Burke v Minister for Lands [1994] QLC 26

LAND COURT BRISBANE 9TH JUNE 1994 Re: Determination of Unimproved Value for purposes of conversion of tenure Special Lease No. 16/34043, Dalby District Lessee: Michael Burke (Hearing at Dalby) D E C I S I O N On 9th October, 1990, the Minister for Lands received an application from the lessee for the conversion of tenure of Special Lease No. 16/34043 under Section 207 of the Land Act 1962, and this date becomes the relevant date as at which the unimproved value is required to be determined. The Minister determined the unimproved value at $15,000 and under the provisions of Section 207, Mr Burke requested that the matter be referred to the Land Court for hearing and determination. Special Lease No. 16/34043, Dalby District, is in respect of the land described as Lot 34 on Plan LY916, Parish of Earle, containing an area of 28.531 hectares. It is situated approximately 2.4 kilometres south-east of the town of Brigalow and approximately 23 kilometres south-east of Chinchilla. Access is by means of 1 kilometre of the bitumen sealed Warrego Highway and approximately 1.4 kilometres of formed gravel road. The property originally comprised mixed brigalow, belah, and wilga scrub with some melonholes, merging to poplar box and myall forest. The whole area has been developed. It is watered by a dam of approximately 1,400 cubic metres and is used for the grazing of dairy cattle. The applicant, Mr Michael Burke, appeared and gave evidence. He is of the opinion that the unimproved value for conversion purposes should be $7,000 or approximately $100 per acre because of the clay content and melonholes. He said that this special lease is part of a 930 acre dairying enterprise and that it is his intention to continue to use it for dairying purposes. He recently received a rate notice [1994] QLC 26 -- 1 of 4 -- 2 showing that 556 acres of his land, which includes the subject land, is valued at $58,000 or $104 per acre. This is his basis for saying it should be valued at $100 per acre. Mr Burke considers that the land should be regarded as rural and that it is incorrect for the Crown to regard it as rural residential. It is incorporated into a dairy farming enterprise and has been used as rural land only, and will continue to be so. He thinks that the Crown valuation of approximately $214 per acre would be appropriate for high quality pastoral land. However, because of the inferior quality of the soil and clay on the subject land, it is unsuitable for cultivation. In addition, it has large melonholes and is subject to regrowth which makes control difficult. Mr Burke went on to say that he had improved the land with fencing to the value of about $1,500 and, because of regrowth, has cleared the land twice at a cost of approximately $4,200. In addition, he had built a dam costing approximately $1,500, bringing the total cost of improvements to $7,200. He contends that the money he has spent on improvements should be taken into account when determining its unimproved value for conversion purposes. He said that he does not want to be paying again for what he has already done. In addition, he said, the proposed Kogan Creek Coal Mine has plans to use the road adjoining the subject land as a haul-out road. He feels this will devalue any land adjoining it. Unfortunately, Mr Burke was unable to provide any evidence of sales of any comparable land. Evidence for the Crown was given by Mr S L Hoadley, registered valuer employed by the Department of Lands. Mr Hoadley tendered a report and valuation which stated that he considered the highest and best use of the subject land to be as a rural residential site. He went on to state that he had no directly comparable sales evidence on which to base the valuation. However, regard was had to the sales of rural residential sites approximately 40 hectares in area, in the Daandine-Kumbarilla area. These sales show analysed -- 2 of 4 -- 3 unimproved values of between $15,900 and $22,500 for sites fronting the Moonie Highway and between $19,700 and $23,500 for sites situated off the highway. These sites in the main comprise sandy, poor to inferior forest country, while the subject land has mixed forest and scrub country of much superior quality. Mr Hoadley also had regard to three sales on the outskirts of Chinchilla, which showed him a range of values for rural residential sites in that area. The most comparable of these is an area of 43.74 hectares situated on Charleys Creek, approximately 12 kilometres north-east of Chinchilla on a formed gravel road. This property sold in August 1990 for $36,000 and Mr Hoadley analysed the sale to show an unimproved value of $29,400. The other two sales are just over 2 hectares in area and are situated closer to Chinchilla. These properties sold in april 1990 and October 1990 for $21,000 and $23,000 respectively. Having regard to the gravel road frontage, the situation of the subject land and its quality of country, Mr Hoadley arrived at an unimproved value of $15,000. In response to Mr Burke's arguments, Mr Hoadley said that he was required to value the land as if it was on the open market, as if it was unimproved, on the basis of its highest and best use, regardless of its present use and the intentions of the lessee. He was convinced that its highest and best use is as a rural homesite and as such it would, if unimproved, sell for $15,000. In response to Mr Burke's argument in relation to his rating valuation, Mr Hoadley explained that he had valued the subject land together with Lot 147 on Plan LY954 and Portion 21V and 148, Parish of Earle, a total area of 222.4 hectares, at $260 per hectare as at 31st March, 1992, for the purposes of the Valuation of Land Act 1944. As this land was used for the purposes of farming, it was required to be valued for farming purposes and any potential for any higher use to be excluded under the provisions of Section 11(9) of that Act. However, under Section 207 of the Land Act he was not so constrained. He was required to value the land at its highest and best use which he considered to be as a rural residential site. I have carefully considered the evidence in this matter and have come to the -- 3 of 4 -- 4 conclusion that the unimproved value of $15,000 adopted by Mr Hoadley is fair and reasonable. Accordingly, the unimproved value for the purposes of conversion of tenure of Special Lease No. 16/34043, Dalby District, is determined at $15,000. J J TRICKETT MEMBER OF THE LAND COURT -- 4 of 4 --