Dyson-Holland v Department of Natural Resources and Mines [2005] QLC 40

LAND COURT OF QUEENSLAND CITATION: Dyson-Holland v Department of Natural Resources and Mines [2005] QLC 40 PARTIES: Richard J and Alison J Dyson-Holland (appellants) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NO: AV2004/0132 DIVISION: Land Court of Queensland PROCEEDING: Appeal against an annual valuation under the Valuation of Land Act 1944 DELIVERED ON: 13 July 2005 DELIVERED AT: Brisbane HEARD AT: Atherton MEMBER: Mr RS Jones ORDER: The appeal is dismissed. CATCHWORDS: Appeal against unimproved value of land - Valuation of Land Act 1944 - Unimproved value of Permit to Occupy APPEARANCES: Mr RJ Dyson-Holland in person for the appellants Mr DJ Grealy of Counsel for the respondent Background [1] The subject land comprises of a Permit to Occupy (No. 01/7219) issued pursuant to s.371A of the Land Act 1962. The Permit to Occupy commenced on 4 February 1994. The subject land adjoins freehold property which, together with the subject land, forms a grazing aggregation totalling about 68 ha at Danbulla located on the eastern side of Lake Tinaroo Falls Dam approximately 15 km north-east of the township of Yungaburra. The -- 1 of 8 -- 2 nearest town having a wide range of services and amenities is Atherton which is located some 13 km further by road west of Yungaburra. [2] The subject land consists of three narrow strips each having a width of between 10 metres and 20 metres comprising in total an area of about 5.62 ha. The full description of the land is Lot 1 on PER7219 held as Permit to Occupy 1/7219, Parish of East Barron, County of Nares. [3] The respondent has valued the land at $14,800 as at 1 October 2001 (effective 11 June 2004). In their Notice of Appeal dated 29 September 2004 the appellants estimated the value of the land to be $1,482. However, Mr Dyson-Holland, when presenting the case for the appellants finally contended for a value of $10,400. The Notice of Appeal, when identifying the grounds upon which the appellants then intended to rely in the prosecution of their appeal, referred to an attachment to the Notice of Appeal. That document identified three grounds of appeal and contained what was said to be the appellants' "case". I think it is fair to say that the grounds identified in this document were particularly concerned with the lack of any commercial viability of the land as a stand alone parcel. However, as already referred to, this document was attached to the Notice of Appeal which contended for a value of $1,480. During the conduct of the appeal Mr Dyson-Holland in cross-examination effectively abandoned the more specific grounds identified in the attachment to the Notice of Appeal and adopted a more general approach that was to the effect that the unimproved value to be attributed to the Permit to Occupy land must be less than that attributed to the freehold land by the respondent on a per hectare basis. [4] Mr Dyson-Holland, when describing what he considered to lie at the heart of his argument said: "… The basis of my argument is: the property of the Permit to Occupy is less value than mine: it should first and primarily be considered against mine; and that means it should be considered against that $1,900 per hectare and some factor less than that. That's the guts of the argument Sir." The Valuation of Land Act 1944 [5] Section 13 of the Valuation of Land Act 1944 ("VLA") requires the Chief Executive to decide the unimproved value of the land to be valued. Section 3 of the Act provides, so far as is relevant - "3(1) For the purposes of this Act - unimproved value of land means - -- 2 of 8 -- 3 (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. …" The subject land is unimproved and therefore the valuation is to me made under s.3(1)(a). [6] Pursuant to s.33 of the VLA the appellants have the burden of proving that the valuation appealed against is wrong. Further, pursuant to s.45(4) the burden of proving every ground of appeal lies with the appellants. However, a presumption in favour of the correctness of the valuation may be rebutted where it can be shown that the valuations were based on a wrong principle and/or involved a serious error of fact and/or were made by a fundamentally erroneous method: Brisbane City Council v Valuer-General (1977- 78) 140 CLR 41 at 56-57; C Cominos & Co Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 311 at 331-332 (LAC). In this context, as has often been observed, the valuation of land is not an exact science. The valuer is usually required to apply his or her experience and subjective judgment to many matters relevant to the valuation process. The Issues in the Appeal [7] As the subject land is held by the appellants pursuant to a Permit to Occupy, it is necessary to give consideration to s.14 of the VLA. Section 14 relevantly provides: "(1) For the purpose of deciding the unimproved value of land that is not granted in fee simple, the land is taken to be land granted in fee simple. (2) In deciding the unimproved value of land held under a lease from the State that is subject to a restriction, limitation or other onerous covenant or condition, the chief executive must not take into account the restriction, limitation, covenant or condition. … (5) In making, under this part, the valuation of the unimproved value of any land - … (b) in a lease, licence, permit or permission to occupy under the Land Act 1994 or granted or issued by the coordinator-general or the chief executive of the department responsible for the administration of the Forestry Act 1959; or … the unimproved value of that land shall be determined having regard to and making proper allowance for any restriction or limitation of use having regard to the purpose and conditions to which that permit, lease, licence permission to occupy, agreement or determination is subject. " [8] No limitations and/or restrictions arising out of the terms and conditions of the Permit to Occupy were raised as issues in the appeal. -- 3 of 8 -- 4 [9] The grounds of appeal attached to the Notice of Appeal contending for an unimproved value of $1,482 were identified as being: "1. As leased the property comprises of 3 separate strips of road verge in an unimproved condition classified as 'not good quality agricultural land', not suitable for cropping with no access to water and not fenced so not able to be grazed. The largest of the three strips has pines on it and telecom cable under it thus precluding any form of tillage. Stand alone the property has no commercial capacity and therefore no commercial value therefore cannot support a commercial rent. 2. The commercial yield the land can produce is so small that the value it justifies is of the order of one-tenth that with DNR has subscribed to it. 3. Properties such as this that cannot produce a commercial return and hence cannot support commercial values should not attract commercial rents. They should continue to attract minimum, nominal rents." [10] As identified above when this matter came on for hearing the appellants, in relative terms, contended for a substantially higher figure as being their estimate of the unimproved value of the land than was originally identified in the Notice of Appeal. Also, as identified in [4] above, the basis and/or argument underlying the appeal as presented was more general and robust than previously defined. [11] Notwithstanding this shift on the part of the appellants, no objection was taken to the conduct of the appeal relying on s.45(4) of the VLA which provides: "Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated and the burden of proving any and every such grounds shall be upon the owner." [12] In the absence of any objection on the part of the respondent I am prepared to, with some reservation, proceed with determining the appeal on the merits on the basis that the case as presented by the appellants fell under Ground 1 as identified in [9] above [13] As I understand the evidence of the appellants, they seek to rely mainly on the following facts in support of their appeal: (i) the area of the land is closer to 5.31 ha than 5.62 ha; (ii) the only value the land has is as part of the appellants' overall grazing holding; (iii)the land is designated as "not good agricultural land" by the relevant local authority; (iv) the shape, area and lack of water together with other characteristics of the land including standing pines and Telecom cables have not been adequately taken into account by the respondent; (v) the subject land is part of a more remote and genuine grazing property and therefore should not be compared with sales of land which are fundamentally "hobby farms". -- 4 of 8 -- 5 (vi) the location and number of standing pines on about 1 ha of the land further limits the grazing capacity of the land; [14] The appellants argue that once these matters are brought into account the value of the land being subject to the Permit to Occupy must be less than the rate of $1,900 per ha which the appellants say is the rate per ha applied to their freehold land by the respondent on an unimproved basis. [15] As to the first of the matters identified above, no serious challenge was raised to the area of the land as identified in the actual Permit to Occupy being about 5.62 ha. In the circumstances I intend to proceed on the basis that the land has an area of 5.62 ha. [16] As to the second matter it seems clear to me that there is no dispute about it. Mr Moroney valued the land on the basis of the highest and best use of the land being grazing worked in conjunction with the appellants' surrounding freehold land. [17] As to the third matter, again I do not believe there is any real controversy between the parties. That is, as identified above, Mr Moroney valued the subject land on the basis of it being grazing land. That is, as I understand the evidence of Mr Moroney, no premium was applied to what he considered to be the grazing value. The fact that the subject land had been identified by the local authority as "not good quality agricultural land" is a matter expressly acknowledged by Mr Moroney in his valuation report.1 [18] As to the fourth matter, the odd shape and dimensions of the property were clearly identified as being relevant matters by Mr Moroney in his valuation report.2 The fact that he had taken into account shape, topography and size was confirmed by Mr Moroney in his re-examination. [19] There was some considerable discussion concerning the basis upon which Mr Moroney categorised the subject land into "superior" and "inferior" grazing land. Having regard to the evidence of Mr Moroney in cross-examination I am left with the clear impression that this categorisation of the land was based mainly on conversations with Mr Dyson-Holland as remembered by him. However, Mr Dyson-Holland made it quite clear that he had some real reservations about any such conversations concerning the categorisation of either the subject land or the surrounding lands ever occurring. [20] At the end of the day, it is not necessary for me to resolve any conflict concerning whether or not such conversations did or did not occur and, if they did what was the precise subject matter of the conversations. Mr Dyson-Holland, in my view, did not put before the Court any probative evidence to support the contention that Mr Moroney's categorisations were in fact wrong and how that might affect the final rate per ha which 1 Exhibit 3 ,P 3, Item 16. 2 Ex 3, p.2 "Nature of Land". -- 5 of 8 -- 6 ought to be attributed to the land. That is, the appellant did not satisfy the onus of proof required to show that the valuation relied on by the respondent ought to be changed. [21] As to the lack of water on the subject land, that was clearly a matter taken into account by Mr Moroney. His evidence was clearly to the effect that it was not necessary for the subject land to contain water when it was being used in conjunction with the freehold land owned by the appellants where stock water was available. No evidence was put before me to establish how the existence of Telecom cables might materially affect either the grazing capacity and/or the value of the land. [22] As to the fifth matter raised by the appellants, it seemed to me that the evidence did offer some support for the proposition that smaller parcels of land more proximate to Atherton did attract a "lifestyle premium" when compared to more genuine grazing enterprises more remote from town. While Mr Dyson-Holland raised this matter in his evidence-in- chief he did not seriously challenge the reliability of the sales evidence relied on by Mr Moroney during his cross-examination. The matter seemed important enough for me to raise it with Mr Moroney and therefore at the conclusion of his cross-examination and before re-examination the following exchange between myself and Mr Moroney occurred: "Question: And then I think there was only one other matter and I thought Mr Dyson- Holland might have raised it, but I'll raise it. He referred to your three sales as being 'hobby-farm' properties and having a lifestyle premium. Do you have anything to say about that? Answer: The Atherton Tableland generally is a closely settled area so almost all the sales in this Atherton, Parish of Barron -Danbulla-Barron-Tinaroo area - all have a proximity to various urban areas. In each of the sales I spoke to at least one party to the sale. Generally it satisfied (me) that they were purchased for a farming purpose and they were entitled to be valued under the Valuation of Land Act on that basis. The sales that occurred on the Danbulla side - this is not where Mr Dyson-Holland is situated, but generally the department likes to use those sales as primary evidence because we regard the proximity to the lake and proximity to Cairns as a major influence, a much greater lifestyle there than there would be on the western side of the lake, so we steered away from using any sales of land there to form any sound farming rates because we feel there's a far greater lifestyle hobby influence on the eastern side as opposed to the western side. Mr Dyson-Holland did not take issue with this evidence of Mr Moroney. [23] Having regard to Mr Moroney's evidence on this topic I can see no justification for concluding that the sales evidence relied on by him was anything other than comparable and reliable sales evidence. [24] Turning then to the final matter raised by the appellants, the best evidence as to the area of land occupied by the stand of pines is about 0.7 ha. This evidence came from Mr Moroney who identified the area as being an area of about 15 metres by 450 metres in dimension. -- 6 of 8 -- 7 [25] As I understood the evidence of Mr Moroney, this land fell into the "superior" grazing land category. Also, having regard to Mr Moroney's evidence on this issue I was left with the impression that the density of these trees might well have had some effect or impact on the grazing capacity of that area of land. I was also left with the impression that Mr Moroney did not consider that the value attributed to the 0.7-odd ha of land affected by the pines ought to be reduced in value because, if in fact it was an issue, it could be resolved by simply clearing the land. In this regard however, Mr Moroney quite candidly conceded that he had not given any consideration to the cost/benefit issues associated with such land clearing. [26] Notwithstanding the above, whilst I might have had some sympathy for the appellants' position concerning that land affected by the pine trees, there was no evidence upon which I could rely with any degree of confidence to apply another rate per ha to this land other than that attributed to it by Mr Moroney. Mr Moroney adopted a rate of $2,970 per ha to the superior grazing land and $1,125 per ha to the inferior grazing land. To adopt the so-called "inferior" rate would in my view be overestimating the degree of impact of the trees. That is, in the absence of any reliable evidence, I am not prepared to find that the rate per ha which ought to be attributed to this area of land ought to be more than halved. [27] In the bundle of material tendered on behalf of the appellants (Exhibit 2), attached to the appellants' Notice of Objection dated 3 August 2004 lodged with the respondent was a document also dated 3 August 2004 containing various matters the appellants wished the respondent to take into account in considering their objection. At the second page of that document (Exhibit 2 at p.10) it was contended on behalf of the male appellant, referred to in that document as "Rick Holland", that the "rough grazing" value of the land was around $1,000 per acre, that is about $2,470 per ha. In this assessment of the value of the land by Mr Dyson-Holland no distinction was made for different classes of grazing land or for the existence of the pine trees. [28] In circumstances where it would be nothing more than a guess on my part to choose a rate per ha of between $1,125/ha and $2,470/ha or $1,125/ha and $2,970/ha, and, where any adjustment would have only a minor effect on the total value, I do not consider it appropriate to vary the valuation contended for by Mr Moroney. [29] For the reasons canvassed above the appeal is dismissed and the respondent's assessment of the unimproved value is affirmed. [30] By way of observation I note that: (i) The respondent's valuation was $14,800. -- 7 of 8 -- 8 (ii) A the hearing of the appeal the appellants contended for a value of $10,400. (iii) In previous documents the appellants seemed content to adopt a rate of about $2,470/ha for the land. That would result in a value of $13,881 if 5.62 ha is applied or $13,116 if 5.31 ha is applied. In circumstances such as this it seems to me that this was a matter which could and should have been resolved without the need for the parties to incur the expense and inconvenience of a Court hearing. Order The appeal is dismissed. RS JONES MEMBER OF THE LAND COURT -- 8 of 8 --