Fawckner v Chief Executive, Department of Lands [1995] QLC 158

LAND COURT BRISBANE 8 DECEMBER 1995 Re: Appeals against Annual Valuations Valuation of Land Act 1944 Shire of Winton. (AV94-465 and AV94-466). Robert D Fawckner v. Chief Executive, Department of Lands (Hearing at Winton) D E C I S I O N These are two appeals by Mr RD Fawckner against the unimproved values applied to his grazing properties known as "Bonnie Downs" and "Corunna". "Bonnie Downs" or GHPL 23/16674 is described as Lot 7 on Plan C22863 and Lot 8 on Plan C22871, Parish of Lucella, County of Cumberland, containing an area of 16,242 hectares. "Corunna" or GHPL 23/16547 is described as Lot 3 on Plan CM60, Parish of Lucella, County of Cumberland, containing an area of 9,838 hectares. As at 30 June 1993, the Chief Executive determined the unimproved value of "Bonnie Downs" at $185,000, or approximately $11.50 per hectare and the unimproved value of "Corunna" at $118,000, or $12 per hectare. Objections lodged by Mr Fawckner were disallowed and he appealed to the Land Court against the decision of the Chief Executive on his objections, advising that his estimates of the unimproved values of "Bonnie Downs" and "Corunna" were $170,000 and $103,000 respectively. The two properties adjoin one another. Therefore, with the agreement of the parties, the appeals were heard together. The properties are situated approximately 120-125 kms north-east of Winton. They are used for the grazing of sheep and cattle. At the hearing, Mr RD Fawckner appeared and gave evidence, while evidence for the respondent was given by Mr MP Galvin, a registered valuer, who at the time of the valuation was employed by the Department of Lands. Mr Galvin's report described these two properties as consisting of predominantly gently undulating, open mitchell grass downs, with areas of pebbly ridges, lightly to sparsely shaded with whitewood and vinetree and well shaded with [1995] QLC 158 -- 1 of 7 -- 2 coolibah along Lucella Creek. He assessed the carrying capacity of each property at 1 sheep to 1.6 hectares. Mr Fawckner had no great disagreement with the description of country. He described "Bonnie Downs" as all open downs country, sparsely shaded, with areas of loose country and approximately 450 hectares of claypan and pebbly ridge, mostly along Lucella Creek and Culloden Creek. He said that "Corunna" was fairly similar, with patches of loose country and about 328 hectares of claypan and pebbly ridge, much of which was on the stock route which was fenced in on the northern boundary of "Corunna". Both properties had an amount of feathertop, but there was no great problem with prickly acacia. Mr Fawckner thought that there was much the same proportion of loose country on both "Bonnie Downs" and "Corunna" and that there would be little between the unimproved value of both properties. Mr Galvin thought that there was a greater proportion of loose country on "Bonnie Downs", particularly on the western block. However, they disagreed about carrying capacity. Mr Galvin assessed the carrying capacity of both properties at 1 sheep to 1.6 hectares. Mr Fawckner considered that because the average rainfall was 400mm and no-one really was able to say what is an average season, the overstocking of mitchell grass country was a recipe for disaster. To avoid overstocking, he considered that for the long-term economic and environmental sustainability of the mitchell grass country, a carrying capacity of 1 sheep to 1.8 hectares is the optimum. Mr Fawckner's argument was with the relativity of the valuations of his two properties with that of a neighbouring property known as "Malboona" (GHPL 3725, described as Lot 2 on Plan G24945), containing an area of 8,135.8 hectares, which had been valued by the Department of Lands at approximately $10.50 per hectare. He was also concerned about the relativity of the valuations of his two properties with the valuation applied to the property known as "Glenullin", which adjoins "Corunna" to the south. "Glenullin", he said, had been valued by the Department of Lands at approximately $10.50 per hectare. Mr Fawckner described "Malboona" as basically open downs, with areas of loose country, but with no channels and no claypan. He described "Glenullin" as fairly similar country to the subject properties, but with no big channels through it and no big areas of claypan. However, it did have areas of loose country. While he thought there was not much in it either way, he considered that the "Malboona" block was not as good as his country, while "Glenullin" was similar to "Bonnie Downs" and "Corunna". Mr Fawckner thought that the two subject properties should be valued at the same rate per hectare as "Glenullin". While they were superior to "Malboona", he felt -- 2 of 7 -- 3 that there was too much difference between their values and the valuation per hectare applied to "Malboona". He was of the opinion that his properties had more loose country than "Glenullin", but less than the neighbouring block of "Malboona". Mr Galvin explained that he valued the subject lands by direct comparison with two sales. His basic sale was that of a property known as "Clio" located some distance to the west of the subject property. "Clio", containing an area of 17,437 hectares, sold in September 1992 for $850,000. The sale analysed to show an unimproved value of $167,400, or $9.60 per hectare. The valuation of "Clio" made as at 31 March 1990, was $158,000, or $9.05 per hectare. Mr Galvin therefore considered that the sale supported the existing valuation. "Clio", like the two subject properties, comprised open undulating downs, sparsely shaded, but it contained large ashy patches in the south. Mr Galvin considered that the subject lands were superior both in location and country to "Clio". Mr Galvin's second sale was of a property known as "Judith Royl" located in the Richmond Shire, further to the north-west of the subject lands. "Judith Royl" of 14,068 hectares, sold in June 1993, for $530,000. The sale analysed to show an unimproved value of $129,300, or $9.19 per hectare. As at 31 March 1990, an unimproved value of $105,000, or $7.50 per hectare, had been applied to "Judith Royl". Mr Galvin explained that although the analysis of this sale showed an increase on the existing unimproved value, it was purchased by an adjoining owner and was considered to be a high sale. Therefore, the unimproved value disclosed by the sale had not to be applied in full. He said that he had included it as a supporting sale, rather than a basic sale. "Judith Royl" was described as consisting of predominantly ashy, open downs. Mr Galvin considered the subject lands to be superior in location, carrying capacity and country. Unfortunately, Mr Fawckner did not know either of these sales. However, he made the point that his argument was not with the sales themselves, but with the relativity of values in the area. Mr Galvin explained that on the basis of the sales evidence available at the time, the valuations in Winton Shire in 1993 had been rewritten at the levels applied in 1992. While the relativity of values had been changed in isolated cases throughout the Shire, there had been no change to the relativity of values in the immediate locality of the subject properties. Mr Galvin explained that a valuation of $10.50 per hectare had been applied to "Malboona". However, it comprised an aggregation included in the one valuation with a total area of 48,933 hectares. Included in that aggregation was Lot 2, of 8,135 -- 3 of 7 -- 4 hectares, the block referred to by Mr Fawckner. Because of the size of the property and as the southern part was considered by Mr Galvin to be inferior to the subject lands, he had applied a valuation of $10.50 per hectare to the whole of the area. In the circumstances, he thought that it was not appropriate to compare the valuation of such a large area with those of the subject lands. Mr Galvin did not know "Glenullin". He explained that "Glenullin" is situated in the Aramac Shire and he was not responsible for the valuation of that Shire. He was not sure what valuation had been applied to "Glenullin". However, he knew that the valuations in Aramac Shire had also been rewritten in 1993, with generally no changes in the relativity. However, under cross-examination, Mr Galvin admitted that if "Glenullin" was, as described by Mr Fawckner, very similar to the subject lands, then if he had been responsible for its valuation, he would have applied a similar value to those applied to "Bonnie Downs" and "Corunna". In Mr Galvin's opinion, "Corunna" was slightly superior to "Bonnie Downs", because he felt that the latter property had a greater proportion of loose country. He said that in 1992, the valuation of "Bonnie Downs" had been reduced on objection from $12 to $11.50 per hectare to reflect the slight superiority of "Corunna" at $12 per hectare. He had maintained that relativity. Mr Fawckner was unaware that "Malboona" was part of a valuation comprising nearly 50,000 hectares for a total unimproved value of over $500,000. He said that his argument was confined to Lot 2 adjoining "Bonnie Downs" on the west, which he considered to be similar to "Bonnie Downs". Therefore, he reasoned that their values per hectare should be similar. As part of his argument, Mr Fawckner produced a schedule which had been an exhibit in a Land Court challenge to the 1990 determination of rent. The schedule indicated that GHPL 3725, Lot 2 of "Malboona", was inferior to "Bonnie Downs". Mr Galvin was the valuer responsible for the determination of those rents, but explained that they were assessed under the previous system which took into account a number of criteria which were not necessarily relevant to the determination of unimproved value. I did not find this schedule to be of any assistance because in the present appeals the best evidence of unimproved value is direct comparison with sales. The old system of determining rents was quite different and a schedule of rents arrived at under that system could have no bearing on the relativity of unimproved values. Mr Galvin also explained that his assessment of carrying capacity of 1 sheep to 1.6 hectares had been just one of many points of comparison between the sales and -- 4 of 7 -- 5 the subject lands and between the subject lands and other lands. If, as contended by Mr Fawckner, the correct carrying capacity was 1 sheep to 1.8 hectares, he would also have to apply that carrying capacity to the surrounding properties, as he considered them to all be of similar carrying capacity. That would not change the relativity of values that he had applied. In these cases, Mr Fawckner's argument was based solely on the relativity of values between the subject lands and those applied to part of "Malboona" and to "Glenullin". An unimproved value of $11.50 per hectare has been applied to "Bonnie Downs" and an unimproved value of $12 per hectare has been applied to "Corunna". On the other hand, a valuation of only $10.50 per hectare has been applied to both "Malboona" and to "Glenullin". In Mr Fawckner's opinion, there is little difference between any of these properties. He cannot understand why his two properties should be valued at up to $1.50 per hectare higher than "Malboona" and "Glenullin". Mr Galvin explained that the valuation of "Malboona" is of an area of nearly 50,000 hectares with an unimproved value in excess of $500,000. He considered that no valid comparison could be made with the valuation per hectare applied to the two subject properties which are much smaller. He also indicated that there was inferior country to the south of the "Malboona" aggregation. This explanation would seem to be reasonable, particularly as Mr Fawckner was not aware that the valuation of "Malboona" was of such a large area. His comparison was with Lot 2, adjoining "Bonnie Downs" to the east. This would have been a valid comparison as it is of more comparable area. It remains unexplained as to whether a valuation of that property was made for rental purposes under the present system where rents are based on a percentage of unimproved value. Mr Galvin could not remember making a separate valuation or what he had applied to it, if one was made. It is unfortunate that this was not resolved, because such a valuation would have been a much better comparison than the valuation of the whole of "Malboona", the area of which is of nearly 50,000 hectares. Mr Fawckner's other comparison, the valuation of "Glenullin", was not known by Mr Galvin. It is situated in Aramac Shire for which he had no responsibility. It is most unfortunate that Mr Galvin did not know what values had been applied to the adjoining properties in Aramac Shire, as this would seem to be an important consideration in the relativity between the valuations of the two local authority areas. However, be that as it may, Mr Galvin could produce no evidence of the reason for the valuation of "Glenullin", except to say that if it was as described by Mr Fawckner he would have -- 5 of 7 -- 6 applied a similar value to those applied to the subject lands. It was argued by Mr G Kelsey, Senior Valuer, who appeared as advocate for the respondent, that the unimproved values in these cases should be determined by direct comparison with sales rather than by the comparison with the valuations applied to other properties. While relativity of values was important, he submitted, the authorities on this matter indicate that the Court must look to sales, rather than to the values applied to other properties: (Grahn v. Valuer-General (1992) 14 QLCR 327). Mr Fawckner did not attempt to challenge the sales or Mr Galvin's comparison with those sales. His case was based solely on the relativity of valuations in the area. However, as the Land Appeal Court made clear in Grahn's Case , while the maintenance of correct relativity is of considerable importance, the use of the principle of relativity should not be preferred to the exclusion of relevant sales evidence. The Court went on to say that the Valuer-General should obtain relativity between different blocks in the same land category or type, but should do so (preferably by reference to sales of comparable land) by correcting inaccuracies rather than by making an inaccurate assessment in order to obtain uniform error. The Court referred to Barnwell v. Valuer-General (1989) 13 QLCR 13, and the cases cited therein. From the evidence given by Mr Fawckner, it would seem that the valuation of "Glenullin" may be out of relativity with the valuations applied to the subject lands. Mr Galvin has satisfied me that the relativity of values that he has applied on the Winton Shire side is soundly based. It would therefore be wrong to reduce the subject valuations to the level of "Glenullin", because if "Glenullin" is wrongly valued it should be adjusted to the level of the subject lands. In such circumstances as these, it should be remembered that the long title of the Valuation of Land Act 1944 states that it is "An Act to make better provision for determining the valuation of land for rating and taxing purposes, and for matters incidental thereto or consequent thereon". Until recently, the valuations made under the Valuation of Land Act were used primarily for local government rating purposes and for land tax where applicable. In rural areas it was usually for the former purpose which valuations were used. The importance of maintaining the relativity of values within a local government area has been emphasised by the Courts on many occasions (see, for example, King Ranch Pastoral Pty Ltd v. The Valuer-General (1968) 35 CLLR 255). For the distribution of the rating burden in an equitable manner, it is essential that valuations within a local government area are relative one to the other. If they are not, the valuation authority has not met its obligation to provide relative valuations. With the passing of the 1991 Land Legislation Amendment Act, valuations made under the Valuation of Land Act 1944 are also used for the assessment of rent -- 6 of 7 -- 7 for leasehold land. The respondent now has the responsibility to produce relative valuations,not only within local government areas, but across the whole State. If relativity problems such as those which are perceived by landowners to exist on the boundary between the Winton and Aramac Shires are not addressed, particularly where leasehold land is involved, then more challenges to the respondent's valuations, such as in the present cases, can be expected. However, in the subject cases the appellant has not demonstrated that the valuations applied to the subject land are not correct. Therefore, the appeals must fail. Accordingly, the appeals are dismissed and the unimproved values determined by the respondent are affirmed at $185,000 for GHPL 23/16674, "Bonnie Downs" and at $118,000 for GHPL 23/16547, "Corunna". JJ Trickett Member of the Land Court -- 7 of 7 --