Young v Chief Executive, Department of Lands
[1995] QLC 92
•31 August 1995
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BRISBANE
31 August 1995
Re: Appeal against rental valuation -
Valuation of Land Act 1944 -
Shire of Livingstone.
(RV94-87).
Trevor Albert Young
v.
Chief Executive, Department of Lands
(Hearing at Rockhampton)
D E C I S I O N
Mr Young is the lessee of Special Lease No 35/39091, Rockhampton District, which is described as Lot 86 on Plan LN1996, Parish of Hewittville, and contains an area of 28.9 hectares. This Special Lease was granted for a term of 30 years from 1 December 1974 for business (grazing) purposes.
The subject land is situated approximately 3 kms north-west of the town of Emu Park. Access is by means of the bitumen sealed Yeppoon-Emu Park Road, with a short distance of formed gravel road. This latter road, known as Young Avenue, was constructed by the then Department of Harbours and Marine to access a quarry situated on a gravel reserve described as Lot 29 on Plan LN1029.
Young Avenue is shown on the map as connecting the Yeppoon-Emu Park Road with Albemarle Street on the southern boundary of the subject land, severing the northern part of the Special Lease and generally following the western boundary of the remainder of the Special Lease. However, the constructed road stops at the northern boundary of Lot 29. The road, therefore, effectively severs an area of approximately 10.5 hectares on the western side of the Special Lease from the balance area of approximately 18.4 hectares on the eastern side. For this distance it comprises a raised gravel causeway providing an all-weather roadway to the quarry. Its indirect function also prevents tidal intrusion to the 10.5 hectares on the western side.
Under the provisions of the Valuation of Land Act 1944, the respondent valued this land for rental purposes at $8,600 as at 31 March 1992. Mr Young objected to that valuation and by letter dated 9 February 1994 he was advised that his objection had been allowed and the valuation had been altered to $3,200. Mr Young appealed to the Land Court against the respondent's decision upon his objection, advising that in his opinion the unimproved value as at the date of valuation is $500.
Mr Young's grounds of appeal may be summarised as follows:•The lease has no suitable stock water;
•It is used solely for grazing in conjunction with adjoining freehold land as provided for by Condition 7 of the lease;
•Therefore, it has no value to any other person;
•The whole of the lease area was bare salt pan before the construction of a bank to prevent tidal intrusion.
•Carrying capacity in its natural state was nil. After many years with no tidal intrusion, it will only support one beast; and
•Because of its high salinity in boggy areas, it is costly to manage.
Mr Young appeared and gave evidence. He is the owner of the adjoining freehold land described as Lot 2 on RP 612846 with an area of 331 hectares. This land has an area of swampy country with para grass, which runs back into gently sloping ridges timbered with ironbark. It also has sandy country timbered with wattle and associated scrub, running back into steeper ridges timbered with ironbark and bloodwood.
Mr Young explained that the swampy country adjoined an area of salt pan associated with the tidal Shoalwater Creek and that there was a problem with salt intrusion eroding away the freehold land. Therefore, he had approached the then Land Commissioner who advised him to apply for a Special Lease over part of the salt pan, as it was simpler to block the tidal intrusion at the smaller end of Shoalwater Creek than to put a bund wall around the whole of the freehold boundary.
However, the Land Commissioner explained that as there were other adjoining neighbours, the salt pan area would have to be offered to them as well. The result was that Mr Young obtained the subject Special Lease over about half the clay pan area in December 1974, while his neighbour to the east obtained a Special Lease over the other half of the salt pan area, described as Lot 87 on Plan LN1996.
The Special Lease was granted for business (grazing) purposes. However, it is clear from the special conditions of the lease that the lessee was to construct bunding along the lease boundary abutting tidal waters and such other works that were necessary, in the opinion of the then Department of Harbours and Marine, to protect the leased land from tidal intrusion. Condition No. 7 states:"No persons other than the owners of resubdivision 2 of subdivision 1 of resubdivision 13 of subdivision E of portion 195, parish of Hewittville, shall be entitled to hold an interest in the leased land. "
The land described in that condition is now described as Lot 2 on RP 612846.
Mr Young went on to explain that a bund wall was constructed by the lessee of Lot 87 across Shoalwater Creek at the northern boundary of the two Special Leases. Mr Young's share of the construction costs was $3,000. He also explained that about 1977 the then Department of Harbours and Marine constructed the causeway road to the quarry, which also acts as a bund wall.
It seems that the bund wall has had the effect of preventing further salt intrusion to the freehold lands, while the causeway road has virtually "reclaimed" the severed area of approximately 10.5 hectares. This area is growing, according to Mr Young, a low quality herbage consisting mainly of a salt tolerant reed known as "Schnoaplectis", which is not eaten by stock, with a scattering of marine couch amongst it. He comments that this has taken 12 to 18 years of no salt intrusion and he estimates that this area will only carry one beast at its present stage. It seems that the salt is still present, as Mr Young said that rain water ponded on the subject land becomes salty after about a fortnight.
Although the bund wall across the end of Shoalwater Creek has prevented further tidal intrusion, the balance area is still largely salt pan with very little grass and not capable of supporting any stock. Although it has had 12 years of no salt intrusion there are little signs of the salt leaching out.
Despite its undoubted benefits, Mr Young said that the causeway road is a public road and causes interference with management because of the movement of vehicles and machinery backwards and forwards, with gates being left open. Although the quarry is not now regularly used, it has been in the past and, in any case, the road is frequently used by members of the public, bird watchers and others, accessing the quarry reserve. It seems that much of the surrounding area is covered with water and supports a lot of bird life.
Mr Young compared the value applied to the Special Lease with the valuation applied by the respondent to the 331 hectares of far better country in the adjoining freehold land. He said that in March 1992 the freehold was valued at $46,500 while the Special Lease was valued at $500. In 1993 the freehold value remained the same while the Special Lease was increased in value to $3,200. (It appears that the rental value intervened requiring the land be valued as at 31 March 1992 for rental purposes, originally at $8,600 and then reduced to $3,200 following Mr Young's objection.)
According to Mr Young, the adjoining Special Lease over Lot 87, with an area of 28.3 hectares of bare salt pan, has an unimproved value of $1,700. He said that the major difference between the two Special Leases was that the public road ran through the subject land causing major interference with the management of the lease. Therefore, he considered that $500 was the appropriate unimproved value for the subject land.
Because of Clause 7 of the lease, only the owner of the adjoining freehold can lease the subject land. As no other person can hold the lease, Mr Young thinks that its value can only be as grazing land in conjunction with that freehold.
Mr Young also emphasised the problems of managing the Special Lease area. Because of the boggy conditions and the salt corrosion, he said that fencing requires replacement more frequently to prevent losses of cattle. He also feels that the valuer has not properly taken into account the fact that in its unimproved state the whole of the Special Lease area was bare salt pan and therefore worth very little.
Evidence for the respondent was given by Mr DW Drew, a registered valuer employed by the Department of Lands. Mr Drew described the land as "relatively level marine flat and salt pan. About 10 hectares severed by road and reclaimed. Grassed with fresh water couch. Balance salt pan with small area of marine couch along road and natural by-wash". He classified these areas as 10.5 hectares suitable for cattle grazing, severed from salt pan by road construction, grassed with fresh water couch and balance about 18.4 hectares of salt pan with small areas of marine couch.
Mr Drew explained that he was not the valuer originally responsible for the valuation of $8,600. He said that on objection the value was reduced to $3,200, being approximately $400 per hectare for the 10.5 hectares of reclaimed land and $10 per hectare for the 18.4 hectares of salt pan, with an allowance being made for the bund wall. However, having regard to the provisions of the Valuation of Land Act, he regards that as an error, as he considers that it is a concessional value made under the primary production provisions of the Act, which should not be taken into account in the valuation for rental purposes.
Mr Drew gave his opinion that he now considers that the land should be valued at $10,000 as a flooded site for grazing purposes. His reasoning is based on valuing the 10.5 hectares of reclaimed land at $1,000 per hectare and the 18.4 hectares of salt pan at the nominal $10 per hectare. Although this produces the result of $10,684, Mr Drew has rounded this to $10,000. He said that he considers its highest and best use to be as a flooded horse paddock situated handy to the town of Emu Park.
Mr Drew concedes that the vegetation on the reclaimed area is largely a reedy grass, but he said there is also softer couch grass. He considers that the bund wall gives a nominal value to the 18.4 hectares of salt pan.
Mr Drew said that sales of comparable land were difficult to find. In making his valuation he referred to the sales of two flooded grazing blocks where houses could not be built.
Mr Drew's Sale No. 1 is situated in Nine Mile Road on the outskirts of the City of Rockhampton. It has an area of 15.72 hectares, zoned non-urban and sold in October 1992 for $35,000. This sale analysed to an unimproved value of $25,700. Mr Drew described this land as "relatively level to falling creek flat", with the whole area subject to flooding. He considers that it is superior in location, quality of country and access to the subject land. It has been subject to flooding three times in the last six years.
Mr Young did not know this property and could offer no comment about the sale.
Mr Drew's Sale No. 2 is situated not far from the subject land on the outskirts on Emu Park. It has an area of 5.666 hectares, is zoned "Rural A" and sold in April 1994 for $14,000 in an unimproved state. Mr Drew describes this land as relatively level to low lying ti-tree flats, with the whole area being subject to flooding in normal seasons.
Mr Young knew this parcel of land and regarded it as choice para grass country. Although he conceded that it was flooded, he said that it was fresh water flooding and the land had never been subject to tidal influence or salt intrusion.
Mr Drew said that the purchaser of Sale No. 2 lived nearby and was leasing the land in between, as well as other land in the area. He thought that the land had been purchased for additional grazing. He said an unimproved valuation of $5,500 had been applied to this land and he thought that it may have been a concessional primary production valuation.
Mr Drew did not know the value that the respondent had applied to the adjoining Special Lease. He said that while the salt pan area was similar to that of the subject land, the reclaimed area on the latter was far superior.
Mr Drew thought that the causeway road was of benefit to the subject land, both for internal access and in providing drier country. He thought that the special lease would run more than 1 beast, with supplementary feeding. He considered that it should be valued on the basis of what a small flooded paddock close to Emu Park was worth.
Mr Drew did not consider that Condition 7 of the lease was detrimental, as he considered the highest and best use to be a horse paddock, and the land could be used as such by the adjoining freehold owner. He said that he had not made allowance for either the road or the bund wall, because while the former was excluded from the Special Lease, the bund wall had added little value to the salt pan country. He thought that his amended valuation as a flooded grazing block compared favourably with the two sales.
Although the amount of rent involved in this case is not great, the matter is an important one, both to Mr Young and to the respondent. Mr Young considers that in the circumstances, an unimproved value of $3200 is excessive, as the land in its unimproved state was no more than bare salt pan. On the other hand, Mr Drew thinks that the valuation was the result of an error and that the unimproved value should be $10,000 as a flooded horse paddock, handy to Emu Park.
The provisions of the Valuation of Land Act 1944 require that the land be valued as if the improvements had not been made. Mr Drew is correct in regarding the road causeway as something external to the subject land and therefore not an improvement. It is as a result of its construction some 18 years ago that the 10.5 hectares has been "reclaimed".
However, after considering the whole of the evidence, I have come to the conclusion that the highest and best use of the subject land is not as grazing or as a flooded paddock. Despite the purpose of "Business (Grazing)" appearing in the lease document, it seems to me that its highest and best use is the very purpose for which it was originally granted and that is to prevent the salt water intrusion onto the adjoining freehold land. Any reclamation of the Special Lease or any part of it is a bonus. However, while the principal purpose seems to have been achieved, reclamation has, as yet, not achieved a great deal, if only one head of stock can be run on the regenerated area of 10.5 hectares, which is comprised largely of useless reeds at this stage.
The question then is, how much would a prudent purchaser pay for this area of land for the purpose of spending money to prevent salt intrusion of the adjoining freehold land? I have no evidence on that basis. Mr Young thinks its value should be $500 compared with the valuation applied to the adjoining Special Lease, which is used for the same purpose. However, that land does not have the advantage of the road/causeway, the advantages of which outweigh its difficulties.
On the other hand, I do not accept Mr Drew's altered valuation of $10,000 as I consider that it is based on a different highest and best use. Both of the sales that he has relied on are considerably superior to the subject land and are used for quite different purposes.
In the circumstances, Mr Young has not convinced me that the respondent's unimproved value of $3,200 should be reduced, but neither has Mr Drew convinced me that it should be increased.
Therefore, the appeal is dismissed and the unimproved value of $3,200 determined by the respondent for rental purposes is affirmed.
(JJ Trickett)
Member of the Land Court
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