Best v Chief Executive, Department of Lands [1995] QLC 137

LAND COURT BRISBANE 20 OCTOBER 1995 Re: Appeals against valuations Stanthorpe Shire Council (AV95-226/7) Glenroy G Best and Margaret P Best v. Chief Executive, Department of Lands (Hearing at Stanthorpe) D E C I S I O N These are two appeals against determinations of the Chief Executive, Department of Lands, of the unimproved value of land held jointly and severally by the above appellants for the purpose of the annual valuation of the area of the Shire of Stanthorpe as at 1 January 1995 The relevant properties and valuation details are as follows: AV95-226 - GG & MP Best - Lot 2 RP 115879, Parish Stanthorpe - 11.54 ha -applied value $9,500 - appellants' value $6,400. AV95-227 - GG Best - Lot 2 RP 31727, Lots 5, 12, 16 and 18 RP 31733 and Lots 5 and 6 RP 31743, Parish Stanthorpe - 85.79 ha - applied value $45,500 - appellant's value $30,000. The subject land comprises an aggregation of parcels situated about 1 kilometre west of The Summit, bordered by Tennant Road on the north-eastern part and severed in an east-west direction by Best Lane, Teale Road and Church Road. The land in the ownership of Mr Best has been valued as one parcel, with the parcel in joint ownership valued separately because it is not in the same ownership. Both areas have been valued under the provisions of s.17 of the Act as land exclusively used for the purposes of farming. "Farming" is defined in the Act as meaning:- "(a)the business or industry of grazing, dairying, pig farming, poultry farming, viticulture, orcharding, apiculture, horticulture, aquiculture, vegetable growing, the growing of crops of any kind, forestry; or (b)any other business or industry involving the cultivation of soils, the gathering in of crops or the rearing of livestock; if the business or industry represents the dominant use of the land, and - (c)has a significant and substantial commercial purpose or character; and (d)is engaged in for the purpose of profit on a continuous or repetitive basis." [1995] QLC 137 -- 1 of 5 -- 2 In the evidence of Mr Best it is said that the aggregation was built up over a number of years in order to provide a "viable area" for orchard purposes. He said that out of the total area of his own land of about 85 hectares, the maximum area (including rocky and marginal areas) put to orchard was about 38 hectares. At the date of valuation he has turned from orchard growing to more of a grazing use, running approximately 80 head of cows with calves. This decision is said to have been caused by viability of orcharding which he said is evidenced by the number of growers going out of that use and caused by costs, particularly the cost of replanting and hail netting. In his opinion, the likely use which would be made of the aggregation unimproved at the relevant date by a prudent purchaser would be for grazing purposes. He seems to be of the opinion that there is inherent in the applied values a component of the potential in the land for a higher and better use, for example, by subdivision and sale - sale of the lots separately. That question may be answered simply by asking whether the eight lots which are capable of sale separately would realise no more than the gross sum he has applied of $36,400 or the gross applied value of $55,000. Under the provisions of s.17 the mere fact that the particular use of land, for example grazing, may qualify the land within the terms of the section, the valuation is not restricted to a valuation of the land for that particular use. Under the law, the land may be valued for its highest and best use within the field of "farming" uses. See Caboolture Co-operative Association Ltd v. The Valuer-General (1986/87) 11 QLCR 138 at p.139 where the Land Appeal Court said:- " There is no dispute that within the division of primary production there is no protection from the operation of the rule that a potential for higher primary production use is not excluded. This was established by Land Appeal Court in K.J. Keilbach and M.J. Robinson v. The Valuer-General 24th July, 1981 - unreported - On page 2 of the judgment the Court said: `What this Court has to ascertain is the capital sum which the fee-simple of the subject land might be expected to realize if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as at which the value is required to be ascertained for the purpose of the Valuation of Land Act, the improvements did not exist. In the market place the rule of highest and best use applies. It would be unrealistic to assume a prudent vendor being willing to part with his land at a price which did not reflect this rule. In respect of valuations for the purpose of the Valuation of Land Act the Legislature has seen fit to offer a measure of exemption to or protection from this rule in respect of land exclusively used for the purpose of a single dwelling house or for the business of primary production. In either such case any potential for a higher use must be ignored. However, within the division of primary -- 2 of 5 -- 3 production there is no protection from the operation of the rule in that a potential for a higher primary production use is not excluded.'" In the reports of Mr DB Redgen, registered valuer in the employ of the Department of Lands, he describes the parcel in joint ownership (11.54 hectares) as consisting of 8 hectares of gentle sloping, granite agricultural soils with 3.54 hectares of gully lines, swampy areas and granite rock. The larger area of about 85 hectares is described as consisting of 48 hectares of gently sloping, granite agricultural soils with the balance of 37.79 hectares consisting of gully lines, low and wet and timbered areas of granite rock and boulder outcrops. He said that the agricultural soils in patches has some floating isolated rocks which have limited impact on the workability of the land for agricultural purposes. He said that the first parcel is used for small crops and grazing purposes and that the second is used for orchard and grazing purposes. In the map produced by DPI and put in evidence by Mr Best showing some four classes of land within the Shire, the subject land would appear to fall within the area classified as - "Class A: Crop Land - Land suitable for current and potential crops" - although, as stated by Mr Best, it may be close to the western border of that land classification, bordering Class B land which is described as a "complex of crop land, pasture land and non-agricultural land". The description of the land by Mr Best is well-known to the Department and personally known to Mr DP Coe, senior valuer, who conducted the case on behalf of the Chief Executive. He had previously valued the land for rating and taxing purposes. Therefore, whilst the particular land owner may not appreciate the description given to his particular land, the departmental valuer in valuing the whole of the area and in applying the principles of relativity and highest and best use must operate on a broader horizon with land classifications reasonably consistent throughout the Shire- including the classification of sale lands. The substance of the case put forward by Mr Best is that this land has lost its attraction for orchard growing through viability and is best suited for grazing purposes. The Department did not attempt to answer the question directly - that is by arguing that say for a carrying capacity of 80 breeder cattle the land would not fetch in an unimproved state a value around $50,000 or $625 per beast area. Rather, the Department simply pointed to sales of comparable land purchased for the purposes of using the land for a farming (as defined) purpose. Two sales were put in evidence by Mr Redgen for purposes of direct comparison. The first (S1) is to the north-east of the subject land on Maryland Road and the old Warwick Road between Thulimbah and the State border. Here a parcel of 13.76 hectares sold in January 1994 from Thomas to Sutton for $340,000. The sale land was improved with structures (including hail netting), fencing, water and -- 3 of 5 -- 4 timber treatment. The consideration also included items of plant and equipment. All such plant and equipment and improvements were given a value of $324,600 which resulted in a land value of $15,400 or $1,120 per hectare. The value applied to the land is $15,200 or $1,100 per hectare. That land and the subject land have similar access and services but the sale land is said by Mr Redgen to possess "almost all good quality agricultural soils while the subject land has shallower soils in parts and has a larger percentage area affected by water" and/or "waterways and rock". The relativity between the sale land and the subject smaller parcel (comparable size with the sale parcel) is put at $1,100 per hectare to $825 per hectare, while the relativity with the larger parcel (depreciated amongst other things for size) is put at $1,100 to $530 per hectare. The second sale (S2) is at Applethorpe. This sale consists of an area of 16.99 hectares, which sold from Roberts to Bertinazzi for $115,000 on 14 August 1993. The land contained structures, fencing and water improvements with timber treatment to which an added value of $101,200 was ascribed, leaving a land value unimproved of $13,800 or $812 per hectare. The applied value is $12,800 or $755 per hectare. Again the sale land possesses comparable access and services available to the subject land. In his comparison, Mr Redgen describes the sale land as consisting of 65% (11 hectares) of good quality agricultural soils and the balance 35% (5.99 hectares) of rock and bouldered outcrops, with the advantage of having access to a Waterworks Licence from Four Mile Creek. The sale lands have continued to be used for the purposes for which they were used prior to sale. Mr Best knew of these sales and he understood that a third sale of land situated at Cottonvale had also been relied upon as a basis for value. This sale was apparently of land sold to Sunstar, which Mr Best said is a Swiss-owned company which owned land adjoining the sale land. He described S1 as a very good property with the availability of underground water for which he said a premium would be paid. Similarly, he pointed to the fact that S2 had a Waterworks Licence. Part of the attraction with S1, in his opinion, was the existence at sale of "so much hail netting in place". Notwithstanding the evidence of Mr Best that growers have gone out of orcharding, the sales evidence tends to belie the theory that orcharding has lost entirely its attraction in the marketplace. Further, it seems oblique to argue that the viability of any land for orchard purposes is non-existent when S1 should change hands for $340,000 of which $324,000 is said to be the added value of improvements, etc., on the land for the purpose for which it was used and has continued to be used since sale. In the circumstances, I hold that the sales constitute reasonable evidence of value. I am satisfied that Mr Redgen has put the subject lands in reasonable relativity with the sale lands and that the appeals should be dismissed. -- 4 of 5 -- 5 Accordingly, the appeals are dismissed and the determinations of the Chief Executive are affirmed. PRESIDENT OF THE LAND COURT -- 5 of 5 --