Wild v Department of Natural Resources and Mines
[2004] QLC 104
•6 December 2004
LAND COURT OF QUEENSLAND
CITATION: Wild v Department of Natural Resources and Mines [2004] QLC 0104 PARTIES: Ivan G Wild
(applicant)v. Chief Executive, Department of Natural Resources and Mines
(respondent)FILE NO.: AV2003/0194 DIVISION: Land Court of Queensland PROCEEDING: Appeal against annual valuation under Valuation of Land Act 1944 DELIVERED ON: 6 December 2004 DELIVERED AT: Brisbane HEARD AT: Caboolture MEMBER Dr NG Divett ORDER: The appeal is dismissed. The unimproved value of the subject land as determined by the Chief Executive in the sum of Three Hundred and Ten Thousand Dollars ($310,000) is affirmed. CATCHWORDS: Statutory valuation – the use of the land – Section 17 farming – Valuation of Land Act 1944 – Judicial interpretation – Amendments to the Act APPEARANCES: Mr IG Wild for the appellant
Mr P Rabaa for the respondent
Background:
This matter relates to land at 730 to 860 Kilcoy-Beerwah Road, Stanmore, and described as Lots 4, 6 to 8 on RP 18106, and Lot 10 on RP 215633, Parish of Durundur. The subject land has an area of 243.935 hectares, and is located about 11 kilometres north of Woodford, and 10 kilometres west of Peachester in the Caloundra local government area. Access to Woodford is bitumen sealed with high level bridges which are rarely cut by floodwaters. Side access is also available by formed Phillips Lane, 0.6 kilometres along the northern boundary. Access is available to large cattle transports, and the property is known as "Phillips", "Running Creek" and "Blackburns".
The subject land is zoned as Rural under the planning scheme of the Caboolture Shire Council of 17 December 1993, effective at the date of valuation of 1 October 2002. Utility services include telephone, three phase power and mail service. The power line runs both north to south, and also east to west across the parcel. Amenities and primary schools are available at Woodford, and regional services at Caboolture some 26 kilometres east of Woodford. The key issues are the nature of the land, changes in the values, the use of the land and comparison of sales.
On 24 February 2003 the Chief Executive issued a valuation of the subject land at $310,000. Following an objection the Chief Executive confirmed that unimproved value on 17 June 2003. The appellant has now appealed, claiming the unimproved value should more properly be $185,000. Mr Wild argues that the original valuation had been $320,000, which was then reduced to $310,000 following his objections at a previous conference with the valuers. However he could provide no evidence to support his recollection of the facts, and I accept the respondent's documented records as proof of the history of the current matter.
Mr Ivan G Wild appeared and gave evidence on his own behalf. Mr P Rabaa, Counsel of Crown Law appeared for the respondent, calling evidence from Damien Peter Jones, the departmental registered valuer responsible for determining the valuation. There was a preliminary conference before the Judicial Registrar of the Court on 24 October 2003.
Nature of the land -
The subject land is a well balanced mix of heavier carrying well watered flats and flood-free lighter forest relief country. The country types include 11% of heavy flooded alluvial rainforest brown loamy scrub along the western side fronting the Stanley River. The pastures include kikuyu, paspalum and couch, and surface waters rest in the lower areas for long periods. There is also 41% of flooded to swampy alluvial blue gum country along Running Creek, and the Stanley River to the south of the land. Flooding of those areas are more localised, and the soils are heavier/brown clay loams and melon-hole depressions. The eastern part is subject to rapidly rising river floods, which can isolate cattle due to a dangerous flood gutter on the eastern part of Lot 8 (Phillips paddock). The small lagoons can become infested with hyacinth and other noxious weeds.
The balance of the land comprises 46% easy sloping light brown sandy forest country, with scattered improved pastures of kikuyu and roach grasses between the yards and the cottage fronting Kilcoy-Beerwah Road. Details of those country types are shown on maps of the property (Exhibit 6, pp. 13 and 14). There is also 2% of steep to unavailable rocky volcanic knoll, which provides some shelter for cattle from cold winds. Both parties agree with the general descriptions.
The subject lands have been classified by Mr Jones as 11% alluvial rainforest grazing, 41% flooded forest grazing, 46% easy fair lighter forest and 2% steep to unavailable forest. The carrying capacity is assessed overall as one beast to 1.3 hectares on a mixed herd basis of 188 head. Mr Jones assesses the unimproved value on the basis of 127 hectares at $1,650 per hectare, plus 112 hectares at $925 per hectare and 4.935 hectares at $250 per hectare, or overall 243.93 hectares at $1,275 per hectare, equalling $314,384, for which he has adopted $310,000. Mr Jones advises that while the country type classification areas are slightly different to the previous understanding of those details, any variations make little difference to the final valuation.
While Mr Wild agrees overall with the country types, he argues that the subject lands are low lying cold grazing country, with frosting problems, and that type of country should not be directly compared with other farming lands which do not suffer from similar disabilities. Mr Jones notes that the subject lands are drought free because of the water situation, and such lands are in demand during certain periods of drought. However he agrees that kikuyu is not the predominant pasture on the subject lands.
Changes in the valuations -
Another problem concerning Mr Wild is the apparent inconsistency in the percentage changes that have occurred with the subject lands. He notes for instance that while the subject land had increased by 67.5% from $185,000 in 1998, his other property in Caloundra local government area, which is used in conjunction with the subject lands as explained later in paragraph [19], only increased by 19.8% from $116,000 at 1 October 1998 to $139,000 in 2002. Mr Jones rejects those comparisons as he notes that they reflect different market periods. Mr Jones advises that the subject land had increased by 29% from $240,000 at 1 October 2000 to $310,000 at the relevant date (Exhibit 6, p.6).
Mr Jones notes that the comparative percentage increases mentioned by Mr Wild relating to the Caloundra land at Commissioner's Flat, Peachester, actually reflected values at 1 October 1998 and 1 October 2001. He advises that the unimproved value of that parcel at the current relevant date of 1 October 2002 was in fact $152,500 (Exhibit 3). Mr Jones further advises that the previous value of the subject land at 1 October 2000 had been reduced from $280,000 to $240,000 following a decision of this Court in a number of Kilcoy appeal matters. He notes also that there had been no revaluation in Kilcoy Shire since 1 October 2000, so that relativities between Kilcoy Shire at 1 October 2002 are not available. He advises that at the relevant date of 1 October 2002 Esk Shire grazing lands had increased by 25%, while the Caloundra grazing lands increased by 10%.
Mr Jones argues that while the larger rural home sites in Caboolture Shire had increased by only 10% at the relevant date, those unimproved values were still higher than the grazing lands in that Shire. Mr Jones advises that in respect of seeking some relativity between Caboolture and Caloundra local government areas, he had compared his analysis on a per hectare basis of a common Sale 1 (Frizzo). He advises that the valuer undertaking the Caloundra local government area (Mr Fitzpatrick) had concluded a similar percentage increase in the values of 10% from the previous valuation. However he concedes that those comparisons occurred prior to his having to reduce his previous values by 20% following the Kilcoy court decisions. In the event the Caboolture local government area grazing lands were increased by 26 to 28%; while the adjoining Caloundra local government area grazing lands had increased by 10%.
Mr Jones advises that both he and Mr Fitzpatrick had been in agreement on the relative values of the horticulture lands on the Frizzo sale, as that owner (Fullerton) also had pineapple country in both Caloundra and Caboolture Shires. Mr Jones agrees that the horticulture lands on the Frizzo sale indicated a higher level of value for such lands, than had been applied in the Caloundra local government area. However he agrees that the analysis of the Frizzo sale had not been as thorough as one would like. However Mr Jones notes that Mr Fitzpatrick had other sales in Caloundra local government area that supported the 10% increase at that time. He also agrees that those comparisons were predominantly horticultural lands.
In that respect Mr Jones argues that the appellant had previously grown a semi-horticultural crop (palm trees) upon the subject land. Mr Wild agrees that that had occurred, but advises that proved entirely unproductive, and the palm trees could not be marketed, and remain today as testimony of that inappropriate use of the subject lands.
In respect of whether there was direct comparability between grazing lands in Caboolture and Caloundra local government areas, Mr Jones notes that there has been more increases in grazing land unimproved values in the Caboolture Shire than in the neighbouring Caloundra local government area. He notes that may be the result of previous unimproved values in Caboolture local government area being too low. However he could not advise whether the two submarket areas did in fact reflect differing market levels for grazing lands (Transcript 69).
The use of the land -
While it is agreed that the highest and best of the subject lands is for grazing purposes, Mr Wild now argues that current stricter land management practices have a much greater impact upon its use for that purpose. He argues that the subject land has 24 neighbours, each of whom must grant permission before certain "burning off" land management can proceed. He argues those more stringent safety procedures over the last few years are now required by the Rural Fire Board, and cause more management problems than encountered on other properties, where lesser neighbours are involved. Mr Wild advises that he has tried to get permission but, because some of his neighbours on smaller properties are either uncontactable, or refuse to give permission to burn off on environmental grounds, then he has serious land management problems.
Mr Jones agrees that such "burning off" practices are now more constrained, but argues that those conditions also apply to other grazing lands in the area, including his comparative sales. Mr Jones indicates a similar problem for a farmer (Thompson) in Caboolture Shire, but then advises that provides no assistance in this matter as that owner did not proceed to appeal to this Court. In that case the heavier grazing patterns also distinguish grass management problems occurring on the subject land. However Mr Jones does not dispute that the problem for owners in respect of maintenance of grass problems, would increase with the number of neighbouring properties involved. He notes also that in some cases owners may need to change to using machinery to slash along boundaries.
In respect of the incidence of dingoes on those grazing lands, it is agreed that dingoes tend to migrate from one forestry area to another in that locality, often along the river or creek corridors which provide cover for the predatory animals. Mr Jones does not dispute that dingoes could be a problem on the subject land. However he argues that his sales could also be subject to similar problems.
A major concern of Mr Wild in respect of the use of grazing lands, is the apparent use by Mr Jones' sales of lands that are, in his opinion, more lands used either as a rural home site, or for a part-time or hobby type farming purpose. He argues that concession for farmers under the Valuation of Land Act 1944 is one of only a few concessions now available to genuine farmers in the Queensland community. He claims that it is not appropriate for Mr Jones to compare sales of rural grazing lands, where there is some potential for a higher use, such as a rural home site. Mr Wild notes that is specifically precluded by s.17(1) of the Act. He argues that Mr Jones has made that error in his current comparisons in the subject matter. He argues that s.17 is currently not achieving its original purpose of providing relief to genuine farmers.
In respect of the use of the subject land for grazing purposes, Mr Wild advises that is used in conjunction with his other nearby property at 488 Commissioner's Flat, Peachester (Lot 163 on C 31987 and Lot 2 on CG 56 – "Stanley Hills"). That property is located about 4 kilometres east of the subject land, and is used to sustain a dairying operation. The subject land is used for the dry part of that operation, when milking cows are put off and held as store cattle. While Mr Wild notes that he has a third property at Kilkivan, which is used for fattening purposes for any steers, he advises that is not operated in conjunction with his Commissioner's Flat lands and the subject land. He argues that it is not practical to shift cattle from Kilkivan to Caboolture for fattening purposes so that the subject land is just used for his dry cows. Overall Mr Wild runs about 1,000 head of cattle on the three properties, and has been in farming for most of his 73 years.
Mr Wild notes that while the press statements might indicate that there is a buoyant cattle market, the reality is that prices for beef, particularly Jap Ox, are now less than they were in 1996. On that basis he argues that, with the recent decline in dairying opportunities and other management restrictions, grazing lands for genuine farming purposes could not be seen to be in a very buoyant situation. Mr Jones rejects that opinion, based upon his sales evidence discussed later, noting that was similar to the previous evidence supplied in AV89-122, 31 October 1989, unreported.
Mr Wild further argues that it is not in accordance with the intentions of s.17 to compare genuine farming lands, where an ongoing income needs to be earned upon the land, with sales of land where short term annual turnover of stock can allow a rural residential site owner to meet the minimum criteria of the Act. Mr Wild argues that is clearly demonstrated by comparisons with his other parcel at 488 Commissioner's Flat ("Stanley Hills"), where the influence of rural home sites in Caloundra local government area has had a lesser influence than in Caboolture Shire, where rural home sites are more prolific. However Mr Jones argues that farming lands are used for primary production purposes as defined under s.17 of the Act.
In respect of why Mr Jones had not sought to value both the "Stanley Hills" land and the subject lands as apportioned parts of a single valuation for farming purposes under s.17, Mr Jones advises that had never been requested by Mr Wild. However Mr Jones concedes that, while actions under s.35 of the Act are generally applied to properties that fall partly in one valuation division area and partly in another division area, it was possible under s.35 to consider separations in different Shires. However he advises that Mr Wild did not pursue that approach.
However, whether a more satisfactory outcome for Mr Wild could be achieved by such an approach, would depend upon the particular circumstances of those properties, and any allowance for severance that might apply to that single "farming" operation. However he notes that Court precedent dictate that the business undertaken must be the same type of farming. For example, it would not be possible in his opinion, to amalgamate a horticultural business such as say pineapples, with a grazing farm. Mr Jones also notes that Shire Councils have sought to resist such approaches in the past, as it has tended to reduce the rateable valuations. However that is not a matter for consideration in establishing unimproved valuations.
Comparison of sales -
While he provides no sales evidence to support his estimate of the unimproved value, Mr Wild is familiar with Mr Jones' sales. Mr Jones provides the following comparison of rural grazing lands:
· Sale 1 – (Frizzo to Fullerton Farms – Lot 329 on CG 452 – "Frizzo). This is a 164.3 hectare site located about 5 kilometres south-east of the subject land, and 9.7 kilometres north-east of Woodford. Access is by 2 kilometres of bitumen Cemetery Road, 6.5 kilometres formed gravel Woodford-Beerburrum Road, and 1.2 kilometres rough forestry track. The sale comprises 24% good red brown horticultural forest slopes, 21% marginal grey/yellow horticultural forest slopes, and 55% creek flats forest grazing lands. The sale is used for macadamia and pine plantation, with the balance suitable for grazing. There is one dam, and seasonal water in Blackrock Creek. The subject land has superior access and location, is of similar size, but is overall inferior to the sale due to the established horticultural areas on the sale. The sale sold in April 2002 for $850,000, ($2,094 per acre) was analysed at $554,045 ($3,372 per hectare), showing a factor of 1.4. The sale was applied at $515,000 ($3,134 per hectare) showing a 30% increase.
[25]
· Sale 2 – (Smith to Rimbond Pty Ltd – Lot 174 on CG 85 – "Smithfield"). This is a 105.5 hectare property located about 8 kilometres west of the subject land, and about 11.3 kilometres west of Woodford. Access is by 8.3 kilometres of bitumen sealed D'Aguilar Highway, then 1.5 kilometres bitumen Eaton Lane, and 1.5 kilometres of dirt road. The sale comprises 23% heavy wet forest creek flats, 44% gentle forest slopes and 33% light grey easy to moderate forest slopes. The sale is used for cattle breeding. There are ten medium to small dams and seasonal water in Stoney Creek. The subject land has superior access, less expensive water supplies, is larger in area, but similar in location, forest country type and general grazing market. Overall the sale is similar. The sale sold in January 2002 for $650,000 ($2,493 per acre), was analysed at $157,842 ($1,496 per hectare), showing a factor of 1.4, and applied at $144,000 ($1,365 per hectare), showing a 27% increase.
· Sale 3 – (Willaton to McInnis – Lot 153 on C 31856 – "Black Rock Ridge"). This is a 60.6 hectare parcel located about 5 kilometres south of the subject land, and 6.1 kilometres north of Woodford. Access is by 2 kilometres of D'Aguilar Highway, 1.9 kilometres Kilcoy-Beerwah Road, 1.2 kilometres bitumen strip Cove Road, and then bitumen McCabe Road. The access can be cut off by flooding in the Stanley River. The sale comprises 46% creek flats, and swampy forest country, 54% level to easy wattle and gum forest. The sale is used for cattle breeding and fattening, and has one dam, one bore and seasonal water in Black Rock Creek. The sale has similar rainfall, locality and forest country type, is smaller in size, but that is balanced by its inferior country type and water, due to the subject's location on the river. Overall the sale shows a similar increase for grazing lands. The sale sold in May 2001 for $450,000 ($3,005 per acre), was analysed at $140,629 ($2,320 per hectare), showing a factor of 1.48, and has been applied at $120,000 ($1,980 per hectare). The sale shows a 26% increase.
· Sale 4 - (Deacon to Aitken – Lot 192 on LX 276 and Lot 7 on SP 100198 – "Lyndhurst"). This is a 75.593 hectare site located about 7 kilometres north-west of the subject land, and 18.6 kilometres north-west of Woodford. Access is by 2 kilometres bitumen D'Aguilar Highway, 6.1 kilometres bitumen Kilcoy-Beerwah Road, and 10.5 kilometres bitumen Bellthorpe Range Road. The Bellthorpe Range Road is subject to restrictions during logging and school periods. The sale comprises 49% easy to moderate arable good grazing stony rainforest, and 51% easy to moderate brown soil heavy forest country. There is seasonal water in Camp Creek, and one large dam. The sale is used for cattle fattening, with some horticultural potential. It was an ex-dairy farm. The sale has superior country type, rainfall, and flooding problems, is smaller than the subject land, but has poorer access and location and less access to water because of the river adjoining the subject land. The sale has greater potential for horticulture, which was apportioned at $5,000 per hectare. The sale sold in April 2002 for $700,000 ($3,747 per acre), was analysed at $329,359 ($4,357 per hectare) and applied at $280,000 ($3,704 per hectare), showing a 10% increase, as the previous valuation at 1/10/2000 had not been reduced following the Kilcoy decisions of this Court.
[28]
· Sale 5 – (Murray to Patterson – Lots 3 to 5, 19, 20 and 22 on RP 30010, Lot 2 on SL 708 and Lot 3 on RP 852159 – "Everest"). This is a 189.0977 hectare site located about 24 kilometres radially south of the subject land, 19 kilometres south of D'Aguilar, and 39 kilometres west of Caboolture. Access is by 20 kilometres bitumen D'Aguilar Highway and 19 kilometres bitumen Brisbane-Woodford Road to the Murray Road turnoff. The sale comprises 5% easy red/chocolate rainforest scrub soils, 72% steeper vine and bastard scrub improved pastures, and 23% fair to steeper heavy forest. The improved pastures are difficult to develop. There is permanent water in Flagstone and Byron Creeks and two small house dams. The sale was an ex-dairy, and is now used for cattle fattening and breeding. The subject land has inferior country type and rainfall, and similar water, size and fattening potential, with more native pastures on the subject land. Overall the subject land is seen as inferior. The sale was a conservative mortgagee sale which occurred slightly after the date of valuation. The sale is used as a support sale. The sale sold in November 2002 for $1,450,000 ($3,113 per acre), was analysed at $643,428 ($3,403 per hectare), and applied at $485,000 ($2,565 per hectare), showing a 28% increase.
Mr Wild rejects the use of what he sees as perhaps the only truly comparable sale in that area, of a farmer (Nicholls) to another farmer (Hewitt), as he notes that was an adjoining owner sale. Mr Wild has spoken to the purchaser (Hewitt) who advised that the sale was at too high a price, but Mr Hewitt was forced by the need to obtain an increased area in order to survive in a very competitive industry. However he provides no details of that sale.
The Nicholls to Hewitt sale was included in the broad schedule of rural sales provided in both this matter and the Krause matter (AV2003/0210 – at Exhibit 9). That sale was at 21 Newman Lane, Delaneys Creek (Lot 5 on RP 228491), immediately across the Stanley River from "Phillips Paddock". The sale has an area of 57.88 hectares, and sold in July 2001 for $300,000, was analysed at $300,000 and applied at $120,000, showing an increase of 28%. The sale was moderate scrub/forest grazing, and was analysed as an adjoining owner sale.
In respect of Mr Jones' Sale 5 (Everest), Mr Wild argues that the purchaser (Patterson), was a retired Army officer seeking to acquire property with a higher potential for closer development purposes, similar to lands at Buderim Mountain. He advises that the vendor (Murray) had sold so that he could then relocate to expand in the Callide Basin, and had since gone into liquidation. He argues that Sale 5 will have enhanced value should the Council rezone the lands for a higher purpose. Because of that future investment potential, Mr Wild rejects Sale 5 as a fair comparison of "farming" lands.
In respect of Mr Jones' Sale 1 (Frizzo), Mr Wild argues that is a sale of basically horticultural lands, with some grazing as a sideline on the balance areas. He argues that is a comparison of a different market sector within the "farming" community, and reflects a higher market level than his grazing lands. He argues further that the Fullerton family have been in horticulture for many years, and 40 hectares (24%) of horticultural land on Sale 1 is an effective working area. He sees the balance area of 89 hectares (55%) of creek flats as too small to make a business out of grazing, but large enough to be used as an adjunct to the horticultural lands.
In respect of Sale 1 (Frizzo) Mr Jones argues that while the southern ridge of horticultural lands is virtually frost free, the balance of the ridge in the centre does suffer from frost, similar to the subject land. Mr Jones confirms that while the horticultural areas are suitable for macadamia nuts, that is restricted to only one type of macadamia, compared to the normal two or three varieties elsewhere.
Mr Wild also sees Sale 2 (Smithfield) as a hobby farm, and he rejects Sale 3 (Blackrock Ridge) as good fattening lands. He argues Sale 3 is really rugged poor country, which could only be used for limited opportunity fattening. He advises that he has to send his cattle west to Kilkivan in order to fatten cattle properly. He mainly uses the subject land to store dry dairy cattle for periods.
Mr Jones concedes that the new owner (Smith) of Sale 2 (Smithfield) is a doctor, who has subsequently redeveloped a new dwelling, the yards and internal fencing, and built additional new dams. The property has since been resold as a grazing lifestyle property. Mr Jones sees that sale as not the normal rural home site as it is much larger in area. However he concedes that if the new buyer saw similar taxation benefits in acquiring such a large rural lifestyle property, that would likely be the best marketing strategy.
Mr Jones advises that Sale 3 (Blackrock Ridge) was purchased by Mr McGinnis from a chemist who had gone into insolvency in his business on the Sunshine Coast. At the time of sale the residence was in very bad condition as it was empty, and inhabited by cattle. He advises that Mr McGinnis was a former farmer from Cleveland, who had sold his property to developers. It was his desire to relocate to another farming environment. Mr McGinnis was originally a grazier from Barcaldine, who confirmed that the relatively small Sale 3 suited his semi-retirement needs, although Mr McGinnis regularly sells cattle through the Woodford sale yards. Mr Jones sees Mr McGinnis as a genuine farming type, as he has continued to upgrade Sale 3 for grazing purposes. Mr Jones confirms that the large dam on Sale 3 has been used for rural waterskiing purposes, but that has since ceased.
In respect of Sale 4 (Lyndhurst), Mr Wild knows that land well, and argues that was bought by Mr Aitkin following his sale of his farming lands in the Samford Valley. Mr Jones agrees with that understanding, advising that Mr Aitkin had wished to upgrade his farming business, and had since leased the land back to Mr Deacon for a period while Mr Aitkin upgraded his management skills. Mr Jones sees that as a genuine farming sale. Mr Jones further advises that in view of the location of the dam, future subdivision of the lands is unlikely unless significant alternative water arrangements were made.
In selecting his sales, Mr Jones advises that he has chosen sales where farming activities have continued after sale. He agrees that in that area grazing properties tend to be for areas less than total living areas, but argues that the market reveals that purchasers are prepared to pay for grazing lands similar to the subject land, which is also used in conjunction with Mr Wild's other land at Commissioner's Flat. On that basis Mr Jones argues that the sales evidence is directly comparable, as people may also wish to expand to remain viable in the grazing industry. Mr Jones cites the Hewitt sale (paragraph [30]) and subsequent further sale of adjoining land to Sale 5 (Francis) to Mr Patterson, as examples where farmers are expanding their grazing operations.
Mr Jones agrees that in the Caboolture Shire market area purchasers of land for primary production purposes must compete against purchasers who are seeking to locate on a rural home site. However he notes that generally the rural home site buyers tend to focus upon the smaller rural sites. In order to allow some margin for genuine primary producers, Mr Jones advises that in analysing those sales he only allows development reductions (perhaps 20%) for lands which are used for primary production purposes. In respect of whether the sales evidence was similar in Caloundra local government area to the Caboolture Shire, Mr Jones concedes that the two shire areas are handled by separate officers of his Department.
Decision:
Before considering the evidence I turn to the legislation, and note that "farming" is defined under s.17 of the Act which relevantly directs:
"17.(1) In making a valuation of the unimproved value of land exclusively used for purposes of a single dwelling house or for purposes of farming, any enhancement in that value for that the land has been subdivided by survey or has a potential use for industrial, subdivisional or any other purposes shall be disregarded irrespective of whether or not, in case of potential use as aforesaid, that potential use is lawful when the valuation is made.
(2)In subsection (1) –
'farm improvements' includes appropriate sheds, other structures, facilities, farm plant and land development for the particular farming business but does not include a dwelling or car accommodation.
'farming' means -
(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; and
if the business or industry represents the dominant use of the land, and –
(c) has a substantial commercial purpose or character by –
(i) having an average gross annual return, calculated over a 3 year period, of at least $5,000; or
(iv) having -
(A) a minimum value of farm improvements or plantings of forest or orchard trees of $50,000; and
(B)the appearance of being maintained for farming or expenditure on crops, forest trees, maintenance of farm improvements, livestock or orchard trees; and
(d)is engaged in for the purpose of profit on a continuous or repetitive basis."
In respect of the use of the subject land in conjunction with Mr Wild's other dairying property at Commissioner's Flat, I note that s.34 of the Act relevantly states:
"34.(1) Unless the chief executive otherwise directs, there shall be included in 1 valuation –
(b)several parcels of land in the same area which do not adjoin but are worked as 1 holding and used exclusively for the purposes of farming, and are owned by the same person and which, if let, are all let to 1 person.
(2) However, any such parcels of land shall be valued separately if buildings are erected thereon which are obviously adapted to separate occupation and which may respectively be lawfully held under separate ownerships."
I note also that discretion lies with the Chief Executive in such matters under s.35 which also relevantly states:
"35.(1) Unless the chief executive otherwise directs –
(b)lands which do not adjoin or which are separated by a public road, or are separately owned, shall be separately valued;
(c)where land in respect of which one valuation would otherwise be made under this Act –
(i)is situated partly in 1 area and partly in another; or
(ii)is situated wholly in one area, but partly in one division or category and partly in another, and the amount of a general rate made and levied in respect of the rateable land in each division or category is not the same;
the parts that are in such separate areas, divisions or categories, or the part that is rateable or the part that is valued for land tax or rental purposes, shall be separately valued.
(3) Where, by direction of the chief executive, the 1 valuation is made of any land to which subsection (1)(c) applies, that valuation shall be apportioned among the parts of that land specified in the applicable provisions of that subsection and, subject to this subsection, the amount of that valuation apportioned to such a part shall be deemed to be the valuation thereof made under this Act."
(4) Where in valuing land in any 1 area any 1 valuation and apportionment as aforesaid are made in respect of land situated partly in that area and partly in another area, the apportionment shall be deemed to be made solely for determining the valuation of the part of the land situated in the area being valued, and accordingly the amount apportioned to the part of that land situated outside that area, shall not be or be deemed to be a valuation of that part made under this Act.
(5) In subsection (1) –
"category", in relation to land in an area, means a category of rateable land decided by the local government for the area for levying a differential general rate."
Now while the evidence is that the subject land is used in conjunction with other lands at Commissioner's Flat (paragraph [22]), there has been no request by the appellant to the Chief Executive for consideration of that combined used as a "single farming" enterprise. Should that subsequently occur, then that would be a matter for consideration at that time. In such circumstances any allowance for severance of the parcels would depend upon the additional operational problems confronting such joint operation, and the need to ensure that a single "farming" operation was in fact undertaken on the two parcels.
However it needs to be remembered that the exercising of his discretion is a matter for the Chief Executive in such matters, and would depend upon the circumstances of each case. Where the Chief Executive has not exercised such discretion under s.35(1)(b) of the Act, then it is not for the Court to challenge that failure to decide. However, where the Chief Executive gives a direction under s.35(1)(b), and the reasons for that decision are expressed, then that direction is open to review. That was found in Chief Executive, Department of Natural Resources v Hedges (1999) 20 QLCR 122, where the Land Appeal Court said at 126:
"We therefore agree with the Chief Executive's submission that the power to direct if he wishes to use that discretion, lies with the Chief Executive or his delegate. If he merely fails to give a direction the matter rests there. If he gives a direction and the reasons for that direction are exposed, that direction is open to review, as was found by the majority of this Court in Beanland v Valuer-General (1990) 13 QLCR 113."
In the matter of RM and AJ Beanland v The Valuer-General (supra), the Land Appeal Court noted the findings of the Land Appeal Court in a similar appeal by those appellants (1986-87 11 QLCR 131). In that matter in respect of whether the Valuer-General should have followed a different course, the Land Appeal Court said at 135:
"It follows that it is not enough for an appellant to convince us that if we were in the position of the Valuer-General we would have taken a different course. It must be shown that the Valuer-General has not had regard to all the material and relevant facts of the case or has otherwise been capricious or unreasonable."
In the later matter in 1990, the Land Appeal Court was asked to consider whether the distance between the two properties was too great to really consider a single valuation for the one farming enterprise. In 1986 it had been argued that the two properties were 5.5 kilometres apart, a distance not much greater than with the subject land and Commissioner's Flat. However in 1986 the Land Appeal Court found that the Chief Executive had acted intra vires as there was no evidence that the Chief Executive "had failed to take into account any material consideration" (135).
In the 1990 appeal the Land Appeal Court decided that the criteria adopted under s.14 as it then was,( now s.17) had been altered, and that new criteria then applied, which said that "5.5 kilometres is now regarded as too great a distance for properties to be given the benefit of s.14" (117). The Land Appeal Court then considered the effects of that direction by the Valuer-General, when it said at 119:
"What then does section 14 of the Valuation of Land Act require? It is abundantly clear that all the criteria that are stated in section 14(b) are satisfied by these appellants. There are two parcels in the same area; they do not adjoin but are worked as one holding; they are used exclusively for the purposes of a single business of primary production; and they are owned by the same person. They satisfy everything that the section spells out. The Act directs therefore that the two Beanland farms be included in the one valuation 'unless the Valuer-General otherwise directs'."
The Land Appeal Court in the majority decision found that the direction was reviewable, and that "there was no rational basis upon which that direction could be justified" (122).
However in the current matter, whether a single valuation could have issued for the two properties is not a matter for my consideration. I also note that there is a caretaker's house on the subject land.
The use of the land -
In respect of Mr Wild's concerns with the current problems confronting him as an owner under the new land management practices, I note that Mr Jones agrees that "burning off" is now much harder than it was previously. Mr Jones also agrees that the problem is increased by the number of adjoining owners whose agreement must be obtained. While it is agreed that Mr Wild has 24 adjoining owners, some of whom are absent owners, the sales evidence also has similar problems, although all sales have something less than the 24 potential objectors to "burning off" matters.
The major concern with comparisons by Mr Jones in respect of the use of similar grazing lands, lies really with his understanding of the implementation by Mr Jones of s.17 of the Act. Mr Wild argues that the sales of Mr Jones reflect lands that have some potential for subdivision, or for a higher use such as a rural home site, which is particularly excluded by the Act. Mr Jones rejects that conclusion noting that he has tested his sales against criteria established in s.17(2) of the Act as outlined in paragraph [40]. On the evidence I accept that conclusion.
Now the history over recent years in respect of the application of s.17 of the Act is a matter worth reporting in the interests of the appellant. Before 1971 there was no protection of land used for a primary production purpose. In 1971 the Valuation of Land Act 1944 was amended to include the provision under s.11(1)(vii) as it then was, to include concessions for "farming" purposes. The purpose of those amendments was expressed by the then Minister in the Parliament on 1 December 1971, when introducing the Bill he said "the provision regarding primary production has been inserted to ensure that a primary producer caught up in urban development is not valued on the potential until he ceases using the land for primary production. This will enable a primary producer to carry on economically for as long as possible,". That history was set out by the Land Appeal Court in its decision in Chief Executive, Department of Lands v KW Wackett (1994-95) 15 QLCR 311, at 318.
In the Wackett decision the Land Appeal Court went on to detail the history of subsequent decisions of the Courts in respect of s.17, until further amendments of the Act under the Lands Legislation Amendment Act 1991, which recasts the terms of the exceptions now included in s.17(1) and (2) of the Act at that time. Those amendments in 1991 included, among others, the requirements of the use of the land to be a "significant and substantial purpose or character". As noted in GT and BT Taylor v Chief Executive, Department of Lands (1992-93) 14 QLCR 477, the Land Appeal Court found at 489:
"The purpose of this amendment would seem to be to avoid the effect of the decision of the Land Appeal Court in Crawford's case by making more stringent the requirements for land to qualify for valuation under the protected provisions as being used for purposes of farming."
That was later examined in GR and M McGuire v Department of Natural Resources (1997-98) 17 QLCR 123, at 138.
Following those 1991 amendments, the judicial interpretation of the new conditions of s.17(2) resulted in many "genuine" farmers failing to satisfy the higher test then required. To overcome what was seen by the Government as an unanticipated outcome of their 1991 amendments, the Valuation of Land Amendment Act of 2000, Act 31, clause 5, introduced a further amendment of s.17(2), as now described in paragraph [40]. Those amendments were designed to provide some measurable criteria for eligibility, and to enable "the genuine attempt by an owner to establish a farm business including a plantation and native timber forestry or an orchard may also qualify. This type of venture is often excluded under the current eligibility criteria as no actual profit is being realized at the time of the valuation." (Queensland Acts (2000), Volume 2. Explanatory Notes, p.1212).
Since those more recent amendments, the criteria now required for s.17(2) status has resulted in a greater variety of "farmers" now receiving concessional valuations. The problem for Mr Wild would appear to lie with the statutory definition of "farmer", which is now apparently set at a lower level than was originally intended in 1971. However, what Mr Jones has now to compare are similar properties that meet that s.17(2) test.
Whether it is acceptable to compare sales of "farming" lands which are used for horticultural purposes, with sale used for grazing purposes, is another matter to be considered. That matter was addressed in RM and AJ Beanland v The Valuer-General (1986-87) 11 QLCR 131, where the Land Appeal Court said at 137:
"We accept that it is preferable, if the appropriate sales are available, to compare land with a highest and best use for pineapple production with sales of land with a similar highest and best use. Based on the admission of Counsel for the Valuer-General and the presence of clay sub-soil in some part at least of the land it seems that the subject property is not suitable for avocado growing. This, however, does not make it an unsupportable proposition to compare the property with the sales that have been used by the Valuer-General (one of which is noted was a former pineapple farm purchased to grow sweet potatoes) provided that in the comparison process appropriate allowances are made for relevant differentiating preferences."
That matter was also considered in The Proprietors "Whyanbeel Gardens" Group Titles v Chief Executive, Department of Lands (1992-93) 14 QLCR 524, where the learned Member (now President) said at 532:
"The provisions of Section 11(9) require that if land is used for the purposes of "farming", any enhancement in its value because of a potential use for any other purpose shall be disregarded. However, where that higher potential is within the definition of "farming", it cannot be disregarded. Therefore, all land used for farming must be valued at its highest and best farming use. In the case of the subject land, it is correctly valued at its horticultural value. However, in respect of the lands held by Schultz and by Wertz, if these properties are similar to the subject land and are capable of being used for horticulture, then it is quite incorrect to have them valued at a lesser value simply because they are used for a lesser primary production purpose." Section 11(9) is now section 17 in the amended Act.
That principle of highest and best use of the land was also noted in JS Andrew v Chief Executive, Department of Natural Resources and Mines (AV2001/0135), 15 November 2002, unreported, where the Member noted at paragraph [29]:
"Now while that principle ensures that all "farming" lands of a similar highest and best use type are to be valued in a similar manner, it does not direct that all the different types of "farming" use have the same value. For example the value of "farming" land for grazing purposes may well be quite different from the "farming" lands used for horticultural purposes. The market place itself will govern those respective rates. However what Whyanbeel Gardens demonstrates is that where similar types of lands are used for different purposes, but where their highest and best use are seen to be similar, then those lands used for a purpose less than the highest and best use are to be valued as if they were the highest and best use. In that matter the grazing use was accepted as a lesser value, but the highest and best use of those lands currently used for grazing, were seen to be suitable for horticulture, and should be valued accordingly, in spite of the personal decision of the owner not to use it for horticulture purposes. That principle removes any personal effects of choice in the valuation process.
However in the current matter I believe that Mr Wild has ably demonstrated that the subject land is low lying and subject to frosting, and is therefore not comparable to lands which demonstrate a capacity for horticulture. His ill-fated experience with the palm trees demonstrates that limitation. It is agreed that the highest and best use of the land is for grazing purposes.
Comparison of sales -
If I look then at Mr Jones' sales, I find the following comparisons:
Sale Area Applied Rate Comparison
1164.3 ha $3,134 per ha Overall superior/horticulture
2105.5 ha $1,365 per ha Overall similar
360.6 ha $1,980 per ha Smaller size, but less water
475.593 ha $3,704 per ha Smaller size but horticulture
potential
5189.1 ha $2,565 per ha Superior
Subject land 243.935 ha $1,275 per ha -
If I look at Sale 1 and Sale 4, I note that both of those properties contain horticultural lands, which Mr Jones agrees is better "farming" lands, as he has apportioned those horticultural components at $5,000 per hectare (paragraph [27]). Mr Jones has applied much higher rates per hectare to allow for those differences in land use of both Sales 1 and 4. I note also that while Sale 5 was slightly after the date of valuation, it was well before the date of issue of the valuation, and is therefore an appropriate comparison.
I note also that while the sale was a mortgagee sale, and therefore likely to be conservative in value, it has only been used by Mr Jones as a supporting sale. While Mr Jones does not specifically refer to his detailed analyses of his Sale 5 (Everest), he has provided that analyses in another matter heard at about the same time as the current matter in FJ Woods v Chief Executive, Department of Natural Resources and Mines (AV2003/0437 --November 2004, unreported). That analysis reveals that the purchaser, subsequent to the sale, sold for $50,000 certain dairying machinery in his moves to use the lands for grazing purposes. On that basis I accept Sale 5 as a fair comparisons used for "grazing, farming" purposes, and agree it is a superior property.
That then leaves Sales 2 and 3 as the most comparable properties. While the evidence would support Mr Wild's claim that those two sales reflect more a grazing lifestyle property, that does not preclude the use for comparisons of other "farming" lands under s.17 of the Act. I accept Mr Jones' advice that the market for both grazing and grazing lifestyle lands in that area is really a single market. I also agree that Mr Jones' method of analysis of those grazing lands, by only allowing development interest where it is demonstrated that the lands were not purchased for rural home site purposes, is a fair method of ensuring that fair comparisons are drawn. On the evidence there is nothing to discredit Mr Jones' comparisons.
Summary
Now I turn then to Mr Rabaa's final address, and note that this property was the subject of a previous decision of this Court in AV89-122 (31 October 1989) unreported. The grounds then argued by the appellant were similar to those now placed before the Court in this matter, in that the appellant then sought to exclude any sales where subdivisional potential or home site price influence was involved. It was also argued in that matter that relativity should be maintained across Shire boundaries. However in that matter the appellant also did not provide any sales of his own to discredit the respondent's sales evidence. The learned Member noted at page 3 of that decision:
"I say that it is possible for an appellant to succeed without presenting sales evidence in support of an appeal if he or she can present evidence which leads the court to conclude that the Valuer-General is in error in making his valuation."
However the Member found that the appellant had not proved that the valuation was not supported by the sales of comparable lands (page 3).
In respect of the onus of proof in such matters, I note that s.45(4) of the Act places that squarely upon the appellant. Where that onus of proof has not been satisfied, then s.33 of the Act directs that the unimproved value as determined by the Chief Executive is deemed to be correct. While the problems confronting Mr Wild in the new era of land management do provide him with some extra difficulties, because of the larger number of absent adjoining owners, Mr Jones has allowed for such matters in his conservative application of the matter.
Conclusion:
Having considered the whole of the evidence I am not persuaded that the appellant has proved his case. The appeal is dismissed. The unimproved value of the subject land as determined by the Chief Executive in the sum of Three Hundred and Ten Thousand Dollars ($310,000) is affirmed.
NG DIVETT
MEMBER OF THE LAND COURT
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