Emmott v Chief Executive, Department of Natural Resources [1997] QLC 152

LAND COURT BRISBANE 19 SEPTEMBER 1997 Re: AV96-427 - An appeal against an unimproved valuation - Valuation of Land Act 1944 - Longreach Shire B.F. Emmott v. Chief Executive, Department of Natural Resources (Hearing at Longreach) D E C I S I O N As at 1 January 1996 the Department of Natural Resources assessed the unimproved value of the property "Noonbah" in the amount of $48,500. For its surveyed area, exclusive of roads and stock route, of 17,159 ha, that valuation equates about $2.85 per ha. The real property description is Lot 2, Plan VG10 and Lot 3 Plan VG11; GHPL 29/11171, Parish of Trotter. The property is situated about 150 km south-west of Longreach via the Longreach-Jundah and Tonkors Roads, with about 100 km of bitumen the balance being earth formed. Access to the property is available by road during dry weather only. Electricity and telephone are connected. Mail delivery is twice weekly. Although he was not the original valuer, Mr R.R. Taylor, registered valuer, took responsibility for the defence of the Department's valuation. He had carried out an inspection of the property together with the sale properties which provided the evidence used to support the valuation. Mr Taylor classified the land as follows: 3,250 ha (19%) flood channels and claypan 500 ha (3%) ashy downs/pebbly downs 4,509 ha (26%) red mulga 5,900 ha (34%) hard tableland and ridge - very poor 3,000 ha (18%) gidyea scrub and scalded flats. In Mr Taylor's opinion the property was suitable for sheep breeding and wool growing and he assessed the carrying capacity as being 4,900 sheep (one to 3.5 ha). Mr Emmott attended the hearing and gave evidence in support of the appeal the grounds of which referred to the poor quality of the land; woody weed infestation and [1997] QLC 152 -- 1 of 4 -- 2 resultant decreased carrying capacity; unviability as an individual property; lack of marketability as such and lack of comparable sales evidence. Reference was made to the sale of "Thurles Park/Bald Hills" in 1994 for $4.10 per acre (approximately $10.13 per ha) including plant. Reference was also made to the lack of market interest in a nearby property "Evengy" to the south of "Noonbah", at an asking price of less than $2.50 per acre ($6.17 per ha). The estimate of unimproved value of the land as contained in the Notice of Appeal was $24,000 ($1.43 per ha). The evidence provided by Mr Emmott suggested that the aggregation of "Thurles Park/Bald Hills" contained about 40,000 ha, 23,500 ha of which was similar to part of "Noonbah" with much of the balance of the sale property superior. In his opinion, the improvements on "Noonbah" were worth "$12 to $14 per acre" but, based on the "Thurles Park" sale he did not see it as likely that a sale of "Noonbah" could be achieved even "to an outsider" at the value of the improvements. If there was any demand for the property it would be restricted to an adjoining owner when "it would only attract a very low price". In fact, "Noonbah" was run in conjunction with another property which had been acquired from Mr Emmott by the Commonwealth Government, and then leased back to him. According to Mr Emmott the property "Evengy" which he said contained about 134,000 acres (54,228 ha) had eventually sold for $2.30 per acre only shortly before the hearing. Mr Emmott described "Evengy" as containing flood frontage country to the Thomson River and excellent improvements. Although he felt the plan showing the classifications of country as produced by Mr Taylor and tendered with his report, was not precisely accurate, Mr Emmott generally agreed with Mr Taylor's classification of the country and carrying capacity. He had understood that the property had previously been assessed as capable of carrying 6,500 sheep and part of his original objection was that there had been no inspection by the valuer at that time, to observe the increase in woody weeds and to confirm that a significant part of originally good grassland had been lost to "thick bendee, gidyea and bluebell bush" none of which were edible. From his long experience managing the property, Mr Emmott challenged Mr Taylor's opinion that the property was in any way suitable for sheep breeding. His efforts to try to breed had been frustrated by low lambing percentages and the potential for flooding of the channel country made it too dangerous for lambing ewes. -- 2 of 4 -- 3 Included in Mr Emmott's evidence was reference to significant stock losses resulting from the activities of dingoes and then the significant cost involved in their control. Another particular problem mentioned was the abnormal maintenance costs of fencing. Mr Taylor was not swayed from his opinion that the breeding of sheep should have been possible on "Noonbah" albeit it with lower than average lambing percentages. He was fully aware of the dingo problem; the prevalence of woody weeds and did not disagree that "Noonbah" by itself would be economically unviable due to the inferior overall nature of the country and the resultant low carrying capacity. However, in his opinion, as the valuation equated an unimproved sheep area value of less than $10, the various disabilities including the low rainfall, drought susceptibility and remote location, had been sufficiently recognised. He had not inspected "Thurles Park" but had established that while the sale price had been $410,000 (in May 1994) the area involved in the sale had been recorded as 34,400 ha (and not the 40,000 ha suggested by Mr Emmott). Mr Taylor had verbal information that "Evengy" had very recently sold and he had understood the sale price to have been $300,000 but that sale was not one which he saw as having relevance to the much earlier date of the subject valuation. Brief details of the sales upon which Mr Taylor had relied were: (1) "Merriman" - 16,967 ha - 20.3.95 - $522,244, analysed $5.35 per ha unimproved, applied valuation $4.77 per ha, carrying capacity 1 to 2.5 ha, equivalent sheep area value $11.93. (2) "Namarva" - 25,135 ha - 11.95 - $780,000, analysed $5.47 per ha unimproved, applied valuation $4.73 per ha, carrying capacity 1 to 3 ha, equivalent sheep area value $14.19. (3) "Waroona" - 13,581 ha - 16.5.95 - $770,000, analysed $11.61 per ha unimproved, applied valuation $11.60 per ha, carrying capacity 1 to 1.8 ha, equivalent sheep area value $20.88. Mr Emmott had expressed surprise to learn of the sales upon which Mr Taylor had relied to support the valuation appealed against. He had not had the opportunity to investigate these sales but had concentrated on other sales evidence which he had understood had been adopted as the basis. He pointed out that the property "Namarva" being closer to Winton would enjoy higher average rainfall than the subject property. Findings There is no dispute as to the carrying capacity of the property and its lack of viability as an individual holding. The only area of disagreement in the description of the property -- 3 of 4 -- 4 was whether or not it had potential for sheep breeding. I prefer the appellant's opinion, based on a long association with the subject land, in that regard. Nevertheless, Mr Taylor had specifically inspected the property for the purpose of the appeal hearing, had then inspected the sale properties and provided the analyses of those sales. While each sale was of superior productive potential and overall country type, Mr Taylor's is the only professional opinion before the Court as to the unimproved value of the subject land based on actual sales evidence. Whether that sales evidence had been included in the original valuer's basis or not is unknown but that is largely irrelevant. Mr Emmott had given consideration to market evidence relative to much larger properties and had, it seems, endeavoured to consider improved values rather than unimproved. He was concerned that the subject property would in a practical sense be difficult to sell even at a most conservative value of the improvements. It is observed that the "added value" of the improvements on "Noonbah" could be a subject of considerable argument, even at heavily discounted values from replacement cost, due to the limited potential of the property to be run as a separate entity. "Noonbah" is clearly a property of an inferior nature with many disabilities. The evidence suggests however that those disabilities have been recognised in the valuation appealed against, which is said to represent one of the lowest levels of value in the shire. The onus is in these matters on the appellant to prove not only the grounds of appeal but that the valuation appealed against is wrong. I have not been convinced that the latter has been proved. The appeal is therefore dismissed and the valuation of the chief executive affirmed. RE WENCK MEMBER OF THE LAND COURT -- 4 of 4 --