Walker v Department of Natural Resources and Water
[2008] QLC 5
•15 January 2008
LAND COURT OF QUEENSLAND
CITATION: Walker v Department of Natural Resources and Water [2008] QLC 0005 PARTIES: Alvinia Betty Walker
(appellant)v. Chief Executive, Department of Natural Resources and Water
(respondent)FILE NO.: AV2006/0280 DIVISION: Land Court of Queensland – General Division PROCEEDING: An appeal against an annual valuation DELIVERED ON: 15 January 2008 DELIVERED AT: Brisbane HEARD AT: Blackall MEMBER Mr JJ Trickett, President ORDER: The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of "Tara" as at 1 October 2005 is determined at One Million and Fifty-one Thousand Dollars ($1,051,000). CATCHWORDS: Unimproved value – grazing property in Barcaldine Shire – classification of country – direct comparison with analyses of improved sales – method of analysis – added value of improvements – choice of appropriate sales – effect of vegetation management legislation – effect of prickly acacia – Valuation of Land Act 1944 APPEARANCES: Mr S Ure of counsel, instructed by Bernard Ponting & Co for the appellant.
Mr W Isdale, Executive Consultant, Crown Law, for the respondent.
This is an appeal by a landowner against the unimproved value applied to her land situated in the Shire of Barcaldine by the Chief Executive, Department of Natural Resources and Water (the Department) as at 1 October 2005.
Background
Alvinia Betty Walker is the owner of a property known as "Tara", which is used for sheep and cattle grazing. It is described as Lot 6 on Plan R5733:GHFL 3650, Parish of Brixton, containing an area of 7,509.347 ha. As at 1 October 2005, the Department applied an unimproved value to that land of $1,150,000, under the provisions of s.37(1) of the Valuation of Land Act 1944 (the Act). This appeal is against that valuation. The owner's estimate of the unimproved value is stated to be $700,000.
The grounds of appeal are general in nature and refer to a number of issues, none of which is particular to "Tara". However in compliance with a Court order, the valuers for the parties conferred on 1 May 2007 and prepared a joint report identifying the issues upon which they are in agreement and where they disagreed, stating the reasons for their disagreement. The joint expert report identified that the issues between the valuers related to the classification of country, carrying capacity, appropriate sales, the effect of prickly acacia infestation and the effect of the vegetation management legislation.
The subject land
There is no dispute that "Tara" comprises predominantly open, gently undulating, Mitchell grass, black soil downs country, with a small proportion consisting of red/brown loam soils, established to buffel grass. Although there was disagreement about the extent of the latter classification, the small area of mixed gidyea sandalwood scrub in the north-western corner of the property and the carrying capacity of the property overall, these differences were small and effectively negated when the Department's valuer conceded that there was no real difference in carrying capacity between the country classifications. Furthermore, the valuers agreed that on an open downs property such as "Tara", the presence of a small area of scrub is an asset for shade and shelter purposes. In any event, the clearing of such a small area would not be economical. That agreement eliminated any issue about the effect of the vegetation management legislation on "Tara".
"Tara" is situated approximately 30 km west of Barcaldine, with access via the bitumen sealed Landsborough Highway, except for the last 4 or 5 km of formed earth road. That latter road seems to be by private arrangement with an adjoining landowner, as the designated access is not formed. The property has rural power, telephone and a twice weekly mail service. Water facilities include dams, earth tanks and access to water from a bore located on an adjoining property which is reticulated via underground polythene piping.
Although there was initially some dispute as to the carrying capacity of "Tara", during the course of the evidence it was conceded that the buffel grass country carries as well as the Mitchell grass country, effectively 1 sheep to 1.3 ha.
The relevant legislation
The responsibilities of the Department in valuing the subject land are set out in the provisions of the Act. It is required to make annually or periodically, a valuation of all land in the local government area: s.37. For the purposes of the Act, the valuation of each parcel of land is to be "the unimproved value" of that land, which is defined to mean, in relation to improved land, the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming the improvements on that land do not exist: s.3(1). However, the unimproved value must not be less than the sum that would be obtained by deducting the value of improvements from the improved value of the land: s.3(2).
The Act thus requires the Department to ascertain the unimproved market value of each parcel of land as at the date of valuation, assuming that there were no improvements on the land, but also assuming the existence of all present facilities and amenities external to the land, such as roads, power, access and the like.
The test for the determination of "market value" of land was established by the High Court in Spencer v The Commonwealth of Australia (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property (see Griffith CJ at 432, and Isaacs J at 441).
It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said:
"Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it, but – as with other commodities – the best way to ascertain the market price is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales."
However, in most areas of the State there is essentially no unimproved land, as all land has been improved to a greater or lesser extent. Therefore, there are no sales of unimproved land that can be used as a basis for assessing unimproved value. In such cases, it is necessary to have regard to improved sales. The use of improved sales in establishing unimproved values was considered by the Land Appeal Court in the Valuer-General v Marano (1978) 5 QLCR 194. In that case the Court said at 200-201:
"It is well established that the best way to ascertain the unimproved value of land is by applying to it sales of unimproved, comparable, lands which took place reasonably close to the date at which the valuation is to be made. But in many districts it is impossible to obtain sufficient unimproved sales to form a sound foundation, and it therefore becomes necessary to analyse sales of improved lands for the purpose of ascertaining, as far as is possible, what part of the purchase price of the sale property relates to improvements and what part is attributable to the land itself."
That was the process adopted by the Department in valuing the subject land.
A landowner who is dissatisfied with the Department's valuation of his or her land may object against that valuation (s.42 in the case of annual valuation and s.52 in cases other than an annual valuation). If dissatisfied with the decision of the Department upon the objection, a landowner may appeal to the Land Court against the valuation (s.45 in the case of an annual valuation and s.55 in cases other than an annual valuation).
However, an appeal is limited to the grounds stated in the owner's notice of appeal and the burden of proving those grounds is upon the owner. Furthermore, every valuation made by the Department is deemed to be correct until proved otherwise upon objection or appeal: s.33. However, the statutory presumption of correctness can be rebutted if the appellant can show that the Department made a serious error of fact, or acted upon a wrong principle, or that the valuation was made by a method fundamentally erroneous: Brisbane City Council v The Valuer-General (1978) 140 CLR 41 at 56-57.
The evidence
Valuation evidence on behalf of the Department was given by registered valuer, Mr PJ Haydon, while valuation evidence on behalf of the appellant was given by registered valuer, Mr CV Dyer. Additional evidence was given by Mr AFM Boyd, the appellant's agent.
Mr Haydon described "Tara" as comprising:
6,209 ha (83%) downs, with a carrying capacity of 1 sheep to 1.3 ha
1,300 ha (17%) easy undulating red/brown to brown loam ridges, well established to buffel grass, with a carrying capacity of 1 sheep to 1.5 ha. Mr Haydon assessed the overall carrying capacity at 1 sheep to 1.35 ha.
Mr Dyer described "Tara" somewhat differently as comprising:
approximately 7,326 ha (98%) of open gently undulating Mitchell grass downs; and
approximately 183 ha (2%) mixed gidyea scrub on red/brown loam soils with sandalwood, bauhinia, etc. Mr Dyer assessed the carrying capacity at 1 sheep to 1.3 ha.
Essentially, both valuers agree that it is predominantly an open Mitchell grass downs property, with a small area (Mr Haydon 120 ha, Mr Dyer 183 ha) of mixed gidyea, sandalwood scrub. I accept the evidence that there is a strip of tighter red/brown loam soils along the northern area of the property, measured by Mr Haydon as 1,300 ha, which includes the area of scrub.
It seems to me that the differences between the valuers are more apparent than real. Mr Haydon explained that "Tara" has traditionally been classified by the Department's valuers in the manner described, separating the red/brown loam soils from the black soil Mitchell grass soils. In undertaking the annual valuation of the area, he had endeavoured to preserve the historical classifications of country, because not all properties were inspected in the Department's mass appraisal process. In such circumstances, Mr Haydon said, if he was to classify the property in any other way he would have to reclassify all other properties with similarly described soil types.
However, he considered that the well established buffel grass pastures on the red/brown loamy soils were equal to the Mitchell grass downs country, effectively conceding the overall carrying capacity of the property was 1 sheep to 1.3 ha. This accords with Mr Dyer's carrying capacity.
A minor issue arose in this case as to the impact of the Vegetation Management Act 1999 and the other vegetation management legislation. As I understand Mr Haydon's evidence, at the time of the previous valuation as at 1 October 2001, the Department's valuers assessed suitable timbered areas of each property as having potential for development. However, for the present valuation of the area as at 1 October 2005, the Department regarded the vegetation management legislation as prohibiting the further clearing of trees, even though the moratorium on broadscale tree clearing was not in force until 31 December 2006. Therefore, where there were developable areas on a property, such land was valued in its uncleared state, without potential for development. That had a considerable impact on properties which had a large proportion of uncleared timbered areas which had previously been assessed as having potential for clearing and development. The relativity of values from property to property was therefore considerably disturbed.
Mr Haydon mentioned in his report that the vegetation management legislation restricted the development of the remnant gidyea/sandalwood country comprising about 120 ha in the north-west corner of the property. However, in his oral evidence he conceded that for an open downs property such as "Tara", such an area would be an advantage for both shade and shelter, particularly for lambing ewes. This accords with the evidence of Mr Dyer who added that the clearing of such a small area (he estimated approximately 183 ha) would not be economic.
The remaining major issues between the valuers relate to what they consider to be the appropriate sales and their analyses of those sales to unimproved value.
The Sales Evidence
Mr Haydon explained that for the valuation of the central western shires, all sales which occurred within the period June 2004 to October 2005 were inspected and analysed by the Department's valuers. In the Barcaldine, Blackall and Tambo Shires, he had investigated over 20 sales, the majority of which were purchased for cattle grazing. Only two were purchased primarily for sheep grazing. In his opinion, the market in the area was a cattle market and he made the point that a woolgrower wishing to purchase land would have to compete on that market. This influenced the manner in which he assessed the added value of sheep improvements in his analyses of sales of properties formerly used for sheep.
Mr Haydon relied on two sales of predominantly downs country to which the vegetation management legislation had only limited or no effect.
The first of those sales, "Newstead", a property of 12,251.32 ha, the boundary of which is only 4.5 km east of Ilfracombe, sold in July 2004 for $2,754,899. That sale was analysed by registered valuer, Mr P Schefe, another of the Department's valuers, to $1,941,890, or $158/ha. As at 1 October 2005, the Department applied an unimproved value to that property of $1,850,000, or $151/ha.
According to Mr Haydon's report, "Newstead" comprises sparsely shaded to open loose brown soil downs, with parts scalded and pebbly in the south-west corner. It is considered to be inferior to the subject property, because of the "higher rated Downs" on the latter. Its carrying capacity overall was assessed to 1 sheep to 1.45 ha. Mr Haydon's report notes that although inferior to the subject land, it has better access and is well located to the primary school at Ilfracombe. Mr Haydon states that the subject parcel is considered superior downs country, but with inferior access and is further removed from town. The sale, he contends, supports the application of $153/ha to the subject parcel.
Mr Haydon's second sale, "Ascot Downs", with an area of 6,303 ha, sold in May 2005 for $1,300,600. That sale was analysed to $1,063,132, or $168.67/ha. As at 1 October 2005, the Department applied an unimproved value to that land of $940,000, or $149.14/ha.
"Ascot Downs" is located 31 km south of Aramac and 26 km north of Barcaldine. It is 54 km north of "Tara". Mr Haydon describes the property as mainly open Mitchell grass downs, with some gidyea and boree, with parts ashy on the western boundary. He assessed its carrying capacity at 1 sheep to 1.4 ha. He regards the country as inferior to that on "Tara", but it has better access and overall he considers that "Tara" is slightly superior. He expresses the view that the sale supports the application of $153/ha to the subject property.
However, Mr Dyer was of the opinion that neither "Newstead" nor "Ascot Downs" were appropriate sales as a basis for the valuation of "Tara". "Newstead", he contended, is not appropriate for two reasons. First, it is substantially superior, because of its proximity to Ilfracombe, with bitumen road access and flowing water, none of which "Tara" has. Second, because, according to Mr Dyer, the purchaser had school-aged children and her major motivation for buying "Newstead" was its proximity to town.
Mr Dyer regarded "Ascot Downs" as not appropriate because it was purchased by a grazier from Longreach who was desperate for grass. In addition, he contended, it was a "paddock" sale, with fencing and water, but no structures other than yards. Such sales, he said, are reasonably scarce. He knew of only one other such sale, a property known as "Illabunda", west of Aramac. He did not consider that "paddock sales" were reflective of the overall market, which was made up predominantly of highly improved sales.
Instead of the two sales relied upon by Mr Haydon, Mr Dyer preferred the sale of "Ashgrove", a property of 5,514.651 ha, situated just one property removed, north of "Tara", with frontage to the bitumen sealed Landsborough Highway. "Ashgrove" sold in August 2004 for $1,100,000 and was analysed by Mr Dyer to show an unimproved value of $725,714, or $131.60/ha.
Mr Dyer described "Ashgrove" as comprising basically two country types; approximately 3,820 ha (69%) of open to well shaded Mitchell grass downs, lightly timbered with bauhinia, whitewood and vine tree, with areas of severe prickly acacia infestation; and, approximately 1,695 ha (31%) of mixed gidyea scrub falling to some creek flats and channels, none of which was cleared. Approximately 740 ha of the gidyea scrub is located in "a solid clump" in the north-east corner. The remaining 955 ha is in scattered patches, or associated with Packsaddle Creek and Westbrook Creek channels and flats.
In their joint report, Mr Dyer originally agreed with Mr Haydon that the carrying capacity of "Ashgrove" was 1 sheep to 1.55 ha. However, in his valuation report, he explained that he had since reviewed his decision and concluded that the carrying capacity should be 1 sheep to 1.35 ha. Of the 1,695 ha of mixed gidyea scrub on the property Mr Dyer thought that only about 950 ha would ever have been able to have been cleared, but that area is in the riparian areas associated with Packsaddle Creek and Westbrook Creek, of which 100 metres each side of the creeks must be left for buffer areas. That would leave only about 20% of the total area of the property available to be cleared prior to the restriction on clearing. Relying on Department of Primary Industry studies which showed that up to 20% in shade lines and scattered scrub areas would not affect the carrying capacity, Mr Dyer reasoned that his estimate of carrying capacity should be revised to 1 sheep to 1.35 ha.
On the other hand, Mr Haydon did not rely on the sale of "Ashgrove". Although he considered it to be reflective of the market, he rejected it as an appropriate sale because of the infestation of prickly acacia on about 750 ha. He had analysed the sale to $745,141, or $135.12/ha. However, he contended that he was unable to ascertain how much the purchaser had discounted the sale because of the presence of the prickly acacia infestation and was therefore unable to bring the sale to a district standard for the purposes of comparison with properties such as "Tara".
In addition to the sale of "Ashgrove", Mr Dyer relied on the sale of "Auteuil", a predominantly open Mitchell grass downs property, situated 49 km north of Barcaldine. It also had some prickly acacia infestation.
"Auteuil" sold in June 2004 for $1,636,680 and was analysed by Mr Dyer to show an unimproved value of $678,636, or $80.97/ha. Mr Dyer assessed the carrying capacity of "Auteuil" at 1 sheep to 1.4 ha. While conceding that "Auteuil" is inferior to both "Ashgrove" and "Tara", Mr Dyer considers that the "Auteuil" sale is of some assistance in demonstrating, as he termed it, "a bottom value".
Mr Haydon had not analysed the sale of "Auteuil". In his opinion it was not an appropriate sale for the valuation of "Tara".
Before proceeding further, it is necessary to determine which of the sales is most appropriate to arrive at the unimproved value of "Tara".
The most appropriate sales
In my view, none of the sales should be disregarded. However, some are obviously more appropriate as a basis valuation than others, particularly as regards their evidentiary value. On this latter point, neither of the valuers had inspected or analysed the sale of "Newstead". Mr Dyer considered it inappropriate, while Mr Haydon was requested by the owner not to do so. Mr Haydon contends that "Newstead" is the most comparable sale and places most reliance on it. However, the analysis and inspection was undertaken by Mr Schefe, and Mr Schefe was not called to give evidence in this case.
Mr Haydon explained that he accepted Mr Schefe's analysis of the sale because he had checked Mr Schefe's analysis of the sale of "Ascot Downs" and agreed with it. He could see no reason why he would not also agree with Mr Schefe's analysis of the sale of "Newstead". It emerged in evidence that Mr Haydon had seen "Newstead" only from the road. Therefore, he relied not only on Mr Schefe's analysis of the property, but also on his description of the country for comparison with "Tara".
On the other hand, Mr Dyer did not rely on "Newstead" as a basic sale. It was, he said, a sale in a different market area, close to the town of Ilfracombe, closer to Longreach than the subject land, and the sale price of the property had been influenced by its proximity to school facilities. Like Mr Haydon, he had not inspected the property, except from the road.
In the circumstances, I can place no weight on this sale. Mr Haydon has not made an inspection of the land and improvements which would be essential in order to satisfy himself that he could adopt Mr Schefe's analysis. The sale was put forward by Mr Haydon as his primary sale, but he cannot accept any responsibility for the analysis or comparison with the subject land. This Court has held on a number of occasions that when a party relies on a valuation and the author of that valuation is not called to give evidence, then little weight can be attached to that evidence. It is little better than hearsay.
Nor am I able to obtain much assistance from the sale of "Auteuil". Although, like "Tara", it is predominantly an open downs property, it is situated some distance from "Tara" and on Mr Dyer's evidence, is inferior both in quality of land and carrying capacity. Indeed, he includes the sale only as an indication of the "bottom value". It is not seriously advanced as directly comparable with "Tara".
On the other hand, Mr Haydon places no reliance on the sale of "Auteuil". Not only does he consider it to be not comparable with the subject land, but the sale included stock about which he contends, there was some disagreement between vendor and purchaser.
In the circumstances, I can derive no direct assistance from the sale of "Auteuil". However, indirectly it is part of a pattern of sales which were in the range referred to by Mr Haydon.
Mr Haydon relies on the sale of "Ascot Downs", the second sale in his basis of valuation. He had inspected the property and, as I understand his evidence, had checked the analysis of the sale undertaken by Mr Schefe, agrees with it and adopts it as his own. I can therefore, in effect, accept the analysis as that undertaken by Mr Haydon.
Mr Dyer rejected the sale of "Ascot Downs" as an appropriate sale for two reasons. First, because it is a "paddock sale" with relatively few improvements. He reasoned that it differed from a sale of a fully improved property, as the analysis of such a paddock sale would not reflect the market overall. By this I infer he means that the analysis would reflect a higher unimproved value.
Mr Dyer's second reason for rejecting the sale is that the purchaser owned properties which were drought stricken and was desperate for grass to save her livestock. The sale price would therefore reflect that, putting her in the category of an over-anxious purchaser.
Mr Dyer had not fully inspected the property, nor had he analysed the sale. He had seen what he could of it from the road. However, he had spoken to the purchaser, who had informed him that she was desperately seeking a property with grass.
Mr Haydon did not think that "Ascot Downs" was a high sale as it fitted the market pattern. It sold for $83/acre ($206/ha), compared with "Newstead" which sold for $91/acre ($225/ha). According to Mr Haydon, the market in the area at the time was in the range of $80 to $90/acre, dropping off to $70/acre at Winton.
However, although he did not think "Ascot Downs" was a high sale, he said that the Department applied less than the analysed figure, because "Ascot Downs" was lightly improved, or a "paddock sale". In his examination-in-chief, when asked by Mr Isdale why he had referred to "Newstead" and "Ascot Downs" as his Sales 1 and 2, and whether this was an indication of priority in regard to their suitability, Mr Haydon replied:
"No, I think they both form a reasonable basis. One sale is sometimes more comparable to a subject than another sale, but no they're both fairly solid sales. The only thing with 'Ascot Downs' we've lessened off the application of 'Ascot Downs' because it is perceived effectively as being a paddock sale." (Transcript, p.64).
This is reflected in the unimproved values applied to the sales: "Newstead" analysed to show $158/ha, and $151/ha was applied, while "Ascot Downs" analysed to show $169/ha, while only $149/ha was applied.
Both valuers agree that such lightly improved, or paddock sales, are quite scarce. Mr Dyer knew of only one other sale in the area. Because paddock sales are so scarce, they may well attract a premium in the marketplace.
There is authority for the proposition that the best evidence of the unimproved value of land will usually be from sales of vacant or lightly improved comparable land. See for example, Fischer v Valuer-General (1983) 9 QLCR 44, at 46 (LAC); Barnwell v Valuer-General (1989) 13 QLCR 13 at 17 (LAC); Grahn v Valuer-General (1992) 14 QLCR 327 at 328 (LAC). However, this may not be so when such sales are scarce.
In Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111, the High Court dealt with a case concerning the unimproved value of an improved parcel of waterfront land at Hunters Hill in Sydney. The Commissioner's valuer had relied upon two sales of vacant land. It was accepted by the parties that vacant land at Hunters Hill was scarce, if not very scarce. The valuer had relied on vacant land sales because he considered that the relevant Act required him to disregard sales of improved land. The High Court held that the Act did not so require. The Court found that the Commissioner's valuer did not proceed rationally, in that he was unreasonably selective in confining himself to two sales of scarce vacant land for the purposes of comparison. The High Court went on to say that a fair estimate of the value of the land could only be made on the basis of a reasonably representative group of comparable sales, and a group cannot be reasonably representative if it does not go beyond sales of scarce vacant land. The sales evidence must be relevant and sufficient in volume, but the sales of scarce vacant land are likely to be to a special and different class of buyer than buyers of improved land.
However, it is clear that Maurici is not authority for the proposition that a sale of vacant or lightly improved land even if such sales are scarce, is to be disregarded. Obviously adjustments will need to be made to the sale to eliminate its scarcity factor. But there is nothing new in sales having to be adjusted in order to render them comparable (see New South Wales Court of Appeal in AMP Henderson Global Investors v Valuer-General (2004) 134 LGERA 426).
It seems to me that the Department recognised that such sales are scarce and may well have involved a scarcity factor in applying only $149.14/ha to "Ascot Downs", which figure became the basis for comparison with other properties, such as "Tara". However, there remains the uncertainty as to whether that adjustment was sufficient in the circumstances.
That leaves the sale of "Ashgrove", which Mr Dyer considers to be the most appropriate sale because of its proximity to the subject land. As he put it, "… it's about as good a sale as you're going to get to value "Tara"." (Transcript p.30). However, Mr Haydon rejects that sale because of the prickly acacia infestation.
In my view, the sale of "Ashgrove" is the most appropriate sale. It is the closest sale to "Tara" and has similar types of country, although the proportion of mixed gidyea country is greater on "Ashgrove". The presence of prickly acacia on the sale property is no reason to reject it.
According to the experts' joint report, there is no suggestion that "Ashgrove" is a low sale. Mr Haydon considered it to be reflective of the market. They also agreed about the classification of country and the carrying capacity at 1 sheep to 5.5 ha, although Mr Dyer later revised his assessment to 1 sheep to 1.35 ha.
Furthermore, they are not far apart in their respective analyses of the sale. Although the various improvements are assessed somewhat differently, there is less than $20,000 difference between their analysed values, Mr Dyer at $725,714 and Mr Haydon at $745,141. While Mr Dyer's value of the water improvements was greater than Mr Haydon's, this was offset by Mr Haydon's value of fencing improvements at a greater sum than Mr Dyer's. However, in my view, it would be pointless to attempt to establish who is correct.
For comparison purposes, I will adopt an analysed unimproved value of $133/ha derived from the "Ashgrove" sale. That amounts to $733,500. Mr Dyer contends that only 95% of the analysed figure should be applied. That no doubt relates to the practice of the Department of applying less than the analysed value to the sale properties. However, there is no requirement at law or principle of valuation that supports the application of a particular percentage of an analysed figure to the valuation of a sale property. It is a judgment that must be made by the valuer in the circumstances of each case. In the present case, there is evidence of a buoyant market which continued to rise.
In such circumstances, I endorse the observation by the Land Court in Fawckner & Ors v Department of Natural Resources and Mines [2004] QLC 100, where Mr Wenck was considering the unimproved values applied to early sales on a rising market in the Winton area:
"In my view the application of the full or near full level of value shown by analyses of the sales … to those individual properties was consistent with a conservative approach which followed sound valuation practice for revenue-gathering valuations in light of the overall market evidence." (at [47]).
Although there may have been good reason for Mr Haydon to discount the analysed figure in the case of the "Ascot Downs" sale, the evidence is to the contrary in the case of the "Ashgrove" sale. "Ashgrove" was sold to an adjoining owner, but both valuers agree that it was at market value at the time. However, it is a sale in mid-2004 and the evidence is that the market had increased by the date of valuation.
"Ashgrove" has not been valued separately by the Department, but has been amalgamated with the adjoining property and a valuation struck for the combined area. However, Mr Haydon stated that if he had to value "Ashgrove" separately, he would have applied $770,000. However, that is more than his analysed unimproved value and was no doubt based on the sales of "Newstead" and "Ascot Downs", both of which I consider to be less appropriate than "Ashgrove". He seems to suggest that the differences between his analysed figure of $745,141 and his proposed unimproved value of $770,000, represents his opinion of the discount the purchaser made for the infestation of prickly acacia.
That raises the issue of whether "Ashgrove" can be compared directly with "Tara", because of the presence of prickly acacia. Mr Boyd gave unchallenged evidence that a representative of the appellant had told him of destruction of prickly acacia on "Tara" in the past, and of ongoing control measures. There is no evidence of what, if any, control measures were undertaken on "Ashgrove". There was no suggestion that the control measures on "Tara" would be improvements as defined by s.6(1) of the Act and, if so, the effect of s.3(1)(b), under which improvements must be assumed not to exist.
The valuers could not agree whether the presence of prickly acacia affected the sale price of "Ashgrove". Mr Haydon thought it would have reduced the price a prudent purchaser would pay, but he was unable to prove it. Mr Dyer acknowledged the presence of prickly acacia, but was unable to find any evidence of a purchaser discounting a sale price for its presence.
I am aware that in decisions on appeals against the 2001 valuations of the Department in the Shires of Winton, Longreach and Aramac, the Land Court made allowances in some circumstances for the presence of prickly acacia (Fawckner & Ors v. Department of Natural Resources and Mines). However, as I understand those decisions, that was because the Department had made various allowances depending on the extent of infestation. There was no such evidence here. In the present circumstances, the evidence on this point is insufficient to make any allowance for the presence of prickly acacia on "Ashgrove". However, it is obviously a detriment to its carrying capacity and should be recognised, as a prudent purchaser would take that into account.
The joint experts' report indicates that both Mr Haydon and Mr Dyer agree that "Tara" is superior to "Ashgrove"; Mr Dyer by 4%, Mr Haydon by 9%. Because of its larger proportion of downs country and smaller proportion of timbered country, "Tara" is clearly superior per ha to "Ashgrove". However, that superiority is offset to some extent by the inferior access and by its lack of shade and shelter. Furthermore, there is evidence that flowing bore water is not as readily available on "Tara".
I have come to the conclusion that Mr Dyer's reassessment of the carrying capacity of "Ashgrove" does not fully allow for the greater proportion of gidyea scrub and the generally heavier timber cover on "Ashgrove", including the area with prickly acacia. While those clumps of timber are undoubtedly an asset for shade and shelter purposes, they must reduce the coverage of grass, be it Mitchell grass or buffel grass. Therefore, for the purposes of comparison, I will adopt a carrying capacity for "Ashgrove" of 1 sheep to 1.4 ha, compared to 1 sheep to 1.3 ha on "Tara". That is a sheep area value for "Ashgrove" of $186 in situ.
If "Tara" had all the attributes of "Ashgrove" but with its better country, I am of the view that a sheep area value of $190 would be reasonable. At 1 sheep to 1.3 ha that would be an unimproved value of $146/ha. However, taking into account the bitumen road access, the availability of the school bus and the water superiority of "Ashgrove", I conclude that an unimproved value of $140/ha should be applied to "Tara". That amounts to a rounded unimproved value of $1,051,000.
Order
The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of "Tara" as at 1 October 2005 is determined at One Million and Fifty-one Thousand Dollars ($1,051,000).
JJ TRICKETT
PRESIDENT OF THE LAND COURT
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