Burgess v Chief Executive, Department of Natural Resources [1997] QLC 202

LAND COURT BRISBANE 18 DECEMBER 1997 Re: AV96-458 An appeal against an unimproved valuation - Valuation of Land Act 1944 - Shire of Murweh M.G. Burgess v. Chief Executive, Department of Natural Resources (Hearing at Charleville) D E C I S I O N As at 1 January 1996 the unimproved value of land comprising the property known as "Banff Downs" being Lot 11 on Plan DL 363 (GHPL 7833), Parish of Armadilla, County of Dublin, containing 8,766 ha, was determined by the chief executive in the amount of $44,500 ($5.08 per ha). "Banff Downs" is situated about 21 km south of the township of Morven. An objection against the valuation had been disallowed and an appeal against that decision was duly filed in the Land Court. The ground of appeal was that "the property is over valued in relation to the red box-mulga lands in close proximity" - examples being the properties "Kanalba" and "Maryvale". Mr Burgess attended the hearing and gave evidence in support of the appeal. His estimate of value was $27,250 ($3.11 per ha). The evidence provided by the Department was that at the relevant date the unimproved value of "Kanalba" equated $2.61 per ha and of "Maryvale" $2.36 per ha. It was Mr Burgess' contention that "the box-mulga country of 'Banff Downs' is of no greater value than that of 'Maryvale' and 'Kanalba'"; the yapunyah/brigalow country on "Banff Downs" was of no greater value than the box-mulga country; and the remainder either comparable (box/sandalwood) or inferior (rocky ridges). However, because "Banff Downs" had the advantage over "Kanalba" and "Maryvale" of proximity to town (Morven), rail and the highway, by way of sealed road access, Mr Burgess saw some premium in value in comparison being warranted - hence his estimate of value being the equivalent of $3.11 per ha. Mr Burgess had no dispute with the classification of country and estimate of carrying capacity for "Banff Downs" as contained in a report prepared by Mr B.M. Tannock, the registered valuer responsible for the valuation appealed against. [1997] QLC 202 -- 1 of 5 -- 2 Mr Tannock estimated the carrying capacity of "Banff Downs" to be 1 sheep to 2.4 ha (3,652 dry sheep equivalent). He had classified the country as comprising: approximately 17% or 1,440 ha of good to fair open box, sandalwood flats and watercourse country; approximately 36% or 3,173 ha of mixed undulating yapunyah, brigalow and box and some boyacca ridges; approximately 32% or 2,812 ha of inferior forest mostly mulga, box, silverleaf ironbark; approximately 15% or 1,341 ha of hard bendee, ooline and boyacca gravelly ridges. Mr Burgess also agreed that the yapunyah/brigalow country had more fertile soils than the red box-mulga country and was capable of growing better quality pastures. However, central to his argument was that, in its unimproved state, as it is to be considered pursuant to the Valuation of Land Act, the yapunyah/brigalow country was no more valuable, because the cost involved in achieving the permanently better country status was in comparison so much higher as to offset that eventual advantage. In its strictly unimproved state, Mr Burgess said that both types of country would support light stocking with sheep but the box-mulga country is capable also of carrying some cattle because of the heavier natural pastures on the box flats. In his written statement, Mr Burgess set out the differences and difficulties experienced in development of the yapunyah/brigalow country in comparison with the box-mulga country, with initial timber treatment being by mechanical pulling. He said that generally the box-mulga country gives better initial results with less management difficulties in establishing buffel pasture with generally little maintenance required. Even if box and/or sandalwood regrowth requires re-pulling, the cost could be contained within the range of $15 to $25 per ha. On the other hand, the scrub country suckers quickly and requires favourable rainfall for grass growth for good burn conditions. Buffel grass seeding does not respond as well initially as on the lighter country although it grows well once established. Mr Burgess said that only rarely will fire and heavy stocking control the regrowth with two-way re-pulling, then heavy stocking for long periods usually required after about 10 years. The alternative to achieve permanent improvement is to stickrake and blade plough but that costs in the range of $125 to $250 per ha. -- 2 of 5 -- 3 In Mr Burgess' opinion, the softer box country with some sandalwood either in its natural or improved state, was "probably the most valuable country" and each of "Banff Downs", "Kanalba" and "Maryvale", had about 15-20% of that type of country. On an overall comparison, he saw the three properties as having comparable stocking rates per ha and it was the productive capacity of any grazing property which he considered as being the dominant influence on market value. Under cross-examination, Mr Burgess agreed that the northern portion of "Tregoning" which adjoined "Banff Downs" to the west, was of generally similar but slightly superior country as was "Caledonia" which adjoined to the north-west. The valuations applied by the chief executive to those properties at the relevant date valuation had equated $5.76 per ha and $5.83 per ha respectively. "Armadilla", "Armadilla South" and "Roslin" to the north-east and east of "Banff Downs" had been valued at the equivalent of $8.71, $6.50 and $8.11 per ha respectively. Mr Burgess agreed that "Banff Downs" was geographically located as Mr Tannock described it, "in the merge area between the true mulga lands and the better quality mixed open forest and scrub lands to the north and east". Mr Burgess, when it was put to him, did not agree that the valuations applied to adjoining properties should necessarily be presumed to be correct. He held the opinion that many of the older/or previous generations of district graziers had been inclined not to challenge departmental valuations whether they believed them to be correct or not. Where valuations in the locality had in more recent years been challenged, there had been some success achieved by landholders in disturbing previously adopted relativities. Mr Tannock's evidence was that he had inspected "Kanalba" but not "Maryvale". "Kanalba" had been extensively improved and it was difficult to precisely classify the nature of some of the country as it would have existed in its unimproved condition, but the Department's classification had included only about 800 ha of the better class box/sandalwood country. He had no reason to disagree with that assessment after his inspection and discussion with the owner. The balance of "Kanalba" was mainly red sandy soil box-mulga country with, in his opinion, generally inferior natural grasses than would be found in the better box and yapunyah/brigalow country of "Banff Downs". The carrying capacity potential of "Kanalba" had been adopted as 1 sheep to 3.6 ha and it was his experience that the normal carrying capacities for the softer mulga country in the locality was in the range of 1 sheep to 3.5 to 4 ha. -- 3 of 5 -- 4 Mr Tannock agreed that the scrub country was generally regarded as more difficult to develop than the lighter country. However, in his experience it was not economical to develop large areas of the scrub country by stickraking and blade ploughing. It was normal district practice to pull, burn and seed. Although the mulga country was not generally considered to be good permanent buffel grass country, through "sheer persistence and good management", "Kanalba" had been very well developed and included some buffel grass establishment. Although Mr Tannock accepted that graziers did breed sheep on mulga country and "Kanalba" had been used for breeding purposes, it was his opinion, that the market considered the use potential of mulga country as being for wool growing rather than sheep breeding. "Banff Downs" on the other hand had about 50% of better class country which was generally recognised as lending itself to use for sheep breeding. In Mr Tannock's experience there were distinctly different markets for the mulga country and the better forest and mixed scrub country. The valuation of "Banff Downs", in his opinion, recognised the fact that the property was located where the better country merged into the lighter country. The valuation had been based on three sales, the details of which were contained in his report, a copy of which was provided to Mr Burgess. The first sale was of the property "Dungowan" about 50 km north-west of Morven, of 22,293 ha. It comprised box, sandalwood, brigalow to soft mulga (44%); sandy mulga, box, ironbark, pine to hard mulga (29%); then harder mulga, yapunyah ridges and slopes (27%). The estimated carrying capacity was 1 sheep to 2.6 ha (DSE) or 1 beast to 18 ha (cattle breeding). The sale in August 1995 showed $29.73 per ha improved, analysed to show an unimproved value of $4.83 per ha with an applied valuation of $4.53 per ha. Mr Tannock considered the sale property which was much larger in area, to be inferior to "Banff Downs" in country type, location and access. The second sale was of the property "Bonarby", 5.5 km south-east of Mungallala. It contained 5,616 ha comprising box, sandalwood and myall (some plain) (34%); soft red mulga with silverleaf ironbark and box (40%); marginal to hard box, mulga, sandalwood to hard bendee ridges (26%). The estimated carrying capacity was 1 sheep to 1.7 ha (DSE). The improvements were described as very run down at the time of sale in September 1995 with the sale price equating $65 per ha improved, analysed to show an unimproved value of $11.44 per ha. The applied valuation had been $10.50 per ha. The property was described as having superior access, location and country. -- 4 of 5 -- 5 The third sale was of the property "Rundalua", about 90 km south-east of Charleville, containing 27,091 ha. It comprised soft mulga box, to box sandalwood, narrow frontage watercourse (15%); hard mulga, box, silverleaf ironbark (72%); spinifex sandy wattle (13%). The carrying capacity was estimated as being 1 sheep to 4.5 ha. The property had sold in August 1995 for $15.32 per ha improved, analysed to show an unimproved value of $1.97 per ha with an applied valuation of $1.96 per ha. It was put to Mr Tannock by Mr Burgess that "Banff Downs" was too small an area to be regarded as a living area. Mr Tannock agreed although he suggested that there would be buyers in the market who would consider that the better country influenced its ability to provide a living area. Nevertheless, there was general demand for smaller properties purchased to provide additional areas for use in conjunction with existing holdings. Mr Burgess had not seriously challenged the sales evidence, although he thought that the property "Dungowan" was located in an area which enjoyed a higher rainfall. Mr Burgess preferred to rely on the relativity argument. The question of correct relativity is often raised in this type of valuation matter. In Fischer v. The Valuer-General (1983) 9 QLCR 44 the Land Appeal Court said at 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." The sales evidence in this matter clearly supports Mr Tannock's valuation. Even so, and regardless of the close personal knowledge which Mr Burgess has of the property "Kanalba", I have not been convinced that in their hypothetical unimproved condition, "Banff Downs" would not fetch a significantly higher price than would "Kanalba" regardless of the cost of developing the scrub country on "Banff Downs". Further, better relativity comparisons could have been made between "Banff Downs" and adjoining properties, valuations of which well support, on the evidence, the valuation appealed against. For the reasons given the appeal is dismissed and the valuation of the chief executive affirmed. RE WENCK MEMBER OF THE LAND COURT -- 5 of 5 --