Cowan & Anor v The Valuer-General [1991] QLC 247

· f f '. -·: _. {,it lf' j :-- --;;l Re: An appC!al agamsi a -determinatiot(of the Valuer-General, Shire of Banana - A V90-590. G.C., MJ., & AJ. Cowan v. The Valuer::General (Hearing at BiloeJa) DECISION lAND COURT, BRISBANE. 24th May, '.1991'; As at 31st March, 1989, the Valuer-General has assessed the unimproved value of a farming and grazing aggregation at Jambin, about 32 km north of Biloela, in the sum of $137,000. The land comprises two sections, being Lots 23-24 on PM19, Parish of Greycliffe, County of Pelham, Lots 118 and 121 on RN344, Parish of Earlsfield, County of Raglan, northerly of Melcers Road through to Jordisons Lane, then Lots 123-124 on RN337, Parish of Earlsfield, County of Raglan, southerly of Melcers Road off Cowans Lane. The total area of the aggregation is 726 hectares. It is used with other land, in differing ownership, as a family aggregation for dry land grain cropping, in conjunction with cattle breeding and fattening. The appellants contend for a valuation of $104,000. The basis of this estimate is to add the annual Consumer Price Index increase to the previous valuation. The grounds of the appeal as set out in the Notice are:-· ( 1) There have been no recent sales of similar land in the district to provide a basis for any alteration to valuations. (2) Profitability for industries in which the property is engaged is diminishing, as is productivity. (3) The discrepancy in valuation per hectare between this and other district properties, when allowance is made for productivity. [1991] QLC 247 -- 1 of 7 -- ,, 2 ( 4) A significant part of the property is flood prone yet has no irrigation water and no available water allocation. (5) The property valuation increased far more than the district and Shire average. (6) The property was not inspected by the Valuer. Mr G. Cowan attended the bearing and gave verbal evidence in support of the appeal. It is bis contention that differing levels of value apply to the various district localities and that the subject lands are located within a locality with specific characteristics affecting a limited number of properties. Much of the subject land lies on a flood plain and Mr Cowan says that the Jambin locality has a well recognised regular flood disability. The Callide Dam has mitigated the effect of some flood rains but only when the dam level prior to such rains is low. The property has no irrigation water and no available water allocation. When the property is inundated, severe damage results to fencing, water improvements and pastures and subsequent loss is caused by weed infestation. Mr Cowan says that there is no correlation between the diminishing productivity potential and returns from the property as compared with the rapidly escalating values applied in recent times by the Valuer-General. He is aware of lower pro-rata valuations applied to other district properties to which specific references were made and which, in his opinion, have higher productivity potential. Mr Cowan is unaware of any sales of land within the Jambin district with the disabilities of the subject and he fails to see firstly, how an increase in excess of the inflation rate can be justified, but secondly, why the subject valuation bas increased at a greater rate than the district or Shire average. ·He said that the property had not been inspected by any officer of the Valuer-General's Department in connection with the Annual Valuation appealed against, although an inspection had been carried out as a result of the appeal, for this hearing. -- 2 of 7 -- 3 Evidence for the Valuer-General was provided by Mr D.P. Jones, AAIV, the registered valuer who was responsible for the valuation appealed against. He explained that for the 31st March, 1989, relevant date annual valuation, the previously recorded description and classification of country comprising the subject lands, had been adopted. For the purpose of the Court hearing he had specifically inspected the property and had formed the opinion that an amendment to the classification of the land types was warranted. This had resulted in a lesser area being found in the arable forest classification and a corresponding increase in the forest grazing classification. While a relatively insignificant overall reduction would result on the individual values applied to those classifications, a rounded valuation of $190 per hectare had been applied before and after the amendment. Mr Jones' evidence was that in the annual period prior to the relevant date of the valuation, there were 56 recorded sales of rural properties in the Callide Valley and a further 23 sales in the Dawson Valley. The sales evidence indicated that in those localities where a 20% reduction in water allocation to irrigated farms had occurred, fewer sales had taken place and values had remained static. However in the northern part of the Shire where there had been no water allocation reduction, sales had indicated a 25% increase in the value of irrigated farmland. A similar 25% increase had been indicated in the value of non-irrigated farmland. Across the Shire a broad increase of 50% had been indicated in the value of grazing lands. With the subject land having a mixed grazing and dry farming classification, a 40% increase in valuation had resulted and this was higher than that resulting in the Jam.bin statistical district. Here an increase of 30% had resulted from the higher proportion of either irrigated or dry farming lands, as opposed to the grazing land. The varying increases in the urban lands in the Shire affected the overall increase. -- 3 of 7 -- 4 In the subject valuation consideration had been given to four sales of rural properties of varying country type, scattered throughout the district, none in the immediate locality of the subject property. The full details of these sales are contained within Mr Jones' report. Broadly the sales evidence is as follows:- (1) A 382.8 hectare grazing block of melanholey brigalow, blackbutt and yapunya red to black soil scrub grazing, breeding and fattening block with inferior access, similar potential as the forest grazing component of the subject, but inferior overall land quality, with inferior water, sold in May 1988 to show an analysed unimproved value of $177 per hectare. A valuation of $157.50 per hectare had been applied to this sale property. (2) A flood prone 478.3 hectare irrigated lucerne and grazing property with 179 hectares of alluvial forest cultivation with scrub fringe, balance blue gum coolibah and poplar box flooded grazing, 2 irrigation bores, 1 well and Don River holes - 610 megalitre allocation sold in October 1988 to show an analysed unimproved value of $274 per hectare with an application of $257.50 per hectare, on a classification basis of $490 per hectare for the irrigated arable forest, $260 per hectare for dry arable forest and $150 per hectare for the forest grazing. The sale property is described as being superior overall to the subject property due to the irrigation usage and better water, but has an inferior grazing component and a greater flood disability. (3) A 187.4 hectare property used for dryland framing, breeding and fattening, with superior access, superior arable scrub, similar scrub grazing but superior to the forest grazing of the subject property, inferior underground water and no creek holes but access to a water scheme, sold in May 1988 to show an analysed unimproved value of $351 per hectare with an applied value of $345 per hectare overall. This reflected $490 per hectare for the first quality arable scrub, $400 per hectare for second quality arable scrub and $230 per hectare for the scrub grazing. The sale property is described as being overall superior to the subject property, being all scrub. It is flood free, although cut by gullies and is much smaller in area. (4) A 1933 hectare cattle breeding property with limited farming potential, superior access to Gracemere saleyards but a greater distance from the nearest main centre than the subject property, vastly inferior forest grazing, with a much smaller proportion but similar quality arable scrub component, sold in December 1988 to show an analysed unimproved value of $76 per hectare with an application of $69 per hectare. This reflected classification values of $330 per hectare for dry arable scrub,$110 per hectare for bastard scrub grazing and $47.50 per hectare for forest grazing with carrying capacity of 1 beast to 6.5 hectares. The sale property is described as being much larger in size and much inferior in overall quality and potential to the subject property. -- 4 of 7 -- 5 Mr Jones describes the subject property as having 2 km of formed gravel road access off the Burnett Highway restricted by Callide and Neville Creeks in wet weather: His description of the nature of the country and water is as follows:- " The country consists of brigalow, blackbutt red to brown loam soils in Lots 23-24 to the north-west becoming stonier on the yapunya hill slopes and heavier on the bauhinia influence flats towards Skull Creek where 50 hectares are considered as stock cultivation. < The brigalow scrub black soil alluvial flats run along the western side of Skull Creek into Lots 118 and 121 with 36 hectares of good scrub cultivation running through to Melcers Road. To the east of Skull Creek the country changes into coolibah black clay loam alluvial soils with 100 hectares of higher elevation soils between Skull and Neville Creeks classed as cultivation. Across the channels of Neville Creek to the east, a further 30 hectares of alluvial forest in Lot 118 is considered permanent cultivation adjoining the railway line. To the south Lots 123-124 are separated by Melcers Road and Lot 122 from the balance with access gained along Cowans Lane. The land is cut by numerous channels of Skull, Neville and Callide Creeks, and is only considered grazing although it has been ploughed. The country consists of washed black soil brigalow to the west of Skull Creek and black clay loam coolibah, sally wattle, blue gum and poplar box forest in the east becoming more loamy towards Callide Creek. Overall approximately two-thirds of the country is subject to flooding in larger floods and the country comprises approximately 53 percent scrub and 47 percent alluvial forest There are 2 equipped bores, 1 equipped well, 2 dams and seasonal to semi-permanent water holes in Neville Creek. " Mr Jones values the land on a direct overall basis of comparison with the sales evidence at $190 per hectare but offers for further comparison, classified values as follows:- 36 hectares 2nd Dry Arable Scrub 110 hectares 2nd Dry Arable Forest 50 hectares Stock Cultivation Scrub 300 hectares (1:2.4 hectares) Scrub Grazing 230 hectares (1:2.8 hectares) Forest Grazing @ 330 = 11,880 @ 230 = 25,300 @ 230 = 11,500 @ 190 = 57,000 @ 135 = 31,050 $136,730 There is no disagreement between the parties as to the classification of the land. -- 5 of 7 -- 6 To answer the grounds of appeal concerning relativity of values, Mr Jones provided a schedule of the valuations applied to various nearby properties then · a supplementary schedule with values of the various land classifications which he sees being reflected for the subject property, the sale properties and specific properties referred to by Mr Cowan. Mr Jones readily admits tha,t there are instances where land he has classified for valuation purposes as grazing land which is in fact used for cultivation and cropping. He says that these lands are, in his opinion, of marginal quality for arable use although under conditions of good seasons and/or high crop prices, farming can be successfully carried out. He points to the subject property where land although cultivated in the past is classified as grazing because of its arable disabilities. Mr Cowan has strong views as to productive capacities and relative overall values of certain properties well known to him and to which specific reference had been made. He sees the subject property being disadvantaged to some significant degree when other properties developed for arable use are classified as grazing lands. It seems to me, however, that if a consistent approach has been maintained by the Valuer-General in direct comparison of the various land types with similar potential, then reasonable relativity will result. I have direct evidence before me that the question of specific relativities, not only with regard to the overall valuations of the subject and various other properties, but individual land classifications and other value influencing factors, as well, has been the subject of investigation and consideration by the Valuer- General. Quite apart from matters of relativity, Mr Jones has put before me well considered evidence of value to support his valuation of the subject property, both on an overall basis as well as to the various classifications of land. This evidence is largely unchallenged on factual matters, although there is challenge to the. degree of -- 6 of 7 -- .. 7 comparability with the subject property. In the alternative, the appellants' submission is that I should accept a theoretical assumption of value - based on a previous vah1atiorf by the Valuer-General adjusted by inflationary factors. Matters of productivity and economic returns are factors which among others , such as supply and demand, might reasonably be expected to influence levels of market value. Market value will, however, be expressed by the forces at woi:k which result in actual sales of property. While the appellants put forward strong arguments related to their perceptions of relativity and lack of directly comparable sales evidence, the totality of the evidence leads me to the conclusion that the disabilities of the subject lands, as well as the advantages, have been considered by the Valuer-General and that the land is capable of cogent professional comparison by reference to and analysis of the broader market place evidence. The sales evidence adopted by the Valuer-General is seen to provide a reasonable overall basis for the valuation process. Proper relativity between valuations used for revenue gathering purposes is an important consideration, but even if relativity was the only consideration in this matter, I am not convinced that the Valuer-General's valuation would be shown to be wrong. On the evidence before me, the appeal is dismissed and the determination of the Valuer-General affirmed. (R.E. Wenck), Member of the Land Court. -- 7 of 7 --