Allen v Minister for Lands [1993] QLC 73

LAND COURT, BRISBANE. 25th June, 1993. Re: Determination of Unimproved Value for conversion purposes - GHPL 02/3947 Barcaldine District. Lessee: W G Allen DECISION The Crown seeks an unimproved value of $48/ha for GHPL 02/3947 Barcaldine District which is more particularly described as Lot 2 on Plan EV108 Parish of Goonadee containing an area of 12,500 hectares. The property is known as "Evora" and is situated about 40 kms north from Blackall. It is used for grazing sheep and cattle. The relevant date for the determination of the unimproved value is shown in a Crown Report in evidence (Exhibit 1) to be 4th December, 1990. In a tendered basis of valuation document (Exhibit 3) the relevant date is shown as 4th December, 1989. It is submitted on behalf of the lessee that the relevant date is 19th October, 1989. In view of the confusion I have caused enquiry to be made with the District Office of the Department of Lands at Blackall and consequent advice confirms that the relevant date is 4th December, 1989. No appearance was made by or on behalf of the lessee. A statement by Alister Forrest McClelland Boyd, who is a consultant to the legal firm Sly & Weigall [1993] QLC 73 -- 1 of 11 -- Cannan & Peterson was filed and admitted. Mr Boyd says that searches by his firm for property sales in the Blackall District during the years 1989, 1990 and 1991 revealed only one sale with a sheep breeding use in 1989, and this was of a property some 98 miles (156 kms) south of "Evora" on the border of the Quilpie, Blackall and Tambe Shires. The only other property sale with sheep breeding use took place in 1991. With this lack of sales evidence and with the Crown seeking what Mr Boyd believes to be an extraordinarily high value for the subject land, an attempt was made to obtain the sales basis from the Department of Lands inspecting officer but to no avail. Mr Boyd informed the Court that the Valuer-General (as he then was) valued the whole of the land in the Blackall Shire with a relevant date of 31st March, 1989. In so doing, he valued a property known as "Alice Downs" at $49. 76 per hectare and "Evora" at $32.96 per hectare. Both properties are under the control of the lessee in this case. Mr Boyd suggests that the Valuer-General has always rated "Alice Downs" as the best property in the Blackall District and he doubts that many would disagree with that suggestion. Accordingly it is submitted by Mr Boyd that his client showed some concern when he was informed that • the Crown was seeking a value for "Evora" for conversion purposes almost equal to the value placed upon "Alice Downs" with relevant dates both in 1989. Mr Boyd says that the current valuations for rating purposes with a relevant date of 31st March, 1992 are $29.86 per hectare for "Alice Downs" and $21.22 per hectare for "Evora". Mr Boyd conducted a search in the Land Court Registry and took notes from a former inspecting officers report on "Evora". He then sought the station managers description of the country and this was done "paddock by paddock". Mr Boyd produced in his statement a schedule showing the country type as described -- 2 of 11 -- - Page 3 - by the parties on "Evora" Crown's present description - 7142 hectares (57%) good quality open and shaded brown soil downs 3500 hectares (28%) open to shaded lighter downs with red soil rises intruding throughout. 1482 hectares (12%) gidyea and sandalbox scrub, stoney in parts 376 hectares (3%) sandy desert forest. Crown's former description - 6200 hectares (50%) open to shaded brown soil downs 4050 hectares (32%) red pebbly low top rock ridges with small areas down on fringes 1850 hectares (15%) gidyea and sandalwood scrub 400 hectares (3%) sandy desert forest timbered with box, dead finish, and sandalwood in the north-east Station Manager's description - 6294 hectares (50%) brown soil downs 5274 hectares (42%) light red and pebbly ridge 365 hectares (3%) gidyea scrub - remaining undeveloped. 567 hectares (5%) sandy desert. Now Mr Boyd stresses in his statement that the present Crown report shows that "Evora" has more good quality open and shaded downs (before 50% - now 57%) and less pebbly top rock ridges (before 32% - now 28%) . He says that although the differences in description may be small, it could be large enough to affect value. The property manager has about the same amount of good downs as did Mr Coe who was the Land Commissioner who filed the former report dated 3rd July, 1985. Mr Boyd makes the submission that as the Manager's description has been taken paddock by paddock then it is more reliable than the Crown's current assessment of country types. He makes the assertion in his submission that "the Crown is presently attempting to paint the subject land to be superior to what it actually -- 3 of 11 -- - Page 4 - is, in their attempt to maximise the value being sought for freeholding. Having been involved with hundreds of freeholding contests all over the state over the years, I have always held the view the Department views the Crown lease as their belongi.ng rather than being the custodian for the Crown and any landholder wishing to freehold must of consequence pay top dollar. On the evidence above I use this case as a glaring example of this." Mr Boyd submits that he has had discussions with the District Manager of the Department of Lands at Blackall on another matter (rental assessment PCL 03/2547 Blackall District) and became aware that the Department was using the analysis of the sale of a property known as "Bexhill" - GH 5972 - Portion 6 Parish of "Bexhill" - as a basis for valuing smaller leases in the district. Mr Boyd believes that it would be unjust to use the sale of "Bexhill" for valuing the much larger "Evora". He further submits that despite the fact that the Valuer-General valued "Alice Downs" at $49. 76 per hectare, he could not even imagine sales evidence would support a value of $60 per hectare unimproved for that property in 1989, a figure which he suggests must have been sustainable if "Evora" is to be valued even at $40 per hectare for conversion purposes (2/3rds of the hectareage rate of "Alice Downs" - vide Rating Values). A value of $40 per hectare is acceptable to the lessee in this case. The Crown recommendation of the unimproved value of $48 per hectare was made by Bernard James Sorensen who is a former Land Commissioner in the employ of the Department of Lands and who was stationed at Blackall. Examination of Mr Sorensen's report indicates that he did describe the nature of the country on "Evora" as outlined by Mr Boyd. Mr Sorensen assesses the -- 4 of 11 -- - Page 5 - carrying capacity of "Evora" at 1 sheep to 1.3 hectares and says the country is suitable for breeding and woolgrowing. Mr Sorensen bases his valuation of "Evora" principally on the analysis of the sale of "Mena Park" and "Prairie Downs" on 19th October, 1988 from Vail to Scholes and Campbell for $2, 175,000. These properties are more particularly described as GHFL 02/3672 - Lot 3 on Plan YN 65 and GHFL 03/5983 - Lot 3 on Plan YN 61 Parishes of Mayfair and Weetwood which collective contain an area of 14,717.309 hectares. The sale properties are located about 10kms west from "Evora". Mr Sorensen analyses the sale to show an unimproved value of $46.88 per hectare. He describes the country of "Minor Park and "Prairie Downs" as comprising about 1,905 hectares (13%) downs, about 310 hectares (2%) semi open gidyea forest, about 12060 (82%) good quality thick gidyea scrub, about 290 hectares (2%) sandy dead finish gidyea rises and about 151 hectares (1%) gidyea, boree channels and clay pans. Mr Sorensen sees "Evora" to be superior to the sale property as its better quality country in the natural state outweighs all other factors. Mr Sorensen did include his analysis of the sale of "Bexhill" in his basis of valuation document but placed little reliance upon it due principally to its much smaller size. It contains an area of 4862. 703 hectares and is situated about 80 kms south-east from "Evora". Mr Sorensen analyses the "Bexhill" sale to show an unimproved value of $83.22 per hectare. The country on "Bexhill" comprises about 3952 hectares (81%) good quality open and lightly shaded downs and about 910 (19%) gidyea scrub. Mr Sorensen's estimate of carrying capacity of "Bexhill" is 1 sheep to 1.4 hectares with a potential capacity of 1 sheep to 1.2 hectares. It is -- 5 of 11 -- - Page 6 - suitable for breeding and woolgrowing. Mr Sorensen sees "Evora" to be far inferior to "Bexhill" due to "Bexhill" having better country and being much larger in area. Mr Sorensen has scheduled analyses of other property sales in the District. "Evora" (the subject lease) and "Mascot" (GHPL 02/3947 and GHFL 02/3717) containing 16,854.822 hectares sold on 28th September, 1989 from Hunter to Allen (the applicant lessee) for $2,750,000. Mr Sorensen analysed this sale to show an unimproved value of $50.51 per hectare. He describes the country as being 10,505 hectares (62%) good quality open and shaded brown soil downs, 4,250 hectares (25%) open to shaded lighter downs with red soil rises intruding throughout, 1,723 (10%) gidyea, sandalwood scrub stoney in parts and 376 hectares (3%) sandy desert forest. Mr Sorensen assesses the carrying capacity of this property at 1 sheep to 1.3 hectares and considers it to be suitable for breeding and woolgrowing. Mr Sorensen points out that this was a sale to an adjoining owner . and the property was sold at public auction. Mr Sorensen considers the country on the aggregation as being similar to that on the "Evora" lease in most respects. "Harden Park" containing 16,608.685 hectares sold from McLean to Russell on 20th October, 1989 for $2,600,000. Mr Sorensen's analysis of this sale shows an unimproved value of $45.37 per hectare. He describes the country on "Harden Park" as comprising 1,149 hectares (7%) open to well shaded downs, 13,276 (85%) thick gidyea and associated softwood scrub, 861 (5%) brigalow and associated gidyea sandalbox scrub, 1,081 hectares (7%) mixed scrubby forest and flooded channels, and 241 (1 %) red sandy forest. His estimate of carrying capacity for "Harden Park" is 1 sheep to 1.5 hectares with a potential capacity of 1 sheep to 1.2 hectares. The country is suitable for breeding and woolgrowing. The property was -- 6 of 11 -- - Page 7 - purchased by an adjoining owner. The lease was freeholded by the purchaser as at a relevant date of 3rd January, 1990 at $38 per hectare. Mr Sorensen sees "Harden Park" as being inferior overall to "Evora" as the poorer country on "Harden Park" overrides other considerations. Mr Sorensen explained that for his classification and description of the country on "Evora" he broke it into areas using aerial photographs and calculated the areas using a planimeter. These calculations have been rechecked and Mr Sorensen is quite confident that his areas of the differing country types are correct. He looked for the red pebbly top rock ridges contained in the previous Crown report but could only find lighter red soil intrusions in the downs country on gentle rises, not typical top rock ridge. Mr Sorensen placed in evidence photographs he took of the type of country. Mr Sorensen commented during the course of the presentation of his evidence that sale values can often be higher than the revenue (rating) values and that it may well be that the Valuer-General was concentrating on obtaining the correct relativity in values when valuing lands within the Blackall Shire. Mr Sorensen is of the opinion that at the relevant date for the valuation of "Evora" the market was right at its peak, and that it is fair comment that the market may have fallen since that time, although he has been away from the district of recent years. Also called in evidence by the Department of Lands was Michael Douglas Hoare who is the District Manager stationed at Blackall. Mr Hoare was asked to go out and see the Manager of "Evora" in view of the difference in the description of the country types as between Mr Coe and Mr Sorensen. He inspected the property and took photos of the country on the ridges. Mr Hoare says the -- 7 of 11 -- - Page 8 - differences arise out of the use of differing terminology and the Property Manager conceded that the coloured aerial photograph that is in evidence gives a better indication of the extent of red soil intrusion than is apparent from a ground inspection. Mr Hoare is satisfied that Mr Sorensen's description of the country type on "Evora" is correct. While giving evidence, Mr Hoare took the opportunity to refute the suggestion by Mr Boyd in his submission about the Crown being unwilling to disclose the sale basis for the valuation of "Evora". He said he tried his best to help and was prepared to exchange sales evidence if Mr Boyd would reciprocate, and clearly Mr Boyd was not in a position to so do. This I think is a perfectly understandable and logical position for Mr Hoare to take, this notwithstanding that according to Mr Boyd in respect of a current freeholding matter in the Longreach District, that District Manager readily made the Department's sales basis available on request. In any event, there is provision within Section 41 A of the Land Act of 1962 for the lessee and the Crown to have access to mutual discovery of information as to basic properties and the general nature of the evidence, and Mr Boyd would be aware of this and had the opportunity to make application for exchange if he was in a position to so do. Now it is clear that Mr Boyd's searches of print out information on sales did not disclose all of the sales of properties in the District which were suitable for and/or used for breeding and woolgrowing. Before me there is in a schedule tendered by Mr Sorensen, five sales of properties which in his opinion are suitable for breeding and woolgrowing, all of which took place in 1989, although Mr Sorensen's principal basic sale took place late in 1988. But for whatever reason -- 8 of 11 -- - Page 9 - the searches certainly did not reveal all of the sales of properties in the area which are used, or capable of being used, for sheep breeding. Apart from the submission that Mr Sorensen and Mr Hoare are not in agreement with Mr Coe or the property manager on the description of the country on "Evora", with which I will soon deal, the central core in the submission made on behalf of the lessee concerns the comparison between the value determined for the freeholding of "Evora" and the values struck by the Valuer-General under the provisions of the Valuation of Land Act of 1944 for rating purposes. In Re: Determination of Unimproved Value for freeholding - SFL 3558 and 3559 Goondiwindi District v. The Queen v. Tennant and Another Ex Parte Woods - (1962) 29 CLLR 64, the Full Court held that valuations of the Valuer-General are valuations receivable in their own right under Section 28 of the Valuation of Land Act of 1944, but are not conclusive evidence of the unimproved value of land for freeholding purposes. Further, Section 245 (1) of the Land Act of 1962 expressly provides that Section 25 of the Valuation of Land Act of 1944 does not apply to the expression "unimproved value" where appearing in any provision of the Land Act. This section was repealed in 1991 but was effective at the relevant date for valuation in this case. Accordingly there can be no doubt that the best evidence of value before the Court is the analysed sales evidence produced by Mr Sorensen, and this is unchallenged. As to the suggestion that the Crown is in error in describing the country, I am satisfied that Mr Sorensen's description is more likely to be accurate than that of the Station Manager, notwithstanding the Manager's undoubted familiarity with the property. Mr Sorensen told us about his use of a planimeter and aerial -- 9 of 11 -- - Page 10 - photography to calculate the areas and I accept his evidence as to country description especially as it is confirmed by Mr Hoare and there is no direct evidence from either the Station Manager or Mr Coe. I am not influenced in this decision by the somewhat inflammatory statement by Mr Boyd about the Crown seeking to maximise values being sought for freeholding. If it is thought by Mr Boyd that this is the case, it is open for him to call evidence in support of such a suggestion and he elected not to do so. Mr Boyd says in his submission that he is conscious of the findings of the Court about the relative weight given to statements when witnesses do not present themselves before the Court to allow the right of cross-examination. He suggests that if the Crown has this concern, it does not close its case at the sittings in Blackall, and seek an adjournment to finalise the matter in Brisbane when he would be prepared to present himself before the Court so that the Crown advocate could cross examine him on any part of his statement. The Crown representative in the case, Mr O'Connor elected not to stay his case for the cross-examination of Mr Boyd. This being so, I have an unsworn submission from him, and as a result it is lacking from an evidentiary point of view; and of course, it is not for the Court to direct parties as to the conduct of their cases. Further, it is not for the Crown to adjourn a matter which is before the Court. That decision properly rests with the presiding Member of the Court. In the circumstances, I simply have no evidence which convinces me that Mr Sorensen's recommendation of an unimproved value of $48 per hectare of "Evora" for conversion of tenure purposes is excessive or unreasonable, especially as at the relevant date for the determination, the property market was at its peak. -- 10 of 11 -- r ' - Page 11 - Accordingly, the unimproved value of GHPL 02/3947 Blackall District for the purpose of conversion of tenure is determined in the sum of $48 per hectare. (CH Carter) Member of the Land Court. -- 11 of 11 --