Crossley v Department of Natural Resources and Mines [2003] QLC 14

LAND COURT OF QUEENSLAND CITATION: Crossley v Department of Natural Resources and Mines [2003] QLC 14 PARTIES: John Crossley (applicant) v. Chief Executive, Department of Natural Resources and Mines (respondent) FILE NO: AV2001/0093 DIVISION: Land Court of Queensland PROCEEDING: An Appeal against an Unimproved Valuation of land in the Shire of Kilkivan – Valuation of Land Act 1944 DELIVERED ON: 7 March 2003 DELIVERED AT: Brisbane HEARD AT: Gympie MEMBER: Mr RE Wenck ORDER: The appeal is disallowed and the unimproved valuation of the chief executive in the amount of One Hundred and Seventy-three Thousand Dollars ($173,000) as at 1 October 1999 is affirmed. CATCHWORDS: Statutory Valuation – Valuation of Land Act 1944 – Unimproved value. Unimproved value – Relativity between valuations – Forest grazing lands. Unimproved value – effect of weed infestations Relativity between valuations – Sub-market areas – Comparison of like with like. APPEARANCES: Mr J Crossley, the applicant in person Mr J O'Rourke for the respondent -- 1 of 7 -- 2 [1] As at 1 October 1999 the respondent made an unimproved valuation of land owned by the applicant in the Shire of Kilkivan. [2] The land is described as Lot 265 Plan LX532 and Lot 266 Plan LX533, Parish of Brooyar, containing an area of 376.4 ha. The land is situated about 7 km north of the township of Widgee and about 30 km west of the Gympie Post Office. [3] The valuation appealed against is in the amount of $173,000. A valuation in the amount of $205,000 was initially issued on 27 March 2000 then reduced on objection to $190,000 before finally being determined in the amount now appealed against. [4] There were 15 grounds of appeal contained in the Notice of Appeal and the appellant's estimate of unimproved value is in the amount of $130,000. Background to Kilkivan Shire Valuations of Forest Grazing Lands [5] The chief executive's unimproved valuations of forest grazing lands in Kilkivan Shire as at 1 October 1999 had initially represented a 50% increase above the level of value which had previously existed. On review, as a result of the high level of objection, the increase was reduced to 40%. The previously existing relativity between valuations had not been disturbed. [6] A significant number of owners remained dissatisfied with the valuations which had been reviewed as a result of the objections then exercised their right to appeal to this Court. Following negotiations between the parties four appeals were selected as representative of the primary grievances. When those four appeals were heard by the Court the predominant issues were identified as being:  the extent of the increase over the previously existing valuation;  the sales evidence which provides the most reliable evidence of market value as at the date of valuation;  the unimproved value component in that sales evidence;  the added value of the treatment of the original and regrowth forest timbers on the sale properties. Another issue which was not necessarily of a representative nature related to the existing relativity between valuations of various properties. [7] The findings relative to the representative cases were that the relevant sales evidence generally supported the chief executive's valuation, representing the 40% increase; there were no grounds for any general reduction and there were no grounds relating to market evidence which warranted disturbance to the general level of relativity between unimproved valuations of the forest grazing lands throughout the Shire. However when each individual appeal was determined on its merits, some alterations were found to be warranted in specific cases, for reasons individual to those specific properties. -- 2 of 7 -- 3 [8] Subsequent to those unreported decisions being published on 10 May 2002, a number of owners remained reluctant to withdraw their appeals on the allegations that there were disabilities specific to their properties to which the chief executive had not given any or sufficient consideration. The remaining appeals were set down for hearing subsequent to a directions hearing. Further discussions took place between the parties and all but two appeals, one of which is the subject matter, were settled and/or withdrawn. Matters Relevant to this Appeal [9] Mr Crossley attended the hearing and gave oral evidence in support of those grounds of appeal which related to the nature of the subject land, its particular disabilities and relativity between the subject valuation and other valuations in the immediate locality. [10] Mr Crossley accepted that the remaining grounds of appeal were of a general nature which had been relevant to matters considered in the representative cases. [11] Mr PJ Haydon, a registered valuer in the employ of the chief executive was responsible for the Kilkivan Shire forest grazing land valuations at the relevant date, including the valuation of the subject land. He had given evidence in the representative cases. In this matter he relied on the findings of the Court in those matters. [12] The valuation of the subject land as originally issued then as reduced on objection had maintained the previously existing relativity between valuations of the forest grazing lands throughout the Shire. [13] The subject land was inspected by Mr Haydon prior to the hearing. He accepted that there were grounds for a further reduction. It was his oral evidence that the land had been considered in the past to comprise two generally distinct land classifications. On his inspection he had been persuaded that one of those original classifications comprised two different types of country one inferior to the other. He reclassified the overall property into three classifications. Those classifications and the values which he ascribed to each are as follows: "About 115 ha (30%) heavier blue gum, broad-leaf ironbark, apple and Moreton Bay ash, easy slopes to flats. This land is suitable for pasture development - $550/ha. About 165 ha (45%) of lighter, easy granite ridges originally timbered with narrow-leaf and broad-leaf ironbark, Moreton Bay ash and bloodwood. This land is suitable for pasture development - $450/ha. About 96.4 ha (25%) of easy forest ridges timbered with narrow-leaf and broad-leaf ironbark bloodwood and gum. This area is very stony and development is restricted to tordoning - $374/ha." The overall valuation equates a rounded $460/ha. -- 3 of 7 -- 4 [14] Mr Crossley, as I understood his evidence, has been associated with the subject land for about 30 years. He had "land mapped" the property once for his farm management plan and then a second time very recently subsequent to Mr Haydon's inspection. The results of that land mapping were not produced but in Mr Crossley's opinion, Mr Haydon had over-estimated the area of the better type heavier country and under-estimated the area of the more inferior classification. In his opinion, a more accurate classification of the land would be (with my calculation of (rounded areas)): About 20% (75 ha) loamy to heavy type soil. About 45% (169 ha) sandy granitic soil types. About 35% (132.4 ha – balance) very stony soils. [15] Mr Crossley regarded an area of about 40 ha of undeveloped land as "unavailable". He disputed Mr Haydon's description of the natural vegetation in so far as, in his opinion, there had been no broad-leaf ironbark at least in the inferior land classifications. [16] In their oral evidence Mr Crossley and Mr Haydon had agreed that it was a question of personal opinion as to whether some pockets of country should be included in or excluded from the first classification but both were confident that their estimates were realistic. [17] There was disagreement as to whether the uncleared land should be regarded as "unavailable". Mr Crossley described it as "pure sand", infertile, highly erodable and "to clear it would be insanity". As I understood it, Mr Haydon had included this land in the classification which he considered capable of being developed by tordoning, being similar to adjoining land which had been treated in that manner. [18] Mr Crossley produced analyses of the granitic soils which showed very low content of phosphorous and generally poor fertility, despite having been fertilised over the years with superphosphate. [19] It had been Mr Crossley's understanding that at some time in the fairly distant past departmental valuations had been based on sales of land with frontage to the permanent Widgee and Little Widgee Creeks. However, Woonga Creek, which the subject land fronted in the western end, has always been inferior in his opinion and was not now permanent. [20] Mr Haydon described the water in Woonga Creek as semi-permanent. There was no record on the files, on his evidence, of the water ever having been regarded by the department differently. He was aware of one bore on the subject property having failed. However he considered the available water as adequate in normal seasons. [21] Mr Crossley spoke of the subject land having "small incursions" of Giant Rats Tail grass, a pest which he says is "definitely not everywhere". From his knowledge of the local market, the presence of this pest had a deleterious effect on values. -- 4 of 7 -- 5 [22] Mr Haydon accepted that the market value of properties which suffered significant infestation of Giant Rats Tail grass is discounted heavily. However from his experience the pest exists throughout the Shire and even if it is not known to be in existence on any particular property the risk of it appearing is very real. The sale properties were similarly at risk or would have had "small incursions" requiring management control. It was his opinion that market discounting for existence of weeds only becomes identifiable when the problem is recognised as one of significantly greater impact than is experienced generally within the locality. [23] While matters such as declining water supplies and the pest weeds were of concern to him, Mr Crossley's primary complaint was that, in his opinion, incorrect relativities exist between valuations in the immediate locality. [24] Properties on the opposite side of the road which Mr Crossley strongly believes to be of significantly better overall quality, were identified as having been valued at $468, $339, $370 and $257/ha overall. His inquiries of Mr Haydon and other valuers had led him to believe that the steep ridge country on the western end of those blocks is valued by the department at $100 per ha. However, in his opinion, this steeper ridge country has far superior soils and greater productive potential than the infertile granitic soils of the subject land. [25] The relativity examples quoted by Mr Crossley were not challenged by the chief executive although it emerged that some blocks on the opposite side of the road then to the south of the subject land comprise at least some softwood scrub country or scrub influence and these lands had been included by the department within a different "sub- market area", for purposes of the adopted mass valuation methodology. [26] It seems that the sales evidence in that scrub "sub-market area" had indicated a weaker market than in the pure forest country which had caused a shift in the relativity of values which had previously existed between the differing sub-market areas. [27] Mr Haydon was unable to enlighten the Court as to the values applied to the steeper scrub grazing components in the overall valuation examples given by Mr Crossley. However he confirmed that in the forest country directly opposite the subject land to the west, the steep ridges which had historically been regarded by the department as having little, if any development potential, were valued at $100 per ha. He gave an example of one property immediately to the west of the subject land (Lot 2 on RP 806945) where the applied overall valuation equated $525 per ha, on classification values of $600 per ha for the heavier country (in comparison with $550 per ha for the subject comparable classification) but then $100 per ha for the steep hills. -- 5 of 7 -- 6 [28] It came as a surprise to Mr Haydon when Mr Crossley put it to him that the steep area on Lot 2 had been fairly recently developed. Mr Haydon offered the opinion that, if that steep country had been successfully and economically developed, then the department's assessment would require review. He maintained the opinion however that the lighter granitic soil country on the subject property was regarded by local standards as being capable of economic development for improved pastures and the balance stony area as suitable for economic tordon treatment. On that basis he considered the sales evidence as generally maintaining the previous relativity between values based on market influences including location (including proximity to Gympie) as had been found by the Court in the representative cases. [29] Mr Crossley had also raised, as an example of the valuation of the subject land being too high, the valuation of a smaller parcel adjoining to the north. In his opinion this adjoining land was not inferior to the subject land overall, but was valued at $424/ha in comparison with the subject land at $460/ha. Mr Haydon was unable to agree that the adjoining land was of equal quality. He had inspected that land in connection with a sale analysis and had given specific consideration to the question of the relativity between the two valuations. In his opinion, the relativity was correct, particularly as there had been a review of the original valuation. Summary of Evidence and Findings [30] The findings regarding the sales evidence in the representative cases has not been challenged. It was Mr Haydon's professional opinion that the valuation of the subject land now appealed against is correct on the basis of direct comparison with that sales evidence. In the comparison process, matters such as the nature of the country and its soil types, availability of water, location, existence of or potential for weed infestation and the like have been considered. That comparison process resulted in the previously existing relativity between the valuation of the subject land and valuations of other forest grazing lands including the sale lands, having been adjusted by Mr Haydon. [31] Mr Crossley's evidence as to relativity between valuations has raised the question whether the valuation process has ensured that the rating burden has been equitably distributed. It is well held that, for that reason, correct relativity between valuations is a desirable principle. However, it is also recognised that correctness of a valuation should not be sacrificed to ensure uniformity (see Ladies Hosiery Ltd v West Middlesex Assessment Committee (1932) ALL ER 427 at 432). In this matter there is a possibility that the valuations of nearby steeper forest country may require review if the chief executive's valuers have incorrectly assessed the development potential of those lands. -- 6 of 7 -- 7 [32] Nevertheless it is necessary, when attempting to make comparisons between unimproved valuations, that those comparisons be made on a like-with-like basis. It seems that Mr Crossley included in his relativity exercise, examples of valuations of lands which comprised, at least in part, softwood scrub country, albeit within fairly close proximity to the subject land. Apart from those lands being within, for the purposes of the respondent's valuation methodology, a different "sub-market area", with apparently differing market influences at the relevant date, unimproved values may well be affected by matters such as differing costs of development in achieving highest and best use. Relativity issues of this nature were discussed by the Land Appeal Court in ACF & Shirleys Limited (1978) 5 QLCR 370. [33] Despite relativity issues that have been raised, I have not been persuaded that the disabilities associated with the subject lands have not been considered or sufficiently considered in the valuation process, or that the valuation now appealed against has been shown to be wrong based on the grounds of appeal. In the absence of better evidence to the contrary I accept Mr Haydon's description of the nature of the land for the purposes of comparison with the sales evidence. Order The appeal is disallowed and the unimproved valuation of the chief executive in the amount of One Hundred and Seventy-three Thousand Dollars ($173,000) as at 1 October 1999, is affirmed. RE WENCK MEMBER OF THE LAND COURT -- 7 of 7 --