Elks v Chief Executive, Department of Natural Resources [1998] QLC 35

LAND COURT BRISBANE 13 MARCH 1998 Re: Appeal against annual valuation - Valuation of Land Act 1944 - Valuation Roll No.: 4633 Local Government: Stanthorpe Shire (AV97-220) Henry A Elks v. Chief Executive, Department of Natural Resources (Hearing at Stanthorpe) D E C I S I O N Background: This matter relates to a property located at Elks Lane, Stanthorpe, and described as Lot 79 on Plan BNT119 and Lot 99 on Plan BNT142, Parish of Marsh. The subject has an area of 109.8 ha and is zoned as "Rural" under the Town Planning Scheme of the Stanthorpe Shire Council of 29 March 1996 and effective at the date of valuation of 1 October 1996. The subject is located 11 km west of the Stanthorpe Post Office. The key issues are relativity, comparison of sales, the nature of the land and the percentage increase in the valuation. Access to the property is via Elks Lane, which is a formed earth and gravel all-weather road. Telephone, electricity, mail delivery and school buses are available. The property comprises 60% gentle to easy sloping sandy granite forest country with minor rock outcrops, and 40% of steep, rough granite boulder outcrop country. There are several minor watercourses which provide possible dam sites for water storage. Some areas are considered suitable for crop-assisted grazing purposes. The subject was valued for the purpose of farming under s.17 of the Valuation of Land Act. On 10 March 1997 the Chief Executive, Department of Natural Resources, issued a valuation at $9,600. Following an objection, the Chief Executive confirmed the valuation at $9,600 on 2 July 1997. The appellant appealed that figure claiming the valuation should more properly be $5,300. Mr HA Elks appeared and gave evidence on his own behalf. Mr DR Coe appeared for the respondent, calling evidence from Mr DB Redgen, the departmental registered valuer responsible for determining the valuation. [1998] QLC 35 -- 1 of 7 -- 2 Evidence: The appellant's case relies on five grounds, including the use of sales as the basis for the valuation, the nature of the land and its disabilities and the large percentage increase and relativity. Mr Elks noted that the subject was virtually the only grazing property in the area which had shown such a large increase in the valuation (81%). (1) The Nature of the Land - In considering the nature of the land, Mr Elks noted that the soils were poor and exhibited a lack of minerals which impacted their fertility. However he conceded that, as with other grazing lands in the area, it was normal for the soils to have a low fertility status. He was unable to provide evidence of any soil tests of surrounding parcels with which to draw comparisons. Mr Redgen personally conducted some soil tests on the subject as part of his normal valuation process on rural properties. These confirmed his broad conclusions about the soils deduced from his earlier assessment based upon broadscale mapping of the soils of the area at one in two hundred and fifty thousand scale. While the more detailed soil tests were only undertaken on 4 March 1996, just prior to the date of issue of 10 March 1996, they did confirm the initial conclusions about the impact of the soils. Mr Redgen also emphasised a need for care when interpreting the existing condition of soils in the process of determining unimproved value, as there may have been a significant fertility improvement program undertaken. In summary, Mr Redgen demonstrated a good understanding of the nature of the land, which disclosed that the subject is unsuitable for extensive horticulture. This is because its soils are shallow with a poor structure, are not suitable for irrigation, are poorly drained and parts are waterlogged, with low fertility and a limited catchment for dam storage. Mr Redgen was also aware of the existence of the old cattle dip and yards and the existence of contamination"notifications" with the Department of Environment and Department of Primary Industries in respect of "dieldrin quarantining". Mr Elks agreed that the contaminated areas upon the subject were quite small (less than 0.4 ha) and many properties in the area were similarly impacted. In former years Mr Elks has had to destroy cattle because of dieldrin contamination. (2) Relativity - Mr Elks argues that relativity between the subject and a neighbouring property of Mr Casey, a parcel of 366.7 ha located about 3 km from the subject, has varied over the last few valuations. He has twice come before the Land Court in 1988 (V88-299) and 1989 -- 2 of 7 -- 3 (AV89-199). In both former matters Mr Elks confined his evidence entirely upon relativity with surrounding parcels. Matters relating to the fertility of soils and problems confronting the grazing industry, agreed by the respondent at the time, were considered by the learned Member in 1988 as not in dispute. The Member noted that the sales adopted by the respondent were not, in his opinion, an ideal basis for comparison, because of their use for rural residential purposes and as they were highly improved. However, they were the only sales available. As the onus of responsibility fell upon the appellant to prove that the valuation of the then Valuer-General (now Chief Executive) was incorrect, the Member dismissed the appeal. In the 1989 matter (AV89-199) the learned Member, on the evidence before him, found in favour of the appellant. The Member preferred the evidence of Mr Elks and a local farmer, Mr Passmore, a former retired forester of long experience, who gave evidence of the nature of the land and its relativity compared to neighbouring parcels (including what is now the Casey land). The respondent had relied upon a sale near the New South Wales border which was rejected by the Court as not a comparable sale. The Member also noted at p.3: "Of course, if I am led to a determination with which the respondent Valuer-General disagrees, then it is open for him to take the matter further, or to correct any anomaly which may result in the next annual valuation of land within the Stanthorpe Shire." Mr Redgen noted that Mr Elks had objected against the valuation in 1995, but had not chosen to appeal, presumably in view of the overall consistent rise across the area. However, Mr Elks now claims that, while relativity with the Casey land had varied over two successive valuations (1 January 1996 and 1 October 1996), he still feels that the subject is now out of step with the former relativity prior to those anomalies. In seeking to clarify the history of relativity in the last few years, Mr Redgen advised that he had inadvertently missed increasing the subject in line with surrounding parcels in the 1 January 1996 valuation. At that time the whole of the Nundubbermere Valley had been adjusted by approximately 20%. Subsequently, in the 1 October 1996 valuation, having had the Elks' anomaly brought to attention, he then brought the subject into line with the other properties. In comparing historic relativities between the Casey land and the subject, I find from the evidence supplied in the three cases before this Court: -- 3 of 7 -- 4 Table 1 Date of Casey Land (366.7 ha) Subject (109.8 ha) Relativity Valuation Value per ha Percentage Value per ha Percentage (Casey to subject) Usable Usable 31.03.1988 $32.72 50% $40.00 76% 0.82 01.01.1995 $39.27 50% $48.27 76% 0.82 01.01.1996 $75.00 90% $48.27 60% 1.55 01.10.1996 $75.00 90% $87.00 60% 0.86 The relativity of 0.82 (31 March 1988) was established by this Court in AV89-199. Mr Redgen confirmed that the difference between the Casey land and the subject relates to the percentage of usable country and an allowance for size. (3) Comparison of Sales - Mr Elks provided no evidence of sales to support his estimate of the valuation, relying upon the words of the former learned Members who noted the paucity of relevant sales of grazing land in the area at those times. Mr Redgen supported his valuation by the following sales of land zoned "Rural" in each area. All have electricity and telephone available and all are inferior in access to schools and shops, except for Sale 1 which is similar to the subject. Other features of the sales are summarised in the following table: Table 2 Features Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6 (1) Location Similar Inferior Inferior Inferior Inferior Inferior (2) Access Superior Superior Inferior Superior Superior Superior (3) Nature of 252.4 ha 80.51 ha 40.23 ha 2,048 ha 2,415.73 ha 1,958 ha the Land 90% usable 60% usable 94% usable Traprock Traprock Traprock (4) Water Superior Superior Superior Superior Superior Similar (Dams and creek) Better catchment (Creek) (Creek) (Glenlyon Dam) (Dams only) (5) Land Use Grazing Grazing Grazing Sheep only Sheep only Sheep only (6) Overall Superior Superior Inferior Superior Superior Superior Comparison (7) Rate per Superior Superior Superior Inferior Inferior Inferior hectare The appellant was unfamiliar with any of the sales. Mr Redgen drew particular attention to Sale 3, which involved a DDT quarantine contamination, but which had not deterred a well-informed buyer.  Sale 1 - Sold in November 1995 for $450,000 ($1,785 per ha) which, after allowing for improvements, was analysed at $44,994 ($180 per ha) and applied at $39,500 ($156 per ha). -- 4 of 7 -- 5  Sale 2 - Sold in September 1996 for $164,000 ($2,037 per ha) which, after allowing for improvements, was analysed at $13,633 ($170 per ha) and applied at $12,000 ($150 per ha).  Sale 3 - Sold in September 1996 for $125,000 ($3,120 per ha) which, after allowing for improvements, was analysed at $9,539 ($237.50 per ha) and applied at $8,700 ($215 per ha).  Sale 4 - Sold in January 1996 for $620,000 ($305 per ha) which, after allowing for improvements, was analysed at $48,280 ($23.50 per ha), and applied at $43,000 ($21 per ha).  Sale 5 - Sold in September 1996 for $1,400,000 ($580 per ha) which, after allowing for improvements, was analysed at $62,393 ($25.75 per ha), and applied at $60,000 ($25 per ha).  Sale 6 - Sold in September 1996 for $700,000 ($360 per ha) which, after allowing for improvements, was analysed at $47,347 ($24.15 per ha) and applied at $47,000 ($24 per ha). Sales 5 and 6 were used to depict the bottom end of the market, and also that sales on the eastern side of the area tend to be superior in value. Mr Elks agrees with Mr Redgen on this later conclusion. Decision I turn first to the matter of the comparison of sales adopted by Mr Redgen, and note that he has used a principle which has precedent in many courts, in various jurisdictions and over many years. It has been found many times that, when seeking to determine the unimproved value of land, the most appropriate method is to compare the sales of comparable vacant lands where they occur in the region. In this regard I note the decision in WM and TJ Fischer v. The Valuer-General (1983) 9 QLCR 44 where the Land Appeal Court said at p.46: "It is indeed a fundamental principle of valuation that the best basis for assessment of unimproved value is the use of sales of vacant or lightly improved parcels." That was also followed in PH Clough v. The Valuer-General (1981-82) (LAC) 8 QLCR 70. In the matter of R and MM Barnwell v. The Valuer-General (1989) (LAC) 13 QLCR 13, the Land Appeal Court found at p.17: "The Valuer-General in this case has used the sales of unimproved or lightly improved properties as a valuation basis and it is clear he has not erred in principle in valuing the subject land on the basis of such sales analyses." -- 5 of 7 -- 6 In considering the appropriate rate per ha to apply to the subject, Mr Redgen has drawn upon his experience over seven years in the shire. He has based his conclusion upon an assessment of the difference in area of the sales and the percentage of usable area on each parcel. In the end, he has applied a value of $87 per ha, which is not inconsistent with surrounding relativities. In using his general knowledge of valuations in the shire, Mr Redgen has followed the findings of the Land Appeal Court in King Ranch Pastoral Co Pty Ltd v. The Valuer-General 35 CLLR 255 which said at p.262: "In Bingham v. Cumberland County Council (1954) 20 L.G.R. 1, at pp.18 and 19, valuer may find himself in a position resembling that to which Lord Romer referred in the Raja case (1939) A.C. at pp. 312 and 313, in which he will have no market value to guide him, and he will have to ascertain as best he may from the material before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land.' The valuer in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant." Mr Redgen has also followed the principle outlined in H & E Grahn v. The Valuer-General (AV89-246/247), 13 December 1990, unreported, at p.5: "A proper valuation calls for an exercise in balancing all the respective advantages and disadvantages inherent in or pertaining to a lot." In considering the matter of relativity between the Casey land and the subject, I note Mr Elks now accepts that, following some changes during the valuations of 1 January 1996 and 1 October 1996, the current relativity is approximately similar to what it was when he last came to this Court in 1989. (See Table 1). While relativity with Casey's land was relied upon by Mr Elks, I note the decision of WM & TJ Fischer v. The Valuer-General (supra) which also found at p.46: "Whilst maintenance of correct relativity is also of considerable importance for rating or revenue type valuations, we cannot prefer in the circumstances of this case, the use of the principle of relativity to the exclusion of the sales evidence." In respect of the nature of the land, I note that both parties are now in agreement, and I will not comment further on that matter. The changes that occurred in the valuations of 1 January 1996 and 1 October 1996 would appear to have occurred, initially as an oversight in not increasing the valuation of the subject on 1 January 1996, and later as a departmental policy to rectify that inconsistency at -- 6 of 7 -- 7 the next valuation of the area on 1 October 1996. I note that the Chief Executive has the power to amend the valuation of the subject, immediately he becomes aware of the anomaly. However, under s.28(1)(h) of the Act, the Chief Executive has the discretion to so do, should he determine it to be warranted. 28.(1) No alteration shall be made in the valuation of any parcel of land during the period during which any general valuation or annual valuation relating to the area in question is in force or, in the case of a general valuation or an annual valuation which has not come into force, during the period between the issuing of an annual valuation notice under part 4, or a notice of valuation under part 6, and the date of valuation coming into force - (h) unless the valuation is affected by error or omission which the chief executive considers it necessary to correct;" Where isolated inconsistencies occur, the next valuation tends to be used to amend the value, but where larger number of properties are involved, the Chief Executive may choose to alter the values between valuations. In the end I believe that Mr Redgen has made no error in detail, nor has used an incorrect principle in determining the valuation. I find the unimproved value at $9,600 is fair and reasonable. Conclusion: Having considered the whole of the evidence, I am not persuaded that the appellant has proved his case. The appeal is dismissed, and the unimproved value as determined by the Chief Executive, Department of Natural Resources, in the sum of Nine Thousand Six Hundred Dollars ($9,600) is affirmed. NG DIVETT MEMBER OF THE LAND COURT -- 7 of 7 --