Elliott v Department of Natural Resources and Water [2008] QLC 162

LAND COURT OF QUEENSLAND CITATION: Elliott v Department of Natural Resources and Water [2008] QLC 162 PARTIES: Heather M. Elliott (appellant) v Chief Executive, Department of Natural Resources and Water (respondent) FILE NO: AV2006/0162 DIVISION: Land Court of Queensland – General Division PROCEEDING: An appeal against an annual valuation DELIVERED ON: 20 August 2008 DELIVERED AT: Brisbane HEARD AT: Longreach MEMBER: Mr JJ Trickett ORDER: The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Small Glenample” as at 1 October 2005 is determined at Four Hundred and Twenty-six Thousand Dollars ($426,000). CATCHWORDS: Unimproved value – grazing property in Aramac Shire – relativity with valuations of other properties – direct comparison with determinations of selected cases – Valuation of Land Act 1944 APPEARANCES: Mr A Boyd, agent, for the appellant Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent [1] This is an appeal by a landowner in the Shire of Aramac against the unimproved value applied to her land by the Chief Executive, Department of Natural Resources and Water (the Department) as at 1 October 2005 under the provisions of the Valuation of Land Act 1944 (the Act). -- 1 of 6 -- 2 Background [2] Mrs HM Elliott is the owner of a parcel of land of 4,393 ha, which is part of a grazing property known as “Glenample”, with a total area of 20,799 ha. For the sake of convenience, Mrs Elliott's part of the property has been referred to in these hearings as “Small Glenample”, while the balance of the property, of 16,406 ha, held jointly by Mrs Elliott and her husband, Mr TN Elliott, was called "Large Glenample". [3] As at 1 October 2005, the Department applied an unimproved value of $570,000, or $130/ha, to “Small Glenample” and $2,150,000, or $128/ha, to “Large Glenample”. The Elliotts appealed against both valuations, advising that their estimate of the unimproved value of “Small Glenample” is $250,000 and that their estimate of the unimproved value of “Large Glenample” is $820,000. [4] The appeal against the valuation of “Large Glenample” was heard in Longreach. Evidence for the appellants was given by registered valuer, Mr CV Dyer, and evidence for the Department was given by registered valuer, Mr PD Schefe. On 22 January 2008, I determined the unimproved value of “Large Glenample” at $1,837,000, or $112/ha.1 Subsequent to that determination, the parties were unable to reach agreement as to the unimproved value of “Small Glenample”. That matter came before me for hearing at Longreach on 18 June 2008. [5] As with the “Large Glenample” appeal, this appeal was lodged on the owner’s behalf by her agent, Mr A Boyd. The grounds of appeal are wide-ranging but general in nature, essentially contending that the unimproved value is excessive because of the failure by the Department to take into account and make proper allowance for various matters, or to apply the correct principles of valuation. As with other landowners represented by Mr Boyd, this case was tried by fast-track hearing, whereby evidence was confined to comparisons with the determinations of the valuations of selected cases (in this case “Large Glenample”), and to the determinations of the valuations of other properties in the area. The Evidence for the Appellant [6] Evidence for the appellant was given by Mr TN Elliott. He was aware that the Department had originally classified “Small Glenample” as comprising 80% downs country and 20% developed scrub country, with an overall carrying capacity of 1 1 Elliott v Department of Natural Resources and Water [2008] QLC 0009. -- 2 of 6 -- 3 sheep to 1.44 ha. He was also aware that subsequent to the determination of the valuation of “Large Glenample”, the Department had generally agreed with Mr Dyer’s classifications of the country, at 50% downs country, 40% developed gidyea (growing mostly herbage), 9% flooded channels and flats and 1% hard stony knob and ridges. The overall carrying capacity was also agreed at 1 sheep to 1.75 ha. [7] Mr Elliott maintained that with such major adjustments to the classification and carrying capacity, the Department’s valuation of $130/ha should be reduced significantly. He contended for an unimproved value of $352,000, or $80/ha. [8] In support of his contended unimproved value, Mr Elliott expressed the view that while the downs country on “Small Glenample” is much the same as the downs country on “Large Glenample”, a greater proportion was affected by flooding. The eastern end of “Small Glenample” is at the junction of two creek systems, with Aramac Creek somewhat further to the south. According to Mr Elliott, when Aramac Creek is in flood, the water from the two creek systems does not get away but backs up, covering an area from 1 km to 2 km wide. In 2006, 200 rams were lost. For that reason, stock are not run in the two affected paddocks from the end of November to the end of April of each year. [9] Mr Elliott also gave evidence relating to the quality of pulled gidyea country. He had been responsible for the pulling of all the gidyea country on “Glenample” in 1999. He produced a series of photographs taken the day before the hearing which showed extensive regrowth over the pulled area on "Small Glenample", with very little grass.2 His experience with the nearby property, “Scotstoun”, leads him to conclude that the area will have to be pulled again when the regrowth is high enough, probably after 15 years. He maintained that the scrub on “Scotstoun” had been pulled a second time and although a better result had been achieved, sandalwood regrowth was returning. He expressed the view that the ongoing maintenance cost of the pulled area would affect the price that a potential purchaser would pay for the property. [10] Evidence for the appellant was also given by registered valuer, Mr CV Dyer, who had given valuation evidence in the “Large Glenample” case. In this case, Mr Dyer did not express an opinion about the valuation. His evidence related to the 2 Exhibit 3. -- 3 of 6 -- 4 agreement with the Department as to classification of country and carrying capacity. He also gave evidence relating to the flooded area and the regrowth. [11] Mr Dyer explained that he had inspected and classified the country on “Small Glenample” at the time of preparing for the hearing of the valuation of the selected case, “Large Glenample”. Subsequent to that determination, when discussing other matters with Department valuer, Mr Peter Haydon, they had reached agreement as to the classification and carrying capacity of “Small Glenample”. Mr Dyer’s evidence relating to the flooding generally supported that of Mr Elliott. [12] As for the developed scrub country, Mr Dyer described the regrowth on the pulled area as “quite thick”, but too small to re-pull at the present time. However, he maintained that it was growing no grass, only herbage and that it would have to be re-pulled in the next few years, because it is of no use as it is. Mr Dyer maintained that not only does “Small Glenample” have a larger proportion of pulled gidyea country than “Large Glenample”, but the suckers are a greater problem because most of them are in the alluvial country. The Evidence for the Department [13] Evidence for the Department was given by registered valuer, Mr PD Schefe, who explained that he had originally assessed the valuation of “Small Glenample” by reference to the Department’s historical record, with the assistance of the WARLUS land system mapping, regional eco-system mapping and satellite imagery. The Department’s record had originally classified the property as comprising 3,500 ha (80%) downs and 893 ha (20%) developed scrub, with an overall carrying capacity of 1 sheep to 1.44 ha. [14] However, following the determination by the Court of the valuation of “Large Glenample”, Mr Schefe had reviewed the classification of “Small Glenample” as follows: 2,157 ha (49%) open to lightly shaded Mitchell grass downs; 370 ha (9%) channels and flats associated with Bullock Creek; 1,802 ha (41%) developed gidyea scrub, predominantly herbage, not suitable for buffel grass (identical to the “Large Glenample” developed scrub); and 64 (1%) ha hard stony knob and ridges, known as “Mount Myth”. He reassessed the carrying capacity to 1 sheep to 1.75 ha, or 2,510 sheep. -- 4 of 6 -- 5 [15] Mr Schefe further explained that he had arrived at those classifications independently and had advised Mr Haydon, who had subsequently reached general agreement with Mr Dyer. They had also agreed to a carrying capacity of 1 sheep to 1.75 ha. [16] Mr Schefe conceded that in view of his adjusted classification and carrying capacity, his original valuation of $130/ha required adjustment. He reasoned that the selected case, “Large Glenample” had been determined at $112/ha, with a carrying capacity of 1 sheep to 1.5 ha, resulting in a sheep area value of $168. “Large Glenample” has a greater proportion of downs country and a smaller proportion of developed scrub, but at 16,406 ha, it is significantly larger. [17] Mr Schefe also had regard to the sale of “Brendallan”, relied upon in determining the selected case. The Department had applied $126.50/ha to that sale property, with a carrying capacity of 1 sheep to 1.41 ha, which is a sheep area value of $178. It has an area of 7,351 ha and is situated on the outskirts of Aramac. [18] Mr Schefe also referred to the determination by the Land Court of the valuation of “Scotstoun”, situated immediately to the north of “Small Glenample”, at $116.50/ha.3 With a carrying capacity of 1 sheep to 1.5 ha, the sheep area value of “Scotstoun” is $174.75. It has an area of 7,470 ha and a somewhat smaller proportion of developed scrub (about 30%). [19] Mr Schefe reasoned that notwithstanding that “Small Glenample” has a lighter carrying capacity, its sheep area value should be similar to the sheep area value of “Scotstoun”, because of its size. His revised valuation based on a sheep area value of $170, is $97/ha. In his opinion, the unimproved value of $80/ha contended for by Mr Elliott is far too low. The Issues [20] With the general agreement between Mr Dyer and the Department as to the classification of the country and the carrying capacity, the only issue is to what extent the valuation of the subject land should be adjusted. Mr Schefe originally applied $130/ha and is now contending for a valuation of $97/ha. However, Mr Elliott maintains that a valuation of $80/ha would be more appropriate. [21] The selected case in this area is the valuation of the adjoining property, “Large Glenample”, the determination of which results in a sheep area value of $168. Although it has a greater proportion of downs country with a heavier carrying 3 Mitchell v Department of Natural Resources and Water [2008] QLC 0114. -- 5 of 6 -- 6 capacity that “Small Glenample”, it is also a great deal larger. Any comparison must take those aspects into account. [22] The sale property “Brendallan”, with a sheep area value of $178, is better situated, has a greater proportion of downs country and a superior carrying capacity. The sheep area value of “Small Glenample” must be somewhat lower. [23] Mr Schefe seemed to place most reliance on the Court determination of the valuation of “Scotstoun”, with a resulting sheep area value of $174.75. “Scotstoun” is similarly situated and has a somewhat higher proportion of downs country. All other things being equal, a somewhat lower sheep area value should be applied to “Small Glenample” because of its lighter carrying capacity. However, Mr Schefe is of the opinion that a somewhat higher sheep area value is warranted because of its size. [24] Mr Schefe produced no market evidence to demonstrate that a property of 4,393 ha would sell at a higher rate per ha than a property of 7,470 ha. However, the principle was recognised in the “Bonnie Downs” and “Corunna” cases where the two components of the “Bonnie Downs” aggregation were determined at slightly higher rates per ha than the valuation of the aggregation itself, partly because the two components were smaller.4 [25] Having regard to the differences in their respective areas, in the circumstances, I can see no reason why a sheep area value slightly lower than that determined for “Scotstoun” should not be applied to “Small Glenample”. Therefore, I accept Mr Schefe’s revised valuation of $97/ha based on a sheep area value of $170, which amounts to a rounded unimproved value of $426,000. Order The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Small Glenample” as at 1 October 2005 is determined at Four Hundred and Twenty-six Thousand Dollars ($426,000). JJ TRICKETT MEMBER OF THE LAND COURT 4 Fawckner v Department of Natural Resources and Water [2008] QLC 0107. -- 6 of 6 --