Webster v Department of Natural Resources and Mines
[2003] QLC 53
•1 August 2003
LAND COURT OF QUEENSLAND
CITATION: Webster v Department of Natural Resources and Mines [2003] QLC 0053 PARTIES: Garry J and Jennifer Webster; Wilfred D Webster
(applicants)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NOS: AV2002/0075 and AV2002/0076 DIVISION: Land Court of Queensland PROCEEDING: Appeals against unimproved valuations - Shire of Paroo - Valuation of Land Act 1944 DELIVERED ON: 1 August 2003 DELIVERED AT: Brisbane HEARD AT: Cunnamulla MEMBER Mr RE Wenck ORDER: 1. AV2002/0075
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2001 determined in the amount of One Hundred and Seventy-five Thousand Dollars ($175,000).
2. AV2002/0076
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2001 determined in the amount of Sixty-seven Thousand Dollars ($67,000).
CATCHWORDS: Statutory Valuation - Unimproved value - Valuation of Land Act 1944
Valuation - Sales evidence - Direct comparison - Relativity between valuations
Degradation - Worsement - Woody weed infestation - Loss of natural pasture
Worsement - Degradation of land - Loss of natural pasture
APPEARANCES: Mr G Webster for the appellants
Mr MK Fisher, Crown Law, for the respondent
AV2002/0075
Mr GJ and Mrs J Webster are the registered owners of land described as Lot 4 NO40:GHFL15/1676, Parish of Belar, containing 13,088 ha, situated about 80 km south-east of Cunnamulla. This block is known individually as "Cudnappa" but forms part of a family aggregation known as "Mitchell Plains". As at 1 October 2001 the unimproved value of this land was assessed by the chief executive in the amount of $187,500. An objection was disallowed and an appeal filed. Subsequently the valuation was reduced to $182,500 pursuant to s.68 of the Valuation of Land Act 1944 (VLA). That is the valuation now appealed against. The owners' estimate of value as contained in the notice of appeal is $152,000.
The grounds of appeal were wide but included several specific issues as set out below:
· "There is a glaring relativity gap between the UCV of Mitchell Plains and the UCV of neighbouring property Yankalilla.
· There has been no consideration given to the inundation problem of the heavy coolibah country and the resulting stock losses when it does rain.
· We have a bitumen road through the property, but the Cudnapper Creek cuts our access after rain.
· There is a lack of understanding of the increasingly devastating woody weed problem and the valuer's inability to identify those species."
Mr GG Naish, registered valuer, employed by the respondent chief executive, took responsibility for the valuation appealed against. His report on this block included the following:
Nature of Land -
3270 ha(25%) open brown soil plain
3530 ha(27%) ashy grey soil, open to lightly timbered coolibah, including creek
3270 ha(25%) moderate to thick red to grey soil gidyea, sandalwood with pockets of mulga and areas of sandalwood
3018 ha(23%) heavy sandhills and sandridges with cypress pine, ironwood, box, mulga, sandalwood and beefwood
Carrying Capacity -
1 DSE to 2.2 ha (5950 sheep)
Valuation -
$182,500 or $13.94/ha.
Remarks -
Review upon inspection and given a flood allowance.
In his oral evidence Mr Naish said that the flood allowance had been in the amount of $5,000 in recognition of management difficulties associated with the location and severance of the property by Cudnapper Creek and the floodplain. The allowance was not intended to include the fact that the homestead and associated infrastructure were inaccessible during flooding of Cudnapper Creek.
Mr Webster conducted both appeals. In this matter he tendered a statement and gave oral evidence directed to the more specific grounds of appeal. Satellite imagery had been interpreted on the basis of his direct knowledge of the land and with the assistance of a grid overlay for estimations of area, he had calculated that "Cudnappa" contained:
17%open plains
36%ashy coolibah
47%gidyea, sandalwood, cypress, hopbush, sandhills
Although he had broken up the better country with less open plains and more of the ashy coolibah, Mr Webster conceded that there was no significant difference between his classification and that of Mr Naish's, and particularly with regard to the overall area of the inferior country. He accepted that since the appeal had been lodged, an allowance had been made by Mr Naish in the reduced valuation for flooding problems, but made reference to the problems associated with the dusty dry weather environment of the ashy coolibah country with consequent lower wool yields and prices. He did not accept that the allowance for "flooding" was sufficient to include complications associated with shearing and stock-handling operations or the difficulties associated with access from the bitumen road to the homestead and infrastructure being cut off by flooding for long periods.
One of Mr Webster's main concerns was the relativity between the subject valuations and that of the adjoining property "Yankalilla" ($11.16/ha overall). Based on the chief executive's classification of the nature of the "Yankalilla" country, he was of the opinion that the "Cudnappa" country was inferior. Mr Naish's evidence was that prior to the flooding allowance having been made, the previously existing relativity between the valuations of "Yankalilla" and that of "Cudnappa" had been retained. Although he accepted that the quality of the "Yankalilla" country overall may have been slightly superior, a significant factor in the "Yankalilla" valuation was the block's large size (37,156 ha) in comparison with the subject block of 13,008 ha.
Mr Webster is concerned that the effective use of the sandhills/gidyea paddocks "has been dramatically reduced by the encroaching Buddah (sandalwood) and hopbush ...." He intends to embark "on a blade-ploughing exercise" when departmental permission can be obtained. Mr Naish's evidence was that the sale properties also had woody weed infestation on the sandy country and he had observed sandalwood understorey where there had been gidyea country on those properties.
The sales on which Mr Naish relied were of the properties "Yerinan", "Warambah", "Cleland" and "Randwick Downs".
The purchasers of "Yerinan" (AJ & JA O'Brien) were also appellants against unimproved valuations of that property as at 1 October 2001. In those appeals I found that the circumstances surrounding the sale of the property "were such that any unimproved value analysis would be sufficiently clouded as to be an unreliable basis for valuation purposes".
Brief details of Mr Naish's descriptions of the remaining sale properties are as follows:
1."Warambah" - 32,827 ha - sold 24.8.2000 - $1,404,000 ($42.77/ha) - analysed unimproved value $385,569 ($11.75/ha) - applied unimproved value $385,000 ($11.73/ha) - carrying capacity 1DSE to 2.5 ha - nature of land (5%) open brown soil Mitchell grass plain - (28%) watercourse, brigalow, gidyea, coolibah, grey brown soil (not gilgaied) open to thick brigalow, coolibah, box and watercourses - (40%) gidyea, brigalow, box on red brown soils - (28%) sandy to sandhills with red soil mulga and box - located on the fringe of the eastern section of the Warrego Floodplain, merging into mulga lands. Woody weed problem in red sandy country. "Overall: In comparison to 'Cudnappa', this property comprises similar access and location to a service centre. It comprises of inferior country. It is a much larger sized block than 'Cudnappa'. Overall, on a per hectare basis, it is inferior to the subject."
2."Cleland" - 32,590 ha - sold 19.6.2001 - $1,090,611 ($33.46/ha) - analysed unimproved value $308,866 ($9.48/ha) - applied unimproved value said to have been $300,000 ($8.62/ha) (sic) - ($9.20/ha) - carrying capacity 1DSE to 2.8 ha - nature of country classified as - (15%) open Mitchell grass plain, coolibah, box, gidyea - (11%) broken coolibah and gidyea - (5%) box, coolibah flats and claypans - (40%) mulga/box - (26%) sandridges running into box/gidyea and ironwood - (4%) Spinifex - located on the northern section of the Warrego Floodplain, merging into mulga lands - woody weed problem in red sandy country. "Overall: In comparison to 'Cudnappa', this property comprises of superior location and access, with inferior country type. The sale is larger in area than the subject. Overall, on a per hectare basis, the sale is inferior to the subject. ..."
3."Randwick Downs" - 19,560 ha - sold 16.6.2000 - $800,000 ($40.90/ha) - analysed unimproved value $237,007 ($12.12/ha) - applied unimproved value $232,500 ($11.89/ha) - carrying capacity 1DSE to 2.6 ha - country described as (52%) brown soil flooded coolibah, lignum, brigalow, some scalded Mitchell grass - (38%) red soil gidyea scattered to thick with wilga, dogwood, sandalwood, brigalow - (10%) sandhills, cypress pine, wilga, mulga, ironwood, leopardwood - woody weed problem in red sandy county. "Overall: In comparison to 'Cudnappa', this property comprises of inferior location and access, with inferior country type. The sale is larger in area than the subject. Overall, on a per hectare basis, the sale is inferior to the subject."
Mr Webster had some knowledge of "Warambah". He knew it had some well-regarded ringbarked country and was partly flooded. He did not accept that the "Warambah" country overall was inferior to "Cudnappa". In his opinion the sales history of the property indicated that land values had fallen in the last decade rather than having risen. He offered no opinion as to a comparison of "Cudnappa" with the remaining two sales. He did however offer some criticism as to the departmental valuers' emphasis on property sales "when in many cases they have come about from a lifestyle change, not an economic decision".
With regard to the estimated carrying capacity, his evidence was that over 30 years, "we have never achieved the stocking rates set down by the DNR." He provided an Agforce (Member Profile) as at 8 June 2001 in which stock numbers were provided for, as I understand it, the whole of the aggregation which appears to include land other than the two appeal blocks. In that profile, 6,000 sheep and 380 cattle were listed. In 2002 and 2003 according to Mr Webster the drought had depleted the numbers to 2,200 grown sheep and 1,800 hoggets. As he sees it, the departmental stocking rates "were set in the 50's - big seasons/big prices ... and make no allowances for the drought years".
AV2002/0076
Mr GJ Webster and his father Mr WD Webster are the registered owners of this part of the "Mitchell Plains" aggregation, described as Lot 2 NO6:GHPL15/1737, Parish of Belar, containing 6,704 ha. This land, which for the purposes of the appeal was referred to as the "Mitchell Plains block" adjoins "Cudnappa" to the north and easterly of Cudnapper Creek. As at 1 October 2001 the chief executive's unimproved valuation was $76,000 ($11.34/ha). The owners' estimate as contained in the notice of appeal is $55,000.
The grounds of this appeal were identical to those in the "Cudnappa" appeal.
Mr Naish's report included the following:
Nature of Land -
1400 ha(21%) open Mitchell grass plain with grey and brown soil coolibah and gidyea watercourse
1880 ha(28%) red soil gidyea scrub and sandalwood, pockets of brigalow
3424 ha(51%) sandhills with cypress pine, beefwood
Carrying Capacity -
1DSE to 2.6 ha
Mr Webster disputed Mr Naish's classification of the nature of the land. From his direct knowledge of the block, his interpretation of satellite imagery and the use of a grid overlay to assist in the calculation of areas, he classified the land as comprising:
15.3%coolibah, including small areas of open country, but no Mitchell grass
15.6%red gidyea (pulled) scrub with major re-infestation of sandalwood
69.1%sandhills/thick gidyea riddled with inedible hopbush/sandalwood.
Mr Webster alleged that "a thickly covered sandhill" which had been burnt in 1999 in an endeavour to control hopbush, had been identified on a WARLUS map included in Mr Naish's report as alluvial plains (open). The uncoloured photocopied version of that map which had been provided to Mr Webster prior to the hearing was confusing. The printed description of an adjoining pocket of open plain encroached over the pocket of sandhill country which in fact had been separately coded on the original coloured version of the map.
Mr Naish had inspected the property in company with Mr Webster. It was his evidence that he had ground truthed the WARLUS mapping classifications and then checked them against aerial photography and satellite imagery. Included in his report were a series of photographs taken at identified points on both this block and "Cudnappa". He agreed with Mr Webster that there was vegetation, particularly gidyea, on the fringe of the open country where it merged into other land classifications but not specifically identified on the WARLUS mapping. However in his opinion the areas involved were insignificant in an overall relatively broad-based identification of the nature of the country. With the measuring technology available to Mr Naish I accept that the areas calculated by him of the various land classifications identified on the WARLUS mapping, provide a sufficiently accurate base for valuation purposes. However I also accept that on the relatively small and partly severed areas of the actual open alluvial plains within the "open" country classification, the original Mitchell grass pasture has been lost as the result of over-grazing, by both commercial and feral animals. Mr Webster's evidence was that the block had been leased by the previous owners to sheep dealers who had given it a "hammering" leaving it in a bare and messy state. After the purchase some 40 years ago it had been spelled in an endeavour to restore it to "some sort of productivity". That "nearly worked for a while" but then woody weeds germinated and the infestation became progressively worse to its present stage of being largely unmanageable, unproductive and in his opinion, unmarketable. Various photographs were tendered by Mr Webster depicting the density of infestation which now exists.
On the evidence relative to this and other appeal properties, the loss of Mitchell grass pasture is not uncommon in the merge areas, but on an individual block as small in size as is the subject, the degradation of the relatively small proportion of originally premium pasture land is seen to cause worsement to a degree greater than on other merge properties with a superior overall mix of country.
Mr Naish has adopted historical carrying capacity standards for direct comparison and relativity purposes. Mr Webster's evidence was that from his practical experience the subject land is incapable and was never capable of carrying the numbers of stock suggested in the departmental estimate. While there may be disagreement in many cases on estimates of carrying capacity it has been noted by the Court over the years that provided the estimates are consistent, whether conservative or optimistic, they are a useful tool in the comparison process for valuation purposes.
Again on this block, Mr Naish agreed that the sandy country carried heavy woody weed infestation and that the areas of red soil gidyea country carried an understorey of false sandalwood infestation. However it was his evidence that each of the sale properties carried woody weed infestation to varying degree on similar land types and in his opinion there was no warrant for making a special further allowance on this block.
The sales adopted as providing evidence of value were the same as in the "Cudnappa" appeal. However in the comparison process with this block he had based his valuation on the opinion that "Warambah" was superior on an overall per ha basis, including the size differential, "Cleland" was inferior overall per ha and "Randwick Downs" superior.
When Mr Webster compared the departmental classification of "Cleland" with his own of the subject block, he could not agree that "Cleland" should be regarded as inferior. Mr Naish's oral evidence was that there would be a significant market differentiation for size alone "Cleland" being 32,592 ha and the subject only 6,704 ha. However, even if comparisons were possible on an equal size basis, he was of the opinion that the large component of mulga/box country on "Cleland" with no similar classification on the subject, was a significant factor in favour of the subject land. Mr Webster did not accept the size argument, because as he saw it, the subject land was in reality part of a much larger family aggregation. However, he submitted that it was totally unrealistic to suggest that the mulga country on "Cleland" with its ability to provide edible drought relief and a good overall mix of country was less valuable than the subject's unproductive red country with inedible woody weed infestation.
The "Yankalilla" relativity argument was also raised by Mr Webster in this appeal.
Conclusions and Findings
In the "Yerinan" (O'Brien) appeals the following comment was made in the decision:
"After hearing Mr Naish's evidence as to the review which had taken place to the original analysis of the 'Yerinan' sale and bearing in mind that valuation is not an exact science, it would be optimistic for the respondent to expect that a close examination of each component of the analysis of any highly improved sale would not reveal some areas where review could be argued as warranted. It is for that reason that some caution needs to be exercised in the application of sales evidence. It is observed that in the sales of 'Warambah', 'Cleland' and 'Randwick Downs' the analysed unimproved values were near fully applied (99.8%, 97.4% and 98.1%) when the added value applied to the improvements were assessed at $1,018,431 (72.53% of the sale price), $781,745 (71.67%) and $562,993 (70.37%) respectively. Those figures suggest that little margin was allowed for any possible review of the sales analyses ... In the subject matters I have formed the view that a small reduction in the individual lot valuations is warranted. The basis for a 25% increase is not only weakened by the removal of the sale of the subject property from consideration, but allows no meaningful benefit of doubt when the purpose of the valuations is for revenue gathering."
For consistency, based on my approach to the sales evidence analyses in the "Yerinan" and other appeals, both the subject valuations are entitled to some small reduction before consideration of matters individual to each block.
Although Mr Webster argues that the individual blocks, despite separate ownership, are part of a family aggregation, the VLA (s.35(1)(b)) provides that lands which are separately owned shall be separately valued. It is Mr Naish's interpretation of the market that due to the wider range of purchasers with the financial capacity to acquire smaller blocks, those smaller blocks sell for relatively higher rates per ha than larger blocks of otherwise comparable country. That seems to be a generally accepted interpretation of market forces and there is no evidence in this matter which proves otherwise. Therefore just as it is difficult to compare either block with the larger sale blocks, due to the size differentials, little is to be gained by endeavouring to make comparisons between the subject blocks and the 37,156 ha "Yankalilla" property.
As was found by the Land Appeal Court in Grahn v Valuer-General (1992-1993) 14 QLCR 327 at p.328 - "While 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 & TJ Fischer v The Valuer (1983) 9 QLCR 44 at p.46."
The sales had been interpreted by the chief executive to reflect a 25% increase for properties in the Warrego Floodplain Sub Market Area. As I understand it that increase was applied consistently maintaining the previously existing relativity between valuations except in cases such as "Cudnappa" where a review was considered appropriate for a specific reason.
There has been no challenge to the evidence provided by the sales other than the suggestion by Mr Webster that factors, other than sensible economic considerations, influence the sales of some properties. The more specific challenge was to Mr Naish's opinion that "Warambah" on an overall per ha basis, is less valuable than "Cudnappa" and for similar reasons, "Cleland" is less valuable than the "Mitchell Plains" block. While Mr Webster has strong views on relativity matters, he has not, on the evidence, carried out any detailed inspections of the properties the valuations of which are used as comparison examples. His comments are based on the nature of country as described by the chief executive's valuers for those comparison properties while questioning, to varying degree, the chief executive's description of the nature of the subject lands and in particular the "Mitchell Plains" block.
On the evidence generally and not restricted to these appeals, it is clear that woody weed infestation on the red sandy country and its encroachment onto the better quality gidyea lands is not restricted to the subject lands but is a factor affecting the sale properties and district properties generally. Despite this escalating problem, the sales show an increasing trend in levels of unimproved value as compared to those existing at the previous valuation date. That would indicate, as a matter of logic, that if the degraded country is decreasing in value then the better quality country must be increasing to a degree in excess of the average trend. I have not been persuaded that the degradation of the "Cudnappa" country is any worse than has been experienced generally throughout the district. Consistent with my conclusions in other appeals relative to the application of the sales evidence I have decided that there should be a relatively small reduction in the valuation of "Cudnappa". There is no dispute that the house and infrastructure on "Cudnappa" were located originally in a position which causes considerable inconvenience and for long periods, during flooding of Cudnapper Creek. There was no evidence to suggest that there had been no building sites available which would not have been affected to the same degree. Difficult as it may be to accept, assessment of unimproved value is conducted on the assumption "that at the time as at which the value is required to be ascertained, the improvements did not exist." (See s.3(1)(b) VLA). The working difficulty associated with flood severance of a property does affect unimproved value and Mr Naish was correct when recognising this disability as an issue separate from the inaccessibility experienced by the structural improvements.
I find that "Cudnappa" should be valued as follows:
13,088 ha @ $13.75/ha $179,960
Less allowance for flooding disability say 2.5% $4,499
$175,461
Adopt$175,000
Based on Mr Webster's knowledge of the country and his evidence generally, I have been persuaded that as a result of the generally inferior nature of the mix of country and the distribution of the relatively small area of open country with original Mitchell grass pasture, the effect of worsement from the overall degradation of country is more serious on the relatively small "Mitchell Plains" block than on "Cudnappa" or on district properties generally. Any marketplace advantage which this small individual block may have possessed as a result of its size, is seen to be largely negated by the extent and effect of degradation. While comparison with the sale properties is difficult, the degree of superiority of this block over "Cleland" is seen to be significantly less than the valuation appealed against suggests, while the degree of inferiority with both "Warambah" and "Randwick Downs" is seen to be greater.
I find that this part of the aggregation as an individual block, should be valued as follows based on the sales evidence:
6,704 ha @ $10.00/ha $67,040
Adopt$67,000
Orders
1.AV2002/0075
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2001 determined in the amount of One Hundred and Seventy-five Thousand Dollars ($175,000).
2.AV2002/0076
The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2001 determined in the amount of Sixty-seven Thousand Dollars ($67,000).
RE WENCK
MEMBER OF THE LAND COURT
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