Walker Road Pty Ltd v Valuer-General [2025] QLC 19

Land Valuation Act 2010 (Qld) s 45, s 46, s 48

Valuation of Land Act 1944 (Qld) s 17

Brumpton v Chief Executive, Department of Natural Resources [1998] QLC 128, cited

Buntine v Hume [1943] VicLawRp 11; [1943] VLR 123, considered

Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20, followed

Graham v Lewis (1888) 22 QBD 1, considered

Mreef Project Company No 15 Pty Ltd v Department of Natural Resources and Water [2007] QLC 13, cited

Nelson v Evans [1923] St R Qd 158, considered

Sturgess v Valuer-General (2013) 34 QLCR 1, cited

Taylor v Owners - Strata Plan No 11564 (2014) 253 CLR, applied

Thomason v Chief Executive, Department of Lands [1995] QLAC 4; (1994-1995) 15 QLCR 286, applied

K Wylie instructed by Bennett & Philp Lawyers for the appellant

J Ware instructed by Clayton Utz for the respondent

• [1] Walker Road Pty Ltd owns various lots[1] in Bentley Park, a suburb south-west of Cairns ('the land'). Eventually, the land will be further subdivided and become part of the Cherry Brook residential development. In the interim, Fortress Rural Investments Pty Ltd a company related to both Walker Road and the Cherry Brook developer, Fortress Management Services Pty Ltd, has been grazing cattle on the land.
• [2] Andrew Sheahan and his family live in the four-bedroom house on the land. Mr Sheahan manages the cattle, spending about 2 - 3 hours per day on that task.
• [3] Subdivision 2 of Chapter 2 Division 5 of the Land Valuation Act ('LVA') applies for deciding the value of land used only as a single dwelling house or for farming.[2] If either of those situations apply, any enhancement in value because of a potential for subdivision must be disregarded.[3]
• [4] The Valuer-General valued the land as "farming" until the valuation issued as at 1 October 2021. When the Valuer-General determined that the land was no longer used for farming, unsurprisingly, she valued the land at a much higher figure.
• [5] Walker Road challenges the Valuer-General's decision on two grounds. Firstly, it says that the land is used for farming. In the alternative, it says that the land is used as a single dwelling house.

• [6] What is farming is set out in s 48 of the LVA. There are four elements:

(a) a farming business must be the dominant use of the land;[4]

(b) the business must be carried out for profit;[5]

(c) the business must be carried out on a continuous or repetitive basis;[6] and

(d) the business must have a substantial commercial purpose or character shown by having an average gross annual return, worked out over a 3-year period, of at least $5,000.[7]

(a) Fortress Rural carried out a farming business;

(b) the farming business was carried out on a 'continuous or repetitive basis'; and

(c) the business had a substantial commercial purpose or character.

• [8] There are three issues the parties want me to determine:

(a) Does Fortress Rural managing agistment agreements between related companies and third parties on land owned by the related parties form part of a farming business?

(b) Was the farming business the dominant use of the land?

(c) Was the farming business carried out for profit?

• [9] Fortress Rural leased other properties from companies related to Fortress Investments and then issued grazing licences to third parties. The income from that exercise was between $7,500 and $14,000 p.a., about 20% of Fortress Rural's total income.[8]
• [10] The Valuer-General submits that this income is derived from managing agistment agreements, not from grazing, as that term is understood from s 48 and, therefore, should not be considered when evaluating whether the business was carried out for profit.
• [11] The question of whether agistment agreements can form part of a farming business has been partly answered in the affirmative by the Land Appeal Court in Thomason v Chief Executive, Department of Lands.[9] The Court held that animals agisted onto the subject land met the definition of a grazing business because they feed themselves on the grasses or pastures for the purpose of later sale as part of an enterprise and they benefit from pasture grown on the subject land.
• [12] This leaves the question of whether managing agistment agreements on other land can form part of the grazing business on this land.
• [13] Walker Road relies on Thomason:

We have concluded that the use of the subject land for the purposes of grazing, considered in isolation from any other land, does not have a significant and substantial commercial purpose or character. Considered as part of the dairying enterprise of Leslie Sellin & Co, the subject land is being used as part of a business which has a significant and substantial commercial purpose or character.[10]

• [14] And President MacDonald in Sturgess v Valuer-General who said:

...if the appellants establish that the subject land is used in conjunction with other lands as part of a business or industry with a significant or substantial commercial character, as shown by an average gross annual return of $5,000, calculated over a 3 year period, this criterion will be fulfilled. [11]

• [15] Walker Road submits that Fortress Rural's business can be characterised as a singular business because:

(a) All aspects of the business relate to a common subject matter - cattle grazing;

(b) The same person manages all aspects of the business;

(c) There is a single set of business records;

(d) Fortress Rural's income tax records identify its main business activity as 'beef cattle and sheep farming'.

• [16] I accept that Fortress Rural is conducting a singular business which, for the purposes of taxation, is 'beef farming'.
• [17] Walker Road submits that the agistment business may still be considered a 'farming business' within the meaning of the LVA because it falls within the meaning of 'the business or industry of grazing' under s 48(4)(a).
• [18] It submits that 'business' and 'industry' must have separate meanings. It has referred me to the Macquarie Dictionary definition of 'industry' as:

1. a particular branch of trade or manufacture: the steel industry. 2. any large-scale business activity: the tourist industry. 3. manufacture or trade as a whole: the growth of industry in underdeveloped countries.

• [19] As the Valuer-General points out, however, that definition is incomplete. The definition continues:

4. the ownership and management of companies factories etc.: friction between labour and industry. 5. systematic work or labour. 6. assiduous activity at any work or task: To win 3-2 showed a lot of courage, great industry

• [20] The discussion about the difference between 'business' and 'industry' is unhelpful as, largely, the dictionary definitions are the same.
• [21] There is some force in the Valuer-General's submission that, whichever definition applies, the activity must involve doing farming as opposed to facilitating farming. Support for that proposition can be found in the definition of 'farming business' as it lists activities that require engagement with the land. It does not, for example, list 'managing' a farming business.
• [22] There is also support for that proposition in the statements from relevant Ministers when the Valuation of Land Act was introduced in 1971. The Honourable WAR Rae said:

The Bill also provides that land used exclusively for primary production in a potentially higher-use area is to be valued without regard to the potential. ... The provision regarding primary production has been inserted to ensure that a primary producer caught up in urban development is not valued on the potential until he ceases using the land for primary production. This will enable a primary producer to carry on economically for as long as possible, and is parallel to the single-unit residential owner in a higher use zone.[12]

• [23] In Thomason, the business was conducted by a third party on the appellant's land. In Sturgess, the business was conducted by the appellants on third party land. Here, we are concerned with income from a business that is not conducted on the subject land and is not conducted by the appellants. It is stretching the analogy too far to suggest that the third party agistment agreements on land remote from the subject land should form part of the farming business.
• [24] I find Fortress Rural's management of the agistment agreements, on land remote from the subject land and with parties not connected with the subject land, to be a separate business.
• [25] The income from the agistment agreements should not be considered when evaluating whether the business was carried out for profit.

Was the farming business the dominant use of the land?

• [26] The relevant time for determining the relevant use of the land is the period between 1 October 2021 and 19 October 2022.
• [27] Walker Road submits that the dominant use of the land was grazing. There is clear evidence that Fortress Rural had between 10 and 15 head of cattle on the land during that period.
• [28] The Valuer-General submits that, at the relevant time, the land was actively being used for the development of Cherry Brook and that this was the dominant use of the land. To support that proposition, the Valuer-General points to fill being scraped from the subject land and used in Cherry Brook; truck movements on the land; pipes and other materials being stored on the land; and, a bitumen road stub, similar to the roads constructed on Cherry Brook. I will refer to these activities collectively as 'the works'.
• [29] Once again, the parties have referred me to Thomason in which the Land Appeal Court said:

In our opinion, the expression "dominant use" implies that some other use may be made of at least part of the land. Further, it does not necessarily follow that the other use must be incidental or ancillary to the dominant use before section 17(1) can apply to the land. Uses of land which were distinct from but incidental to the business of primary production (such as dairy farmer's home on the land) did not exclude the operation of section 11(1)(vii) to the land

In our view, the proper approach to be taken when ascertaining the dominant use of land is to consider such matters as the amount of land actually used for any purpose, the nature and extent and intensity of the various uses of the land, the extent to which land is used for activities which are incidental to a common business or industry of a type specified in section 17(2), the extent to which land is used for purposes which are unrelated to each other, and the time and labour and resources spent in using the land for each purpose. When undertaking this exercise, one cannot ignore the conclusion that an objective observer would reach from viewing the land as a whole.[13]

• [30] In considering the words 'dominant use' in a land tax context, the High Court in Godolphin defined them this way:

Whether land is being used for the dominant purpose of maintaining animals for their sale or the sale of their natural increase or bodily produce is a question of characterisation of the use or uses to which the land is put. The proper approach is to consider the amount of land used for any purpose, the nature and extent and intensity of the various uses which are taking place, and the time and labour and resources spent in using the land. In some cases, the financial gain from a given activity may be an indicator of predominance. And in all cases one should not ignore the conclusion reached by an objective observer who is viewing the land as a whole.

Where land has more than one use, for a given use to be dominant it must exhibit such predominance as to impart to the whole of the land the necessary exempting character.[14]

• [31] The Valuer-General submits, and Walker Road largely agrees, that Thomason and Godolphin demonstrate that the following factors are relevant to a consideration of the dominant use:

(a) The amount of land actually used for any purpose;

(b) The nature, extent and intensity of the various uses of the land;

(c) The extent to which land is used for activities which are incidental to the business of grazing;

(d) The extent to which land is used for purposes that are unrelated to each other;

(e) The time, labour and resources spent in using the land for each purpose;

(f) When undertaking this exercise, I cannot ignore the conclusion that an objective observer would reach from viewing the land as a whole.

• [32] The total area of the land is 21.944 ha. Of that, 9.6 ha is used for grazing. The balance, according to evidence from the Bar table is the residence and its curtilage. The area subject to the works is somewhere between 1% and 3.4% of the total area.
• [33] I accept the Valuer-General's observation that grazing is a 'quite passive' activity but that is not the test. Grazing is a continuous activity on the land. It uses all the available 9.6 ha, albeit in rotation. In grazing terms, carrying 10 - 15 head may not be intense, but the evidence suggests that it is the land's capacity. As I have already noted, Mr Sheahan spends a couple of hours per day attending to the grazing business.
• [34] By contrast, the works were for a limited period. The scraping was a one-off activity. According to Messrs Southwell and Sheahan the vehicle movements and storage were conducted over a period of 2 to 4 weeks, or no longer than 'a few weeks'.[15] There were limited traffic movements across the subject land.[16]
• [35] The Valuer-General used satellite imagery to demonstrate that the effect of the works lingered long after the works were completed. In particular, the Valuer-General focussed on the absence of a fence to one of the paddocks. If the fence was missing for a long period then, the Valuer-General submits, that would affect the productivity of the grazing business. Mr Sheahan did not agree with that proposition[17] and I accept his evidence in that regard.
• [36] It is true that Mr Southwell underestimated the amount of land involved in the works and, probably, underestimated the duration of the works. Even if I accepted the Valuer-General's best case, the works amounted to a small proportion of the use of the land.
• [37] Mr Southwell told the Court that the works were not associated with the development of the subject land.[18] That is probably true but there is no doubt that the works were associated with the development of Cherry Brook, of which the subject land will ultimately form a part.
• [38] Looking at all factors objectively, I find that the dominant use of the subject land was grazing. The extent, duration and character of the works was not, then, enough to displace grazing as the dominant use of the subject land.

Was the farming business carried out for profit?

• [39] The first question is to determine the meaning of 'for profit'. This is particularly important because the accounting experts - Timothy Lunn and Grant Williams - undertook different exercises when examining the books of account. Mr Lunn assessed whether the farming business was profitable as a matter of fact. Mr Williams examined the books of account to determine whether the business was carried out with the intention to make a profit.
• [40] The Valuer-General says that 'for profit' means making a profit or capable of making a profit. Walker Road says that whether the farming business was, in fact, making a profit is only one factor in determining whether the business was carried on 'for profit'. It submits that the test is whether the farming business was being carried out 'for the purpose of profit'.
• [41] The Land Court has decided a number of cases using the concept of 'for the purpose of profit'.[19] All of them, however, were decided under s 17 of the Valuation of Land Act 1944 ('VOLA'), which preceded the LVA.
• [42] Section 17 of VOLA allowed the farming exemption if, inter alia, the farming business was 'engaged in for the purpose of profit on a continuous or repetitive basis'.
• [43] For the exemption to be engaged now, the 'business must be carried out for profit on a continuous or repetitive basis'. Section 48(2) no longer includes the words 'for the purpose of'. It refers to 'carried out' instead of 'engaged in'. For these reasons, the Land Court cases that interpret VOLA do not assist in interpreting s 48(2).
• [44] The High Court in Taylor v Owners - Strata Plan No 11564 cautioned against inserting words into legislation:

The question whether the court is justified in reading a statutory provision as if it contained additional words or omitted words involves a judgment of matters of degree. That judgment is readily answered in favour of addition or omission in the case of simple, grammatical, drafting errors which if uncorrected would defeat the object of the provision. It is answered against a construction that fills "gaps disclosed in legislation" or makes an insertion which is "too big, or too much at variance with the language in fact used by the legislature".[20]

• [45] Section 48 does not involve a drafting error, and I cannot see a gap in the legislation. There is no basis for reinserting the words 'for the purpose of' after they were omitted from s 48(2) when the Legislature had the benefit of the Land Court decisions on s 17 of VOLA.
• [46] The Valuer-General submits that the omission of the words 'for the purpose of' indicates a deliberate tightening of the profit test. I agree.
• [47] I also note the change in language from 'engaged in' in VOLA to 'carried out' in the LVA.
• [48] 'Engaged in' appears to be of wide application, requiring at least a substantial part of any period of time being directed to some thing, excluding a 'mere casual or intermittent' commitment to that thing.[21]
• [49] The phrase 'carried out' has not been the subject of judicial consideration or statutory application; however, there have been decisions that consider 'carried on'. Fry LJ said in Graham v Lewis:

I think that the expression has a narrower meaning than that of doing business or having business to do. In my opinion it imports that the person has control and direction with respect to a business, and also that it is a business carried on for some pecuniary gain.[22]

For, in my opinion, just as residing connotes some fixed place in which a man personally lives, so carrying on business connotes a fixed place in which a man personally transacts his business, and in my opinion a grazier cannot be said to carry on business ... in every place on which he has stock running.[23]

• [51] These decisions support a conclusion that 'carried out for profit' means something more than carrying out with the intention to make a profit. The test under s 48 must be whether the farming business was making a profit or capable of making a profit.

• [52] The second question is whether the farming business, as a matter of fact, was carried out in a way that was either profitable or capable of making a profit.
• [53] In calculating the actual profit (or loss) of the business, Mr Lunn added in an expense of about $22,000 p.a. representing Mr Sheahan's wages. Mr Williams did not.
• [54] Mr Lunn justifies the addition of a wages component because, he says, that will show the 'true nature' of the business and is a standard adjustment he makes when valuing a business for sale.
• [55] The Fortress Rural accounts do not show any expense for Mr Sheahan's wages. There is clear evidence that Mr Sheahan occupies the house on a contra deal; he will look after the cattle in exchange for free housing. There is some difficulty in this arrangement because the documents evidencing the contra deal are between Walker Road and Mr Sheahan not Fortress Rural and Mr Sheahan but if Fortress Rural is fortunate enough to have 'free' labour, then there is no reason for either an accountant or the Court to look behind that arrangement.
• [56] Mr Lunn's task was not to value the business for sale but to assess whether it was making a profit or capable of making a profit based on the actual accounting records, not on an adjustment to reflect a theoretical real profit trend of that business.[24]
• [57] Walker Road submits that I should only look at the valuation year when assessing whether the farming business was carried out for profit. Because Fortress Rural made a profit in 2022, Walker Road says that the test in s 48(2) is satisfied.
• [58] The Valuer-General submits that this is a flawed approach for two reasons. The first is that the financial year and the valuation year cover different periods so that the financial year results are not a true representation of the financial position during the valuation year.
• [59] The second submission lies within the terms of s 48(2): the business must be carried out for profit on a continuous or repetitive basis. The Valuer-General submits that this means the profitability of the farming business must be assessed over a period.
• [60] I agree with both propositions. Whether or not the farming business was carried out for profit cannot be considered by looking only at the valuation year. To do so would be unfair to Fortress Rural: on that test, it would not have been within the farming exemption for four of the seven years examined.
• [61] Because I have excluded the agistment income from a consideration of whether the farming business was profitable, Fortress Rural's trading results for the financial years 2015 to 2022 are:

• [62] Mr Williams submits the figures show Fortress Rural is capable of making a profit as:

(a) a gross profit was derived in 3 of the 7 periods or 42.86% of the time.

(b) there is a cumulative gross profit of $26,969 across the 7 periods.

(c) the average gross profit across the 7 periods was $3,853.

(d) the cumulative gross profit across the last 3 periods (i.e. FY20, FY21 and FY22) highlights the business's improved performance in recent years.

• [63] Mr Lunn asserts that Fortress Rural was never capable of making a profit because Mr Sheahan's labour had to be brought to account. I have already stated why I do not agree with Mr Lunn on that issue.
• [64] I agree that the farming business was capable of making a profit which is demonstrated by the business in fact making a profit for some of the years under review. Section 48(2) does not require a substantial profit, or even a profit that makes commercial sense. Like most rural enterprises, the farming business's fortunes waxed and waned but, as Mr Williams observed, it was in profit for the last three financial years. It follows, therefore, that the farming business satisfies the test in s 48(2).

Was the land used only as a single dwelling house?

• [65] Because of my conclusions about whether Fortress Rural carried out a farming business within the meaning of s 48(2), it is not necessary to answer this question.

• [66] Before Walker Road bought it, the land was used for cane farming until the construction of a school nearby meant that cane farming on the land was no longer viable.
• [67] Given the extract in paragraph [22] above, it might be argued that the farming business on the land ceased when Walker Road bought it. However, that is how the Valuer-General has assessed value in the past and there was no submission that this should change. If change is to occur, it is for the Legislature, not for me.
• [68] Although the legislation has been amended since the decision in Thomason, I echo that Court's observations about the drafting of the definition of 'farming'. Subdivision 2 is still 'difficult to reconcile'. There is still 'an infelicity of drafting to which further attention may need to be given'.
• [69] This decision shows that there are more complications in the drafting that require consideration. And, a threshold of a gross annual return of $5,000 to indicate a 'substantial commercial purpose' is farcical. A person selling leftover eggs or fruit could easily have a gross annual return of $5,000 but it would not be a 'business that has a substantial commercial purpose or character'. The Valuer-General might give serious consideration as to whether a monetary limit imposed fifteen years ago is still apposite.
• [70] Despite these comments, I am satisfied that the subject land falls within the ambit of Subdivision 2 and Walker Road is entitled to the farming exemption.
• [71] The parties have agreed on the value of the land in the event that I find the farming exemption applies. The agreed figure is $1,200,000 and I accept that figure as correct.

1. The appeal is allowed.
   1. The unimproved value of Lot 42 on Registered Plan 704153, Lot 47 on Survey Plan 295100, Lot 803 on Survey Plan 324597; Lot 804 on Survey Plan 333304 (formerly part of Lot 804 on Survey Plan 273355) as at 1 October 2021 is reduced to $1,200,000.
   2. There be no order as to costs.

[1] Lot 42 on RP704153; Lot 47 on SP295100; Lot 803 on SP324597; Lot 804 on SP333304 (formerly part of Lot 804 on SP273355).

[2] Land Valuation Act 2010 s 45(1).

[3] Ibid s 46(1)(b).

[4] Ibid s 48(1)(a).

[5] Ibid s 48(2).

[7] Ibid s 48(3)(a).

[8] Joint Expert Report, 14 [7.5]-[7.6].

[9] [1995] QLAC 4; (1994-1995) 15 QLCR 286, 297.

[11] (2013) 34 QLCR 1, 9 [48].

[12] Parliamentary Debates, Legislative Assembly, 1 December 1971, 2401-2.

[13] Thomason v Chief Executive, Department of Lands [1995] QLAC 4; (1994-1995) 15 QLCR 286, 299, 303.

[14] Godolphin Australia Pty Ltd v Chief Commissioner of State Revenue [2024] HCA 20 [34] (citations omitted).

[15] Affidavit of Christopher Paul Southwell affirmed on 25 July 2025 [11(a)]; Transcript 1-40, lines 20-26.

[19] See, for example, Mreef Project Company No 15 Pty Ltd v Department of Natural Resources and Water [2007] QLC 13, Brumpton v Chief Executive, Department of Natural Resources [1998] QLC 128, and Thomason.

[20] Taylor v Owners - Strata Plan No 11564 [2014] HCA 9; (2014) 253 CLR 531, 546-9 at [35]-[40] (citations omitted).

[21] Buntine v Hume [1943] VicLawRp 11; [1943] VLR 123, 128 (O'Bryan J).

[22] (1888) 22 QBD 1, 5.

[23] [1923] St R Qd 158 [3].