Fegan v Minister for Lands [1992] QLC 355

1 r ' LAND COURT, BRISBANE 18th December, 1992 Re: Determination of Rent - Second Rental Period - Special Lease No 16/44014. Lessee: Edward Pirie Fegan (Hearing at Dalby) DECISION The Grown is seeking an annual rent of $2, 113 per annum for the second period of the abovementioned Special Lease, which commenced on 16th November, 1987. The lessee has requested that this matter be referred to the Land Court for hearing and determination. The rent for the first period of the lease was $700 per annum. The subject Special Lease is in respect of the land described as Lot 4 on Plan AU 197 in the parish of MacDonald, containing an area of about 35,400 hectares. It is situated approximately 32 kilometres north of the town of Chinchilla and access is obtained by means of the bitumen sealed all weather Auburn Road. This Special Lease was granted for a term of 30 years from 16th November, 1977, for grazing purposes. It is subject to the normal conditions attaching to special leases over State Forest. The Crown report describes the land as comprising "... easy undulating to low ridgy inferior forest with some fair intersecting creek flats and predominantly timbered with spotted gum, narrowleaf ironbark, yellowjack, cypress pine, bulloak, wattle, cabbage gum, gum topped box and tea tree." The soils are described as grey and brown sandy and light loamy to grey and red gravelly types. There are permanent waterholes and lagoons in Stockyard Creek with some other creeks lasting well in average seasons. This natural water supply is supplemented by five earth dams in various stages of repair, all unequipped. There is very little timber treatment although the report indicates that an area of 310 hectares has been ringbarked and is in fair order. [1992] QLC 356 -- 1 of 6 -- 2 Mr E.P. Fegan appeared and gave evidence that he considered there should be very little or no increase in the present rent of $700 per annum. He said that he understood the basis of the Crown rental system, but disputed whether any prudent person would be prepared to pay $2.20 per beast for this land and he argued strongly that the present carrying capacity was less than 1,000 head, his estimate being 500 head. Most of Mr Fegan's evidence centred on his assertion that the land could not carry 500 head in an average season. He backed this up by saying that the previous owners could carry no more than · 500 head even though they enjoyed good seasons for most of the 20 years they held the lease. Mr Fegan has provided Statutory Declarations from Mr Robert John Plant, Mr Mick Duff, and Mr Roy Kerswell. Mr Plant is the lessee of the land immediately to the north of the subject land and contract mustered for the previous owners and for Mr Fegan. Mr Plant, who knows the country well, estimates that the carrying capacity of the subject land would be no more than 500 head. He mentions that Mr Fegan originally put 1,000 head of cattle on the lease but suffered serious losses because the country was overstocked. He disagrees strongly with the Crown's estimate of carrying capacity. Mr Mick Duff was the previous lessee of the subject land for nearly 20 years. Mr Duff said that he cannot recall having been able to run more than 500 head on the lease at any time even during the good seasons. Mr Roy Kerswell is the owner of land to the south of the subject land. He worked for the Forestry Department in the area for many years and has a good knowledge of the subject land, as he carried out an assessment of commercial timbers throughout the area. Mr Kerswell gave a good description of the country which he regards as very poor quality grazing land, with only a few permanent water points. He said that the better type country along Stockyard Creek and other creeks is becoming overgrown with undergrowth. He also estimates the carrying capacity of the property to be 500 head. Mr Fegan tendered a copy of the rainfall records from the Barakula Forest Station. He submits that these records show that four out of the last six years were below the yearly average rainfall and that even where the average was exceeded, winter rain was detrimental and affected the cattle badly. -- 2 of 6 -- 3 Mr Fegan said that a lot of the natural waterholes on the property had silted up and that the big lagoon, previously regarded as permanent, had gone dry in recent years. Because of the seasons, he had only had about 300 head of cattle on the property in the last three years. He said that he originally bought the property for drought relief when his home property at Longreach was badly affected by drought. He had then decided to retain the property as a standby block in case of another drought. He conceded that if he was prepared to provide more watering points and to do some timber treatment and, provided that the Forestry Department would agree to him periodically burning the country, he may be able to run more cattle. However, the terms of the lease restricted him from burning the country except as part of the Forestry Management Plan for the area. There was also a difficulty with any further fencing because of brumbies which knocked fences down as fast as they were put up. The country being particularly deficient, it was necessary to put out supplements to keep stock alive. However, Mr Fegan was not able to put out such supplements as he lived at Longreach, and it was not possible for him to manage the property in this way. Mr Fegan said that the regeneration of cypress pine over the last four or five years is affecting the better class of country. The pine regeneration and other undergrowth is getting progressively worse and is affecting the carrying capacity, as the Forestry Department will not allow any control of the spreading cypress pine. Mr Evan Zander, Senior Valuer employed by the Department of Lands, gave evidence for the Crown. Mr Zander said that in 1985 the Lands Department initiated a scheme for renting all Forestry Special Leases for Grazing purposes at a rate per beast, with a notional maximum applicable through districts throughout the State. The Dalby rate was $7 per beast, being based on tenders for Forestry Special Leases, agistment rates throughout the district and other information provided by lessees and landowners. The highest rated block in the Dalby district was Special Lease No 16/40060 and this was determined at a rate of $6 per beast. All other Special Leases were then compared With this property. -- 3 of 6 -- ' ' 4 Mr Zander tendered a schedule of some 38 Special Leases in the Dalby District, showing the rates adopted for rental purposes. This method of assessment was accepted by the Land Court in the case of Special Lease No 16/45556, the rent for which was determined at $550 on 1st June, 1990. This was for an area of 5,430.882 hectares with a carrying capacity of 1 to 22, or 246 head, at a rate per beast of $2.25, after a reduction of 30% as recognition of the problems of being in a State Forest. The Court also determined the rent of Special Lease No 16/41275 with an area of 15,037 hectares and a carrying capacity of 1 to 25, or 601 head, at $1350 on the same date. This rent is also on the basis of $2.25 per beast, after a 20% reduction for the same reason as above. Mr Zander also drew my attention to a Land Court determination in the Mundubberra area for Special Lease No 43588, Lessee R G Webb, containing an area of 3,056.186 hectares which was determined on 11th June, 1992, by my learned colleague, Mr Carter, at $444 per annum, on the basis of a rate of $2.90 per head, for a carrying capacity of 1 beast to 20 hectares or 153 head. This land is considerably superior to the subject. Mr Zander said that the Department had extended the carrying capacities of all the Special Leases in the State Forest area after receiving feedback from the lessees that the Department's carrying capacities were too tight. He originally assessed the carrying capacity of the subject land at 1 beast to 25 hectares, but had extended this subsequently to 1 beast to 35 hectares. Mr Zander had arrived at these revised carrying capacities after speaking to people with knowledge of the area. He mentioned that he got particular assistance from Mr John Plant. Mr Zander said that he had not taken into account the restrictions contained in the conditions to this special lease over Forestry land, because his Departments' Head Office had instructed him not to make such allowance. This instruction was made on the reasoning that the $7 notional maximum per beast was based on Forestry Lease tenders which themselves would take account of the restrictions of the lease. However, Mr Zander expressed the opinion that the $7 maximum would apply to a block without any restrictions and he regarded it as an anomaly in the process. He said that if he had to take the restrictions into account he would -- 4 of 6 -- . ' 5 reduce the rent by 20%. Mr Zander agrees that the country is becoming choked with thick undergrowth and this was one of the reasons that the carrying capacity was extended. He agrees that the country has deteriorated for grazing over a long period of time. Mr Fegan made two other points. The agistment rates he said would be based on the top dollar because any owners of grass would try to make more out of agistment .than they would by running their own stock. He also said that the Forestry Department regarded graziers as a necessary evil to keep the grass down, but did not go out of their way to assist graziers to run their enterprises. They were also forbidden from touching any of the regenerated cypress pine which reduced the carrying capacity of the country. I have considered the evidence submitted in this case and have come to the conclusion that any benefit of the doubt should be given to the lessee. I cannot totally ignore the opinions of people long experienced with the subject land and its capacity to run cattle. However, I have also taken note of the statement by Mr Fegan that the carrying capacity could be increased with the expenditure of more money on water and timber treatment. I have therefore adopted a carrying capacity of 750 head. In doing so I have been mindful that Mr Zander has made all his rental assessments of special leases in this area on the basis of their comparative carrying capacities in a changing environment of poor seasons, increasing undergrowth and failing water supplies. I therefore adopt this carrying capacity for the purpose of this rent assessment only, as the basis for rent assessments is going to change in the near future. I also note with concern what Mr Zander said about the instructions he received from Head Office. It is the valuer's task to form his own conclusions on the evidence before him and to honestly state those opinions when giving evidence under oath, as I believe he has done in this case. Mr Zander said that if the restrictions in the lease had to be taken into account then he would reduce the rent by 20%. The provisions of Section 204(5B)(c) of the Land Act 1962, require those restrictions to be taken into account. However, Mr Zander said this in respect of the rent based on his carrying -- 5 of 6 -- 6 capacity of 1011 head and not, as I have found, 750 head. Therefore, in the interests of maintaining some relativity with the previous decisions of the Court referred to above, I propose to adopt the rate of $2.00 per beast. Accordingly, the rent for Special Lease No 16/44014 for the second period of the lease is determined at the sum of One thousand, five hundred dollars ($1,500) per annum. (J.J. Trickett) Member of the Land Court -- 6 of 6 --