Burnett v Chief Executive, Department of Lands [1995] QLC 165 (1994-1995) 15 QLCR 518

LAND COURT BRISBANE 21 December 1995 Re: Appeal against Rental Valuation Valuation of Land Act 1944. Shire of Belyando. (RV95-23). Albert Edgar Burnett v. Chief Executive, Department of Lands (Hearing at Clermont) D E C I S I O N Mr AE Burnett is the lessee of Grazing Homestead Perpetual Lease No 12/2564, known as "Nairana", and described as Lot 2 on BL57, Parish of Disney, County of Bell, containing an area of 19,700 hectares. As at 30 June 1993, the respondent determined the unimproved value of that land at $355,000. As the result of an objection, the respondent reduced the valuation to $335,000, or $17 per hectare. Mr Burnett has appealed to the Land Court against that decision upon his objection. "Nairana" is situated approximately 162 kms north of Clermont with access by approximately 140 kms of bitumen road, the remainder being formed gravel road. The main Clermont/Charters Towers Road severs the property. Electricity and telephone services are available. At the hearing, Mr AE Burnett appeared and gave evidence and evidence on his behalf was also given by Mr NJ Heelan, a grazier of "Pasha", Clermont. The respondent was represented by Mr J O'Rourke, Director of Legal Services, Department of Lands, while valuation evidence was given by Mr JC Greenhill, a registered valuer employed by the Department of Lands. Mr Greenhill's report described the country on "Nairana" as follows: "About 6061 hectares comprises inferior quality forest, sandy in places with areas of inferior stoney bendee and lancewood ridges. Timbered with bloodwood, cabbage gum, box, ironbark and wattle. Some spinifex in places. About 3518 hectares blackwood scrub. About 1797 hectares mixed brigalow, gidyea and blackwood scrub of fair quality. [1995] QLC 165 -- 1 of 9 -- 2 About 1632 hectares brigalow scrub. About 2098 hectares gidyea scrub. About 4594 hectares flooded coolibah and mixed forest with scrub influence in places. Situated mostly along the frontages of Mistake Creek and the Belyando River. " Mr Greenhill stated that about 40% of the property was considered to be phosphorous deficient and this deficiency occurs through the Belyando Shire in varying degrees. He considered that it could be controlled by appropriate management. Mr Greenhill assessed the fully developed carrying capacity for "Nairana" at 1857 head, or 1 beast to 10.6 hectares. He arrived at that figure by attributing the following carrying capacities to the various categories of country: 6016 ha (37.5%) forest cc. 1-24 ha 252 head 3518 ha (17.85%) blackwood scrub cc. 1- 9 ha 391 head 1797 ha (9.1%) mixed scrub cc. 1- 9 ha 200 head 2098 ha (10.65%) gidyea scrub cc. 1- 7 ha 300 head 1632 ha (8.3%) brigalow scrub cc. 1- 8 ha 204 head 4594 ha (23.35%) flooded coolibah cc. 1- 9 ha 510 head 1857 head Under the heading "Water", Mr Greenhill's report noted that Ten Mile, Pelican, Six Mile, and Old Station waterholes were considered to be permanent, while others lasted for varying periods. Artificial water comprised five equipped earth tanks and two equipped dams. Mr Burnett tendered a comprehensive statement attacking the valuation. He disagreed with most of what Mr Greenhill said. He argued that "Nairana" contains a large proportion of blackwood scrub, a type of scrub which is inferior to both brigalow and gidyea scrub, as it is very difficult to develop to improved pastures. He referred to the unimproved values applied to five other properties in the area located in the blackwood scrub belt. He stated that the unimproved value of "Nairana" cannot be any higher than the average of those five, which was $11.70 per hectare, or $230,000. Mr Burnett also set out the unimproved values applied to six adjoining properties, two of which were included among the blackwood properties. He stated that three of the other properties, unlike "Nairana", consisted of considerable areas of gidyea clay country and each had a considerable number of waterholes that did not go -- 2 of 9 -- 3 dry during the prolonged drought. All but one of the waterholes on "Nairana" went dry. He concluded that the unimproved value of "Nairana" could not be higher than the average of the other three properties, which was $12.43 per hectare, or $245,000. Unfortunately, Mr Greenhill did not know most of the comparison properties referred to by Mr Burnett. They are situated in Dalrymple Shire and he was not responsible for that area. However, while the averaging of applied unimproved values is an understandable method of comparison for a landowner to make, it is not a recognised method of valuation. Mr Burnett argued that the valuation was not supported by sales. He referred to the sale of a property known as "Vine Creek" in December 1994, for $720,000. He was of the view that the Lands Department had analysed the sale to show an unimproved value of $250,000, or $10.20 per hectare. Mr Burnett set out a detailed comparison of "Vine Creek" with "Nairana". He was of the opinion that it was the only prudent sale in the area. He conceded that "Nairana" would be more valuable because of its better soils, access and situation. However, this evidence about "Vine Creek" was of no assistance in this case. Mr Burnett had not attempted to make an analysis of the sale, but relied on what he thought was the Lands Department's analysed unimproved value. Mr Greenhill did not know the property, but he said that the sale was well after the date of valuation and therefore not appropriate as a basis for the valuation as at 30 June 1993. Mr Burnett was very sceptical about the sale prices for properties in the area. He said that a number of landowners had sold their properties to mining companies and, as he put it, with a pocket full of money had paid imprudent prices for other lands. As an example, he referred to the sale of a property known as "Sondella", which was notorious for the high price paid by a purchaser whose own land had been purchased by a mining company. Mr Burnett thought that this influence extended to all other sales in the area. Mr Burnett was of the opinion that the special disabilities suffered by "Nairana" had not been fully considered in the valuation. Approximately half its western boundary was the Belyando River, an area where there was the convergence of a number of creeks, including Mistake Creek which was the largest. Therefore, a substantial area of "Nairana" can be subjected to long periods of flooding. According to Mr Burnett, the flooded frontage could not be developed with improved pastures because there was no pasture species suitable for any of that country. Buffel grass would not stand any length of flooding. He said that in its natural state the country did not have even moderate density of pasture. It was the type of country that would not stand the level of stocking that the Lands Department -- 3 of 9 -- 4 had attributed to it. He felt that the respondent's unimproved value for that type of country was far too high. In recent years, Mr Burnett said, the property had suffered severe losses through botulism. He felt that this had something to do with the prolonged flooding, as the losses on "Nairana" were far higher than suffered by any other landowners in the area. During the drought only one waterhole, the Old Station Waterhole, had never gone dry, Mr Burnett said. The others could now be regarded only as semi-permanent. He said that the artificial water supply consisted of ten excavations, a number of which were close to one another sharing the equipment. Mr Burnett was of the opinion that the Lands Department had overestimated the classification of the better types of country on "Nairana" and thereby overestimated its potentialities. He had classified the various types of country on "Nairana", and had measured the areas of each from an aerial photograph mosaic, using a grid square measurement technique on a paddock-by-paddock basis, which he had learned at a land planning school. Mr Burnett's classification is set out below: Potential Carrying Capacity Per Ha Total 2795 ha frontage forest, flooded coolibah/gidyea/gum/dogwood 1:16 175 head 850 ha gidyea scrub 1: 7 121 head 5090 ha blackwood scrub 1:11 462 head 2545 ha mixed scrub 1: 9 283 head 8400 ha mixed forest 1:16 525 head No brigalow scrub as such 19700 1:12.5 1566 head Mr Burnett provided details of the various areas of country in each paddock. He was convinced that the Lands Department had overestimated the areas of better country and vastly underestimated the areas of poor country. This was particularly so in relation to the frontage country which, he said, could carry nothing like the number of cattle that the Lands Department thought it would. The Department had, in Mr Burnett's opinion, also overestimated the potential of the blackwood country. Because of the difficulty of establishing improved pastures in the blackwood scrub country, he felt that much of the scrub on "Nairana" was not economical to pull. He was critical of the classification of country made by the Lands Department. He said that areas of scrub that had been included as either mixed scrub or brigalow scrub in Mr Greenhill's classification, were really blackwood scrub -- 4 of 9 -- 5 country. Mr Burnett said that he would not develop the remaining small area of gidyea scrub, because it was too valuable for fence timber. Because he thought that the Lands Department had wrongly classified the country, Mr Burnett felt it had concluded that the developed carrying capacity of "Nairana" was 1857 head. Mr Burnett estimated its developed carrying capacity was 1,566 head. There were a number of other problems associated with the property which Mr Burnett mentioned, including the presence of parthenium and other pests which were common to most properties in the area. Management was made more difficult as the property was severed by the main Clermont-Charters Towers Road. He said that because the Department of Transport would not install grids, he was forced to fence the road both sides. However, the Department had provided money which would cover half the cost of the fence. Mr Burnett attempted to arrive at the unimproved value of "Nairana" by deducting his estimate of the value of improvements from what he considered to be the improved value. However, there are difficulties in that approach. For example, there was no evidence as to how he arrived at the improved value of "Nairana", let alone the cost and depreciation applied to the improvements. Therefore, that exercise was of no assistance in arriving at the unimproved value. Mr NJ Heelan, a grazier from "Pasha", a property situated about 50 kms east of "Nairana", gave evidence about the characteristics of blackwood scrub. Mr O'Rourke challenged Mr Heelan's qualifications to give such expert evidence. Mr Heelan stated that his parents drew "Pasha" in 1973 and that he had been personally involved in the development of brigalow scrub on that property. Although there was no blackwood on "Pasha", there was on neighbouring properties and he had a keen interest in the subject for over 20 years. Mr Heelan graduated from the Emerald Agricultural College, where he had studied soils and botany. He had later worked for King Ranch Australia, a company which was among the leaders in land development in that part of Central Queensland. He had closely observed all the company's land clearing developments. He worked closely with the Department of Primary Industries and, because of his expertise in the subject, had been invited by the DPI to present a paper at a workshop on "Pasture Options and Animal Production in Brigalow Lands". He was a producer representative for the northern brigalow area. I was satisfied that Mr Heelan had sufficient expertise and qualifications to give evidence as an expert witness. The substance of Mr Heelan's evidence was that the type of soil in the -- 5 of 9 -- 6 blackwood scrub area is a limiting factor to establishing improved pastures in that country. He quoted from a CSIRO Land Research Series entitled "Lands of the Nogoa/Belyando Area" which gave detailed requirements for the establishment of buffel grass pastures. He concluded that the establishment of good improved pastures in the blackwood country on "Nairana" would be very limited and chancy. He said that in the Belyando/Suttor country the gidyea and brigalow scrubs are far superior to the blackwood. Mr Heelan went on to say that it is very difficult to pick out blackwood scrub from the other scrubs from an aerial photograph. He had inspected "Nairana" and stated that a large percentage of the property consisted of blackwood scrub. He disagreed with the areas marked on the Lands Department map as mixed scrub. He said that he would rate them as practically all blackwood scrub. He felt that the only way to correctly classify blackwood scrub was by detailed on site inspection. From his own observations he would class the majority of the scrubs on "Nairana" as blackwood scrubs. Because of the difficulty of establishing good stands of buffel grass in the blackwood scrubs, Mr Heelan felt that such country should have a considerably lower value than brigalow or gidyea scrubs. He said that in their natural state the blackwood scrubs had useful low yields of pasture compared to that found in the other acacia scrubs. From what Mr Heelan said about the difficulty of establishing improved pastures on blackwood country, the implication was that such country was best left alone. Mr Greenhill said that he regarded "Nairana" as a very mixed block. He valued it on a classification basis by direct comparison with the sales of two properties. He explained that at the date of valuation, 30 June 1993, the only sales available were those of "Yarmina" and "Albinia", which were considered to be particularly high. Because of the lack of other sales evidence in the locality, he did not feel that they could be used to justify an increase in the whole of the area. He therefore had to rely upon the sales of "Telerah" and "Cantaur Park", which had occurred somewhat earlier. "Telerah" of 18,171 hectares, is situated 130 kms by road south of the subject land. It sold in March 1992 for $1,200,000 and the sale was analysed to show an unimproved value of $449,913, or $24.76 per hectare. While "Telerah" had superior location, access and possibly rainfall, Mr Greenhill said it had comparable country types. He assessed the property as having about 27.5% of scrub, being brigalow, gidyea, sandalwood, yellow wood, and blackbutt; about 62.5% of forest, comprising undulating to steep stony forest, moderately -- 6 of 9 -- 7 timbered with silverleaf ironbark, box, bloodwood, with some good creek frontages with a scrub influence, and 10% of virtually unavailable mountain range with limited carrying capacity. The other sale, "Cantaur Park", of 11,656 hectares, is situated approximately 60 kms east of the subject land. This property sold in January 1991, for $1,450,000 and was analysed to show an unimproved value of $362,385, or $31.09 per hectare. Mr Greenhill considered it to be a breeding and fattening block, which was superior to the subject land in country type, location, rainfall and permanent water. He classified the land as 17% of flooded frontage country, which comprised fair to good sandy box frontage between the Suttor and Steep Creek, 45% brigalow, blackwood and gidyea scrubs, 17% ironbark and box forest, with the remaining 11% being bendee ridges. He considered that the sales supported the $17 applied to the subject land. Mr Burnett knew both the sale properties. He said that the purchaser of "Telerah" lived only about 30 kms away and he felt that a premium had been paid because of adjacency. He had inspected the property and felt that the big difference between "Nairana" and "Telerah" was that most of the soils on "Telerah" would grow buffel grass, whereas those on "Nairana" would not. He felt therefore that "Telerah" had a lot more potential than "Nairana". Mr Burnett also had inspected "Cantaur Park" and did not agree with Mr Greenhill's classification. His own classification was 14% coolibah, Moreton Bay ash and gidyea sandalwood country, that was only marginally flooded. He said that the Suttor River flooded country was totally different to that on "Telerah". It had a lot denser vegetation and had good buffel grass growing on it which indicated that it was not subject to prolonged flooding. He did not agree with Mr Greenhill's description of the scrub on "Cantaur Park" as he said that there was little blackwood. It was predominantly better brigalow. He classified it as 60% brigalow, with some blackwood and gidyea. Mr Burnett also classified 14% of ironbark and box forest. He disagreed with the area described by Mr Greenhill as bendee ridges. He said that it had been cleared, but he would describe it as 12% mixed scrub. He said there was little evidence of inferior country. Mr Burnett's assessment was that by comparison with these sales, which he thought were vastly superior to "Nairana", he considered that its unimproved value should be much less than $17 per hectare. Mr Heelan also knew "Cantaur Park". He said that the flooded country on that property was very different to that on "Nairana". Because of a natural levee bank -- 7 of 9 -- 8 along the river on "Cantaur Park", it very rarely flooded. As far as he knew, it had been under water only twice in 40 years, with pasture being immersed for only approximately one day. However, he said, the frontage country on "Nairana" was frequently flooded with water remaining for long periods. This was detrimental to the establishment of buffel grass but did, however, produce limited amounts of excellent fattening grasses after small moderate floods. This made it very productive country, but only for short periods. On the other hand, the "Cantaur Park" country was very productive for much longer periods. It emerged in evidence that Mr Greenhill relied heavily upon Departmental records in classifying the various areas on "Nairana". He also had the assistance of aerial photographs, but agreed that it was difficult to distinguish the blackwood areas from such photographs. He agreed that if the Departmental records were wrong in this regard, then his classifications were also wrong. Mr Greenhill did not agree completely with the assessment by the other witnesses as to the potentialities of blackwood country. He conceded that it was generally regarded as inferior scrub to both gidyea and brigalow and that there could be problems in establishing pasture such as buffel grass in such areas. However, from his experience of properties to the south of "Nairana", blackwood country did seem to carry good stands of buffel grass. This case depends principally upon the assessment of the relevant merits of the frontage country and the blackwood scrub country on "Nairana". Mr Greenhill's assessment of those merits was challenged not only by Mr Burnett, but also by Mr Heelan. Mr Greenhill described "Nairana" as being a very mixed property, which is obvious from the description of the land. It is very difficult for a valuer who spends only a few hours on each property to accurately assess its full capabilities, particularly where there are country types which are out of the ordinary. Flooded country often carries good pasture and, apart from problems when it is actually flooded, is regarded as good country. Also, with the successful development of brigalow and gidyea scrub, it is understandably difficult to appreciate that there are types of scrub which may not lend themselves to successful development, at least by conventional means. It would appear from the evidence that has been presented in this case, that blackwood scrub is one such variety. In the circumstances, therefore, I can well understand why Mr Greenhill assessed the subject property in the way that he did. He frankly admitted that he has relied heavily upon the Departmental records to indicate the extent of the various types -- 8 of 9 -- 9 of scrub. However, no-one knows a property better than the man who works it. I accept the evidence of Mr Burnett about the areas and quality of country. Essentially, his evidence was backed up by Mr Heelan. Therefore, I find that the Department has underestimated the extent of the blackwood scrub and has overestimated the potentialities of the frontage country. As Mr Burnett was not able to advance any figures in substitution for those used by Mr Greenhill for the various categories of land, I intend to substitute Mr Burnett's classification and carrying capacity and use the values for the various types of country contained in Mr Greenhill's report. Therefore, the assessment becomes: 2795 ha of frontage forest cc. 1:16 175 hd @ $15/ha = $ 41,925 850 ha gidyea scrub cc. 1: 7 121 hd @ $27.50/ha = $ 23,375 5090 ha blackwood scrub cc. 1:11 462 hd @ $16/ha = $ 81,440 2545 ha mixed scrub cc. 1: 9 283 hd @ $19/ha = $ 48,355 8420 ha mixed forest cc. 1:16 525 hd @ $12/ha = $101,040 19700 ha 1566 hd $296,135 or $15.03 per hectare ADOPT 19,700 hectares @ $15 per hectare = $295,500 It hardly needs to be said that this case was decided on the evidence before me and that I preferred the evidence given by Mr Burnett and Mr Heelan in relation to the areas and quality of country rather than that given by Mr Greenhill. If subsequent measurements indicate that the areas are somewhat different to those contained in this judgment, then this decision in no way prevents the parties from adopting the areas that have been ascertained by more accurate measurement. As Mr Burnett has not been able to advance any evidence derived from sales as to the value of particular types of country, I preferred the evidence given by Mr Greenhill in relation to those values. The result is a combination of the evidence as I have seen it. Accordingly, the appeal is allowed, the valuation of the Chief Executive is set aside and the unimproved value of the subject land for rental purposes is determined at Two hundred and ninety-five thousand, five hundred dollars ($295,500). (JJ Trickett) Member of the Land Court -- 9 of 9 --