Dagg & Ors v Department of Natural Resources and Mines [2005] QLC 6

LAND COURT OF QUEENSLAND CITATION: Dagg & Ors v Department of Natural Resources and Mines [2005] QLC 6 PARTIES: Laurence S Dagg and Others (appellants) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NOS: AV2003/0608, 0604, 0605, 0606, 0609, 0611, 0612, 0613, 0620, 0621, 0622, 0624, 0625, 0626, 0627, 0636, 0637 and 0638 DIVISION: Land Court of Queensland PROCEEDING: Appeals against unimproved valuations - Valuation of Land Act 1944 - Shire of Warwick DELIVERED ON: 31 January 2005 DELIVERED AT: Brisbane HEARD AT: Warwick MEMBER: Mr RE Wenck ORDERS: Appeal AV2003/0608 - Laurence S Dagg The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Ninety- eight Thousand Dollars ($98,000). (Refer p.30 ) Appeal AV2003/0604 - Peter J & Cheryl Wickham The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred and Four Thousand Dollars ($104,000). (Refer p.33) -- 1 of 74 -- 2 Appeal AV2003/0605 - Darren J Eather, Peter J & Cheryl Wickham The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Ninety- two Thousand Dollars ($92,000). (Refer p.36) Appeal AV2003/0606 - PJ & C Wickham and PR & PJ Wickham The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred and Ninety-five Thousand Five Hundred Dollars ($195,000). (Refer p.39) Appeal AV2003/0609 - James R Watts The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Seventy-five Thousand Dollars ($75,000). (Refer p.42) Appeal AV2003/0611 - Deane E, Donald B & Wayne Watts The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred Thousand Dollars ($100,000). (Refer p.44) Appeal AV2003/0612 - Kenneth H Watts The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred and fifty-six Thousand Dollars ($156,000). (Refer p.46) Appeal AV2003/0613 - Eric G Watts The appeal is allowed. The valuation of the chief executive appealed against in the amount of Two Hundred and Five Thousand Dollars ($205,000) is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Ninety- five Thousand Dollars ($195,000). (Refer p.49) -- 2 of 74 -- 3 Appeal AV2003/0620 - John B & Shirley M Smith The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Seventy Thousand Dollars ($70,000). (Refer p.52) Appeal AV2003/0621 - John B Smith The appeal is dismissed and the valuation of the chief executive affirmed. (Refer p.54) Appeal AV2003/0622 - Samuel S Smith The appeal is allowed. The chief executive's valuation is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Two Thousand Dollars ($102,000). (Refer p.56) Appeal AV2003/0624 - Norman J Young The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Ninety-four Thousand Dollars ($94,000). (Refer p.59) Appeal AV2003/0625 - Fraser J, Sharon L & Eric L Young The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Eight Thousand Dollars ($108,000). (Refer p.62) Appeal AV2003/0626 - Simon J & Dorothy E Bolitho The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Fifty-six Thousand Dollars ($56,000). (Refer p.64) Appeal AV2003/0627 - Ellen Bowley The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Sixty-two Thousand Dollars ($62,000). (Refer p.66) -- 3 of 74 -- 4 Appeal AV2003/0636 - Inez L Rosser The appeal is allowed. The chief executive's valuation is set aside and the unimproved value as at 1 October 2002, pursuant to s.17 of the Valuation of Land Act 1944, is determined in the amount of Twenty Thousand Dollars ($20,000). (Refer p.70) Appeal AV2003/0637 - Mervyn E Hancock The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Forty Thousand Dollars ($40,000). (Refer p.72) Appeal AV2003/0638 - Margaret R Hancock The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Thirty-eight Thousand Dollars ($138,000). (Refer p.74) CATCHWORDS: Statutory Valuation - Unimproved valuation - Valuation of Land Act 1944 Evidence of Value - Sales Evidence - Relativity between valuations Sales Evidence - "Spencer" test - Sales to adjoining owners - Sales of rainforest land - Sales of forest land - Analysis of sale including standing timber Classification methodology - Useful as a check against primary "direct comparison" methodology - Subjectivity issues where absence of sales evidence for specific classifications Relativity - Productivity of rural land not sufficient test - Correct relativity important - Relativity not preferred to sales evidence as valuation basis Vegetation Management Act 1999 - Mapped Vegetation Management Areas - Effect on unimproved value APPEARANCES: Mr KG Flehr, Solicitor, for the appellants Mr K Fisher, Barrister, Crown Law, for the respondent -- 4 of 74 -- 5 Background [1] The respondent chief executive ("the Department") conducted an annual valuation of all lands in the Shire of Warwick as at 1 October 2002. The date of the previous valuation had been 1 October 2000. Valuations of land used for "purposes of farming" throughout the Shire increased, in most cases, by about 20% above their previous level. However in a relatively small farming district in the Condamine River headwaters easterly of Killarney to the Queensland-New South Wales border and north-easterly along Spring Creek Road to Boonah Shire at "The Head", the valuations as first issued were increased by, in some instances, up to 300%. [2] The dominant feature of the Spring Creek Road locality is that the original vegetation included areas of rainforest with varying quality soil types, merging into red and black soil forest country. There is no other rainforest country within the Shire. Much of the original vegetation had been felled for milling and subsequently cleared and developed for grazing and farming purposes. Those pockets of original or regrowth vegetation which had remained at the time of the enactment of the Vegetation Management Act 1999 ("the VMA") are included within Mapped Vegetation Management Areas, with varying restrictions on further development. [3] The evidence in these appeals indicates that properties within this locality are "tightly held" with the limited sales activity influenced largely, but not completely, by inter- family and adjoining owner purchasers. There is no dispute that the better quality rainforest country is the most desirable farming land in this locality. [4] On 6 February 1999, prior to the date of the previous valuation, a property comprising two parcels was offered for sale at auction by the vendor, a Mr Rimes. The smaller parcel of 39.6805 ha sold for $205,000 ($5,166/ha improved). The purchaser was the Watts Bros Family Trust, a family with local connections. The second parcel of 83.268 ha sold for $444,000 ($5,332/ha improved), to Eather, Keogh and Wickham, members of a family which owned adjoining land. [5] Both parcels had been recorded in the Department's files as containing rainforest country. The sales evidence, on the Department's analyses, indicated unimproved land values much higher than the then existing levels of applied values to the sale lands. However, the Department was cautious not to apply those increased levels of value to the rainforest lands until further supporting market evidence became available. As a consequence, the Rimes' sales had been disregarded as a basis for the 1 October 2000 valuation. [6] Then, on 25 January 2002, a parcel of rainforest land at The Head, containing 63.7099 ha sold at auction from Adams and Simmich to Endean for $370,000 ($5,808/ha improved). -- 5 of 74 -- 6 This sale had initially been interpreted by the Department as having reached an even higher level of analysed unimproved value than had been indicated by the 1999 Rimes' sales. [7] The Department's opinion had been that the Endean sale, by itself, was again insufficient evidence to warrant application of the level of unimproved value which the sale had been believed to indicate. However it was seen as confirming the trend of increasing levels of value for rainforest lands as had been shown by the earlier Rimes' sales. That confirmation led the Department to decide that, for the 1 October 2002 date of valuation it could no longer ignore the evidence of value shown by those Rimes' sales. [8] Although there had been some departmental concern that the VMA would have some effect on the unimproved value of undeveloped lands in the area, the 2002 valuations were issued on the basis that insufficient human resources were available to inspect individual properties for the purpose of identifying any areas of undeveloped land. The reasoning was that if there were VMA implications in relation to individual properties, they would be established through the relevant objection process. [9] The owners of land in this locality were alarmed by the level of value at which the 2002 valuations had been assessed and the increases above the previously existing valuations, particularly when other farming lands throughout the Shire had received, in comparison, relatively nominal increases in valuations. The rating burden implications were of real concern to the farmers involved. [10] A group of owners - "The Condamine Headwaters Landholders Group" set about challenging the new valuations. As a result of the objection then the preliminary appeal processes, significant but widely varying reductions in valuations were achieved. However, remaining dissatisfied with the overall results, many of the owners decided to have the matters in dispute determined by the Court. [11] It had been accepted by the Department that each of these appeal properties is "exclusively used for purposes of farming" and fell to be valued pursuant to s.17 of the Valuation of Land Act 1944 ("the Act"). [12] Mr Allan J Matson, a registered valuer who conducts a general valuation practice in the locality and who has had long and extensive professional experience both with the State Government in matters including statutory valuations and later in private practice, was engaged to investigate the appellants' case and to give professional evidence accordingly. [13] Mr Danny B Redgen, registered valuer, employed by the Department and with 15 years' experience in the Warwick district, took responsibility for the valuations appealed against -- 6 of 74 -- 7 and gave evidence in support of those valuations, although leading evidence to lower amounts in some instances. [14] As there were issues involved which related to the classification of land types on individual properties it had been considered inappropriate, given the history of disputed facts, to have the parties attempt to apply decisions in representative cases to the individual properties. However as the evidential basis for the individual valuation disputes was generally common, it was agreed that the substantive evidence of value could be limited to the hearing of one appeal in relation to a property of mixed land types, with much briefer evidence then relating to the individual characteristics of the remaining appeal properties. The Issues [15] The appellants' challenge was directed to four primary issues which were identified by Mr Flehr as: (1) the valuation having been made by the Department on "flawed" sales; (2) the classification of country types by the Department had been inaccurate and there had not been appreciation of the inferiority of country which had originally carried a species of rainforest tree colloquially known as "squeaker" timber; (3) the valuations of the subject properties were out of relativity with the valuations of other farming lands throughout the Shire; (4) the Department's interpretation of market forces associated with the size factor in relation to land used for farming purposes, and particularly the rainforest land. The Valuation and Objection History [16] An extraordinary situation developed after the valuations first issued and the Department began to consider objections to the valuations. [17] Based on its sale from Rimes to Watts, the valuation of that 39.6805 ha parcel of land had first been increased from $24,500 in 2000 to $98,000 ($2,470/ha) in 2002. As a result of objection to that valuation it was reduced to $13,800 ($348/ha). The reason for the reduction (to less than the 2000 valuation) was said to have been based on an argument that the Department's "rainforest" classification of part of the land had been historically wrong. It had been accepted by Mr Redgen that an area of cleared red soil country had been originally timbered with "forest" species and not "rainforest". It was further accepted that, as "pure" forest country, the sale once analysed, showed an unacceptably high unimproved land content, compared with levels of value shown by forest sales in other localities. [18] Consequently, subsequent to the objection stage in the process the Department was then left with the remaining 1999 sale of the 83.268 ha parcel from Rimes to Wickham & -- 7 of 74 -- 8 Others. The original analysis of the sale by the Department was not disclosed, but it is assumed that the analysis supported the valuation which is said to have first issued, in the amount of $136,000. There was evidence to the effect that the original analysis had been amended after a review of the allowance for clearing and development. The analysis before the Court was in the amount of $122,340, and the valuation was eventually reduced to $109,000. The appeal against the original valuation was withdrawn, it seems based on preliminary valuation advice or misinterpretation of that advice. The sale analysis is not now challenged by the appellants. However for reasons which will be discussed later, the sale has been challenged by the appellants on the allegation that it does not provide an appropriate evidentiary basis for a statutory unimproved valuation. [19] Based on the Rimes' sales, the 63.7099 ha Endean land had initially been valued as at 1 October 2002 in the amount of $113,000 increased from the 2000 valuation of $28,000. However, as a result of the objection process, the 2002 valuation of this land was reduced to $42,000. It had been revealed that, when the land had been purchased by Endean, as a consequence of the VMA, 38.537 ha (61% of the total area) was subject to a "Mapped Vegetation Management Area - Regional Ecosystem 12.8.5 (Rainforest)". This area of virgin or regrowth rainforest was unable to be cleared for grazing or arable purposes. However, "sustainable logging" of any mill timber was permitted. Information had been obtained by Mr Redgen which led him to accept that included in the sale to Endean was standing timber with in situ value of $188,000 (in a total sale price of $370,000). Once the standing timber was excluded from the sale price but consideration given to the VMA implications on the usage potential of the vegetated area, Mr Redgen formed the opinion that the sale did in fact provide basic sales evidence. [20] It happened that through the objection process, while the Rimes to Watts sale had been "lost" as a basic sale, the Adams and Simmich to Endean sale had been "gained", according to Mr Redgen. [21] It can be seen that having been faced first with massive increases in their valuations, then complete reversal of those increases in some instances, lesser reductions in other instances and further amendments prior to the hearing, the appellants are entitled to be less than impressed with the Department's ability to "get it right". [22] While of no comfort to the affected landowners, the reasons for the valuation debacle are seen to be a mixture of human error and the shortcomings in this instance, of the mass valuation, computer-orientated methodology necessitated by legislative requirements for "annual" valuations, as defined in the Act. Apart from a well-exposed lack of appropriate -- 8 of 74 -- 9 human resources, it would be impossible for each and every property required to be valued by the Department on an annual basis, to be inspected by the valuers responsible. [23] Instead, the valuers inspect only those properties involved in relevant sales, analyse the sales and compare the resultant unimproved values with the unimproved valuations of those sale properties at the date of the previous valuation. Where a consistent trend of movement is identified within sub-market areas of property with particular characteristics, the previous valuations are altered accordingly, and consistently throughout the specific sub-market area. Critical to the methodology is the Department's acceptance that after a long valuation history which once involved inspections of each property, then the fine- tuning of valuations through the objection and appeal processes, reasonable relativity has been established between valuations within the specific sub-market areas. Where anomalies are exposed, individual valuation considerations are adopted. [24] In the subject matters where properties suffered deleterious effect from VMA implications, there was an obvious need for individual consideration to be given to the valuations of those properties. However, the lack of human resources did not allow identification of the specific problems before the valuations were issued. That was not necessarily a human error, but one resulting from a departmental orientated policy decision. Once corrected, the established relativities between valuations altered and in some cases, such as the Endean property, quite significantly. [25] The human error relates to mistakes apparently made by inspecting officers at least 20 years previously when the last general valuation involving the inspection of each individual property had been conducted. It seems that the classification of soil types by those earlier inspecting officers had not, in some cases, reflected the original vegetation cover. For example, the land sold by Rimes to Watts had been recorded in the relevant departmental files as having a component of red soil rainforest. Mr Redgen had conducted what appears to have been a fairly cursory inspection of the land for the purposes of analysing the unimproved value content in the sale. He had relied on the historical file description and accepted that the red soil component had been rainforest country, or at least an original merging vegetation cover from rainforest to forest. The red forest soils are accepted by all parties as being of inferior fertility and productive capacity to red rainforest soils. [26] It should be said that once the original vegetation has been cleared and the land developed for farming purposes, subtle differences in soil quality are not always immediately discernible to those who are not actively engaged in working the land. Indeed, while Mr Redgen admitted to having failed to recognise the differences in the Watts' case until it -- 9 of 74 -- 10 had been pointed out to him through the objection process, Mr Matson's evidence with regard to that property, which will be discussed later, exposed the difficulties facing a valuer. Furthermore, it appears from the evidence that even experienced farmers in the locality cannot be certain as to the actual "break-line" between differing original vegetation, and sometimes even on their own farms. [27] In the end result, where Mr Redgen was prepared to admit that past errors had been identified, amendments to valuations resulted. Whether the extent of amendment, from rainforest values to forest values was warranted, is another matter. However it is clear that Mr Redgen applied the benefit of doubt on his interpretation of the evidence, or lack of it, in his valuations of the forest country in this locality. Highest and Best Farming use [28] A number of farmers cultivate the geographically and topographically suitable rainforest soils, including the inferior quality soils with squeaker influence, and the red soil forest country soils, for the growing of potatoes. [29] The soils with this arable potential are not regarded as being capable of annual cropping and rotational farming is generally practised, at intervals related to varying farm management practices, including the use of fertilisers and trace elements. It seems to be generally accepted that "opportunity" cropping once in each four to five years' cycle is standard local practice. After cropping, advantage is taken of the residual fertiliser benefits and the arable lands are maintained by the planting to oats and improved pasture for intensive cattle grazing. [30] It did not appear to be in dispute that the highest and best use of the farming lands is for cattle grazing with rotational opportunity cropping of the suitable lands. The highest and best use of the Mapped Vegetation Management Area lands is related to the uses permitted by the legislation. [31] Mr Malcolm Smith, a local farmer and one of the group of appellants, has taken a particular interest in recommended practices required to effectively grow potatoes "and at the same time looking after fertility of soil for the long term". For the purposes of the hearing he had prepared a schedule of costings comparing the practices he follows in comparison with district standards, in ground preparation from the grassed state, fertiliser and trace elements, potato seed, maintenance treatments, harvesting and then regrassing for the next cycle. His costs, related mainly to heavier application of fertiliser were estimated at $1,588 per acre to the harvesting stage, compared to the variable district standard of $1,323 per acre. Mr Smith's direct mechanical harvesting costs, based on an average 10 tonnes per acre (within a range of 4 tonnes to 25 tonnes) were estimated as -- 10 of 74 -- 11 $94 per tonne compared with handpicking at up to $132 per tonne. The cost of regrassing was estimated at $55 per acre. It was Mr Smith's experience that the production from squeaker country was about 50% of that of the best arable rainforest and from the better red soil forest country about 75% of the better rainforest. The costs of production and harvesting were no less than for the rainforest country. In his opinion the improved pasture grazing potentialities of the various soil types were within a similar range. The Department's Valuation Basis [32] Mr Redgen's valuations were based on comparisons, on an overall value per ha, with a number of sales, additional to those two "rainforest" sales already briefly discussed. He conducted a "check valuation" in each case, based on values which he would apportion to the various land classifications, again based on the sales evidence presented. Rainforest Sale 1 [33] Adams and Simmich to Endean - 63.7099 ha - sold by auction 25 January 2002, for $370,000 ($5,808/ha) - analysed unimproved value $45,145.70 ($710/ha) - applied unimproved value $42,500 ($670/ha). Nature of Land - By Mr Redgen 25 ha (39%) easy sloping rainforest with small areas of steeper slopes and swampy lands. 38.5379 ha (61%) Mapped Vegetation Management Area - Regional Ecosystem 12.8.5 (rainforest). [34] As mentioned earlier, in Mr Redgen's analysis an amount of $188,000 had been assessed as the value of standing timber. His evidence was that he had discussed the question of the value of the timber with a member of the family of the auction sale under bidder. He had accepted that experienced under bidder's estimate of $200,000 less "logging and snigging" costs of $12,000. [35] Mr Matson's evidence was that his investigations had indicated that both the purchaser and the under bidder had estimated the value of the standing timber to be between $150,000 and $200,000. However, although he had initially accepted Mr Redgen's overall sale analysis, he had later become doubtful about Mr Redgen's assessment of the value of the standing timber. [36] In his oral evidence Mr Redgen said that he had also spoken to a Mr Ashley Sewell, a person "who knew the site" and who had apparently been the author of a report on general commercial timber values. Mr Matson had interpreted that report to suggest that there would need to have been up to 1,400 trees capable of being "cut down and milled for there to be $150,000 to $200,000 worth of commercial timber on there ..." However, from his general knowledge of the past logging history of the Endean site, Mr Sewell had -- 11 of 74 -- 12 according to Mr Redgen, assumed there would have been 100 stems each capable of producing a gross 4 m³ with a recovery rate of 2 m³ or a total of 200 m³ grossing $1,000 per m³ "green off-sawn ... Now what that means is sawn into boards by a sawmill on site ... To achieve that would cost about $60 per m³ ... to cut snig and haul". Mr Redgen then said (Transcript p.51) - "That's how we arrived at our valuation of the timber - by working out what Mr Sewell thought it was and also by Mr Brett's estimate and they both seemed to line up quite well." Leave was granted during the course of the hearing for the Court to hear evidence from a Mr RJ Baartz, a contract logger who had carried out a broad inspection of the vegetated area prior to the auction. This had been done at the request of Mr Brett, the auction under bidder. It had been Mr Baartz's opinion that the in situ value of the timber at the time of the auction sale had been about $20,000. [37] Mr Brett was too ill to be called to give evidence. There was no dispute that he was experienced in the timber industry. Telephone contact was made with him by various people including Mr Redgen, subsequent to Mr Baartz giving his evidence. Mr Redgen said that Mr Brett had suggested that Mr Baartz's estimate would have been based on a "royalty value" while Mr Brett himself maintained that had he bought the land he could have "obtained a return" of $200,000 from the available timber. [38] Mr Baartz impressed as a forthright witness but as a logging contractor rather than as a timber valuer. His inspection had not been precise and his estimate had been given to Mr Brett on that basis. He said that the actual payment which an owner would receive from a sawmiller would have been calculated on the actual logging obtained. [39] It is not possible to reconcile the significant differences between the estimations of Mr Baartz and the opinion given to Mr Redgen by Mr Brett and Mr Sewell. In his written report Mr Redgen's valuation of the timber is understood to have excluded the value adding process of the cutting and snigging of the logs by the owner. However it seems first on Mr Redgen's oral evidence then the further contact with the under bidder, that Mr Brett had also envisaged the sale of timber at least sawn into boards by a sawmiller on site. That would involve more "value adding" to the "royalty value" of the timber to a sawmiller. Royalty value would normally be regarded as the value of the standing timber to an owner not experienced in the timber industry. [40] According to Mr Matson, Dr Endean's estimate had been based on some advice as to the value of the standing timber given her by the vendor when the property had been on the market years earlier and then some verbal agreement between her and the vendor as to the -- 12 of 74 -- 13 increase in value which would have been expected to the date of the auction sale. However, tendered through Mr Redgen was a written statement by Mr Richard Simmich who had "cared for and arranged the sale of the property" owned by his late wife. He stated that the property had never been on the market or listed for sale prior to the auction arrangement; they had never requested a valuation or estimate of the timber and had no idea of the value of the timber; and the property had not been milled for at least 25 years. [41] Regardless of the value of the standing timber and his initial acceptance of Mr Redgen's unimproved analysis of the sale, Mr Matson was of the opinion that special circumstances surrounded the sale and it failed the "Spencer" test. [42] The female purchaser of the land is a medical practitioner. Mr Matson had interviewed the purchaser's husband. The special circumstances surrounding the sale as he saw them were that the purchaser: " ● Was from outside the district and purchased the land not only for primary production purposes. ● Was pushed by an adjoining landholder under bidder who owned land on both sides of the sale parcel and whose family once owned the sale parcel. ● Was imprudently advised concerning the added value of commercial timber in the standing rainforest area." [43] In his oral evidence Mr Matson inferred that Dr Endean had been over-anxious to obtain a "foothold" in the locality and was more interested in the lifestyle and taxation benefit potentialities of the land than its use for farming purposes. In his opinion the land, with no arable potential, and a large area restricted to forestry use pursuant to the Mapped Vegetation Management Area was different to "the district average management standard" and "not an appropriate property to use as a basic sale". He agreed that another rainforest block had been purchased by Dr Endean or her husband, subsequent to the relevant date of valuation and at a further increased improved price level. He saw that purchase as confirmation of the desire of Dr Endean to obtain a foothold in the locality and the increased price level as irrelevant in these matters because the market had improved since the relevant date of valuation. Rainforest Sale 2 [44] Rimes to Eather, Keogh and Wickham - 83.268 ha - sold 6 February 1999 for $444,000 ($5,332/ha) - analysed unimproved value $122,339.93 ($1,469/ha) - applied unimproved value $109,000 ($1,315/ha). Nature of Land - By Mr Redgen 70 ha (84%) rolling rainforest with areas of steeper slopes, 3 ha of swampy lands and areas of eucalypt forest influences -- 13 of 74 -- 14 13.2681 ha (16%) Mapped Vegetation Management Area - Regional Ecosystem 12.8.5 (rainforest). [45] Mr Matson did not challenge Mr Redgen's analysis of the sale. In his opinion Mr Redgen's description of the nature of the country could be read to infer that the 70 ha was all rainforest when it was not. However he did not accept that this sale either, could be adopted as a reliable basis for statutory valuation purposes. [46] Mr Matson was of the opinion that the Wickham sale also failed the "Spencer" test. He said that the purchaser: " ● Was an adjoining owner. ● Was pushed by an under bidder who had purchased adjoining land minutes before and who was abnormally cashed up having won a significant sum in a lottery. ● Had his most significant local area of arable rainforest land adjoining and was compelled to purchase rather than take the risk of a dwelling being constructed in a position which would restrict his use of chemical sprays. ● Was influenced by a trend which at that time indicated that red soil potatoes commanded a premium. This is not now the case." [47] No oral evidence was given regarding the potato trend, but at transcript p.9 and p.10 Mr Matson enlarged on Mr Wickham's circumstances as follows: "Wickham was an adjoining owner ... but more than that he was a driven purchaser of this particular parcel because his very best piece of rainforest arable land adjoins a small severed area on the northern side of Spring Creek Road which adjoins his arable rainforest country. His concern he told me was that if someone used that area to build a house and it's not a bad spot to put a house he would then be restricted from using chemicals in the control of insects and so on in his potato, oats and various other crops on that country. He told me that he would have bought it regardless. He couldn't afford to have someone buy that piece of country and wreck the rest of his operations. He was driven by an under bidder in that case who had just purchased the Watts property that we spoke of. That under bidder was a cashed up person having sold a property fairly recently before that and having had a big win in lotto, so you know you had two hard heads belting each other along at a public auction and I think that no- one else in that district being prudent, knowledgeable, experienced owners and graziers and operators of property in that area would have gone anywhere near those levels of values. I think it's a high sale. It just doesn't make a lot of sense particularly in comparison with what was going on in the rest of the Shire. I'd reject it as a basis of valuation. I've got no argument with Mr Redgen's analysis of it because I came in at a slightly higher figure than his as it's finally turned out but it's just not an appropriate sale to use." -- 14 of 74 -- 15 The Softwood Scrub Sales [48] There is no dispute that the arable softwood scrub country in the Killarney locality is inferior, in terms of market value, to the better quality arable rainforest country on the appeal blocks, but superior to the best of the forest country. In Mr Redgen's opinion, the rainforest country overall was capable of development to provide markedly superior grazing potential. He agreed that had there been no sales of rainforest country he would have sought some valuation guidance from the sales of the softwood country near Killarney. [49] There were two sales of this type of country included in Mr Redgen's basic sales evidence. No dispute ensued as to Mr Redgen's description of the sale properties or his analyses of the sales. Brief details of the sales are as follows:  Mr Redgen's Sale 6 - Wilson to Laing - 114.395 ha - sold 8 January 2002 for $375,150 ($3,279/ha) - analysed unimproved value $90,476 ($791/ha) - applied unimproved value $79,000 ($690/ha) - described as 34% arable softwood scrub, 10% inferior arable softwood scrub with shallow soils, 56% hilly to steep softwood scrub grazing.  Mr Redgen's Sale 7 - Ure to Ellis - 64.547 ha - sold 8 November 2001 for $240,000 ($3,718/ha) - analysed unimproved value $74,970 ($1,161/ha) - applied unimproved value $73,000 ($1,130/ha) - described as 18% creek flats, 53% arable softwood scrub, 29% hilly to steep softwood scrub grazing. The Forest Country Sales [50] The sale from Rimes to Watts does not now form part of the Department's evidential basis. However it is seen as appropriate to make some comments. Criticism was levelled at Mr Redgen for inability to identify the difference between red soil forest and red soil rainforest on this sale property. It seems that not only those in the Department who went before Mr Redgen and possibly the under bidder and the purchaser had similar difficulties. Indeed, even after it had been well exposed and Mr Matson was aware that Mr Redgen had accepted through the objection process that the red soil component must have been originally timbered with dominant forest species, Mr Matson described the land as follows (Transcript p.10): It's primarily what they call up there a black forest block as I guess a way of differentiating it from forest country with red soil but there is a piece of country in it that's got red soil. I think it's merge country. It's cleared now so you can't really tell but I think it's merge country between some lower rainforest type scrub and eucalypt country with a bit of a scrubby understorey and straight eucalypt country. It wouldn't be of a similar quality to rainforest country. It's more aligned with standard eucalypt forest country." -- 15 of 74 -- 16 [51] The circumstances surrounding the Rimes to Watts sale such as the purchasers' knowledge of the quality of the land and the identity of the under bidder may have provided evidence which was relevant to the potential of the land and matters related to demand for forest country in this location, if indeed it had been accepted in the marketplace as being land with no rainforest influence. However it appears that no such inquiry was made by either valuer. Both now accept that the unimproved value shown by an analysis of the sale is out of line with the level of value shown by sales of, or applied to, forest grazing land in other localities within the Shire. [52] Brief details of the forest sales to which Mr Redgen made reference are as follows:  Forest Sale 3 - Ittensohn to McConnell - 505.048 ha - sold 29 June 2002 for $190,000 ($376/ha) - analysed unimproved value $86,554 ($171/ha) - applied unimproved value $83,000 ($165/ha) - described as easy sloping light forest grazing.  Forest Sale 4 - Makim to Ramm Investments - 617.2254 ha - sold 18 April 2002 for $1,400,000 ($2,268/ha) - analysed unimproved value $295,982 ($480/ha) - applied unimproved value $290,000 ($470/ha) - described as 5% fiver flats irrigation; 6% arable river flats; 6% arable creek flats; 4% arable mixed forest and softwood scrub rises; 7% riverbank grazing; 72% sandy forest grazing.  Forest Sale 5 - Sullivan to Crawford and Smithers - 96.821 ha - sold 11 May 2001 for $100,000 ($1,033/ha) - analysed unimproved value $23,549 ($243/ha) - applied unimproved value $23,000 ($237.50/ha) - described as easy to moderately sloping light forest grazing. [53] There is insufficient detail provided in Mr Matson's description of the Watts' sale land to make comparison between the forest sales and that land. However, based on some of the general evidence as to the nature of land contained in the Watt's block, a valuation of $348/ha overall appears to be most conservative in comparison with the sales evidence. Not surprisingly Mr Matson adopted Mr Redgen's valuation of the Watts' land as the benchmark for his assessment of the forest components within the various appeal blocks. He did not challenge Mr Redgen's analyses of the forest country sales only the comparisons made by Mr Redgen in some instances where he alleged that there was a lack of correct relativity with the benchmark Watts' valuation. Mr Matson has relied on the fact that, pursuant to s.33 of the Act, the Department's valuation of the Watts' block "shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered." Mr Matson's Valuation Basis [54] Having rejected the evidence provided by the Endean and Wickham sales, for the reasons earlier discussed, Mr Matson had no sales evidence of land with rainforest influence. He was of the opinion, and Mr Redgen did not disagree, that in the absence of sales evidence -- 16 of 74 -- 17 for that class of land it would be necessary to consider the best alternative sales evidence available. It seems that there had been no shortage of sales evidence for arable and grazing lands in other localities within Warwick Shire. [55] Mr Matson held the view that the intent of the Act was directed to the achievement of correct relativity between valuations for rating and taxing purposes. He had no argument with the level of value applied by the Department to land used for farming purposes in other parts of the Shire, accepting that, other than in the subject locality, farming lands had been valued on the basis of appropriate sales evidence. Rather than rely on specific sales evidence in other localities his approach was to value the rainforest lands on the basis of what he saw as correct relativity with valuations of two properties of which he had close knowledge. [56] The first was a property on Glengallan Creek, owned by one of the Wickham family, if not the purchaser in the Rimes to Wickham sale. The property contained 111.1 ha and was described by Mr Matson as "a near level to gently sloping clay loam parcel ... intersected by the Cunningham Highway, irrigated by three high capacity bores and used for potato and small crop production. It was his opinion that "on a per hectare basis it is significantly more productive and valuable than any area in the subject location." The Department's unimproved valuation of this Glengallan Creek land at the relevant date equated $1,485/ha. He had not been aware that in its unimproved state this property had comprised some open plain country, with no timber treatment costs involved in its development. He had not been aware that the added value of the irrigation licences had been excluded from the Department's unimproved valuation. He had discussed with Mr Wickham, the relative productive capacity of the Glengallan Creek lands in comparison with that of the arable rainforest lands. In Mr Wickham's opinion, the Glengallan Creek lands were of sufficient quality and "strong enough" to grow potatoes and other crops on an annual basis, while the arable rainforest lands comprised "fragile soils" and were suited to potato growing only on a rotational basis once in every four or five years and then with higher production costs. In Mr Wickham's opinion, according to Mr Matson, the rainforest arable land would be worth no more than half the Glengallan Creek land. [57] The second relativity example was of a softwood scrub block containing an area of 132.2 ha described by Mr Matson as "a prime iron wood scrub block in close proximity to Killarney, mostly arable and as productive and valuable as any area in the subject location". It was his evidence that while the sale land received less rainfall than the locality of the appeal blocks it retained moisture longer and was not as badly affected as the rainforest country during periods of less than average rainfall. The softwood scrub -- 17 of 74 -- 18 country was described as more versatile and capable of growing winter oats and summer cereal crops. Mr Matson was of the opinion that the softwood scrub country was more comparable to the rainforest/squeaker country than the forest country on Mr Dagg's property. However, he would prefer the iron wood scrub country to the inferior squeaker type rainforest "any day". [58] Mr Matson's evidence was that when his investigations of the appeal matters had commenced and the rainforest sales analysed, his first impression had been that the Department "had got it right". However when he gave consideration to the Watts' sale of forest land and rejected that sale as evidence of value and "had time to consider the Crown application of values on this block and other forest blocks" he was prepared to generally accept the Department's valuation of the forest country. He concluded that if it was necessary for the Department to look outside the local area for forest country sales, and as a consequence, correct relativity was achieved for valuations of that class of country throughout the Shire, the same should have been done with the better quality farming lands. When he compared valuations of the better quality subject lands with those outside the area he concluded that those relativities were "out of whack". [59] Mr Matson held the opinion that unless some specific check methodology is utilised in considering the various land classifications on individual properties, it is virtually impossible to make cogent relativity comparisons. [60] In the end result Mr Matson concluded that proper relativity would be achieved between all classifications throughout the Shire if the lands in the local area were valued with application of "the following maximum values, in a general way and subject to various adjustments ...":  Good quality easy slope rainforest arable $1,000 per ha  Sloping rainforest arable $750 per ha  Rainforest grazing $600 per ha  Squeaker arable/grazing $500 per ha  Forest grazing $350 per ha  Vegetation Management Areas $200 per ha. Findings - Bases of Valuation [61] Mr Matson's relativity approach is, in his opinion, a reflection of the intent of the Act as contained in the preamble. The preamble in fact states that the Valuation of Land Act 1944 is: "an Act to make better provision for determining the valuation of land for rating and taxing purposes and for matters incidental thereto or consequent thereon." -- 18 of 74 -- 19 In making better provision for determining the valuation of land for those purposes, it follows that if valuations are made in accordance with correct principles and pursuant to the provisions of the Act, the intent of the Act will be achieved and correct relativity should result. [62] In Appeals by Landholders against the determination of the Valuer-General - Shire of Monto (1984-85) 10 QLCR 32 at p.38 the Land Appeal Court made the following observations: "Relativity between properties or parts of shires may vary from valuation period to valuation period. It is not a matter of mere mathematical calculation or progression. The revaluation of a shire does not involve the application of a more or less uniform increase (or decrease) in the various types of land comprising the shire. What has to be determined is the unimproved value of each parcel of land within the shire at the relevant date. The task set the Valuer-General and the Court is to determine the capital sum which the fee-simple of the land, assuming it were in an unimproved state, might realise if offered for sale on the open market ... The best method of basis for making such determinations is the use of properly analysed comparable sales conforming to the test of the Spencer case." (Spencer v Commonwealth (1907) 5 CLR 418). [63] In that matter the Land Appeal Court then continued at p.38: "In A.C.F.& Shirleys Limited v The Valuer-General (1978) 5 QLCR 370 at p.375 this Court said:- 'We agree with counsel for the appellant Company that relativity between valuations is a desirable principle which should be observed to ensure an equitable distribution of the rating burden. However, in our opinion, it is difficult, if not impossible, to extend the principle beyond relativity as between lands with a similar highest and best use or land types with some common nexus. For example in the valuation of a shire, lands with a highest and best use for producing sugar-cane, lands with a highest and best use for grazing, or lands with a highest and best use for orchard production should, within their respective land use categories, bear reasonable valuation relativity each to each. Obviously the sales of lands within each individual category or purchased for a similar use provide the appropriate guide and basis. We do not think that relativity can be established with any degree of confidence as between various land categories with different highest and best uses.' It is bona fide sales conforming to the test for the Spencer case that set the level of values for respective land categories and types. Relativity is established in the marketplace not by previously established relativities which, in their turn, would reflect the sale market of an earlier relevant date. As already discussed, relativity between individual parcels within the various land categories or types, is important. If it cannot be -- 19 of 74 -- 20 established by sales of properties similar or comparable in all relevant aspects, a previous relativity may provide a guide." [64] The reasons for Mr Matson not accepting that the rainforest sales to Endean and Wickham met the Spencer test, were discussed earlier. In rejecting those sales he does not accept then that the values applied by the Department to the Endean and Wickham properties are correct despite s.33 of the Act and the fact that there are no appeals against those valuations now before the Court. [65] The Spencer test relates to open market value. As Griffiths CJ said in that case at p.432: "In my judgment the test of value is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, that is, whether there was in fact on that day a willing buyer, but by inquiring 'what would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?' It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural, the necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together." [66] Then at p.441 in Spencer, Isaacs J described the considerations involved in arriving at the value of land as follows: "... we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property." [67] Apart from Mr Matson's perceptions with regard to the over-anxiousness of both purchasers, and the influence of adjoining owner circumstances, the evidence suggests that both Endean and Wickham were well acquainted with the land they purchased and would have passed the remaining "tests" envisaged by Isaacs J. [68] The question arises as to whether the adjoining owner influences as described by Mr Matson are such as to disqualify the sales from consideration. It is accepted that sales transacted in circumstances where adjoining owner influence exists need to be treated -- 20 of 74 -- 21 with caution. However, as Hardie J said in Hurdis v The Minister (1957) 2 LGRA 132 at pp.140, 141: "Where, as here, there are no other sales available to support a party's contention that the sale to an adjoining owner refects something more than market value it is incumbent on that party to point to some circumstances associated with the sale or with the property itself or the position, needs and desires of the purchaser to justify the inference that the selling price was an excessive one." [69] In Barber v Valuer-General (1969) 17 LGRA 409 Else-Mitchell J, in considering the admissibility of sales to adjoining owners as evidence of value said at p.421: "I question the propriety of excluding from consideration entirely a sale made to a neighbouring owner, at any rate in the absence of evidence showing that such an owner bought under some sort of strong economic pressure." [70] The overall evidence in these matters leads me to conclude that the available sales evidence in the subject locality indicates a market trend for rainforest land which cannot be related to the levels of value in other localities within the Shire. That is a trend which no prudent, knowledgeable and experienced vendor or purchaser would ignore. It appears that the "tightly-held" nature of ownership creates an open market environment in which not only adjoining owners or local family members, but also informed outsiders, compete. As an example Mr Malcolm Smith who gave the evidence to which reference was made earlier and who clearly is a prudent, knowledgeable and experienced local farmer, well aware of the productive potential of the various soil types, when asked if he had ever bought a local property on the open market responded (Transcript p.47): "It was a property of my wife's grandmother's. I had to buy it on open auction. I paid too much for it, but anyway." I accept on both Mr Matson's and Mr Redgen's oral evidence, that Mr Wickham also believed he had paid a premium for that sale land. However I have not been persuaded that as a prudent, knowledgeable experienced local farmer he would allow himself to be "driven" to act irrationally at a public auction through fear of potential complaints about his farm management practices by some potential new neighbour, who might choose to use a particular site for the construction of a new dwelling. The price paid, on an improved basis by Wickham was only a little higher than that paid by Watts earlier for an inferior parcel. The Wickham improved purchase price was later overtaken by the price paid by Endean, a purchaser who had shown interest in acquiring land in the area over a period of time, according to Mr Matson, and who had continued to operate in that market environment subsequently. -- 21 of 74 -- 22 [71] The state of the evidence in relation to the value of the millable timber standing on the land purchased by Dr Endean is such that the evidentiary weight provided by an unimproved value analysis of the sale, is significantly weakened. However if Mr Redgen's assessment of the value of that timber is wrong, the unimproved value component could not be less than that adopted by him. I accept the Department's stance that the sale price paid by Dr Endean, supports the trend shown by the level of value shown by the earlier Wickham purchase. I am persuaded that the price paid by Dr Endean is a factor which would not or should not be ignored in market considerations relative to the value of land in this geographical environment, at the relevant date of valuation. [72] Another issue of concern to Mr Matson was that a "lifestyle" influence now exists in the market for land in the subject locality and that influence was reflected in the Endean sale. He interprets the Act as requiring any resulting enhancement in value to be disregarded in the assessment of the value of land exclusively used for farming purposes. Mr Redgen said that the properties in the area were valued as rural holdings and that any potential for sale of separate titles or any potential for rural homesite or lifestyle property purchasers had been disregarded. Clearly he did not accept that the Endean purchase included any lifestyle element. [73] The perception that the market in the subject locality is influenced by the "lifestyle" potentiality could well be a reality. The question is however, if it were possible to identify the monetary effect of that influence, should it be disregarded in the assessment of the value of land exclusively used for farming purposes. That question needs to be considered in the context of the legislation and the definition of "purposes of farming" in s.17 of the Act. In each of the rainforest sales, the land has been used, subsequent to the dates of sale, for the "purposes of farming" and has been valued accordingly. While productive capacity of land is relevant to its use and market value for farming purposes, "prudent, knowledgeable and experienced farmers" would give consideration to matters other than productive capacity which affect value, "either advantageously or prejudicially", (some of which matters were identified by Isaac J in Spencer), when deciding to participate in open market transactions of farming lands. [74] I accept that it was a reasonable argument to suggest that the sales evidence for rainforest land is clouded by the circumstances surrounding the sales, as described by Mr Matson. However I do not accept that the sales should have been excluded from consideration in favour of a subjective relativity argument based on valuations of land in different locations with distinctly different soils and productive capacities. -- 22 of 74 -- 23 [75] In Grahn v Valuer-General (1992-1993) 14 QLCR 327 the Land Appeal Court cited WM & TJ Fischer v The Valuer-General (1983) 9 QLCR 44 as authority for the proposition: "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." [76] I am not persuaded to disregard the rainforest sales evidence in favour of Mr Matson's relativity approach. [77] The basis for Mr Redgen's application of value to the Wickham property, ie an amount representing about 89% of the analysed sale price is not explained. On the overall evidence it may be assumed that the unimproved value component which would be apportioned to the Mapped Vegetation Management Areas on that sale property would be relatively nominal. The impact of the area described as swampy lands and of eucalypt forest influences is not transparent through any exposed apportionment. There are no significant issues between the valuers with regard to the values to be applied to the Mapped Vegetation Management Areas (Mr Redgen demonstrating a generally more conservative approach than did Mr Matson) or to the forest lands. However while I would not interfere with the levels of value applied by Mr Redgen to the forest lands through his disregard for the level of value shown by the Watts' sale, it would follow that if he has been too cautious in valuing the forest classifications or the Vegetation Management Areas, in the absence of any, or any better evidence, he may have become too optimistic in his opinion as to the values which would be apportioned then to the "pure" unrestricted rainforest components in the two sale properties. [78] In recognition of an evidential situation which is less than perfect, and a perception that the apportioned relativity between, in particular, the valuations of the better quality red forest soils and the better quality rainforest soils has become skewed in favour of the former to the disadvantage of the latter, I have decided to determine the individual valuations on the basis of comparison with a slightly more conservative application of the Wickham sale, at a rounded $102,000, or about 85% of the analysed sale price. I would not interfere with the application of value to the Endean property. [79] I have concluded that, on the evidence, Mr Redgen has taken too optimistic an approach to the relative value of the squeaker timber components of the rainforest classifications. He appears to have been overly influenced by the use of that type of country by some farmers for opportunity potato growing when it seems clear that such use is economically marginal except for the benefits derived through the residual fertilisers and soil -- 23 of 74 -- 24 improvement additives for grazing purposes. Even so, there is compelling evidence to the effect that the squeaker timber country remains a significantly inferior class of country. [80] Finally it was Mr Redgen's opinion that as the size of a particular classification of country, and particularly the rainforest country, decreased or increased there would be expected to be an inverse effect on market value. He had observed that in the rainforest country many of the properties had available about 20% of that component which was physically suited to arable use. That was his observation with the Wickham sale. However, as I understood his evidence, there were climatic conditions which restricted the available Endean property to grazing use. Mr Matson did not accept that it was the size of a particular classification of country, but the size of the property overall which was relevant in the marketplace. However, it seems to me that, with some reservations when areas of particular classification components become too small to warrant individual consideration, the size factor can be a relevant consideration in the check classification approach, as well as the overall direct comparison approach. The difficulty which faced Mr Redgen was the proof of his opinions. Consideration will be given to the facts in relevant individual cases. Findings - The Issues [81] (1) It is not accepted that the rainforest sales although not ideal, should be disregarded. (2) Where, through the appeal process, historical land classifications have been accepted by Mr Redgen as inaccurate, a valuation review has resulted. It is seen as an area where market expectations would relate to broadly accurate land classifications rather than scientifically tested soil mapping. However, there has been persuasive argument to support the allegation that too high a relative value has been ascribed by the Department to country with a squeaker timber influence. Both valuers used a classification approach in checking the result of their overall valuation of each individual appeal property. There has been some judicial criticism of the "classification method of valuing" ie the application of values to the various classifications of country contained within a property, for reasons such as those expressed by the Land Appeal Court in Scougall v The Valuer-General (1980-81) 7 QLCR 51. The Court suggested in that case, at p.57, that "the method may provide supporting evidence of valuation but direct block to block comparison is generally to be preferred as a primary method". The reality is, as Mr Matson observed, that "direct block to block comparison" in the valuation of rural properties of mixed land classifications could, in many cases, be so subjective a task that the veracity of the result would be near impossible to support -- 24 of 74 -- 25 unless "checked" by consideration of the classification method. He believes and I have no doubt that while often denied and not disclosed by departmental valuers, classification methodology or some similar weighting processes are, and need to be considered in maintaining reasonable relativity of valuations particularly across a shire, "from block to block". A check methodology should be of real assistance to a court when disputes about relativity require consideration and determination. In these matters a check methodology which concentrates on the broader classifications rather than any methodology which attempts to isolate and apply unproved levels of value to "sub-classifications" is seen to be more market orientated. In other words, rainforest country which contains components of squeaker country, as an example, will be regarded as inferior to rainforest country which does not. To apply some subjective opinion of value to a precise area of squeaker country when the precise area itself is difficult to prove conclusively and when there is no specific evidence as to the value of "pure" squeaker country is, in my view, interpreting a standard of theoretical precision which is not able to be demonstrated to exist in the marketplace itself. (3) It has not been proved on an evidential basis that proper relativity between valuations of the subject appeal properties and valuations of properties in other shire localities can be based on productive capacity alone. (4) The subjective opinion of Mr Redgen as to the influence of size on the valuation of, in particular, the rainforest country needs to be considered on an individual case basis. [82] Details of the issues specific to Mr Dagg's property, my findings and relevant order will now follow, as will my findings and orders relevant to the remaining appeals. -- 25 of 74 -- 26 [83] Appeal AV2003-0608 Appellant: Laurence S Dagg Real Property Description: Lot 169 on Crown Plan M341333 and Lot 31 on Crown Plan ML1621, parish of Killarney Area: 137.5 ha Situation and Access: The property is severed by the bitumen sealed Spring Creek Road about 9 km east of the Killarney Post Office. The property also has frontage to the gravel formed Bowleys, Wissemann and Watts Roads. Services: Telephone, electricity, mail delivery and school bus services are available. Nature of Land: [84] By Mr Redgen: "The property is an irregular shaped holding being elongated in a north/south direction. Overall the property consists of: Approximately 63 hectares (46%) of Rainforest rolling hills with some steeper slopes along watercourse approaches. This area includes 12 hectares of an inferior Squeaker Wood influence and 4 hectares of merging rainforest and eucalypt forest. Approximately 60 hectares (44%) of easy to moderate sloping Eucalypt Forest country. This area includes 13 hectares of red soil that may be used on an opportunity basis for cultivation; 13 hectares of moderately sloping red soil, 16 hectares red soil merging to black soil, 8 hectares of rocky gully tree lines and 10 hectares of low lying swampy black soil with significant areas of rocky flags and outcrops. Approximately 14.5 hectares (10%) of country mapped as Remnant Vegetation Map under the Vegetation Management Act 1999. This area is made up of 2 hectares of regional ecosystem 12.8.5 (rainforest) and 12.5 hectares of regional ecosystem 12.8.1 (forest with an understorey). The property is dissected by Spring Creek, which passes through the northern elongation of the property and Harpers Gully, which passes through the southern elongation of the property. These watercourses and their spring fed tributaries provide permanent and semi-permanent natural supplies." [85] By Mr Matson: Approximately 14 hectares arable rainforest in small areas. Approximately 40 hectares mixed grazing forest, merge, squeaker and rainforest. Approximately 67 hectares mixed quality forest grazing. Approximately 16.5 hectares Vegetation Management Areas. -- 26 of 74 -- 27 [86] Valuation Appealed Against - Notice of Appeal - $126,000. Evidence led by Mr Redgen to the following Valuation: 137.5 ha @ $820/ha - adopt $113,000 Check Valuation 63 ha Rainforest country @ $1,530/ha $96,390 (includes 12 ha of squeaker influences and 4 ha of merge rainforest to forest) 60 ha Forest country @ $350/ha $21,000 (includes 13 ha of opportunity arable red soil, 13 ha of red soils, 16 ha merging red to black soils, 8 ha rocky and 10 ha swampy) 14.5 ha declared Vegetation Management Area @ $85/ha $1,233 $118,623 Less Working Disability for overall property Shape and road severances 5% $5,931 Adopt $113,000 ($820/ha) [87] Owner's Estimate of Value - Notice of Appeal - $54,000 Evidence led by Mr Matson to the following Valuation: 137.5 ha @ $410 per hectare Adopt $56,000 Apportioned as: 14 ha @ $900 per hectare $12,600 40 ha @ $500 per hectare $20,000 67 ha @ $300 per hectare $20,100 16.5 ha @ $200 per hectare $3,300 The Issues [88] The valuers were unable to agree on a precise classification of country. However Mr Matson accepted Mr Redgen's calculation of the Mapped Vegetation Areas and, not unnaturally, the lower unimproved value which Mr Redgen applied to that classification on a check valuation. [89] Mr Redgen had inspected this property on several occasions and on the more recent occasion in company with Mr Dagg and Mr Malcolm Smith. He took note of Mr Dagg's opinions as to the "break-lines" between various classifications of country and took some soil samples. He gave consideration to the property plan prepared by another valuer many years earlier and included in the Department's file. He also sought further opinion from another local farmer. Mr Flehr challenged the introduction of the previously undisclosed evidence regarding the soil sampling and the manner in which it was taken and no weight will be given to Mr Redgen's opinions regarding the testing of the soil -- 27 of 74 -- 28 samples. However Mr Redgen's efforts to verify the original vegetation classifications are seen to have exceeded normal market inspection expectations. [90] Mr Matson had inspected the property also in Mr Dagg's company and, as I understood his evidence, also did the best he could to gain an appreciation of the nature of the mixed classifications of country. He was assisted in that regard by Mr Dagg's close knowledge of the property. [91] The nature and productive capacity of the various types of country are important criteria in the establishment of market value. However the valuer's task is to interpret the market through the eyes of those who operate within it. It is seen as highly unlikely that those who would be regarded as prudent, knowledgeable and experienced vendors and purchasers would do other than base their decisions as to the market value of a property on an overview of the mix of country involved. I am satisfied that both Mr Redgen and Mr Matson have carried out their tasks on a practical basis and it is not surprising that with country which has been cleared for many years some differences of opinion resulted in the identification of original vegetation break-lines. [92] It is not possible to resolve those differences with any precision. However I prefer the methodology of Mr Redgen in this matter whereby he attempted to identify the dominant rainforest classification for comparison with the rainforest sales evidence. He found 63 ha, some with the squeaker and merging forest influences. His considerations have included the assessment, for checking purposes, of "sub-classifications" as components of the dominant classification based on opinions which have no evidential foundation, when there was no sales evidence of, for example, "pure" squeaker country. The Squeaker Country [93] Although Mr Redgen's formal valuation of the dominant rainforest classification had been based on an overall "direct comparison" with the Endean and Wickham sale properties, he indicated in his oral evidence that, in his opinion, the overall rate could be apportioned as $1,625/ha for 47 ha of rainforest, $1,425/ha for the rainforest merge to forest and $1,215/ha for the squeaker component. In his opinion, while the squeaker country was admittedly of a less productive soil type than the best softwood scrub country on his Sales 6 and 7, the better average rainfall in the subject locality largely negated the soil type inferiority. Furthermore, he interpreted the rainforest sales evidence as identifying a market category which in itself commanded a higher level of value than elsewhere in the Shire. He accepted the general view that the potato production capacity of the squeaker country was as Mr Smith suggested, being about 50% of the capacity of the best quality rainforest. As I understood his evidence, he also accepted the potentiality of the squeaker -- 28 of 74 -- 29 country remained inferior on an improved pasture grazing basis but did not accept to the same degree as for potato production . [94] As was mentioned earlier in my general findings, it was Mr Redgen's view that if squeaker country was capable of opportunity cropping, regardless of its low productivity, it would logically carry more value than rainforest grazing with no arable potential such as the Endean land. Another point that he raised, as one of the "quirks" associated with the assessment of unimproved capital value was that because squeaker timber country was less expensive to clear than the heavy better quality rainforest, unimproved value comparisons tended to be skewed away from a direct productivity criterion. [95] The question as to the true value of the squeaker country becomes one of subjectivity in the absence of the existence of that type of country, on the Endean and Wickham sale properties. Some of the considerations which have led Mr Redgen to his opinions as to the relative value of squeaker country have validity from an unimproved value perspective. However, I have been persuaded that in the absence of direct market evidence in support of Mr Redgen's opinion, he has been too heavily influenced by the fact that squeaker country is used by some farmers for rotational potato growing. The evidence leads me to suspect that such farming practice is followed not so much for the returns from cropping but the desire of those farmers to increase the residual grazing potentiality of the squeaker country to a greater level than could otherwise be expected. The Forest Country [96] Mr Malcolm Smith's evidence with regard to the potentiality of the red soil forest country and, no doubt, the merge country, indicates to me that not only did the Rimes to Watts' sale warrant closer investigation and consideration than did occur, but that the level to which the valuation was reduced, apparently on advice received at objection conference level, is not necessarily proved by reference to sales from other localities. There is a distinct possibility in my opinion that the better quality forest soil classifications in this locality have received the benefit of what might be seen as significant doubt as to their true market value. As was also mentioned earlier in my general findings, I do not propose to interfere with the benefit of that doubt. However I do not accept that the levels of value applied by the Department and as adopted by Mr Matson for the forest components, should be used as any base for a relativity comparison which should be applied to the better quality rainforest lands. Findings [97] On the evidence I am unable to find that Mr Redgen's broad classifications of land on this property have been proved wrong. They will be adopted as the base for the check -- 29 of 74 -- 30 valuation methodology. I will also adopt for that methodology Mr Redgen's apportionment of value to the Mapped Vegetation Management Area (which includes an area utilised for a land care project) and, with the reservations already expressed I will adopt the level of value applied to the general forest classification. I have concluded however that an apportionment of $1,530/ha overall for the 63 ha of broad rainforest classification would be too high in comparison with my reasoning as to the more conservative application warranted for the Wickham sale property. I have decided to adopt an overall valuation of $750/ha, before any disability allowance. That would suggest an apportionment of about $1,300/ha for the broad rainforest classification including the rainforest merge and squeaker influences. [98] Both the Wickham and Endean properties suffer road severance disabilities and the application of value to those properties would be expected to take that disability into account. Mr Redgen's evidence was that his allowance in this case for a "working disability for overall property shape and road severances" was primarily directed towards the shape disability. In resolving another benefit of doubt in favour of the appellant the 5% disability allowance will be maintained. [99] The determination will result as follows: 137.5 ha @ $750/ha overall $103,125 Less working disability allowance - 5% $5,156 $97,969 Adopt $98,000 Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Ninety-eight Thousand Dollars ($98,000). -- 30 of 74 -- 31 [100] Appeal AV2003-0604 Registered Proprietors: Peter J and Cheryl Wickham Real Property Description: Lot 107 on M341383, Lots 1800 and 1803 on M34645, Lot 96 on ML320 and Lot 1 on RP 25358, Parish of Killarney Area: 330.4362 ha Nature of Land: [101] There is no disagreement between the parties as to the classification of country as adopted by Mr Redgen, which is as follows: 46 hectares Rainforest 120 hectares Forest (which includes 4 ha opportunity arable red soils, 36 ha easy to moderate sloping black soil and 80 ha steep black merging to red soils) 164.4362 hectares Vegetation Management Areas (includes 5 ha regional ecosystem 12.8.5 and 159.4362 ha 12.8.1). [102] Valuation Appealed Against - $108,000. Mr Redgen's valuation was as follows: 330.4362 ha @ $325/ha - adopt $108,000 His check valuation was as follows: 46 ha Rainforest @ $1,700/ha $78,200 120 ha Forest @ $190/ha $22,800 164.4362 ha Vegetation Management Areas @ $42/ha $6,906 Adopt $108,000 [103] Owners' Estimate of Value - Notice of Appeal - $70,000 Mr Matson's valuation was as follows: 330.44 ha @ $260 per hectare $85,910 Adopt $86,000 Apportioned as: 46 ha @ $900 per hectare $41,400 120 ha @ $175 per hectare $21,000 164.43 ha @ $150 per hectare $24,660 [104] The primary issue is the value which would be apportioned to the rainforest classification within the total valuation. Mr Matson saw the subject rainforest area which is "mostly" capable of arable use as being about 10% less valuable than the best in the locality due to slope and soil quality and would apply $900/ha on his relativity basis. -- 31 of 74 -- 32 [105] Mr Redgen was of the opinion that the highest and best use of the rainforest country as being for grazing with opportunity cropping. His investigations and inquiries suggested to him that the rainforest grazing classifications on individual farms generally contained an arable potential on about 20% of the total rainforest area. He saw that as a "district standard" component of arable potential and, as I understood his evidence, had the subject property contained that district standard he would have applied a rate of about $1,500/ha on the subject rainforest component. However as the rainforest grazing on this property was mostly arable it was his opinion that it would enjoy a market premium. In this case his opinion was that a premium of about 15% would represent reasonable interpretation of market expectations. It is also observed that the rainforest component overall is smaller than on the Wickham sale property. [106] While some challenge was consistently made to Mr Redgen's opinions as to "district standards" it seems to me that he has endeavoured to use some transparent weighting process, to confirm that this rainforest land overall is significantly more valuable than, for example, the rainforest land on the adjoining Wickham sale property. [107] It is observed that Mr Matson's evidence was that he would have valued the rainforest component on the Wickham sale property at $700/ha (in comparison with the $900/ha apportionment for the subject rainforest land). [108] There is on the above analysis, no dispute that, on a unit of area basis the subject rainforest classification is more valuable than that which would be applied to the Wickham sale property component. However, consistent with my general findings, and in particular, that an application of $1,400/ha to the rainforest component on the Wickham sale property was justified in the circumstances, I will adopt $1,600/ha for that component on the subject property. [109] Mr Redgen has applied a more conservative level of value to the Vegetation Management Areas than did Mr Matson and there is marginal difference between the valuers in the level of value which they would apply to the forest classification. Finding [110] I will adopt a valuation of $104,000, rounded from $315/ha overall, apportioned as follows: 46 ha rainforest @ $1,600/ha $73,600 120 ha forest @ $190/ha $22,800 164.4362 ha Vegetation Management Areas @ $42/ha $6,906 $103,306 Adopt $104,000 -- 32 of 74 -- 33 Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred and Four Thousand Dollars ($104,000). -- 33 of 74 -- 34 [111] Appeal AV2003/0605 Registered Proprietors: Darren J Eather, Peter J and Cheryl Wickham Real Property Description: Lots 2 and 118 on ML1671, Parish of Killarney Area: 222.634 ha Nature of Land: [112] Again there was agreement between the parties with regard to the classification of country adopted by Mr Redgen, which is as contained in the check valuation described below: [113] Valuation Appealed Against - $97,000 or $425/ha overall. Mr Redgen's classification and check valuation was as follows: 37 ha Rainforest @ $1,600/ha - (includes 29 ha steep to very steep) $59,200 145.234 ha forest @ $230/ha - (includes 20 ha opportunity arable red soils, 50 ha easy to moderate sloping black soil with areas of flag rock and 75.234 ha steeper black soil) $33,404 40.4 ha Vegetation Management Area @ $107.50/ha (includes 13.75 ha regional ecosystem 12.8.5 and 26.65 ha 12.8.1) $4,343 Adopt $97,000 [114] Owners' Estimate of Value - Notice of Appeal - $57,000 Mr Matson's valuation was $61,000 or $275/ha overall and his apportionment was as follows: 37 ha @ $800 per hectare $29,600 145 ha @ $175 per hectare $25,370 40.63 ha @ $150 per hectare $6,090 [115] Again the main difference between the valuers related to the value of the rainforest component. Mr Matson pointed out that, just as Mr Redgen had done, he valued that component on his relativity basis at $100/ha less than the rainforest component in the previous matter and that the difference between himself and Mr Redgen was really a question of approach. [116] Although there was no issue made of it Mr Redgen indicated that, in this matter, the 29 ha of steep to very steep rainforest which was unable to be cultivated safely would have been valued at about $1,550/ha and the balance 8 ha capable of arable use at about $1,800/ha. [117] It was an agreed position between the parties that the Court could take judicial notice of the overall evidence and argument whether or not specifically raised in these individual appeals. -- 34 of 74 -- 35 [118] This is seen as one of the appeals where the "size" issue is relevant to Mr Redgen's considerations, although not specifically raised by Mr Flehr. In the previous matter Mr Redgen said that generally it was found that about 20% of the rainforest grazing classifications on individual properties in this locality had arable potential and that was regarded by him as a "district standard". In the previous matter the value applied to the rainforest classification had been loaded from a standard of about $1,500/ha to $1,700/ha because almost 100% of that land had arable potential. In this matter, it is observed that the area with arable potential is about Mr Redgen's district standard, being a little more than 20%. It seems however that if he would value the 8 ha at $1,800/ha, and the steep country at $1,550/ha, the potential for double accounting on the size factor exists. In my view it is the total area of the rainforest classification which might be relevant if Mr Redgen's size theory is correct, ie that more buyers are able to afford a lesser total sale price and smaller properties will sell at a higher rate on a unit of area basis than larger properties of otherwise comparable country. [119] I am not convinced however that where, as in this and the previous matter, areas of 37 ha and 46 ha of rainforest classifications are being compared and the smaller area is markedly inferior, despite Mr Matson's "slightly inferior" evidence, the relativity applied by Mr Redgen and apparently adopted in a fashion by Mr Matson, would fairly interpret market expectations through the size differentials. [120] With consideration to my findings with regard to the Wickham sale I have concluded that the level of value which would be apportioned by Mr Redgen to the rainforest category overall is excessive. I will adopt $1,475/ha overall for that component. [121] I prefer however Mr Redgen's approach to the level of value that he would apply to the Vegetation Management Area and find more support for his valuation of the forest classification based on the sales evidence on which he has chosen to rely. While Mr Matson pointed out that there is some very poor forest within this classification he did not disagree that there was also an area of 20 ha of opportunity arable red soils as described by Mr Redgen Finding [122] I have decided to determine the unimproved value of this land in the total amount of $92,000, rounded from $415/ha overall, apportioned as: 37 ha rainforest @ $1,475/ha $54,575 145.234 ha forest @ $230/ha $33,404 40.4 ha Vegetation Management Areas @ $107.50/ha $4,343 $92,322 Adopt $92,000 -- 35 of 74 -- 36 Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Ninety-two Thousand Dollars ($92,000). -- 36 of 74 -- 37 [123] Appeal 2003/0606 Registered Proprietors: PJ & C Wickham and PR & PJ Wickham Real Property Description: Lot 32 on M341102, Lots 97 and 102 on M341258, Lot 160 on ML2061, Lots 130 and 131 on ML465 and Lot 3 on RP 51644, Parish of Killarney Area: 455.1 ha Nature of Land: [124] Again there was no disagreement between the parties as to the classification of country as adopted by Mr Redgen, which is as contained in his check valuation described below: [125] Valuation Appealed Against - $210,000 rounded from $460/ha overall. Mr Redgen's classification check valuation was as follows: 113 ha Rainforest @ $1,550/ha - (includes 48 ha suitable for potatoes and 65 ha steeper and broken country) $175,150 122 ha forest @ $170/ha - (includes 12 ha moderate sloping red soils merging to black soils, 44 ha easier slopes black soils and 50 ha inferior stony to rocky black soils) $20,740 220.1 ha Vegetation Management Area @ $85/ha (includes 98.843 ha regional ecosystem 12.8.5 and 121.257 ha 12.8.1) $18,709 $214,599 Less working allowance for non-contiguous properties - 2.5% $5,365 Adopt $210,000 [126] Owners' Estimate of Value - Notice of Appeal - $116,000 Mr Matson had valued the land as two separate parcels in conformity with "split" valuations which had issued subsequent to the lodgement of the notice of appeal. It appears that no appeals had been lodged against the split valuations through an oversight. However, as it happened there would be no dispute as to the valuation of one of the separate parcels (the Davies' block) because Mr Matson agreed with the Department's split valuations on that area of 238.37 ha in the amount of $25,500. Mr Matson valued the other area (the Smith's block) in the amount of $103,000 or $475/ha overall apportioned as follows: 113 ha rainforest slopes including about 40 ha arable @ $750 per hectare $84,750 28 ha cleared forest grazing @ $250 per hectare $7,000 75.82 ha Vegetation Management @ $150 per hectare $11,370 In comparison with the valuation of $210,000 appealed against Mr Matson's total valuation would be $128,500 or about $282/ha overall. -- 37 of 74 -- 38 [127] It can be seen that the main difference between the valuers is again in the value which would be apportioned to the rainforest component, with Mr Matson suggesting $750/ha and Mr Redgen $1,550/ha. [128] There was a further difference in their estimates as to the area which had opportunity arable potential, Mr Matson suggesting 40 ha and Mr Redgen 48 ha (based on his mapping calculations after accepting the areas suggested by Mr Wickham). However Mr Wickham's estimate of the actual cultivated area, according to Mr Redgen, had been about 36 ha which he thought probably excluded areas such as headlands. [129] Mr Matson suggested that the 40 ha of arable land would have a sub-classification value of $1,000/ha and the balance $600/ha as grazing land. Mr Redgen's theory was that within the rainforest component, on his calculations, the arable potentiality represented about 42.5% of the total rainforest area, in excess of double the "district standard" component and the overall valuation had been "slightly loaded" for that reason. It would seem then that on a relativity basis some discounting might have been allowed for the size of the overall rainforest component. [130] Based on my findings that Mr Redgen's application of $1,500/ha to a "standard" rainforest component (ie with 20% having arable potential) is excessive together with, in this matter, the disputed area of arable component and the relatively large area of rainforest, I have concluded that the rainforest component in this case should be reduced to $1,425/ha overall in the apportionment check. [131] Mr Matson described the forest classification on the Smith's block as containing some very poor areas. However he also agreed that Mr Redgen's description appeared reasonable. I see no reason to disturb Mr Redgen's opinion as to the apportionment of value to that classification, once limited to the sales evidence on which he relied. I also accept his more conservative opinion with regard to the level of value to be apportioned to the Vegetation Management Area. Finding [132] Based on $1,425/ha, for the rainforest component, and Mr Redgen's valuation of the other classifications a rounded valuation of $440/ha overall will be adopted, before the allowance of 2.5% made by Mr Redgen for the effect of the severance of these parcels whilst held in the same ownership at the date of issue of the valuation appealed against. [133] The unimproved valuation will be determined as follows: 455.1 ha @ $440/ha $200,244 Less working allowance for non-contiguous properties - 2.5% $5,006 $195,238 Adopt $195,000 -- 38 of 74 -- 39 Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred and Ninety- five Thousand Five Hundred Dollars ($195,000). -- 39 of 74 -- 40 [134] Appeal AV2003/0609 Registered Proprietor: James R Watts Real Property Description: Lot 6 on M341105, Parish of Killarney Area: 64.75 ha Nature of Land: [135] Prior to the hearing the valuers agreed that 53 ha of this property could be included in the rainforest classification with the balance 11.75 ha classified as forest, or "scrubby forest" according to Mr Matson. Mr Redgen described the forest area as including 1 ha of old cultivation, red merging to black soils, 3 ha rocky areas and the balance steep slopes and creek bank approaches. However there was disagreement as to the nature of the rainforest quality. Mr Redgen had based his valuation on there being "11 ha squeaker wood influence, 28 ha suitable for potato growing with 25-30% of that area stony". Mr Matson described the whole of the rainforest classification as having been "used in rotation for potatoes, predominantly light squeaker scrub soils with heavier patches". [136] Valuation Appealed Against - Notice of Appeal - $103,000 - evidence led by Mr Redgen to a lower valuation of $89,000 or $1,375/ha overall. His check valuation was as follows: 53 ha @ $1,600/ha 11.75 ha @ $335/ha [137] Owner's Estimate of Value - Notice of Appeal - $38,000. Mr Matson led evidence to a valuation of $36,500 apportioned as: 53 ha @ $600/ha 11.75 ha @ $400/ha [138] The issues in this appeal related to the quality of the rainforest classification through the extent of the squeaker wood influence and then the value to be applied to the classification. [139] This was a property which had been historically classified by the Department as containing all rainforest classification with no notation as to any squeaker wood influence. Through the objection process Mr Redgen said that he had accepted that there was a forest country influence which could be separately classified and that there was an area of lighter soil which was an indication of the original squeaker timber. He had understood from a visual inspection and discussions with the owner that the squeaker influence was contained to the southern slopes of a ridge line which traversed the -- 40 of 74 -- 41 southern section of the property. That understanding was consistent with the nature of country on adjoining property. However, he had also understood that the owner had considered the balance of the rainforest area to have been good quality rainforest capable of producing up to 18 tonnes of potatoes to the acre, compared to up to 10 tonnes/acre on the lighter soil squeaker country. [140] Mr Watts was called to give his version of the discussion. He agreed that for comparison purposes he had quoted general rainforest/squeaker production figures mentioned by Mr Redgen but denied having suggested that he had ever achieved that level of production from the northern or southern sections of the subject property. In his opinion, the southern slope of the ridge was of lighter inferior soil types but the northern slopes and the balance of the arable country was inferior to the better quality rainforest soils and in his opinion would also have had some original squeaker influence. [141] Mr Matson's evidence was that the southern slope which he believed extended further to the north than suggested by Mr Redgen, was as Mr Redgen described, but in his opinion, which had been formed after a visual inspection in company with "two local farmers" there was definitely a predominating squeaker influence over the whole of the rainforest area. This could be identified by the soil colours. He agreed that the soil quality, because of its fragile nature had the potential to deteriorate, if over the many years since its original clearing, the arable area had been over-worked. [142] One of the reasons for Mr Redgen leading evidence to a lower valuation than the amount appealed against was his acceptance, following a further inspection prior to the hearing, that 25-30% of the arable area had been originally affected by stone, which had been manually removed over the years. [143] The standard argument remained between the valuers as to the true value of rainforest country. Mr Redgen was prepared to accept that the production potential of the squeaker country either for opportunity cropping or grazing was significantly less than the best rainforest country but he was adamant that the squeaker country with potential opportunity use for cropping, regardless of the economics of such use, had to be worth more than rainforest land with no arable potential, such as the Endean land. [144] It seems relevant to observe, given Mr Redgen's opinions in other matters as to the effect on market value of size, that the total area of the rainforest on Endean's property unaffected by the Vegetation Management Area is only 25 ha. Regardless of that observation, I think Mr Redgen has been overly influenced by the fact that regardless of the economics of potato growing, the squeaker country has and is being used by farmers in the rotational management practices. The evidence suggests that red soil forest country -- 41 of 74 -- 42 in this locality is also used for rotational cropping, but the valuation of that type of country is not valued by Mr Redgen using the same logic as he applies to the squeaker country. [145] It seems that even if the soil quality of the subject country which is superior to the southern slope of the southern section has been degraded by poor farming practice through non-observance of district rotational standards, then the question of "worsement" would need to be considered. [146] I have been persuaded that the overall quality of the arable component on this property, including the squeaker component is inferior to Mr Redgen's assessment and particularly so before his recognition of the original existence of stone. The area available for arable use is higher than his theoretical 20% "district standard". However based on my general findings and findings in other individual appeals I am unable to accept that the total rainforest component of 53 ha should have carried an apportionment greater than in the range of $1,350/ha after the allowance for stone. [147] I accept Mr Redgen's assessment of the forest component in light of my general findings. Findings [148] I will adopt a valuation of $75,000 rounded from an overall rate of $1,150/ha. Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Seventy-five Thousand Dollars ($75,000). -- 42 of 74 -- 43 [149] Appeal AV2003/0611 Registered Proprietors: Deane E, Donald B and Wayne Watts Real Property Description: Lot 1108 on M34556, Lots 1737 and 1752 on M34705, and Lot 1945 on M34763, Parish of Killarney Area: 105.6 ha Nature of Land: [150] A compromise was reached between the valuers as to the areas of separate classifications as follows: 58 ha rainforest 33 ha forest 14.6 ha Mapped Vegetation Management Area [151] Valuation Appealed Against - Notice of Appeal - $118,000. Based on the classification compromise, Mr Redgen led evidence to a valuation of $116,000 rounded from $1,100/ha. His check valuation was as follows: 58 ha rainforest (includes 18 ha squeaker wood influence, 12 ha suitable for potato growing) @ $1,500 ha $87,000 33 ha forest (includes 14 ha former opportunity cultivation and at least 6 ha suit opportunity arable, red soils, 4 ha rocky and stony steeper slopes creek bank approaches) @ $775/ha $25,575 14.6 ha Mapped Vegetation Management Areas (includes 10 ha regional ecosystem 12.8.1 and 4.6 ha 12.8.5) @ $210/ha $3,066 Owner's Estimate of Value - Notice of Appeal - $44,500. Mr Matson's valuation, based on the classification compromise became $51,000 apportioned as: 58 ha mostly light squeaker slopes with heavier patches and stony patches @ $600/ha 33 ha mixed forest grazing @ $400/ha 14.6 ha Mapped Vegetation Management Areas @ $200/ha [152] In Mr Matson's opinion the overall rainforest classification was affected by the poorer soil quality associated with squeaker wood influence, although there were some patches of better quality soils. He pointed out that there was an obvious squeaker wood influence within an area of ridge and spurs off that ridge along the State border which adjoins the subject property to the east. [153] Mr Redgen did not disagree that there was such influence in the eastern end of the subject property and while he also agreed that there were patches of lighter soils, it was his opinion that generally the balance of the original rainforest area was of better quality soils some of which (again about 20%) was suitable for potato growing. He pointed out that -- 43 of 74 -- 44 the majority of the classification of the rainforest away from the Border area comprised easy slopes. [154] Despite the easier topography, I accept that the rainforest classification on the subject property is inferior overall to the Wickham sale property, due to the squeaker influence. Consistent with my general findings and findings with regard to other appeal properties I have concluded that the rainforest component on this property should not have exceeded $1,250/ha overall. [155] It is observed that in this matter Mr Redgen has found a significantly higher level of value for the red soil forest component than has generally been the case elsewhere. It appears he has been influenced largely by the extent of the area capable of arable use. In his oral evidence Mr Redgen pointed out that on the Watts' sale property which had been valued at $350/ha overall, a valuation used by Mr Matson as a benchmark level of value for forest classifications, there was a component of about 15% of better quality red soils but about 60% on the subject forest area. Mr Matson had seen the subject forest as superior to the Watts' land but not to the same degree as Mr Redgen. I have made comment in my general findings with regard to the perceived conservative level of value applied by Mr Redgen to forest classifications generally as a result of the evidential basis on which he chose to rely. There is no transparent comparison offered for the level of value applied in this matter. However, the country is clearly superior to the Watts' land overall. Having accepted Mr Redgen's application of value to the forest lands generally I see no reason to depart from his application in this matter. The same applies to the Mapped Vegetation Management Area. Finding [156] Based on $1,250/ha for the rainforest component, and Mr Redgen's valuation of the other classifications, I have decided to determine the unimproved value in the amount of $100,000, rounded from $950/ha overall. Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred Thousand Dollars ($100,000). -- 44 of 74 -- 45 [157] Appeal 2003/0612 Registered Proprietor: Kenneth H Watts Real Property Description: Lot 34 on M341190, Lot 988 on ML1659 and Lot 3 on ML1670, Parish of Killarney Area: 195.6 ha Nature of Land: [158] A compromise was reached between the valuers as to the classification of country being as follows: 88 ha rainforest 97 ha forest 10.6 ha Mapped Vegetation Management Areas [159] Valuation Appealed Against - Notice of Appeal - $160,000 As a result of the compromised classification which led to a small increase in the area of rainforest and a decrease in the forest component compared with Mr Redgen's original valuation he then led evidence to a valuation of $162,500 rounded from $830/ha overall. His check classification approach was as follows: 88 ha rainforest (includes 21 ha squeaker wood influence and 2 ha stony) @ $1,375/ha $121,000 97 ha forest (includes 40 ha opportunity arable red soil, 16 ha easy to moderately sloping red soil merging to black, 18 ha stony and rocky red soil merging to black, 17 ha steep (4 ha of which is actually opportunely cultivated) red soils merging to black and 8 ha swampy puggy and sticky black soils @ $410/ha $39,770 10.6 ha Mapped Vegetation Management Areas (includes 5 ha regional ecosystem 12.8.1 and 5.6 ha 12.8.5) @ $200/ha $2,120 Adopt $162,500 [160] Owner's Estimate of Value - Notice of Appeal - $76,000 Mr Matson's valuation based on the compromised classification became $83,000 rounded from $425/ha overall, apportioned as: 88 ha of mixed, cleared rainforest and squeaker slopes, arable in parts, stony in parts @ $650/ha $57,200 97 ha cleared, grazing, forest, stony and swampy in places, poor squeaker @ $250/ha $24,250 10.6 ha Mapped Vegetation Management Areas @ $200/ha $2,120 [161] It seems that some of the squeaker country in the south-east corner of this property and which Mr Matson described as very poor country, had been included in the forest category by both valuers. There did not appear to be any specific differences between the -- 45 of 74 -- 46 valuers as to the nature of the rainforest or forest country classifications, the difference once again being in the level of value which should be applied. [162] It was Mr Redgen's estimate that of the rainforest country at least 20% would be of arable quality and, as I understood his evidence, as good as if not slightly superior to the arable component in the Wickham sale property. However on an overall comparison the subject rainforest category was inferior as a result of the component with squeaker influence. [163] In this case the basis for the specific application of value to the rainforest component was not provided. It is probable that some relatively minor discounting has resulted from Mr Redgen's opinion generally as to the effect of size, in this case in comparison with the Wickham sale property. [164] Nevertheless, on an overall relativity basis and consistently with my general findings, I am of the opinion that the level of value applied by Mr Redgen to this classification should be reduced to $1,300/ha [165] The effect of the relatively high component of arable quality land in the forest component is not transparent in the level of value applied by Mr Redgen. It is assumed once again that some discounting has occurred, when the level of value applied to the forest component in appeal AV2003/0611 is considered. However, consistent with my findings generally, I find no reason to disturb the level of value which Mr Redgen has suggested for the forest classification or the Mapped Vegetation Management Area components. Finding [166] As a consequence of application of a reduced level of value to the rainforest component, I will determine the unimproved value in the amount of $156,000, rounded from $800/ha overall. Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of One Hundred and fifty-six Thousand Dollars ($156,000). -- 46 of 74 -- 47 [167] Appeal AV2003/0613 Registered Proprietor: Eric G Watts Real Property Description: Lot 8 on M341105, Lot 33 on ML145, Lots 98, 117 and 1135 on ML146, Parish of Killarney Area: 230.956 ha Nature of Land: [168] This valuation is of land held in two separate parcels, the "Mountain View" block and "The Range" block, some distance apart. Mr Redgen has not identified the classifications of each parcel separately but instead describes them in aggregation. It would have been preferable for the sake of transparency and probably for future recording purposes had each parcel been separately described and valued before allowances for severance and, as it happened, size. There were some differences in the estimated areas of the overall classification in aggregation. Mr Redgen valued: 156.097 ha rainforest 64 ha forest 10.859 ha Vegetation Management Area Mr Matson valued: 92.397 ha squeaker scrub soils as the total area of "The Range" block 50 ha rainforest 69 ha forest 19.563 ha Mapped Vegetation Management Area Mr Redgen's explanation for the difference in the Mapped Vegetation Management Areas, as I understood his evidence, was that the area of Mapped Vegetation, for whatever reason, is greater than the actual area of vegetation actually standing. He had included an additional area of 1.7 ha of cleared rainforest and about 7 ha of cleared forest within their respective country classifications, which seems an appropriate approach until the VMA mapping is checked on the ground. With regard to "The Range" block of 92.397 ha Mr Redgen concurred with the advice he was given by the owner on inspection, that the total area would have been original rainforest, but part of it had squeaker wood influence. It appears that that the latter area has been estimated to contain 32.397 ha. A broken area in the north-western corner of this block which Mr Redgen described as 27 ha of rough broken rocky ledges, was described by Mr Matson as equivalent to squeaker country because if it was originally rainforest it is now so badly degraded as to be of significantly inferior value. Mr Redgen -- 47 of 74 -- 48 agreed that it was inferior to the better quality rainforest but still "quite reasonable" grazing land. The home block, "Mountain View", was inspected by Mr Redgen in company with the owner and he had accepted the owner's opinion as to the break-lines between forest and rainforest country. Mr Matson had not inspected the properties with the owner but with other local farmers in the case of "The Range" block and "Mountain View" with a relation of the owner. There is no great difference, except for the actual opinions as to soil types, in the overall classifications, but in the circumstances Mr Redgen's descriptions will be adopted. [169] Valuation Appealed Against - Notice of Appeal - $205,000. Mr Redgen led evidence to a valuation of $195,000 rounded from $845/ha overall, with a check valuation as follows: 156.097 ha rainforest (includes 33 ha suitable for potato growing, 27 ha rough, broken, rocky ledges, 19 ha steep and rocky, 45 ha rolling rocky hills and 32.397 ha squeaker wood influences) @ $1,175/ha $183,414 64 ha forest (includes 4 ha opportunity arable red soil, 6 ha easy to moderately sloping red soils, 18 ha stony black soil with swampy, puggy and sticky patches and 19 ha easy sloping black soils) @ $245/ha $15,680 10.859 ha Vegetation Management Areas (regional ecosystem 12.8.1) @ $85/ha $923 $200,017 Less working allowance for non-contiguous properties 2.5% $5,000 Adopt $195,000 [170] Owner's Estimate of Value - Notice of Appeal - $88,000. Mr Matson's valuation as separate parcels was: "The Range" block - 92.397 ha all light squeaker scrub soils, stony in places, generally easy contour in the south, broken in the north @ $450/ha $41,580 Less severance 2.5% $1,040 $40,540 Adopt $40,500 The "Mountain View" block - 138.563 ha @ $510/ha $70,670 Adopt $70,500 Apportioned as 50 ha mostly rainforest with some merge red Forest @ $850/ha $42,500 69 ha red and black forest grazing slopes @ $350/ha $24,150 19.563 ha @ $200/ha $3,910 -- 48 of 74 -- 49 Finding [171] On my analysis I am satisfied that the value which Mr Redgen would attribute to the rainforest component has been discounted from the level which would be justified, before size consideration, based on my general findings and determinations in other matters. Similarly I find no reason to disturb the levels of value he would attribute to the forest or Vegetation Management Area classifications. It follows that the valuation to which Mr Redgen has led evidence, and which includes an allowance for the severance factor, has not been shown to be wrong. However, the valuation by Mr Redgen before the Court is lower than the valuation appealed against. Order The appeal is allowed. The valuation of the chief executive appealed against in the amount of Two Hundred and Five Thousand Dollars ($205,000) is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Ninety-five Thousand Dollars ($195,000). -- 49 of 74 -- 50 [172] Appeal AV2003/0620 Registered Proprietors: John B and Shirley M Smith Real Property Description: Lot 2 on RP 160487, Parish of Killarney Area: 115.1231 ha Nature of Land: [173] By Mr Redgen: 11 ha rainforest 60 ha forest 44.1231 ha Mapped Vegetation Management Areas By Mr Matson: 50 ha suitable for opportunity cultivation including potatoes 22 ha grazing forest 43.12 ha Mapped Vegetation Management Areas In his oral evidence Mr Matson described the opportunity arable area as a mixture between red soil rainforest, rainforest merging into red soil forest and forest red soils. [174] Valuation Appealed Against - Notice of Appeal -$76,000 Evidence was led by Mr Redgen to a valuation of $70,000 rounded from $610/ha overall. His check valuation was as follows: 11 ha rainforest (includes 3 ha moderately sloping, 3 ha severed by standing timber and 5 ha suit opportunity cropping) @ $2,600/ha $28,600 60 ha forest (includes 39 ha suit opportunity arable red to red/brown soils, 3 ha steep red soils, 9 ha rocky red soil merging to black on moderate and steep slopes, 3 ha puggy black soil former cultivation and 6 ha puggy and rocky black soil swamp) @ $635/ha $38,100 44.1231 ha Mapped Vegetation Management Areas (includes 8.123 ha regional ecosystem 12.8.5 and 36 ha 12.8.1) @ $85/ha $3,750 $70,450 Less severance allowance 1% $704 Adopt $70,000 The property is severed by a surveyed road. A road has been formed in a more appropriate location and the evidence was that whilst a survey has been conducted to accommodate the formed road, the title correction had not been finalised. [175] Owners' Estimate of Value - Notice of Appeal - $39,500 Mr Matson led evidence to a value of $54,000 rounded from $470/ha overall apportioned as : 50 ha suitable for opportunity cultivation including potatoes @ $800/ha $40,000 22 ha forest grazing, stony and wet in places @ $250/ha $5,500 43.12 ha Mapped Vegetation Management Areas @ $200/ha $8,620 -- 50 of 74 -- 51 [176] This was an example of Mr Redgen's opinion that small areas of rainforest should logically carry a higher unit of area value than larger areas of comparable quality. He based his opinion on his experience in other country classifications where longstanding application of higher values to, for example, small areas of prime irrigated cultivation or orchard lands, in comparison with larger areas of comparable quality lands, appeared to be supported by sales analyses. [177] Mr Matson agreed that in situations where smaller blocks were of comparable quality to larger blocks, the smaller block would be expected to command a higher value on a pro- rata unit of area basis. He also agreed that a block of red soil rainforest arable land would carry a higher pro-rata unit of area value than a block of red soil arable forest land. However, with a property such as the subject, where the arable land was of a mixture of merging soil types and where it was possible to consider the mixture of arable land as a whole, for valuation purposes, it was his opinion that the overall mixture would carry pro- rata value something less than pure rainforest and something greater than pure forest. [178] This is also an example of the manner in which the classification method of valuation cannot be proved with any cogency in the absence of sales evidence not only of specific land classifications, but also of properties with mixes of those specific classifications. [179] There is no evidence which supports the value which in this case Mr Redgen would apportion to the small areas of rainforest on a property of overall reasonably "district average" size. Similarly there is no conclusive evidence to support the value which he would apply to the forest classification including an arable component. The question which needs to be determined is not so much whether, in this case, the values which Mr Redgen would apply to the rainforest and forest classifications are correct, but whether the overall valuation has been proved wrong. [180] In my opinion, it is helpful to isolate, as Mr Matson has done, in part at least, the value which Mr Redgen would apportion to the mixed component of 71 ha comprising 11 ha of rainforest and 60 ha of forest. The apportioned amount would be $66,700 or about $940/ha. According to Mr Redgen, about 62% or 44 ha (as opposed to Mr Matson's 50 ha or 69%) is of arable quality, predominantly within the forest classification. In these matters the primary evidence of value, the Wickham sale, has a very similar area of 70 ha of which 3 ha is swampy land and, as I understood Mr Redgen's "district standard" comparison, about 20% or 14 ha would be of arable quality. He apportioned $1,500/ha to the Wickham sale rainforest component but, on my findings a more cautious approach was warranted. The question then is whether 71 ha of the subject land as described would -- 51 of 74 -- 52 be worth $940/ha in comparison with say $1,400/ha on the Wickham sale property. It is observed that Mr Matson would value the 72 ha which he found in the two classifications of the subject property at $45,500 or about $632/ha when he would value the 70 ha of the Wickham sale property at $46,550 or $665/ha in comparison. [181] It is also seen to be of some assistance in this matter, to consider the sales of the softwood scrub blocks off the mountain. In particular, Sale 6 which had a mixed arable content of 46 ha or 71% of its total area, described by Mr Redgen as being of superior quality to the arable content of the subject block, sold to show an analysed unimproved value of $1,161/ha overall, including a grazing component, with an application of $1,130/ha. Finding [182] I have not been persuaded that Mr Redgen's amended valuation of the overall subject property, including the Mapped Vegetation Management Areas has been shown to be wrong or unreasonable. However, as his amended valuation is lower than that appealed against, the appeal will be allowed accordingly. Order The appeal is allowed. The valuation of the chief executive as at 1 October 2002 is set aside and the unimproved value determined in the amount of Seventy Thousand Dollars ($70,000). -- 52 of 74 -- 53 [183] Appeal AV2003/0621 Registered Proprietor: John B Smith Real Property Description: Lot 2 on RP 98146, Parish of Killarney Area: 164.1 ha [184] Nature of Land: By Mr Redgen: 118 ha rainforest 8 ha forest 38.1 ha Mapped Vegetation Management Areas By Mr Matson: 35 ha rainforest arable 35 ha rainforest/forest merge and lighter scrub soils 56 ha grazing rainforest and forest slopes 38.1 ha Mapped Vegetation Management Areas [185] Valuation Appealed Against - $170,000 - rounded from $1,040/ha. Mr Redgen's check classification approach was as follows: 118 ha rainforest (includes 63 ha easy to moderate slopes, 7 ha easier slopes severed by steep slopes, 24 ha squeaker wood influence, 20 ha steep to very steep, 4 ha stony and rocky) @ $1,375/ha $162,250 8 ha forest (all puggy black soils with areas of rock) @ $350/ha $2,800 38.1 ha Mapped Vegetation Management Areas (includes 33.1 ha regional ecosystem 12.8.14 and 5 ha regional ecosystem 12.8.5) @ $140/ha $5,334 Adopt $170,000 [186] Owner's Estimate of Value - Notice of Appeal - $62,000 Mr Matson's valuation was $90,500, rounded from $550/ha, apportioned as: 35 ha, rainforest soils, used in rotation for potatoes @ $1,000/ha $35,000 35 ha, rainforest/forest merge soils and lighter scrub soils, used in rotation for potatoes @ $650/ha $22,750 About 56 ha grazing rainforest and forest slopes, stony in Places @ $450/ha $25,200 38 ha Mapped Vegetation Management Area @ $200/ha $7,620 [187] On analysis there is no significant differences between the valuers as to the nature of the country, although Mr Matson was of the opinion that it was likely that there had been mixtures of rainforest, rainforest to forest merge and forest in the 56 ha which he described as "grazing rainforest and forest slopes" now cleared and developed to the stage where it is difficult to identify with accuracy the break-lines between the original -- 53 of 74 -- 54 vegetation cover. Both he and Mr Redgen inspected the property, albeit at different times, with the owner. Mr Redgen adopted some relatively minor alterations to his original classification based on the owners' advices to him. [188] There was agreement between the valuers that the best quality rainforest arable country was on the northern slopes of an east to west ridge line and that this country was as good as any which is subject of these appeals in this locality. It is common ground that there is a squeaker wood influence and lesser quality lighter soils generally on the southern slopes although Mr Redgen had identified, with the owners' assistance an area of "fair rainforest" near the central southern boundary. [189] Under cross-examination Mr Redgen agreed that he had apportioned sub-classification values of $1,600/ha to the best of the rainforest area of about 51 ha, $1,350/ha to 20 ha of steeper rainforest and $1,150/ha to the balance area of 47 acres of squeaker timber, lighter broken and steeper rainforest. He defended the difference between the rate apportioned to the superior rainforest on this property and the much higher rates on smaller areas of lesser quality rainforest on other appeal properties on the basis of the size argument to which reference was made in the previous matter. [190] Again, on an analysis with the 70 ha of mostly rainforest on the Wickham sale property, of which about 20% was said to have arable potential at say, $1,400/ha (or $1,500/ha on Mr Redgen's application) and a total of $108,600 as said to have been apportioned to 71 ha of the best rainforest on the subject, or about $1,530/ha overall, it seems to me that, if anything, that part of the subject property has been conservatively valued in comparison. Once again it is observed that in comparison to the Wickham sale property to which Mr Matson would apply $665/ha to the relevant 70 ha, he would apply $825/ha to the 70 ha of the subject. I am persuaded that an apportionment of $1,150/ha for the 47 ha of balance country would be excessive, in comparison, but an overall apportionment of $1,375/ha for the total area of 118 ha does not appear to warrant adjustment. I also accept the amounts which Mr Redgen would apportion to the forest and Vegetation Management Areas as being reasonable. Finding [191] An overall valuation of $170,000 rounded from $1,040/ha overall is found to maintain reasonable relativity based on my general findings and has not been shown to be wrong. Order The appeal is dismissed and the valuation of the chief executive affirmed. -- 54 of 74 -- 55 [192] Appeal AV2003/0622 Registered Proprietor: Samuel S Smith Real Property Description: Lot 34 on M341101, Lot 2620 on M34989 and Lot 1, RP 98146, Parish of Killarney Area: 169.8 ha [193] Nature of Land: The valuers agree that the property contained 71 ha of rainforest country and 98.8 ha of Vegetation Management Areas. [194] Valuation Appealed Against - $109,000 rounded from $640/ha overall. Mr Redgen's check classification approach was as follows: 71 ha rainforest (includes 25 ha easy to moderate rolling slopes, 26 ha broken and rocky, 20 ha squeaker wood influence) @ $1,400/ha $99,400 98.8 ha Vegetation Management Areas (includes 7.8 ha regional ecosystem 12.8.14 and 91 ha regional ecosystems 12.8.4 and 12.8.5) @ $155/ha $15,314 $114,714 Less a working and access allowance for non-contiguous parcels and track access 5% overall $5,736 Adopt $109,000 Mr Redgen pointed out that a small area of the aggregated property fronts the bitumen Spring Creek Road while the main area of the aggregation has only track access. He thought the 5% working and access allowance for these non-contiguous parcels was generous. [195] Owner's Estimate of Value - Notice of Appeal - $65,000 Mr Matson's valuation was in the amount of $61,000 rounded from $360/ha apportioned as: 20 ha used in rotation for potatoes, mostly rainforest soils but with some light scrub soil influences in places as $800/ha $16,000 51 ha grazing rainforest and squeaker soil, broken and stony in places @ $550/ha $28,050 98.8 ha Vegetation Management Area @ $200/ha $19,760 $63,810 Less access allowance 5% $3,190 $60,620 [196] It is seen as relevant to once again compare the 72 ha rainforest component with the Wickham sale property. Mr Redgen was of the opinion that, before the disability allowance, $1,400/ha for the subject land "fitted nicely" with the $1,500/ha he applied to the sale land. It is observed that Mr Matson apportioned $665/ha and $620/ha to the sale -- 55 of 74 -- 56 land and subject land respectively, a similar relativity albeit at a significantly lower level of value. In my general findings a reduction of Mr Redgen's application on the sale property to say $1,400/ha for the rainforest component would see his application here reduced to $1,300/ha, also maintaining Mr Matson's implied relativity. I accept the level of value which Mr Redgen would apply to the Vegetation Management Area and the overall allowance of 5% primarily for the poor access to the larger block. Finding [197] Reducing the rainforest component to $1,300/ha would have the following effect: 71 ha rainforest @ $1,300/ha $92,300 98.8 ha Vegetation Management Areas @ $155/ha $15,314 $107,614 Less 5% $5,380 $102,234 I will adopt an unimproved valuation of $102,000 rounded from 169.8 ha @ $600/ha overall. Order The appeal is allowed. The chief executive's valuation is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Two Thousand Dollars ($102,000). -- 56 of 74 -- 57 [198] Appeal AV2003/0624 Registered Proprietor: Norman J Young Real Property Description: Lot 103 ML145 and Lot 2 ML2007, Parish of Killarney Area: 89.767 ha [199] Nature of Land: The valuers agree that the property comprises 85 ha of rainforest and 4.289 ha of Vegetation Management Area. Mr Redgen pointed out that a small severed area of 0.478 ha of creek flat in the same general locality and in the same ownership as the main parcel had been included in this one valuation pursuant to the provisions of the Act (s.34(1)(b)). [200] Valuation Appealed Against - Notice of Appeal - $104,000. Mr Redgen led evidence to a valuation of $101,000 rounded from $1,125/ha overall. His check valuation approach was as follows: 85 ha rainforest (includes 36 ha suitable for potato growing, 36 ha squeaker wood influence, 9 ha steep and rocky, 6 ha stony) @ $1,275/ha $108,375 4.289 ha Vegetation Management Area (regional ecosystem 12.8.5) @ $300/ha $1,287 $109,662 Less access allowance 5% $5,483 $104,179 0.478 ha creek flats @ $750/ha $359 $104,538 Less a working and access allowance for non-contiguous Parcels 2.5% $2,613 Adopt $102,000 [201] Owner's Estimate of Value - Notice of Appeal - $38,000. Mr Matson's valuation was in the amount of $44,000, rounded from $500/ha overall and apportioned as: 32 ha used in rotation for potatoes, predominantly light squeaker scrub soils but with heavier patches @ $600/ha $19,200 53 ha predominantly light squeaker scrub soils, slopes and stone, grazing @ $500/ha $26,500 4.289 ha Vegetation Management Area @ $200/ha $860 $46,560 Access allowance 5% $2,330 $44,230 [202] It was Mr Matson's evidence that the 32 ha used for rotational potato growing had required removal of significant amounts of stone before it was capable of arable use and -- 57 of 74 -- 58 any premium that the land carried over the balance area in its unimproved state, was limited by the cost of the stone removal. [203] Mr Matson was prepared to accept that the country overall could be classified as rainforest but generally of poor soil quality due to the heavy squeaker wood influence. [204] Mr Redgen agreed that this was a "very light" block due to the squeaker influence and did not dispute that stone would have been removed from some of the areas of cultivation. In his opinion, total areas greater than the 36 ha which he had assessed as used for rotational cropping (based on the owner's advice) had been cultivated in the past, probably as regrowth control management. He said he had made allowance for the squeaker influence in comparison with his standard $1,500/ha for the Wickham sale land where only about 20% was capable of arable use. [205] Consistent with my general findings relative to the application of value to the Wickham sale land, the effect of the squeaker country within the rainforest classification, and allowances made by Mr Redgen in other valuations for the presence of stone in arable areas, I have concluded that the rainforest classification on this property should not exceed $1,150/ha overall, before allowance for the poor access. I find no reason to interfere with the level of value which Mr Redgen would apply to the Vegetation Management Area or the small severed parcel. However, in this case, as the level of value which would be applied to the small severed area has been exposed, I am of the opinion that it is overly generous to then make some further allowance for any disability which might be associated with working or severance of the two non-contiguous parcels. The allowance significantly exceeds the value applied to the small severed parcel and it seems to me that the benefits to the owner of having a small site included in an aggregated valuation based on exclusive use for farming purposes, outweighs any disability caused by the severance. Finding [206] I will adopt an overall valuation of $94,000 rounded from $1,050/ha overall which would be apportioned as follows: 85 ha rainforest @ $1,150/ha overall $97,750 4.289 ha Vegetation Management Area @ $300/ha $1,287 $99,037 Less access disability 5% $4,952 $94,085 Add 0.478 ha severed area @ $750/ha $359 $94,444 Adopt $94,000 -- 58 of 74 -- 59 Order The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Ninety-four Thousand Dollars ($94,000). -- 59 of 74 -- 60 [207] Appeal AV2003/0625 Registered Proprietors: Fraser J, Sharon L and Eric L Young Real Property Description: Lot 13 M341104, Lot 89 M341192, Lot 88 M341193, Lots 1727 and 1728 M34655, Lot 1792 M34764, Lot 2285 M34921 and Lot 2361 M34989, Parish of Killarney Area: 323.571 ha [208] Nature of Land: There was general agreement between the valuers, both of whom had been assisted by the accuracy with which one of the owners had measured areas of some sub-classifications, that this property comprised: 44 ha rainforest 167 ha forest 112.571 ha Vegetation Management Areas [209] Valuation Appealed Against - Notice of Appeal - $119,000 Mr Redgen led evidence to a valuation of $114,000 rounded from $355/ha overall. His check valuation approach was as follows: 44 ha rainforest (includes easy to moderate slopes all suitable for potato growing) @ $1,750/ha $77,000 167 ha forest (includes 27 ha opportunity arable red soils, 15 ha easy to moderate sloping red soil merging to black soil and 125 ha moderate to steep rocky black basalt soils) @ $245/ha $40,915 112.571 ha Vegetation Management Areas (includes 27 ha regional ecosystem 12.8.14 and 85.571 ha ecosystems 12.8.4 and 12.8.5) @ $77.50/ha $8,724 $126,639 Less access allowance of 10% $12,664 Adopt $114,000 [210] Owners' Estimate of Value - Notice of Appeal - $71,000 Mr Matson's valuation was in the amount of $84,000 rounded from $260/ha overall apportioned as: 44 ha rainforest arable, easy to steep slopes @$800/ha $35,200 29 ha forest arable easy to moderate slopes @ $450/ha $13,050 137 ha (sic) rough forest grazing @ $175/ha $23,975 113.57 ha Vegetation Management Areas @ $150/ha $17,035 $89,260 Less access disability 5% $4,460 -- 60 of 74 -- 61 [211] Both valuers agreed that the gazetted access to the property was very poor. Mr Redgen's more generous allowance was made on the basis that apart from the nature of the gazetted access, the owners found it more practicable to gain access via a circuitous route over the State border rather than by the more direct route to Killarney. [212] Mr Redgen defended his opinion that on an apportionment of the overall value, a level of value of $1,750/ha was applicable on this property, in comparison in particular, with the $1,600/ha he would apply to "some of the best rainforest in the district" on the Smith property (AV2003/0621). Matters which he considered relevant in the comparison process were the size of the total rainforest component on the subject being much smaller than the total component on Smith's (44 ha and 118 ha respectively, regardless of the best on Smith's containing only 51 ha). Another consideration was the fact that all of the subject rainforest was suitable for rotational arable use while apparently something less than the 51 ha of the best of Smith's was not considered by him to be arable. It is also observed that his standard of $1,500/ha or about $1,400/ha on my finding, for the Wickham sale property was based on an arable component of only 20%. [213] As I understood the overall evidence the subject rainforest is regarded as being of a lesser soil quality than is the best of Smith's arable land. For example Mr Matson applied $800/ha and $1,000/ha respectively. [214] I have not been convinced that, on an apportionment basis, despite size considerations, the subject rainforest component should have a value in excess of that which Mr Redgen would have applied to the best of Smith's. An application of $1,600/ha for the 44 ha of the subject land would appear reasonable in comparison with my finding of $1,375/ha overall for the 118 ha of Smith's or in particular the $1,400/ha I would apply to the Wickham sale property rainforest component of 70 ha. [215] For reasons expressed in other matters, I will not disturb the level of value which Mr Redgen would apply to the forest or Vegetation Management Area classifications and will adopt his allowance for the subject property's access disability. Finding [216] I will adopt an overall valuation of $108,000 rounded from $335/ha overall, apportioned as: 44 ha rainforest @$1,600/ha $70,400 167 ha forest @ $245/ha $40,915 112.57 ha Vegetation Management Areas @ $77.50/ha $8,724 $120,039 Less access disability 10% $12,004 $108,035 -- 61 of 74 -- 62 Order The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Eight Thousand Dollars ($108,000). -- 62 of 74 -- 63 [217] Appeal AV2003/0626 Registered Proprietors: Simon J and Dorothy E Bolitho Real Property Description: Lot 2044 ML1442 and Lots 2 and 3 RP 175340, Parish of Killarney Area: 44.71 ha [218] Nature of Land: After consultation Mr Matson agreed with Mr Redgen that the property comprises 39 ha rainforest and 5.71 ha Vegetation Management Area. [219] Valuation Appealed Against - $65,000 rounded from $1,450/ha. Mr Redgen's check classification approach was as follows: 39 ha rainforest (includes 4 ha suitable for potato growing, 12 ha steeper, 20 ha easy to moderate rolling slopes, 2 ha rocky outcrops, 1 ha squeaker wood influence) @ $1,700/ha $66,300 5.71 ha Vegetation Management Area (includes regional ecosystems 12.8.7 and 12.8.19) @ $105/ha $600 $66,900 Less working allowance for severance by bitumen road 2.5% $1,673 Adopt $65,000 [220] Owners' Estimate of Value - Notice of Appeal - $26,500 Mr Matson's valuation after some minor adjustment to his classification as agreed, would have become $26,000 rounded from $580/ha overall, apportioned as: 39 ha grazing rainforest moderate slope @ $650/ha $25,350 5.71 ha Vegetation Management Area @ $200/ha $1,142 $26,492 Less severance 2.5% $662 $25,830 [221] There was some difference of opinion about the area with arable potential. Mr Redgen had adopted the area of 4 ha as advised by the owner. Mr Matson thought some of that area may have been across the State border where the boundary was difficult to establish with precision. In any event Mr Matson thought it was irrelevant as even 4 ha would be too small a component for it to be economically worked. Mr Redgen accepted that the owner did not regard it as practical to carry on any arable activity. [222] The argument of Mr Redgen was that the small size factor was again relevant in this matter. However, I am persuaded that this property would be regarded, for the purposes of farming, as a small fair quality rainforest grazing block with minor arable potential. The evidence indicates to me that it is of lesser quality and value than for example the 44 ha in the previous matter of Young (AV2003/0625). The 25 ha of rainforest grazing in -- 63 of 74 -- 64 the Endean sale property was valued, probably conservatively, by Mr Redgen at $1,375/ha and on my finding the 70 ha of rainforest with 20% arable potential in the Wickham sale property would have an apportioned value of $1,400/ha. For the purposes of farming, as opposed to a rural homesite, I find no persuasive reason for the subject rainforest land to be valued at more than $1,450/ha, despite its relatively small area. I would adopt Mr Redgen's valuation of the Vegetation Management Area and his allowance of 2.5% for the severance by the road. According to Mr Redgen stock water has to be piped from the northern severance to the southern severance. Finding [223] I will determine the unimproved value of this land in the amount of $56,000 rounded from $1,250/ha overall. Order The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Fifty-six Thousand Dollars ($56,000). -- 64 of 74 -- 65 [224] Appeal AV2003/0627 Registered Proprietor: Ellen Bowley Real Property Description: Lot 14 ML145, Parish of Killarney Area: 59.19 ha [225] Nature of Land: The valuers agree that this property is wholly rainforest albeit of an inferior quality. [226] Valuation Appealed Against - Notice of Appeal - $84,000. Mr Redgen led evidence to a valuation of $76,000 rounded from $1,285/ha overall. His check classification approach was as follows: 59.19 ha rainforest (includes 3 ha easier slopes, 16 ha steeper rocky slopes and 40.195 ha easy to moderate rolling slopes with squeaker wood influences) @ $1,350/ha $79,907 Less access allowance for red soil track 5% $3,995 Adopt $76,000 [227] Owner's Estimate of Value - Notice of Appeal - $30,500 Mr Matson's valuation was $28,000 rounded from $500/ha overall, before the allowance of 5% for the access disability [228] Mr Matson categorised this block as having the most inferior quality country of all the rainforest land in the area, despite it having generally fair topography. Mr Redgen did not disagree describing it in his oral evidence as a "very ordinary block because of the degree of squeaker influence". The elderly owner leases the block to others and the quality of the natural pasture has suffered from lack of fertiliser application. Nevertheless, the state of the pasture was regarded by Mr Matson as indicative of the quality of the soil in its natural state. [229] Mr Redgen took the view that his application of $1,350/ha before the access disability allowance was fair when compared with the $1,500/ha applied by him to the larger component of 70 ha of better quality rainforest on the Wickham sale property. He described the difference in size (70 ha compared to 59 ha) as having significance. I have not been persuaded that, in comparison, the size difference between the Wickham sale property and the subject is of any real significance or a discount of 10% for the inferior quality of the country is realistic. Having found that an application of $1,400/ha to the Wickham sale property is warranted, I find that an application of $1,100/ha is more realistic for this slightly smaller component of considerably inferior rainforest country, before the allowance for access. -- 65 of 74 -- 66 Finding [230] I will determine the unimproved value in the amount of $62,000 rounded from $1,045/ha after the access disability allowance. Order The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Sixty-two Thousand Dollars ($62,000). -- 66 of 74 -- 67 [231] Appeal AV2003/0636 Registered Proprietor: Inez L Rosser Real Property Description: Lot 21 on M341103 and Lot 9 on ML1667, Parish of Killarney Area: 128.9 ha [232] Nature of Land: The classification of the country was agreed between the valuers prior to the hearing as follows: 6 ha rainforest 12.5 ha forest 45.432 ha Vegetation Management Areas 65 ha Nature Conservation Agreement Area [233] Valuation Appealed Against - Notice of Appeal - $57,000. Primarily as a result of the compromise reached as to the extent of the area of rainforest, Mr Redgen led evidence to a valuation of $33,000 rounded from $255/ha overall. His check classification approach, as amended, was as follows: 6 ha rainforest (moderate to steep with areas of rocky outcrops) @ $3,250/ha $19,500 12.5 ha forest (moderate to steep) @ $350/ha $4,375 45.432 ha Vegetation Management Areas (includes regional ecosystems 12.8.1 and 12.8.5) @ $135/ha $6,133 65 ha Nature Conservation Agreement Area @ $45/ha $2,925 Adopt $33,000 [234] Owner's Estimate of Value - Notice of Appeal - $29,000. Based on the agreed classification Mr Matson's valuation became $18,000 rounded from $140/ha overall, apportioned as: 6 ha cleared rainforest grazing @ $700/ha $4,200 12.5 ha semi open forest grazing @ $350/ha $4,375 45.432 ha Vegetation Management Area @ $200/ha $9,086 65 ha subject to Nature Conservation Agreement @ $10/ha $650 $18,311 [235] Mr Redgen had originally valued an area of 18.5 ha of rainforest classification (in two areas severed by standing vegetation) at $2,200/ha overall, the rate/ha related to the relatively small area. Access into the property is difficult and he has not inspected the western section except from positions on adjoining properties. There were conflicting notes on the departmental files as to the nature of the western section and he apparently misinterpreted advice from the owner as to the overall nature of that area. Apparently -- 67 of 74 -- 68 based on Mr Matson's advice, Mr Redgen was prepared to accept that an area of 12.5 ha was forest country rather than rainforest. His amended much smaller area of 6 ha was then considered to add value to the overall property equivalent to $3,250/ha. [236] Mr Redgen remained adamant that as part of a property to be valued for the purposes of farming, based on advice given him as to the number of stock running on the land, the rainforest area was the most valuable component of the overall property and should be valued accordingly. The selected rate/ha resulted from a subjective opinion as to the extent of added value. Mr Matson was just as adamant that for farming purposes the small area of rainforest available for productive use carried no premium in value over and above the level of value applied to larger areas in the district. In fact, Mr Matson believed the area was so small in relative district terms that it might even be less valuable than larger areas of comparable type country capable of more economic use. [237] I am able to accept Mr Redgen's general argument that size is a factor which influences market value and that where properties contain mixed country classifications, the size factor should logically relate to the specific classification of country rather than the overall area of the property. There is however logic in Mr Matson's argument as well, that once an area of a specific classification becomes so small as to have little effect on the productive capacity of the overall property, the size factor argument relative to that small classification becomes largely irrelevant. [238] This is the type of property which fits the "unique" category. The owner is a well-known local whose primary interest in the use of this property is for conservation purposes as a habitat for lyrebirds. That interest provides the background for the existence of the area subject to the Conservation Agreement between her and the State. The area subject to that agreement will be discussed later. However in addition there are the vegetated areas, the use of which are subject to the restrictive provisions of the VMA. Unrestricted use of the property for purposes of farming associated with grazing of cattle is limited to the 18.5 ha of mostly cleared rainforest and forest classifications in the two severed sections. [239] There was evidence that the use of the property for the grazing of cattle was conducted by an adjoining owner. While that does not mean that the subject property would not qualify to be valued as land exclusively used for the purposes of farming, subject to compliance with the provisions of the Act, it seems highly likely that it would qualify only when used in conjunction with other lands and not when used as a separate entity. If it was not to be "artificially" valued on the basis that it was exclusively used for the purposes of farming, then far different valuation considerations would be relevant. -- 68 of 74 -- 69 [240] As it is not suggested by Mr Redgen, albeit subject to relevant considerations in the future, that the property should have been valued at the relevant date other than as exclusively used for purposes of farming, the full effect of that artificiality has to be considered. [241] As far as the rainforest component is concerned, the only market potential that land has, in reality, for exclusive use for purposes of farming as defined in the Act, is to either an adjoining or nearby owner. The only reason an adjoining or nearby farmer would be interested "for farming purposes" would be to extend existing areas of grazing land. It could then be argued that the adjoining owner would be increasing the size of his grazing component and, on Mr Redgen's size factor considerations, reducing the overall value of his total farming area. I think in the circumstances of the subject argument, the addition of a small area would be taking the size factor argument too far. However, unless some particular commercial advantage was obvious for an adjoining owner to acquire the land, as a prudent person that adjoining owner would not be expected to pay the type of premium value suggested by Mr Redgen. I am unable to envisage any other buyers for the grazing component of the subject land, except for other than the purposes of farming as defined. [242] It follows, in my opinion, that given the artificiality involved in the basis of valuation necessitated by the provisions of the Act, and in the specific circumstances of the subject rainforest land, it should carry no particular premium related to its small size. On a strict relativity basis as rainforest grazing land I see its highest and best potential use in association with adjoining land when at least some of its access problems would be eliminated. I will adopt a valuation of $1,350/ha for this component. [243] In this case, both valuers have adopted the same level of value for the forest grazing component and consistent with my general findings I will accept that level. Mr Redgen has been more conservative than Mr Matson in the level of value he would adopt for the Vegetation Management Areas and for consistency, Mr Redgen's level will be adopted. [244] Finally both valuers attempted to apportion a nominal level of value to the Nature Conservation Agreement Area. I think that is the correct approach although I see no reason for an application of other than a nominal total amount rather than an amount calculated on a rate/ha. The land has no transparent use "for the purposes of farming" and is, if anything, a hindrance to management of any farming operation on the balance area. Conversely of course it would likely be considered an attractive feature of a rural homesite retreat. Mr Redgen's approach was to apply the same "ownership" value/ha as the Department had used for the valuation of other lands in the Shire with no productivity -- 69 of 74 -- 70 potential. Not a great deal turns on it but the management implications in the subject case are quite onerous. I will adopt a nominal amount of $1,000, unrelated to a valuation on a unit of area basis. Finding [245] I will adopt a rounded valuation of $20,000 which could be apportioned as: 6 ha rainforest @ $1,350/ha $8,100 12.5 ha forest @ $350/ha $4,375 45.432 ha Vegetation Management Area @ $135/ha $6,133 65 ha Nature Conservation Agreement Area - nominal $1,000 $19,608 Adopt $20,000 It should be noted by the appellant that should this property not continue to be used exclusively for the purposes of farming, no reliance could be placed on this determination, which recognises that the highest and best use of the land is not for the purposes of farming, as defined in the Act. Order The appeal is allowed. The chief executive's valuation is set aside and the unimproved value as at 1 October 2002, pursuant to s.17 of the Valuation of Land Act 1944, is determined in the amount of Twenty Thousand Dollars ($20,000). -- 70 of 74 -- 71 [246] Appeal AV2003/0637 Registered Proprietor: Mervyn E Hancock Real Property Description: Lot 1974 ML1442, Parish of Killarney Area: 29.15 ha [247] Nature of Land: Agreement was reached between the valuers in arriving at the following classification of country: 23 ha rainforest 3 ha forest 3.15 ha Vegetation Management Area [248] Valuation Appealed Against - Notice of Appeal - $54,000. Mr Redgen led evidence to an amended valuation of $50,000 rounded from $1,715/ha overall. His check classification approach was as follows: 23 ha rainforest (includes 2 ha quarry affected, 21 ha rolling easy to moderate hills and ledges with some areas of rock) @ $2,100/ha $48,300 3 ha forest (moderate to steep, rocky merging red to brown soil) @ $410/ha $1,230 3.15 ha Vegetation Management Area (includes regional ecosystem 12.8.5 which Mr Redgen pointed out was incorrectly identified as rainforest when the country was vegetated with stringy bark and messmate forest) @ $370/ha $1,166 $50,696 Less working allowance for split by bitumen road 1% $507 Adopt $50,000 [249] Owner's Estimate of Value - Notice of Appeal - $17,000 Mr Matson's valuation was amended to $18,000 rounded from $610/ha overall, apportioned as: 23 ha rainforest grazing, stone and squeaker influence in places @ $700/ha $16,100 3 ha forest grazing @ $350/ha $1,050 3.15 ha Vegetation Management Area @ $200/ha $630 $17,780 Adopt $18,000 [250] The main difference between the valuers was again the level of value applicable to the rainforest classification. Mr Redgen was consistent in arguing that the value of an area of this size would be expected to increase "sharply" from the standard $1,500/ha applied by -- 71 of 74 -- 72 him to the 70 ha of rainforest on the Wickham sale property. No reference was made in his oral evidence to the Endean sale property to which he had applied $1,375/ha to 25 ha of rainforest grazing. In his written report sale schedule, the Endean rainforest was described as "easy sloping with small areas of steeper ridges" but "inferior in quality of its rainforest". The Endean land was also described as having inferior location but superior natural water. [251] I am not persuaded that, apart from the Vegetation Management Area, the 25 ha of Endean land even if conservatively valued, is as inferior to the subject land as Mr Redgen's valuations would suggest. Furthermore, although I would reduce the application on the Wickham sale property to $1,400/ha for country described as superior, I am not persuaded that the sales evidence of the Endean and Wickham properties supports the assertion made by Mr Redgen that a "sharp increase" in value necessarily results when the size of a particular classification reduces from 70 ha to 25 ha. [252] With such a small component of forest on a predominantly rainforest block I will adopt $1,500/ha for the area of 26 ha of both classifications overall, including the effect of the road severance and quarried area, but exclusive of the Vegetation Management Area for which land I would adopt Mr Redgen's assessment. Finding [253] On the above basis the unimproved value will be determined in the amount of $40,000 rounded from $1,375/ha overall, apportioned as follows: 26 ha predominantly rainforest @ $1,500/ha $39,000 3.15 ha Vegetation Management Area $1,166 $40,166 Adopt $40,000 Order The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of Forty Thousand Dollars ($40,000). -- 72 of 74 -- 73 [254] Appeal AV2003/0638 Registered Proprietor: Margaret R Hancock Real Property Description: Lot 115 ML1598, Parish of Killarney Area: 123.1 ha [255] Nature of Land: The valuers have agreed on the following classification of country: 114 ha rainforest 9.1 ha forest [256] Valuation Appealed Against - Notice of Appeal - $150,000. Mr Redgen led evidence to an amended valuation of $146,000 rounded from $1,190/ha overall. His check classification approach was as follows: 114 ha rainforest (includes 81 ha easy to moderate rolling hills with steeper pinches and areas of rocky outcrops, 33 ha easy to moderate rolling hills with steeper pinches with squeaker wood influence) @ $1,250/ha $142,500 9.1 ha forest (moderate to steep, rocky merging red to brown soil) @ $335/ha $3,049 Adopt $146,000 [257] Owner's Estimate of Value - Notice of Appeal - $52,000 Mr Matson's amended valuation was $77,500 rounded from $630/ha overall, apportioned as: 114 ha rainforest grazing, easy sloping to steep and stony, with lighter squeaker type patches @ $650/ha $74,100 9.1 ha cleared forest grazing @ $350/ha $3,185 $77,285 Adopt $77,500 [258] Mr Matson had not attempted to calculate the area of squeaker influence due to the mixed nature of the country. Although his valuation was closer to the level he had adopted as a basis for "squeaker arable/grazing" country, it was higher than the level he had adopted generally for "rainforest grazing". In his oral evidence, he said that some areas of the easier quality rainforest would have arable potential. It is observed that he would have valued 63 ha of the adjoining Wickham sale land at $700/ha or the 70 ha on that property including the forest influence at $665/ha. Those figures compare with his valuation of -- 73 of 74 -- 74 $650/ha for 114 ha of the subject rainforest or $630/ha for the overall property including the forest component. [259] Mr Redgen had valued 70 ha of the Wickham rainforest with some forest influence at $1,500/ha and the subject rainforest at $1,250/ha. His evidence was that "some discount" had been made for size and also for the squeaker influence which he estimated affected about one-third of the total area of rainforest. In his opinion there would have been about 20% of the area of rainforest which would have arable potential and that compared favourably with the Wickham sale land. I can accept that some decrease in value below the Wickham sale component would reflect market expectations, if the land was strictly comparable and then further discounting in recognition of the squeaker influence. Finding [260] In light of my findings with regard to an application of $1,400/ha to the Wickham rainforest component and findings relevant to the effect of squeaker influence on, for example the Dagg property (Appeal AV2003/0608), I will in this case adopt an unimproved value of $138,000 rounded from $1,125/ha overall for this relatively large area of rainforest including the squeaker influence but also including a small component of forest country. Order The appeal is allowed. The valuation of the chief executive is set aside and the unimproved value as at 1 October 2002 determined in the amount of One Hundred and Thirty-eight Thousand Dollars ($138,000). RE WENCK MEMBER OF THE LAND COURT -- 74 of 74 --