lot 5."
The Department's estimate of carrying capacity is 1 sheep to 1.3 ha. The applied valuation of $40.49/ha represents an application of 87% of the analysed unimproved value. Again the appellants are strongly of the opinion that, because a recognised different market exists in Blackall Shire, no good purpose is served by Mr Jones having introduced such evidence which had not been raised by the Department in earlier discussions.
Mr Jones' opinion was that while this property was within another SMA "the main market for Downs country extended from as far south as Morven northerly to near Richmond." He saw it as reasonable valuation practice to interpret and give consideration to the relationship between different SMA's rather than restrict consideration to, for example Shire boundaries, when conducting valuations under the Valuation of Land Act. He agreed that well-shaded Blackall Downs country was highly regarded and that was reflected in the sales evidence, but in his opinion the Department's interpretation of market trends throughout the main Downs market was also shown in the Blackall evidence.
It seems to me that by the very creation of notional SMA's by the Department, for the purpose stated earlier, the primary or basic evidence of value would ideally come from within or within at least close proximity of that recognised market area. However, any party who believes relevant evidence is provided by sales from another SMA cannot be restricted from introducing that evidence. Mr Jones suggested that introduction of sales evidence from Blackall Shire was relevant to the valuation of certain appeal blocks, particularly those southerly of the railway line.
The weight which will be given to the evidence provided by this sale will be discussed in the individual appeals where Mr Jones believes it to be relevant.
"Tarves" -
10,567.556 ha in Blackall Shire, sold for $1,250,000 on 1 July 1998, analysed to show an unimproved value equivalent to $53.04/ha.
The Department described "Tarves" as being a "well shaded mixed Mitchell grass downs block with good gidgee and boree shade and areas of red bloodwood buffel grass downs. The Gidgee and Boree become thicker on the western side and may require clearing in the future. There is a small area of flooded alluvials' off Douglas Ponds/Skeleton Creeks and Frog Hollow in the south."
The Department's estimate of carrying capacity is 1 sheep to 1.2 ha. The applied valuation of $45.42/ha represents 85.6% of the sale analysis.
Similar comments apply to this sale as have been made in the previous "Lilyveil" sale.
"Valley Downs/Ant Bed"
13,045.748 ha in Aramac/Barcaldine Shires, sold for $500,000 on 11 December 1996 to show an analysed unimproved value equivalent to $8.19/ha.
It emerged that this sale has no relevance to any of the appeals currently to be decided by the Court, except with regard to the discount which might be applied to amalgamated, but severed blocks.
Overview Summary
General Evidence:
Where the question of carrying capacity of sale properties, including "Norbert Park", is an issue in dispute, I will adopt the estimates of the respondent as a true reflection of the historical estimates used for making unimproved valuations pursuant to the Valuation of Land Act.
I do not accept the appellants' contention that the base for consideration of values to be applied as at 1 October 1998, should be related to the level of value reflected by those valuations reduced consequent upon objections to the 1 January 1996 valuation.
The task of the Court is not to determine the correctness of valuations other than those subject of the appeal. In performing that task it is well held that the best evidence of unimproved value of land is that provided by the analyses of sales concluded under open market conditions at or near the date of valuation, of land capable of comparison with that to be valued. While it may be administratively convenient for the chief executive to adopt valuation methodology which relates directly to an existing valuation within a local government area, the Court is not required to concern itself with the valuations previously in force for the particular local government area.
Individual appeals will be treated on their merits on the basis of the evidence presented to the Court. However, there has been found to be a lack of satisfactory proof that individual valuations should be found to be wrong for the generalised reasons contained in the statements marked as Exhibits 3A and 3B.
Relativity Issues:
The thrust of the chief executive's defence of these appeals was that the unimproved valuations of the individual blocks were supported by the sales evidence and were therefore soundly based. Little attention seemed to have been given to defence of the allegations of incorrect relativity of valuations, at least in the material which had been prepared by the departmental valuers for the Court hearing.
In Cairns Resort Investments Pty Ltd v. Chief Executive, Department of Lands (1994-95) 15 QLCR 1 the Land Appeal Court, in considering an argument based on relativity of valuations said at pp.5-6:"Coming then to the question of relativity we find it of assistance to repeat some principles which were restated by the Land Appeal Court in Grahn v. The Valuer-General (1992-93) 14 QLCR 327. At p9 of the judgment the Land Appeal Court said -
'The decision of the High Court of Australia in Brisbane City Council v. The Valuer-General ((1978) 140 CLR 41, 5 QLCR 283) and the decisions of the Land Appeal Court in cases such as WM and TJ Fischer v. The Valuer-General ((1983) 9 QLCR 44) and R and MM Barnwell v. The Valuer-General ((1989) 13 QLCR 13) are authority for the following propositions:
a) It is desirable that valuations made for the purposes of the Valuation of Land Act 1944 of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis. (R andMM Barnwell v. The Valuer-General (1989) 13 QLCR 13, at p. 16 and cases cited in it).
b) The best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels of land (WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, at p. 46; R and MM Barnwell v. The Valuer-General (1989) 13 QLCR 13, at p. 17).
c) Section 13(7) of the Valuation of Land Act 1944 creates a presumption that the value in money terms shown by the Valuer-General in his notice of valuation is correct (Brisbane City Council v. The Valuer-General (1978) 140 CLR 41, at p. 56).
d) Once it is shown that:
1)in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact; or
2)the valuation was made by a method fundamentally erroneous,
the presumption created by section 13(7) is rebutted (Brisbane City Council v. The Valuer-General (1978) 140 CLR 41, at pp. 56-7).
e) Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence (WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44, at p. 46).
f) If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error (R and MM Barnwell v. The Valuer-General (1989) 13 QLCR 13, at pp. 16-17 and cases cited in it).'
In applying these principles to the body of evidence before the lower Court and this Court we find that for the purpose of the 1989 valuation sales evidence is of a general and mixed nature with the overlap between commercial (CBD) values and resort/accommodation site values impacting to a greater or lesser degree in the mind of Mr Goodman-Jones and depending upon the highest and best (mixed) use of the sites - more so in respect of the three sites calling for our attention on relativity. For these reasons although there is a strong probability that in retrospect Mr Goodman-Jones would have liked to have rewritten the valuation of the Cairns International site we are not prepared to hold that the value applied to that site was fundamentally wrong and should be put aside when considering relativity for the purposes of this annual valuation."
Mr Fischer for the respondent, also referred the Court to the principles set out in Grahn (supra). It is seen as relevant that also in Grahn, following the principle set out in paragraph (f) was the following comment -
" Bearing those propositions in mind, it is best to approach this case by considering first the position regarding sales evidence then considering the relativity of the valuations of the subject blocks with the valuations of comparable blocks of land."
As I interpret the authorities, when the grounds of appeal include allegations of incorrect relativity of valuations and the appellant endeavours to prove the grounds of appeal, the chief executive needs not only to show that the valuations central to the allegation are soundly based, but to answer the allegations of incorrect relativity.
In these matters, the evidence provided by the chief executive's valuers concentrated on showing that the evidence of value provided a sound basis for adoption of trends in value, as those trends related to the previously existing valuation and existing relativities of valuations. Generally, apart from specific instances to which reference has already been made, the 1996 valuation was adopted as a base, to which factors were applied resulting in no variation in some cases as lands merged into adjoining SMA's showing no increase, up to a maximum increase of 10%. In the specific cases referred to earlier, higher increases resulted for relativity-associated reasons. It followed that with trends interpreted as varying between no increase up to 10%, previous relativities between valuations were disturbed by the merging influence of different levels of value.
In the end result, I have not been persuaded on the evidence of the respective positive and negative features of "Arundel", "Glenferrie" and "Accord", that the valuation of "Avro" is indicative of any identifiably incorrect valuation relativity.
The appellant has not therefore proved the grounds of appeal which is, as a consequence, dismissed. The valuation of the chief executive is affirmed.
MEMBER OF THE LAND COURT
ANNEXURE K
Re: Appeal AV99-1287
Valuation Roll No. 97/10000
Appellant: JE Back
Local Authority: Ilfracombe Shire
D E C I S I O N
Mr Back owns the adjoining properties "Navarre", "Nimaloola" and "Logie", described as Lot 1, Crown Plan PD59 and Lots 9 and 11, Crown Plan PD177:GHFL 29/11370, Parish of Bampton and Lot 3, Crown Plan YN145:GHFL 29/11361, Parish of Tylden, containing a total area of 15,490.541 ha.
"Navarre" is about 53 km by road south-east of Ilfracombe via the bitumen Landsborough Highway for 23 km then the Dandaraga Road for 30 km, 18 km of which is bitumen sealed, the balance being formed earth. Access to the property is dry weather only.
Power and telephone are connected and mail is delivered three times per week.
As at 1 October 1998 the chief executive's unimproved valuation of the aggregation is $470,000, which equates $30.34/ha the amount apparently rounded from $30.50/ha. Mr Taylor, although not responsible for making the valuation, took responsibility for its defence. The valuation which originally issued equated $32.92/ha ($510,000) but was then reduced, on objection, to the valuation now appealed against.
Mr Back appeared in person and conducted his own case although as I understand it, he was one of the group of appellants for whom Mr Alexander was the spokesman. The general evidence as prepared by Mr Boyd for the group and by Mr Jones and Mr Taylor for the chief executive is accepted by the parties as forming part of the record of proceedings in this matter.
Mr Back's estimate of unimproved value was $433,720 equating $28/ha. Tendered by him were the usual Statement of Evidence (Exhibit 9) and supplementary Statement of Evidence (Exhibit 10) which had been prepared by Mr Boyd. The thrust of the appellant's written submission was that the "Navarre" aggregation identified with Ilfracombe rather than Barcaldine, not only geographically but also with regard to the nature of the open downs country particularly in the western sections of "Nimaloola/Logie". It was the appellant's submission that lands which identified with Ilfracombe were less favoured and consequently less valuable than those identifying with Barcaldine.
It was submitted that the sales of "Honan Downs" which Mr Boyd argued had a carrying capacity of one sheep to 1.4 ha (as mentioned in the general evidence), which had been analysed by the Department to show an unimproved value of $28.99/ha with an application of $27.05/ha and "Hazelwood" with a carrying capacity of one sheep to 1.4 ha, analysed unimproved value of $26.65/ha, applied $25.08/ha, provided the best evidence of value for the valuation of the subject property. Both sales were said to be geographically more comparably located than any of the sales closer to Barcaldine.
From a relativity perspective it was submitted that in comparison with the "settlements" of the superior "Vermont/Lyndon" at $32.50/ha with carrying capacity of one sheep to 1.3 ha; the superior adjoining "Oakhampton" at $31.95/ha, carrying capacity one sheep to 1.3 ha and "with 92% of well shaded downs" together with superior access; the adjoining "Eagle Farm" and "Smithfield", at $26.75/ha with a generally similar mix of country to "Navarre", of 74% downs to 26% gidyea and carrying capacity "extended" to one sheep to 1.5 ha; a valuation of $28/ha on the subject aggregation was realistic.
In Mr Back's opinion, the subject aggregation should be regarded as having a carrying capacity "year in-year out" of one sheep to 1.45 ha - 1.5 ha. He said the property was capable of carrying one sheep to 1.4 ha only in excellent seasons.
While Mr Back accepted that the gidyea scrub provided shade, he agreed with the opinions of other appellants, particularly the Walkers, that gidyea scrub in excess of shade requirements was of very limited use potential. He was particularly concerned that the productive capacity of the "Navarre" section was continually worsening by the natural extension of the older gidyea areas into the fringing downs through the intrusion of thick "false sandalwood" and gidyea seedling growth. His efforts to control this seedling growth had been unsuccessful.
Mr Taylor gave evidence to the effect that he had, at first, been critical of the degree of reduction, to the originally issued valuation, as a result of the objection hearing. Apparently that reduction had the effect of increasing the 1996 valuation by only 1% (from $465,000 to $470,000). However, he had, in connection with the subject appeal, inspected the aggregation in company with Mr Back. The inspection had taken 1½ days. While there was no evidence from him as to the previously adopted classification of country or the historically adopted carrying capacity, he said that he had been "mystified" by some "good timber" notations on original file notes. After his inspection and the plotting of areas of gidyea intrusion, he was satisfied that the objection reduction had in fact been realistic.
Mr Taylor's classification of the country as set out in his report and with which Mr Back readily agreed was as follows:"3,740 ha (24%) thick Gidgee, some small open areas, with Sandalwood and seedling encroachment.
11,750 ha (76%) Open to lightly shaded downs, timbered mainly with Boree, with some Whitewood and Vinetree on the western end of the property."
Mr Taylor considered the water supply as being adequate provided by "1 flowing bore, 1 Trust bore (share), 5 tanks, 3 dams, and pipelines to tanks and troughs. … 15 kms of bore drain, and 18 kms of pipeline."
Mr Taylor's estimation of carrying capacity as contained in his report, was one sheep to 1.4 ha.
Mr Taylor prefers to make his valuations by direct comparison of the nature of the country on the property to be valued, with that of the country on the basic sale properties, the carrying capacity estimate being but one of the comparison criteria. He had in this matter relied, in particular, on the evidence provided by the sales of "Honan Downs", "Ashgrove" and "Audreystone".
The Department's description of the country comprising the sale properties is included earlier, under the "Principal Sales" heading. "Honan Downs" is one sale which both parties adopt as evidence of value. Mr Taylor had fully inspected the sale properties while Mr Back's knowledge of the overall country on "Honan Downs" is fairly limited. He relied on Mr Boyd's advice that its carrying capacity was one sheep to 1.4 ha. As I understood the general evidence, the Department would accept the carrying capacity of the downs/gidyea component on "Honan Downs" as being one sheep to 1.4 ha but the overall lighter estimate resulted from the extent of flooded country together with gravelly and sandy ridge influences. Mr Taylor gave no written comparison in his report, but in his oral evidence expressed the opinion that the "Honan Downs" downs country was reasonably comparable to the eastern section of "Navarre" but superior to the western section of the aggregation. He accepted that the availability of natural water on the Barcoo River boundary of "Honan Downs" was an advantage although one limited in his opinion, by the particular circumstances. He saw the location and access to "Honan Downs" as being inferior to that of the subject property.
Mr Back had inspected "Ashgrove", prior to its sale but lost interest in purchasing it due to the extent of Prickly Acacia. In his opinion however it comprised a superior and different type of country to the subject lands. He thought that the circumstances surrounding the actual sale reflected the location and size of that particular property. He had no intimate knowledge of the property "Audreystone".
Mr Back agreed with the general evidence which had been given by Mr Taylor that there existed a wider field of potential purchasers and consequently greater competition in the marketplace for the smaller blocks than for larger properties with size such as that of the "Navarre" aggregation. Mr Taylor's oral evidence was that the size and the somewhat irregular shape of the subject property were factors which had been taken into consideration in the valuation. However, there was no indication as to just how such consideration was reflected in monetary terms.
Mr Taylor had made no reference to the sale of "Hazelwood" in this particular matter although in the general evidence it was suggested that, due to considerations such as location and its lower annual rainfall "Hazelwood" was more relevant to the Longreach Downs SMA, within which it was in fact located. The sale had shown no increase in value over the 1996 valuation which had then been rewritten. Mr Back had no intimate knowledge of the "Hazelwood" property.
In Mr Taylor's opinion, the valuation appealed against was well supported by the basic sales to which he had made reference. He offered the opinion that the valuation was in correct relativity with the valuations of adjoining and nearby properties, but offered no evidence in rebuttal of the relativity comparisons provided by Mr Back in the written material prepared by Mr Boyd.
Findings
Both parties accept that an analysis of the sale of "Honan Downs" provides basic evidence for the valuation of the subject property. There is however a difference of opinion as to the carrying capacity potential of both properties. I accept the evidence put forward on behalf of the chief executive as to the carrying capacity of "Honan Downs" being potentially one sheep to 1.5 ha. However I am influenced by the forthright evidence of Mr Back to accept that the carrying capacity of one sheep to 1.4 ha on the "Navarre" aggregation may be a little optimistic on an average season basis. Difficult as it may be to achieve a direct comparison of country type between "Honan Downs" and "Navarre", due to the fairly large proportion of flooded and other inferior country on "Honan Downs", the existence of which could, no doubt, be seen by some to have benefits as well as disadvantages, I am able to accept that on an overall unit of area basis the subject property may be regarded as being superior to "Honan Downs". In Exhibit 7E at p.17, Mr Jones identified that, with regard to "Honan Downs", the limited benefit of "access to natural water for artificial distribution has attracted a 5% loading built into the all-up valuation rates". If it was to be accepted that the natural water benefit to "Honan Downs" was equalised in valuation terms by its inferior location and access then, on a direct comparison basis, the difference between the properties on a unit of area basis would be the degree of difference in the relative quality of the land. I have accepted that the carrying capacity of "Honan Downs" is lightened due to the nature of country other than the downs/gidyea component but I have also been persuaded that the carrying capacity potential of the subject aggregation is now less than that estimated by the Department. That conclusion in itself would give rise to some reduction in the subject valuation. Furthermore, if consideration has indeed been given to the relative size and shape of the subject aggregation in comparison then it is not seen as being reflected in the valuation result.
However I am then unable to accept the appellant's value comparison between "Honan Downs" and the subject aggregation particularly when the carrying capacity of "Honan Downs" ha been accepted by Mr Back as being one sheep to 1.4 ha. Nevertheless, I am persuaded that the sale of "Honan Downs" adds some support to the appellant's arguments.
I find it unnecessary to remove the sale of "Honan Downs" from consideration when turning to the sales of the relatively small blocks "Ashgrove" and "Audreystone". The degree of market superiority of those properties is of significance.
There is no direct evidence, or evidence on which I am able to rely, as to the comparison for valuation purposes between the sale property "Hazelwood" and the subject aggregation. However it seems to me that the sale provided evidence which Mr Taylor might have closely considered, regardless of the location of the sale property outside but adjacent to SMA 62, and within reasonable proximity of the subject property.
From the perspective of relativity, the Court has been provided with insufficient evidence as to the factual basis for valuations of adjoining or nearby properties, particularly those where amalgamation of individual parcels has resulted in reduced valuations.
On the evidence overall I will determine the unimproved value on the basis of $29/ha. I am not concerned that this will result in a valuation less than that which existed as at 1 January 1996. It is not the task of the Court to decide whether or not that previous valuation was soundly based.
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value of the "Navarre" aggregation is determined in the rounded amount of Four Hundred and Fifty Thousand Dollars ($450,000) as at 1 October 1998.
MEMBER OF THE LAND COURT
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