Fawckner v Department of Natural Resources and Water [2008] QLC 36

LAND COURT OF QUEENSLAND CITATION: Fawckner v Department of Natural Resources and Water [2008] QLC 36 PARTIES: Robert Dale Fawckner (appellant) v Chief Executive, Department of Natural Resources and Water (respondent) FILE NO: AV2006/0152 DIVISION: Land Court of Queensland – General Division PROCEEDING: An appeal against an annual valuation DELIVERED ON: 8 February 2008 DELIVERED AT: Brisbane HEARD AT: Winton MEMBER: Mr JJ Trickett, President ORDER: The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Bonnie Downs” as at 1 October 2005 is determined at Two Million, Eight Hundred and Sixty-nine Thousand Dollars ($2,869,000). CATCHWORDS: Unimproved value – grazing property in Winton Shire – relativity with valuations in adjoining Aramac Shire – admissibility of agent’s evidence – direct comparison with analyses of improved sales – whether sales at market value – relativity with applied values to sales – carrying capacity – prickly acacia – Valuation of Land Act 1944 APPEARANCES: Mr P Crombie for the appellant Mr W Isdale, Executive Legal Consultant, Crown Law, for the respondent -- 1 of 26 -- 2 [1] This is an appeal by a landowner in the Shire of Winton against the unimproved value applied to his land by the Chief Executive, Department of Natural Resources and Water (the Department) under the provisions of the Valuation of Land Act 1944 (the Act). Background [2] Mr RD Fawckner (the appellant) is the owner of a grazing property known as “Bonnie Downs”, containing an area of 26,079.562 ha. As at 1 October 2005, the Department applied an unimproved value of $3,100,000, or $120/ha, to that land under the provisions of the Act. Mr Fawckner appealed to the Land Court against that valuation. The notice of appeal was lodged by his agent, Mr Alistair Boyd. The grounds of appeal are quite general in nature, but contend the valuation is excessive because of failures by the Department to take into account or make proper allowance for various factors, and/or to apply the correct principles of valuation. The owner’s estimate of unimproved value is stated to be $1,120,000. [3] The parties agreed that this case and the subsequent case of “Belmont”, be heard together, but on the application of Mr Isdale, the two matters were dealt with separately. However, the parties agreed that any relevant evidence in either of these cases be evidence in the other. Because there are many appeals against the Department’s valuations in the central west, they also agreed that any relevant evidence in other cases heard at Blackall and Longreach in previous and subsequent sittings, should also be treated as evidence in these two cases. Admissibility and Weight of Mr Boyd’s Evidence [4] Mr Boyd is the agent for Mr Fawckner. He lodged the appeal and assisted Mr Fawckner to prepare his evidence for this case. However, he also prepared a written statement which the appellant sought to tender. Mr Isdale objected to the admissibility of the majority of Mr Boyd’s statement. [5] Mr Boyd had prepared similar statements in respect of cases in the Shires of Barcaldine, Blackall and Tambo. He has detailed knowledge of many properties in the central western area and has tertiary qualifications in rural land management. The status of Mr Boyd’s evidence was argued in the Barcaldine Shire case of -- 2 of 26 -- 3 “Tara”.1 After hearing argument from Mr Ure and Mr Isdale in that case, I held that the factual evidence within the area of Mr Boyd’s expertise was admissible, but the parts of the statement that were argumentative and clearly partisan would not be admitted, but would be dealt with as part of the appellant’s submissions. [6] However, in that case, the appellant was represented by counsel, Mr Ure, instructed by the appellant’s solicitors. Mr Boyd, acting as agent for the appellant, assisted in the preparation of the appellant’s evidence. The limitations and scope of his evidence were therefore clearly defined. In the present case the situation is somewhat different. Mr Boyd realised the difficulty of acting both as an advocate/agent and as an expert witness. Therefore, at the opening of the case, he handed over the role of advocate to Mr Peter Crombie, a local landowner. He seemed to think that by withdrawing as advocate he would no longer have a conflict of interest as a witness. [7] However, Mr Boyd was mistaken. He is the agent for the owner. He helped him prepare his case and inspected the subject property and other properties in the area. His written statement in respect of “Bonnie Downs” and “Belmont” contains some facts, much historical material from various departmental valuers’ reports and a great deal of argument. [8] In view of my rulings in the “Tara” case, Mr Isdale was prepared to allow the factual material in Mr Boyd’s report to be admitted, but submitted that the opinions expressed and the argument be excluded from consideration. He did not contend that the whole of Mr Boyd’s statement was inadmissible. [9] As agent for the appellant, Mr Boyd is clearly partisan. This conflicts with the duty of an expert witness to provide independent assistance to the Court by way of objective, unbiased opinion in relation to matters within that person’s expertise. An 1 AB Walker v. Department of Natural Resources and Water [2008] QLC 0005. -- 3 of 26 -- 4 expert witness should never assume the role of advocate and argumentative or adversarial evidence may be rejected.2 [10] Mr Boyd’s statement is largely subjective and partisan. However, it also contains some facts and historical details. Cross suggests there is some authority for the proposition that an interest or a perceived interest in the outcome of litigation does not constitute a justification for the exclusion of expert evidence. It is simply a matter of weight.3 [11] Therefore, I intend to have regard only to relevant factual parts of Mr Boyd’s statement and treat the argumentative and adversarial statements as no more than submissions on behalf of the appellant. They will be accorded no evidentiary weight. Furthermore, where Mr Boyd’s factual statements were challenged by the Department, no weight was given to them. A somewhat similar approach was adopted by the Federal Court in Yarmirr v. Northern Territory of Australia (1998) 156 ALR 370 at 400. The Subject Land [12] According to Mr DA Routh, the registered valuer for the Department, “Bonnie Downs” is situated north-east of Winton, on the Olio to Muttaburra Road, with access by 9 km of the bitumen sealed Landsborough Highway and 102 km of formed earth road. Access can also be obtained by means of the Winton to Hughenden bitumen sealed road and thence by black soil roads with some gravel. However, access to the property is dry weather only, with roads being impassable for two weeks at a time or longer. [13] “Bonnie Downs” has the usual rural services, power, telephone and twice weekly mail service. It is used for wool growing and cattle grazing. 2 See Cross on Evidence, 7th Australian Edition 2004, at para 29080, referring to Fox v Perry (2003) 197 ALR 201 at [151]. 3 Cross, ibid. -- 4 of 26 -- 5 [14] Mr Routh describes “Bonnie Downs” as comprising two GHPLs, “Bonnie Downs” and “Corunna”, collectively known as “Bonnie Downs”, with a total area of 26,079.562 ha. He describes the country as predominantly gently undulating open Mitchell grass downs, with areas of pebbly ridges lightly to sparsely shaded with vinetree and whitewood. It is well shaded with coolibah along Lucella Creek. Parts are tending to be ashy on “Corunna”. Approximately 3,769 ha (14%) of alluvial soils along the watercourses. [15] Mr Routh explained that the Department’s records show the carrying capacity at 1 sheep to 1.7 ha. However, he seemed to be more comfortable with 1 sheep to 1.6 ha, which had been the Department’s historical carrying capacity. He did not know why it had been altered. [16] Mr CV Dyer, the registered valuer who gave evidence on behalf of the appellant, described “Bonnie Downs” as comprising approximately: 11,190 ha (43%) open to very lightly shaded undulating Mitchell grass downs on looser clay soils tending to grow more annual grasses, such as Flinders grass and herbages, with areas lightly timbered with whitewood and vinetree. 12,350 ha (47%) open undulating Mitchell grass downs. 2,540 ha (10%) creek channels, flats and hollows breaking into claypans, timbered with coolibah. Mr Dyer assessed the carrying capacity at 1 sheep to 1.8 ha, or 14,489 dry sheep equivalents. [17] Mr Fawckner, who has lived on “Bonnie Downs” virtually all his life and who would have better knowledge of the country than either of the valuers, took some issue with their descriptions. His own description was in these terms: “These lots are comprised of gently undulating open Mitchell grass downs, with coolibah along creeks and 400 to 450 ha of claypan adjacent to creeks, considerable areas of bull Mitchell and large areas of loose country. The claypan areas adjacent to Lucella and Culloden Creeks are bare of grass only growing some herbage after rain. The claypans drain into swampy bull Mitchell country which grows no other grass and very little herbage. It cracks badly when dry and when wet becomes an absolute quagmire. Over the years, probably 90% of sheep bogging problems occur in this swampy country. Large areas of loose country occur on the higher areas away from the creeks. The vegetation pattern in this area is precise. Next to the creeks are the claypans, -- 5 of 26 -- 6 surrounded by bull Mitchell swampy areas. Further from the creeks, is the best curly Mitchell country with tighter soils, often with very light pebbles or gidyea stones. Still further away from the creeks, is found the looser country. This country is sparsely covered with Mitchell grass, grows Flinders grass (a short life annual) after summer rains and not much else that is edible. It is boggy after rain and when dry, it cracks badly. The cracks become so big that mustering on motorbikes and/or horses becomes hazardous.” [18] Mr Fawckner’s estimate of carrying capacity is also 1 sheep to 1.8 ha. The Case for the Appellant [19] The appellant’s main concern is the unimproved value of “Bonnie Downs” of $120/ha, compared with the lower unimproved values applied to similar or better properties to the south and south-east. Mr Fawckner gave evidence supplemented by a DVD recording to illustrate the differences in the country types. [20] According to Mr Fawckner, past valuations by the Department have reflected the quality of the country and decreased westerly from the Aramac Shire into Winton Shire. The DVD tendered by Mr Fawckner commences on a property known as “Kenya”, just west of Muttaburra, which is well shaded gidyea and boree country, with tight vinetree/whitewood ridges on the western side. It has an abundance of mimosa which, according to Mr Fawckner, is a typical sign of tight country and has large stands of buffel grass, as well as Mitchell grass and other native grasses. [21] Moving westward through “Levuka”, the DVD shows well shaded country with an abundance of buffel grass and Mitchell grass, through “Eskdale” adjoining the “Corunna” block of “Bonnie Downs”, on the Winton/Aramac Shire boundary. This shows very few trees, a lack of Mitchell grass, with Flinders grass and some other inferior grasses and no mimosa, which Mr Fawckner contends is a typical sign of loose country. [22] The DVD then proceeds onto “Bonnie Downs”, showing the lack of shade, lack of mimosa and the predominance of early Spring grass, but little Mitchell grass. One segment of the DVD was recorded on the southern boundary of “Bonnie Downs” adjoining “Glenullin”, which is situated in the Aramac Shire and shows the similarity of the two properties. -- 6 of 26 -- 7 [23] The DVD then records the other appeal property, “Belmont”, again showing the lack of shade, lack of mimosa and cracking ashy soils. [24] The lack of relativity between the valuations of similar properties in the adjoining Aramac and Winton Shires has been an ongoing concern to Mr Fawckner. On several occasions he has appealed to the Land Court. On at least one occasion he succeeded in having the Department’s valuer admit that the country on “Glenullin” and “Bonnie Downs” is “much of a muchness”. [25] Mr Boyd gave evidence that there had been a dramatic change in the relativity between valuations in the Aramac Shire and those in the immediately adjoining Winton Shire. According to Mr Boyd, the 2005 valuation had resulted in increases of between 200% to 270% in Aramac Shire, while the increases in Winton Shire had been of the order of 450%. As a result, the vastly superior property, “Kenya”, is now valued at $98.77/ha, compared with “Bonnie Downs” at $120/ha and “Belmont” at $114.64/ha. The similar and adjoining property “Glenullin” is valued at $80.70/ha. [26] According to Mr Boyd, at the time of the last valuation by the Department in 2001, “Glenullin” in the Aramac Shire was valued at $21.40/ha, while “Bonnie Downs” in Winton Shire was valued at $21.86/ha and “Belmont”, also in Winton Shire, at $22.11/ha. That was not challenged by the Department. [27] Mr Boyd contends that it has long been recognised that the lands in the western part of Aramac Shire are superior to the lands in the eastern part of Winton Shire. However, as a consequence of the 2005 valuation, the Department’s valuations of the properties on the western side of Aramac Shire are all considerably less than $100/ha, while lands in the adjoining eastern part of Winton Shire have valuations well in excess of $100/ha. In Mr Boyd’s submission, that relativity is wrong. [28] Registered valuer, Mr Dyer, explained that he had been retained by the appellants, not to make assessments of the unimproved values of “Bonnie Downs” and “Belmont”, but to give his opinion of the quality of the downs country in the western part of Aramac Shire and in the eastern part of Winton Shire. Mr Dyer had made a general inspection of the country types on the properties “Kenya”, “Levuka”, -- 7 of 26 -- 8 “Hanworth”, “Bengal” and “Glenullin” in the western part of Aramac Shire and of “Eskdale”, “Lucella”, “Bonnie Downs” and “Belmont” in the eastern part of Winton Shire. [29] Mr Dyer concluded that: “… as a general rule, the overall country type deteriorates the further west you go. ‘Kenya’, ‘Levuka’, ‘Hanworth’ and ‘Bengal’ have tighter Mitchell grass downs, tending to be pebbly with lightly shaded ridges, generally having heavy buffel pasture. From the western side of ‘Levuka’ the country tends to become less shaded with a greater percentage of looser or ashy soils.”4 [30] Mr Dyer expressed the opinion that “Glenullin” and “Bonnie Downs” are very similar, while “Belmont” has larger areas of ashy downs than “Bonnie Downs”, and would have a lower carrying capacity for that reason. [31] Mr Dyer explained that the ashy soils on the downs country grow less bulk grasses than the tighter soils, which have a much larger body of Mitchell grass, while the looser soil tends to grow more annual pasture, such as Flinders grass rather than perennials, such as Mitchell grass. He said that in good seasons the ashy country is as good as the tighter downs, due to the proliferation of herbage, annuals and even perennials. However, in lighter seasons, the country has a much lower carrying capacity than the tighter downs. [32] In his opinion, the relativity of values in the so-called Aramac Shire tongue (running west from Muttaburra) appears to be correct. However, in the Winton Shire immediately adjoining, similar properties are valued much higher than those in Aramac Shire. [33] Mr Dyer’s evidence supports the appellant’s contention that there is a serious lack of relativity between the valuations in the western part of Aramac Shire and the valuations in the eastern part of Winton Shire, particularly the two appeal properties. 4 Exhibit 5, p.1. -- 8 of 26 -- 9 The Case for the Department [34] Mr Routh was responsible for the 2005 valuation of the Winton Shire and other shires to the west. However, he was not responsible for the valuation of Aramac Shire. He did not inspect any sales in that Shire and seemed to have very little knowledge of the basis for the valuations in the Aramac Shire. It is clear, however, that they were not based on the sales that he relied upon for the valuations in Winton Shire. [35] Mr Routh explained that he had investigated all property sales in the Winton area since the date of the previous valuation, 1 October 2001. However, he had placed particular emphasis on the market from July 2004 to October 2005, where the majority of the sales evidence lay. He inspected and analysed those sales. [36] In support of the Department’s valuation of “Bonnie Downs” at $120/ha, Mr Routh relied upon four sales. One of those sales, “Dahlia”, adjoins “Bonnie Downs” to the south-west. Two other sales, “Ashfield” and “Knapdale”, are situated to the north of Winton on the bitumen-sealed Winton to Hughenden road and adjacent to the Winton to Hughenden railway line. The fourth sale, “Goolma”, is situated approximately 48 km west of Winton, with most of its access by means of the bitumen-sealed Winton to Boulia road. [37] Details of those sales in the order they appear in Mr Routh’s report are as follows: 1. “Dahlia”, with an area of 13,327ha, sold in August 2005 for $2,800,000 ($210/ha) and was analysed by Mr Routh to show an unimproved value of $148.66/ha. However, for the purposes of the 2005 valuation, Mr Routh applied an unimproved value of only $112.55/ha. Mr Routh described “Dahlia” as open to lightly shaded Mitchell grass downs, with areas of vinetree and whitewood ridges with light pebble in places, mimosa in patches and coolibah on the creeks. Generally firm country with some looser patches throughout and an area of claypan on the creek lines. The Department records its carrying capacity at 1 sheep to 1.8 ha. Mr Routh was of the opinion that “Dahlia” is inferior per hectare to “Bonnie Downs” due to the nature of its land and its access. 2. “Ashfield”, with an area of 9,783 ha, sold in March 2005 for $1,990,000 ($203.41/ha) and was analysed by Mr Routh to show an unimproved value of $164.61/ha. However, for the 2005 valuation he applied only $117.55/ha. -- 9 of 26 -- 10 Mr Routh described “Ashfield” as comprising open to lightly shaded downs on the western side, merging to good pebbly downs west of the stock route. The eastern side of the property is well grassed, open brown soil downs tending loose, with light pebble in the south. Coolibah channels run along the eastern side of the stock route from north to south. Its carrying capacity is shown as 1 sheep to 1.8 ha. In comparing the much smaller “Ashfield” with “Bonnie Downs”, Mr Routh states that the sales evidence in 2005 does not indicate any difference for size in the price paid per hectare for downs blocks. In his opinion, the sale has better location and access than “Bonnie Downs” but is severed by the stock route. He considers it to be marginally less productive, but was of the opinion that on a per hectare basis it was comparable. 3. “Knapdale”, with an area of 8,178.75 ha sold in March 2005 for $1,785,000 ($218.24/ha), was analysed by Mr Routh to $181.61/ha, but he applied only $128.81/ha to that property. Mr Routh described “Knapdale” as comprising mainly (75%) open Mitchell grass brown soil downs, with approximately 20% open ashy downs and 5% coolibah channels with claypan and flooded flats. Its carrying capacity was stated to be 1 sheep to 1.8 ha. In comparing “Knapdale” with “Bonnie Downs”, Mr Routh repeated his comments regarding the lack of evidence that size was a factor in the purchase price per hectare for downs blocks. Overall he considered the sale to have better location and access, but pointed out that it is severed by the main road and the railway line. He thought that they were comparable with regard to the nature of land. Overall he considered that “Knapdale” was superior per hectare to “Bonnie Downs”. 4. “Goolma”, with an area of 9,869 ha, sold in May 2005 for $2,020,000 ($204.68/ha), was analysed by Mr Routh to show an unimproved value of $115/ha, but for the 2005 valuation he applied an unimproved value of only $99/ha. Mr Routh described the country of “Goolma” as comprising mainly open pebbly brown soil downs, with some ashy country in the centre, with a small area of coolibah channels on the Western River, with areas of claypan on the northern boundary. He was of the opinion that it was better watered than “Bonnie Downs”. However, notwithstanding this advantage and the superior access, he was of the opinion that “Goolma” was inferior to “Bonnie Downs” per hectare because of its inferior country. [38] The principal issue is the extent of the increase in the valuation of “Bonnie Downs”, compared with the much lower valuations of immediately adjoining similar properties in the Aramac Shire. However, before considering that issue, I will refer -- 10 of 26 -- 11 briefly to the legislation and relevant legal principles governing the assessment of unimproved value. The Relevant Legislation and Legal Principles [39] Under the provisions of the Act, the Department is required to make annually or periodically a valuation of all land throughout the State. A valuation of each parcel of land is to be the “unimproved value” of that land, which is defined to mean 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 the improvements on that land do not exist: s.3(1). However, the unimproved value must not be less than the sum that would be obtained by deducting the value of improvements from the improved value of the land: s.3(2). [40] The Act thus requires the Department to ascertain the unimproved market value of each parcel of land as at the date of valuation, assuming that there were no improvements on the land, but also assuming the existence of all present facilities and amenities external to the land, such as roads, power, access and the like. [41] The test for the determination of market value was established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the Court held that the market 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 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. [42] It has been well established that the unimproved value of land is ascertained by prices that have been paid for similar parcels of land.5 However, in most areas there 5 Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137-138. -- 11 of 26 -- 12 is essentially no unimproved land, as most land has been improved to a greater or lesser extent. Therefore, there are usually no sales of unimproved land that can be used as a basis for assessing unimproved value. It is therefore necessary to analyse sales of improved land for the purpose of ascertaining, as far as is possible, what part of the purchase price of the sale property relates to improvements and what part is attributable to the land itself.6 [43] That was the process adopted by the Department in valuing the lands in the central western Shires as at 1 October 2005. [44] In this case, Mr Fawckner argues that the valuation of “Bonnie Downs” is out of relativity with other land. On a number of occasions, the Land Appeal Court has dealt with similar arguments and has determined the following principles:  It is desirable that valuations of comparable lands should bear proper relativity, one to the other, so long as the valuations are soundly based. It is, however, untenable to adopt a value for one parcel on relativity with another which has no sound basis.7  Whilst maintenance of correct relativity is of considerable importance for rating valuations, the use of the principle of relativity should not be preferred to the exclusion of relevant (even if not ideal) sales evidence.8  If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error.9 [45] Those cases clearly establish that valuations based upon sound sales evidence are to be preferred to valuations based on the relativity with valuations of other comparable lands. Furthermore, the onus and burden of proof are upon the appellant and the valuation by the Department is deemed to be correct until proved otherwise: s.33. However, if it can be shown that in making the valuation the Department acted upon 6 Valuer-General v Marano (1978) 5 QLCR 194. 7 Barnwell v The Valuer-General (1989) 13 QLCR 13 at 16. 8 Fischer v The Valuer-General (1983) 9 QLCR 44 at 46. 9 Barnwell v The Valuer-General at 16-17. -- 12 of 26 -- 13 a wrong principle, or made a serious error of fact, or the valuation was made by a method fundamentally erroneous, the presumption of correctness is rebutted.10 The Issues [46] While the relativity of values between the eastern part of Winton Shire and the western part of Aramac Shire was the principal issue in this case, there were other related issues. Similar issues were previously considered in the appeal by Mr Fawckner against the Department's valuation of “Bonnie Downs” as at 1 October 2001.11 In a combined decision, Mr Wenck also determined appeals against unimproved values of many other properties in the Shires of Winton, Longreach and Aramac. Carrying Capacity [47] As Mr Wenck pointed out in that case, the Department's historical carrying capacity of “Bonnie Downs” was 1 sheep to 1.6 ha (1 sheep to 4 acres) and that carrying capacity had been adopted by the Department's valuer. In the present case, and in the earlier cases, Mr Fawckner has consistently contended for a carrying capacity for “Bonnie Downs” of 1 sheep to 1.8 ha (1 sheep to 4½ acres). [48] However, Mr Routh has adopted a carrying capacity of 1 sheep to 1.7 ha (1 sheep to 4¼ acres). In his oral evidence he explained that the departmental records indicate that following the objections to the 2001 valuation, the carrying capacity of “Bonnie Downs” was “let out” from 1 sheep to 1.6 ha to 1 sheep to 1.7 ha. Mr Routh adopted the Department's revised carrying capacity of 1 sheep to 1.7 ha, but he expressed some surprise. He agreed with Mr Dyer's comment that “we don't do carrying capacity for 4¼ acres”. Although he described it as “a funny figure”, he said that he 10 Brisbane City Council v The Valuer-General (1978) 140 CLR 41 at 56-57. 11 Fawckner & Ors v Department of Natural Resources and Mines [2004] QLC 0100. -- 13 of 26 -- 14 did not have an issue with it being 1 sheep to 1.7 ha any more than he had an issue with it being 1 sheep to 1.6 ha. [49] Carrying capacity also became an issue in the comparison of “Bonnie Downs” with Mr Routh's Sale 1, “Dahlia”, the Department’s carrying capacity of which was shown to be 1 sheep to 1.8 ha. Under cross-examination by Mr Crombie, Mr Routh conceded that the Department's historic carrying capacity of “Dahlia” was 1 sheep to 1.6 ha, but the carrying capacity had also been “let out” from 1 sheep to 1.6 ha to 1 sheep to 1.8 ha. Mr Routh was not aware why the carrying capacity had been revised. [50] The question of carrying capacity again arose while Mr Routh was being cross- examined about the sale of a property known as “Rangelands”, which was not relied on by the Department. The Department's records showed the carrying capacity of the property as 1 sheep to 1.9 ha. Mr Routh speculated that the carrying capacity would include the effect of the prickly acacia infestation on “Rangelands”. However, he thought it was somewhat low and was surprised it was not 1 sheep to 1.8 ha. [51] It is of some concern that the carrying capacities adopted by Mr Routh do not accord with his own assessment. While carrying capacity is only one element in comparing one property with another, it is a crucial element for any comparison of sheep area values. If there is doubt about the carrying capacity, there will be doubt about the sheep area value. [52] It has been explained to this Court on several occasions that in undertaking annual valuations, the Department does not inspect every property. Instead, the valuers inspect and analyse the appropriate sales and then, using the Department's historical records, together with other resources that are available, such as the Regional Ecosystem mapping, the WARLUS Land Study, satellite imagery and aerial photographs, the annual valuations are struck by comparison with the sales. [53] The annual valuations depend upon two assumptions: (i) that the Department's historical records are accurate, and -- 14 of 26 -- 15 (ii) that the previous valuations are in correct relativity one to the other. [54] If either of those assumptions is wrong, then there is a danger that the annual valuation will not achieve the desired result of having relative valuations throughout the area. [55] From time to time changes to the Department’s historical records must be made. For example, previous valuations have been determined on the basis that the scrub on individual properties had potential for development, but broadscale clearing of remnant areas is now prohibited under vegetation management legislation. The valuations of those properties with remnant vegetation had to be reassessed on the assumption that the uncleared areas had no potential for development. That had a major impact on the relativity of values in those areas. However, in the present cases there is no such complication. [56] As they are important in the comparison process, it is of concern that the Department’s historic carrying capacities of some properties have been altered for reasons which Mr Routh could not explain, or does not appear to agree with. As was explained by Mr Wenck in the previous Fawckner case, the carrying capacities adopted by the Department's valuers may not equate with the actual numbers of stock run by an individual landowner. Management practices and stocking policies vary, but as long as the Department’s assessments are relative from one property to the other, carrying capacities can provide an important tool in the comparison process. However, if those comparative carrying capacities are changed in an attempt to get closer to the actual numbers carried by an individual landowner, then it is essential that it is not done on an ad hoc basis, but that a review of the carrying capacities be carried out over the whole of the area. [57] I will consider carrying capacities further in making the individual comparisons between sales and subject lands, and between the subject lands and other similar properties. -- 15 of 26 -- 16 Prickly Acacia [58] The issue of prickly acacia arose in the “Tara” case,12 in Barcaldine Shire. In that case there was no evidence that the Department had made any allowance for the presence of prickly acacia, although the Department's valuer had expressed the view that the sale price of “Ashgrove” was affected by the presence of prickly acacia. Mr Dyer was the valuer for the appellant in that case. He gave evidence that he was unable to find a sale where the presence of prickly acacia had affected the price paid. It was his opinion that no allowance should be made for the presence of prickly acacia. The Department’s valuer, Mr Haydon, was unable to provide any evidence of the effect of prickly acacia on a sale, suggesting that perhaps purchasers avoided properties infested by prickly acacia. In the absence of any definitive evidence, I could make no allowance in the sale of “Ashgrove”, except to the extent that the infestation must affect the carrying capacity. [59] However, in the present case, when discussing the sale of “Rangelands”, Mr Routh said that he had made an allowance of 25% in the unimproved value of that property because of a severe prickly acacia infestation. It seems that in Winton Shire at least, the Department made allowances for the presence of prickly acacia. [60] The issue again arose in the comparison of “Bonnie Downs” with the adjoining property, “Glenullin”, immediately to the south in Aramac Shire. It emerged in evidence that “Glenullin” had prickly acacia infestation, while “Bonnie Downs” did not. However, that did not account for the large discrepancy in the valuations of otherwise similar lands. [61] In the decision Fawckner & Ors v Department of Natural Resources and Mines, Mr Wenck recorded that there was evidence from the Department (at least in respect of properties in the Aramac Shire), that allowances had been made for the presence of prickly acacia. In respect of a property known as “Highbury”, an allowance of 12.5% had been made for a severe infestation. In the case of “Glenullin”, an allowance of 2.5% was made for prickly acacia infestation over an area of 1,100 ha, 12 AB Walker v Department of Natural Resources and Water. -- 16 of 26 -- 17 or 14% of the property. However, in the present case, there was no evidence of the extent of the infestation on “Glenullin”, or what if any allowance was made. The Sales [62] In Mr Boyd's submission, the Department's valuations are not soundly based. He contends that the Department did not apply the analysed unimproved values to any of the four sales referred to by Mr Routh. Furthermore, he contends, the Department did not have regard to “Rangelands”, the only genuine sale. There were other sales, he submits, that the Department quite rightly rejected because they were either too high or not comparable. In summary, Mr Boyd's comments on each of the sales of which he had knowledge are as follow:  “Dahlia”, the closest sale to the subject lands, relied on by the Department, but the analysis of the sale not applied, comparable to but valued less than either of the subject lands, purchased by an over- anxious purchaser.  “Rangelands”, a sale not referred to by the Department, sold at auction on 22 April 2005 for $2,135,000, to which the Department applied an unimproved value of $2,000,000 in October 2005, which Mr Boyd regards as the only "genuine" sale in the area.  “Knapdale”, a sale relied on by the Department, which Mr Boyd regards as a high sale, to which the Department applied significantly less than the analysed unimproved value.  “Ashfield”, a sale relied on by the Department, the circumstances of which Mr Boyd was unaware, but to which the Department applied considerably less than the analysed unimproved value.  “Goolma”, a sale relied on by the Department, situated over 100 km west of the subject lands, on the western side of the Winton/Hughenden railway line, which Mr Boyd regards as completely different to “Bonnie Downs” and “Belmont”.  “Fairview”, a sale not referred to by the Department, situated just east of the town of Kynuna, which is situated 164 km north-west of Winton. Mr Boyd regards the sale as not comparable to the subject lands.  “Congewoi”, which adjoins the sale of “Fairview”. Mr Boyd regards this sale as not comparable to the subject lands.  “Lana Downs”, a sale not referred to by the Department, situated north of Winton, but west of the Winton/Hughenden railway line, which Mr -- 17 of 26 -- 18 Boyd considers to be a high sale and not comparable to the subject lands. [63] Of the eight sales to which he referred, Mr Boyd contends that only the sale of “Rangelands” is a genuine sale. He suggests that all the other sales were high sales, but apart from “Dahlia”, he did not explain why their sale prices were not at market value. [64] The thrust of Mr Boyd's submission is that the sales referred to by the Department are high sales and the purchasers are either imprudent or over-anxious, because the sale prices are the same per ha as those paid for better quality country further to the east in Aramac Shire. In Mr Boyd's submission, the historical trend was for sale prices to decline from Aramac towards Winton and beyond. However, the evidence in this case is that the properties around Winton and west of Winton were selling for the same prices per ha as properties at Aramac. Mr Boyd submits that the Winton sales could not be at market value, but offered no cogent explanation of why so many sales were selling at similar improved sale prices per ha in 2005. [65] It is to be regretted that Mr Dyer, the registered valuer called on behalf of the appellant, had not investigated the sales in the area. Apart from confirming that there was a general deterioration in the quality of country from Aramac west towards Winton and beyond, Mr Dyer was unable to comment on why properties near Winton were selling for the same improved sale prices per ha as properties adjacent to Aramac, such as “Brendallan”. [66] “Dahlia” should be the key sale. It adjoins both “Bonnie Downs” and “Belmont”, sold in August 2005 close to the date of valuation and is generally similar country. However, Mr Fawckner contends that the purchaser was desperate for grass and paid more than market value because he was over-anxious. According to Mr Fawckner, the purchaser told him, “I know I paid too much for ‘Dahlia’, but what else could I do?”13 13 Exhibit 3, p.7. -- 18 of 26 -- 19 [67] On the other hand, Mr Routh gave evidence that he had also spoken to the purchaser who told him that he had paid the going rate for “Dahlia”. In any case, Mr Routh was of the opinion that “Dahlia” was not a high sale as it fitted the general pattern of sales of downs country in Winton Shire, at $210/ha improved. This might explain the apparent contradiction. The purchaser had to pay the going rate for “Dahlia”, but he thought that it was too much. [68] Similarly, with the sales of “Ashfield” and “Knapdale”, the appellant contends that they are high sales because they are “paddock sales”, with few structural improvements. However, those sales are also in the general pattern, according to Mr Routh. Even “Goolma”, on the other side of the railway line, with admittedly inferior country and carrying capacity, sold for $205/ha improved and fitted the general pattern. [69] I cannot accept the appellant’s submission that all those sales are high and should be rejected. However, it seems to me that Mr Routh had some difficulty reconciling those sales. There is a significant difference in each case between his analysed unimproved value and his applied unimproved value. Mr Routh suggested that such discounting was required for the maintenance of relativity with other sales which, he inferred, had been applied in full. However, no details were provided of those sales, or why it was thought necessary to discount all four sales relied on by the Department. [70] Of the other sales mentioned in the appellant’s submissions (through Mr Boyd), “Fairview” and “Congewoi” near Kynuna, are too far away to be of any assistance. The sale of “Lana Downs” was not investigated or analysed by Mr Routh, because of the large number of stock involved in the transaction. [71] That leaves “Rangelands” as the only sale which Mr Boyd contends is a genuine sale. It sold at auction in April 2005, a little over five months prior to the date of valuation, for $2,135,000. The Department applied an unimproved value of $2,000,000, which Mr Boyd submits could not possibly account for the value of all improvements. -- 19 of 26 -- 20 [72] Mr Routh regards “Rangelands” as a low sale, because it sold for $57/acre ($141/ha), compared with the other sales at $85/acre ($210/ha). In his opinion, it sold cheaply because of a significant prickly acacia infestation, which is not only costly to treat, but which impacts on the carrying capacity. [73] Mr Routh did not deny that his analysis of the sale resulted in an unimproved value which is significantly less than the unimproved value he applied. As I understand his evidence, he applied $146.50/ha to “Rangelands”, but discounted that valuation by 25% because of the severe infestation of prickly acacia. [74] Therefore, notwithstanding the substantial differences between the analysed unimproved values and the applied unimproved values, the weight of evidence is against the appellant’s contention that the four sales relied on by the Department are high sales and that “Rangelands” is the only reliable sale. In order to reject all four sales, I would require much more cogent evidence than has been produced by the appellant. While the reason why Mr Routh applied substantially less than the analysed unimproved values was not satisfactorily explained, if he had applied the analysed unimproved values in full to the sale properties themselves, then by comparison, he would have arrived at substantially higher values for both “Bonnie Downs” and “Belmont”. [75] Nor can I accept that the sale of “Rangelands” is the only reliable sale, notwithstanding that it sold at auction. Mr Routh thought it was a low sale because the infestation of prickly acacia frightened prospective purchasers away. He valued “Rangelands” by comparison with other sales, probably the same sales used to value “Bonnie Downs” and allowed a discount of 25% for the prickly acacia. There was no cogent evidence from the appellant to back up the contention that “Rangelands” should be relied on to the exclusion of the other sales. [76] While I find it difficult to accept that as at 1 October 2005, the downs country in Winton Shire was selling for the same price as the downs country at Aramac, the four sales relied on by the Department sold at roughly the same price per ha as the better quality property “Brendallan” immediately adjacent to the town of Aramac. Mr Dyer realised that as the productivity of the country declined from the -- 20 of 26 -- 21 Aramac/Barcaldine area towards Winton, the sheep area values should decline as well.14 However, he had not investigated or analysed the Winton sales, so was unable to take the matter further. [77] In his oral evidence, Mr Routh said that no matter where they are in the Shire, all downs blocks sold for around $85 per acre and that later sales were for even higher prices. He could offer no explanation as to why the sales at Winton were so high, except to suggest it was because more purchasers had ready access to two to three million dollars. In the circumstances, I must accept the weight of evidence that the four sales were at market value at the relevant date. [78] Having made that finding, it is now necessary to examine the appellant’s other contention concerning the relativity between “Dahlia” and “Bonnie Downs”. The Comparison of “Dahlia” and “Bonnie Downs” [79] Mr Routh has valued “Dahlia” at $112.55/ha and “Bonnie Downs” at $120/ha. As mentioned earlier, the Department’s historical carrying capacity of both properties was 1 sheep to 1.6 ha. However, the carrying capacities had been “let out”, “Bonnie Downs” to 1 sheep to 1.7 ha and “Dahlia” to 1 sheep to 1.8 ha. Mr Routh was not responsible for the revision of carrying capacities, but accepts them. The relative sheep area values are $202.60 for “Dahlia” and $204 for “Bonnie Downs”. [80] The appellant contends that “Bonnie Downs” is inferior country to “Dahlia” and should have a lower unimproved value per ha. In his opinion, the relativity of Mr Routh’s applied values is wrong. [81] In cross-examination, Mr Crombie put to Mr Routh that his own descriptions of the country suggest that “Dahlia” is superior to “Bonnie Downs”. Mr Routh responded in the following terms: “I would have said they were similar. ‘Bonnie Downs’ is a well run property … ‘Bonnie Downs’ is larger, it’s got the road frontage that ‘Dahlia’ has not got. ‘Dahlia’ has got a nice run of country running through it and … its got the channels which are shaded. The access to ‘Dahlia’ is past ‘Carraward’, I know it’s a detriment that you’ve got to open gates all the time you go in and out of the property. I know I’ve 14 Transcript, pp57-58. -- 21 of 26 -- 22 certainly put in a couple of grids because I got sick of opening gates. So all those things taken into account, I think I’d prefer ‘Bonnie Downs’ to ‘Dahlia’.”15 [82] When it was suggested to Mr Routh that “Dahlia” had far more tree cover than “Bonnie Downs”, he responded: “They are both pretty open. ‘Dahlia’ has perhaps got a bigger run of channel through the middle of it and up to the north-west corner, but yes, perhaps it is a bit more treed, but there’s still large areas of ‘Dahlia’ that are open.”16 [83] Mr Fawckner who knows “Dahlia”, well described it as tighter country compared with the loose country on “Bonnie Downs” and better shaded. As he put it, “… ‘Dahlia’ is probably the pick country in the area … a nice handy little block.”17 [84] Mr Peter Crombie, whose property “Lucella” adjoins “Dahlia”, had inspected the sale property. He described “Dahlia” as a well shaded block with tighter country. For the purposes of this case, he had taken photographs of “Dahlia” in the week before the hearing. The general thrust of his evidence was that “Dahlia” is superior to “Bonnie Downs” per ha, because it is tighter country and better shaded. [85] In my view, the evidence is convincing that the country on “Dahlia” is superior to that on “Bonnie Downs”. There is therefore no reason why its carrying capacity should be inferior to “Bonnie Downs”. If anything, it should be superior. However, it seems that prior to the recent “letting out” of the carrying capacities, the Department had the same carrying capacity of 1 sheep to 1.6 ha on both properties. Mr Routh did not know the reason for the revision of those carrying capacities, but he was prepared to accept them. In my view, those revised carrying capacities have led to an unwarranted change of relativity. [86] The danger of arbitrarily revising carrying capacities is well illustrated in this case. If the Department had retained the previous carrying capacities of 1 sheep to 1.6 ha for both properties, the sheep area value for “Dahlia” would be $180. The application of a similar sheep area value to “Bonnie Downs” would result in much the same value per ha unimproved to that property. However, with the revision of 15 Transcript, p.91. 16 Transcript, p.92. 17 Transcript, p.21. -- 22 of 26 -- 23 the Department’s carrying capacities, the sheep area value resulting from the applied value to “Dahlia” is $202.60. If the revised carrying capacity of “Bonnie Downs” of 1 sheep to 1.7 ha is applied to that sheep area value, the result is $119.17/ha, very close to the $120/ha applied by Mr Routh. This illustrates how the arbitrary revision of carrying capacities can result in significant changes to relativities, if sheep area values are used for comparison purposes. [87] Putting sheep area values to one side, on a direct comparison basis no reason has been shown why the valuation of “Bonnie Downs” should be higher per ha than that of “Dahlia”. I accept the evidence of Mr Crombie that on a per ha basis, “Dahlia” is superior to “Bonnie Downs”. [88] The only other reason for the difference in value per ha was that Mr Routh regarded the access to “Dahlia” as inferior to that of “Bonnie Downs”, because of the number of gates, notwithstanding that it is closer to Winton. In my view, that would hardly justify a difference of $7.45/ha. [89] Having regard to the whole of the evidence, I have come to the conclusion that the valuation of “Bonnie Downs” is excessive compared with the valuation per ha applied to “Dahlia”. All the evidence indicates it should be less. However, there is no evidence to indicate just how much less. In the circumstances, I propose to adopt a valuation of $110/ha for “Bonnie Downs”. That amounts to a rounded total valuation of $2,869,000. The Lack of Relativity between Aramac Shire and Winton Shire [90] In this case, the appellant contends that the valuation of “Bonnie Downs” is out of relativity with the valuations of properties immediately adjoining to the south and better quality properties to the east, all of which are in the Aramac Shire. In this he has been successful. [91] However, he also contends that the valuation of “Bonnie Downs” should be reduced so that it is relative to the Aramac valuations. To succeed in this contention, he had to prove that the sales relied on by the Department were unreliable, because the purchasers of all four properties had been over-anxious and had paid more than -- 23 of 26 -- 24 market value. Alternatively, he had to prove that the Department’s valuer, Mr Routh, had erred in the analyses of those sales. He has failed to do so. [92] The appellant also contends that the Department had abandoned those sales by applying significantly less than the analysed unimproved values. However, while this was not fully explained, the appellant could offer no convincing alternative. In any case, it has been proved that the valuation of “Bonnie Downs” is not excessive in relation to the unimproved values derived from the sales. If Mr Routh had applied the analysed unimproved values, the valuation of “Bonnie Downs” would have been significantly higher. [93] However, for reasons explained previously, I have found that the valuation applied to “Bonnie Downs” is out of relativity with the valuation which Mr Routh applied to his principal sale, “Dahlia”, and I have altered the valuation accordingly. [94] That does nothing to remedy the lack of relativity between the valuations in Winton Shire and those in the western part of Aramac Shire. Mr Routh said he became aware of the difference only as a result of objections against the 2005 valuations. He was not responsible for the valuation of Aramac. His responsibility was the valuation of Winton Shire. However, he concedes that the country on properties such as “Kenya” would be significantly superior to that on “Bonnie Downs” and it seems that he is less than pleased with what he called the “cliff face” of valuations.18 [95] The situation has arisen because two different valuers were responsible for the valuations of the two Shires. Mr Schefe, the Department’s valuer responsible for the Aramac Shire, apparently knew little or nothing about the sales in Winton Shire. He certainly had not relied on the sale of “Dahlia”, but had relied on sales in the Aramac Shire, some of which were discussed in the “Glenample” case.19 As mentioned previously, his principal sale of downs country was “Brendallan”, which sold in September 2004 for $204.53/ha. Other downs sales were “Ascot Downs” in May 2005 for $206.35/ha and “Illabunda” in August 2005 for $197.70/ha. No sales 18 Transcript, p.83. 19 Elliott v Department of Natural Resources and Water [2008] QLC 0009. -- 24 of 26 -- 25 further to the west were relied on. Mr Dyer, the registered valuer who gave evidence for the appellant in this case and in the “Glenample” case, has investigated the relativity of the properties in the western end of Aramac Shire and expressed the opinion that they appear to be in correct relativity, one with the other. [96] On the other hand, Mr Routh gave evidence that he knew nothing about what happened in Aramac. He relied on somewhat later sales in the Shire of Winton and endeavoured to ensure that the relativity of valuations within that Shire was correct. It seems that there was no attempt on the part of the Department to coordinate the valuations between the two Shires. That has resulted in a quite spectacular lack of relativity in the valuations of similar properties simply because they are situated on different sides of the Shire boundary. [97] The appellant contends that I should correct the relativity by altering the valuation of “Bonnie Downs” so that it is relative to the valuations of properties in the Aramac Shire. However, if the valuations in Winton Shire are correctly based on the sales within that Shire, then it is the valuations in Aramac which are incorrect. As was pointed out in Barnwell v The Valuer-General, uniformity of valuations between different properties with similar land should be made by correcting inaccuracies, rather than making an inaccurate assessment in order to secure uniform error. That would be the result of reducing the valuation of “Bonnie Downs” to the level of the Aramac valuations. [98] The only other alternative is that the Aramac valuations are soundly based on the sales in that Shire and that the valuations in Winton are excessive because they are based on inappropriate sales. The evidence in the present case is against such a proposition. [99] Clearly there is an undesirable lack of relativity. I have no power to correct that relativity in the present case. All I can do is point out to the Department that there has clearly been a lack of coordination in the valuation of the two Shires. Failure to correct that relativity will perpetuate what is obviously an inequitable and unfair situation which has led to understandable dissatisfaction by landowners in the Winton Shire. -- 25 of 26 -- 26 Order The appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of “Bonnie Downs” as at 1 October 2005 is determined at Two Million, Eight Hundred and Sixty-nine Thousand Dollars ($2,869,000). JJ TRICKETT PRESIDENT OF THE LAND COURT -- 26 of 26 --