Chambers & Anor v Minister for Land [1991] QLC 238

. ,. .. . .... ,.. Ir, ..'! '· ... -· Id > -··. ,\ -~f. '· ... , ' Re: In the matter of the determination of (1) the unimproved value of the land comprised in, and (2) the market value of the commercial timber, the property of the Crown, on Grazing Homestead Perpetual Lease No 36/8002, Roma District, for the purpose of conversion of the tenure of the selection to a freeholding tenure. Lessees: C.A. and R.J. Chambers DECISION (Hearing at Roma) LAND COURT, BRISBANE 19th June, 1991 On 8th November, 1987, Charles Albert and Ross Jon Chambers made application to the Honourable the Minister to convert the tenure of Grazing Homestead Perpetual Lease No 36/8002, Roma District, to freeholding tenure. For such purpose the Crown contends to a value of $4.50 per hectare. The land is described as Lot 5 on Plan KE 65, parish of Womel, containing 17,985.039 hectares. It is situated about 27 kilometres southerly of the railhead at Mungallala and about 73 kilometres south-westerly of Mitchell. It is used for the grazing of sheep. There are two matters to be determined in this case and I propose firstly to deal with the market value of the commercial timber, the property of the Crown, on the lease. The Crown contends to a value of $22,649 while the lessees submit that there is no commercial timber upon the land. Mr Ross J. Chambers gave evidence. He says that he arranged for a Mr A.W. Wehl, the manager of a cypress sawmill at Mungallala for N.K. Collins Industries, to value the timber. Mr Chambers says that a day was spent on this inspection and in the result he obtained a written report from Mr Wehl which he tenders. It reads: [1991] QLC 238 -- 1 of 6 -- II 2 With reference to Cypress Pine on GHPL 36/8002, "Eversfield" Mungallala, I have inspected the pine in this area today for the fourth time. The greatest volume is growing along the Dulbydilla Creek. In the past twenty years I have purchased pine from properties either side of the abovementioned portion, namely "Wodonga" and "Albury" and the quality of the pine in close proximity to the creek has always been influenced in the form of yellow doze. Pine away from the creek on "Eversfield", except for one patch of large trees show a high proportion of defects, such as breeched trees and broken tops. The necessity for excessive road construction to make the pine accessible is also a consideration. Owing to the abovementioned defects reducing the average stem volume and the inaccessibility of the area, this company's best offer would be $6,000 all available. " Mr Chambers in his evidence says that in his opinion there is no merchantable timber and he could not find enough timber to build a hay shed which would hold 10,000 bales of hay. As to the quantity of timber estimated by the Department, he does not believe that there is this quantity of timber. Evidence was given by Mr David Jermyn who is employed as a forester with the Queensland Forest Service and has been so employed since 1964. He said that in this case, following instructions to value the timber, accompanied by an overseer he inspected the whole property and located information on previous sales of timber from the property and formed the conclusion that there was sufficient timber in certain areas to warrant further investigations. At first he was a little doubtful concerning the quality of the cypress pine and five trees which looked doubtful were felled. He formed the conclusion that the trees were of much better quality than appeared from the outside. In the result a 5 percent sample of the area using the stripping method was undertaken. Details of the useful trees were recorded and the useless trees not recorded. A map which he tenders only shows the area of loggable cypress. He says there is an extensive area of cypress on the property which was not included as there was not enough timber in there to warrant commercial logging. A team of men undertook this count of trees in the period from 13th April to 20th April, 1988. -- 2 of 6 -- 3 On 4th April, 1989, he says that a Mr J. McBean, a senior marketing officer of the Queensland Forest Service, inspected the trees and recorded that he was satisfied that the amount of timber assessed was actually on the ground. There have been further inspections since then including a recent visit to ensure that timber had not been lost by some form of catastrophe since the count was done. He gives detailed evidence as to how the accounts and volume of millabl~__· · timber is ascertained. Mr Jermyn expresses the opinion that the sawmilling industry at the present time is somewhat depressed and that mills are not working to capacity in the area but two or three years ago the sawmillers here were looking for every stick of timber they could get and they were all working towards capacity. He is satisfied that in the foreseeable future timber could be sold for a substantially higher price than the $6,000 suggested by Mr Wehl. I am satisfied that the more cogent evidence as to the quantity of · millable timber on this parcel of land comes from the Departmental evidence. It is the evidence of Mr Chambers that there is no millable cypress pine but I have the evidence of Mr Jermyn of the investigations which have been carried out to assess the quality of the timber and his evidence of the method of calculating the quantity of millable timber. I note also the period of time taken in such investigations and accounting. I would require evidence in the strongest terms to satisfy me that these officers would be party to conduct which would result in a lessee paying for something which had no value. The statement from Mr Wehl is of no real value as evidence in the matter as he was not present in the Court to give evidence as to how he has arrived at his quantities of timber or the price which he suggests. What has to be ascertained is the value of the timber on the open market and while there may not be an immediate demand for the timber at the present time, there _is no justification for allowing a profit or risk allowance for a slow selling period because the timber, the property of the Crown, is sold on an extended ten year interest free term. Accordingly I will determine the timber valuation at the figure contended for -- 3 of 6 -- 4 by the Crown. I turn now to the question of the value of the land. Mr Chambers says that he cannot give me any figure at all. He says that he has had the property on the market from late 1988 after it had been inspected for conversion purposes at about $25 per hectare on a walk-in/walk-out basis to include stock and plant but although some ten inspections have been done, he has not received an offer. As__· to carrying capacity he believes that the Crown estimate is too high at a sheep to 2.8 hectares (6423 sheep). He says he cannot run 4,500 sheep so that they produce economically and if he carries over this number, the wool clip drops but with 4,500 sheep he can get a greater wool clip and breed about 50 percent of lambs from the ewes. He says that some land which was good box country is overrun with currant bush, fuschia and boronia and the mulga country has regrown so that no grass can grow in the area which makes a permanent job pushing mulga ~ to feed stock. Waters are insufficient and the old natural water holes are all silted up. He makes mention of pimelea and having lost cattle as a consequence of the existence of pimelea but he acknowledges that this problem has become more serious in the years since he applied for conversion of the land to freehold. Mr Chambers makes reference to the valuation of the Valuer-General which apparently was $38,650 as at 31st March, 1984. No further revaluation was done until the valuation as at 31st March, 1988, which, after the allowing of objection, was determined by the Valuer-General at $79,000 ($4.40 per hectare). He was asked to comment on the sales which have been used as a basis of valuation. He prefers to "Passchendle" which is known to him as it was part of his family's aggregation. He says it was over capitalised, a small area of 2953 hectares and the purchasers were imprudent in the price they paid. ''Fairview" would be the one that comes closest to the subject land but, he says, it sold at the height of the wool boom in July, 1987. -- 4 of 6 -- 5 Evidence for the Crown was given by Land Inspector Mr M.D. Redgen who has carried out the valuation of the subject land and has analysed certain sales to arrive at the unimproved value of the subject land. He says that historically the carrying capacity of this particular land has been rated as a sheep to 2.6 hectares but it is his opinion that the land has deteriorated in recent times and he has now estimated the carrying capacity as a sheep to 3.2 hectares (5,643 sheep). He say~_ that "Kerry" sold on 11th May, 1988, for $192,610. It has a carrying capacity of a sheep to three hectares and an area of 7,086.046 hectares. The sale analysed to an unimproved land value of $4.12 per hectare which he considers was low and says he is supported in his opinion because it was immediately freeholded as at 6th October, 1988, when the purchaser paid $4.76 per hectare for the freeholding in addition, of course, to what he had paid in May 1988 for the leasehold of the land. He relied mainly on the sales of "Fairview" and "Wotamolla" to arrive at his value of · the subject land at $4.50 per hectare. He agrees with Mr Chambers that the period in which the sales occurred were in a period of wool boom when purchasers would have had in mind running sheep for wool growing rather than running cattle. This would mean that pimelea would not be the significant problem as that plant does not affect sheep in the same way as it affects cattle with St. George's disease. Counsel for the Crown in his address makes mention of the valuation of the Valuer-General as at 31st March, 1988. This is in close proximity to the relevant date for conversion of this lease and no doubt the Valuer-General would have been considering the same sales that have been considered by Mr Redgen, including "Fairview", which occurred in July 1987, only some nine months prior to his relevant date. On the evidence before me I find that Mr Redgen has adopted proper valuation principles in his task of arriving at an unimproved value for the subject land. The best evidence is to look to sales at or about that time and the sale of "Fairview" fully supports the value for which he contends. He also derives support -- 5 of 6 -- .... 6 from his supporting sale of "Kerry" where the purchaser had on the analysis paid $4. 12 per hectare for the leasehold land and almost immediately was prepared to pay $4. 75 per hectare to freehold the land. As to carrying capacity I note that Mr Redgen has assessed the land as wool growing country only and not breeding and wool growing as it is being used by the lessees. The sales fully support the valuation contended for and there is no basis upon which this Court could vary that value. For the purpose of conversion of the tenure of Grazing Homestead Perpetual Lease No 36/8002, Roma District, to freeholding tenure, the unimproved value of the land comprised in the lease is determined at Four dollars and fifty cents ($4.50) per hectare and the market value of the commercial timber, the property of the Crown on the selection, is determined at Twenty-two thousand, six hundred and forty-nine dollars ($22,649). (D.J. Barry) President of the Land Court -- 6 of 6 --