Dowling & Anor v Valuer-General [2023] QLC 1

LAND COURT OF QUEENSLAND CITATION: Dowling & Anor v Valuer-General [2023] QLC 1 PARTIES: Alan Reginald Dowling and Noel Edward Dowling (appellants) v Valuer-General (respondent) FILE NO: LVA007-22 DIVISION: General PROCEEDING: Appeal against objection decision on a valuation under the Land Valuation Act 2010 DELIVERED ON: 16 January 2023 DELIVERED AT: Brisbane HEARD ON: 14 December 2022 HEARD AT: Atherton MEMBER: PG Stilgoe OAM ORDERS: 1. The appeal is dismissed 2. Any submissions seeking a costs order in this proceeding must be filed and served within 14 days of the publication of these reasons. CATCHWORDS: REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – where the appellant claimed the water licence should not be part of the valuation – where the appellant disagreed with the valuer’s method of assessing the value of the water licence – where the appellant claimed several environmental factors detracted from the value of the land – where the appellant claimed that the Valuer-General wrongly interpreted the comparable sales – where the appellant did not engage a valuer for the hearing Land Valuation Act 2010, s 33 Beydoun v Valuer-General [2017] QLC 36 -- 1 of 7 -- 2 Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299, applied, cited YFG Shopping Centres Pty Ltd as Tte & Anor v Valuer- General; Shayher Alliance Pty Ltd as Tte v Valuer-General; Leda Commercial Properties Pty Ltd as Tte v Valuer- General; Lipoma Pty Ltd as Tte v Valuer-General; RG Property Three Pty Ltd as Tte v Valuer-General [2020] QLC 10, applied APPEARANCES: A Dowling, the applicant (self-represented) P Prasad (solicitor), Department of Resources, for the respondent [1] One of the main attractions for visitors to Yungaburra is platypus sighting at Peterson Creek. The best way to view these elusive monotremes is to take a path across Noel Dowling’s property and onto Alan Dowling’s property at 82 Mather Road, Yungaburra. The Dowling brothers have facilitated access for many years at their own expense. Alan Dowling says that the Valuer General’s 2020 valuation of his property is the last straw; the costs associated with this valuation mean that he will not provide public access to the platypus viewing area. [2] Mr Dowling’s property is 10.0711 hectares of undulating land close to Yungaburra. The highest and best use of the land is as a hobby farm/lifestyle farming.1 His objections to the valuation fall into three broad categories. Firstly, he disagrees with the way the Valuer General dealt with the water licence. Secondly, he says that the environmental aspects of the land – its tendency to collect water from surrounding properties, the bird life, noise from quarry trucks and the effects of the bordering national park – detract from the value of the land. Lastly, Mr Dowling says that the Valuer General has wrongly interpreted the comparable sales. The water licence [3] Mr Dowling says that the water licence attached to the land should not be part of the valuation exercise. If the water licence is included, Mr Dowling says it has no or little value. 1 Ex 18, [2.8]; Ex 5; T1-75. -- 2 of 7 -- 3 [4] Section 33 of the Land Valuation Act states that, in deciding the value of land, any lease, licence or permit from SunWater or a water authority must be considered. The Valuer General submits, and I agree, that Mr Dowling’s water licence is a licence from a water authority within the meaning of section 33. [5] Mr Dowling says that, because he must pay for the licence, and then cannot be sure that he will be able to use any of the water within the entitlement, the licence should not be valued as part of the land. He would prefer the Sunwater system, where parties pay a fee and then pay for the water they use.2 He says this system would make it easier to budget the cost of water and the “cents and the dollar that the Council’s going to charge us for land valuations”.3 He takes issue with the fact that people pay for their water differently, that it seems the Council is doubling up (charging for a water licence and then for the water and rates), that the Council does not know that the unimproved value of land includes a component for any water licence, and that the Council does not know the value of a water licence. [6] I cannot change the system of water licensing. I cannot change the system of charging for water. I must decide this case based on the system that exists. Although Council rates may be based on the unimproved value of a property, what a Council charges for rates is not part of the Valuer General’s assessment of the value of land and, therefore, not part of my consideration. It is also not the Valuer General’s job, nor mine, to make budgeting easier for owners of rural properties. The Valuer General was required to consider the value of the water licence. [7] David Paton, a valuer employed by the Valuer General, assessed the value of the water licence. The sales evidence suggested a value of between $3250/megalitre and $4000/megalitre.4 Mr Paton adopted a conservative approach, valuing the water licence at $3000/megalitre. [8] Mr Dowling says that Mr Paton’s assessment is wrong because he referred to sales from the central Tablelands region, where water trades for a higher price because 2 T1-8, lines 39 to 43. 3 T1-8, line 47 to T1-9, line 1. 4 Ex 8, page 28. -- 3 of 7 -- 4 there is more demand and the available water is fully allocated most of the time.5 Mr Dowling also submits that the trading data Mr Paton relied on shows that Yungaburra transfers commonly showed a “nil” value for the transfer.6 [9] Mr Paton explained that7 the data on transfers is incomplete. If the transfer is between properties that have the same owner, then there is no sale and therefore no record of the value of the transfer. He explained that it is not compulsory for the vendor or purchaser of a water licence to advise the department of the sale price. He stated that the document Mr Dowling relied on to prove the licence had no value was a transfer list, not a sales list. [10] The evidence of the price at which water licences change hands is not ideal. Mr Paton included sales that occurred two years before the valuation date and two that occurred after the valuation date. Had he excluded these outliers, Mr Paton’s valuation of the water licence may have been closer to $4000/megalitre. [11] Mr Dowling was suspicious of the fact that he could not find a valuer who was willing to value the water licence.8 That does not mean that water licences cannot be valued, or that there is no one capable of valuing a water licence. I recognise Mr Dowling’s disadvantage, but I am required to consider the evidence as presented, not the absence of evidence. [12] Mr Dowling calculated the value of his water licence this way:9 he added up all the sales of water in the document provided by the department, deducted the GST component, and then divided that number by the total sales, giving a figure of $1196/megalitre. Mr Dowling divided that figure by 50%, because that is the limit of water he could draw through his entitlement over the last few years. That gave him a final figure of $598/megalitre. [13] Mr Dowling’s calculation is flawed in a number of ways. Although the department sales list10 refers to 59 sales, the document only records prices for 23 of those sales. 5 T1-16, lines 20 to 22. 6 T1-11, line 29; T1-56, T1-57. 7 T1-56, line 45 to T1-57, line 8. 8 T1-19. 9 T1-44, lines 12 to 33. 10 Ex 19. -- 4 of 7 -- 5 Mr Dowling deducted GST but, at least in one case, the price was recorded as being exclusive of GST. Dividing the total value of the sales by the number of sales results in an average, but not a correct realistic assessment of the value of the water licence to Mr Dowling.11 Finally, it is unrealistic to relate the value of the water licence to the actual water taken. The value of the water licence is the potential to take water; those with no water licence would not be able to take even the 50% that was available to Mr Dowling. [14] I prefer the evidence of Mr Paton, a professional valuer with many years of experience, to the evidence of Mr Dowling. Environmental factors [15] Mr Dowling’s main issue is that his land is a drainage basin, into which water from all the surrounding land accumulates. The Valuer General agrees, and Mr Paton identified12 3.711 hectares of unproductive land.13 [16] Mr Dowling submits that, whatever the value per hectare of the balance land, the unproductive land should be valued at zero. For reasons I will address when considering the comparable sales, I am satisfied that Mr Paton’s valuation adequately deals with the value of the unproductive land. [17] There is no doubt that the unproductive land is a haven for migrating birds. I accept that they are noisy and that they damage the pasture. I do not accept that the migrating birds are a recent phenomenon which would justify a reduction in the value of the land. [18] Other environmental issues – the bushfire overlay, the airport environs overlay, the biodiversity and waterway overlays, the wild pigs and dingoes coming from the national park – are not unique to Mr Dowling’s land and he has not explained how they adversely affect value. The same can be said of the drop in the bores due to the earthquake in Tonga (the volcanic pressure issue). Mr Dowling conceded14 he had 11 Daandine Pastoral Company Pty Ltd v Commissioner of Land Tax (1943) 7 The Valuer 299. 12 Ex 18 [3.1]. 13 Ex 18, page 8; T1-76, line 8. 14 T1-34, line 40. -- 5 of 7 -- 6 little or no information about the effect of the earthquake on his property or on other properties in the area. Mr Dowling simply makes an assertion; there is no evidence to support a finding that the earthquake effects would have affected the value of his property. [19] Mr Dowling referred to mabbi forest planting as a factor of carbon credits being available.15 In fact, of the 85 trees Mr Dowling planted for this purpose, few have survived. Mr Dowling does not explain how the availability of carbon credits, or his inability to capitalise on them, affect the value of his land. [20] I accept that Mr Dowling’s land is frost affected. If the highest and best use of the land was primary production, frost might be an issue. I am not persuaded that frost is a factor for a purchaser seeking a hobby farm. [21] Mr Dowling refers to a potential Yungaburra bypass but he provided no information on when that might occur or how much of the subject land might be taken. I am not prepared to act on hypotheticals. If and when the bypass occurs, there will be a fresh valuation exercise. There will be different considerations and different sales that will inform the parties’ views. Comparable sales [22] As I have previously mentioned, Mr Paton is a professional valuer of some years’ experience. Mr Dowling provided a letter from Anthony Ball,16 a real estate agent and auctioneer who was not available for cross examination. Mr Dowling is an enthusiastic amateur with a vested interest in achieving a low valuation. The Court does not place much weight on lay valuation opinion evidence.17 Mr Paton was untroubled in cross examination. [23] Although there is no reason why I should not accept Mr Paton’s opinion, I will deal with Mr Dowling’s submissions. 15 Ex 1. 16 Ex 5. 17 Beydoun v Valuer-General [2017] QLC 36. -- 6 of 7 -- 7 [24] Mr Dowling and Mr Paton had the same comparable sales. Unsurprisingly, they assessed their applicability differently. [25] Mr Dowling asked Mr Paton to calculate the unimproved value per hectare of each of the comparable sales.18 Both Mr Dowling and Mr Paton agreed that the sale most comparable to the subject land was 99 Hunt Road. [26] Mr Paton thought that Hunt Road was inferior land19 because it had inferior access, inferior soil, inferior clearing rights, no electricity, no garbage collection, less water and the land is steeper. The comparable sale occurred 18 months prior to the valuation date in a rising market. Mr Paton thought that the unimproved land component of the subject land “must be much greater than the $282,645 analysed unimproved sale”.20 [27] Mr Paton calculated the Hunt Road per hectare rate at $50,877. Even if I excise Mr Dowling’s unproductive land and apply the per hectare rate to the balance (I concede this is not necessarily good valuation practice) and ignore Mr Paton’s assessment that the subject land’s value must be much greater, the total value of the land is $323,582. This is quite close to Mr Paton’s assessment of $342,000. The difference in the two figures is less than 5%, a margin that is within the normal tolerances of valuation.21 Mr Dowling’s calculations do not assist him in demonstrating that the Valuer General is in error. Orders 1. The appeal is dismissed. 2. Any submissions seeking a costs order in this proceeding must be filed and served within 14 days of the publication of these reasons. 18 T1-65 to T1-67. 19 Ex 18 [5.1]. 20 Ex 18, page 29. 21 YFG Shopping Centres Pty Ltd as Tte & Anor v Valuer-General; Shayher Alliance Pty Ltd as Tte v Valuer-General; Leda Commercial Properties Pty Ltd as Tte v Valuer-General; Lipoma Pty Ltd as Tte v Valuer-General; RG Property Three Pty Ltd as Tte v Valuer-General [2020] QLC 10. -- 7 of 7 --