Burtenshaw v Minister for Lands [1993] QLC 150

Re: Determination of Rent - Second Rental Period LAND COURT BRISBANE 26TH NOVEMBER, 1993. Special Lease No. 26/49997 - Lessees: Garry Frederick Burtenshaw and Rosemary Anne Burtenshaw (Hearing at lnnisfail) DE C"I SI ON For the second period of the lease of Special Lease No. 26/49997 the Crown is asking a rent of $570 per annum. The lessees have requested that this matter be referred to the Land Court for hearing and determination and have advised that their estimate of the rent that should be charged is $200 per annum. The rent for the first rental period was $210 per annum. Special Lease No. 26/49997 is in respect of the land described as Lot 297 on Plan NR 5437, Parish of Mourilyan, containing an area of 47.592 hectares. This Special Lease was granted for a term of 30 years from 1st January, 1988 for primary industry (sugarcane growing) purposes. It is situated about 10 kilometres north of Silkwood and about 29 kilometres south of lnnisfail. It is about 5 kilometres east of the nearest rail head at Warrabullen Siding and about 21 kilometres south of the Mourilyan Sugar Mill. Access is by means of a bitumen road except for about 2 kilometres of formed earth and gravel road and 1 kilometre of earth and gravel track which is difficult to negotiate in the wet season. According to the Departmental report tendered on behalf of the Crown, the land comprises about 33.5 hectares of moderately to steeply sloping scrub and [1993] QLC 150 -- 1 of 7 -- 2 bloodwood and wattle forest in the east, and about 14.092 hectares of low-lying to gently sloping scrub in the west. The property has limited views of the countryside to the south and west. Soil types comprise grey brown loams and clay loams and brown gravelly loams. About 14 hectares is considered to be suitable for cane production and approximately the same area is assigned to the Mourilyan Sugar Mill. The balance area of 33.5 hectares is considered to be of use for limited marginal grazing. It is worked with adjoining land. Mrs R A Burtenshaw tendered a written statement and gave evidence. She said that only about 20 acres (8 hectares) of the land is used for cane growing. The balance is made up of swamp, headlands, drains, gullies and hilly scrub country. Although there is dedicated access to the subject land, actual access is through adjoining land and across cane farm headlands, which becomes impassable in wet weather. Much of Mrs Burtenshaw's evidence was directed towards the cost of providing all-weather access and other services to the subject land. She said that she had provided this information on the basis, mistakenly as it turns out, that the Crown had valued the land as a rural residential site. I will not review this evidence as it is not relevant as the subject land has been valued as primary production land. Mrs Burtenshaw referred to one sale from Stanford to Halbriener of Special Lease No. 26/52738 comprising an area of 39.6592 hectares. This property sold on 31st May, 1989 for $10,000. Mrs Burtenshaw said that this land was similar to some of the subject land and is a fairer indication of the real value of leasehold land in the area. -- 2 of 7 -- 3 Mrs Burtenshaw said that the cane land is heavy clay land producing about one unit below the mill c.c.s. When the lessees bought the subject land in 1989 it was producing 14 tonnes per acre of cane and since they have built up the soil it is now producing closer to 30 tonnes per acre. They have spent a lot of money on drainage and feel that they cannot grow cane on any more than 8 hectares of the land and even on that area some of the cane rots when there is a wet season. The bottom part of the property is below the level of Liverpool Creek and in wet seasons the majority of the 8 hectares floods and unless the water gets away quickly, .it will wipe out the cane. About 4 hectares of the cane land is flat and the other 4 hectares is hilly, which makes it very difficult to work with wheeled machinery. Mrs Burtenshaw said they can only use about 10 to 15 acres (4 to 6 hectares) of the lower parts of the balance area, as the higher areas are too steep, not well grassed and infested with lantana. She said that the lessees did not use it for grazing all year round, but only on occasions. Mrs Burtenshaw knew the land comprised in the Crown's sale No. 1. She said that it is more open land, higher and of better quality, with no swamp, a far superior piece of land which has better access and is watered by a good bore. Apart from the fact that it has better access, Mrs Burtenshaw did not know much about sale No. 2. Mr G F Burtenshaw also gave evidence. He said that sale No. 1 has potential for running cattle and growing bananas, has a permanent creek and once was assigned cane land. He considered it to be much superior to the subject land. He also knows sale No . 2 to be better and more fertile country and thinks part of it -- 3 of 7 -- 4 is assigned cane land. On the whole he considers it to be superior country. Mr S A Cross, registered valuer employed by the Department of Lands, gave evidence on behalf of the Crown. Mr Cross said that he arrived at the recommended rent by adopting 3 per cent of the unimproved value which he assessed at $19,000. In arriving at this valuation, Mr Cross referred to the sales of two properties in the immediate vicinity of the subject land. Sale No. 1 has an area of 71.12 hectares, zoned "Rural B", which sold in September 1992 for $170,000 or $2,390 per hectare. This sale analysed to show an unimproved value of $34,500 or $485 per hectare. Mr Cross classifies this sale as comprising 25 hectares at $1,000 per hectare and 46.12 hectares at $200 per hectare. This property is situated about 27 kilometres south of lnnisfail with access by means of formed earth and gravel road. Services are similar to those available to the subject land. The land consists of level to moderately sloping coastal scrub country intersected by gullies, with a section of arable country in the south-western corner of the property. Mr Cross said that the sale has a higher percentage of arable land (35 per cent) than the subject property and is larger, with similar access and services. Therefore, he considers it superior to the subject land. Mr Cross's sale No. 2 is situated in Edgerton Road, about 25 kilometres south of lnnisfail, and has an area of 23.2694 hectares. It is zoned "Rural" and sold in April 1992 for $80,000 or $3,438 per hectare. This sale analysed to show an unimproved value of $25,000 or $1,075 per hectare. Mr Cross classifies this sale as 16 hectares at $1,200 per hectare and 8 hectares at $400 per hectare. Access to the sale land is principally by means of a formed gravel road with a short -- 4 of 7 -- 5 distance of earth track. Services are similar to those available to the subject property. This land comprises fairly level to moderately sloping rainforest country adjoining Little Moresby Creek, with soils varying from low-lying brown grey clays to easier brown clay loams, rising to sections of red brown schists, with some stone. Mr Cross said that the sale property has a higher percentage of better-class arable land (16 hectares or 70 per cent), it is similar in access and services, but it is smaller than the subject land. Overall he considers it to be marginally superior. Mr Cross said that he rejected the sale of Special Lease No. 26/52738 adjacent to the subject land, even though it is similar to part of that land. He said that the sale of a Special Lease tenure is of no assistance to him in arriving at the unimproved value of the subject land for this purpose, as it must be made on the basis of the land being held in fee simple. He said that he had adopted 3 per cent of the unimproved value in the absence of evidence of market rentals in the area. In arriving at his unimproved value of $19,000, Mr Cross has valued the subject property as follows: 13.5 hectares of third-class cane land at $800 per hectare 34.092 hectares moderate to steep grazing at $250 per hectare Adopt $19,000. $10,800 $8,522 $19,322 - - --- - --- - Mr Cross adopted these levels of value by reference to the two sale properties. He said that he obtained the area of cane land by measuring from the aerial photograph the area that had been cultivated. However, I have the sworn evidence from Mr and Mrs Burtenshaw that they can use only 20 acres or 8 -- 5 of 7 -- 6 hectares of the subject land for growing cane and even some of that is marginal at best. They say that while 1O acres or 4 hectares is flat country, it is so low lying and boggy that cane is lost on occasions. The other 4 hectares is higher, but is sloping and this makes it difficult to use machinery. Even though about 14 hectares of the subject land is assigned land, I think this is an occasion when the land which cannot be used as cane land should be valued as grazing only. I think that Mr Cross has valued the land correctly as third-class cane land and his assessment at $800 per hectare seems appropriate, However, the Burtenshaws say that they can only use a very limited area of the grazing land as the slope is too steep and the land is infested with lantana. They have lost stock from eating this lantana. On the other hand, Mr Cross said that the land is usable in his opinion, and he has had the advantage of seeing all the grazing land in the shire and should be in a position to judge the district practice for working such areas. Therefore, after weighing the respective arguments, I have adjusted Mr Cross's valuation as follows: 8 hectares, third-class cane land at $800 per hectare 39.592 hectares, moderate to steep grazing at $250 per hectare Adopt $16,000. $6,400 $9,898 $16,298 ----- ----- In the circumstances, as neither party was able to produce evidence of market rents in the area, I propose to adopt 3 per cent of the unimproved value to arrive at the rent. This method has been approved by this Court as appropriate in -- 6 of 7 -- 7 certain circumstances. Therefore, the rent for Special Lease No. 26/49997 lnnisfail District for the second period of the term of the lease is determined at $480 per annum. J J TRICKETT MEMBER OF THE LAND COURT -- 7 of 7 --