Batzloff v Department of Natural Resources, Mines and Energy [2004] QLC 52

LAND COURT OF QUEENSLAND CITATION: Batzloff v Department of Natural Resources and Mines [2004] QLC 52 PARTIES: R.T. and B.M. Batzloff (applicants) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NO: AV2002/0596 DIVISION: Land Court of Queensland PROCEEDING: An appeal against an unimproved valuation – Valuation of Land Act 1944 – Murweh Shire DELIVERED ON: 16 July 2004 DELIVERED AT: Brisbane HEARD AT: Charleville MEMBER Mr RE Wenck ORDER: The appeal is allowed. The valuation of the Chief Executive is set aside and the unimproved value of the property “Laguna” determined in the amount of Six Hundred and Fifteen Thousand Dollars ($615,000) as at 1 October 2001. CATCHWORDS: Statutory valuation – unimproved value – Valuation of Land Act 1944 Relativity of valuations – Sub-market area – Court determinations in representative cases – Negotiated settlements in same SMA but adjoining Shire Court determinations in representative cases – Basis for relativity considerations Negotiated settlements – No weight given in absence of professional evidence as to facts. APPEARANCES: Mr Batzloff in person Mr K Fisher, Barrister, Crown Law instructed by Chief Executive -- 1 of 10 -- 2 [1] This is an appeal against the Chief Executive’s valuation, as at 1 October 2001, of a property known as “Laguna” located north-west of Augathella in Murweh Shire. [2] The real property description of “Laguna” is Lot 3 on BND 13, Parish of Rayner, containing an area of 7,688.2178 ha. [3] The valuation originally appealed against was in the amount of $720,000 ($93.65 ha) when the appellants’ estimate was $468,000. [4] The property is situated in a sub-market area (“SMA”) identified by the Department’s valuers as the Tambo Downs SMA. That SMA is located in the central northern part of Murweh Shire, then northerly into Tambo Shire. The original valuations issued in this SMA as at 1 October 2001 both in Murweh and Tambo Shires represented a “blanket” 100% increase over the previous valuations as at 1 October 1998. Many landowners had objected to the valuation of their properties and proceeded to file appeals in the Land Court. In Murweh Shire, Mr Dominic Devine, a registered valuer, acted as agent for many owners, including Mr and Mrs Batzloff, while in Tambo Shire, Mr Alastair Boyd acted as agent for a number of owners. [5] It was decided between Mr Devine’s group and the Departmental valuers that representative cases from various SMA’s in Murweh Shire should be set down for hearings. After the Court’s determinations were handed down, it was expected that, “save for any specific matters relating to individual properties or localities”, those determinations would be applied in a “blanket” fashion over the remaining appeals in the relevant Murweh Shire SMA’s. Mr Boyd had no formal input into the hearing of these representative appeals, although clearly the determinations would have been expected to have significance with regard to valuations at the same date, of similar classes of country in SMA’s which extended into Tambo Shire. The representative cases were duly heard, the appellants being represented by Counsel with Mr Devine providing expert valuation evidence. For the Tambo Downs SMA in Murweh Shire, Mr G Naish was the valuer responsible for defending the Department’s valuations. The thrust of the appellants’ case was that in the Tambo Downs SMA, the increase in values since the previous valuation should have been 30% rather than the 100% applied by the Department. [6] The end result was that the Court, in Bauer and Ors v Department of Natural Resources and Mines [2003] QLC 0064 found that the 100% increase in the Tambo Downs SMA in Murweh Shire should be reduced to 80%. The “blanket” application assumed the correctness of the relativity between valuations within the relevant SMA in Murweh Shire. -- 2 of 10 -- 3 [7] Consistent with that assumption the valuations within the Murweh Shire Tambo Downs SMA were reduced by the Department. The valuation of “Laguna” was reduced to $648,000 ($84.28 ha), reflecting the 80% increase above the previous valuation. The appellants did not accept the correctness of that valuation and decided to have Mr Boyd act as their agent in place of Mr Devine. [8] The evidence was that, subsequent to the Murweh Shire determinations having been published, Mr Boyd and Departmental officers set about negotiating the Tambo Shire appeals with the result that each of those appeals was settled and/or withdrawn from the list awaiting hearing and determination by the Court. On the evidence prepared by Mr Boyd for Mr Batzloff the valuations “settled” in the Tambo Downs SMA within Tambo Shire (the boundary of which adjoins “Laguna”) significantly disturbed the previously existing relativities between valuations not only in Tambo Shire but also across the Murweh Shire boundary. [9] The Murweh Shire representative appeal properties within the Tambo Downs SMA are located in the same general locality as “Laguna” and two, “Aubigny” and “Wicklow” immediately adjoin to the south. The Court determinations for those properties, reflecting the increase of 80% above the previous valuations, were rounded from $84 ha and $80 ha respectively. “Aubigny” contains an area of 7,212 ha and “Wicklow” 7,179 ha. The determination for the much larger representative property “Southampton Downs”/“Glendoroy” also reflected an increase of 80% and the previously existing relativities between the valuations of those three representative properties was preserved, consistent with the opinions of the valuers as to the correctness of that relativity. However, for a fourth representative property “Brumich” the Court’s determination reflected an increase of 85% on the evidence of Mr Devine, that its previous valuation had been too low in comparison. [10] The written evidence prepared for Mr Batzloff by Mr Boyd extensively covered matters of a relativity nature. It may be summarised as having provided Mr Batzloff’s personal opinion as to the correct description of the “Laguna” country and his estimate of its carrying capacity, then comparisons with the relevant representative properties, as well as various properties in Tambo Shire for which the appealed valuations had been “settled”. In the written statement of evidence there was an inference that the Court may have come to a different conclusion in the Murweh Shire appeal determinations, had it been apprised of certain opinions held by Mr Boyd as to the weight which should have been placed on the sale of the property “Downlands” which sale had formed part of Mr Naish’s valuation basis. -- 3 of 10 -- 4 [11] Mr Boyd had intended that Mr Batzloff give evidence regarding a 1994 sale of “Aubigny” for $123.56 ha improved. That sale had been analysed by the Department to show an unimproved value of $43.96 ha. In comparison, the property “Downlands” had sold for $105.78 improved in 1994 then $127.97 in 2000 “just 4% above the 1994 sale of “Aubigny”.” Mr Boyd clearly saw significant relevance in this information as an argument against the correctness of the Department’s analysis of the “Downlands” sale in 2000 at $88.71 ha unimproved and the Department’s assessment that there had been “100% increases above the market which existed before.” His writings included “The Delegate” (in the Tambo Shire pre-court conferences) “was informed at that time if those matters proceeded to the Land Court for hearing, that evidence would be led to the court”. If Mr Boyd had personally given evidence in this matter, some cogency as to the relevance of his writings may have been revealed. However, as it stands, the “evidence” in relation to the “Downlands” sales has no relevance. The “Downlands” sale was used by Mr Naish as evidence of the unimproved value of that property at the date of its sale in 2000. The sale analysis supported the increase applied over the previous valuation. That was the relevance of the sale in 2000. This Court has often stated that it is not the correctness of an earlier valuation which is being determined in these matters. There were far more “facts” revealed in connection with the “Downlands” sale in 2000 in the Murweh Shire appeals than Mr Boyd apparently provided to Mr Batzloff. [12] The “facts” are that Mr Boyd’s advice to Mr Batzloff did not reveal any relevant sales evidence which might have been of further assistance to the Court in determining this matter. The factual information provided with regard to the extent of reductions in valuations in Tambo Shire is accepted, but in the absence of the reasons for those reductions in individual cases, no assistance is gained. The written evidence of Mr Batzloff included the following: “· The Delegate of the Chief Executive and the Senior Valuer had the Decision of the Land Court of 16 September 2003 before them at the pre-Court conferences,  they had all the sales evidence before them (not the limited number used by Mr Devine)  they were aware of the above facts about “Aubigny” and therefore they had a mass of evidence before them in making the determinations of the valuations in the Tambo Downs SMA in Tambo Shire. I therefore submit those determinations are relevant in these proceedings, along with the determinations of the Land Court as set out in its Decision of 16 September 2003.” [13] It may be inferred that with full knowledge of the Court’s findings in the Murweh Shire appeals, the Department has been convinced that previously existing relativities between -- 4 of 10 -- 5 valuations not only in Tambo Shire but also between Tambo and Murweh Shire required correction. However it should have been clear from the reasons in the Murweh Shire determinations that the sales evidence was found to support the 80% increase in the Tambo Downs SMA and possibly higher increases in some localities within that SMA (see Bauer & Ors [26]), “save for any specific matters relating to any individual properties.” [14] Much of the written evidence produced for Mr Batzloff suggests that the valuation of “Laguna” should be corrected as it is now out of relativity with the valuations of the various properties mentioned by Mr Boyd in Tambo Shire. Mr Batzloff himself had visited all but one of the properties with which comparisons were sought to be made and stands by the opinion that relativity is now incorrect. Even if his opinion could be shown to be correct, it is my view that serious doubt would be cast on the basis relied on by either Mr Boyd or the Departmental officers in the negotiation of the reduced valuation amounts. I do not propose to discuss the relativities between valuations in Tambo Shire and Murweh Shire in the absence of evidence as to the reasons for the valuations in Tambo Shire having been reduced and professional valuation evidence as to the nature of country being compared. [15] The comparison of the valuation of “Laguna” with those of the representative properties in Murweh Shire, and particularly “Aubigny” and Wicklow”, is a different matter. Professional evidence was considered in the making of those valuation determinations. The decisions were not appealed against and are accepted as correct for the purpose of determining this appeal. [16] Mr Batzloff has a more than casual knowledge of both “Aubigny” and Wicklow” and is adamant that “Laguna’s” country and carrying capacity is inferior to both. It is his submission that based strictly on the Court’s determinations in those cases, together with those of “Southampton Downs”/“Glendoroy” and “Brumich”, a valuation of $70.15 ha would be fair for “Laguna”. That is the degree of inferiority that he sees when comparing “Aubigny” ($84 ha), “Wicklow: ($80 ha), “Southampton Downs/Glendoroy” ($76.50 ha) and “Brumich” ($72.50) with “Laguna”. [17] By the time this matter was set down for hearing, Mr Glen L Morris had taken over the task of supporting the reduced valuation of $648,000. Mr Naish had been transferred. Prior to being provided with Mr Morris’ valuation report, Mr Boyd had prepared Mr Batzloff’s written statement of evidence. It was stated that at that time Mr Batzloff was unaware of the Department’s classification of “Laguna” but “had heard in a previous assessment the Department described Laguna as 100% Downs country”. He was aware -- 5 of 10 -- 6 of the Department’s classification of the representative properties through evidence provided in the Murweh Shire appeals and some historical information provided by Mr Boyd. Mr Batzloff had personally prepared a property plan for “Laguna”, showing the country as he would classify it. It was his evidence that the location of the various country types had been established with the use of a handheld GPS. The extent of the various types of country was ascertained by traversing their perimeter. His classification and estimated areas of the various country types were as follows: 6,000 ha 78% open downs 689 ha 9% claypans 615 ha 8% creek channels 384 ha 5% undeveloped gidyea The property plan indicated that within the downs country were fairly significant areas of “stoney ridge” although no specific reference was made in the Statement of Evidence as to their impact on the downs classification. Reference was made to the large areas of Mitchell grass country which have been taken over by inferior white spear and feather top grasses. [18] In a supplementary statement prepared by Mr Boyd, after having read Mr Morris’ report, Mr Batzloff was critical of the lack of reference to the stoney ridges, “which are clearly identifiable by virtue of their shallow clay soils, as compared with the black soils in the downs country”. He was also critical of Mr Morris’ description of the gidyea and scalded claypans being “lightly interspersed” when his plan indicated those areas as being “quite extensive”. [19] Mr Morris’ report contained the following classification of country: 6799 ha (88%) open undulating Mitchell grass downs on brown clays. 889.2178 ha channels and creek flats of open downs lightly interspersed with clumps of gidgee, coolibah, gum and scalded claypans along the drainage lines. [20] Included in Mr Batzloff’s statement of evidence were various “comparison sheets” including comparisons with Tambo Shire properties and the four representative Murweh Shire properties. Mr Morris had supplied comparisons with only “Aubigny” and “Wicklow”. In this relativity exercise, I accept that comparisons with those two properties are sufficient, for I am not persuaded that Mr Batzloff has intimate knowledge of either “Southampton Downs”/“Glendoroy” or “Brumich”. In any event, there are distinguishing features which set those properties apart from “Laguna” namely size in the case of “Southampton Downs”/“Glendoroy” and the general nature of country which was exposed in the Murweh Shire appeals in the case of “Brumich”. -- 6 of 10 -- 7 [21] Mr Batzloff’s written comparison of “Aubigny” with “Laguna” as prepared by Mr Boyd accepted the Departmental description of “Aubigny” as being “100% open downs with shaded areas along watercourses” and with a carrying capacity of 1 DSE to 1.2 ha. That was the description accepted by both valuers in the Murweh Shire appeals. In his written statement Mr Batzloff said “this property adjoins “Laguna” and having inspected it and knowing it intimately, I have no doubt it is far superior to “Laguna”. It contains 100% of downs country with a carrying capacity of 1 sheep to 1.2 ha.” Although this was expressed as Mr Batzloff’s evidence, prepared by Mr Boyd, it did not in fact convey Mr Batzloff’s personal opinion. In his oral evidence he said that the written statement accepted the Department’s historical description. However he did not agree that such a description was accurate. Instead he felt that a description of “80% undulating downs and 20% alluvial plains and woodlands” as identified by “WARLUS” mapping was more accurate. [22] Mr Batzloff’s written statement as prepared by Mr Boyd, again accepted a Departmental description of “Wicklow” as provided by Mr Naish in the Murweh Shire appeals. That description was as follows: 6460 ha (90%) open undulating downs with some myall shade 719 ha (10%) gidyea with watercourse [23] At [121] in the Murweh Shire decision are the following comments: “Although in the end result, little turned on it, Mr Devine suggested that the above classification was inaccurate as it ‘does not reflect the alluvial plains and coolibah influence throughout the property’ as identified by his inspection with the assistance of satellite imagery and land system (WARLUS) mapping. His classification was as follows: 5,800 ha (82%) open undulating downs with some myall shade 80 ha (1%) wooded downs 709 ha (11%) alluvial plains and woodlands, coolibah, gum. 429 ha (6%) undulating gidyea/brigalow lands.” Then at [122]: “Mr Naish’s response was that although Mr Devine’s classification may have been a correct interpretation of the WARLUS mapping, it was usually accepted that the downs country incorporated alluvial areas identifiable by the tree lines. He pointed out that where he had followed the same incorporation approach on the property “Southampton Downs”, Mr Devine had agreed there with his classification.” -- 7 of 10 -- 8 [24] Again with regard to “Wicklow”, Mr Batzloff admitted that he did not agree with the Department’s historical description, but thought a description based on the WARLUS mapping as described by Mr Devine would have been “closer to the mark.” [25] No reliance can be placed by this Court on the written comparisons of “Aubigny” and “Wicklow”, as contained in the statements prepared by Mr Boyd. It is untenable to adopt generalised although probably more market acceptable descriptions of country types in some instances, then more detailed WARLUS type descriptions when it suits the argument. [26] With regard to “Laguna”, it was Mr Morris’ opinion that “the soil profile and type does not differ from the surrounding properties with the exception of the waterways and channel areas.” The WARLUS mapping and satellite imagery which was tendered indicates general comparability of land systems between “Laguna”, “Aubigny” and “Wicklow”, but little assistance is provided as to actual soil profiles. It was Mr Batzloff’s oral evidence that “Laguna” is located closer to the watersheds of the local drainage systems and with the stoney ridge influence the downs country is of lighter soil profile than on the properties lower in elevation, off the watershed. [27] The white spear and feather top grasses are apparently more common in the southern Murweh Shire section of the Tambo Downs SMA country and not isolated to “Laguna”. However Mr Morris agreed that at least by the date of his inspection in 2004 the encroachment of these inferior grasses was more extensive on “Laguna” than on other nearby properties. His inquiries indicated that these grasses are natural in the downs country but their incidence can be of a cyclical nature and can also relate to management practices. While Mr Batzloff does not accept the management theory it has been his experience that the encroachment of these grasses has intensified significantly since their purchase of “Laguna” in 1998 and are largely confined to the lighter downs on the stoney ridges. He accepts that there are white spear and feather top grasses on “Aubigny” but only on a relative small area adjacent to his boundary where the stoney ridge influence extends a short distance. Mr Batzloff’s oral evidence was that there was also a relatively small area of this stoney ridge country on “Wicklow” while generally its downs country was of heavier soil type as was also the case on “Aubigny”. [28] Mr Batzloff’s opinion is that these inferior grasses and the extensive areas of claypans on “Laguna” reduce its carrying capacity to the equivalent of 1 DSE to 1.34 ha in comparison with 1 DSE to 1.2 ha as the historical Departmental estimate not only for “Aubigny” and “Wicklow” but also “Laguna”. The evidence, as might be expected, does not suggest that the drainage areas on “Aubigny” and “Wicklow”, or for that matter on -- 8 of 10 -- 9 any of the “downs” blocks, are not affected by areas of claypan. The satellite imagery could not be interpreted, in my opinion, to suggest that the actual claypans on “Laguna” are as extensive in terms of the calculated area, as suggested by Mr Batzloff. However, as was pointed out by him, the WARLUS mapping attached to Mr Morris’ report indicated drainage systems, particularly in the eastern section of “Laguna”, far more extensive than had been delineated, apparently for the purpose of calculations of the area involved. Conclusion [29] Section 33 of the Valuation of Land Act provides as follows: “33. Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.” [30] For the reasons given, the argument on relativity issues will be decided on comparisons between the subject property and the representative appeal properties in Murweh Shire, in particular “Aubigny” and “Wicklow”. [31] It is clear from the mapping provided by Mr Morris that these properties have a predominance of downs country and all carry a mix of “channels and creek flats”. Mr Morris is of the opinion, based on his inspections and interpretation of the mapping that “Laguna” is overall similar to “Aubigny”, except that the latter has more channels and creek flats. In comparison with “Wicklow” it is his opinion that “Laguna” is slightly superior, with the proportion of gidyea and claypans being less than on “Wicklow”. That of course accords with the relativities which are indicated by the valuation history of the three properties. In the absence of a scientific soil study he could find no difference in the soil profiles of the downs country on the three blocks. [32] Soil profiles are not necessarily capable of detailed identification from the satellite imagery or the material relied on by Mr Morris. His relatively brief inspection of “Laguna”, albeit in the company of Mr Batzloff, needs to be considered in the light of Mr Batzloff’s intimate knowledge of these three properties. I have been persuaded that the extent of the stoney ridges with lighter soil types on “Laguna” is greater than on either “Aubigny” or “Wicklow” and that there appears to be some association between those lighter soil types and the incidence of the inferior grasses. While there is a larger proportion of channels and creek flats on “Aubigny”, that type of country is also superior to the narrow drainage lines on “Laguna”, according to Mr Batzloff. While I do not accept that Mr Batzloff’s comparison between “Laguna” and “Aubigny” is based on consistent criteria, I am persuaded, on his evidence, that “Laguna’s” valuation should be something less than that of “Aubigny”, rather than marginally higher. -- 9 of 10 -- 10 [33] It seems reasonable to accept that the extent of gidyea influence on “Wicklow” as described by Mr Morris and as indicated on the land system mapping and satellite imagery, is a factor which has influenced the lower unimproved valuation on that property in comparison with both “Aubigny” and “Laguna”. Again however, I have been persuaded that the overall quality of the downs soils on “Wicklow” may be a little superior to those of “Laguna” overall, and that is not a factor which was accepted by Mr Morris. While I am prepared to accept that, all things considered, the valuation of “Laguna” should be less than that of “Aubigny”, I do not accept that it should be more or less than that of “Wicklow”, on strict relativities of country types. [34] There was an inference in the Department’s case that both “Aubigny” and “Wicklow” suffered a disability from the severance effect of a formed but unfenced road serving the locality. That road carries only occasional traffic and I am not persuaded that any identifiable deleterious effect on unimproved value is a consequence. This was not an issue raised in the representative appeals. [35] I will adopt an overall valuation of $80 ha for “Laguna”, rounded to a total of $615,000. Order The appeal is allowed. The valuation of the Chief Executive is set aside and the unimproved value of the property “Laguna” determined in the amount of Six Hundred and Fifteen Thousand Dollars ($615,000) as at 1 October 2001. RE WENCK MEMBER OF THE LAND COURT -- 10 of 10 --