Zatta v Minister for Lands

[1994] QLC 11

[1994] QLC 11

 

  LAND COURT

BRISBANE

6TH MAY, 1994.

Re:     Determination of Rent - Second Rental Period
  Special Lease No. 24/49179, Ingham District

Lessees:      Domenico Zatta, Piera Iola Alba Zatta and
  Elda Ivy Howell

(Hearing at Ingham)

D E C I S I O N

For the second period of Special Lease No. 24/49279, Ingham District, which commenced on 20th May, 1992, the Crown is seeking an annual rent of $3,715.  The lessees have requested that this matter be referred to the Land Court for hearing and determination and have advised that their estimate of the rent that should be paid is $1,500 per annum.  The rent for the first period of the lease was $500 per annum.
           Special Lease No. 24/49179, Ingham District, is in respect of land described as Lot 107 on Plan CWL 3483, Parish of Garrawalt, containing an area of about 1,020 hectares.  It is situated about 42.9 kilometres north-west of Ingham and access is by means of the bitumen sealed Ingham-Abergowrie Road for 38.5 kilometres, then 2.5 kilometres of bitumen sealed Tarakan Road, .9 of a kilometre of formed earth and gravel road, and 1 kilometre of gazetted but unformed earth track to the boundary of the subject land.  This latter part of the access is poor as rain can render the track unusable. 
           Special Lease No. 24/49179, Ingham District, was granted for a term of 20 years from 20th May, 1987, for primary industry (agriculture and grazing) purposes.  The report tendered on behalf of the Crown describes the land as consisting of approximately 30 per cent or 300 hectares of easy sloping forest country, bisected by creeks and swamps, and 70 per cent or 720 hectares of undulating to steep forest country.  The southern section of the property contains about 160 hectares of arable land, which was originally undulating wet tea-tree, messmate, pandanus palm and poplar gum coastal forest.  The soils are a mixture of hard white clays, "spewey" poor clay loams and fair sandy loam.  Approximately 35 hectares of the arable area on the northern side of Elphinstone Creek consists of easy sloping, dark brown sandy forest loam.  This area has recently been cleared and prepared for cultivation.  The majority of the arable area is subject to substantial drainage problems and pests associated with the proximity to a large area of native forest. 
           The report states that although it is estimated that there is an area of about 160 hectares of fair to poor arable land, only 135 hectares has been classed as arable.  Approximately 140 hectares of the balance comprises swamps, watercourses and ridges and the majority of this land is considered to be suitable for development with improved pastures.  The balance 720 hectares of undulating forest country is suitable only for unimproved grazing.
           The property is bisected by Elphinstone and Waterfall Creeks which provide permanent natural water.  Artificial supply consists of a 6 metre deep well situated at the yards.
           According to the report, the subject land is used for cane farming, with 28.5 hectares being assigned to the Victoria Mill.  In its present state it is estimated that the balance land would carry one beast to 10 hectares or 80 head.  The lessees, individually and jointly, own other land in the Abergowrie district which they use for cane farming and grazing purposes.
           Mrs Piera Zatta appeared and gave evidence on behalf of the lessees.  Mrs Zatta tendered a statement in which she said that the lessees consider that a large proportion of the area is wasteland.  The area cleared for cane totals 212 acres or approximately 86 hectares, while a further 50 acres or 20 hectares could be cleared for cane.
           The statement goes on to say that the land is very poor and requires lots of costly drainage and excavator work.  In the wet season it can have water up to knee deep running through it.  Mrs Zatta added that the present drains are not sufficient in heavy wets.  In some places it would be necessary to have drains 3 to 4 feet deep to effectively drain the worst of the land.  Cane is at risk in waterlogged country and there are problems with harvesting.  This year, which was not a bad wet season, the lessees were not able to cut cane on this land in the normal rotation.  They started harvesting in mid-October which means that the ratoons for next year will be retarded, as the cane will not have reached full maturity at time of harvest.
           The statement also says they are disadvantaged for the delivery of cane to the siding which is three miles away and this results in extra cost as the contract harvester has to engage a third pull-out unit.  There is no decent road and the Council will not form a road to the property.
           Mrs Zatta knew the land on Agostinelli's Lot 141 adjoining, the rent for which had recently been determined by this Court.  She said that about 50 acres of the land recently cleared was similar to Agostinelli's sandy loams. 
           Mrs Zatta said that the lessees had originally intended to run cattle on the subject land but did not do so because of a slump in cattle prices.  She agreed that cattle could be run on the balance land as long as the property was well fenced.  She did not disagree with the Crown's estimate of 80 head, but made it clear that the rougher country would be difficult to manage.
           Evidence for the Crown was given by Mr Dominic Treston, registered valuer employed by the Department of Lands.  Mr Treston explained how he had assessed the annual rent at $3,715.  He adopted 135 hectares as the arable area to which he applied a rental value of $25 per hectare or $3,375 per annum.  To the balance 885 hectares he had attributed a carrying capacity of one beast to 10 hectares or 80 head, to which he applied a rental value of $4.25 per beast or $340.  This gave him a total of $3,715 per annum. 
           Mr Treston arrived at the rate of $25 per hectare on the arable land by comparison with recent Court decisions in respect of rentals for Special Leases in the Parishes of Leach and Garrawalt, where the Court had arrived at various rental values for different qualities of assigned and unassigned lands.  Mr Treston referred particularly to the decisions in the cases of Celotto, Stallan and Agostinelli, where the rental values for assigned lands were found to be $65 per hectare, $55 per hectare and $55 per hectare respectively.  The values for unassigned land were $40 per hectare, $35 per hectare and $40 per hectare respectively.
           Mr Treston said that in assessing the rent he had adopted only 135 hectares as the area of arable land and had applied the unassigned rate to that land, even though some of it was assigned at the relevant date.  He did this because he had difficulty in establishing the exact area of arable land, as part
of it was still undeveloped.  He also was unsure of the extent of assignment on the lease as at 20th May, 1992.  He said that, in any case, the granting of assignment to applicants with suitable spare land has become a mere formality.  In Mr Treston's opinion the value an assignment adds to the land is minimal.  He considered that he had adopted a conservative approach.
           The rental determinations for the basic lands were assessed as at 1st July, and 1st December, 1991.  Mr Treston said that he was of the opinion that the value of arable land had risen slightly between that date and the date of this assessment, 20th May, 1992, but he had not increased the rental standard from the Court decisions.
           In arriving at his rent for the grazing land, he had relied upon the Townsville grazing rental standard for large grazing properties, which was $4.25 per beast per annum.  He went on to say that this standard was derived from the evidence of leased and rented properties in the Townsville district.  It consisted of two parts, one for small grazing areas and the other for larger grazing areas.  He had applied the larger grazing standard which he thought was particularly conservative and, by way of example, he said that he knew of agistment rates in the Dalrymple Shire for $1.50 per beast per week, or the equivalent of about $80 per beast per annum.
           In this case the rent falls to be assessed under the provisions of Section 204(5B)(c) of the Land Act 1962 which states:

"The Court shall determine the annual rent at such sum as it considers an experienced and bona fide person would be willing to pay as annual rent for the land comprised in the lease during the rental period in question, having regard to the use to which the land may be put in accordance with the purpose for which the lease was granted and under the terms and conditions of the lease."

Mrs Zatta has emphasised the low-lying and wet nature of the arable area of the subject land and its difficult access in wet weather.  She said the lessees thought that the rent sought by the Crown was excessive because of the expense they have to incur in order to grow cane.  However, it seems to me that Mr Treston has taken these matters into account in arriving at his rental value.  He has compared it with Court determinations on somewhat similar land nearby, but has not adopted the rental determined for assigned land, but the rate of $25 per hectare, which is $10 per hectare less than the rate applied to the unassigned land on the basic comparison properties.  This seems to me to adequately cater for the problems suffered by the arable area of the subject land.  In the absence of any other evidence, the rent he has applied to the balance area amounting to only $340 per annum, seems reasonable.
           Therefore, I have come to the conclusion that an experienced and bona fide person would be prepared to pay an annual rent of $3,715 for the subject land, particularly having regard to the rent determined on the basic properties.
           Accordingly, the rent for Special Lease No. 24/49179, Ingham District, for the second period of the lease is determined at $3,715 per annum.

J J TRICKETT
  MEMBER OF THE LAND COURT