Bilonda Pty Ltd as trustee for the J Farkas Family Trust v Minister for Lands [1995] QLC 76

LAND COURT BRISBANE 8 AUGUST 1995 In the matter of an application for conversion of tenure and the market value of Commercial Timber Special Lease No. 21/32232, Gympie District Lessee: Bilonda Pty Ltd as trustee for the J Farkas Family Trust (Hearing at Gympie) D E C I S I O N This is a reference to the Land Court under section 207 of the Land Act 1962 for the determination of the purchase price of the land contained in Special Lease 21/32232 and the market value of commercial timber on the land. The lessee, Bilonda Pty Ltd as trustee for the J Farkas Family Trust, applied to the Minister on 28 August 1990 for the conversion of the tenure of the Special Lease to freehold. The Minister determined the value of the land at $25,000 and commercial timber at $3,000. The applicant did not accept these figures and, in accordance with the provisions of section 207(3) of the Act, the lessee has requested that this matter be referred to the Land Court for hearing and determination. The lessee says that the land should be valued at $3,500 and that the timber value ought to be nil. In response to the notice to the lessee from the Court Registry advising that the matter of the application for conversion was to be heard in Gympie on 28 July 1995, the lessee replied saying, amongst other things, that the lessee would not be present at the hearing nor would be represented. As this letter did not constitute a withdrawal of the matter, I was obliged to take evidence tendered on behalf of the Crown and consider it in disposing of the matter. Mr Bryan Alwyn Lyons, registered valuer in the employment of the Department of Lands, gave evidence on behalf of the Crown as to the value of the land contained in the Special Lease. Mr Lyons described the land as comprising an area of 47.019 hectares, located approximately 13 kilometres south of the township of Kilkivan. Access is via Rossmore Road and an unnamed road running off Rossmore Road. Access to the block is not good, comprising about 6.5 kilometres of bitumen road, followed by about 5 kilometres of formed gravel, then 1.5 kilometres of earth track which is not all-weather and not accessible by a sedan vehicle. No services are available to the subject land. The subject comprises a regular shaped parcel of moderate to steep high hills of poor stony forest country grassed with wire, spear and kangaroo varieties. There is no natural water supply and none of the land is arable. The land is zoned "Rural" under the Kilkivan Shire Town Plan, applying at the time. [1995] QLC 76 -- 1 of 3 -- 2 Mr Roger James Burgess tendered his valuation of the commercial timber on the land. Mr Burgess valued the commercial timber at $7,242 as at the date of the hearing. In this regard, section 207D.(5) of the Land Act is relevant: " If the Minister refers the matter to the Court, the Court (or, on appeal, the Land Appeal Court) is to determine - (a)the unimproved value of the lease at the day the Minister received the application; and (b)if applicable - the market value of the commercial timber at the day the Court (or, on appeal, the Land Appeal Court) makes its determination of the market value." In his valuation, Mr Burgess valued mill timber, potential mill timber and poles. He deleted from consideration any sleepers or 8 metre poles on the basis of his appreciation of the timber market in the locality. The assessment was made by way of a strip survey and the computed volume was calculated for mill logs from which allowance for duds was taken, and potential mill logs which were adjusted for growth rate and mortality. Poles were calculated on a piece basis. The depot prices at Goomeri Depot were applied and the stumpage rate for hardwood was arrived at after deducting extraction costs. Mr Burgess's approach to valuing the commercial timber accords with the practice frequently accepted by this Court. Mr Lyons's valuation of the subject land was based on his view that the highest and best use of the land, as if it were held in fee simple, is "rural homesite". In his valuation, Mr Lyons referred to three sales ranging in value on an analysed unimproved capital basis from $23,000 to $25,000 and $55,000. Each of these sales was described by Mr Lyons as being superior to the subject and supporting the site value placed on the subject land of $15,000. He said that the type of land contained in the Special Lease is being purchased as rural retreats with special value being placed on privacy, tranquillity and access to nature. In response to a question from me, he said that there was no evidence to suggest that the extraction of the timber referred to in Mr Burgess's valuation would impact on the value of the land as a rural homesite and that he was confident that his price of $15,000 could be achieved. I have considered the evidence from Mr Burgess and Mr Lyons and I determine the unimproved value of the subject land for the purpose of conversion of the tenure to a freeholding tenure in the amount of Fifteen Thousand Dollars ($15,000) and the value of the commercial timber in the amount of Seven Thousand Two Hundred and Forty-two Dollars ($7,242). -- 2 of 3 -- 3 RP SCOTT MEMBER OF THE LAND COURT -- 3 of 3 --