Anderson v Department of Environment and Resource Management [2010] QLC 59

LAND COURT OF QUEENSLAND CITATION: Anderson v Department of Environment and Resource Management [2010] QLC 59 PARTIES: Paul Anthony Anderson (appellant) v. Chief Executive, Department of Environment and Resource Management (respondent) FILE NOS: AV2005/1339, RV2005/1340, RV2005/1580, AV2005/1581, RV2005/1582, RV2005/1583, AV2007/0620, RV2007/0621, RV2007/0622, RV2007/0623, AV2007/0624 DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual and rental valuations under the Valuation of Land Act 1944 DELIVERED ON: 9 April 2010 DELIVERED AT: Brisbane HEARD AT: Emerald MEMBER: Mr PA Smith ORDERS: The appeals are allowed and the following valuations determined for each appeal: Valuations as at 1 October 2004 Appeal Number Determination AV2005/1339/RV2005/1340 $1,100,000 RV2005/1580 $474,000 AV2005/1581 $584,000 RV2005/1582 $21,500 RV2005/1583 $34,500 Valuations as at 1 October 2006 Appeal Number Determination AV2007/0620 $2,270,000 RV2007/0623 $942,000 AV2007/0624 $1,177,000 RV2007/0622 $41,000 RV2007/0621 $69,000 -- 1 of 9 -- 2 CATCHWORDS: Valuation – Factors in valuation –presumption in favour of correctness of valuation – grounds of appeal – evidence of stocking rates a question of fact – classification of land – comparative sales - Valuation of Land Act 1944 - Vegetation Management Act 1999 APPEARANCES: Mr P.A. Anderson, self representing Mr W.A. Isdale of Counsel, Crown Law Office, for the respondent Background: [1] This decision relates to eleven appeals by the appellant Mr Anderson against valuations by the respondent, pursuant to the Valuation of Land Act 1944 (the VLA) which valued the appellant’s property situated about 8 kilometres west of Alpha, accessed via the Capricorn Highway as at 1 October 2004 and 1 October 2006. The appellant’s property is made up of ‘Eureka’, a freehold block of 8093 ha; ‘Oakleigh’, a leasehold block of 8090.881 ha; ‘Eureka’ permit to occupy of 512 ha; and ‘Oakleigh’ permit to occupy of 941 ha. All of the blocks are joined, and the appellant runs the property as a single grazing business. The appeals relate to each of the parcels separately for each valuation, as well as the valuations for the property as a whole. During the first day of the hearing, it became apparent that the appellant had, in error, appealed the 2004 overall valuation twice. AV2005/1339 and RV2005/1340 are in fact the same AV appeal. Details of 2004 appeals [2] Set out below are the valuations as at 1 October 2004 with respect to each appeal, and the amount contended for by the appellant: Appeal Number Valuation Appellant’s Contention AV2005/1339/RV2005/1340 $1,300,000 $665,269 RV2005/1580 $590,000 $317,444 AV2005/1581 $690,000 $325,000 RV2005/1582 $25,500 $8,320 RV2005/1583 $41,000 $14,505 Details of 2006 appeals [3] Set out below are the valuations as at 1 October 2006 with respect to each appeal, and the amount contended for by the appellant: Appeal Number Valuation Appellant’s Contention AV2007/0620 $2,700,000 $665,269 RV2007/0623 $1,200,000 $317,444 AV2007/0624 $1,400,000 $325,000 RV2007/0622 $49,000 $8,320 RV2007/0621 $82,000 $14,505 -- 2 of 9 -- 3 [4] Telephone and electricity are both connected to the property. The property is artificially watered by bores and dams. The land is zoned “Rural” under the Town Plan for the Jericho Shire Council. The land is used for the grazing of cattle, and has been valued as a primary production property. [5] Approximately 27% of the property has been recorded as restricted vegetated country under the Vegetation Management Act 1999 (“the VMA”). [6] There is good, all weather bitumen access to near the property from Alpha via the Capricorn Highway. The central rail line runs along the southern boundary of the property, and the Capricorn Highway runs parallel to, and to the south of, the railway. Accordingly, whilst access is good, all weather to railway, it then becomes gravel/dirt access and subject to seasonal difficulties, particularly for trucks seeking to access the property during periods of rain. The Hearing [7] The appellant self represented and gave evidence at the hearing. Mr Anderson has no legal or valuation qualifications. The respondent was represented by Mr W Isdale, barrister, of Crown Law, and relied on evidence of a registered valuer, Mr Paul Schefe. It should be noted that, due to urgent medical issues relating to the birth of a child of the appellant, significant delay occurred in the giving of submissions while the appellant cared for his wife and child. The respondent is commended for its compassion and understanding in readily agreeing to give the appellant the time he needed. That delay resulted in this matter being further delayed as volume of work before the Court, and dwindling resources, impacted on the timeliness of the decision. Relevant legislative provisions [8] Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land. [9] Section 3(1) of the VLA says as follows: “3.(1) For the purposes of this Act – ‘unimproved value’ of land means – (a) in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and (b) in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.” [10] I note that the subject land in all appeals is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land. -- 3 of 9 -- 4 [11] As then President Trickett said in Fairfax v Department of Natural Resources and Mines [2005] QLC 0011 at paragraphs 11 and 12: “The principles for determination of the 'market value' of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441). It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that: 'Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales."” I respectfully agree with these observations. Presumption of correctness of valuation [12] I now turn to section 33 of the VLA, which states as follows: 33 Status of valuation Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered. [13] This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation at page 56: “In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of fact, the presumption created by s. 13(7) is rebutted.” It should be noted that s. 33 of the VLA is in essentially the same terms as what was then s. 13(7) of the Act. The issues in the Appeals [14] The appellant has relied on eight grounds of appeal which can be summarised as: 1. Valuation excessive and not supported by fair market sales 2. Respondent relied on suspect sales 3. Insufficient allowance made for value of improvements in sale properties 4. Impact of regrowth, seedlings, weeds and animal pests 5. Classification of the country and limitations on the land, including water 6. Impact on clearing caused by the VMA 7. Valuation presupposes a prosperity on the land which does not exist 8. All facts not taken into account in arriving at the unimproved value. -- 4 of 9 -- 5 The evidence [15] It is a frequent occurrence for appeals to be brought to the Court by appellants dissatisfied with their valuations and passionate in their belief that certain attributes of their land have not been properly taken into account by the respondent’s valuer. The appellants are, in the majority of cases, honest people who give open, reliable evidence, particularly as to the land’s disabilities. More often than not, such appeals are not supported by expert valuation evidence, and they fail because the sales relied upon by the respondent’s valuer support the valuations contended for by the respondent, and the respondent’s valuer gives evidence that they were aware of the disabilities referred to by the appellant, and those disabilities have been taken into account in the assessed valuation. Superficially at least, the appeals under consideration collectively fall precisely into that generalisation. [16] I accept Mr Anderson’s evidence as to each of the disabilities referred to in his grounds of appeal. However, that said, I also accept that the appellant’s objections have been, in most relevant circumstances, properly taken into account by Mr Schefe in both his oral evidence and his reports. [17] The evidence as between Mr Anderson and Mr Schefe is in conflict in a number of key aspects. In his major valuation reports, Mr Schefe refers to the property as having ‘all weather’ access.1 I accept that the property has all weather access up until the point where the access reaches the railway line on the southern boundary. However, once the access leaves the main highway, it becomes gravel/dirt and subject to seasonal factors, such as rain. During cross-examination, Mr Schefe conceded that the access could not be considered all weather.2 I find Mr Schefe’s reports to be in error when referring to the property as having all weather access. [18] Another aspect where there is a divergence in opinion relates to the carrying capacity of the property. Mr Anderson during cross-examination was asked a number of questions about the carrying capacity of the property. It is noted that he has owned ‘Eureka’ for 14 years, and ‘Oakleigh’ for 6 years,3 and so has a good working knowledge of the property. Mr Anderson’s evidence is that the average carrying capacity of the property is 1,300 cattle4 in a mixed herd. During a good season, the property will carry about 1,500 head, and in a bad season, about 1,100 head, and in a drought, it drops back to about 800 to 900 head.5 Mr Schefe, on the other hand, puts the carrying capacity of the property at 1559 head.6 Clearly, in my view, the carrying capacity of the property is not one of valuation expert opinion, but 1 See Ex 37, page 4.2 and Ex 42, page 4.2. 2 Transcript, page 123, lines 33-47. 3 Transcript, page 35, line 11. 4 Transcript, page 35, lines 13-18. 5 Transcript, page 35, line 20-34. 6 Ex 37, page 5.4 and 6.9; and Ex 42, page 5.4 and 6.9. -- 5 of 9 -- 6 one of discernable fact. In this regard, I note the reasoning of the Full Court of the Federal Court of Australia in Kestrel Holdings v APF Properties:7 “Counsel for Kestrel and Mr Robinson attempted to establish that Mr Robinson had a reasonable basis for his estimate of croppable land. To do so, he characterised the representation as a matter of opinion, rather than as a matter of fact. This argument cannot be accepted. Although the primary judge said that assessing what land is croppable was not a matter of precision, his Honour did characterise the amount of croppable land as an objectively discernable fact. There is no inconsistency between these two statements and both are correct. Mr Robinson’s representation was to a total of 81 ha of croppable land, not merely as to 13. It was a statement of fact. Even if land on which there were items of infrastructure and dams was included, there was still a difference between the estimate and the reality that was great enough to make the representations misleading.” [19] In my view, the Full Court’s comments in Kestrel as to evidence of croppable land being a statement of fact and not opinion are equally relevant to the evidence as to carrying capacity in the case at hand. Even though I consider that Mr Schefe has done his best to arrive at what he considers to be the appropriate carrying capacity of the property, taking not only Mr Anderson’s evidence into account, but also the myriad of generally supporting material tendered by Mr Anderson, I make the finding of fact that the property has a carrying capacity of 1,300 head on a mixed herd basis.8 9 [20] The conflicting evidence with respect to carrying capacity flows directly on to conflicting evidence as to the respective evidence as to the nature of the land on the property. Mr Schefe’s views are clearly set out in Exhibits 37 and 42, pages 4 and 5, while Mr Anderson explains his view in Exhibit 14. It is important to note that Mr Anderson did not just rely on his own observations in preparing Exhibit 14, but also made reference to studies undertaken by government agencies on his property. The Court also had the benefit of a full day inspection of the property. Taking all of the evidence into account, I accept without qualification Mr Anderson’s classification and description of the nature of the land on his property. [21] As mentioned earlier, Mr Anderson did not call expert valuation evidence to support his case, but instead Mr Anderson attempted to give his own evidence as to various sales in the locality. In so far as Mr Anderson’s evidence in this regard attempts to put itself as equal to, or even of greater weight than, Mr Schefe’s expert valuation evidence, and takes on the flavour of expert valuation evidence, I reject Mr Anderson’s evidence [22] A direct comparison approach has been adopted by the respondent’s valuer, Mr Schefe, to determine the unimproved value of the property and all appeal blocks. Mr Schefe has relied 7 [2009] 260 ALR 418@452. 8 I note that Mr Schefe referred to ‘carrying capacity’ as “a numerical means for describing country” (T100, line8) on a long-term basis. 9 I note that, during Examination in chief, Mr Isdale put to Mr Schefe that the average carrying capacity stated in evidence by Mr Anderson was 1,500, and Mr Schefe agreed (T108, lines 16-19). Both Mr Isdale and Mr Schefe were mistaken in this aspect of the evidence. -- 6 of 9 -- 7 on comparable sales in his 2 principal reports – one group of sales for the 2004 valuation, and another for the 2006 valuation, as follows: The 2004 Valuations Sales Area Ha Date of Sale Analysed U/Value Applied U/Value 1/10/2004 And Beast Area Value (BAV) Comparison 1 Rainmore Pastoral Holding 27244 28/10/2002 $1,750,825 ($64.26/ha) $1,600,000 ($58.73/ha) $763 BAV Sale inferior to subject 2 Mt Observatory Pastoral Holding, Star Downs 33,600 06/08/2002 $2,287,332 ($68.08/ha) $2,200,000 ($67.25/ha) $807 BAV Sale inferior to subject 3 Texas 13,942.6 16/07/2003 $330,665 ($23.72/ha) $320,000 ($22.95/ha) $413 BAV Sale vastly inferior to subject The 2006 Valuations Sales Area Ha Date of Sale Analysed U/Value Applied U/Value 1/10/2006 Comparison 1 Kilcool Pastoral Holding 16,500 06/06/2006 $2,351,311 ($142.50/ha) $2,200,000 ($133.33/ha) $2018 BAV Sale inferior on $/ha basis, but superior on BAV basis 2 Rivington 9,683 18/08/2005 $3,123,898 ($322/ha) $2,000,000 ($206.55/ha) $2112 BAV Sale superior to subject 3 Hexham 12,930.111 14/10/2005 $670,911 ($52/ha) $630,000 ($49/ha) $785 BAV Sale inferior to the subject [23] It should be noted that Mr Schefe for the 2004 valuations also relied on the decision of the Land Court in Sparrow and Anor v Chief Executive, DNRW.10 I also note that Mr Schefe did not rely on the sale in May 2002 when Mr Anderson purchased “Oakleigh” at auction. Mr Schefe appears to be of the view that that sale was not a good indication of the market. In my view, however, Mr Schefe does not adequately state why such sale should not have been considered. Certainly, as a May 2002 sale it is dated, but Mr Schefe has relied on sales dated August and October 2002. At the very least as a form of ‘check sale’, I believe it would have been appropriate for Mr Schefe to make some reference to the May 2002 ‘Oakleigh’ sale in his report. I note that, on Mr Anderson’s evidence, the sale price of ‘Oakleigh’ was $990,000 10 [2007] QLC 0071. -- 7 of 9 -- 8 and included $240,000 worth of cattle.11 I further note Mr Anderson’s evidence that he paid more for the property because it was an adjoining block. [24] I accept the valuation evidence of Mr Schefe insofar as it relates to the analysis of sales for the 2004 and 2006 valuations. However, for the reasons already stated, I do not accept Mr Schefe’s categorisation of the subject land. It follows that I cannot accept the valuations arrived at by Mr Schefe for the subject land. [25] Given that I generally accept the individual analysis of each of Mr Schefe’s sales (leaving to one side the issue of comparison to the subject) it should be a relatively easy task to apply Mr Schefe’s sales to the land categorisation set out in Exhibit 14 for the subject property. However, a close examination of the evidence reveals an inconsistency in terminology between Mr Schefe and Mr Anderson, making any sensible cross-referencing between Mr Schefe’s sales and exhibit 14 difficult, if not impossible. [26] Accepting Mr Schefe’s sales evidence results in my also accepting Mr Schefe’s Beast area Value (BAV) for the subject, and accepting Mr Andersons evidence as to categorisation of the land and his evidence of carrying capacity, means that Mr Schefe’s secondary BAV valuation method can be used, applying all of my findings of fact, to arrive at valuations of the property as a whole as at 1 October 2004 and 2006. When this is done for 2004, it amounts to 1,300 mixed head @ $850 BAV for a total value of $1,105,000, and for 2006, it amounts to 1,300 mixed head at $1750 BAV for a total of $2,275,000. Taking all factors into account, including specifically the evidence of Mr Anderson and Mr Schefe as to access, I round down these sums to $1,100,000 and $2,270,000 respectively [27] I should add, for completeness, that on the basis of the evidence in its entirety, Mr Anderson has produced evidence sufficient to disturb the presumption of correctness.12 Conclusion [28] I am now faced with applying my findings with respect to the property as a whole to the individual component parts. Doing the best that I can by applying my reasoning set out above, and effectively applying pro-rata rates across appeals,13 and noting that the respondent led evidence to lower values with respect to RV2005/158014 and RV2007/0623,15 I have arrived at the following valuations for each appeal: 11 See transcript, page 47. 12 See paragraphs 15 and 16 above. 13 Using a multiplier of 0.8461538 ($1,100,000 ÷$1,300,000) for 2004 valuation with rounding and using multiplier of 0.8407407 ($2,270,000 ÷ $2,700,000) for 2006 valuation with rounding. 14 See Transcript page 106. 15 See Transcript page 114. -- 8 of 9 -- 9 Order The appeals are allowed, and the following valuations determined for each appeal: Valuations as at 1 October 2004 Appeal Number Determination AV2005/1339/RV2005/1340 $1,100,000 RV2005/1580 $474,000 AV2005/1581 $584,000 RV2005/1582 $21,500 RV2005/1583 $34,500 Valuations as at 1 October 2006 Appeal Number Determination AV2007/0620 $2,270,000 RV2007/0623 $942,000 AV2007/0624 $1,177,000 RV2007/0622 $41,000 RV2007/0621 $69,000 P A SMITH MEMBER OF THE LAND COURT -- 9 of 9 --