Weber v Chief Executive, Department of Natural Resources
[1999] QLC 38
•30 April 1999
|
BRISBANE
30 APRIL 1999
Re: AV98-459 –
An Appeal against an Unimproved Valuation –
Valuation of Land Act 1944 –
Shire of Inglewood
M.J. Weber
v.
Chief Executive, Department of Natural Resources
(Hearing at Inglewood)
D E C I S I O N
Mr Weber is the owner of land described as Lot 1 RL 5062: RL 5062 and Lot 1 RL 5063: RL 5063 and Lots 101-102 T1926 and Lots 1 and 2 RP 162982, Parish of Texas, County of Clive, containing 7.554 ha. The land is situated in St. John Street, on the south-western outskirts of Texas, about 1 km from the Post Office. Electricity, town water and telephone services are available.
As at 1 October 1997, the unimproved valuation of the land made by the chief executive was in the amount of $15,500 having been reduced on objection from $19,800. In the Notice of Appeal the appellant estimated the unimproved value to be $10,000.
Mr WG Major conducted the case for Mr Weber, who also was called to give evidence.
The land was described as having a flood-free site (Lot 1 RP 162982) in the extreme north-eastern corner of the aggregation, immediately adjacent to a now disused railway line, then comprising predominantly flooded river flats and a lagoon. The evidence was that there is a good underground water supply accessed by an irrigation well. About 5.5 ha of the flats are used for rotational cultivation for the growing of lucerne and oats. Cattle bred or grown on other lands or purchased, are fattened on this home block.
The thrust of the appellant's case through Mr Major, was that the land should be valued under s.17(1) of the Valuation of Land Act, on the basis that it is used for the purposes of farming.It was Mr Major's evidence that Mr Weber has been in the business of buying, breeding, fattening and selling cattle since 1965. As at 1 July 1997 Mr Weber owned 70 head of cattle, depastured at various locations. In the financial year to 30 June 1998, he had purchased 26 head and there was natural increase of 16 head. 55 head had been sold during the year, realising a gross $15,900. In the years ended 30 June 1997 and 30 June 1996 cattle sales of $12,247 and $11,742 respectively had been achieved. On the subject land, on the average, about 1,700 bales of lucerne hay are produced annually, about half of which have been used as stock feed by the appellant and the balance sold. Hay sale records for the 1996, 1997 and 1998 financial years averaged about $3,650. The gross average sales including cattle and hay over those years averaged about $16,950 per annum. Mr Major had calculated that the average net profit from the overall operation was $7,452 per annum. Mr Major estimated that Mr Weber worked about 18 hours per week on his farming activities. He submitted that the farming activities represented the dominant use of the land; are engaged in for the purpose of profit on a continuous basis; the profit achieved (being "far above the national average") was indicative of the business having a significant and substantial commercial purpose or character. Based on relativity with the valuation of about $1,400 per ha applied to comparable adjoining farm land, Mr Major suggested that the subject valuation should be calculated based on the same hectarage rate. That would have resulted in a valuation of about $10,500.
In the alternative, it was Mr Major's submission that as a large homesite, the land should be valued in the amount of $6,000 in comparison with the "average $6,000-$8,000" values applied to the physically superior, albeit smaller town blocks. He referred to the subject dwelling being situated with one wall almost on the railway boundary, the railway having been constructed subsequent to the dwelling. In his opinion, the configuration of the homesite area between the railway and the floodplain/lagoon, would, if the land was unimproved, cause difficulties in design of a dwelling, to be accessed over what was once a level crossing to the north. While the railway was now disused, he saw potential for it to be reopened at some time in the future.
Mr MW Malone, registered valuer employed by the Department of Natural Resources, made the original valuation and the subsequently reduced valuation now appealed against. In his opinion, the dominant use of the land was for residential and ancillary purposes and not for farming purposes. As with other larger homesites in the Texas locality, his primary evidential basis for the valuation was obtained from two sales, the full details of which have been discussed in other appeals in which Mr Major was involved. Briefly, the sales are of a 50.17 ha site in Inglewood-Texas Road, to which land a valuation of $21,000 had been applied based on the analysis of its sale, and an improved site of 207.3 ha in Sweedmans Road, to which a valuation of $29,000 had been applied, based on the analysis of its sale.
Mr Malone agreed that it was a difficult task to compare the subject land with the sale lands. However those sales had been accepted by him in other matters, as being representative of the rural homesite market in the locality.
In his verbal evidence he said he had given consideration to a second approach by ascribing a value of $6,000 to a residential site area of about 5,000 m² then $1,400 per ha to the balance area overall. The residential site value was considered to provide relativity between values applied to surveyed lots in the town and in particular to the sale for $5,000, of a site of 1,821 m² in Broadway Street, which had a physical disability caused by a gully intersection. In other appeals when reference had been made to this sale, it had been established that the unimproved value had been analysed to show $3,500 and a valuation of $3,000 had been applied to that land.
Under cross-examination, Mr Malone indicated that he had not been able to establish the flood-free area within the notional 5,000 m² site. However it was his estimate that about 2,000 m² would be flood free in the north-eastern corner. The value applied to the balance area was in relation to the valuation applied to adjoining lands used for farming purposes. The site which had obviously been surveyed initially as a homesite (Lot 1 RP 162982) in the extreme north-eastern corner, contained an area of 1,334 m². Although he had not given specific consideration to the value which he would have applied to that lot, as a separate entity, he suggested that in relativity, it would be worth about $4,000.
Use for Purposes of Farming
Section 17(2) of the Valuation of Land Act provides the meaning of "farming" as follows:
"(a)the business or industry of grazing, dairying, pig farming, poultry farming, viticulture, orcharding, apiculture, horticulture, aquiculture, vegetable growing, the growing of crops of any kind, forestry; or
(b)any other business or industry involving the cultivation of soils, the gathering in of crops or the rearing of livestock;
if the business or industry represents the dominant use of the land, and -
(c)has a significant and substantial commercial purpose or character; and
(d)is engaged in for the purpose of profit on a continuous or repetitive basis."
The evidence of both Mr Major and Mr Weber was that the subject land was used to fatten about 12 head of cattle on a generally continuous basis. That grazing activity in conjunction with the fairly intense arable use of the river flats persuades me that the dominant use of the land could be accepted as being for a business involving the cultivation of soils and grazing. Clearly the business conducted on the land is engaged in for the purpose of profit on a continuous basis. The remaining question in deciding whether the subject land is being used for purposes of farming is whether the business has a significant and substantial commercial purpose or character.
It is submitted by Mr Major that the land is used in conjunction with other lands and it is the overall business operation which has a significant and substantial commercial purpose or character. A business involving the grazing of about 70 head of cattle together with the growing of crops producing overall gross sales of $17,000 per annum has, in my opinion, potential to be regarded as one of significance and substantiality. However, in the submission made by Mr Major, I am not persuaded that the subject land is "used in conjunction" as part of the total aggregation of lands under the appellant's control. It appears that some of the appellant's cattle which go to make up the total business of grazing, are agisted on a property some distance removed from the subject land, at Allora. It is my understanding that the use of the Allora land has no association with the subject land, except that the cattle are in the same ownership. For example, it appears that the cattle grazed on the subject land are either purchased specifically for fattening or grown on other land under the control of the appellant but not the Allora land. Some of the hay produced on the subject land is fed to the appellant's cattle, but not to the cattle at Allora.
Consequently, if land is to qualify to be valued as being used for purposes of farming, but only in circumstances where it is used in conjunction with other land, there must, in my opinion, be some identifiable integration of the land aggregation. For example, if cattle bred and/or grown on one part of the aggregation were finished for marketing on another, then the parts of the aggregation could properly be said to be used in conjunction. Similarly if hay grown on one property is used to feed the total herd then that would be seen to be an integrated operation. However, the argument for recognition of significance and substantiality of the business, depends on the size of the total herd, when at least one segment of the business (at Allora) appears to be operated independently of the others.
It is my opinion therefore after consideration of the evidence and submissions by Mr Major, that the subject land is not used for purposes of farming because the segment of the business operation limited to the lands with integrated use has not been shown to be a business having a significant and substantial commercial purpose or character.
Rural Homesite
The sales evidence on which Mr Malone's valuation was said to have been based is not persuasive other than to confirm the valuations applied to the sale lands. Previous relativity of valuations of those lands and the subject land was disturbed when the relevant date valuation of the subject land was reduced.
The verbal evidence given by Mr Malone as to the sale of land in the town area has been of assistance. Although a comparison between a site of 1,821 m² and the subject site of 7.554 ha is not ideal evidence, it does allow analytic consideration of Mr Malone's secondary approach in ascribing a value to a notional site then additional value for the excess area. I see nothing wrong with that checking approach when there was no directly comparable sales evidence available.
Mr Major has submitted that the land is more valuable for the purposes of farming than it is for residential purposes. When there is a flood-free homesite on the land enjoying good access and the amenities of the town, it seems illogical to me, to suggest that the additional area of usable land adds nothing or only nominal value to a basic homesite. Mr Major spoke of the deleterious effect of the lagoon when water become stagnant and the breeding ground for mosquitoes etc. Nevertheless, it is seen as probable that others in the marketplace would see the lagoon even in close proximity to the homesite, as a landscape feature.
While Mr Malone's secondary approach has merit in principle, I have not been convinced that his selection of a notional homesite area of 5,000 m² has been vindicated. He had not given specific consideration to the flooding disability of that notional area. He suggested that the flood-free surveyed site of 1,334 m² could have an unimproved value of $4,000 as a separate entity. That seems to me to be a fairer basis on which to commence the secondary valuation consideration. I see merit in reducing the unimproved valuation, albeit only marginally, to $14,500.
Finding
The appeal is allowed, the valuation of the chief executive set aside and the unimproved value determined in the amount of Fourteen Thousand Five Hundred Dollars ($14,500).
RE WENCK
MEMBER OF THE LAND COURT
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