Fawckner v Department of Natural Resources and Water [2008] QLC 107

LAND COURT OF QUEENSLAND CITATION: Fawckner v Department of Natural Resources and Water [2008] QLC 107 PARTIES: Robert Dale Fawckner (appellant) v Chief Executive, Department of Natural Resources and Water (respondent) FILE NOS: RV2006/0153 and RV2006/0154 DIVISION: Land Court of Queensland – General Division PROCEEDING: Appeals against rental valuations DELIVERED ON: 30 May 2008 DELIVERED AT: Brisbane HEARD AT: Winton MEMBER: Mr JJ Trickett, President ORDER: 1. In appeal RV2006/0153, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the “Bonnie Downs” lease for rental purposes as at 1 October 2005 is determined at One Million, Eight Hundred and Twenty-seven Thousand Dollars ($1,827,000). 2. In appeal RV2006/0154, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the “Corunna” lease for rental purposes as at 1 October 2005 is determined at One Million, One Hundred and Thirty-one Thousand Dollars ($1,131,000). CATCHWORDS: Unimproved value – grazing properties in Winton Shire – relativity with valuations of other properties – direct comparison with determination of selected cases – sales relied upon in determination of selected cases – Valuation of Land Act 1944 -- 1 of 6 -- 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 a landowner in the Shire of Winton against the unimproved values applied to his land for rental 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 Fawckner (the appellant) is the owner of a grazing property known as “Bonnie Downs”, containing an area of 26,079.562 ha. The appeal against the valuation of the whole property was determined by this Court on 8 February 2008 at $2,869,000, or $110/ha.1 “Bonnie Downs” comprises two grazing homestead perpetual leases. The western lease known as “Bonnie Downs”, containing an area of 16,241.654 ha, was valued by the Department at $1,950,000, or $120/ha. The eastern lease, known as “Corunna”, containing an area of 9,837.908 ha, was valued by the Department at $1,200,000, or $122/ha. [3] Under the provisions of s. 35 of the Act, both those leasehold parcels are required to be valued separately for rental purposes. Mr Fawckner appealed against those valuations through his agent, Mr A Boyd, contending that the unimproved value of the “Bonnie Downs” lease should be $710,000 and that the unimproved value of the “Corunna” lease should be $430,000. [4] These cases were tried by fast-track hearing whereby evidence was confined to comparisons with the determinations of the valuations of the selected cases “Bonnie Downs” (the aggregation) and “Belmont”2 and the sales relied upon in the determination of those appeals. As the two present appeals against the rental valuations are simply smaller components of the “Bonnie Downs” aggregation, the evidence was concerned largely with how each component related to the determined valuation of the property as a whole and the most relevant sale “Dahlia”. 1 Fawckner v Department of Natural Resources and Water [2008] QLC 0036. 2 Elliott v Department of Natural Resources and Water [2008] QLC 0040. -- 2 of 6 -- 3 The unimproved value of the “Bonnie Downs” aggregation [5] As at 1 October 2005, the Department had valued the 26,080 ha aggregation at $3,100,000, or $120/ha. On 8 February 2008, the Court determined the unimproved value of the aggregation at $2,869,000, or $110/ha, with detailed reasons. It is unnecessary to repeat those reasons and the comparisons with the various sales. The present two appeals are in respect of the two parts of the aggregation, to which the Department applied higher rates per hectare. [6] The Court found that the key sale for the determination of the unimproved value of the “Bonnie Downs” aggregation was the sale of the property “Dahlia”, with an area of 13,327 ha, to which the Department had applied an unimproved value of $1,500,000, or $112.55/ha as at 1 October 2005. After considering the evidence in that case, the Court came to the conclusion that the country on “Dahlia” is superior to the country on the “Bonnie Downs” aggregation, determining a valuation of $110/ha for the 26,080 ha aggregation, compared with the unimproved value of $112.55/ha applied to “Dahlia”. [7] The issue in these cases is what value should be applied to the two separate leases, having regard to the differences between them, including their respective areas. The “Bonnie Downs” lease [8] Mr Fawckner gave evidence that the Department had previously made little difference in the unimproved values per hectare applied to the aggregation and the valuations of the two individual leases. He contended that as at 1 October 2001, the Department had valued the respective properties as follows: “Bonnie Downs” aggregation 26,080 ha at $21.50/ha; “Bonnie Downs” lease 16,242 ha at $21.90/ha; “Corunna” lease 9,838 ha at $21.90/ha The appeals against those valuations had been dismissed by the Land Court and the values applied by the Department confirmed.3 Mr Fawckner agrees with that 3 Fawckner v Department of Natural Resources and Mines [2004] QLC 0100. -- 3 of 6 -- 4 relativity and contends that the two rental appeals should be determined at $112.50/ha. [9] Mr Fawckner is of the opinion that the two leasehold properties are “much of a muchness”; however, the “Bonnie Downs” lease is larger and the country is slightly looser. It also has two creek channels compared with the one channel on “Corunna”. In the hearing of the appeals against the 2001 valuations, he had expressed the view that it should be valued at marginally less per hectare than the “Corunna” lease. The “Corunna” lease [10] Mr DA Routh, the registered valuer who gave evidence on behalf of the Department, stated that in his opinion the differences between the individual properties are only marginal. He agreed with Mr Fawckner’s opinion that the unimproved value per hectare of the “Corunna” lease should be slightly higher than the unimproved value of the “Bonnie Downs” lease. [11] Mr Routh had originally valued the “Bonnie Downs” aggregation at $120/ha and had applied the same rate per hectare to the “Bonnie Downs” lease. However, he had valued the “Corunna” lease at $122/ha, because he considered it to be slightly better country and it was smaller. Mr Routh contends that the unimproved values applied to the two leasehold properties should be maintained, even though the valuation of the aggregation had been reduced from $120/ha to $110/ha. Conclusion [12] For the reasons explained in the determination of the unimproved value of the aggregation, in my view a comparison of carrying capacities between “Dahlia” and the various components of “Bonnie Downs” is misleading, because the Department had arbitrarily revised the carrying capacities of both “Bonnie Downs” and “Dahlia”. This in turn affects any comparison on a sheep area basis. In my view, carrying capacities and sheep area values should be put to one side, and comparisons made on a direct comparison basis. [13] In its decision on the appeal on the “Bonnie Downs” aggregation, the Court found that on the evidence the country of “Dahlia” is superior to that of the “Bonnie -- 4 of 6 -- 5 Downs” aggregation.4 However, there was no evidence of how much less the unimproved value per hectare should be. In the circumstances, the Court adopted a valuation of $110/ha for the “Bonnie Downs” aggregation, compared with the unimproved value applied to “Dahlia”, which it found to be the superior property per hectare. [14] In my view, having regard to the unimproved value applied to “Dahlia” and the determination of the “Bonnie Downs” aggregation, the valuations applied by Mr Routh to the “Bonnie Downs” lease and the “Corunna” lease cannot be maintained. Mr Routh cannot justify the differences in the applied values on the basis that the two leasehold parcels are smaller than the aggregation. He had made only a slight difference in the value applied per hectare to the aggregation and the valuations applied to the “Bonnie Downs” lease and the “Corunna” lease. [15] However, Mr Routh gave evidence that the adjusted carrying capacities on “Bonnie Downs” and on “Dahlia” were part of a merging process with better quality and higher valued properties to the east. There is also evidence in other appeals that the quality of the country improves from the Corfield area towards Aramac to the east. [16] Having regard to that evidence, I have come to the conclusion that the larger “Bonnie Downs” lease should be valued at the same rate per hectare as the “Dahlia” sale. However, because the “Corunna” lease is slightly better country, is smaller and is further to the east, it should be valued at the slightly higher rate of $115/ha. Therefore, I propose to determine the unimproved value of the “Bonnie Downs” lease at 16,242 ha at $112.50/ha, or $1,827,000 and I propose to determine the unimproved value of the “Corunna” lease at 9,838 ha at $115/ha, or $1,131,000. Orders 1. In appeal RV2005/0153, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the “Bonnie Downs” 4 [2004] QLC 0100 at [85]. -- 5 of 6 -- 6 lease for rental purposes as at 1 October 2005 is determined at One Million, Eight Hundred and Twenty-seven Thousand Dollars ($1,827,000). 2. In appeal RV2005/0154, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the “Corunna” lease for rental purposes as at 1 October 2005 is determined at One Million, One Hundred and Thirty-one Thousand Dollars ($1,131,000). JJ TRICKETT PRESIDENT OF THE LAND COURT -- 6 of 6 --