Callcott v Chief Executive, Department of Lands [1995] QLC 39

LAND COURT BRISBANE 26 May 1995 Re: Appeal against a rental valuation - Dalrymple Shire Council. AV94-10. AJ, ND and EJV Callcott v. Chief Executive, Department of Lands D E C I S I O N (Hearing at Charters Towers) This appeal is against the determination of the Chief Executive, Department of Lands, which (who?) applied a rental value of $390,000 to Grazing Homestead Perpetual Lease No 11/770, Lot 4 on Plan PP24, parish of Ellen, containing an area of 23100 hectares. The sum determined is the most recently made valuation (31 March 1992) for the rental period which commenced on 1 July 1993. The appellants contend that the valuation should be $254,100 on grounds that the determined value is not relative to neighbouring property. Under s.15 of the Valuation of Land Act 1944, it is provided that the value to be used to determine rent "is the unimproved value under this Act". The subject property which is known as "Ellenvale" is situated about 187 kms north-west of Charters Towers with access by about 72 kms of bitumen road and the balance by formed earth and gravel road. In the report and valuation written by Mr M McDougall, registered valuer in the employ of the Department of Lands, the property is described as comprising - About 6800 ha (29%) grey to red sandy forest country timbered with narrow leaf ironbark, ghost gum, poplar gum and bloodwood, with areas of box. About 16,300 ha (71%) gently undulating red basalt tableland, timbered with ironbark and bloodwood. This is broken by stony basalt ridges and areas of good blacksoil plain. The Basalt River which appears to have its source in the subject property and in part forms the southern boundary, provides non-permanent supplies of water and there is one permanent spring. Artificial water supplies comprise 10 bores and one well. The river went dry in [1995] QLC 39 -- 1 of 4 -- 2 1994 for the first time in 25 years. The property is used for breeding and fattening beef cattle and is given a carrying capacity by Mr McDougall of about 1800 head (with 1 beast to 13 ha) of dry adult cattle in average seasons. Mr AJ Callcott who appeared on behalf of the lessees would assess the carrying capacity at about 2100 head of mixed cattle and agrees that about 1800 head of dry adult cattle would be a reasonable assessment. He agrees with the description of the country emphasising that the sandy type country in the south-western part of the block is not well-watered and lacks underground water. This part of the block responds quickly to rainfall but, on the other hand, falls off quickly in drier times. The lot suffers cold winters and, in common with other elevated basalt properties, supplementary feeding is necessary from July to October when the first storms are expected. Despite an underlying feeling that basalt country is over-rated in the eyes of purchasers, Mr Callcott accepts the only reasonable method of ascertaining value is through a consideration of sales and comparable properties. This method is indeed the one required by law. Under the Valuation of Land Act, unimproved value in relation to improved land is defined as the capital sum which the fee simple of the land might be expected to realise 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 purposes of this Act, the improvements did not exist. In Toohey's Ltd v. The Valuer-General (1925) A.C. 439 P.C., Lord Dunedin at page 433 in discussing "unimproved value" said:- "Now, what he (the valuer) has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made. Words could scarcely be clearer to show that the improvements were to be left entirely out of view. They are to be taken not only as non-existent, but as if they never had existed.... What the Act requires is really quite simple. Here is a plot of land; assume that there is nothing on it in the way of improvement, what would it fetch in the market? It will be observed that the value is not what has been sometimes designated by the expression 'prairie value'. The land must be taken as it exists at the date of valuation." Holdings referred to in the evidence and in the neighbourhood of "Ellenvale" include "Cargoon" on the south and "Junction Creek" on the north. "Cargoon" comprises one of three sales put in evidence by Mr McDougall, the others being sales of "Greenvale" and "Mt Oweenee" holdings. These two properties are situated to the north-east of "Ellenvale" and comprise forest country with a fair percentage (about 20%) of inaccessible range. They are both inferior to basalt country and are suitable for -- 2 of 4 -- 3 breeding purposes only. "Cargoon" which comprises 56,600 hectares sold in December 1992 for $1,540,000. The analysis of the sale by the Department reflected an unimproved land value of $504,000 or about $8.90 per hectare. The value applied to the land by the Department is $490,000 or $8.15 per hectare. "Cargoon" comprises basalt and forest country in these percentages which are taken from the report of Mr McDougall: 18500 ha (33%) good red and black basalt forest timbered with narrowleaf ironbark, box, Mt Coolibah and ghost gum. 12500 ha (22%) fair granite forest country timbered with narrowleaf ironbark, box and bloodwood, and 25600 ha (45%) poor forest ridges timbered with broad and silver leaf ironbark, bloodwood, box, wattle and yellowjack. The property is assessed as carrying 3537 head (dry cattle) in an average season or 1 beast to 16 hectares. Mr Callcott would value "Ellenvale" at $11/hectare when compared with "Cargoon" by putting the comparable components of country side by side - Basalt 18,500 17,100(subject) Schist 12,500 6,000 (subject) Poorer type 25,000 NIL Insofar as the first two components of country are concerned, Mr Callcott sees the properties as both comparable in country and in water. They are in the same locality and they have comparable access. The comparison however becomes difficult when the effect of the poorer type country on "Cargoon" is brought into consideration. "Mt Oweenee", for example, which is breeding country with about 20% of steep and inaccessible range, reflected on sale in April 1993 a land value overall of $7.10/ha. "Greenvale" which sold in June 1989 and again in May 1990, reflected land values of $13.90/ha and $12.80/ha. It is also a breeding block. There is no dispute that basalt country is considerably superior to this type of forest country. "Junction Creek" which comprises a mixture of red and black basalt country with sandy country is, in the opinion of Mr McDougall, slightly superior to "Ellenvale", notwithstanding that in his opinion it possesses more inferior country than does "Ellenvale" - the advantage being in the mix of basalt country. That property is valued at $7.50/ha and is given a similar carrying capacity of 1 beast to 13 hectares. It is more comparable with the subject land than "Cargoon" and the applied value, in my opinion of the evidence, blends nicely with the sales evidence of the forest breeding blocks and evidence I heard of the superiority of basalt country to this type of breeding country. There is no dispute that "Ellenvale" is inferior to "Junction Creek" but not by much, the evidence would suggest. On my -- 3 of 4 -- 4 consideration of it, I have concluded that the applied value reflects a reasonable depreciation of the market available at the relevant date. In the circumstances, the appeal is dismissed and the determination of the Chief Executive is affirmed. President of the Land Court -- 4 of 4 --