Crombie v Department of Natural Resources and Water [2008] QLC 156

LAND COURT OF QUEENSLAND CITATION: Crombie v Department of Natural Resources and Water [2008] QLC 156 PARTIES: Peter J Crombie and Oenone J Crombie (appellants) v Chief Executive, Department of Natural Resources and Water (respondent) FILE NOS: AV2006/0205 and RV2006/0206 DIVISION: Land Court of Queensland – General Division PROCEEDING: Appeals against an annual valuation and a rental valuation DELIVERED ON: 31 July 2008 DELIVERED AT: Brisbane HEARD AT: Winton MEMBER: Mr JJ Trickett, President ORDERS: 1. In appeal AV2006/0205, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Drumlion” for rating purposes as at 1 October 2005 is determined at Six Hundred and Eighty-six Thousand Dollars ($686,000). 2. In appeal RV2006/0206, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Drumlion” for rental purposes as at 1 October 2005 is determined at Seven Hundred and Ten Thousand Dollars ($710,000). CATCHWORDS: Unimproved value – grazing property in Longreach Shire – relativity with valuations of other properties – direct comparison with determinations of selected cases – sales relied upon in those determinations – Valuation of Land Act 1944 -- 1 of 5 -- 2 APPEARANCES: Mr A Boyd, agent, for the appellants Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent [1] These are appeals by landowners in the Shire of Longreach against the unimproved value applied to their lands for revenue purposes 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). Background [2] Mr and Mrs Crombie are the owners of a grazing property known as “Drumlion”, containing an area of 8,261.961 ha, situated about 168 km west of Aramac, 105 km north-west of Longreach and about 61 km east of Winton. Access from Longreach is by the bitumen sealed Landsborough Highway, except for about 10 km of earth road. As at 1 October 2005, the Department applied an unimproved value of $760,000, or $92/ha, for rating purposes and an unimproved value of $790,000, or $95.62/ha, for rental purposes to that property. The owners appealed against those valuations, stating that their estimate of the unimproved value is $330,000 for both rating and rental purposes. [3] The appeals were lodged on their behalf by their agent, Mr A Boyd. The grounds of appeal are wide ranging but general in nature, essentially contending that the unimproved values are 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. [4] These appeals were among a number of cases tried by fast-track hearing, following the determinations of selected cases in the Shires of Aramac and Longreach.1 The parties agreed that the remaining appeals be determined by confining the evidence to comparisons with the decisions in those cases and to the sales relied upon in arriving at those determinations. However, evidence of the differences between individual properties was also heard. The Evidence for the Appellants [5] Evidence for the appellants in both these cases and in the “Pialaway” appeal, was given by Mr PJ Crombie. As he had done in the “Pialaway” case, Mr Crombie referred to the extent of the ashy soil country on “Drumlion”, which he considered to 1 Elliott v Department of Natural Resources and Water [2008] QLC 0009, Pratt v Department of Natural Resources and Water [2008] QLC 0063 and Sedgwick v Department of Natural Resources and Water [2008] QLC 0066. -- 2 of 5 -- 3 be proportionally greater than on “Pialaway”. The ashy country has a predominance of Flinders grass rather than Mitchell grass. He agreed with the Department’s assessment of carrying capacity of 1 sheep to 1.8 ha. [6] As with “Pialaway”, Mr Crombie was concerned about the relationship of the valuations applied to “Drumlion”, compared with the valuation of “Glenullin” at $80.70/ha, with a carrying capacity of 1 sheep to 1.6 ha. [7] It is clear that Mr Crombie thought that there should be little difference in the unimproved value per ha applied to “Drumlion” and “Pialaway”. While he regarded “Pialaway” as superior as it had more shady channels, it also had more stony whitewood ridges. “Drumlion”, on the other hand, had the greater percentage of Flinders grass, particularly on the additional area. Although Mr Crombie was given the opportunity to nominate one property as superior to the other, I formed the impression that he regarded them as much of a muchness, when all things were considered. The Evidence for the Department [8] Evidence for the Department was given by registered valuer, Mr PD Schefe, who assessed the valuations in the area by reference to the Department’s historical record, with the assistance of the WARLUS land system mapping, regional eco-system mapping and satellite imagery. He observed that the Department’s record described “Drumlion” as comprising: “All higher water shed, gently undulating brown soil downs, lightly shaded with whitewood and vinetree. Coolibah along Kanyanya Creek provides some shade together with mimosa. Mostly ashy country lacking density of Mitchell grass. Grows mainly flinders plus herbage.” Carrying capacity was assessed at 1 sheep to 1.8 ha, or 4,589 sheep. [9] Mr Schefe conceded that the rating and rental valuations of “Drumlion” should be revised. He led evidence to a valuation of $686,000, or $83/ha, essentially the same value per ha that he applied to “Pialaway”. For rental purposes he led evidence to a slightly higher value of $710,000, or $86/ha. [10] The basis for Mr Schefe’s altered valuations and his comparisons with “Glenullin” are explained in the “Pialaway” decision and need not be repeated here.2 However, it is necessary to deal with Mr Schefe’s evidence about his slightly different valuations of “Drumlion” for rating and rental purposes. 2 [2008] QLC 0155. -- 3 of 5 -- 4 [11] Although “Pialaway” and “Drumlion” are adjoining properties, both owned by Mr and Mrs Crombie and are worked in conjunction, under s. 35 of the Act the Department is required to make separate valuations because “Pialaway” is situated in Aramac Shire, whereas “Drumlion” is situated in Longreach Shire. If they had been situated in the same local authority area, the two properties would have been included in the one valuation. [12] Section 34(1) of the Act requires that parcels of land which adjoin and are owned by the same person shall, unless the Chief Executive directs otherwise, be included in one valuation. However, in circumstances where one parcel is situated in one local authority area and the other parcel is situated in a different local authority area, those parcels shall be separately valued. In such circumstances, s. 35(3) requires that a valuation be made of the total area and that valuation be apportioned amongst the parts of the land in the different local authority areas. The amount of the valuation apportioned to the relevant part, in this case the Aramac Shire part, is deemed to be the valuation of that land made under the Act. [13] The total area of the “Pialaway/Drumlion” aggregation is 16,598 ha. Mr Schefe reasoned that as one valuation he would apply approximately $83/ha. As “Pialaway” and “Drumlion” are “much of a muchness”, he would apportion the same rate per ha to “Drumlion”. [14] However, the provisions of s. 34(1) of the Act do not apply to valuations for rental purposes. The valuation of “Drumlion” as a separate entity, being only 8,262 ha should, Mr Schefe reasoned, have a slightly higher rate per ha because of its smaller area. Therefore, he led evidence to a valuation for rental purposes of $86/ha. [15] Mr Schefe’s reasoning is not based on sales evidence in this area, but upon his experience as a valuer in other areas. While the theory is sound enough, in the present cases I have no evidence that properties of 8,000 ha are selling at any lesser rate than properties of 16,000 ha. [16] However, that principle was accepted in the “Bonnie Downs” case,3 where I determined the unimproved value of the 26,080 ha aggregation at $110/ha, but the valuations of the two component parts, comprising areas of 16,242 ha and 9,838 ha, at slightly higher rates per ha. In those cases there was some evidence of the superiority of each of those components compared with the overall aggregation. 3 Fawckner v Department of Natural Resources and Water [2008] QLC 0036. -- 4 of 5 -- 5 [17] In the present cases the evidence is that the two components of the aggregation are similar and it is not suggested that either component should have a higher value per ha than the other, apart from the size difference. Mr Schefe has led evidence to a difference of $3/ha, amounting to about $24,000 in the unimproved value. In the absence of any evidence to the contrary, I can see no reason why that should not be accepted. The other Issues [18] Apart from that matter, the other issues are very similar to those discussed in the “Pialaway” case. “Drumlion” has the advantage of being closer to the bitumen road and so has an access advantage over “Pialaway”, but in Mr Crombie’s opinion, “Pialaway” is slightly better country. [19] Having regard to the whole of the evidence, I can see no reason why the unimproved value of “Drumlion” would be any different per ha to the valuation of “Pialaway” for rating purposes. However, because of its size compared with the size of the aggregation, it should have a slightly higher value per ha for rental purposes. Orders 1. In appeal AV2006/0205, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Drumlion” for rating purposes as at 1 October 2005 is determined at Six Hundred and Eighty-six Thousand Dollars ($686,000). 2. In appeal RV2006/0206, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved valuation of “Drumlion” for rental purposes as at 1 October 2005 is determined at Seven Hundred and Ten Thousand Dollars ($710,000). JJ TRICKETT PRESIDENT OF THE LAND COURT -- 5 of 5 --