Webb v Chief Executive, Department of Natural Resources, Mines and Water

[2007] QLC 66

LAND COURT OF QUEENSLAND

CITATION:	Webb & Ors v Chief Executive, Department of Natural Resources, Mines and Water [2007] QLC 0066
PARTIES:	William Vernon and Shirley Mary Symes Lenore Ann Johnstone Verna Ellen Webb (appellants)
v.
Chief Executive, Department of Natural Resources, Mines and Water (respondent)
FILE NOS:	RV2006/0077
DIVISION:	Land Court of Queensland
PROCEEDING:	Appeals against valuations.
DELIVERED ON:	26 September 2007
DELIVERED AT:	Brisbane
HEARD AT:	Charters Towers
MEMBER:	Mr RP Scott
ORDER:	The appeal is allowed and the value of the subject land is determined at One Million, One Hundred and Fifty Thousand Dollars.  ($1,150,000).
CATCHWORDS:	Valuation – unimproved value – sales evidence preferred to relativities.
APPEARANCES:	Mrs V E Webb for the appellants. Mr W Isdale of Crown Law for the respondent.

1. Pursuant to the provisions of the Valuation of Land Act 1944 and the Land Act 1994 the Chief Executive placed a valuation of $1,200,000.00 on the subject land as at a relevant date of 1 October 2004.  The appellants had previously objected against a higher valuation and following partial success in that objection appealed to this Court seeking a valuation of $880,000.  A leasehold property valued under the provisions of the Valuation of Land Act is required under s.14 of that Act to be valued as if it were held in fee simple.  It transpires that the application of the relevant statutory provisions leads to the conclusion that a valuation for the purposes of either Act would be based on the same principles leading to the same valuation outcome. 

2. Mrs Verna Ellen Webb appeared for and gave evidence on behalf of the appellants whilst Michael McDougall, registered valuer, provided valuation evidence in support of the Chief Executive's figure.  The grounds of appeal were expressed as follows

   "Relativity with neighbouring and near neighbouring properties Bletchington, Wambiana and Trafalgar.  All of these properties have been valued at a lesser rate than Merricourt.  In the case of Bletchington it is smaller, closer to town, has similar country and yet is valued at approximately $25 p. ha less than Merricourt.  We also feel not enough consideration has been given to the disruption caused to Merricourt by the Wambiana Access Rd and Pajingo Mine Rd.  This is a problem peculiar to our property and creates management difficulties including erosion, spread of weeds, work health and safety issues, fires, disruption to ease of stock movement, theft and Cattlecare issues involving rubbish and contamination."

3. Section 45(4) of the Valuation of Land Act provides:

   "…

   (4)Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such ground shall be upon the owner."

4. Mrs Webb provided a statement of evidence in support of the appeal and, following an objection from Mr Isdale counsel for the Chief Executive, I have ruled that part of that statement was inadmissible as being caught by s.45(4) of the Act in that it included grounds of appeal in excess of those included in the notice of appeal.

5. Mrs Webb did not attempt to directly support the suggested valuation figure of $880,000 by reference to valuation evidence; however, adopted the approach of taking Mr McDougall's valuation report and suggesting where that document was deficient.  Mrs Webb did not disagree with the factual contents of Mr McDougall's valuation which I now summarise. 

6. The subject property known as "Merricourt Holding" is a leasehold property held under the provisions of the Land Act, has an area of 12,691 hectares and is located approximately 50 kilometres south of Charters Towers.  Most services and facilities are available in Charters Towers including schools, hospital, supermarkets and saleyards.  Access to "Merricourt" is had via the Gregory Developmental Road which is a dual lane bitumen carriageway which tracks directly through the subject land severing it into two large segments.  A formed gazetted gravel road provides additional access to the western boundary of the property from the Gregory Developmental Road whilst there is a bitumen sealed private mining road which extends to the east.  Rural power and Digital Radio Concentrator Site (D.R.C.S.) telephone are connected to the property which has the benefit of a twice weekly mail service. 

7. Mr McDougall assessed the carrying capacity of the subject land as 1 beast to 10 hectares on an Adult Equivalent basis.  He provided a detailed description of the various classifications of country found on the land – a description which I will summarise only.  About 5,049 hectares or 40% of the land is good developed scrub grazing and selectively cleared forest grazing originally comprising brigalow and brigalow/blackbutt and box on brown clays and clay loams.  Approximately 652 hectares or 5% is fair developed forest grazing, originally comprising predominantly broad leaved ironbark and ghost gum on sandy yellow earths.  About 30% or 3,741 hectares is described as good to fair forest grazing comprising the narrow alluvial creek frontages and the open box woodlands with an understorey of current bush.  Around 20% or 2,511 hectares is described as fair forest grazing, whilst the remaining 5% or 738 hectares is poor forest grazing.  Mr McDougall observed that chinee apple is widespread on the property whilst rubbervine is scattered along watercourses and parthenium occurs along some property tracks.  Mrs Webb said that parthenium would have been introduced by vehicles travelling through the property via the Gregory Developmental Road. 

8. There is no permanent natural surface water on the property though there is one non-permanent waterhole along Policeman Creek.  Owners over the years have developed 21 earth dams and one bore to provide for the grazing cattle.  The property has a highest and best use of breeding and fattening beef cattle. 

9. In addition to his sales evidence Mr McDougall referred to six other valuations by the Chief Executive.  He considered the relativity between those other valuations and that of the subject property and formed the view that "there does not appear to be any great anomaly" between the relativities of the valuations with that applied to the subject.  Mr McDougall had not fully inspected each of these relativity properties.

10. He had inspected "Liontown" and had some passing knowledge of others including "Bletchington Park".  Mr McDougall's consideration of these relativity properties was carried out on a desk top basis.

11. Mrs Webb recognised that the market for properties in the class of the subject had increased leading up to the relevant date in 2004 but said that there no sales similar to the subject land to which reference might be made.  On that basis she made particular reference to "Bletchington Park" which is smaller than the subject, has similar country, is closer to town and has a higher percentage of country classified as non-remnant vegetation.  She expressed the view that the forest grazing country on "Merricourt" is inferior to that on "Bletchington Park" and would carry lighter.  "Bletchington Park" is less affected by severing roads than is the subject. 

12. Mr McDougall accepted that there are concerns with "Bletchington Park" which may in fact be under valued.  He would prefer to use the sales evidence available which he says as a valuer he finds to be comparable and suitable for valuation purposes.  In Grahn v Valuer General[1] the Court recorded these propositions with approval:

    "(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 and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at p. 16 and cases cited in it."

    (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 (WMand TJ Fischer v the Valuer-General (1983) 9 QLCR 44, at p.46."

    The importance of sales evidence in valuation cases as against the relativity between statutory valuations was stressed by Land Appeal Court in Clough v Valuer-General[2]

    "It has been judicially laid down many times and in many jurisdictions that in ascertaining unimproved value, sales of unimproved land of comparable quality, situation, etc., to the subject parcel, if they are available, are to be preferred as the best guide for arriving at unimproved value.  The reason is obvious.  In applying such sales there is no room for error in analyzing the value of improvements."

    [1] (1992) 14 QLCR 327at 328.

    [2] (1981) 8 QLCR 70 at 76.

13. I accept Mr McDougall's opinion that the sales evidence referred to in his valuation is superior for valuation purposes than reference to relativities such as "Bletchington Park".  Accordingly, I reject reliance on "Bletchington Park" as a basis for valuing "Merricourt".

14. In his valuation report Mr McDougall referred to four sale properties with which he compared the subject land.  The sales were "Southernview", "Chippendale Valley" and "Taemas" and "Mt Cooper".  Each of these properties, apart from "Taemas" was said by Mr McDougall to be superior to the subject.  In writing about "Taemas" in his valuation report Mr McDougall said:

    "'Taemas' is larger in land area.  It is considered inferior in situation being 75 km further removed from Charters Towers, although this is offset to some extent by the Highway severance associated with the subject property.  Access is considered to be similar.  The zoning is similar.  Services are considered to be similar as the property is connected to rural power and D.R.C.S telephone.  Mail delivery is also available twice weekly.  From a country classification perspective, Taemas is considered similar in overall carrying capacity and the quality and percentage of developed country, but is slightly inferior due the slightly larger area and percentage of poor to unavailable land.  Taemas is considered to be slightly superior in waters.  Whilst the groundwater and the availability of dam sites are similar, it does not have access to non-permanent surface water in the Cape River.  The sale of Taemas analysed to show an unimproved sale price of $2 334 306 or $131.14/ha.  It is considered to be similar to the subject property on a per hectare basis, but superior overall due to the greater size."

15. Subject to what I say below, I think that Mr McDougall's comparison of the subject with this sale, supported by the others, is quite sound.

16. A matter of major concern to the appellants is the effect on the property of the Gregory Developmental Road running through it and the two other access roads within it.  Mrs Webb gave evidence that the spread of weeds, the setting of unseasonal fires, theft of property assets and serious difficulties in herding livestock across these roads are major problems in the management of the property.  All of the off-farm vehicles have to be registered and roadworthy and all employees have to be fully licensed.  She puts down the infestation of current bush and some brigalow suckering to the out of season fires.  The mine road is actually fenced and provides only two crossing points for stock.  The location of the road is such that it has disrupted the availability of water to some paddocks and interferes with pasture management, as small fenced off areas of good country are often over-grazed as a result.

17. Mr McDougall explained that he had regard to the severance issue and had made an allowance in his valuation which he said usually amounted to 5 to 10%.  He said that "Mt Cooper" suffered severance from the development road, though the access road to the mine on the subject property is unique to it.  He acknowledged that fires would be detrimental to the property, however made no specific allowance based on that.  He had no market evidence that such an issue would affect a property's price in the market place.  He was aware of the existence of current bush and felt that the comparisons made by him took that issue into account.  He said that "Mt Cooper" carried a lot of current bush whilst "Taemas" was infested with Parkinsonia. 

18. The subject property includes 4,585.17 hectares mapped as non-remnant vegetation under the regional ecosystem mapping (Queensland Herbarium 2007).  As the land is held by way of lease under the Land Act that area requires a regrowth clearing permit in order that tree clearing may be carried out.  As at the date of valuation only 2,960 hectares had been approved for re-treatment under regrowth permits; however Mr McDougall expressed the view that there was a higher probability that further permits would issue.  I was not convinced by the appellants that there was a high risk associated with such a permit issuing.

19. Mr McDougall said that in the application of sales he had employed a conservative approach on the basis that there might have been at the time of the earlier sales some uncertainty in the market place as to the potential impact of 2004 amendments to the Vegetation Management Act 1999.  The amending Act passed through Parliament on 29 April 2004 and was proclaimed during the following month. 

20. I formed the view that Mr McDougall's valuation is generally sound and is based on suitable evidence.  Nevertheless I have been convinced by Mrs Webb that his allowance for the road severances on the subject property should be increased.  I notice that in his valuation report Mr McDougall has, on a classified basis, produced a valuation figure of $1,209,995 which is rounded down to $1,200,000.  Having regard to that and the fact that he has made some allowance to the severances on the property any further allowance that I make would not be substantial.  I have formed the view that a reduction of the valuation to $1,150,000 would be appropriate and the effective of that being to reduce the overall valuation to around $90 per hectare.  

21. Accordingly, I allow the appeal and determine the valuation as the subject land at One Million, One Hundred and Fifty Thousand Dollars.  ($1,150,000).

RP SCOTT

MEMBER OF THE LAND COURT