Bauer & Ors v Department of Natural Resources and Mines [2003] QLC 64

LAND COURT OF QUEENSLAND CITATION: Bauer & Ors v Department of Natural Resources and Mines [2003] QLC 64 PARTIES: BM Bauer & Ors (applicants) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NOS: AV2002/0604; AV2002/0610 and RV2002/0611; AV2002/0654 and RV2002/0655; AV2002/0643; AV2002/0600; AV2002/0644; AV2002/0591, RV2002/0589, RV2002/0590, RV2002/0592; AV2002/0595 DIVISION: Land Court of Queensland PROCEEDING: Appeals against unimproved valuations - Valuation of Land Act 1944 - Murweh Shire DELIVERED ON: 16 September 2003 DELIVERED AT: Brisbane HEARD AT: Charleville MEMBER Mr RE Wenck ORDERS: Case 1 - "Arlington" (AV2002/0604) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Two Hundred and Thirty Thousand Dollars ($230,000) (rounded from $21/ha). Case 2 - "Khyber" (AV2002/0610 and RV2002/0611) The appeal against is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Four Hundred and Twenty-five Thousand Dollars ($425,000) (rounded from $15/ha). -- 1 of 65 -- 2 Case 3 - "Wicklow" (Appeals AV2002/0654 and RV2002/0655) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Five Hundred and Seventy-five Thousand Dollars ($575,000) rounded from $80 per ha. Case 4 - "Southampton Downs/Glendoroy" (Appeal AV2002/0643) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of One Million Three Hundred and Five Thousand Dollars ($1,305,000) rounded from $76.50 per ha. Case 5 - "Aubigny" (Appeal AV2002/0600) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Six Hundred and Five Thousand Dollars ($605,000) rounded from $84 per ha. Case 6 - "Brumich" (Appeal AV2002/0644) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Six Hundred and Seventy-five Thousand Dollars ($675,000) rounded from $72.50 per ha. Case 7 - "Wansey Downs": (Appeal AV2002/0591) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Five Hundred Thousand Dollars ($500,000) as at 1 October 2001 is affirmed. (Appeal RV2002/0590) The appeal is dismissed and the chief executive's unimproved valuation in the amount of One Hundred and Seventy-seven Thousand Five Hundred Dollars ($177,500) as at 1 October 2001 is affirmed. (Appeal RV2002/0589) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Two Hundred and Seventy-six Thousand Dollars ($276,000) as at 1 October 2001 is affirmed. (Appeal RV2002/0592) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Fifty Thousand Dollars ($50,000) as at 1 October 2001 is affirmed. -- 2 of 65 -- 3 Case 8 - "Yo Yo Park" (Appeal AV2002/0595) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Nine Hundred and Sixty Thousand Dollars ($960,000) as at 1 October 2001 is affirmed. CATCHWORDS: Statutory Valuations - Unimproved value - Valuation of Land Act 1944 Valuation - Sub market areas - Sales evidence - Direct comparison - Check methodologies - Carrying capacity - Sheep and beast area values - Classification of values Sub Market Areas - Mass valuation methodology - Sales evidence - Previous valuation - Relativity between valuations Sales Evidence - Differing sub market areas - Sales analysis - where livestock, plant and machinery included - application with caution - evidence of forensic research - Market trends Direct Comparison - Primary approach - Date of valuation - Date of sales evidence - Difficulties associated with unimproved sheep and beast area values - Assistance from classification of values Carrying Capacity - Need for consistency in comparison process Relativity - Changes within and between sub market areas - Correctness not to be sacrificed to achieve uniformity - Sales evidence APPEARANCES: Mr G Allan for the applicants Mr K Fisher for the respondent SOLICITOR/AGENT: Mr DP Devine for the applicants Crown Solicitor, Crown Law, for the respondent SUMMARY OF FINDINGS: See Paragraphs [48] and [49] Background [1] The Chief Executive, Department of Natural Resources and Mines ("the Department") carried out an "annual" valuation pursuant to the Valuation of Land Act 1944 (the Act) in various Western Queensland local government areas as at 1 October 2001. In Murweh Shire the date of the previous valuation was 1 October 1998. -- 3 of 65 -- 4 [2] For assistance in conducting the mass valuations involved at regular intervals, the Department has identified with the initial assistance of local advisory groups, various "Sub Market Areas" (SMAs) which generally contain predominant land types or dominant mixes of country. When these SMAs were first selected, the initial task of the departmental valuers was to ensure that reasonable relativity was established between valuations of the various holdings within the individual SMAs and between SMAs, based on the market evidence available at that time. Then in the period considered relevant to any subsequent dates of valuation market evidence is investigated and any detected movement within SMAs since the previous date of valuation is applied, generally in a blanket fashion within those SMAs. The level of value applied at the immediately previous valuation is the base for the new valuation. [3] The theory is that if the relativity between valuations within any SMA remains correct, uniform application of the change in market value, if any, will result in correct relativity being maintained. [4] However, as the SMAs are intended to identify areas affected by specific market trends, it is also part of the theory that alteration in relativities between valuations of land within differing SMAs will result, if the market evidence so indicates. [5] The particular SMAs within Murweh Shire in which these decisions are relevant are identified as Eastern Scrub/Cattle, Tambo Downs, Augathella Merge and Augathella Downs. [6] As at 1 October 2001 the Department's valuations when first issued, reflected an increase above the 1 October 1998 valuations of 100% in the Tambo Downs, Augathella Merge and Augathella Downs SMAs and 120% in the Eastern Scrub/Cattle SMA. [7] A significant number of objections were lodged against these valuations. The result, as is relevant to these decisions, was that the objections in the Eastern Scrub/Cattle and Tambo Downs SMAs were generally disallowed. Some objections against valuations in the north-western section of the Augathella Merge SMA were disallowed. Other objections within that SMA were allowed to the extent that the decisions resulted in increases above the 1998 valuation of 60% in the central part and 40% in the south-eastern balance. In the Augathella Downs SMA, objections were allowed to the extent that the increase became 60%. [8] Many objectors were dissatisfied with the decisions on the objections and filed appeals in the Land Court Registry. Forty of those appellants within Murweh Shire are represented by Mr Dominic P Devine of Charleville, registered valuer and the principal of the firm Devine Agribusiness. -- 4 of 65 -- 5 [9] With regard to the Devine group of appellants, agreement was reached between the parties that eight representative cases be heard and determined by the Court. It would be expected then, subject to Land Appeal Court provisions, that the parties would attempt to settle the balance of this group of appeals to the Land Court, on the basis of the decisions in the representative appeals. [10] In these matters the grounds of appeal were similar and all encompassing. Mr Devine was the one witness called to give expert evidence on behalf of the appellants. [11] Messrs Glen L Morris and Guy G Naish, both registered valuers employed by the Department, took responsibility for individual valuations the subject of the representative appeals and gave expert evidence accordingly. The Issues [12] The principal issues between the parties relate to the sales evidence which should be regarded as relevant and reliable; in some cases the analyses of sales evidence; the level of unimproved value applied by the Department; and the alteration in relativity between valuations since 1998. The Representative Appeal Properties [13] The representative appeal properties were "Arlington" and "Khyber" in the Eastern Scrub/Cattle SMA, the departmental valuations of which became the responsibility of Mr Morris; "Wicklow", "Southampton Downs/Glendoroy", "Aubigny" and "Brumich" in the Tambo Downs SMA; "Wansey Downs" in the Augathella Merge SMA and "Yo Yo Park" in the Augathella Downs SMA, the departmental valuations of which became the responsibility of Mr Naish. [14] Each of these properties are located in the Augathella District. The Sales Evidence [15] The sales about which evidence was given are grouped as follows: Eastern Scrub/Cattle SMA "Cunalama" - Mr Devine and Mr Morris "Attica" - Mr Morris "Bangor" - Mr Morris "Bundulla" - Mr Morris "Chesterton" - Mr Morris "Truno" - Mr Morris "Gundare" - Mr Devine "Caledonia" - Mr Devine Tambo Downs SMA "Wicklow" (Appeal Property) - Mr Devine "Southampton Downs/Glendoroy" (Appeal Property) - Mr Devine -- 5 of 65 -- 6 "Raincourt/Glenavin" - Mr Devine "Baneda" - Mr Naish "Isoroy" - Mr Naish "Downlands" - Mr Naish "Kootchie" - Mr Naish "Wyanga" - Mr Naish Augathella Merge and Augathella Downs SMAs "Gundare" - Mr Devine and Mr Naish "Wicklow" - Mr Devine "Raincourt/Glenavin" - Mr Devine "Cunalama" - Mr Devine "Barwhinnock" - Mr Naish "Kootchie" - Mr Naish "Allandale" - Mr Naish The Expert Witnesses Mr Morris [16] Mr Morris is a reasonably experienced valuer having served the Department in several areas of the State but with limited experience in the district where the appeal properties are located. [17] There was severe criticism, by Mr Allan, for the appellants, of the Department having permitted Mr Morris to take responsibility for the valuations of the relevant appeal properties after having been the chief executive's delegate in the decision-making process relative to the objections against those valuations. Mr Allan suggested that such action was contrary to the purpose of the Act, the provisions of which, on his interpretation "indicate an intent that the role of a delegate is to be independent and transparent" referring me to s.53(7) of the Act. I think Mr Allan has confused the role of a "chairperson" appointed by the Minister pursuant to s.53(6) of the Act, with the role of a delegate acting for the chief executive, primarily pursuant to s.43 (which deals with objections against annual valuations). Nevertheless in the interest of public perception as to due process and natural justice, despite any difficulties associated with lack of departmental resources, it is seen as inappropriate for the decision-maker in the objection process to then take expert responsibility on appeal for the defence of the valuation against which the objection was made. [18] However, in the circumstances I am satisfied through his evidence that Mr Morris acted in a professional manner in terms of his role as a valuer when charged with responsibility for defending the chief executive's valuation. [19] While on the subject of Mr Morris' evidence, Mr Allan accused him of lying under oath when Mr Morris denied that he had used the sale of "Gundare" as evidence of value in another valuation within the Eastern Scrub/Cattle SMA. The record gives credence to Mr -- 6 of 65 -- 7 Allan's accusation. However Mr Morris would have been well aware that he had given evidence, at that time fairly recently, before me in another appeal against a valuation in a different location within the relevant SMA. I am able to accept that it was more a case of imperfect memory whilst under the pressure of cross-examination rather than any intention by Mr Morris to give false evidence under oath, or to mislead the Court. [20] Mr Morris indicated to me that he had made a genuine attempt to apply a sensible approach to the evidence which he saw as relevant to the representative cases in the Eastern Scrub/Cattle SMA. It was necessary in the interests of the appellants' case for Mr Morris' analysis of the sale used by both himself and Mr Devine ("Cunalama") particularly with regard to the added value of timber treatment, and more specifically blade ploughing, to be vigorously challenged. Mr Devine had willingly accepted Mr Morris' valuation of various improvements on "Cunalama" when Mr Morris had demonstrated the more generous approach to those items. The timber treatment and blade ploughing evidence will be discussed in more detail later. Although I have decided to take a slightly more cautious approach than did Mr Morris to the "Cunalama" sale analysis, and as a consequence to the valuations of the representative cases in this SMA, it will be seen that I have leant more towards his analysis than that of Mr Devine. Mr Naish [21] Mr Naish does not have the depth of experience of Mr Morris having not practised in the profession for quite as long a period. Nevertheless he demonstrated a sound working knowledge of the country subject of the valuations and general valuation principles. He faced a difficult problem in that there were relatively wide variances in the evidence provided by the sales which had taken place in the period between the previous valuation date and the date relevant to these matters. He had "bitten the bullet" when faced with what he perceived was evidence of conflicting market forces operating within the Augathella Merge SMA. After initially applying a blanket increase of 100% above the 1998 levels of values in that SMA, which was reflected by his analysis of some of the sales evidence, he decided after considering the objections which resulted, to reconsider the weight which might be placed on two sales, of the properties "Gundare" and "Allandale" which had originally been considered low and out of line with market trends. Significant changes were made to the previously existing relativities between valuations in that SMA. He did not suggest that the previous relativity was incorrect as at 1 October 1998, but in need of review as at 1 October 2001. The decision to reduce some valuations, by differing percentages, and not to reduce others has caused much of the criticism of his work. Prima facie it defeats the mass valuation SMA theory by which -- 7 of 65 -- 8 uniform alteration of valuations might be expected if the defined area truly represents a discrete Sub Market. However, if a change in relativity is supported or demanded by reliable sales evidence, then Mr Naish was obliged to act accordingly. [22] My review of the evidence supports his opinion that, while values have increased within the Augathella Merge SMA which stretches a considerable distance from near Morven in the south to near Tambo in the north, the level of increase has been significantly more in the northern section than elsewhere. The reason for that may well be, as Mr Naish suggests, that the market has recognised the superior development potential of the better quality scrub lands in that northern sector. It seems that, if that is the case, a different Sub Market has emerged in the central to northern sector of the SMA as it is currently identified. It also seems that if the integrity of the relationship between SMAs and mass valuation methodology is to be preserved, the Augathella Merge SMA will require subdivision into at least two and possibly three discrete SMAs. [23] The decision to adopt the "Gundare" sale which occurred in 1999 as being reflective of the market for that property and other comparable property, in 2001, in my opinion demonstrates an extremely cautious approach to the forces which were affecting the market for district grazing lands. [24] I have found that in the district and particularly northerly of "Gundare", the 1999 market did not, on a fair interpretation, reflect the market expectations at the relevant date in 2001. Nevertheless, with a lack of reliable evidence in the vicinity of "Gundare" and with the knowledge that lesser quality lands to the south were not meeting with the same demand as was demonstrated in the north, Mr Naish had little option other than to reconsider the question of the evidence provided by the "Gundare" sale. To support, on appeal, any level of value higher than shown by the "Gundare" sale for "Gundare" itself would have proved a difficult task, even if it had been a reasonable professional expectation that values had in fact increased above that level. [25] While condoning Mr Naish's eventual approach within the Augathella Merge SMA, the evidence indicates to me that his application of values in the Augathella Downs SMA do not have the evidential support that he had sought from the "Allandale" sale. His oral evidence in respect of the analysis of that sale for which he took responsibility, demonstrated his lack of experience in conducting the forensic research which would have been necessary for a court to be convinced that any reliance could be placed on the analysis he had presented. Neither he, nor anyone else who might have been expected to assist the Court, seemed to have any real idea as to the true value of the livestock included in the sale and those stock represented a significant component of the sale. There was a -- 8 of 65 -- 9 probability that this sale could have provided significant support for the valuation placed on the "Allandale" land as at the later-in-time relevant date of valuation, had at least proper inquiry been made of the vendor and purchaser of the livestock. As it stands, the analysis is unacceptable although the valuation of the "Allandale" land was not proved wrong by Mr Devine. [26] I have not found Mr Naish's evidence in respect of the Tambo Downs SMA to have demonstrated the more conservative departmental approach which on my interpretation of the evidence has been taken elsewhere in the Shire. There are aspects which are discussed in more detail later which have caused me to reject, for the purposes of this exercise, the sales of "Baneda" and "Isoroy" and for the decision to take a more conservative approach to the sales of "Downlands" and "Wyanga". The sale of "Kootchie" was not subject to challenge other than from the aspect of direct comparability with the representative appeal properties. However my decision to apply what is in effect a relatively small reduction to the representative cases which involve the more traditional downs country, will mean that the "Kootchie" sale would also be applied more conservatively than the evidence, including the sale of "Barwhinnock", suggests should be the case. That may indicate that there has also been some change in the market relativity in the Tambo Downs SMA. It appears that the unimproved value of that country with the greater proportion of developable scrub may have increased in value in the relevant period more so than had the traditional downs country. That is not a matter which can be specifically considered in these representative cases. However the option for finetuning relativity in the Tambo Downs SMA particularly within Tambo Shire should be considered on a direct comparison basis if the evidential support for such an approach exists. [27] Mr Naish saw the distinct possibility that values at least in the Tambo area may have risen significantly since October 2001 and that may be factual. However I have not perceived that his apparent less cautious approach to market level in the Tambo Downs SMA was influenced by his knowledge of the sales which have taken place subsequent to the date of valuation with unproved effect until properly analysed. Mr Devine [28] There can be no doubt that Mr Devine who had been employed by the Department prior to entering private practice some years ago, has the more extensive local and overall valuation and litigation experience than either Mr Morris or Mr Naish. [29] However it is no doubt difficult for a valuer in private practice who has been engaged by a large group of local graziers to challenge an unpopular departmental interpretation of -- 9 of 65 -- 10 the market for revenue-gathering purposes, to distinguish his role as the initial advocate for his clients from his role as an expert witness whose "paramount duty is to the Court and not to the person retaining the expert". (See "Planning and Environment Court of Queensland - Guidelines for Experts" - as annexed to Mr Devine's valuation report). [30] Mr Allan had suggested that Mr Morris, in being overly selective in his sales evidence, had fallen into an error as had been identified by the High Court in Maurici v Chief Commissioner of State Revenue [2003] HCA 8, "that sales to be treated as comparable sales need to be truly comparable; or to put it in another way, in valuing the land the respondent's valuer did not proceed rationally, in that he was unreasonably selective in ultimately confining himself ..." [31] If Mr Morris had been at fault in relying on the limited evidence which was regarded as truly comparable in the Eastern Scrub/Cattle SMA then Mr Devine could not have been accused of not having relied on sales of at least comparable country in the Tambo Downs SMA. He in fact relied on 1999 sales of two of the actual appeal properties. As has often been held, there would be no better evidence than a reliable sale of the property subject of the valuation. However comparability in valuation terms could be meaningless if the date of valuation was to be ignored. [32] I gained the impression that while Mr Devine's choice of some basic sales evidence would have provided the best evidence of value for those sale properties at the date of sale, no exposed attempt was made to prove that such level of value then remained static through to the relevant date of valuation. He accepted that the 1999 sales of the two probably carefully selected representative cases within the Tambo Downs SMA, ie "Wicklow" and "Southampton Downs/Glendoroy", showed increases in levels of value of about 37% in a period less than 12 months from the previous date of valuation in October 1998. He cautiously applied an increase of 30% at a date two years later. There were several sales in early 1999 in the Tambo Downs SMA which resulted in a wide range of analysed unimproved values, although a more consistent level of improved value was evident. The sales which Mr Devine selected were at the low level of that range and as has been said, that would have been an acceptable approach for this type of valuation in 1999. However, a professional valuer of Mr Devine's undoubted experience and local knowledge would have been aware of the level of market activity and the probable effect on values if the obvious demand continued. He should have been aware of the sales of significantly inferior country, in unimproved quality, for example, of the properties "Kootchie" and "Barwhinnock" which had taken place closer to the relevant date of valuation, showing analysed unimproved values not much lower than the significantly -- 10 of 65 -- 11 superior "Wicklow" and "Southampton Downs/Glendoroy". Those sales, as examples, must have been either not considered by Mr Devine in the first place or rejected for the unconvincing reasons as set out in Mr Devine's written reply to Mr Naish's valuation reports. [33] Mr Devine had found it reasonable to adopt the Department's analyses of the sales of "Raincourt/Glenavin", "Wicklow" and "Southampton Downs/Glendoroy" when those analyses suited his case. However his approach had then been to dispute in come cases with cogent reasoning, the analyses or the circumstances surrounding each sale which showed an unimproved value higher than either "Wicklow" or "Southampton Downs/Glendoroy" while accepting as basic evidence the sale of "Raincourt/Glenavin" which reflected an increase of only 2% above the Department's application of value to that property in 1998. [34] It was Mr Devine's stated opinion that the market for grazing properties within any district was not restricted by artificial boundaries such as he considered the Department had adopted in selecting SMAs. As I understood his approach, that is why he found the property "Caledonia", although located south of Morven, capable of comparison with some of the representative appeal properties. Provided the sale properties are capable of comparison and the factors affecting market value are taken into account, then I see nothing wrong with that approach. In fact neither Mr Naish nor Mr Morris had restricted their valuation considerations to sales within individual SMAs although that was only when sufficient directly comparable evidence was considered to be unavailable. I was not convinced however that Mr Devine should have rejected the sale of "Kootchie" and "Barwhinnock" because, in his opinion, although not an opinion which I accept, those sale properties were not capable of direct comparison with the relevant representative appeal properties. [35] One other comment which needs to be made about Mr Devine's approach was his rejection of any sale where livestock, in particular, but also plant and machinery which was included in the sale and which was either not resold soon after or where inspection was not possible. Clearly, if such items are unavailable for inspection the accuracy of their valuation and as a consequence the analysis of the sale becomes unreliable basic evidence of value. Mr Naish commented that many otherwise reliable sales would be removed from consideration in the valuation process if they were automatically rejected because of the inclusion of livestock or plant and machinery. I was referred by Mr Allan to consistent observations by the Land Appeal Court and the Land Court in support of Mr Devine's views on sales where "perishable" items are included (see for example -- 11 of 65 -- 12 Applications for Conversion of Tenure - Roma District (1965) 32 QCLLR 262 at 264 - Land Appeal Court). Clearly much caution must be observed when considering such sales. Nevertheless, questionable as the accuracy of the analyses of such sales may be, particularly where supporting evidence is sought, the investigating valuer should not discard such a sale out of hand before forensic and recorded inquiry has been made at least of the purchaser and vendor who would be expected to have more than casual interest in the value of any items of significance included in the sale. There will no doubt be examples where informed evidence as to the value of such items would be of assistance to a Court in its deliberations. That might even have been a lost opportunity to both parties in the case of the "Allandale" sale. [36] Basic to Mr Devine's argument against the Department's valuations was his opinion that the relativity between valuations of grazing lands in the Augathella district as established by the Department in 1998 had remained generally correct and should have been maintained as at the relevant valuation date in 2001. He provided various schedules which showed details of the land classifications and valuation history of properties in proximity to the representative appeal properties although not necessarily in the same SMA. That information he believed proved that the relativity was now wrong. However all that those schedules showed, in my opinion, was the proof that the previously existing relativities had been altered. There was no dispute about that. From the Department's point of view, the market evidence suggested a shift in relativity had occurred, the fresh relativity having been considered and found in the opinion of the departmental valuers to be justified, including the relativity from one SMA to another. The differences of personal opinions would have been difficult to resolve on that basis alone, but I have been persuaded that the market evidence has been better interpreted by the departmental valuers. [37] I accept that the changed relativity may not have been warranted at the time of Mr Devine's sales but if the "Gundare" sale is to be accepted as basic evidence of value as all valuers have now done, that sale together with those which I have been persuaded not to reject, have largely vindicated the Department's stance. That same evidence is seen to collapse the basis on which Mr Devine's approach largely relied. [38] There was some disagreement between the valuers as to the cattle carrying capacities of some of the representative properties. It is clear that the historical carrying capacities as adopted by the Department were based on the predominant past use being for sheep grazing. The conversion from a DSE (dry sheep equivalent) to AE (adult equivalent) cattle has been a factor of 7 DSE to 1 AE. That conversion factor has been consistently -- 12 of 65 -- 13 adopted by the Department. Cattle grazing has, or is still, emerging as the dominant use of previous sheep lands west of the Dingo Fence in this locality. In the Eastern Scrub/Cattle SMA the "Murweh Shire Cattle Valuation Project" was developed by the Department in 1998 with input from all interested parties. That project resulted in agreed carrying capacities being adopted for some 56 properties within that locality, based on criteria as to development potential and estimated AE carrying capacities for the various land classifications. The Department would be expected to and is understood to now adopt those estimates. Prima facie, when that criteria is then applied to properties not within the Murweh Shire Cattle Valuation Project area, and particularly outside the Eastern Scrub/Cattle SMA the historical estimates may differ. Mr Morris and Mr Naish are of the opinion that it is not a matter of simply translating the criteria to land classifications of other properties when carrying capacity estimates are to be made. Mr Devine disagreed. In his opinion while it would be best served by detailed inspections of any relevant property, outside the project area, the criteria can be reasonably utilised and applied on a like-with-like land classification carrying capacity basis. Invariably when he conducted that exercise the AE carrying capacity estimates resulted in higher carrying capacity potentialities than would have resulted from the historical departmental conversions from sheep to cattle. There was some criticism directed at Mr Devine when it was revealed that in the course of his professional practice he had prepared vegetation management plans, for some of his clients, which had indicated even heavier "stocking rates" than his actual carrying capacity estimates before the Court. However, he distinguished "stocking rates" from long-term average carrying capacities. [39] As part of Mr Devine's valuation support methodology was the comparison of extrapolated beast area values, it was imperative for him to adopt carrying capacity estimates on a consistent like-with-like basis, just as it would have been for the Department to adopt consistent standards within their SMAs if beast area values were to be relevant. As it has happened I have gained no particular assistance from consideration of beast area values which, on an unimproved basis will fluctuate significantly when differing mixes of virgin vegetation and development costs are involved. However it seems to me that Mr Devine, as a professional valuer, trained in the comparison of like with like, was quite correct in making comparisons on the basis of established criteria. I thought the basis of the criticism of his estimates, by Mr Fisher for the Department, was misdirected when in fact Mr Devine was in many cases promoting higher and more positive productive potential than were indicated by the departmental estimates. -- 13 of 65 -- 14 Overview of the Valuation Evidence [40] There were several instances where the reliability of particular sales was challenged by Mr Devine on the basis of what he had been told by either the purchaser or the vendor. Not in every case, but often enough to be of concern, that information was contrary to the information given to the departmental valuers. Where documentary evidence was provided such as in the case of "Isoroy", the Court was assisted to the degree that the sale was found to provide unreliable basic evidence of value. Where information given to one or other of the valuers investigating a sale is considered of importance to the reliability of the evidence, a better standard of proof will need to be found if this Court is to be assisted. [41] The result in these matters is recognised as being of limited benefit to some appellants and of no benefit to others. That is not because the appellants' cases were conducted in other than a professional and searching manner. The burden of proving that a valuation appealed against is wrong rests with the appellant. The benefit of some doubt has been resolved in favour of the appellants' cases with regard to the effect of the analysis of the critical sale of "Cunalama", regardless of apparently strong supporting evidence as to the trend in values for lands of the types in the Eastern Scrub/Cattle SMA. Mr Devine's and the Department's reliance on the "Cunalama" sale is indicative, with the benefit of hindsight, of a reasonably conservative approach to the valuation at a date still well after the date of sale. However once that sale became the principal basic evidence of value for the SMA, its analysis became of particular importance. In the Tambo Downs SMA there was sufficient market evidence, in my opinion, to show that Mr Devine's reliance on 1999 sales for a 2001 valuation provided an unreliable result. Nevertheless there were concerns raised about some of the later evidence on which Mr Naish relied and again a more cautious approach to the application of that evidence was seen to be warranted. The use of the 1999 "Gundare" sale would appear prima facie, to be in conflict with my findings with regard to the Tambo Downs SMA sales evidence. However the Department clearly had significant doubts about the state of the market evidence in that locality when the decision was taken to adopt that sale as basic evidence and to face the consequences with regard to the change in relativity. [42] The fact that previous relativities between valuations of near similar as well as dissimilar country types has been altered by the Department's valuers' interpretation of the market is seen to have been the primary issue between parties. The question of the need for correct relativity is not a new one. As was found in Ladies Hosiery Ltd v West Middlesex -- 14 of 65 -- 15 Assessment Committee (1932) All ER 427, "The assessing authority should not sacrifice correctness to ensure uniformity." In the case of the Augathella Merge SMA in particular, if the existing relativity between valuations has changed, as found by Mr Naish's interpretation of market forces, then the result of the appellants' stance would be to "sacrifice correctness to ensure uniformity". However, if, in hindsight, the Department's and as a consequence this Court's interpretation of the market within the Augathella Merge SMA is proved wrong, I am confident it will not be because the valuations appealed against in that SMA were too high, but because the sale of "Gundare" should not have been relied on as evidence of value for that type of country in that location as at 1 October 2001. If that proves to be the case, then it will be the task of the Department to once again review the question of relativity for the sake of correctness. [43] It should be mentioned that when these matters were proceeding to hearing the appellants endeavoured to obtain disclosure of the Department's apportionment of values to the various land classifications of which individual relevant properties comprise. For various reasons the Department resisted those attempts and in the end result a subpoena to the same effect was set aside by the Court. [44] It would have been a different matter had Mr Devine attempted the "classification of values" methodology even as a check against the primary methodology. The Department would then have been obliged to either provide its own check classification assessments, if they existed, or risk that type of evidence being persuasive as to the correctness of the valuations under dispute. [45] Information provided by the Department in other appeals, eg Dunsdon v Department of Natural Resources and Mines [2003] QLC 0056, indicates that the Department does consider classified values at least in some cases. [46] It is my view and a continued recommendation that when relativity issues are argued, particularly with regard to rural lands, the Department should willingly disclose any check methodology which has been employed. I will repeat here comments from the recent decision in Schmidt v Department of Natural Resources and Mines [2003] QLC 0055: "[23] The 'classification' method of valuation has many shortcomings, probably foremost the cogent establishment of a market- related basis for the various country classifications when factors peculiar to individual properties also affect market considerations. Nevertheless, despite judicial criticism and even condemnation in some individual cases, the classification methodology has not been overruled in principle and is recognised as capable of providing supporting evidence of valuation (see Cooper and Strickland v The Crown (1984-85) 10 QLCR 23 - Land Appeal Court). I agree with Mr Schmidt, that in these types of cases, if -- 15 of 65 -- 16 departmental records included any classification check methodology, that information would assist in the overall decision-making process when the relativity between valuations is subject to challenge." [47] The Department takes the stance that its valuations are made or at least supported in terms of the mass valuation methodology employed, on the basis of direct comparison with the sales evidence. The Court is provided with generally very broad comparisons which indicate that one property is in the end result either "inferior" or "superior" or "comparable" to another. In the absence of cogent weighting such as would be provided by the classification methodology, such descriptions are not sufficiently definitive to be of any real assistance. Summary of Findings [48] As these were representative cases, the overall effect of these decisions is that, on the evidence before it, save for any specific matters relating to individual properties or localities, the Court would find that for the remaining appeals in Murweh Shire against valuations as at 1 October 2001 - In the Eastern Scrub/Cattle SMA - the base levels of value be increased by 100% over the level which existed as at 1 October 1998 rather than 120%. In the Tambo Downs SMA - the base levels of value be increased by 80% above the level which existed as at 1 October 1998 rather than 100%. In the Augathella Merge SMA - the base levels of value applied consequent upon the objections decisions remain unchanged. In the Augathella Downs SMA - the base levels of value consequent upon the objection decisions remain unchanged. [49] It is observed, that the representative appeal properties concentrated on the Augathella locality, while the Eastern Scrub/Cattle SMA and the Augathella Downs SMA extended well to the south into the Morven locality. Individual Appeals [50] The individual appeals are now dealt with under the relevant SMAs as will follow. Eastern Scrub/Cattle SMA - Cases 1 and 2 [51] The Department has identified the Augathella Merge SMA as stretching from near Morven in the south in a north-westerly direction through Augathella and the northern part of Murweh Shire, into Tambo Shire south-westerly of Tambo. [52] The two representative cases selected in this SMA are the appeals against the unimproved valuations of the properties "Arlington" and "Khyber". [53] In these two matters Mr Morris was the departmental valuer who took responsibility for the valuations. -- 16 of 65 -- 17 Case 1 - "Arlington" (Appeal AV2002/0604) [54] "Arlington" is owned by Mr BM Bauer. The property is located about 25 km to the north of Augathella, via the Landsborough Highway. It contains an area of 11,020 ha and is described as Lot 3 on Plan BND82; Lot 4 on Plan BND97 and Lot 2 on Plan BND91, Parishes of Caroline and Balfour. [55] The 1 October 2001 unimproved valuation appealed against is in the amount of $255,000 ($23.14/ha) representing an increase of 120% above the Department's valuation of the property as at 1 October 1998. The appellant's estimate of value, as contained in the notice of appeal is $162,400. Mr Devine's valuation is $160,000 (rounded from $14.50/ha) equating an increase of about 38% over the previously existing valuation. [56] The Department's classification of the land, with which Mr Devine agrees, is as follows: 445 ha (4%) - open downs 1,144 ha (10%) - mixed scrub 9,313 ha (84%) - soft mulga 106 ha (1%) - box watercourse 14 ha (0%) - sandy mix box pine [57] The estimate of carrying capacity as contained in Mr Morris' report is 1 beast to 7.8 ha (1,415 head - adult equivalent). Tendered through Mr Devine were two letters from the Department of Natural Resources (as it was then) to Mr Bauer. The first dated 1 December 1997 advised that a draft land system map had been prepared for "Arlington" in accordance with the Murweh Shire Cattle Valuation Project and the potential carrying capacity had been estimated as 1 beast to 7.8 ha. However the second letter dated 19 March 1998 contained a revision of the first, amending the "country break-up" to the classification now adopted by both Mr Morris and Mr Devine, and the carrying capacity to 1 beast to 8.1 ha as adopted by Mr Devine. [58] The highest and best use of the property was accepted by both valuers as being for beef cattle breeding and fattening. [59] It was Mr Morris' evidence that, following consideration of sales of the properties "Cunalama", adjoining "Arlington" to the south, and "Attica" about 120 km from Augathella along the Mt Tabor Road, both within the Eastern Scrub Merge SMA, the decision had been taken by the Department's valuers to increase the previously existing levels of value within the SMA by 120%. The previously existing relativity between valuations of property within that SMA were consequently maintained. [60] On the departmental analysis, the sale of "Cunalama" (13 January 2000) had indicated an unimproved value of $33.34/ha, an increase of 136% above the valuation as at 1 October 1998. The sale of "Attica" (16 January 2002) had been analysed to show an unimproved -- 17 of 65 -- 18 value of $5.24/ha, an increase of 189%. Both of those sales had been adopted as basic sales in the valuation of "Arlington". Reference was also made in the "Arlington" valuation to sales of the properties "Bangor", "Bundulla", "Chesterton" and "Truno". [61] Mr Devine relied on the sale of "Cunalama" but also the sales of "Gundare" and "Caledonia". He had analysed the sale of "Cunalama" to show an unimproved value of $22.32/ha. He accepted that a departmental analysis of the sale of "Gundare" (4 August 1999) showing an analysed unimproved value of $27.27/ha was correct. That analysis indicated a 37% increase over the valuation which had existed as at 1 October 1998. "Gundare" is located within the department's Augathella Merge SMA and the valuation applied by the Department at the relevant date in 2001 was $26.94/ha. "Caledonia" is located south of Morven in a different SMA which was not identified during the course of the hearing. It sold on 12 July 2001 to show on Mr Devine's analysis an unimproved value of $7.29/ha indicating an increase of 18% above the valuation as at 1 October 1998. Apparently the Department's valuation was based on a 15% increase. Case 2 - "Khyber" (Appeals AV2002/0610 and RV2002/0611) [62] "Khyber" is owned by Mr DJ MacKenzie. The property is located about 55 km north-east of Augathella via the Landsborough Highway and Khyber Road. It contains an area of 28,515.8 ha and is described as Lot 1884 on Plan PH204 being Preferential Pastoral Holding 10/1884, Parish of Khyber. [63] The 1 October 2001 unimproved valuation appealed against, for both rating and rent purposes, is in the amount of $470,000 ($16.48/ha) representing an increase of 120% over the Department's valuation as at 1 October 1998. The appellant's estimate of unimproved value, as contained in the notice of appeal, is $297,500. Mr Devine's valuation is $285,000, rounded from $10/ha and equating an increase of about 34% above the previous valuation. [64] The chief executive's classification of the land, with which Mr Devine agrees, is as follows: 1,280 ha (4%) - brigalow scrub 11,708 ha (41%) - soft mulga 2,833 ha (10%) - box flats and watercourses 636 ha (2%) - soft forest 5,416 ha (19%) - forest 5,445 ha (19%) - inferior forest 1,206 ha (4%) - residual and rough ranges [65] There is agreement that the highest and best use of the land is for cattle breeding and fattening. Mr Morris had adopted a carrying capacity of 1 beast to 12.7 ha (2,239 head adult equivalent) while Mr Devine's estimate is 1 beast to 12.5 ha, in accordance with his -- 18 of 65 -- 19 calculations on the criteria used in the departmental 1998 Murweh Shire Cattle Valuation Project. [66] Mr Morris and Mr Devine relied on the same sales evidence as formed the basis for their valuations of "Arlington". The Sales Evidence "Cunalama" [67] This property contains an area of 11,313 ha and was sold on 13 January 2000 for $1,400,000. The property was first inspected by departmental valuers other than Mr Morris, in January 2001 when the basis for the revaluation of Murweh Shire lands was being established. When Mr Morris took responsibility for the valuations in this SMA which had been appealed against, he inspected the property, gave consideration to the original analysis and found that he concurred with the result which showed an unimproved value of $33.34/ha. [68] Mr Devine inspected the property in May 2002. His unimproved value analysis was $22.32/ha. He agreed with the departmental estimate of carrying capacity being 1 beast to 6.8 ha and classification of country which was as follows: 50 ha (0%) - downs 3,225 ha (29%) - undulating brigalow 2,148 ha (19%) - mixed scrub 5,101 ha (45%) - soft mulga 241 ha (2%) - box flat/watercourse 548 ha (5%) - sandy mixed/box pine [69] The principal area of dispute between the valuers was in the valuation of the timber treatment and in particular the added value of blade ploughing. The Department's total valuation of the timber treatment was $484,995 while Mr Devine's valuation was $615,204. Mr Morris gave evidence, with reference to relevant mapping, in support of an area of 1,028 ha of "generally easy brigalow, bottle tree, sandalwood, some wilga, gidyea, lime bush, dead finish - supports low light to low medium, moderate regrowth - pulled, burnt, grassed and blade ploughed - generally in good order" with an applied rate of $120/ha (including the added value of the blade ploughing at $60/ha) totalling $123,360. Mr Devine had valued 1,200 ha "brigalow with some red country - allow pull, burn, grass and blade ploughing" at $194/ha (including $135/ha for the blade ploughing) totalling $232,800. [70] It was Mr Morris' evidence that the cost of blade ploughing depended somewhat on the area and nature of country involved. On the contract prices of which he was aware, the cost of blade ploughing of the subject lands would not have been expected to exceed $120/ha. In his opinion, blade ploughing of regrowth after the original pulling operation -- 19 of 65 -- 20 would not be categorised as accepted district practice. He regarded blade ploughing as a maintenance operation with the cost being a deductible expense, rather than a capital cost, for taxation purposes. He did not accept that the full contract cost added equivalent value to the original operation and cost of pulling, clearing and pasture establishment. He had given consideration to authorities which he considered relevant (for example O'Brien Nominees Pty Ltd v Valuer-General (1979) 6 QLCR 280 and a Land Court decision by Mr Trickett, Member, as he was then in Mackenzie v Chief Executive, Department of Lands (1994-95) 15 QLCR 423) in reaching his opinion as to the adequacy of the allowance made for the added value of the blade ploughing operation. In the Mackenzie matter, there had been evidence to the effect that, at that time, it had been departmental policy to allow half the cost of blade ploughing as its added value. Despite the fact that the allowance made in this matter ($60/ha) was 50% of the indicated $120/ha maximum cost, Mr Morris denied that there remained any departmental policy of which he was aware, to that effect. The allowance made was said to have represented his personal professional opinion as to the added value of the blade ploughing, albeit in the absence of any evidential basis. [71] Mr Devine's relatively long experience in the area led him to the opinion that blade ploughing had become district practice. He produced mapping on which was indicated properties in the Augathella district where blade ploughing had been carried out albeit to an unidentified extent. He pointed out that regrowth was a recurring problem in pulled country even after repulling of regrowth had been carried out and retreatment could be required after seven to eight years. Apart from the direct costs involved there was also loss of production after repulling. In contrast, while significantly more expensive, blade ploughing gave long-term control and in his opinion some added benefits through better water penetration and pasture growth. He had allowed $135/ha as the cost of blade ploughing. He considered that, if it was regarded in the district as a necessary part of the treatment operation in obtaining a fully effective result, then that was part of the total cost and added value of the overall treatment. His costing had been derived from his local experience and advice received from persons, including members of his family circle, who had been involved in blade ploughing. He said that he had also given consideration to the fact that on "Cunalama" the overall blade ploughing operation had been effected in relatively small areas. [72] In considering the question of the added value of blade ploughing I am not persuaded that it is appropriate to value the total area on "Cunalama" on the basis that it was carried out in other than a total operation. In other words, a purchaser would be interested in the total -- 20 of 65 -- 21 area treated, not the number of operations which were carried out, at apparently less economical rates, to create that total area. [73] Mr Morris spoke of costings having been researched indicating a range of between $110 to $125/ha depending on the extent of land involved. It seems to me that a basic cost of up to but no more than $120/ha is reasonable for the fairly extensive area on "Cunalama". [74] It seems to be common ground that the cost and added value of fully effective pulling, burning and grassing is about $60/ha. When the effectiveness of the original treatment reduces through establishment of regrowth, it also seems to be common ground between the valuers that the added value of the original treatment is found by depreciating the initial cost/added value to allow for the cost of returning the treatment to its fully effective condition. Mr Devine gave an example of his assessment of timber treatment on the sale property "Caledonia" having been depreciated by 70% in recognition of the extent of regrowth. Retreatment by pulling and in some cases pulling in two directions is one method of treatment employed. In fact it is observed that the contract of sale for "Cunalama" included a condition that the vendor complete "70 hours of regrowth pulling (two ways)", rather than blade ploughing. [75] The evidence is that repulling of regrowth is a recurring requirement if full effectiveness is to be maintained. In contrast, blade ploughing provides, if not permanent, a much longer period of retained effectiveness. [76] It is reasonable to accept that if fully effective pulled country having been burnt and grassed adds $60/ha to the value of the land, when potential exists for recurring treatment of regrowth, then blade ploughed country with regrowth largely eliminated would be worth something more. That additional value might theoretically equate the present value, at the date of assessment, of the future costs of pulling retreatment deferred at an appropriate discount rate, had the country not been blade ploughed. No such calculation is before the Court but regardless of Mr Devine's evidence that blade ploughing of regrowth is district practice, and I do not see that as having been necessarily proved merely by the indication of properties where it has occurred, it is difficult to accept that the practice is other than maintenance of an original improvement. Blade ploughing would only be carried out when regrowth had robbed the original improvement of its effectiveness. As Mr Devine pointed out blade ploughing could not be carried out unless the original pulling had once been effected but it does not seem logical that such an expensive operation would be carried out until the original work had lost or was in danger of losing its effectiveness. I am able to accept that if regrowth had been treated by blade ploughing a purchaser of that country might be prepared to pay something above the -- 21 of 65 -- 22 actual cost of blade ploughing to include grassing and any residual value of the original treatment. However it would seem illogical to expect that evidence would be available which would show that treatment of regrowth by repulling would be regarded as a capital cost adding to the value of originally fully effective pulling. The difference between blade ploughing and pulling of regrowth is that future treatment might be expected to have been largely eliminated by blade ploughing but not by repulling. [77] In his submissions Mr Allan drew attention to the fact that in the Mackenzie case, to which Mr Morris had made reference, the learned Member whilst stressing that his decision was intended for the purposes of that case only, had allowed half the cost of effecting the actual improvement (clearing to cultivation) because there was an intention to allow the cultivation to return to pasture. However he noted that the allowance which was made equated the cost of pulling, burning and grassing plus the cost of blade ploughing (emphasis added). [78] It is clear that the circumstances in Mackenzie were different to the position on "Cunalama" where the question is to find the added value of blade ploughing and not the added value of the benefits of land having been cleared for cultivation. [79] I have decided to allow an amount of $135/ha as the added value of the development of the blade-ploughed country. That amount includes the cost of blade ploughing up to $120/ha but realistically something less bearing in mind the area involved, together with the cost of re-establishing pasture from the original development and/or the residual benefits of that original work. I am confident that such an allowance resolves doubt in favour of the appellants' case. [80] The next question relates to the actual areas of timber treatment. Both Mr Morris and Mr Devine had based their analyses on near the same total areas of treated country - 7,186 ha and 7,150 ha respectively. However there were some significant differences in the estimated areas of the varying types of treatment. For example, Mr Devine valued 1,200 ha as having been pulled, burnt, grassed and blade ploughed and 240 ha as having been pulled, burnt, grassed and stickraked. On the eastern side of the intersecting highway he valued 950 ha of red soil country pulled, burnt and grassed with one application of buffel seed. The remaining treatment on the western side of the highway was assessed as 4,760 ha pulled, burnt and grassed. He had inspected the property in May 2002 and used satellite imagery in identifying the location of the treated areas and had interviewed both the vendor and purchaser. The vendor had further assisted by supplying an overlay of the satellite imagery to identify in particular the extent of areas which had been blade ploughed. Mr Devine then used computerised mapping software in the measurement of -- 22 of 65 -- 23 the various areas which had been either confirmed from his inspection or from his discussions with the vendor and purchaser. [81] Mr Morris had inspected the property in September 2002. After satisfying himself as to the details contained in the original analysis he relied largely on the areas and nature of treatment as contained in that original analysis. An area of 1,028 ha was valued as pulled, burnt, grassed and blade ploughed and 60 ha mainly east of the highway, but including 20 ha along fence lines, as having been pulled, burnt and stickraked, but not grassed. Mr Morris had observed that some areas in the north which had not been stickraked were, in his opinion, in generally as clean a condition after burning as parts of the 240 ha which Mr Devine had accepted from his investigations as having been stickraked. An area of 1,103 ha, as I read the tendered mapping (Exhibits 19 and 20), easterly of the highway was valued as pulled only (Mr Devine 950 ha pulled, burnt and part grassed) and another 305 ha, part of which is on the eastern side of the highway as pulled and burnt. Mr Morris valued 4,690 ha as having been pulled, burnt and grassed. [82] It is not possible to reconcile the differences, although it seems that the departmental estimate of treated areas easterly of the highway may generously have included some retained areas of vegetation. [83] While I am inclined to accept the evidence from Mr Morris that at least some of the area east of the highway had not been burnt or grassed at the date of sale or at the date of his inspection, the computerised mapping supplied by Mr Devine (Exhibit 6) seems to be more consistent with the satellite imagery in terms of identification of the overall treated areas. [84] The remaining differences relate to the valuation of the stickraked area (Mr Morris $60/ha excluding grassing but including stickraking $35/ha - Mr Devine $109/ha including grassing $11/ha and stickraking apparently $50/ha) then finally the development period for calculation of interest (Mr Morris half of two years for all but the blade ploughing for which he allowed half of three years - Mr Devine half of three years overall). [85] In taking the broadest possible view which would resolve the benefit of reasonable doubts in favour of the appellants I have decided to adopt the areas of timber treatment as valued by Mr Devine and his valuation of the stickraked area on the basis of his evidence that at the date of sale that land had been prepared and established for the production of buffel seed. Other than for the blade-ploughed areas I will also adopt Mr Devine's valuation of the remaining areas including the calculation of development interest. I have observed that in other departmental analyses (eg "Kootchie" and "Barwhinnock") interest has been allowed on all timber treatment over half of a development period of three years. For the -- 23 of 65 -- 24 sake of consistency, that period will also be allowed here. The following calculation results: 1,200 ha pulled, burnt, grassed and blade ploughed - added value @$135/ha $162,000 240 ha pulled, burnt grassed and stickraked @ $109/ha $26,160 2,160 ha pulled, burnt and grassed @ $59/ha $127,440 2,600 ha pulled, burnt and grassed with regrowth @ $52/ha $135,200 950 ha pulled, burnt and part grassed @ $41/ha $38,950 $489,750 Interest half of three years @ 6.5% $47,750 Total timber treatment $537,500 [86] Mr Devine, not unnaturally, was prepared to accept the department's higher valuation of structures, fencing and water improvements. Again I will follow that more generous approach for the purpose of the exercise. [87] Mr Morris had allowed an amount of $2,476 under the heading of "Sundries" for a UHF base set and aerial and rental revenue for a radio base station site. Mr Devine made no allowance for those items but did allow an amount of $7,360 as the equivalent value of free agistment which had been permitted by the vendor in the period prior to settlement. That arrangement had not formed part of the formal contract but Mr Devine saw it as an inducement provided by the vendor in lieu of the purchaser's attempt to negotiate a lower sale price. I accept that the arrangement may have been of benefit to the purchaser although provided at no cost to the vendor. There is no evidence to suggest that the sale would not have proceeded in the absence of the arrangement. I do not accept that such a verbal arrangement should have a monetary consideration apportioned to it in the analysis of the sale price in the contract. [88] The contract of sale did include a clause which required the vendor to, inter alia, complete prior to the date of delivery "round yard in horse yard". There is some question when the round yard was actually constructed, it not having been noted at the time of the first inspection by departmental valuers about one year after the date of sale. Apparently it had been completed by the date of later inspections. It was not included in the departmental analysis but in Mr Devine's. Mr Morris did not quibble with Mr Devine's valuation of the yards if the round yard was to be included. Again for the purpose of the exercise I will adopt Mr Devine's assessment under that heading. [89] As mentioned earlier, also included in the contract was a requirement that the vendor complete within 12 months of the date of delivery "70 hours of regrowth pulling (two ways)". As I understood the evidence, the timber treatment assessments by all valuers were based on that work having been completed at the times of their inspections. -- 24 of 65 -- 25 [90] The final observation of differences between the analyses of the sale is with regard to the development interest allowance on the land content. It appears that the departmental analysis allows 6.5% on the net unimproved value for half of a development period of two years (or one year full). Mr Devine's calculation methodology is unknown but appears to be significantly excessive. I will adopt the approach taken by the department. [91] For the reasons given earlier the following analysis would result: Sale Price $1,400,000 Less: Sundries $2,476 Structures $147,459 Yards $14,274 Fencing $173,329 Water Facilities $179,996 Timber treatment $537,500 $1,055,034 Gross unimproved value $344,966 Less interest on net unimproved value for half of two years @ 6.5% $21,054 Net unimproved value $323,912 [92] That analysis reflects $28.63/ha, and an increase of 102% over the valuation as at 1 October 1998, in comparison with the departmental analysis of $33.34 and an application of $350,000 or $30.94/ha as at the relevant date, based on an increase of 120% above the previously existing valuation. Mr Devine's analysis reflected $22.32/ha. However it was his opinion that a conservative application of $19.89/ha would have been warranted for the property "Cunalama" as at the date of valuation. [93] The Department's applied value is not now supported by the above analysis. However this amended analysis has resolved doubts in favour of the appellants' case. Mr Devine's analysis has not been found to be a fair interpretation of unimproved value as indicated by the sale. It was his opinion that the analysed unimproved value should then be applied conservatively "to take into account any premium paid for by the purchaser for the extensive quantity of pasture on the property at the time of sale." [94] While I accept that the quantity of pasture may have been an attractive feature of "Cunalama", the added value of the development adopted in the analysis included the establishment of pasture at generally fully effective rates. Furthermore I am persuaded that the additional sales evidence which was not initially relied upon by the Department but considered by Mr Morris to be an indication of the increasing trend in values which had emerged up to the date of valuation, suggests that adoption of the relatively early sale -- 25 of 65 -- 26 of "Cunalama" as basic evidence, is consistent with a reasonably conservative approach to a valuation at a date over 18 months later. "Attica" [95] This property sold shortly after the date of valuation on 16 January 2002 for $690,000 including stock, plant and machinery valued by Mr Morris at a total of $249,100 while the analysed net unimproved value component in one document (Exhibit 18) was shown as $115,673 then $96,776 ($4.38/ha) in the valuation report for the relevant representative appeals. Mr Morris' classification of the country is as follows: 1,561 ha (7%) - box watercourse 320 ha (1%) - brigalow 18,077 ha (82%) - inferior forest 2,123 ha (10%) - ranges, ridges, residual Mr Morris' estimate of carrying capacity was indicated as 1 beast to 29 ha in the sale analysis but then 1 beast to 40 ha in his valuation report. [96] There was no challenge to the departmental analysis of this sale only to its comparability with the representative appeal properties. The chief executive's stance was that although the sale was after the relevant date, its analysis more than supported the applied increase of 120%. Although "Attica" was hardly comparable to the representative appeal properties its primary use, as I understood Mr Morris' evidence, was to show that relativity between valuations from the best to the worst country remained reasonable, within this SMA. "Bangor" [97] "Bangor" contains 4,658 ha and is located 20 km north of Mungallala in Booringa Shire and sold on 6 March 2001 to show an analysed unimproved value of $55.39/ha (carrying capacity 1 beast to 6 ha). It is located just outside the southern end of the Eastern Scrub/Cattle SMA. Although described by Mr Morris as a "basic" sale and within the valuation period, it clearly was not considered as other than supporting evidence for the valuation of Eastern Scrub/Cattle SMA lands generally. Mr Morris described it as representing "a good small quality scrub cattle property sale" and representing "the continuation of the market after the sale of 'Cunalama' ." "Bundulla" [98] "Bundulla" contains 8,670 ha and is situated 17 km west of Mungallala, also within Booringa Shire. It sold on 17 August 2001 to show an analysed unimproved value of $44.54/ha (carrying capacity 1 beast to 8.5 ha). Mr Morris described "Bundulla" as a good quality sheep and/or cattle property just outside the southern end of the Eastern Scrub/Cattle SMA and indicative of the movement in the market since the "Cunalama" -- 26 of 65 -- 27 sale. It was described as a basic sale, within the valuation period, but again was clearly not considered other than as supporting evidence for the valuations applied to the Eastern Scrub/Cattle SMA lands. "Chesterton" [99] The "Chesterton" sale was included by Mr Morris in his valuation report. He stated that it was regarded as a high sale. He provided details of the circumstances which would have excluded it from consideration in any event. The sale provides no evidence of value relevant in these matters. "Truno" [100] This property is located 21 km east, north-east of Tambo. It sold on 28 May 1999 to show an analysed unimproved value of $25.33/ha (carrying capacity 1 beast to 15 ha) and is located within the Eastern Scrub/Cattle SMA. It was regarded by the chief executive's valuers as a high sale at the date and it was excluded from consideration. However, Mr Morris is now of the opinion after further investigations that the purchaser was not as imprudent as had been first thought. This sale is seen to provide evidence which could be interpreted as an indication of the upper range of values in an emerging market. "Gundare" [101] This property sold on 4 August 1999 for $850,000 and was analysed by the Department's valuers to show an unimproved value of $404,977 or $27.27/ha. A valuation of $400,000 or $26.94/ha was applied as at 1 October 2001. [102] The country classification is as follows: 4,950 ha (33%) - downs (open to wooded) 1,250 ha (8%) - box, dead finish 8,144 ha (55%) - mulga, bendee, yapunyah 504 ha (4%) - red mulga country with areas of spinifex and turkey bush [103] The Department has adopted a carrying capacity of 1 beast to 14 ha based on historical records. Mr Devine however adopted a carrying capacity of 1 beast to 11.6 ha (in accordance with DNR&M "Murweh Shire Cattle Valuation Project Criteria"). [104] "Gundare" is located about 10 km south of Augathella within the department's Augathella Merge SMA. "Caledonia" [105] This property sold on 12 July 2001 for $275,000 and the sale was analysed by Mr Devine to show a rounded unimproved value of $40,000 or $7.29/ha. It is located about 6 km south of Morven. [106] The sale was used by Mr Devine but not the chief executive's valuers in any of the representative cases. Mr Devine's analysis was not specifically challenged. However the -- 27 of 65 -- 28 evidence was that the Department's valuers had analysed the sale as part of the valuation considerations for the SMA in which it was located. That analysis was said to have indicated an increase of 13% above the previous valuation while an increase of 15% had been applied. Mr Devine's analysis indicated an increase of 18%. [107] His classification of "Caledonia" was as follows: 1,098 ha (20%) - undulating mixed brigalow scrub with forest influences 1,317 ha (24%) - undulating land mixed scrub forest 1,098 ha (20%) - soft forest country 1,976 ha (36%) - dissected residuals and undulating plains of scrubby forest [108] Mr Devine assessed the carrying capacity of "Caledonia" as 1 beast to 14 ha based on the Murweh Shire Cattle Valuation Project criteria. Summary of Valuation Evidence and Conclusions [109] The real dispute relates to the analysis of the sale of "Cunalama" and the changed relativities resulting from the varying increases applied in the valuations of the overall district grazing lands. [110] "Cunalama" is regarded by both valuers as the most comparable evidence of value in these matters. The analysis which I have decided to adopt does not support either the Department's or Mr Devine's valuation of "Cunalama" or as a consequence the valuations of the representative appeal properties. If the previous valuations within this SMA are to be regarded as a base, the "Cunalama" sale supports an increase of 100% rather than the 120% applied by the Department. [111] There is no dispute in these matters that the relativity between valuations within the Eastern Scrub/Cattle SMA should remain unchanged. The other "basic" sale of "Attica" as relied on by Mr Morris did nothing more, in my opinion, than indicate that, if the previous relativity was maintained, then, based on both sales the value applied to "Attica" was supported. I have not been convinced that the sales of "Bangor", "Bundulla" or "Truno" could in the circumstances be anything more than evidence to support a finding that adoption of "Cunalama" as a basic sale reflected a conservative approach by the Department. [112] With regard to relativity issues, Mr Devine produced schedules containing information which may be factually correct, as to the manner in which relativity between valuations of land have altered between the Eastern Scrub/Cattle SMA and external to it. That is not disputed. That which is disputed by the Department is Mr Devine's opinion that the previously existing relativity should not have been altered. The comparisons made by Mr Devine on the basis of beast area values are not seen to be of any assistance in these -- 28 of 65 -- 29 matters or of any assistance to his arguments once that basis is applied to the adopted sales evidence. [113] In Grahn v Valuer-General (1992-1993) 14 QLCR 327 at pp. 328, 329, the Land Appeal Court considered various authorities and set out several propositions relevant to relativity considerations. Two of those propositions, (e) and (f) are seen to be relevant here. They are as follows: "(e) 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 (WM and TJ Fischer v The Valuer-General (1983) 9 QLCR 44, at p. 46). (f) If possible, the Valuer-General should obtain uniformity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to secure uniform error (R and MM Barnwell v The Valuer-General (1989) 13 QLCR 13, at pp. 16-17 and cases cited in it)." [114] I am satisfied that the Department's approach despite the reduction I have decided to make within the relevant SMA has not offended the general principles contained in the Grahn propositions. Once Mr Devine's analysis of "Cunalama" was rejected his relativity arguments have no substantive support. The sales evidence on which he relied, namely "Cunalama", "Gundare" and "Caledonia" clearly indicates that the previously existing relativity between the valuations of the sale properties has altered. Orders [115] The following orders are made: Case 1 - "Arlington" (AV2002/0604) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Two Hundred and Thirty Thousand Dollars ($230,000) (rounded from $21/ha). Case 2 - "Khyber" (AV2002/0610 and RV2002/0611) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Four Hundred and Twenty-five Thousand Dollars ($425,000) (rounded from $15/ha). Tambo Downs SMA [116] The area identified by the Department as the Tambo Downs SMA is predominantly within Tambo Shire but extends southerly into the central northern section of Murweh Shire, some distance westerly and north-westerly of Augathella It is generally bounded -- 29 of 65 -- 30 on the south-east, south and west by the area identified as the Augathella Merge SMA and in the north-east by the Eastern Scrub/Cattle SMA. [117] Four of the selected representative cases lie within the Tambo Downs SMA. These appeals are against the unimproved valuations of the properties "Wicklow", "Southampton Downs/Glendoroy", "Aubigny" and "Brumich". [118] In these appeals Mr Naish took responsibility for the Department's valuations. Case 3 - "Wicklow" (Appeals AV2002/0654 and RV2002/0655) "Wicklow" is owned by Mr KM and Mrs JI Drysdale. The property is located at its closest point about 35 km north-west of Augathella, the homestead being about 47 km distant accessed mainly by gravel roads but not all-weather according to Mr Devine. It contains an area of 7,179 ha and is described as Lot 2 on Plan BND13:GHPL 10/3010, Parish of Rayner. [119] The unimproved valuation appealed against, both for rating and rent purposes, is in the amount of $640,000 ($89.15/ha) as at 1 October 2001, an increase of 100% above the 1998 valuation. The appellants' estimate of value as contained in both notices of appeal is $384,000. Mr Devine's valuation is in the amount of $415,000 (rounded from $58/ha) equating an increase of 30% above the valuation at the previous date. [120] The Department's classification of the land is as follows: 6,460 ha (90%) - open undulating downs with some myall shade 719 ha (10%) - gidyea with watercourse [121] 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: 5,880 ha (82%) - open undulating downs with some myall shade 80 ha (1%) - wooded downs 790 ha (11%) - alluvial plains and woodlands, coolibah, gum 429 ha (6%) - undulating gidyea/brigalow lands [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. [123] Mr Naish had adopted the Department's historical estimate of carrying capacity as one dry sheep equivalent (DSE) to 1.2 ha. Mr Devine's estimate was 1 DSE to 1.3 ha. A similar -- 30 of 65 -- 31 difference, as will be mentioned later, occurred in the estimate for the property "Aubigny". It was revealed in that case that on a previous occasion Mr Devine in company with other departmental valuers, had accepted an historical estimate of 1 DSE to 1.2 ha rather than 1.3 ha in an analysis of a 1995 sale of "Aubigny". However it had been his understanding that in an analysis of a later 1998 sale the Department had also adopted an estimate of 1 DSE to 1.3 ha. Under cross-examination in that matter his response was "I don't believe there'd be a great difference ..." (Transcript p.35) although he stood by his estimate. [124] While carrying capacity has relevance to Mr Devine's valuation approach, I am not convinced that there is reason to adopt other than the departmental historical estimate, for any relativity considerations based on sheep carrying capacity. [125] Mr Naish suggested that the highest and best use of the land was for "sheep breeding and wool growing or cattle breeding". Mr Devine included cattle fattening. [126] Mr Naish's evidence was that the basis relied on for increasing the previous valuations of all lands within the Tambo Downs SMA by 100% (both in Murweh and Tambo Shires) came from the evidence provided by analyses of the sales of the properties "Baneda", "Isoroy" "Downlands", "Kootchie" and "Wyanga". [127] Mr Devine's valuation relied on the evidence provided by a sale of the subject property "Wicklow" and sales of "Southampton Downs/Glendoroy" and "Raincourt/Glenavin". [128] The differing sales evidence will be discussed in more detail later. It is consistent in each of the Tambo Downs SMA appeals. Case 4 - "Southampton Downs/Glendoroy" (Appeal AV2001/0643) [129] This property is owned by Mr HW Harris. It is located about 60 km north-west of Augathella via bitumen and gravel roads (Mr Devine) or gravel roads (Mr Naish). The area of the aggregation according to the Department's records is 17,070 ha and the description is Lot 11 on Plan BND47:GHPL 10/3226, Parish of Toolmaree and Lot 2 on Plan BND62, Parish of Narrga. (Mr Devine's valuation is of an area of 17,068 ha which is consistent with mapping in Mr Naish's report). [130] The unimproved valuation appealed against is in the amount of $1,450,000 ($84.94/ha) as at 1 October 2001, an increase of about 100% over the valuation as at 1 October 1998. The appellant's estimate of value in the notice of appeal is $942,500. Mr Devine's valuation is in the amount of $940,000 (rounded from $55/ha) equating an increase of about 30% over the 1998 valuation. [131] The Department's description of the land with which Mr Devine agrees is as follows: 15,900 ha (93%) - open downs 670 ha (4%) - gidyea scrub -- 31 of 65 -- 32 500 ha (3%) - gidyea brigalow with roly-poly infestation [132] There was agreement as to the carrying capacity being 1 DSE to 1.2 ha. Mr Naish considered the highest and best use of the land to be "sheep breeding and wool growing or cattle breeding" to which Mr Devine added cattle fattening. Case 5 - "Aubigny" (Appeal AV2002/0600) [133] "Aubigny" is owned by Mr RM and Mrs LA Sperling. The property is located about 45 km at its nearest point north-west of Augathella via gravel road (Mr Naish) or bitumen and gravel - not all-weather (Mr Devine). It is described as Lot 1 on Plan BND13:GHFL 10/2903, Parish of Rayner, containing an area of 7,212 ha. [134] The unimproved valuation appealed against is in the amount of $670,000 ($92.90/ha) as at 1 October 2001, an increase of 100% above the 1 October 1998 valuation. The appellants' estimate of value in the notice of appeal is $435,500. Mr Devine's valuation is in the amount of $435,000 (rounded from $60/ha) an increase of 30% above the previous valuation. [135] There is agreement between the valuers that the total area of the property comprises "open downs with shaded areas along watercourse". Mr Naish adopted the historical departmental estimate of carrying capacity as 1 DSE to 1.2 ha. As discussed in the "Wicklow" matter, Mr Devine had adopted a carrying capacity of 1 DSE to 1.3 ha. For consistency where it may be relevant as to sheep area values, I have decided to adopt the historical departmental estimate. [136] Both valuers adopted the highest and best use of the land as being for sheep breeding, wool growing and cattle breeding, with Mr Devine including cattle fattening. Case 6 - "Brumich" (Appeal AV2002/0644) [137] "Brumich" is owned by Mr MJ and Mrs LJ Lyons. The property is located about 40 km west of Augathella via gravel road (Mr Naish) or bitumen and formed earth road (Mr Devine). It is described as Lot 4 on Plan BND55:GHFL 10/2970 and Lot 1, Plan PER6476:PO 10/6476, Parish of Oakwood, containing 9,338 ha. [138] The valuation appealed against is in the amount of $730,000 ($78.18/ha) as at 1 October 2001, an increase of 100% above the 1998 valuation. The appellants' estimate of value in the notice of appeal is $474,500. Mr Devine's valuation is in the amount of $540,000 (rounded from $58/ha). Mr Devine's valuation report contained a comment that the previous valuation as at 1998 had been in his opinion too low and his valuation in this matter represented an increase of 48%. [139] There is agreement between the valuers that the land classification is as follows: 8,000 ha (86%) - open downs -- 32 of 65 -- 33 687 ha (7%) - hard river frontage, coolibah, box 650 ha (7%) - gidyea scrub [140] There is also agreement that the carrying capacity is 1 DSE to 1.3 ha and that the highest and best use is sheep breeding, wool growing or cattle breeding with Mr Devine including cattle fattening. Sales Evidence and Bases of Valuations Devine Sale 1 [141] "Wicklow" - 7,179 ha - sold 30 April 1999 for $887,000 ($123.22/ha improved) - analysed unimproved value (by chief executive as adopted by Mr Devine) $61.10/ha - $73.32 SAV (Department) $70 SAV (Mr Devine). [142] This is the subject property in Case 3. It was purchased by the owners of an adjoining property who had indicated to Mr Devine an opinion that they had paid a "premium" over and above what they had considered to be market value for the property. While Mr Devine accepted the analysis of the sale which had been carried out by departmental valuers, it was his opinion that the result should be applied conservatively in recognition of the adjoining-owner influence. As a consequence he applied a valuation based on $58/ha and adopted that figure both in the matter of the appeal against the Department's valuation of $89.15/ha and in direct comparison of this evidence with the other relevant appeal properties. He had adopted a sheep area value of $75 (based on his estimate of carrying capacity) for comparison purposes, as part of his valuation methodology. [143] Mr Naish in his report in reply rejected this sale because, in his opinion, it was a "low" sale, out of line with other sales and "later and better evidence" closer to the date of valuation. Devine Sale 2 [144] "Southampton Downs/Glendoroy" - 17,068 ha - sold 16 July 1999 for $2,350,000 or $2,090,080 ($122.46/ha) excluding livestock, plant and machinery - analysed unimproved value (by the Department as adopted by Mr Devine) $60.67/ha - SAV $79. [145] This is the subject property in Case 4. The property was sold at auction to an adjoining owner. The sale included livestock and plant. The Harris family had also purchased other properties in very close proximity earlier that year ("Raincourt/Glenavin" and "Yandarlo"). In agreeing with the Department's valuers' analysis of this sale, Mr Devine had interviewed the vendor and purchaser and established that the value attributed to the livestock in the analysis had been achieved by sale shortly after the purchase of the property. The value attributed to plant and machinery had been considered fair by the purchaser. In Mr Devine's opinion an application of $55/ha (91% of the analysed -- 33 of 65 -- 34 unimproved value) or $75 SAV was reasonable, after consideration of the sales of "Wicklow" and "Raincourt/Glenavin". [146] Mr Naish in his report in reply to Mr Devine's valuation stated that the Harris family had been seeking to expand their grazing operation based in the Mitchell district and had purchased the property "Raincourt/Glenavin" then had been negotiating to purchase "Southampton Downs/Glendoroy" but had decided not to proceed with the negotiations for this property unless they were able to purchase the adjoining "Yandarlo". They were successful in acquiring "Yandarlo" at auction but the "high" price paid prompted the vendors of "Southampton Downs/Glendoroy" to break off negotiations and also go to auction. The price being sought by the owner was not achieved at auction and negotiations with the Harris family were re-opened. Mr Naish commented - "Regardless of whether the Harris family negotiated hard and got a lower than expected market price, the sale is low and out of line with later sales evidence, closer to the date of revaluation ..." Devine Sale 3 [147] "Raincourt/Glenavin" - 11,109 ha - sold 6 April 1999 for $1,372,500 or $1,367,150 ($123.07/ha) excluding sundries - analysed unimproved value (by departmental valuers as adopted by Mr Devine) $38.60/ha - SAV $54. [148] The departmental classification of the land was as follows: 7,331 ha (66%) - open lightly shaded black soil Mitchell grass downs 3,778 ha (34%) - pulled gidyea brigalow scrub country [149] According to Mr Devine this property had sold "after being on the market for an extended period" and was the first of a number of properties purchased by the buyer in the Augathella/Tambo district. In his opinion the sale provided an appropriate basis for determination of the unimproved value and he suggested an application at the relevant date of $38.71/ha and $54 SAV or $379 BAV (cattle). That represented an increase of 2% above the departmental valuation as at 1 October 1998 whereas the unimproved value applied by the Department as at 1 October 2001 was $75.61/ha. [150] Mr Naish commented that the vendor had sold the property due to health reasons and "Regardless of whether the Harris family negotiated hard and got a lower than expected market price, and whether the sale may have been forced due to ill health, the sale is low and out of line with later sales evidence, closer to the date of revaluation ..." Naish Sale 1 [151] "Baneda" - 8,211 ha - 22 km south-east of Tambo - sold 8 July 1999 for $1,300,000 ($158.32/ha) with no livestock or plant - analysed unimproved value $98.51/ha, SAV -- 34 of 65 -- 35 $128.07, carrying capacity 1 DSE to 1.3 ha (or BAV cattle $896), applied valuation $92.55/ha. [152] The "Baneda" land is classified as follows: 6,640 ha (81%) - undulating black soil open and semi-open Mitchell grass downs 1,571 ha (19%) - semi-open to thick gidyea, brigalow, bottle tree, wilga and sandalwood scrub with large areas established to buffel. [153] There was no timber treatment (other than access road grading) allowance in Mr Naish's analysis and it would appear that some development of the second land classification had been carried out since the sale, based on photographic evidence included in his report. [154] The sale property was considered by Mr Naish to be inferior in country type, but overall superior, on a per ha basis in comparison with "Wicklow", "Southampton Downs/Glendoroy" and slightly inferior to "Aubigny" with a similar mix of country, but overall superior to "Brumich". [155] Mr Devine generally agreed with the broad comparisons of "Baneda" with "Wicklow", "Southampton Downs/Glendoroy" and "Brumich" but despite its inferior country, considered "Baneda" slightly superior to "Aubigny". [156] Mr Devine had not analysed the sale. He regarded it as a sale which the Department should have discarded as a "high" sale as had been the case with sales of "Yandarlo" and "West Quarter". He saw this sale as being out of line with the three sales he had adopted, all of which had occurred within the same period. His inquiries had established to his satisfaction that the purchasers had been inexperienced in the grazing industry but anxious to invest in rural industry to offset profits from a construction business and, having recently purchased another property in the locality wished to achieve better economies of scale through the expansion of their grazing operation. As a consequence he said they had been prepared to pay a "premium" over fair market value to induce the vendors to sell. The vendors had been well known to Mr Devine through consultancy services he had provided to them. [157] Mr Naish's evidence was that the main reason that the vendors sold the property was that it had required the injection of much capital for improvements and "the standing gidyea scrub could not be cleared and developed to pasture, due to tree clearing restrictions." The property had not been advertised on the open market, but the vendors had rejected offers from the Harris family before their subsequent purchases of "Yandarlo", "Southampton Downs/Glendoroy" and "Raincourt/Glenavin". An offer from the subsequent purchasers of "Isoroy" had also been rejected. The purchaser then met the vendors' asking price. Mr Naish rejected any suggestion that the purchasers were not -- 35 of 65 -- 36 informed although the slightly earlier purchase of their property "Truno" had been regarded by the Department's valuers as a "high" sale. They had been the losing bidder for "Yandarlo" and had obtained both professional valuation advice and advice from a local grazier before proceeding with the purchase. Mr Naish accepted that the purchasers were looking to diversify their business interests. However they had always intended to run both "Baneda" and "Truno" as a grazing enterprise. He did not see the circumstances surrounding the vendors' refusal to reduce the asking price or their refusal of offers from experienced graziers as indicative of a "premium" price having been asked or paid, as suggested by Mr Devine. Naish Sale 2 [158] "Isoroy" - 9,290 ha - 25 km south-west of Tambo - sold 19 August 1999 for $1,406,850 or $1,383,850 ($148.96/ha) excluding plant and machinery - analysed unimproved value $91.78/ha, SAV $110.31, carrying capacity 1 DSE to 1.2 ha - applied valuation $91.50/ha. The classification of the "Isoroy" land is as follows: 8,010 ha (86%) - open undulating downs with Mitchell and blue grass and some feather top throughout 1,280 ha (14%) - mixed gidyea and brigalow scrub [159] The sale property was considered by Mr Naish to have inferior country but nevertheless to be superior overall on a per ha basis to "Wicklow" and "Southampton Downs/Glendoroy", superior country and overall superior on a per ha basis to "Brumich", but inferior country and slightly inferior overall to "Aubigny". [160] Mr Devine had not inspected "Isoroy" and was unable to agree or disagree with Mr Naish's comparisons. The reason he had not inspected the property or analysed the sale was that he was of the opinion that the circumstances which led to the contract on which Mr Naish relied to be so complex as to complicate any cogent analysis. In his report in reply to Mr Naish's valuation report, Mr Devine stated that when "Isoroy" had been put to auction it had been passed in to a consortium of three purchasers (the Clifts, the Sargoods and the Browns). That consortium, he said, eventually purchased the property for $1,800,000 but after the sale of a substantial number of livestock was negotiated in a separate contract at heavily discounted values. [161] Mr Devine said that the total area of "Isoroy" was approximately 12,400 ha. However the sale involved subdivision of the original aggregation and amalgamation of two areas with adjoining holdings owned by the Sargoods and the Browns who "were looking to expand their enterprises and were prepared to pay a premium above market value to purchase adjoining land." He also stated that the area involved in the contract relied on by Mr -- 36 of 65 -- 37 Naish (to the Clifts) was an apportionment of the total sale price and included livestock and plant, as had the contracts to the other purchasers. Tendered through Mr Devine (Exhibit 7 in these cases) was a bundle of documents including a "Heads of Agreement" between the three intending purchasers made on 15 July 1999 prior to the sale. The parties had agreed that the maximum price to be offered to the vendors would not exceed $1,900,000. No reference was made in the agreement to livestock. In correspondence from the relevant purchasers' solicitors, was a reference to the purchase price in the contract for the 9,290.0156 ha being $1,406,850 the price relied on by Mr Naish but with the true purchase price being $1,400,206.88. That had been calculated on the basis that the area acquired by the Clifts comprised 73.6950983% of the total area of "Isoroy" and the "share of the purchase price being that percentage of $1,900,000. Also included in Exhibit 7 was a copy of a contract for the sale of livestock to the relevant purchasers set out as follows: 4,500 Merino Ewes 2 years and older @ $6 per head with all the unmarked lambs at foot (given in) $27,000.00 70 Merino Lambs mixed age @ $20 per head $1,400.00 30 Mixed age Santa Cows with any unbranded calves at foot (given in) @ $350 per head $10,500.00 2 Santa Gertrudis Bulls @ $650 per head $1,300.00 $40,200.00 Less 18.153% $7,587.06 (sic) $32,612.94 [162] There was also attached to the copy of the contract details of the stock to be acquired by the Sargoods and the Browns. [163] Although it appears that Mr Devine had believed that the livestock was included in the contract price, the documentation clearly demonstrates that all livestock were excluded from the individual contracts, which went to make up the $1,900,000. The point that Mr Devine made with regard to the values attributed to the livestock having represented a significant discount (quite apart from the unexplained 18.153%) appears prima facie to have support. He said that the reason for separate livestock contracts related to stamp duty implications but the discounted prices were offered as an inducement to the purchasers to settle the negotiations. [164] In his reply, Mr Naish said that the purchasers of the major portion of "Isoroy" (the Clifts) had earlier sold "Yandarlo" (to the purchasers of both "Southampton Downs/Glendoroy" and "Raincourt/Glenavin" - the Harris family). He stated that "Isoroy" had been passed in at auction to the Clifts and "after a protracted negotiation" the property was subdivided by survey and the vendor retained part. He saw the later sale of the retained part as a -- 37 of 65 -- 38 separate sale which, due to its smaller area, had not been considered to have any relevance to the unimproved valuations of the Shire and was not analysed. A copy of the contract to Clifts was tendered and he had accepted the details contained therein in good faith. He had been aware that there was a separate contract for the sale of livestock. Indeed, the original valuer who had analysed the sale to the Clifts had noted on the tendered copy of the contract "Separate contract for livestock. Stock contract was written down by vendor. Machinery $1 acre ... Subdivision was done before sale ..." [165] Mr Naish was clearly unaware of the Heads of Agreement and the consortium involved in the overall purchase and the arrangements in relation to the apportionment of the sale price. He was also clearly disadvantaged in not having sighted some of the plant and machinery. Although the original analysis of the sale had been conducted by another valuer, he said he had given consideration to the apportionment in the contract, done some "rough" calculations and accepted the contract apportionment. Naish Sale 3 [166] "Downlands" - 4,273 ha - 40 km south of Tambo (formed earth road for 23 km not a gazetted road) - sold 20 June 2000 for $590,000 or on Mr Naish's analysis $546,813 ($127.97/ha excluding plant and crop, analysed unimproved value $88.71/ha - SAV $106.45, carrying capacity 1 DSE to 1.2 ha - applied valuation $86.59/ha. [167] The classification of the "Downlands" land was as follows: 4,163 ha (97%) - undulating downs country - mimosa shade 110 ha (3%) - braided channels, subject to scalding. [168] "Downlands" was considered by Mr Naish to have similar country but inferior access and overall inferior on a per ha comparison to "Wicklow" and "Aubigny" but superior country and superior on an overall per ha comparison to "Southampton Downs/Glendoroy" and "Brumich". Mr Devine generally agreed with those comparisons but pointed out that electricity was not connected. Mr Naish said that electricity was capable of connection at cost and saw that as the usual position when considering land in its unimproved state. [169] In Mr Devine's opinion, "Downlands" was not comparable to the representative appeal properties being small in size "well below a living area" with the sale price reflecting a "premium" over fair market value. The purchasers were the "long-term" managers of an adjoining property and "Downlands" convenient location to their employment and other family properties in the locality had, on the information given to him by the purchasers, influenced the price paid. The purchasers told him, he said, that they were of the belief that they had paid a significant "premium" for this convenience. -- 38 of 65 -- 39 [170] Mr Devine had not analysed the sale but did not accept the value of $40,000 attributed by Mr Naish to "crop". He had interviewed the vendor "around the time of the sale" and again shortly before the hearing, and similarly the purchasers. Apart from his employment as the manager of the adjoining property, the male purchaser "is a contractor buffel harvesting and seed merchant and derives a significant income from the sale of buffel seed". He had recently advised Mr Devine that "he's had no sales of buffel seed for less than $10 kg over the last four years and that the crop in question at 'Downlands' yielded approximately 8½ tonne which he sold over a two year period for between $10 and $12 kg with a total gross sale of approximately $90,000." Mr Devine has also engaged in buffel seed harvesting and his evidence was that he had direct experience in the sale of buffel seed from a Tambo property at $12 kg and that seed from the Tambo/Augathella district "is highly sought after in the market due to its parthenium free status". He accepted that there would have been costs involved by the purchaser in achieving sales of $90,000 for the "Downlands" buffel seed, but from his experience he suggested that those costs would be no more than $5,000. [171] Mr Naish had not conducted the original analysis of the "Downlands" sale and there was no evidence as to the basis of any original assessment of the value of the buffel seed. However Mr Naish made his own inquiries and, not having had any direct experience in relation to the sale or valuation of a buffel seed crop, was directed to a Pittsworth seed merchant who "regularly deals with buying/selling seed in the Blackall/Augathella region". That merchant advised him that seed bought by his company "of the quality that came from the Tambo area" had been between $4 to $6 kg in the period relevant to the date of the "Downlands" sale. At that date high-grade American strain buffel seed delivered to Charleville would have been sold for $8 kg. Mr Naish estimated $6 kg would have been fair for what he believed would have been the lesser quality seed from "Downlands". The purchaser had been interviewed in October 2002 and had informed Mr Naish that the value attached to the buffel seed had been $12 kg or $80,000. That figure had been the apportionment in the contract but the apportionment of that item had been left to the purchaser. [172] Mr Naish's response to Mr Devine's comments about this sale was that, regardless of the purchasers' employment on an adjoining property, they were not guaranteed of permanent employment on that property and could not be regarded in the same category as adjoining owners who might pay a premium to acquire adjoining land. His inquiry confirmed that the close proximity of "Downlands" to their place of employment was an attractive feature to the purchasers, but so was the price being asked. The vendor had sold the -- 39 of 65 -- 40 property for "family" reasons, but it had not been a forced sale. He offered it to the purchasers because he knew they were actively looking for a property but Mr Naish was told that had they not accepted the asking price he would have offered it on the open market. Mr Naish said that he was told by the male purchaser who was an informed local with a grazing background, that he felt the size of "Downlands" was adequate for a living area. Mr Naish referred then to the "slightly larger" "Ashby Downs" as an example of a small living area. [173] Mr Devine was adamant that "Downlands" had never constituted a living area, that it was a "build-up" block and that was also the purchasers' opinion as conveyed to him. He said that "Ashby Downs" comprised about 6,000 ha and was in fact run in conjunction with another block albeit one some 80 km by road distant. Naish Sale 4 [174] "Kootchie" - 6,782 ha - 56 km south-west of Tambo - sold 25 January 2000 for $850,000 ($125.33/ha) - analysed unimproved value $53.02/ha - SAV $79.53 or BAV $556.71 - carrying capacity 1 DSE to 1.5 ha or 1 beast to 10.5 ha (cattle) - applied valuation $51.61/ha. The "Kootchie" land was classified as follows: 1,602 ha (24%) - downs (open forest) 2,250 ha (33%) - flooded gidyea and coolibah channels and claypan 2,530 ha (37%) - gidyea, brigalow scrub 400 ha (6%) - mulga ridge and tableland. [175] Mr Naish considered "Kootchie" to have inferior country to each of these representative appeal properties and inferior on an overall per ha comparison. Mr Devine did not agree with all points of comparison made by Mr Naish with the individual appeal properties but did agree that the "Kootchie" country was inferior to each as well as being overall inferior on a rate per ha basis. [176] Mr Devine had inspected "Kootchie" at some time in the past but not specifically in connection with the sale. In his opinion it contained no downs country and consequently was not directly comparable to these representative appeal properties all of which were predominantly downs blocks. In his opinion the unimproved value analysis by Mr Naish was out of line "with the trend of values established by the more reliable and comparable sales evidence for the Augathella district, namely 'Southampton Downs', 'Wicklow' 'Raincourt' and 'Gundare'" (the sale of which is discussed elsewhere). [177] In response to Mr Devine's comments, Mr Naish did not accept that "Kootchie" contained no downs country. He agreed that the "Kootchie" country did not comprise "traditional" downs but suggested that "open forest" was locally preferred terminology for "wooded downs" where vegetation was more prevalent than on country described as "shaded -- 40 of 65 -- 41 downs". In his opinion once the flooded country was included, it was reasonable to consider "Kootchie" as comprising about half the equivalent of downs "type" country the balance being mainly brigalow/gidyea scrub. He did accept that it was an inferior downs block. However it had been valued accordingly and although it was at the lower end of value its sale had still reflected a similar trend of increase since the previous date of valuation as had the sales which he had adopted as providing basic evidence of value for the better quality downs country. Naish Sale 5 [178] "Wyanga" - 7,214 ha - 20 km north-west of Tambo - sold 12 September 2001 for $1,656,800 or, on Mr Naish's analysis $1,399,420 ($193.98/ha excluding livestock and plant) - $86.52/ha unimproved - SAV $112.47, carrying capacity 1 DSE to 1.3 ha - applied unimproved value $83.17/ha. The "Wyanga" land was classified as follows: 3,625 ha (50%) - downs, open to shaded 2,965 ha (41%) - gidyea 614 ha (9%) - alluvials, watercourse (McFarlane Creek). [179] Although having superior access and location, Mr Naish described the "Wyanga" country as inferior to each of these representative appeal properties and overall inferior on a rate per ha basis. Mr Devine generally agreed with the overall comparisons. [180] Mr Devine had not analysed the sale. He had not been able to inspect the significant livestock or some of the plant involved. The property had been sold privately not having been listed on the open market. The purchasers owned two other properties in the Tambo district and Mr Devine stated that they had purchased "Wyanga" as a "build-up" area and "were prepared to pay a premium to increase the size of their enterprise and add some diversification to their existing enterprise". His inquiry had indicated that the contract- apportioned values for livestock and plant, where adopted by Mr Naish, had resulted from the vendor's requirements for taxation purposes and did not reflect "the added value ... to the purchaser." The purchasers had advised him that the values apportioned to the livestock were "significantly lower" than their market value at the time of sale. In their opinion the fair market value of the livestock was approximately $284,000 broken up as 5,500 adult sheep at approximately $36 per head, 2,500 lambs at $20 and 60 breeding cows at $600 per head. The contract apportioned the livestock as being worth $160,000 for 8,000 head. [181] In Mr Devine's opinion the sale was, of a consequence, difficult to analyse "and inherently difficult to rely upon". Furthermore he was of the opinion that "Wyanga" was not comparable with these representative appeal properties "when the irrigation potential of the sale is taken into account". -- 41 of 65 -- 42 [182] A waterworks licence attached to the property, permitting storage of a maximum 170 ML of water by way of a dam wall constructed across McFarlane Creek, for irrigation of a maximum area of 40 ha and stock water. [183] Mr Devine accepted that McFarlane Creek was a "minor watercourse" not comparable with, for example, the Warrego or Paroo Rivers. He had been unable to obtain any information from the Department of Natural Resources and Mines as to expected water flows in the creek and there were "no official records for Tambo for over ground flows". He was unable to give an opinion as to the reliability of the resource but agreed that it would be difficult to continually irrigate crops. However the purchaser had informed him that the opportunity to irrigate had been seen as a significant benefit and "a crucial element in his purchase price". Mr Devine had given consideration to the value which the licence would add to the land. He thought that depending on crop requirements a 40-ha licence could involve usage in the range of 240 ML to 400 ML per annum. His inquiries indicated that the added value attributed to water "throughout the country ranged from $500 ML to $1,200 ML". Adopting the lower range and usage potential of 240 ML to 400 ML per annum an added value of $120,000 to $200,000 would result. Whatever was the correct added value, irrigation licences were not attached to the appeal properties and as a consequence he saw the "Wyanga" licence as another matter clouding the use of the "Wyanga" sale as a valuation basis. [184] Included in the contract of sale apportionment had been an amount of $5,000 which Mr Naish, through his inquiries, had understood to be intended to represent the added value of the actual water in the dam at the date of sale, rather than any value apportioned to the licence itself. He had allowed that item but accepted that at the relevant date of sale any value attaching to the licence formed part of the unimproved value of the land. He also accepted, based on his discussion with the purchaser, that the opportunity provided by the licence to engage in irrigation of fodder cropping of the 40 ha had been seen by the purchaser as an attractive feature. Nevertheless, Mr Naish saw the opportunity for fodder crop irrigation as being limited by the opportunity for water to be stored on any regular and repetitive seasonal basis, the extent of storage permitted, and effects of the evaporation rate in this district. He saw the effect on market value of a licence permitting the irrigation of 40 ha of a 7,000 ha grazing operation as being relatively insignificant and questioned the economic viability of the capital expenditure involved in the dam and irrigation infrastructure when irrigation potential was limited by the seasons. Nevertheless, his approach to the analysis of the sale had been to deduct the "expense of the dam wall and associated works" from the sale price. -- 42 of 65 -- 43 [185] Mr Naish's inquiries of the vendor revealed that while the sale was privately negotiated, it had followed earlier negotiations with an interested party who had been unable to obtain suitable finance. Mr Naish had been informed that the vendor had wished to retire but had not been keen to see the property used for cattle, despite the demand which he believed existed at the time from cattle graziers, preferring not to expose the property for sale on the open market. According to Mr Naish although the vendor had believed he could have received a higher price from a cattle grazier "after much negotiation" the subject sale was negotiated. The purchasers had informed him that they had accepted the price as fair at the time and had remarked that since the date of sale, property sales in the locality "make it now look cheap". [186] Mr Naish said that he spoke to the purchasers about the livestock in the contract. Although "the number next to livestock said estimated 8,000" the purchasers had stressed that there was "an additional 60 head of cows" and he accepted that to be the case in his analysis. He thought $20 per head for sheep "did not seem out of line with the market". [187] Mr Naish had been unable to sight various items of the plant and machinery. It was put to him that a particular tractor which he had inspected had sold for a much higher figure than his estimate of its value but there was no evidence of any such sale upon which the Court could rely. However Mr Naish accepted that despite his estimates of value another tractor which he had been unable to inspect might have commanded a higher range of value than the figure he had applied. Many of the other items as listed had been valued he said on the basis of costs researched and recorded by the Department. [188] It was Mr Naish's evidence that despite the information given to Mr Devine by the purchasers as to the values of livestock, plant and machinery, having been written down for the benefit of the vendor, he had not been similarly advised in his discussions with the purchasers. Summary of Valuation Evidence - Tambo Downs SMA [189] Mr Devine's valuations and suggested application of unimproved valuations based on the sales of "Wicklow", "Southampton Downs/Glendoroy" and "Raincourt/Glenavin", result in increases of 30% above the 1998 valuation of the representative appeal properties. However, for the non-representative "Raincourt/Glenavin" he would have adopted an increase of 2%. His valuations were based in the first instance on the premise that the sales of the representative properties "Wicklow" and "Southampton Downs/Glendoroy" provided the best possible evidence of the market value of those individual sale properties not only at the date of sale but also as at 1 October 2001. Those sales together with the sale of "Raincourt/Glenavin" then provided the overall basis for the valuation of each of -- 43 of 65 -- 44 the representative properties including "Aubigny" and "Brumich", by direct comparison. Support for his valuations had been seen to be provided by the relevant sheep area values. [190] It was basic to Mr Devine's approach that the relativity which had previously existed between valuations of district grazing properties was generally correct although it is observed that he chose to apply values which altered that relativity, albeit to a relatively minor degree. Examples were given as to the much greater change in relativity which had resulted from the Department's valuations both from direct comparison and sheep area value considerations. While that information is accepted as factual, the result is not disputed by the Department with Mr Naish's evidence being that the change was warranted by the market evidence. [191] In the particular case of "Brumich", it was Mr Devine's considered opinion that the 1998 valuation by the Department had been low in comparison with the valuations of the surrounding properties "Aubigny" and "Wicklow". Unless it was to be argued that the 1998 valuation of "Raincourt/Glenavin" was also wrong, but in this case for the reason that it was too high, the 1999 sale of that property showing a 2% increase is not accepted as support for Mr Devine's opinion that it should be adopted as evidence of value supporting the "Wicklow" and "Southampton Downs/Glendoroy" sales. [192] Despite Mr Devine's rejection of SMAs for the reason that he sees them as an artificial tool to assist the Department's mass valuation methodology, and apart from specific individual cases such as with "Brumich", there did not appear to be an argument that within the Tambo Downs SMA the previously existing relativity required review. [193] As I understood the evidence the 100% increase had been applied consistently by the Department throughout this SMA. If the "Wicklow" and "Southampton Downs /Glendoroy" sales, reflecting undisputed increases of 37% and 42% respectively above the 1998 valuation, were true reflections of the market as at 1 October 2001, then clearly the Department's application of a 100% increase was wrong. Putting aside the argument that these two sales should have been applied conservatively, in any event, for reasons associated with adjoining owner influences, Mr Naish is convinced that the sales were not reflective of the true market at the relevant date of valuation some two years later. [194] Mr Naish interpreted the overall evidence as showing a steadily increasing trend since 1998. He produced a graph which depicted a "trend line" increasing from the date of a sale of "Aubigny" in 1997 which had provided basic evidence for the 1998 valuation, through to the "Wyanga" sale which had taken place almost precisely at the date of the 2001 valuation. Unanalysed sales subsequent to the date of the "Wyanga" sale and the relevant date of valuation then indicated quite significant increases in overall sale prices. -- 44 of 65 -- 45 Those sales are irrelevant to the matters currently to be decided. In fact, the graph itself is of no real assistance to the Department's case. First it is dependent on the correctness of the analyses of the sales which are in several cases disputed. Second the gradations of time between the date of the "Aubigny" sale and the date of the "Wyanga" sale are not consistent. What the table does show is that in the 1999 period when the market was described by Mr Naish as having "hotted-up", consequent upon the entry of cattle graziers into the market, there were seven sales - of "West Quarter", "Raincourt/Glenavin", "Yandarlo", "Wicklow", "Baneda", "Southampton Downs/Glendoroy" and "Isoroy". In 2000 there were two sales of "Kootchie" in January and "Downlands" in June, then one sale "Wyanga" in late September 2001. The 1999 sales of "West Quarter" and "Yandarlo" in March and April were regarded by the Department as "high" with no precise analyses before the Court. The April sale of "Raincourt/Glenavin" was regarded by the chief executive as "low" but as earlier discussed, adopted by Mr Devine. The later in April sale of "Wicklow" had been regarded as "low" by the Department but adopted by Mr Devine. The July sale of "Baneda" at a level of value higher than "West Quarter" and a little lower than "Yandarlo" was adopted as a basic sale by the Department but considered "high" by Mr Devine. The later in July sale of "Southampton Downs/Glendoroy" at a similar level of unimproved value as "Wicklow" was regarded as "low" by the chief executive but basic evidence by Mr Devine. Then the August 1999 sale of "Isoroy" at an unimproved level less than "Baneda" but higher than "West Quarter" was adopted as basic evidence by the Department but too complicated for comparison purposes by Mr Devine. [195] If each of those sales was of directly comparable country adoption of any in preference to others, would be seen, in my opinion, as selective and not indicative of the range of values which had been achieved. The difficulty in attempting to reconcile the differences as to which sales provided a fair level of unimproved value for revenue-gathering valuations, results from the significant difference between the "low" sales and the "high" sales with none in between. The "low" sales of "Wicklow" and "Southampton Downs/Glendoroy" reflect unimproved values of around $60/ha for predominantly downs country while the "high" sales on the analyses of the Department, adopted as basic evidence by Mr Naish, reflect unimproved values of nearly $100/ha for "Baneda" and about $90/ha for "Isoroy". The "Baneda", "Southampton Downs/Glendoroy" and "Isoroy" sales took place in July and August. Probably of more significance than unimproved value analyses in the minds of those dealing with the "real" marketplace was that of the seven sales during the period up until August 1999, four showed a reasonably -- 45 of 65 -- 46 consistent level of improved value (as I understood the graph, ex livestock, plant, machinery and sundries) of around $125/ha. The exceptions were "Yandarlo" (apparently about $175/ha), "Baneda" ($158/ha) and "Isoroy" ($149/ha). It is understandable that, on that analysis, which cannot be related directly to the widely varying analysed unimproved values, the latter sales may have been regarded as "high" in comparison to the majority. [196] It is also understandable that if the relevant date of valuation had been say 1 October 1999, the sales of "Wicklow" and "Southampton Downs/Glendoroy" would have seemed to have provided a reasonable basis for valuation. There is no direct evidence shown by the sales that in this type of country adjoining owners were doing other than meeting the open market rather than paying significant "premium" levels of value above market, for expansion purposes. [197] Had the position as at 1 October 1999 been as suggested, then it would have been unreasonable for the purposes of making valuations under the Act, for the Department to have relied on the "high" sales of "Baneda" and "Isoroy". In any event, it is seen as curious that in the Eastern Scrub/Cattle SMA, the "high" 1999 sale of "Truno" to the same purchaser of "Baneda" had been rejected by the Department's valuers for the reason that the purchaser had at that time been considered imprudent. That may not have been the case, in hindsight, but it places in question the relativity which results from adopting the higher levels of sales in one SMA then rejecting the higher level of sales in the same period other than as "support" evidence in another adjoining SMA. [198] The background to the "Isoroy" sale is not accepted as having been fully understood by Mr Naish and for that matter by Mr Devine, with regard to the contract for the real estate excluding the livestock acquired under a separate contract. It is accepted that any inducement offered under the livestock contract would have lightened the weight which might have been placed on the real estate transaction. The primary difficulty with the sale as relied on by Mr Naish was that the contract formed part of a wider arrangement not only between three individual purchasers, but the vendor as well. It might have been that some weight could have been placed on the evidence relating to the arrangement to purchase the whole of "Isoroy", but that was not the transaction which was subject of the Department's analysis. In the end result I would reject both the sales of "Baneda" and "Isoroy" as reliable evidence of value either as at a date in late 1999 or 1 October 2001. [199] The next question to be considered is whether there was an increase in level of unimproved value between say 1 October 1999 and 1 October 2001. There are three sales during that period. "Kootchie" sold at about the same improved level $125/ha as the four of the seven 1999 sales mentioned earlier including "Wicklow" and "Southampton -- 46 of 65 -- 47 Downs/Glendoroy", and on the only (and unchallenged) analysis before the Court at a slightly lower unimproved value ($53/ha) than those two sales. The difference is that in its unimproved state the "Kootchie" country is of significantly inferior quality to both those properties. In fact, while it is seen as somewhat inconsistent with his views as to the comparability between the representative appeal properties and those properties in his relativity schedule with a small proportion of downs country, in this case Mr Devine discards the sale of "Kootchie" as he says it is of non-comparable country. There is fairly close comparability in dollar terms between the unimproved SAV value which was shown by the "Kootchie" sale and those adopted by Mr Devine, but that comparability results from the significant expense involved in developing the scrub country of which "Kootchie" has a relatively large area. [200] While I accept that the "Kootchie" country overall is capable of comparison considerations as suggested by Mr Naish, it is better evidence of value for the lower end of the Tambo Downs SMA country types, rather than the traditional downs country. Nevertheless, while the "Kootchie" sale is seen to be one where some caution is required in its general application throughout the Tambo Downs SMA, the level of unimproved value reflected suggests that, even with cautious application, it supports the opinion of Mr Naish that levels of higher value should have been anticipated for the better quality properties such as "Wicklow" and "Southampton Downs/Glendoroy" in the period subsequent to the date of their sales. [201] The "Kootchie" sale is therefore seen to also confirm that the sale of "Raincourt/Glenavin" with clearly inferior country on an overall comparison to "Wicklow" and "Southampton Downs/Glendoroy" should be rejected as evidence of fair market value for that property as at the relevant date. [202] The purchasers of "Downlands" paid a little more on an overall rate per ha improved ($138/ha) than the fairly consistent levels of around $125/ha demonstrated by the sales previously discussed. There was however only nominal value associated with structural improvements. The unimproved value reflected by the sale ($88.71/ha) on the Department's analysis was significantly higher than that shown by the sales of "Wicklow" and "Southampton Downs/Glendoroy" about one year earlier. There is a dispute however with regard to Mr Naish's analysis in particular to the added value of the buffel seed crop as it existed at the date of sale. There is obviously a difference between the value of seed still to be harvested, if that was the case as I understood it to be, and harvested seed available for immediate sale. Apart from the costs of harvesting which Mr Devine thought would not have exceeded $5,000 to the purchaser who was in the harvesting -- 47 of 65 -- 48 business, there was the risk involved in achieving the estimated yield at the date of sale. The purchaser was less than open, apparently in his discussion with Mr Naish, as to the location and area from which the seed was harvested. The apportionment of value for the seed which was said to have been included in the contract of sale on the purchaser's estimate was apparently $80,000. It was Mr Devine's evidence that the purchaser had harvested 8.5 tonne with gross sales over two years of $95,000. The purchaser was experienced in the business and Mr Naish had to do the best he could by making inquiries of a seed merchant, in a global district context. The difference between the sale apportionment and Mr Naish's evidence equates a significant $9.36/ha. If it was necessary to decide this specific issue, despite the relative inexperience of Mr Naish in comparison with the purchaser, I would lean towards Mr Naish's estimate which as I understood it reflected an attempt to value the crop as it stood with consideration given to the associated risks involved in acquiring a standing crop. [203] Nevertheless, as a sale for general application on a direct comparison basis "Downlands" is not devoid of problems. I am not persuaded that the convenience factor to the purchasers is a particular problem, albeit one worthy of some caution. However there was argument put forward by Mr Naish that the size and quality of the block constituted an economic living area. I prefer Mr Devine's opinion to the contrary and that tends to support even greater caution in terms of consideration of the convenience factor to the purchasers. Furthermore, it is a recognised fact that, as Mr Naish accepted, the availability of a good quality block at an overall price level affordable to a greater number of potential purchasers, creates a wider demand factor than would normally be experienced in the market. Against that there were some potential technical negatives relative to the gazetted access and if the property was to be developed further, the need to extend electricity for some unidentified distance to the property boundary. [204] In any attempt to fairly interpret the market which existed subsequent to 1999, it is my opinion that a valuer fully aware of the unimproved value fluctuations which analyses of 1999 sales were indicating would not simply reject the "Downlands" sale, as Mr Devine had done, because there were some difficulties involved in its analysis. I do not accept that Mr Naish's analysis of the sale has been shown to be fatally flawed but there are sufficient doubts created, in my opinion, for there to have been a more cautious approach taken in its application, not only to "Downlands" itself, either at the date of sale or the later date of valuation, but certainly in its general application as basic evidence of value throughout the relevant SMA. -- 48 of 65 -- 49 [205] Finally "Wyanga" ($194/ha), on Mr Naish's analysis showed the highest improved value per ha excluding livestock, plant, machinery and sundries, of any sale within the period between 1 October 1998 and 1 October 2001. Mr Naish's analysis then reflected an unimproved value ($86.52/ha), lower than either "Baneda" or "Isoroy" and an unimproved sheep area value of $112. However, this is for a property with a much lower proportion of traditional downs country (50%) and over 40% of gidyea scrub. It has inferior country, in its unimproved state, to each of the representative appeal properties, but superior access and location. Mr Naish's analysis was disputed, specifically with regard to the value he had ascribed to the livestock included in the sale and then some items of plant. It is not uncommon for apportionments of these components in contracts not to represent fair market value. Mr Naish had been unable to inspect some items of plant and machinery, or the livestock. I did not find his evidence as to the estimated value of some items of plant and machinery to be convincing. As far as the livestock was concerned he adopted the value apportioned to an estimated 8,000 sheep as identified in the contract, at $20 per head. Apparently he had not obtained or was unable to obtain details as to the age or quality of the sheep involved. His conclusion that the value apportioned in the contract represented fair market value, was based on the information which was provided to him, on his evidence, by the parties to the transaction. A copy of the contract was tendered. I have no doubt, after perusing the contract, that the reference to the estimated number of livestock was a specific reference to sheep and the apportioned value of $20 per head was consistent with Clause 36.11 which referred to the allowance for excess or deficiency in numbers on muster. Nevertheless, despite the contract, Mr Naish was informed by the purchasers that 60 head of breeder cows had also been included in the sale and he took the precautionary approach of allowing an amount for those cattle as well. [206] Mr Devine has provided assistance to the Court through his identification of the difficulties he would have encountered in providing a reliable analysis of the sale. However he then introduced evidence of a verbal opinion given to him by the purchasers regarding the value of the livestock, and probably some items of machinery, which, at least with regard to the livestock, contradicts the earlier information from the same source to Mr Naish. In the circumstances Mr Naish's analysis has not been proved wrong. Instead, as would have been the case in any event, it is clear that this is a sale which warranted a cautious approach in its application. [207] The other aspect with regard to the use of the "Wyanga" sale for general application was the effect on unimproved value created by the existence of the waterworks licence. If Mr -- 49 of 65 -- 50 Devine's opinion was to be accepted and I am unable to be so persuaded, the irrigable area permitted by the licence could have an unimproved value in the range of $3,000 to $5,000 per ha, based on his evidence as to values achieved for water entitlements in the more established irrigation area. While I am able to accept that with the infrastructure in place, the opportunity to irrigate could well be an attractive feature to a purchaser, I prefer Mr Naish's opinion that the attraction would relate largely to the existence of the water facility infrastructure. Although he expressed some doubt as to the economic viability of developing the licence, I am satisfied that Mr Naish took a realistic approach in ascribing reasonable or at least unchallenged values to the infrastructure involved and the cost of preparation of the area capable of irrigation when water was available. He also accepted that the water stored on the property at the date of sale had some discrete value. While that may be an unusual approach it seemed to reflect the attitude of the purchasers. I accept that some enhancement of the 40 irrigable ha may have been attributable to the existence of the licence. However I accept Mr Naish's opinion that such enhancement would be difficult to separately quantify and of little overall significance in the subject circumstances when it was the unimproved value paid for in excess of 7,000 ha which is under consideration. [208] In the end result despite the doubts which have been promoted as to the value of livestock, plant and machinery included in the sale, it is clear that on any reasonable analysis the sale would support an opinion that a significant increase in the value of the type of country within this SMA had occurred since mid-1999. I am not convinced however that the sale should have been adopted as supporting other than a conservative application of unimproved value to "Wyanga" at the date of sale and, as it happened, the relevant date of valuation. [209] The task before the Court is to determine as best it can on the evidence, the correct level of unimproved value for the lands selected within this SMA as at the relevant date of valuation. The percentage increase above the previous valuation is the crux of the dispute between the parties. As is often observed, the Court is not concerned with the correctness of the previous valuation but inevitably where mass valuations are involved that previous valuation becomes the benchmark for the Department's calculations. [210] I see the need in these particular cases to comment further on the relativity arguments. If the sales evidence is reasonably interpreted it should follow that reasonable relativity will result subject always to the positive or negative features associated with individual properties. There seems to be no dispute that the previously existing relativity from one property to another, specifically within the Tambo Downs SMA in Murweh Shire at -- 50 of 65 -- 51 least, remains generally correct. However I have formed the opinion that in other SMAs the Department had endeavoured to take a relatively conservative approach to the application of the available evidence. That does not appear to me to have generally extended to the Tambo Downs SMA where the higher level of values indicated by the Department's analyses of sales subsequent to 1999 have been applied quite aggressively. It seems to me that it is an important function for the sake of application of equitable relativity, not only within a SMA but from one SMA to another, for there to be some consistency in the manner in which the evidence is applied. Conclusion [211] I have not been persuaded that Mr Devine's valuations represent fair unimproved market value as at the relevant date. Through the evidence presented by the appellants however the basis relied on by Mr Naish has resulted in two of the five basic sales having been rejected, sufficient doubt raised with two more for them to be applied more conservatively with the remaining sale ("Kootchie"), fully supporting the application albeit for generally inferior quality country. [212] I have concluded despite the sale of "Kootchie" that while an increase of significance has occurred in unimproved values for the type of country found generally in this SMA and particularly the developable scrub country, the increase of 100% above the 1998 valuations as applied by the Department should be reduced to 80%. In the case of the property "Brumich" I have accepted, on Mr Devine's evidence, that the previous valuation was too low in comparison with surrounding properties and have decided that a rounded valuation representing an increase of 85% is warranted. Orders Case 3 - "Wicklow" (Appeals AV2002/0654 and RV2002/0655) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Five Hundred and Seventy-five Thousand Dollars ($575,000) rounded from $80 per ha. Case 4 - "Southampton Downs/Glendoroy" (Appeal AV2002/0643) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of One Million Three Hundred and Five Thousand Dollars ($1,305,000) rounded from $76.50 per ha. Case 5 - "Aubigny" (Appeal AV2002/0600) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Six Hundred and Five Thousand Dollars ($605,000) rounded from $84 per ha. -- 51 of 65 -- 52 Case 6 - "Brumich" (Appeal AV2002/0644) The appeal is allowed. The chief executive's valuation as at 1 October 2001 is set aside and the unimproved value determined in the amount of Six Hundred and Seventy-five Thousand Dollars ($675,000) rounded from $72.50 per ha. Augathella Merge SMA [213] The area identified by the Department as the Augathella Merge SMA runs generally from north and west of Morven to the north-west through Augathella to a strip south-westerly of Tambo. As is relevant to the representative cases it lies westerly of the Eastern Scrub/Cattle SMA; to the east, south and west of the Augathella Downs SMA; and southerly and westerly of the Tambo Downs SMA, except at its northerly point where it extends to be also east of part of that SMA. [214] Mr Naish took responsibility for the valuation of the one representative appeal property in this SMA. Case 7 - "Wansey Downs" (Appeals AV2002/0591; RV2002/0589; RV2002/0590; RV2002/0592) [215] There are four appeals in relation to this representative property. One appeal is against the unimproved valuation of the aggregation for rating purposes and three of the appeals are against the valuation of individual leases for rent purposes. [216] "Wansey Downs" is owned by Mr JC Bryant. At its closest point, it is situated about 30 km west of Augathella, according to Mr Naish, and according to Mr Devine about 58 km apparently to the homestead via part bitumen and mainly gravel roads which Mr Devine did not consider to be all-weather. [217] The property contains an area of about 17,700 ha comprising: Lot 3 on Plan LO3:GHPL/10/3157 Lot 4 on Plan LO4:GHPL/10/3156 Lot 9 on Plan LO5:GHPL/10/3249 all Parish of Dunstan [218] The unimproved valuations appealed against are as follows: AV2002/0591: Lots 3, 4 and 9 - 17,770 ha - $500,000 ($28.14/ha) The valuation which first issued was in the amount of $630,000 representing an increase of 100% above the 1998 valuation. That valuation was reduced on objection and the valuation now appealed against represents a 60% increase. The owner's estimate in the notice of appeal is $421,875 while Mr Devine's valuation is $425,000 rounded from $24/ha, reflecting a 36% increase above the 1998 valuation. RV2002/0590: Lot 3 - about 7,932 ha - $177,500 ($22.38/ha). The owner's estimate in the notice of appeal is $149,000 while Mr Devine's valuation is $150,000. -- 52 of 65 -- 53 RV2002/0589: Lot 4 - about 8,280 ha - $276,000 ($33.33/ha). The owner's estimate in the notice of appeal is $231,850 while Mr Devine's valuation is $230,000. RV2002/0592: Lot 9 - about 1,556 ha - $50,000 ($32.13/ha). The owner's estimate in the notice of appeal is $42,000 while Mr Devine's valuation is $45,000. [219] The chief executive's classification of the total area of the land is as follows: 714 ha (4%) - open downs 3,940 ha (22%) - watercourse, coolibah, channels and plains 4,581 ha (26%) - shaded downs/tableland (areas open) 5,094 ha (29%) - gidyea/brigalow scrub 3,439 ha (19%) - box/mulga and sandalwood (some gidyea and brigalow - areas of tableland mulga). [220] Mr Devine had been involved in an appeal against the earlier 1998 valuation of this property when the above classification had been agreed between him and the departmental valuer involved at that time, after a detailed joint inspection. [221] The Department's historical carrying capacity estimate of 1 DSE to 2 ha or 1 beast to 14 ha (adult equivalent - cattle) had been maintained by Mr Naish although in his oral evidence he suggested that the estimate would have been rounded from a slightly heavier carrying capacity. [222] Mr Devine's estimate of carrying capacity was 1 beast to 9.6 ha (AE). His estimate had been conducted using his adaptation of the criteria which had been used in the Murweh Shire Cattle Valuation Project. Mr Naish was of the opinion that that project criteria was relevant only to the properties within the Eastern Scrub/Cattle SMA and specifically the properties which had been subject of the study project. He believed it was inappropriate to attempt to introduce the carrying capacity criteria into areas external to the project area. As has been mentioned earlier I accept that it is inappropriate to endeavour to make comparisons of carrying capacity based on different criteria. However it seems to me that Mr Devine's approach in making comparisons based on similar criteria, or on a like-with- like basis, is not only appropriate but necessary if carrying capacity is in itself part of the adopted valuation and comparison process. Mr Devine had used unimproved beast area values as support for his direct comparison methodology not only of properties within the relevant SMA but in adjoining SMAs including the Eastern Scrub/Cattle SMA. [223] In the representative cases relevant to the Eastern Scrub/Cattle SMA there had been tendered the Project Carrying Capacity Criteria for the property "Arlington" (Exhibit 9 in those cases). Reference to that document would provide support to Mr Devine's estimate, if it was to become relevant. [224] On the other hand I see the need for similar consistency from the Department's viewpoint. Apparently no attempt has been made by departmental valuers to review historical -- 53 of 65 -- 54 records of estimated carrying capacity in those SMAs which previously comprised predominantly sheep-grazing lands. Provided any comparisons on sheep or beast area values are confined to those SMAs, external to the Eastern Scrub/Cattle SMA or the project area, then it is equally appropriate for that approach to be taken. It would be inappropriate to compare historical estimates in one SMA with reviewed estimates in another. It seems to me however that if cattle grazing usage is emerging as the dominant market influence and, as was Mr Naish's evidence, the permissible development potential of certain types of country is emerging as a market factor, an overall review of carrying capacity estimates as has been attempted by Mr Devine in these matters, will be necessary if beast area value comparisons are to provide any assistance in the valuation process adopted by the Department. [225] The highest and best use of the land in Mr Naish's report was for both cattle breeding, sheep breeding and wool growing while Mr Devine included cattle fattening. [226] Mr Naish's valuation was based on direct comparison with the evidence provided by his analyses of the sales of "Barwhinnock", "Kootchie", "Allandale" and "Gundare". On his analyses those sales showed unimproved values of $53.91/ha (application $49.89/ha), $53.02/ha (application $51.61/ha), $43.49/ha (application $40.08/ha) and $27.27/ha (application $26.94/ha), respectively, in comparison with the applied valuation to "Wansey Downs" of $28.14/ha overall. [227] The sales on which Mr Devine relied for his direct comparison approach supported by beast area values were "Gundare", "Wicklow", "Raincourt/Glenavin" and "Cunalama". For reasons earlier discussed, the sales of "Wicklow" and "Raincourt/Glenavin" have been rejected as providing evidence of fair unimproved value as at 1 October 2001. Mr Devine's analysis of the sale of "Cunalama" for which he found an unimproved value of $22.32/ha with a suggested application of $19.89/ha has also been rejected in Cases 1 and 2. In those matters an analysis of $28.63/ha was adopted for the reasons given. Mr Devine has accepted the Department's analysis of the "Gundare" sale. [228] Mr Naish's analysis of the sale of "Kootchie" was not challenged in the Tambo Downs SMA cases. The sale had not been analysed by Mr Devine as it was his opinion that the "Kootchie" country was not comparable to the properties involved in those cases. He took a similar stance in this matter. Apart from country type he also suggested in this matter that the market for Tambo property did not relate directly to the Augathella district properties. [229] The sales of "Barwhinnock" and "Allandale" are the two sales used by Mr Naish which have not formed a valuation basis in the previously discussed representative cases. -- 54 of 65 -- 55 The "Barwhinnock" Sale [230] "Barwhinnock" is located within the subject Augathella Merge SMA about 82 km north- west of Augathella. It contains 14,430 ha and was sold on 17 May 2001 for $2,154,340 or on Mr Naish's analysis $2,121,790 ($147/ha) excluding plant and machinery. His analysis showed an unimproved value of $53.91/ha. That was 116% higher than the valuation of the property as at 1 October 1998. The Department's valuation as at 1 October 2001 equated $49.89 which was an increase of 100% above the earlier valuation. The historical carrying capacity as adopted by the Department is 1 DSE to 1.5 ha or 1 beast to 10.5 ha (AE cattle equivalent). On these estimates the sale reflected an SAV unimproved of $80.86 and a BAV of $566.05, the application equating $75 SAV and $523.85 BAV. It may be assumed that if the Murweh Shire Cattle Valuation Project criteria had been applied by Mr Devine to this property a higher carrying capacity and lower BAV would have resulted. [231] The Department's classification of the "Barwhinnock" land is as follows: 10, 633 ha (74%) - downs (open to wooded) 3,800 ha (26%) - gidyea/brigalow. [232] In Mr Naish's opinion this sale property had similar access and location to "Wansey Downs" with superior country. It was considered to be significantly superior to "Wansey Downs" on an overall per ha basis. [233] Although in his oral evidence Mr Devine generally agreed with the points of comparison made by Mr Naish and had not been in a position to disagree with the overall comparison, he had rejected the sale as providing a suitable basis for the valuation of "Wansey Downs". He had not carried out an analysis of the sale. His reasoning in his report in reply (Exhibit 2 in this case) was that "Barwhinnock" was not directly comparable in location and country type and again had sold for a "premium" sale price over and above market value. This was said to have been due to the purchaser's requirement to urgently access pasture. He also saw the analysed unimproved value as being "out of line with the trend of values established by more reliable and comparable sales evidence namely "Gundare", "Cunalama", "Southampton Downs/Glendoroy" and "Wicklow". He had said in that report that the purchasers, for the reasons given, were "desperately chasing pasture for their cattle". However he agreed under cross-examination that the terminology "desperately" was his description and "eagerly" could have been more accurate. However, the property had not been on the open market and the sale eventuated after a direct approach to the vendors. The vendors had told him that they "only sold the -- 55 of 65 -- 56 property because they were able to achieve a premium sale price, which they considered to be well over market value at the time." [234] Mr Naish's evidence was that the purchasers of "Barwhinnock" were "keen" but not "desperate" to purchase at the time as they were actively looking for a property. They had inspected an adjoining property which would have been purchased had the offer to purchase "Barwhinnock" not been accepted. His interview with the purchasers in November 2002 indicated to him that they could be regarded as "informed" and that they believed that they had paid a fair price and that that had been confirmed, in their opinion, by later sales. [235] I do not reject this sale on its unchallenged analysis on the basis of Mr Devine's opinion that a "premium" price had been paid. It is seen as of interest that it also supports, on Mr Naish's comparisons, the analysed unimproved value as shown by the earlier-in-time (25 January 2000) sale of the significantly smaller "Kootchie". Both of these properties are recognised as comprising inferior country in their unimproved condition, but with developable scrub country, in comparison to the more "traditional downs" properties "Wicklow" and "Southampton Downs/Glendoroy". The "Allandale" Sale [236] Allandale contains an area of 15,216 ha, located 25 km east of Augathella within the Augathella Downs SMA. It sold on 19 October 2000 for $2,071,125 or on Mr Naish's analysis $1,783,211 ($110.67/ha) excluding plant and machinery, livestock and sundries. His analysis showed an unimproved value of $43.49/ha representing an increase of 74% above the valuation of the property as at 1 October 1998. An unimproved valuation which had been based on an increase of 100% above the 1998 valuation had originally issued for this property but, after objections, as I understand the evidence, all of the Department's valuations as at 1 October 2001 in the Augathella Downs SMA were reduced with the effect that the increase above the 1998 valuation is now 60%. The valuation now applying to "Allandale" is $40.08/ha. The historical carrying capacity as adopted by the Department is 1 DSE to 1.8 ha or 1 beast to 12.6 ha (AE cattle). On these estimates the sale reflected a SAV unimproved of $78.28 or a BAV of $548. The valuation now applied equates a SAV of $72.14 and a BAV of $505. Again it could be assumed that if the Murweh Shire Cattle Valuation Project Criteria had been applied by Mr Devine, a higher carrying capacity and a lower BAV would have resulted. [237] The chief executive's classification of the land is as follows: 6,760 ha (44%) - open to shaded undulating downs 860 ha (6%) - open to thick brigalow, coolibah, box and watercourses 900 ha (7%) - brigalow/gidyea -- 56 of 65 -- 57 3,840 ha (25%) - brigalow, yapunyah, sandalwood ridges 2,648 ha (17%) - red to sandy box, pine, ironbark and sandalwood 208 ha (1%) - hard stony hills. [238] In Mr Naish's opinion this sale property had similar access but superior location and superior country to "Wansey Downs" and was overall superior on a per ha basis. Mr Devine agreed with those points of comparison. [239] Mr Devine had not analysed the sale of "Allandale". The primary reason for that as I understood his evidence was because it was not possible for him to inspect the livestock and any estimation in the absence of an inspection could not be accepted as accurate. In his oral evidence he said that he was unable to inspect the stock when he had made his inquiries because a lot of the stock had been sold and he was unable to give any accurate evidence "in respect of their condition or their breed or what I consider to be the essential items to value the livestock ...". He said that he had discussions with the purchasers but provided no evidence as to what they told him, if anything, about "the essential items" or the price for which the stock had been later sold. However he had formed the opinion based on his experience, that the values which Mr Naish had applied to the breeding stock at the time of the sale "appeared to be low". He also had a discussion with a local stock and station agent who suggested that "average breeder cattle at that point in time would have a value of at least $600 a head". (Mr Naish had valued 298 cows of varying ages at an average $300 a head). The agent could not assist with an opinion as to the value of the steers included in the sale when their weight was unknown. In the end result, Mr Devine said he had no idea what the livestock included in the sale were worth. [240] Mr Naish was cross-examined at some length in respect to his estimate of the value of the livestock. He said he had taken the details of the numbers of stock involved from the contract but clearly he had not understood the description (for example No 4, 5, 6, 7, 8, 9 cows) as indicating the age of the stock. He had ascribed $300 a head to all heifers and cows regardless of age and $400 a head to different aged steers. He apparently had no knowledge as to the breed or quality of any of the stock which totalled 843 in number. He indicated that if his assessment which totalled $277,900 was seen to be conservative then his reasoning had been that an "on farm" sale of stock in bulk would attract a price discounted from saleyard prices. There was no indication as to his opinion of what the saleyard prices might have been. He said that he had discussed the sale with both the vendor and the purchasers. The analysis sheet stated that the purchaser confirmed that the "numbers were approximately achieved on muster". While he had not been the original inspecting valuer to analyse the sale, it is seen as curious that when the livestock -- 57 of 65 -- 58 comprised a significant component of the sale his evidence as to the value of the stock lacked any exposed research. [241] Mr Devine stated in his report and reply, that the Department's original analysis of the sale had found an unimproved value of $33.17/ha. That was neither confirmed or denied but can carry no weight when Mr Naish has taken full responsibility for the analysis before the Court. There is, in effect, no evidence from Mr Devine to which I can give weight. As he said he simply had no idea as to the value of the livestock and that was one reason for his not having attempted any analysis of the sale. Mr Naish had claimed in his report in reply that "the Department" had "costed" the stock at market value. While his is the only stock valuation before the Court his evidence was anything but persuasive. [242] Mr Devine's other reason for rejecting the sale was that his inquiry had indicated that the purchasers were cotton farmers from Emerald, had "spent only a few hours undertaking the inspection, did not inspect any other properties in the district and did not undertake any investigations in respect to ascertaining what similar properties in the district had been selling for ..." and were attracted by the freehold tenure. "The purchasers are of the opinion that in hindsight they paid over the market value ..." [243] In Mr Naish's written response he said that the property had been put to auction, was passed in and had been on the market for between six to seven months. "The vendor feels he should have got between $5 - $10 acre more than what he received, however due to the impact of events that affected his health, he accepted it and retired ... The purchasers felt the country represented in their eyes at time of looking for blocks, good country for best price ..." In his oral evidence Mr Naish mentioned other properties in the wider district which had been inspected by the purchasers and he said that the purchase price of "Allandale" had been $10 an acre less than the asking price. [244] This is another case where the valuers have apparently received conflicting advice as to the purchasers' views of the circumstances surrounding the sale and the purchase price. The evidence was that originally the Department's valuers had considered the "Allandale" sale to be "low" and as has been mentioned earlier a 100% increase above the 1998 valuation was applied to all lands in the Augathella Downs SMA. Apparently it was the only sale in the relevant period in that SMA and on review all valuations including that of "Allandale" had been reduced to show an increase of 60%. [245] I would not be prepared to reject this sale on Mr Devine's evidence as to his understanding of the circumstances surrounding the purchasers' inspection and lack of local knowledge. His comments as to the difficulty involved in the analysis of a sale involving plant and livestock are realistic but in my view the opportunity seemed to have -- 58 of 65 -- 59 been available to establish at least from the vendor and purchasers, evidence as to the "essential items" which could have been placed before the Court as to at least a realistic range of value for the livestock. Mr Naish was, in all probability, disadvantaged by the lack of information obtained by the original valuer, but having taken responsibility for the analysis of the sale either in its original form or in some way adjusted by him, has also failed to establish to my satisfaction "the essential items" which might have assisted in the consideration of the evidence provided by this sale. As it stands, the analysis has not been proved wrong but sufficient doubt has been created for the sale not to be accepted as providing reliable basic evidence of value. Mr Naish is of the belief that he has applied the sale conservatively, by adopting a 60% increase over the 1998 valuation, when on his analysis, the sale showed a 74% increase. While that may give an impression of conservativeness, the application was in fact $3.41/ha less than the analysed unimproved value or 92% of the analysis. If in fact the estimate of the value of the livestock was low as Mr Devine suggested then the application of value would hardly be seen to be conservative. [246] In the end result I have no option other than to reject the analysis of the sale of "Allandale" as providing basic evidence of value for either "Allandale" itself or any other district property. The "Gundare" Sale [247] Brief details of this sale were set out in relation to Cases 1 and 2. The sale had been analysed by the Department's valuers to show an unimproved value of $27.27/ha. Apparently the sale was initially rejected by the Department as not reflecting fair market value as at the relevant date of valuation when as I understood the position, a valuation of about $39/ha (100% increase above the 1 October 1998 valuation) was first applied. However an objection against that valuation was allowed and the sale was adopted as the basis for a valuation of $26.94/ha. [248] Mr Devine was cross-examined at some length about his own research into the sale which had persuaded him to conclude that the Department's analysis was correct. He clearly had not carried out any detailed analysis. However, in not challenging the Department's analysis, there is no dispute between the parties and the sale may be accepted as reflecting an unimproved value of $27.27/ha. There is now no dispute between the parties that an application of $26.94/ha as at 1 October 2001 is fair for the property "Gundare". Further general observations have and will be made in that regard. [249] There is no dispute about the Department's land classification for "Gundare". The dispute now rests with the true cattle carrying capacity and the comparability of "Gundare" with -- 59 of 65 -- 60 the relevant representative appeal properties. The Department's historical carrying capacity estimate for "Gundare" was 1 DSE to 2 ha. On the adopted conversion factor of 7 DSE to 1 adult equivalent beast that converted to 1 beast to 14 ha (cattle). Mr Devine's more optimistic estimate of 1 beast to 11.6 ha was once again based on his adaptation of the criteria used in the Murweh Shire Cattle Valuation Project and provided he was consistent with his comparison base, I have already found that he was entitled to do that. The difference is that the Department's estimate when applied to the "Gundare" valuation produces an unimproved beast area value of $377 while Mr Devine's estimate produces $312.50. Summary of Valuation Evidence [250] Of the sales evidence adopted by Mr Naish the properties "Barwhinnock" and "Kootchie" are accepted by him as being considerably superior to "Wansey Downs". Both sale properties have a historical carrying capacity estimate, based on conversion from a dry sheep equivalent, of 1 beast to 10.5 ha cattle. "Gundare" is more comparable to "Wansey Downs" with historical records indicating similar carrying capacity (1 beast to 14 ha). Mr Naish has clearly given close consideration to the comparability between "Gundare" and "Wansey Downs" and in his opinion sees the "Wansey Downs" country as superior mainly due to its superior scrub country, referring to the presence of the harder and stonier yapunyah influence on "Gundare". He accepts that the Department's unimproved valuation of "Gundare" as at 1 October 1998 was higher than "Wansey Downs" ($19.35/ha in comparison with $17.59/ha) and that "Gundare's" location and access is superior. Nevertheless as he has interpreted the market evidence since the country with the superior developable scrub influence has been the subject of increased demand, the previously accepted relativity has altered with in his opinion "Wansey Downs" now being overall superior in terms of market value. Despite the similar historical carrying capacities, he rates "Wansey Downs" as a little superior on a more considered comparison of country types. [251] On the carrying capacity issue it is of interest that Mr Devine rates "Wansey Downs" as having potential to carry 1 beast to 9.6 ha and "Gundare" 1 beast to 11.6 ha and whilst agreeing that the "Gundare" country is inferior, suggests that all things considered, including superior situation, access and slightly superior rainfall, then its smaller area, that the previous relativity was correct and should have been retained. [252] I have earlier discussed the apparent conflict between my rejection of the "Wicklow" and "Southampton Downs/Glendoroy" sales then the acceptance of the "Gundare" sale at about the same date as evidence of value. The difference is that there was persuasive -- 60 of 65 -- 61 evidence to accept in my opinion, that market values at least for example, in the Tambo Downs SMA northerly of Augathella had risen significantly above those shown by the "Wicklow" and "Southampton Downs/Glendoroy" sales. Despite the early perception by the departmental valuers that a somewhat similar increase would have occurred with property having the location and nature of "Gundare" and for that matter "Allandale", it was accepted by the Department that there was no market evidence of comparable type country, to support that perception. In my view the resulting application of value to "Gundare" reflects a conservative approach as at the date of valuation two years later. [253] The crux of the dispute as it relates to the "Wansey Downs" valuations then is whether the relativity which previously existed between the valuations of "Gundare" and "Wansey Downs" should have been maintained. On a direct comparison basis I accept Mr Naish's explanation as to why "Wansey Downs" should be regarded as the superior property regardless of the previous relativity. [254] Mr Devine's analysis of the sale "Cunalama" has not been accepted in Cases 1 and 2. His valuation suggests that in comparison with "Cunalama", the overall rate per ha on "Wansey Downs" should be on a direct comparison basis, about 20% higher. If that was a fair comparison then, on the application, which I have found should have been made for "Cunalama" ($28.50/ha), a valuation of about $34 would be warranted for "Wansey Downs". Indeed that would have been very close to the initial valuation of "Wansey Downs" before it was reduced on objection. [255] I have gained no assistance from the schedules provided by Mr Devine containing the factual result of objection decisions showing that the previous relativities between valuations has altered. Apart from a comparison between "Gundare" and "Wansey Downs", extrapolated beast area values are unable to be cogently compared. [256] It is my finding then that the Department's valuation of the "Wansey Downs" aggregation is conservative due to the adoption of the "Gundare" sale and in reasonable relativity with the valuation applied to "Gundare". [257] The Department's valuations in relation to the leasehold lots which go to make up the aggregation have been based on individual pro-rata values and apart from the quantum, the proportion of the individual valuations to the total is relatively consistent between the valuers. As the Department's valuation of the aggregated holding is confirmed so also are the valuations for rental purposes. -- 61 of 65 -- 62 Orders Case 7 - "Wansey Downs": (Appeal AV2002/0591) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Five Hundred Thousand Dollars ($500,000) as at 1 October 2001 is affirmed. (Appeal RV2002/0590) The appeal is dismissed and the chief executive's unimproved valuation in the amount of One Hundred and Seventy-seven Thousand Five Hundred Dollars ($177,500) as at 1 October 2001 is affirmed. (Appeal RV2002/0589) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Two Hundred and Seventy-six Thousand Dollars ($276,000) as at 1 October 2001 is affirmed. (Appeal RV2002/0592) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Fifty Thousand Dollars ($50,000) as at 1 October 2001 is affirmed. Augathella Downs SMA [258] The area identified by the Department as comprising the Augathella Downs SMA lies to the north-east, east and south-east of Augathella, bounded on the north and north-east by the Eastern Scrub/Cattle SMA and to the south-east, south and west by the Augathella Merge SMA. Case 8 - "Yo Yo Park" (Appeal 2002/0595) [259] This is the only representative appeal within the Augathella Downs SMA. Mr Naish took responsibility for the valuation appealed against. [260] "Yo Yo Park" is owned by Mr WR Tomlinson. The property is located about 20 km south-east of Augathella at its closest point, via the Landsborough Highway with the homestead about 35 km distant. [261] The property contains an area of 25,140 ha comprising: Lot 52 on Plan 053117:GHFL/10/3074E, Parish of Augathella; Lots 9 - 10 on Plan OR107, Lots 2 and 7 on Plan OR21, Lot 1 on Plan OR269, Lots 4 and 5 on Plan OR35, Parish of Yo Yo and Lot 47 on Plan OR270, Parish of Hood. -- 62 of 65 -- 63 [262] The unimproved valuation as at 1 October 2001 as initially issued was in the amount of $1,200,000. That represented an increase of 100% above the valuation as at 1 October 1998. As a result of an objection, the valuation was reduced to $960,000 ($38.19/ha) the amount now appealed against. That valuation represents an increase of 60% above the 1998 valuation. [263] The owner's estimate of value as contained in the notice of appeal is $750,000. Mr Devine's valuation is $815,000 rounded from $32.50/ha, or 36% above the 1998 valuation. [264] The Department's classification of the land is as follows: 10,100 ha (40%) - open to shaded undulating downs and myall 9,060 ha (36%) - mixed brigalow, gidyea and yapunyah 5,980 ha (24%) - yapunyah mulga ridges. [265] The Department's historical estimate of carrying capacity as adopted by Mr Naish is 1 DSE to 1.8 ha or on conversion 1 beast to 12.6 ha (cattle AE). [266] Mr Devine disagrees with the Department's land classification. His classification is as follows: Approximately 5,900 ha (23%) - open/semi-open Mitchell grass downs interspersed with alluvial plains Approximately 9,500 ha (38%) - brigalow scrub country Approximately 3,745 ha (15%) - watercourses, alluvial woodlands, some sandy areas of ironbark Approximately 6,000 ha (24%) - hard mulga, yapunyah and brigalow ridges. [267] Mr Devine's estimate of the carrying capacity is 1 beast to 8.3 ha (cattle AE). In arriving at that estimate he once again was guided by the criteria used in the Murweh Shire Cattle Valuation Project. [268] Mr Devine's land classification was derived from satellite imagery, WARLUS Land System mapping and Regional Ecosystem mapping (the latter having been revised since the date of valuation), together with his own property inspections. He has been involved in business and vegetation management planning for the owner. The Regional Ecosystem mapping had been recently reviewed by the Herbarium as a consequence of a dispute as to the areas of certain land types and vegetation communities. A botanist had inspected the property and updated the original ecosystem mapping and "specifically in respect of areas that had been identified as downs country". A plan showing the Regional Ecosystem status of the property was tendered and it was Mr Devine's evidence that this had assisted him in his classification of the land. [269] Mr Naish had used a mapping system NELDER which he said is based on WARLUS but goes into finer detail. He found it was necessary for practical purposes to include the -- 63 of 65 -- 64 various different land types into the main complementary groupings and to take the broader approach consistently when making comparisons from one property to another. He had adopted that approach and was comfortable that the resultant land classifications were market related. He had not been aware of the Department's relevant ecosystem mapping for "Yo Yo Park" as tendered through Mr Devine. [270] As I understood the evidence, Mr Devine had also grouped the land types into the broader major classifications but the point he was disputing was the area of specific downs country on "Yo Yo Park". It seems that Mr Naish had included with that classification the watercourses and alluvial woodlands. In the end result there does not appear to be a lot in the differences although I accept that Mr Devine's close involvement with vegetation management issues has provided him with the more specific downs classification. It is of interest that Mr Devine was of the opinion that the previously existing relativity between the valuation of "Yo Yo Park" and other properties had been correct. He also argued that there were permanent waterholes on "Yo Yo Park" which had not been identified in Mr Naish's report. Mr Naish's response to that, not surprisingly, was that permanent waterholes would make "Yo Yo Park" more valuable than reflected in the valuation. [271] Once again Mr Devine's estimate of carrying capacity would suggest that the Department's estimate on a converted cattle equivalent basis is quite conservative and probably inconsistent with estimates in the Eastern Scrub/Cattle SMA. [272] The highest and best use of the land was said by Mr Naish to be sheep breeding and wool growing or cattle breeding while Mr Devine said the highest and best use was for beef cattle breeding and fattening. [273] As in the previous matter Mr Naish's valuation relied on the sales of "Allandale" (which property he considered on an overall hectare basis to be slightly superior to "Yo Yo Park"); "Barwhinnock" and "Kootchie", (both considerably superior) and "Gundare" which he considered to be inferior. [274] Mr Devine also relied on the same sales as in the previous matter. While he obviously did not agree with the degree of superiority of "Yo Yo Park" in comparison with "Gundare" as found by Mr Naish, he agreed it was superior. His valuation indicated a 62.5% superiority over "Cunalama", based on his application of about $20/ha to that sale property. -- 64 of 65 -- 65 Summary of Valuation Evidence and Conclusion [275] Although Mr Devine stands by his opinion that the previously existing relativity between valuations of district grazing properties was and remains correct, I am persuaded that the adopted sales evidence shows otherwise. [276] In the circumstances, no support for the Department's valuations of lands in the Augathella Downs SMA may be obtained from the "Allandale" sale. However, once again I have formed the opinion that the decision of the departmental valuers to rely on the sales of "Allandale" and "Gundare" have, in this case, also resulted in a conservative approach when the overall evidence including, in particular, the sales of "Kootchie" and "Barwhinnock" are considered. [277] If reliance was to be placed on Mr Devine's comparison between "Yo Yo Park" and "Cunalama", then based on my analysis of the "Cunalama" sale, a valuation of about $46/ha (close to the original valuation which was reduced on objection) would result. [278] The relativity comparisons produced by Mr Devine do nothing more again in my opinion, than support the factual situation that relativity has been consciously altered by the Department but that information does not prove that the changed relativity is wrong. However if in hindsight, it is proved to be wrong, the overall evidence suggests that it is not because the valuations in this SMA are too high but probably that the adoption of a 40% increase for "Gundare" and some other lands in the Augathella Merge SMA based on the "Gundare" sale was too conservative. [279] It would be my expectation that despite the loss of support for the Department's valuations from the "Allandale" sale, those valuations throughout this SMA would also be found to be suitably conservative. Order Case 8 - "Yo Yo Park" (Appeal AV2002/0595) The appeal is dismissed and the chief executive's unimproved valuation in the amount of Nine Hundred and Sixty Thousand Dollars ($960,000) as at 1 October 2001 is affirmed. RE WENCK MEMBER OF THE LAND COURT -- 65 of 65 --