Barns v Director-General, Department of Transport
[1994] QLC 62
•22 December 1994
|
BRISBANE
22 DECEMBER 1994
Re: Determination of Compensation -
Resumption under Acquisition of Land Act 1967
and Transport Infrastructure (Roads) Act 1991.
A93-57.
James Thomas Barns and Lynette Joy Barns
v.
Director-General, Department of Transport
J U D G M E N T
By Proclamation published in the Government Gazette dated 18 September, 1992, land described as follows was taken for "future road requirement" purposes:
"County of Canning, Parish of Maroochy -
an area of about 14.761 hectares being part of Lot 3 on RP 214711 contained in C/T, Volume 7024, Folio 58. "
In fact, the land is situated in the Parish of Weyba, and the Court was informed that the final surveyed area of the land taken totalled 15.1471 hectares.
The property from which the land was taken contained an area of about 170.02 hectares, prior to resumption. It is located about 3.5km to the west of Peregian, via Woodland Drive and Murdering Creek Road, the latter road forming the southern boundary. Monak Road forms the northern boundary.
The resumed land comprises a strip generally about 70 metres in width, traversing the property from the extreme south-eastern corner in a north-westerly direction towards the north-western corner. Included in the resumed area is a small detached truncation (271 sq.m.) of the extreme north-western corner of the property. The resumption creates a large triangular-shaped north-eastern severance of about 92.6 hectares and an irregular sawtooth-shaped south-western severance of about 62.4 hectares. Following is a plan indicating the shape of the original parcel, the resumed and balance areas.
The land comprised mainly gently undulating sandy loam coastal forest country with low ridges intersected by a series of predominantly southerly and south-westerly draining shallow gullies and flats. Some clearing had been effected in the past but at the date of resumption the property carried light to medium density green and regrowth forest timber. Apart from a modest cottage located in the north-eastern corner, the land was vacant. Easterly access to Peregian was by way of the gravel and only fairly maintained Murdering Creek Road and Woodland Drive, before a short section of bitumen leading to the David Low Way. Monak Road on the northern boundary was gravel formed from Murdering Creek Road westerly to Lakewood Drive (about 1.1km) then was unformed. South-easterly access was available by way of the gravel formed Emu Mountain Road for about 3.7km. Coolum was then a further 3.8 kilometres south along the bitumen sealed David Low Way.
The purpose of the resumption eventuated to become what most witnesses in the hearing understood to be a section of the Sunshine Motorway. The Court was informed that the road through the subject property, being within that section from the Peregian roundabout (southerly of the property) northerly to the Eumundi-Noosa Road is not formally part of the Sunshine Motorway, which in fact terminates at the Peregian roundabout. The northern extension is formally known as the Emu Mountain Road. The "motorway" status of the carriageway to the south has significance, it is understood, as to the restrictions which may be placed on its use.
After the resumption, Murdering Creek Road meets with the new Emu Mountain Road, providing bitumen sealed access to the south and north as well as through the Peregian roundabout to the David Low Way between Peregian and Coolum. Direct access is not available from the severance areas to the new road. Surveyed access points from the local road system are available to the north-west and eastern extremities of the south-western severance, the latter connecting to Doonan Bridge East Road and thence to the new Emu Mountain Road.
At the date of resumption the immediate locality which is separated from the Peregian residential development by a wide strip of coastal heath wetlands, was of largely undeveloped land tracts, between agricultural (sugarcane lands) and some rural residential style development to the west, then the low intensity rural residential development and the wetlands to the east. Lake Weyba is situated a short distance to the north-east of the property.
Electricity and telephone services were available in the immediate locality, which was not served by reticulated water or sewerage.
The property was zoned "Rural A" in the Maroochy Shire Town Planning Scheme gazetted on 14 December, 1985. In the Strategic Plan appended to that Scheme, the "Preferred Dominant Land Use" for the property was designated as partly "Urban Areas" and partly "Rural Areas".
CLAIM FOR COMPENSATION
A claim for compensation in the amount of $2,700,000 was served on the constructing authority. Leave was sought and granted for the claim to be amended to the amount of $4,308,000 together with items of disturbance totalling $6,776 which latter amount had been agreed between the parties, being made up as:
Valuation Fees $ 2,000
Survey Fees $ 1,420
Engineering Fees $ 1,950
Legal Fees $ 1,406
TOTAL $ 6,776
The amended claim was in accordance with a valuation carried out by Mr R.R. Henderson, registered valuer in private practice, as follows:
Land value "before"
as a hypothetical subdivision $ 6,368,000
Land value "after"
as a hypothetical subdivision $ 2,060,000
Compensation $ 4,308,000
The valuation was amended slightly during Mr Henderson's evidence to the amounts of $6,350,000 "before" and $2,057,000 "after", with the compensation assessment becoming $4,293,000.
Constructing Authority's Valuation
The formal valuation before the Court was provided by Mr A.F. Carrick, registered valuer in private practice, who assessed compensation in the rounded sum of $280,000, with before and after resumption valuations in the range of $722,000 and $442,000 respectively.
Bases of Valuation
Claimants:
The valuation for the claimants was based on the opinion that as at the date of valuation the highest and best use of the property involved rezoning to allow an integrated urban development.
With the town planning support of Mr C.J. Schomburgk, a development proposal had been produced by Mr N. Covey, consultant civil engineer, to allow detailed consideration of the potential of the property, both before and after the resumption.
The before resumption proposal involved a design comprising a staged development of "9 Commercial lots, 9 Light Industrial lots, 61 Residential B lots, 2 Community Use/Church lots, 1 Primary School and 1219 normal residential lots for a total of 1,301 lots".
The after resumption proposal was achieved by linking the two severance areas by a bridge over the resumed area and the design provided for "9 Commercial lots, 10 Light Industrial lots, 59 Residential B lots, 2 Community Use/Church lots, 1 Primary School and 1034 normal residential lots".
Construction costs, as estimated at the date of resumption, exclusive of interest, amounted to $35,571,370 or $27,340 per lot before resumption and $30,840 per lot after resumption.
Mr Henderson had investigated some sales of in globo land with either suitable zoning for residential development in part or overall, or with potential for rezoning. On a direct comparison basis with those sales, he valued the land before the resumption in the amount of $5,523,500 or $32,500 per hectare overall. He did not attempt a valuation by direct comparison in the after resumption situation.
Mr Henderson then carried out hypothetical development valuation exercises based on the proposals developed by Mr Covey. By considering as best he could the value of each proposed lot based on sales of developed lots in various other locations, he assessed the gross realisation before resumption in the amount of $71,893,750 and $59,503,500 after. By adoption of a "profit and risk" allowance of 40%, the residual in globo land values eventually became $6,350,000 (approximately $37,350 per hectare) before resumption and $2,057,000 after. Mr Henderson had adopted the cost estimates provided by Mr Covey. Within Mr Covey's estimates were costs for external and internal water and sewerage reticulation compiled under the supervision of Mr T.D. Monson, a civil engineer and director of a firm engaged as consultants to the Maroochy Shire Council.
Constructing authority:
The opinion of Mr Carrick was that the highest and the best use of the land as at the date of resumption related to its subdivisional potential as zoned. He stated - "Because of the absence of services, the subject had very limited potential for rezoning or subdivision for Residential A purposes". He found no added value flowing to the Rural A zoning from the Strategic Plan partial "Urban Areas" designation.
He was supported by the town planning evidence given by Mr J.C. Franklin, who after "examination of aerial photos since 1981" observed "that there has only been limited housing construction in the area over the last 10-13 years. This fact alone suggests that virtually no precedent would have existed prior to September 1992 for development of the subject site for other than Rural homesites."
Mr Carrick had found no sales evidence of a large area of Rural A zoned land - at least which he found to be comparable. He investigated a number of sales of larger parcels of "Englobo Rural Residential Vacant Land" which on his analyses showed values ranging from $2,900/ha (171.6ha zoned Rural Pursuits - Noosa Shire) to $9,380/ha (122.6ha since subdivided as the "Laguna Palms" rural-residential estate - Noosa Shire). He was aware of a sale ("the Cox Sale") in September, 1992, of a parcel of 170ha (approximately) on the western side of Emu Mountain Road and in close proximity to the subject property to the south-west, zoned Rural A. The sale involved interest free vendor terms but was conditional on rezoning. The contract price was $2,067,000 or $12,158/ha.
His primary basis of valuation was obtained from a hypothetical subdivisional exercise, as a Rural A development of 8 lots, before resumption, and 7 lots after resumption. His values for the individual hypothetical lots were assessed by direct comparison with sales of sites zoned Rural A and with highest and best use as zoned. Mr Franklin had produced the hypothetical design on which the valuation was based. Mr A. Sauermann, a civil engineer with the firm of which Mr Franklin is a partner, estimated the development costs.
The valuation exercise conducted by Mr Carrick produced the rounded in globo values of $722,000 before resumption (approximately $4,250/ha) and $443,000 after ($2,860/ha).
Highest and Best Use - Town Planning Evidence
Not only did the town planners, Mr Schomburgk and Mr Franklin, disagree as to the significance of land in this particular location being within the Strategic Plan "Urban Areas" designation, but also to the reasonable interpretation of the extent of the subject property which was provided with any inherent potential for "Urban Areas" dominant land use.
The intent of the Maroochy Shire Town Plan Rural A zone is:
"to identify and protect significant areas for a wide range of rural activities. "
and, as Mr Schomburgk stated after referring to the relevant Table of Development:
"It is evident from the above Table that the Rural "A" zone is intended to provide for a range of uses relative to the keeping of animals, agriculture and other rural pursuits. "
The intent of the "Urban Areas" designation in the Strategic Plan is:
"to indicate those areas which are preferred for future urban development. "
Those objectives of the "Urban Areas" designation seen to be relevant, but for different reasons, by the town planners, are set out as follows:
" 3. -
(1)To direct future urban growth so as to secure the orderly and proper development of urban centres in a manner consistent with the existing urban structure of the Shire.
(a) The urban areas shown as preferred dominant land use on the Strategic Plan may be progressively converted to urban use by way of rezonings. Contiguous areas may also be considered where the Council is satisfied that orderly and economic growth will occur. These additional urban areas have generally been zoned rural on the scheme maps so that, before urban development can be achieved, rezonings will be necessary and financial contributions may be obtained so that the new areas can be efficiently serviced.
(b) The rezonings necessary to achieve urban development will be determined on their merits and, where they exist, by a series of development control plans indicating the preferred zone for the particular property or locality.
(c) Rezonings for urban purposes will only be permitted within the areas mentioned in (a) above, with the exception of certain tourist type developments and special facility uses.
(3)To ensure that the future expansion of urban areas and development of new urban centres occurs in locations capable of being adequately serviced with public utilities, having at the same time regard to the orderly extension of such public utility services.
(a) The principal areas indicated as urban areas on the Strategic Plan have been selected as areas which can be serviced with public utilities provided new urban development takes place on a progressive basis, so that all public utility services and access to the new areas can be economically provided. This aspect is an important one which will be considered by the Council in determining rezoning applications, not only in accordance with development control plans but on their merits prior to the introduction of such development control plans. "
There was no disagreement that, as Mr Covey stated in his report relative to the subject land:
"For development to occur, Maroochy Shire Council would require the construction of a sealed access road, along with provision of all services normally required for urban development. "
There was also no disagreement between the town planners that rezoning to "Rural Residential" was not an option warranting consideration. The town planners agreed that rezoning and development of the subject land, in the absence of development of similarly designated potential urban land between the subject property and both Coolum and Peregian, would have had, at the relevant date, a "leap-frogging" effect - an undesirable result in terms of town planning principles.
With regard to "leap-frogging", Mr Schomburgk held the view that, if access and infrastructure requirements could be met, rezoning and development of a particular site could not be delayed on the ground that land capable of providing orderly development remained undeveloped - for any of a variety of possible reasons. Mr Franklin, on the other hand, was convinced that the objectives of the Strategic Plan relative to orderly sequence of development would not be served by "leap-frogging" and those objectives would carry more weight in a rezoning application than would the ability for services to be brought to the site together with the provision of sealed access.
In Mr Franklin's opinion, even if the land was seen as having some future urban rezoning and development potential, then that could not reasonably be accepted as applying to the whole of the land. While he agreed that Strategic Plan designation boundaries were not always site specific, and provision existed in Objective 3(1)(a), for contiguous areas to be considered, he interpreted the boundary between the "Urban Areas" and the "Rural Areas" as it applied to the subject land, to intentionally exclude that area westerly of a line drawn between a dog-leg in the southern boundary and a point on the northern boundary opposite an unnamed road westerly of Lakewood Drive. He believed, as did Mr Carrick in his valuation considerations, that the objectives of the "Rural Areas" also demanded consideration. Mr Franklin's investigations relative to the subject matter revealed that an application to rezone part of the site to Rural Residential had been lodged in May, 1990, but not resolved, due to it being considered incomplete. Even so, his "discussions with Council Officers, suggest that concerns were highlighted in relation to retention of rural lands and premature development in the area". Mr Franklin's report contained a map sourced from a Department of Primary Industries' survey of land suitability for sugarcane growing, which showed (in 1979) the subject land as being classified "Class III - suitable with moderate restrictions".
Both Mr Schomburgk and Mr Franklin are experienced in their field, and the polarisation of the results of their considerations, from positive to negative, cannot be disregarded. In terms of the geographic location however, it seems to me that the subject property should have been regarded as offering an identification with and opportunity for the westerly expansion of the coastal strip development at Peregian Beach (Noosa Shire) rather than being the north-westerly extremity of what Mr Franklin saw as desirable sequential development from Coolum Beach within Maroochy Shire. As far as leapfrogging is concerned, the history of rezoning approvals (in particular the Cox land) indicates a willingness by the Shire to put aside that town planning principle. I accept the more positive potential approach taken by Mr Schomburgk, even with regard to the potential for the apparently site specific Strategic Plan boundary between the Urban and Rural designations to be put aside in order to allow future urban development to extend into the western section of the property. This would be seen as a practical response to a rezoning application offering the significant upgrading of access (at least before the resumption) and extension of water and sewerage infrastructure. It is difficult to accept that there would be any good reasons for development of the western section to be restricted, in isolation from the eastern section, to strictly rural pursuits.
However, while the potential for rezoning to allow urban development at the relevant date, before the need to consider the resumption, is accepted as being more positive than the remote possibility and then limited to the eastern end, as suggested by Mr Franklin, the totality of the town planning evidence suggests that a successful rezoning application for any part, let alone the whole, could not have been regarded as a mere formality and devoid of risk. A fair assessment of the market value of the land cannot ignore the potentialities but then neither can it ignore the risks involved in the potentialities being realised.
In the after resumption considerations, as at the relevant date, the town planning position as it relates to urban rezoning, is seen to be made even more positive due to the potential which emerged for the early provision, at no direct cost, of alternative sealed access. Whether the proposed before resumption cost of providing sealed access to Peregian via Woodland Drive would become necessary, as opposed to desirable, after resumption, remains a matter of contention. Some cost may be necessary in directly accessing the new Emu Mountain Road roadworks and there is a possible deleterious effect on values resulting from the new circuitous Emu Mountain Road access to Peregian Beach, in comparison with the more direct Woodland Drive proposal. These are matters which require valuation considerations. Similarly the impact of severance and physical effects of the works associated with the resumption are valuation issues.
Valuation Considerations
Mr Carrick's valuation for the constructing authority was based on the land before and after resumption having potential limited to subdivision into Rural A zoned lots. I have given reasons for not accepting such limitation on potential. It follows that Mr Carrick's formal valuation approach is of no real assistance, except as will be discussed later.
That leaves Mr Henderson's valuation. He effectively put aside his opinion as to the value of the land before resumption on the basis of direct comparison with the sales he had considered. That is understandable, for the sales were of land bearing little comparison with the features, both positive and negative, of the subject property. Mr Henderson's primary valuation approach then became the hypothetical development exercise. As might have been expected, the usual criticism of this method of valuation of in globo land was put forward by the respondent. Mr Carrick went as far as to suggest that the method in this particular case was one of "playing with figures" and "not doing a valuation". It might be interpreted that he saw the method as too speculative when applied to a development proposal of the scale of the subject exercise. It is observed that one of the many difficulties with the use of this approach in a hypothetical development of the scale of the subject, is that it envisages full development at the particular date of valuation. The "text book" principles which were referred to by Mr Carrick, suggest that, for example, interest on development costs should be calculated over one half of the development and selling period in recognition of the fact that cash flow will be generated and the development expenses will not be outlaid over the whole of the period. Mr Henderson had refined the "text book" principles because of the reality that a development of this size would not be constructed other than in stages after the initial necessary external works. He estimated, in a somewhat broad approach, that after consideration of the "up-front" external water, sewerage and roadwork costs, staged development and resultant cashflow would reduce interest costs to an amount calculated on one-fifth of the total development expenditure, over one-half of the selling period. Mr Henderson interpreted Land Court precedent to suggest that the rate of interest which may be adopted in considering this valuation approach, in compensation matters at least, as being the long term bond rate of interest which the owner/developer would forsake by diverting available funds to the development project. Mr Henderson adopted such investment rate of interest rather than a commercial borrowing rate.
Starting from the beginning, the criticism of his exercises began at his estimated gross realisation. For the hypothetical residential lots he felt he was able to make direct comparisons for each individual lot, with sales of lots in developed estates at Tewantin-Noosaville and in the coastal dunal lands west of the David Low Way at Peregian. He felt that the physical quality of the subject land negated any disabilities of perceived geographical isolation caused by the lack of existing residential development in the immediate locality. It seemed to me however, that Mr Henderson took an overly optimistic view of each of the residential, commercial and industrial components in the hypothetical development. Mr Carrick's suggestion that the fair realisable gross income from sales of the subject land at the relevant date, could have been in the range of 10% less than that estimated by Mr Henderson, is seen to be supported when the developed lot sales evidence is examined. While of relatively minor significance, there was seen to be optimism in Mr Henderson's allowance for the advertising and legal components within the selling expenses. He then allowed 40% as an acceptable profit for the risk of realisation in a project of this size. The degree of profit acceptable to developers becomes largely a matter of opinion and method of analysis. It is however directly related to the market value of in globo land and in ideal circumstances could be assessed by analysis of sales of in globo land purchased for comparable subdivisional development. If suitable sales evidence was available for analysis, there would be no need then for the hypothetical development exercise. Direct comparison on an in globo basis would be the preferred approach.
Generally the experts who gave evidence for the claimants painted a picture of minimal risk in obtaining the necessary rezoning. Mr Henderson adopted that approach in his allowance for profit/risk. While I do not accept that pessimism to the degree expressed by the respondent's experts was warranted, it is seen as realistic that some doubt as to ease of rezoning (and of the total property) would have existed in a properly-informed marketplace. It follows that if Mr Henderson ignored the existence of any risk as he said, his allowance under this heading would be, in all probability, too low. It is also relevant that some question was introduced into the sufficiency of Mr Covey's estimate for external roadworks, through evidence given by Mr R.G. Matthews who holds the position of Principal Engineer with the Department of Transport in Gympie. In Mr Matthews' opinion cost of significance should have been allowed for works which would have been sought at the Woodland Drive/David Low Way intersection.
Finally, while I see it as practical that Mr Henderson has recognised the element of interest costs as being related to staged development, it seems to be then theoretical and impractical to also adopt an investment rate of interest when in reality a development of the scale proposed would be most likely dependant on the use of borrowed funds. The development and selling period as adopted by Mr Henderson, having a direct effect on the calculation of interest, was criticised as being too optimistic.
The preceding discussion is intended as an observation that most of the criteria fed into Mr Henderson's exercises would be expected to result in an overly optimistic (and probably significantly so) assessment of in globo value. Nevertheless, Mr Henderson had a very well prepared basis, as provided by Mr Covey, to make the necessary comparison of hypothetical development in the before and after resumption situations. He was able to consider the deleterious effect on the gross realisation caused by not only the loss of lots, but also by the injurious affection which would be occasioned to some of the remaining lots, by the existence of an adjacent arterial road and the incompatibility with quiet enjoyment of residential property. The development costs were higher in the after resumption proposal due to the effects of severance which had been dealt with in the estimates by Mr Covey and Mr Monson. One of the significant severance effects was the perceived need to access the south-western severance by way of a bridge and supporting road infrastructure from the north-eastern severance. The detailed engineering evidence identified the increased costs of development.
Because Mr Henderson had seen no risk in rezoning before the resumption, the availability of access provided by the roadworks was then in his opinion, of no advantage from a rezoning point of view. However, I am persuaded by the evidence generally for the respondent in terms of the potential of the property, that the risks of rezoning before the resumption even with sealed access to be provided to Peregian, would have lessened after the resumption because of the availability of a readily accessible major Sunshine Coast arterial road facility. While this seems to be a reasonable conclusion relative to the north-eastern severance, there is clearly an access disability suffered by the south-western severance.
It is seen as relevant in considering the in globo value of the claimants' land, that Mr Henderson had been unaware of, or unable to establish the details of the Cox sale, referred to by Mr Carrick.
The Cox Sale
Situated in close proximity to the subject land, on the western side of Emu Mountain Road near the roundabout intersection southerly of which the road formally becomes the Sunshine Motorway, is a parcel of land containing 162.1 hectares (after resumption for the same purpose as the subject matter). This land sold in September 1992, virtually at the date of valuation here. The land had previously formed part of a large tract of about 300 hectares of Rural A zoned land designated "Urban Areas" in the Strategic Plan, over which an approval for rezoning to "Residential A" and "Sports Open Space" had been granted by Maroochy Shire Council in 1989. The sale was said by Mr Carrick to be subject to formal rezoning and that is accepted. At the date of the sale, written options were granted to the purchaser to acquire the remainder of the 300 hectares of the Cox land.
Mr Carrick had been unable to sight the contract of sale but had (during the course of the Land Court hearing) discussed the transaction with a director of the purchasing company. He analysed the sale to show an equivalent cash purchase price of $1,627,737 by adopting a discount rate of 10% - intended to reflect the interests of both the vendor and the purchaser in the sale terms. That exercise indicated a rate per hectare of about $10,000. Had the analysis been carried out on the basis of the cash value to the vendor, who provided the finance, and the potential for earlier payment of part of the deposit monies (as was provided for in the contract), then the discounting analysis would have effectively increased the equivalent cash price. The option prices were also analysed by Mr Carrick on a discounted cash price equivalent.
Mr Carrick had described the Cox sale land as being "similar to the subject in country type". It apparently was not - on an overall basis of comparison. When it was eventually rezoned, a relatively large area (approximately 57.8 hectares or 36% of the total area) contained the "Sports Open Space" zone, for which there was a proposal for golf course and lakes development. Mr Covey had given evidence that the yield from the area rezoned Residential A was limited to 450-500 residential lots. As Mr Henderson pointed out, for comparison purposes, that yield of about 3 lots per raw hectare, albeit of relatively prestigious potential being associated with the golf course and lakes development, needed to be compared with the yield of in excess of 7.5 lots per raw hectare of "mid range" quality, as designed for the subject land.
Mr Carrick found application of the Cox sale to the valuation of the subject land to be a difficult task. The inherent difficulty was however his perception of lack of rezoning potential for the subject land, with the Cox sale being conditional on rezoning. After hearing Mr Covey's evidence, Mr Carrick had become aware of the option arrangements for the balance of the Cox land. This prompted him to interview the director of the purchasing company, who confirmed Mr Covey's evidence. Although standing firm in his opinion that any rezoning potential for the subject land was so distant as not to add value, he had come to the conclusion that a review of his in globo valuation of the claimants' land was warranted. His analysis of the overall transaction of contract and options for the Cox land parcel of over 300 hectares indicated to him that a present value overall sale price (September 1992) in the range of $12,000 per hectare had been negotiated. This suggested to him that a Rural A zone level of value for the claimants' land of $6,000 per hectare before the resumption might be more realistic. Adopting a similar relativity as his original exercise had shown, he suggested an after resumption level of value of $4,000 per hectare. On this basis the difference in value and resultant compensation became a rounded $400,000.
It is obvious that the Cox sale had been shrouded in secrecy until it became more exposed through the knowledge of Mr Covey. For comparison purposes the following observations are made:.The sale was not of Rural A zoned land, being conditional on rezoning as described.
.The sale was made to a purchaser who was aware that certain conditions with regard to road construction would be met by the purpose of the resumption on that particular property. That was arguably the after resumption situation with the subject land, although Mr Covey believed that the subject land would still require contribution for the upgrading of Woodland Drive.
.The sale land is closer to existing water and sewerage infrastructure. That aspect seemed to weigh heavily together with the question of sequential development, in the rezoning potential perceptions of the respondent's experts. It is seen to be most relevant however that while the distance from external water and sewerage infrastructure creates significant "up front" costs to any residential development of the subject land, Mr Monson's evidence (which I accept) was that those costs would eventually, as staged development proceeded, be credited against headworks charges. Any extra cost, in comparison with the sale land, is limited then to the holding costs on external works expenditure until full credits are achieved.
.The sale land is closer by sealed road to Coolum but not directly to Peregian (if Woodland Drive was to be sealed).
.The subject land with direct sealed access to Peregian is seen to identify more closely with the more desirable Peregian address than does the sale land. In the after resumption situation a large area of the subject land has location easterly and on the coastal side of the major arterial road.
.The original development proposal and rezoning application for that section which became the sale land envisaged a relatively low yield of residential lots overall. The quality of those lots was to be enhanced by the golf course and lakes development but the costs of development would also be significantly higher than a standard urban development. Although Mr Carrick's enquiries indicated that proposals were being considered to increase the lot yield, it seems clear that the section of the Cox property which was actually sold is of an overall physical nature which creates development difficulties.
Findings
The evidence provided by the Cox sale cannot be ignored.
Mr Carrick's opinion as to comparison of the sale land with the claimants' land is seen to be tainted by his conclusions as to physical qualities of the sale land and limited development potential of the claimants' land. He has been generous in considering the analysis of options to purchase, when the weight which can be placed on such evidence is limited in this matter, to the strength it gives to the concluded contract. Nevertheless, his reviewed assessment of $6,000 per hectare for the subject land before the resumption is considered to remain harsh.
Mr Henderson's response to the evidence provided by the sale was that it supported his valuation on the basis of yield potential. His reasoning in that regard is not accepted.
The sale is seen to provide a basis for valuation of the north-eastern severance of the claimants' land, after resumption. I have concluded that, if that severance area was sold on the same basis as was the Cox land - subject to rezoning, but to Residential A overall, it would realise an overall in globo value significantly higher than did the Cox land. However, with consideration to the need still to obtain rezoning, I will adopt an in globo value closer to that shown by the sale, in the amount of $12,000 per hectare.
In comparison, the south-western severance of the claimants' land is seen to have very limited economic rezoning potential more in keeping with Mr Carrick's views as to the original holding. The reasoning of Mr Franklin in his pessimism as to rezoning potential, more aptly applies to this severance area. It has shape and access disabilities, and much of its area is within the "Rural Areas" designation of the Strategic Plan. It has a closer identification, as a severed parcel, with the objectives of the "Rural Areas" designation. Retention of this land within the Rural A zone would be seen to complement and support an application for residential rezoning of the whole of the north-eastern severance. With the assistance provided by Mr Carrick's evidence relevant to pure Rural A in globo values, I will adopt an after resumption valuation of $3,000/ha for this severance area.
It remains to find the fair market value of the claimants' land, before the resumption. I have decided to adopt an overall in globo value of $10,500 per hectare. This level of value is seen to sit comfortably with that adopted for the north-eastern severance after resumption. Any disadvantages the property suffered by lack of exposure and arterial road access before resumption would be offset, if not totally, to some extent by the elements of injurious affection after resumption. The adopted level of value on an overall basis is not seen to be inconsistent with the Cox sale, when all points of comparison, including the rezoning condition but also the quality of land, are considered.
Compensation Assessment
Value - Before resumptionApproximately 170ha Rural A zoned land
with urban rezoning potential @
$10,500 per hectare - adopt $ 1,785,000
Less
Value - After resumption
North-Eastern Severance -
Approximately 92.6ha Rural A zoned land
with urban rezoning potential @
$12,000 per hectare - adopt $1,110,000
South-Western Severance -
Approximately 62.4ha Rural A zoned land
@ $3,000 per hectare - adopt$ 187,500 $1,297,500
Compensation -
Loss of land, severance and
injurious affection $ 487,500
Add - disturbance - professional fees,
as agreed $ 6,776
TOTAL COMPENSATION $ 494,276
Interest
The Court was informed that an advance in the amount of $100,000 was paid to the claimants by the constructing authority on 23rd April, 1993.
It is ordered that interest at the rate of 8.5% per annum be paid on the amount of $487,500 from 18th September, 1992 up to and including 23rd April, 1993, when the advance was paid then on the sum of $387,500 from 23rd April, 1993 up to and including the date of final payment.
RE WENCK
MEMBER OF THE LAND COURT
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