Barns v Director-General, Department of Transport
[1997] QLAC 120
•15 August 1997
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Re:Appeals against determinations of the Land Court of compensation payable consequent upon the resumption of land under the Acquisition of Land Act 1967 and the Transport Infrastructure (Roads) Act 1991 for future road requirement purposes.
(A93-55 and A93-56).
BETWEEN:
James Thomas Barns and Lynette Joy Barns Appellants
v.
Director-General, Department of Transport Respondent J U D G M E N T
Delivered at Brisbane this Fifteenth day of August 1997.
Introduction
These are appeals by the claimants from the decision of the Land Court determining compensation payable by the respondent to the claimants at $181,417.80. The claim arose consequent upon the resumption for road purposes of about 7.87 hectares from the claimants'
52.55 hectare property described as Lots 1, 2 and 3 on Registered Plan 27021, Parish of Maroochy, County of Canning.
Although about 881 square metres was taken on 6 November 1992, the date of resumption was treated by the parties as 14 August 1992, the date of resumption of the major area of about 7.784 hectares.
The claimants' land fronted the Yandina-Coolum Road on the western outskirts of Coolum, about 2 kilometres from the beachfront. In its natural state the land was ti-tree flood plain, flat to very gently sloping and subject to periodic flooding. It had been developed as a sugar cane farm with an assigned area of 44.9 hectares. However, at the time of resumption, about 8 hectares of Lot 1 was used for grazing angora goats and some 32 rare and valuable exotic animals, namely llamas, alpacas and guanacos. For convenience, these exotic animals were referred as llamas.
The balance of the land was used for sugar cane growing by lessees who had leased those lands from Mr and Mrs Barns until 31 January 1994. The evidence indicates that the angora goats, but not the llamas, had access to the balance lands.
The original farm buildings, including the farm house, were situated towards the northern boundary of Lot 1, with separate dwellings on each of Lots 2 and 3. Two of the buildings on Lot 1 had been rented from Mr and Mrs Barns, one for use as a retail stock feed outlet and the other
in association with a plant nursery business.
The land was zoned "Rural A". However, on 5 July 1991, the Maroochy Shire Council had granted consent for the use of Lot 1 for "Catering Shop and Tourist Attraction and Facilities".
Before resumption, Lot 1 had an area of 20.204 hectares. The resumption severed the land so that the north-eastern severance contains about 6.662 hectares, which includes the farm house and farm buildings, while the southern severance has an area of about 8.385 hectares.
Before resumption, Lot 2 had an area of 19.139 hectares. The resumption severed an area of 3,280 square metres in the north-eastern corner upon which a dwelling house is situated, from the balance of the remaining area of about 16.022 hectares, which became the southern severance.
No land was taken from the 13.213 hectares of Lot 3, which adjoins Lot 2 on the north-
west. Court).
(Annexed to this judgment is a plan which was included in the judgment of the Land Before the Land Court, Mr and Mrs Barns claimed compensation of $1,525,116, being
made up of a "before" and "after" valuation of $317,500 and a claim for severance and disturbance items of $1,207,616. The valuation put in evidence by the constructing authority, also based on a "before" and "after" valuation, was for $95,000.
As set out in the judgment of the Land Court, the claimants had used the property for sugar cane growing until 1979, when they commenced the breeding and farming of angora goats, in conjunction with their cane farming operation. By 1988 they had become interested in South American exotic animals. They leased out their sugar cane operations and imported some exotic animals from Chile via New Zealand and Victoria. After experiencing some difficulty in obtaining the relevant Government approvals, eventually 17 animals were brought to the property in January 1991. By natural increase there were 32 llamas on the property by late 1992, when the initial construction of the motorway roadworks commenced.
Situated near the southern boundary of the eight hectares on which the llamas were running, was a pond (referred to in the Court below as "the llama dam") from which the animals drank and in which they cooled themselves. In January 1993, while certain earthworks were being undertaken nearby by the respondent, an outbreak of blue-green algae occurred in the llama dam. This resulted in stock losses of both llamas and goats and also the loss of crayfish with which the dam was stocked.
A substantial part of the claim for compensation ($681,739) was for loss of stock and costs of remediation of water quality. The claim was based on the premise that the algal bloom was caused by construction activities carried out by the respondent.
For reasons which are set out in some detail in his judgment, the learned Member of the
Land Court was not convinced that there was any causal link between the construction works and the algal bloom.
This was due to his rejection of the evidence of Mr Barns concerning the sudden drop in water level, which the Member described as "an event critical to the outcome of the overall claim under this heading". He accepted the view of the witnesses for the respondent that there had been no sudden drop in the water level of the dam.
Much fresh evidence was led on the appeal in relation to this aspect and it is necessary to now reconsider the question.
Water Level in the Dam - Did it drop and was that caused by the construction activities of the respondent?
The dam was constructed in mid 1990. It was about three metres deep at its deepest point. A clay pipe connected the dam and the pond drain but this may not have had any relevance to water levels. The pipe is shown in the photograph Exhibit 38 Land Court.
The water level in the dam and the pond drain were the same and when the level in the pond drain reached a certain height, it spilled into the mill drain. The layout of the drains in relation to the dam is shown on the overlay to the photograph Exhibit 5 Land Court and numerous maps and plans tendered in the Land Court and before us.
Before the activities complained of and apart from pumping from the dam, the water level in the dam did not fall below the level of the pipe. Mr Barns said it was usually about 3-6 inches above it.
When pumping for irrigation, the water level would reduce to about the level of the pipe but would resume its previous level by the next day.
Dr Johnson (Land Court p. 74) thought it unlikely that the pipe performed any flushing function with respect to the dam (and this appears also to have been the view of the court below) and that the movement of water and the general water level in the area was governed completely by the groundwater conditions - the movement of water through the strata.
On 22 January 1993, Mr Barns observed that the water level in the dam had dropped about 2 feet (600mm) - this occurred within 1-3 or 2-3 days of work starting in the area. This had never previously occurred. The level has not risen since, other than in time of high rainfall/flood. During construction, the pipe was removed and when removed was found to be blocked. As part of the work a new pipe was installed connecting the dam to the inverted box drain running between culvert 3A/9 and the diversion channel. Mr Barns has since removed the section of pipe at the dam end and blocked it at the other end. The water level in the dam has still not returned to its pre-construction level, other than following periods of high rainfall.
The photograph taken by Dr Tuft in February 1994 (her report Land Court Exhibit 14 Fig. 2) showing the water level in the dam above the pipe - by 2 or 3 inches according to Mr
Barns and by 10-15 cm according to Dr Tuft (Land Court 800) - was, according to Mr Barns, taken following a period of heavy rain and was representative of the water level pre-construction. Dr Tuft in her evidence in the Land Court (815) conceded that "there might have been a very large amount of rain before the photograph was taken."
The appellants also relied on the evidence of Ross Rickard, a Yandina Angora goat breeder and freshwater crayfish farmer. He provided a statement in the Land Court (Exhibit 39) and gave evidence there. He did not give evidence before us. No finding below was made as to his evidence about the water level in the dam. Probably all we can say in relation to Mr Rickard's evidence is that it is consistent with that of Mr Barns and appears to support his evidence.
Mr Rickard became involved with angora goats in about 1978/79 and got to know Mr Barns quite well. He became involved in freshwater crayfish farming in 1985.
In December 1992, he provided Mr Barns with 20kg of crayfish breeders for the dam. Before this, in about November 1992 he inspected the dam and observed the water level in the dam to be quite high and certainly above the level of the pipe by about 4 inches and the water level in the pond drain was also above the level of the pipe. On the 22 or 25 January 1993, (but it may have been later), at Mr Barns' request he inspected the dam to discuss its water quality in view of the algal bloom which had developed. He observed that the water level in the dam was below the level of the pipe - it had dropped approximately 2 feet. It is important to recall that the respondent's case was that a drop of this magnitude could not possibly have occurred, certainly in the 1 - 3 days mentioned by Mr Barns.
If Mr Barns' evidence about the drop in the water level is, as the respondent submits, unreliable, then it follows that the same would be said of Mr Rickard's observations. We do not think that Mr Barns' failure to take photographs indicating the sudden drop in the drain water level is, in the circumstances, deserving of the criticism levelled by the respondent. He had other things on his mind and was not then to know of its significance.
It does not follow that the fact that Mr Rickard may have been mistaken about exactly what work was taking place in the vicinity of the dam on the 22 January 1993, as was recognized in the court below, should cause a rejection of his evidence as to the drop in water level, especially when we did not see or hear him and no adverse finding was made about this aspect of his evidence in the court below. It is not correct, as the respondent submitted, that the court below rejected "as unreliable the appellants' version of events". Mr Gibson submitted that we should ignore Mr Rickard's evidence as to the drop in water level, even if only relied upon as corroborative of Mr Barns, otherwise we would inadvertently be embarking on a rehearing de novo.
We are, to an extent, faced with an unusual situation. Mr Rickard gave evidence on this issue below, but not before us. He was not accepted below on another, albeit related, aspect of his evidence. His evidence as to the drop in water level was not rejected below. It is
corroborative of Mr Barns. If Mr Barns is accepted, our view is that this court can, in the circumstances in which this appeal was conducted, act on the evidence of Mr Rickard as corroborative of Mr Barns if we decide to accept Mr Barns. Further, we think we can rely on the evidence of Mr Rickard as a reason for accepting the evidence of Mr Barns in circumstances where his evidence on this issue and the evidence of Mr Barns was not the subject of a finding below.
The court below left the question open, choosing to say, in effect, that it was not satisfied that if there was a drop in the water level (which may have been doubted), any activities of the respondent caused it.
Dr Ian Smith, a senior lecturer in veterinary science, University of Queensland, also gave evidence for the appellants in the Land Court but not before us. The treatment of his evidence is in the same category as Mr Rickard's. He had been visiting the appellants' property since 1990 in connection with a State-wide survey of skin cancer in angora goats. Because of the course the proceedings took in the Land Court, no findings were made about his evidence or his observations.
In June 1993, he observed that the water level in the dam had dropped significantly - 700-800mm - from its previous level. He had previously observed the level of the dam on visits between 1991 and 1992. In June 1993 he could see the line of the previous level and was aware of a "substantial reduction in the peripheral dimensions of the dam". He did not use the pipe as an index of water level. As best we can see from the transcript, he illustrated his observations by reference to the photograph which was taken on 28 February 1993. He was not seriously cross- examined in the Land Court about this evidence.
Mr Robert Henderson, a valuer, also gave evidence in the Land Court but not before us on this issue. Likewise, the treatment of his evidence is in the same category as Mr Rickard's. His valuation report was Exhibit 6 in the Land Court. His observations are supported by photos 1 and 2 of the dam taken on 15 October 1992 and photos 9 and 10 taken about April 1994. Mr Henderson observed a drop in the water level of the dam between these two dates of "a couple of feet or thereabouts". He said it was "quite obvious". He first saw it on the 19 February 1993. In cross-examination he said he first visited the site in September 1992. It was suggested to him that the fall in level in the dam could not be discerned from the photographs; he disagreed - by reference to photos 2 and 10 - but conceded it was a matter of opinion. That was the extent to which he was cross-examined. In re-examination he said that from his own observations and not using the photos there was "a substantial fall" in the water level of the dam.
Mr Christopher Murphy gave evidence before us and below. He was the construction manager for the motorway project between 1989 and 1993. Mr Barns reported the algal bloom to him on the 25 January 1993 and they discussed it on the 17 February 1993. He said the first he heard of a drop in the water level of the dam was in
evidence in the Land Court.
He said in the Land Court that from his observations between about September 1992 and October 1993 the water level in the dam did not seem to vary at all but he made no measurements.
The water level in the dam was about the same as the standing water levels in other drains all over the property. The pipe from the dam was cut or fractured on the 28 January 1993, at which time he said there was no drop in the water level. He in fact noticed no drop in the level of the water in the dam at any time during the construction period.
In cross-examination, however, he said that the water level in the dam appeared to vary and fluctuate which he presumed was because of fluctuations in the ground water table (also the view of Dr Johnson) and pumping by Mr Barns. He also conceded, in effect, that his before and after observations of the dam were fairly limited and associated with other inspections he was carrying out; he observed it on the 7 January 1993 in connection with the possible relocation of a fence, at which time its level was not a very important consideration for him, and in "probably late January, early February" after the algal bloom had occurred. He never really inspected it for its level but did say that he thought he would have observed a 2 feet drop over 3 days.
He agreed that Exhibit 38 generally depicted the level on the 28 February 1993 but could not say categorically that the level was not higher on the 7 January 1993. In relation to a photograph showing the dam taken in mid to late February 1993 (Photo No. 3 Exhibit 84, Land Court, p. 637, top), he said that he had previously seen the level in the dam "higher than that, probably a foot from my observations". Before us he said that the level he observed on about 7 January 1993, was 2 feet or more lower than that shown in Dr Tuft's photo (Land Court Exhibit 14, fig. 2) taken in February 1994 (but representative of the level pre-construction). He did not recall the level before the construction work being as shown in Dr Tuft's photo.
Mr Gibson in his written submissions has mistaken the photo shown to the witness at p. 724 as Land Court Exhibit 38. In fact it was Dr Tuft's photo contained in Land Court Exhibit 14.
Overall, we are not persuaded that Mr Murphy's evidence is to be preferred to that led by the appellants. We agree with Mr Diehm that he really had no reason to be paying any particular attention to the water level in the dam at any particular time. At any rate, his observations, if that is what they in fact were, appear to have been of a relatively limited and superficial nature and not such as to induce a feeling of comfort in their reliability.
Mr Brian Brennan, who did not give evidence in the Land Court, was called by the respondent before us. He was privately employed on the motorway project as a civil engineering inspector and his job was to inspect the contractors' works and record them. In his statement, Exhibit 12, he said he was on the site of the works carried out "in this area" at least three times per day. He used to see the dam every day while working in the area. When it rained it used to fill up. He did not notice any fluctuations in its level. In his written submissions Mr Gibson described this evidence as "similar" to what he submitted was Mr Murphy's evidence; that he did
not notice any fall in the water level of the dam due to construction activities. We did not understand Mr Brennan to be saying the same thing. In fact, what he said was said almost in passing and was relatively non-specific as to the issue in question.
The same applies to the submission that Mr Brennan did not notice any sudden drop in the level of the dam.
He was not asked to comment on levels by reference to relevant photos. We had reservations about his ability to recall events independently of written records or photographs.
The criticised failure of Mr Boyce (who was then conducting the appellants' case) to cross-examine Mr Brennan on this evidence is not, in those circumstances, of any significance.
Mr Brennan also said that the pipe from the dam was broken when the inverted box drain was excavated and it was blocked with solid dirt or silt such that water could not pass through it.
Mr Brennan's evidence does not cause us to doubt Mr Barns, supported as he is by the other evidence referred to.
In argument, Mr Gibson submitted that the respondent's experts were so strong that they impact upon Mr Barns to the extent that we should think twice about accepting him, that his evidence could not stand against that of the respondent's experts. He was reluctant to accuse Mr Barns of lying, rather that he may be confused about the time period over which the water level dropped, if indeed it did. On his case, it was not a matter of 5 days rather than 3, but at least weeks, perhaps more, for the level to have dropped as described by Mr Barns. His case was that it was more probable than not that the water level in the dam did not drop as described by Mr Barns. He submitted that if there is a Regional Water Table and not a perched aquifer, then the water level could not have fallen as described by Mr Barns.
We agree that on one view this was the effect of what Messrs Martin, Wade and Litwinowicz said, but the issue facing us is the cogency of that evidence compared to the actual observations of other witnesses, especially when the experts had no such observations themselves to rely upon but were generally hypothesising and speculating about what they thought was probably the position because of what they thought were probably the sub-surface conditions in the area. Their evidence had a superficially compelling attraction about it, but in the end we are not satisfied that it outweighs the other direct evidence. In addition, Mr Barns appeared to us to be honest and accurate in what he said and observed. The event described by Mr Barns may be unusual, even exceptional generally, and perhaps more so in this particular area, but we do not think that when all of the evidence is considered, including that of Dr Johnson, that is a sufficient reason for preferring the evidence of the Respondent's experts. As we understood their evidence, they conceded with varying degrees of reluctance, that such an event could have happened, they just did not believe it did. In adopting this approach, it is not without importance, indeed it is of significance, that Dr Johnson, also an expert, but called for the appellants, provided evidence supporting the observations of Mr Barns and those corroborating him.
Each of Messrs Martin, Wade and Litwinowicz gave evidence below and before us.
Reports were tendered in the Land Court and before us. We do not propose to here repeat their opinions, but rather to refer briefly to aspects of their evidence which, in our view, leaves ample room to conclude that the water level did in fact drop as described by Mr Barns.
Mr Martin:
-With coffee rock, there are degrees of permeability. He did not want to say that coffee rock cannot be impermeable or relatively impermeable.
-The cross-section Attachment 4 Exhibit 16 Land Appeal Court only includes information from the drill holes that are actually on the motorway construction line.
-Standard Penetration Test ("SPT") values do not indicate anything as to the degree of permeability of the materials sampled.
-SPT values simply do not assist in determining whether the coffee rock material is permeable or impermeable.
-Tests could have been carried out to ascertain precisely what the nature of the subsoil conditions in the vicinity of the Llama Dam were.
-Coffee rock taken from one place can have a different permeability to coffee rock taken from another place.
-The harder the coffee rock, the more organic concentration in it the more the pores in the rock can be clogged up making it less permeable.
-For the level of the water in the llama dam to drop some 2 feet over 2 or 3 days, something unusual must have happened around the site, such as the work that had been carried on or something he did not know about in the whole system.
-Groundwater is a dynamic system.
-Areas of clay or other impermeable material shelving up to near the natural surface level so as to create some impenetrable or impermeable barriers, are possible. He did not discount that. The question could be resolved to a higher degree of certainty by drilling 3 or 4 holes around the llama dam.
-To accurately determine relevant impermeability of coffee rock, it needs to be tested in situ.
-Water levels in a regional water table could vary due to topography, soil conditions, soil types and "other reasons as well".
-The llama dam was located almost in the middle of the whole preconstruction diversion drainage system.
-In this system, he thought the coffee rock was basically permeable, even though it might be of a different permeability in different places. Unless you know the sort of structures that are there within the ground, you cannot really say anything.
-He could not say for sure whether two pieces of coffee rock 30 or 50 metres away from each other, would have the same permeability.
-Permeability tests could not now be carried out on the drill hole samples because they
have been disturbed by the SPT so the structure of the coffee rock would be destroyed.
-He made assumptions about the subsurface conditions near the dam from the drill hole logs.
-Other than a change in geology, he was not too sure what the explanation was for the difference in water levels measured by Dr Johnson.
-He did not know enough about subsurface compositions; data was fairly limited. He had no data on actual permeabilities and properties of the strata, other than the bore holes but they were designed for a different purpose.
-He did not know exact conditions at any point. He did not know the properties of each of the types of strata in the area.
Mr Wade:
-Tests could have been carried out to determine the subsurface conditions.
-Exhibit 28 assumes a uniform soil strata (uniform high permeability). He did not know the qualities of the soil and he had no pumping test data. It was very hypothetical. He was merely going off accepted text and using average values. The subsurface conditions were assumed to be homogenous sand, based on DH61 and other drill holes around the area. Drill holes would have determined whether it was in fact homogenous. Standing water does not act in the way shown on the model. Exhibit 28 is very simplified and illustrates only that a 2 inch pump would not have had the capacity to remove the water in the time frame postulated. (The appellants conceded pumping with a 2 inch pump alone would not have caused the water level drop). If the permeability was significantly variable, the calculations in Exhibit 28 are potentially unreliable.
-Darcy's Law - Exhibit 29 - assumes a uniform permeability. He had insufficient information about actual conditions to say whether Darcy's Law was applicable. His calculations in Exhibit 28 were no more reliable than those in Exhibit 29. The bore logs did not indicate relative permeabilities of the formations.
-His instructions from the Department of Transport were not to enter the property to test for permeability. Such tests would have resolved the issue.
-There was insufficient data to conclude one way or the other as to the existence or otherwise of a series of perched water tables or a better understanding of the subsurface conditions existing in this area.
-He could not categorically say there was not a perched water table in the area because he did not have enough information.
-Groundwater does not do what you expect; an expected reading is not always the actual reading. The water table is dynamic, moving. The water level can vary in a short distance. One can expect things to happen and all of a sudden a boundary might be encountered and things will change. Relevant tests, relevant data and monitoring should
be carried out before conclusions can be expressed.
-In the absence of exact figures as to the water table level in the area, firm conclusions could not be drawn.
Mr Litwinowicz:
-No direct tests of permeability were done.
-He initially said that indirect tests were done at the tramway underpass about 400 metres south of the Llama dam, but then retracted that and said he could not draw that extended conclusion.
-He said a reason for believing that the sands in the coffee rock were permeable, was the results of the SPT testing, but when pressed as to whether he saw a relationship between the SPT results and permeability, he effectively said not necessarily. There is not necessarily a direct relationship between an SPT and coffee rock.
-Permeability tests were not carried out at or in the vicinity of the llama dam.
-Coffee rock can have different characteristics in different locations; the degree of cementing can vary from place to place.
-Not having seen the water level drop, he could not say it could not occur; he was not prepared to make an absolute statement; unless he did a lot of testing he could not make an absolute statement that there was definitely not an impervious layer from which water could not get out.
-Perched aquifers are not that common, but they do exist.
-A bore hole at the llama dam may have helped.
-He conceded it was probably not appropriate to take a water level measurement next to two drains, however it depended on the level of the drains. He relied upon piezometer readings as to water levels. (These are the independent measurements of water level referred to in the second last paragraph on p. 1 Exhibit 17B.)
There is, in our view, some doubt as to the reliability of piezometer measurements to determine water level. Dr Johnson described a piezometer as an instrument put into a drill hole to measure the pressure and that it is not a water measurement device as such.
c.f. Wade and Litwinowicz. Further, piezometer readings taken at the tramway underpass, like DH62 some distance from the dam, and also possibly affected by drain levels, are not, in our view, a reliable indicator of conditions at or in the vicinity of the dam.
-Dr Johnson's measurement of the water level at culvert 3A/9 (RL O.70 - Exhibit 9) was not an indicator of the groundwater table at that point; he conceded, though, that it could have been such an indicator. He said that it was not in fact consistent with the levels of 0.76, 0.78 and 0.80 taken at other places because the ground elevation was significantly higher at those other places. He also said that because it was in a drain it was possible that water may have ponded at the point waiting to percolate down through the lower
level water table. He could not, however, explain why this theory had not occurred to Mr Wade, an expert in aquifers.
In expressing his opinions, Mr Litwinowicz relied on aerometric data of water levels. He relied upon the plan of water levels (Land Court - Exhibit 92) as measured from aerial photography dated 19 November 1991 (i.e. "well before motorway construction had commenced") (Land Court Exhibit 70) as supporting his opinion that a drop of 600mm could not have occurred. That plan indicates water level in the dam at that date at R.L. 0.14 and at R.L.
0.12 in the pond drain. Mr Litwinowicz understood the degree of accuracy was plus or minus 170mm (i.e. R.L. 0.17) according to what he was told by an officer of the Department of Transport. See also Exhibit 36.
He said generally he would have expected the water level in the dam to have been of the order of 0.3 to 0.5. The Aerometrex Survey and Mr Barns' evidence indicated to him that there was an equilibrium between the llama dam and the pond drain and because the pond drain outletted down the mill drain at a level of the order of 0.44 (the high point shown in the Aerometrex survey), he did not see how the dam itself could sustain levels higher than of that order. He could not be more precise than that "without a lot more information".
The only explanation he could offer for the water level being as low as 0.14 was that it was a particularly dry period, which might have led to pumping for irrigation. He did not, however, know whether Mr Barns had been pumping on 19 November 1991.
The aerometrex level of 0.62 obtained from a photograph taken on 12 August 1993 (referred to in Exhibit 92) (Land Court Exhibit 71) i.e. after the relevant construction work had been completed, does suggest that the work may have had an effect on local water levels.
No witness from Aerometrex gave evidence in the Land Court or before us as to the methodology involved in interpreting the photograph and extrapolating measurements, notwithstanding that issue was taken as to the accuracy of the photography and the conclusions based on it in cross-examination of Mr Litwinowicz in the Land Court. When pressed, Mr Litwinowicz conceded that a conflict between field measurements and aerial photography measurements would have to be resolved in favour of the field measurements if satisfied they were correct.
In cross-examination, Mr Litwinowicz admitted receiving by facsimile from the Department of Transport together with Land Court Exhibit 92 another Aerometrex plan (Exhibit 37 Land Appeal Court), this one being an interpretation of aerial photography of the same area taken on 13 September 1989, before the dam had been dug and at a height of 760 metres above sea level.
It indicated the bed level, with no water, of the mill drain nearest its intersection with the pond drain as 0.72 compared with 0.39 on Exhibit 92 Land Court, at the same point. In cross- examination, he said the 1989 measurement (0.72), was not accurate and should not be relied upon but, as was pointed out at the time, such a statement was not within his expertise. Exhibit
37 indicates a greater vertical accuracy for the 1989 figures - plus or minus 115 mm - compared with the 1991 figures. See Exhibit 36.
Mr Litwinowicz was unclear about whether he informed the Department's legal advisers of its existence in the Land Court or before or during the appeal; he believed he most probably did, but could not be certain. Mr Diehm submitted that this was a reason why we should at least adopt a cautious approach in considering the evidence of Mr Litwinowicz. We agree, but not solely for that reason.
Mr Litwinowicz conceded that one of the pieces of information he took into account in concluding that construction activities in the vicinity could not have caused a drop in the water level in the dam in the order of 600mm in 1-3 days was Exhibit 92 Land Court. The others were the water level shown at the piezometer readings, his understanding of the soil conditions throughout the area, the water levels shown on the drill hole logs and global parameters such as the general drainage system and tide levels. The primary drill hole relied upon by him was No. 62 - but this was some considerable distance from the dam (see Exhibit 28 Land Court) and the water level indicated on the bore log was obtained on the 28 March 1991, nearly two years before the events which concern us. We do not consider it a reliable indicator of subsurface conditions in the vicinity of the dam.
We considered Mr Litwinowicz a difficult witness. He was reluctant to consider assumptions and positions contrary to his case and to express an opinion as to cause and effect, assuming those facts. Many of his conclusions appeared to be based generally on the same evidence as was considered by Mr Martin and Mr Wade. Mr Wade's opinions as to water levels appeared to be based to an extent on the views and evidence of Mr Litwinowicz and for the reasons already expressed, the calculations of Mr Wade cannot confidently be accepted. Mr Litwinowicz was dogmatic to the extent of being unrealistic and was imperious and condescending in his demeanour and attitude. We have no confidence in the accuracy of his opinions. He was casually dismissive of Dr Johnson's opinions in circumstances where he himself had not observed the work carried out in the vicinity of the dam. He had no first hand knowledge of the nature and extent of that work and his evidence was, to an extent, second hand supposition. His starting position was that there was no regional water table and any evidence suggesting the contrary was, for that reason alone, of no credible value. His interpretation of the figures may well be correct if in fact there was a regional water table and no perched aquifer(s), but a higher water level in the vicinity of the dam can in fact be a reason for the existence of a perched aquifer. "Impossible to accept" (Exhibit 17B, p. 2, para. 2) became "highly improbable", and "impossible" became "a little bit strong". Messrs Martin and Wade were far too dogmatic in their opinions having regard to the various assumptions and concessions each had made and was prepared to make. In the face of apparently honest observations of what in fact occurred, their evidence did not, in our view, carry a sufficient conviction of reliability. Because the evidence of each is essential to the respondent's mosaic, weaknesses in the evidence of one, or all of them, is sufficient to detract from the opinions each individually expressed. Mr
Martin's evidence depended to a large extent on the drill hole results (which were also relied on by the others) but he conceded or admitted that they do not indicate anything about the permeability of the coffee rock. In fact, Mr Gibson agreed that the effect of Mr Martin's evidence was that coffee rock could vary quite considerably in permeability from being very permeable to not being very permeable. Mr Wade finally concluded (agreeing effectively with Dr Johnson) that he did not know whether Darcy's Law was applicable; in fact, to get a reliable result the actual rate of permeability must be known. If an assumed rate is used, it cannot be said whether the result is reliable or unreliable.
Mr Martin in his statement Exhibit 16 also left room for an acceptance of the evidence of Mr Barns, for example:
-it does not necessarily follow that the measurement of varying water levels in an area indicates independent groundwater systems (para. 1);
-obviously interbeds and coffee rock will have differing permeabilities and therefore could affect groundwater flow patterns (para. 3);
-Dr Johnson's water level measurements may not be truly indicators of the water table (para. 5);
-the current dam level may be temporarily affected by activities such as irrigation (para.
5).
Dr Johnson said of Attachment 3 to Exhibit 16 that there are no actual readings to the left hand side of the dam; everything on that side is just an assumption of what the levels might be. We agree.
Mr Litwinowicz's opinions as to the force required to crack an impermeable layer of coffee rock in the perched water table situation, appeared to some extent outside of his area of expertise, to be speculative and to be expressed simply for the purposes of supporting his initial opinion. Further, his evidence in relation to forces went beyond anything he had said in his statements Exhibits 17A and 17B, and the impression given was that it was an after thought.
A major problem faced by both sides was that neither could state categorically what the sub-surface conditions in the immediate vicinity of the dam were. In our view, it is not possible on the scientific/expert evidence alone to reach a confident conclusion as to the sub-surface conditions; the evidence is inconclusive. In these circumstances, it is not as simple as the respondent asserts, viz. Mr Barns cannot be believed because of it's expert evidence. In this situation, if Mr Barns is believed (supported as he is by the other evidence to which we have referred), the expert evidence and opinion as to the sub-surface conditions more likely to be correct is Dr Johnson and that is the conclusion we have reached.
The position could have been put beyond doubt had appropriate tests been carried out in the immediate vicinity of the dam. All of the experts were agreed on this. During the appeal, correspondence took place between the parties on this subject but agreement was not reached. See Exhibits 41, 42 and 43. We are not, in the circumstances, prepared to draw any adverse conclusion against the appellants for not agreeing to such testing. In fact, if any adverse
conclusion is to be drawn, perhaps it should be drawn against the respondent, in view of the provisions of Section 36 of the Acquisition of Land Act 1967 but it is not necessary to go that far.
Turning now to the evidence of Dr Johnson. On the appellants' application to lead the further evidence from Dr Johnson contained in his report Exhibit 9, he said that if there existed a regional water table (i.e. a "consistent uniform aquifer") in this area, the water level in the dam could not have dropped as described by Mr Barns. For this reason he took the water level measurements referred to in Exhibit 9. The results he found "surprising" because in the Land Court he accepted the respondent's expert evidence that there was no difference in the water table level across the site. He said that the water levels turned out to be surprisingly different at various sites in close proximity to one another in the vicinity of the construction work and the Barns' house. On the respondent's case, the water levels should have been consistent across the entire site. His view was that his water level readings invalidated the concept of one regional water table covering the entire area.
His conclusion from the readings referred to in Exhibit 9 was that there was not one regional water table existing in the area. Water levels vary quite significantly over relatively short distances. He thought that the water level readings abrogated the evidence that there was one water table and indicated that there was a higher level in the dam than existed in the water bodies directly adjoining it. This assumes, though, an acceptance of the evidence of Mr Barns. As we understand his evidence in the Land Court, he opted for a perched water table in the face of the respondent's evidence as the only explanation for the evidence of Mr Barns as to a 600mm drop in water level. His readings in Exhibit 9 provided the basis for his evidence before us and for the statements he made in Exhibit 8 about a perched water table.
The argument became somewhat circuitous. If there was one water table over the whole area - a regional water table - the level in the dam would not have dropped as described and the construction work that Steffens and Walsh were involved in "could not possibly have caused a drop in level because there was no drop in level to have occurred". If there is a difference in water levels, that difference would be because some elements of this site are less permeable than others. If that permeability is interfered with - here by digging to a greater depth or breaking through a bund or a natural obstruction - the water would flow from the higher area to the lower area finding its own natural level. He said one had to go beyond Steffens and Walsh and find a water level difference, otherwise the respondent's view would be correct.
He thought that generally the same water levels would have been found in 1993 as he found in 1995.
In the Land Court, he accepted the respondent's evidence that a number of bore holes taken along the motorway showed a consistent level; they were the same level; they changed; they fell and rose with rainfall or with a dry period. The view of the respondent's witnesses was that these were representative of the vicinity of the dam - were truly indicative of the sub-surface conditions underlying the dam. He said that his measurements in Exhibit 9 showed that not to be the case. His evidence was that significant water level differences do occur from sites in
close proximity to each other.
It was not suggested by either party that the evidence of Dr Johnson led on the application in respect of Exhibit 9 could not be used generally on the appeal. We think it can. It was consistent with his substantive evidence, which really was an amplification of his initial evidence.
The llama dam is a window into the water table (the respondent's witnesses were also of this view) and apart from surface run-off, it is primarily fed by sub-surface water, i.e. water in the water table. The bottom of the dam is below the top of the aquifer.
Groundwater is the major source of inflow to the dam and replenishment and maintenance of the dam level is effectively dependent upon the movement of groundwater as well as the infrequent flushing effect of flood flows.
Coffee rock is not impermeable by its own nature. It is impermeable because of the organic material within the coffee rock that can cause it to hold water.
The presence or otherwise of a perched water table (i.e. a water level that is higher locally than it may be at an adjacent spot, kept high by certain material) was hypothesized as the reason why there was a higher water level in the dam in comparison to the adjoining areas. Areas of non-homogenous material may prevent flow going from one area to the next and may hold up the water level.
In Dr Johnson's opinion there is a regional water table underlying this area, but not in the sense of being a "consistent uniform aquifer", i.e. an aquifer with substantially uniform permeability throughout, subject perhaps to local variations. When he expressed the view in Exhibit 9, last paragraph, that "there is no single regional water table" he meant no single uniform regional water table.
He could not find any significant evidence of a perched water table because there was no documentary evidence to that effect. His hypothesis was that there was perching at this point that caused the water level to be high.
The different levels recorded at different locations indicate that the water table level fluctuates from one location to another. The only reasons he can suggest for the different water levels are either a perched water table or some significant area of impermeability which radically slows percolation. Water level differences of the sort described in Exhibit 9 could be due to impermeable or relatively impermeable materials. Mr Gibson submitted that the hypothesis which Dr Johnson propounded depended for its validity upon acceptance of Mr Barns' evidence that there was a drop in the water level of the llama dam. On the fourth day of the hearing of the appeal, the respondent submitted that we should remit for determination to the Member who heard the matter the question of whether there was at the relevant date a fall in the water level of the dam as described by Mr Barns. We rejected that application. During the course of argument on it, Mr Gibson conceded that there was no explicit or express rejection of the evidence of Mr Barns by the court below. His view then was that the resolution of this issue depended upon
credibility. He also conceded that it was open for us to find that there was a sudden drop in the water level and that Dr Johnson's evidence could be accepted "in some way in that regard". In final submissions he accepted that we could provisionally form the view to believe Mr Barns and then consider whether the respondent's expert evidence - which he had earlier conceded was "largely technical" - caused us to change our minds.
Dr Johnson believed the differences in level between directly adjacent points were greater than what would normally be expected in a homogenous aquifer, i.e. one in which the material was of consistent permeability from one point to another.
As we understood Dr Johnson, he thought that the variations in the levels could reflect something other than a series of perched water tables, such as local areas of variable permeability
- zones of relatively impermeability. He was not sure, but favoured a perched water table.
The evidence derived from the drill holes to which Mr Martin and others referred, could not disprove this hypothesis because they intersect only one vertical position and indicate no more than what is under that point.
Dr Johnson adhered to the conclusion he expressed as follows in Exhibit 9:
"The only conclusion possible is that there is no single regional water table, and that significant water level differences do occur for sites within close proximity to each other. The reason for these differences is presently unknown, and is unimportant in relation to the matter now under review. The only important element is that these level differences exist, and that a higher water level was obviously possible in the llama pond prior to the construction of the Motorway, particularly if it was linked at that time to the aquifer which is supporting higher water levels in the bores to the east."
In our view, the evidence of Mr Wade of the dynamic nature of a water table - a collection of water level points which can be different short distances apart - is not inconsistent with the evidence of Dr Johnson and his conclusions.
We conclude, therefore, that there was a drop in the water level as described by Mr Barns and that the construction activities of the respondent caused that drop. No other activities could be said to have been responsible.
Causal Link
This involves a consideration of the causal link between the fall in the water level of the dam and the outbreak of the algal bloom or blue green algae in turn which caused the stock losses.
To be compensable there must be "a relevant cause and effect (McInnes and Another -v- Commissioner of Highways (1992) 78 LGERA 410 at page 412). In our view the algal bloom
was caused or materially contributed to by the drop in water level (Tubemakers of Australia Ltd - v- Fernandez (1976) 50 ALJR 720).
What caused the outbreak?
No evidence was called before us on this issue so it is necessary to consider the evidence led in the Court below. In approaching this issue the learned Member said:
"On the considerable evidence presented there is seen to be no doubt that an algal bloom occurred in January 1993. There can also be no doubt that the formation of the algal bloom in the llama dam was associated with the bacterial genus Microcystis, an organism which is capable of causing adverse health effects both to humans and animals.
The expert evidence as it related to water quality indicated that Microcystis is a common inhabitant of water storages, particularly those with limited flow regimes. It is not necessary to establish how the cells came to be in the llama dam in the first place. The question is whether the activities of the respondent's contractors or the construction of the road stimulated the seeding of the cells.
The primary expert for the claimants in matters of water quality (as well as hydrology) was Dr T.C. Johnson, whose expertise in the area of water quality was specialised. He, not unnaturally, had no firsthand knowledge of the llama dam at the time of the initial algal bloom or prior to the completion of the Motorway construction. His theories were based on the causation of algal bloom in the dam being linked to alteration of water table levels. While it is submitted that the claimants' case does not stand or fall on an alleged sudden drop in the water level of the dam at about the time of initial road drainage works, that initial bloom is clearly an event critical to the outcome of the overall claim under this heading. If a sudden drop in water level in the dam occurred, and that resulted from construction activities, then the algal bloom might reasonably be linked to the construction activities, based on Dr Johnson's opinions. However even if any drop in the water level in the dam did occur but that was the result of climatic conditions, as the respondent argues, then the algal bloom and the timing of the construction activities would reasonably be nothing more than coincidence."
After concluding that he could not be satisfied that there was a sudden drop in the water level of the dam he said:
"In the end result, there seems no doubt that conditions existed relative to the llama dam which were capable of promoting a blue-green algal bloom regardless of the initial or eventual construction works. I have not been convinced that any construction works at the time of, or immediately prior to, the initial algal bloom in January, 1993, could reasonably be linked to that bloom. ....
With the necessary causal link not being established, I am unable to find that stock losses from death (including the crayfish killed by the application of copper sulphate) or depreciation in value from physical disabilities, due to initial or subsequent algal induced toxicity, or costs associated with the prevention or mitigation of further losses, are a
direct or natural consequence of the resumption."
The equation alters once it is concluded that the water level dropped in the manner alleged and that the drop was caused by the activities of the respondent. The onus of proof is on the appellants.
We do not read the reports and evidence of Doctors Johnson and Robyn Tuft and Mrs Elizabeth Chudek as being mutually inconsistent; in fact there is a considerable amount of common ground. On balance once it is accepted that the water level dropped as described by Mr Barns the conclusion from the expert evidence is irresistible that the drop in water level did in fact precipitate or cause the algal bloom. Realistically we do not think that in those circumstances Doctor Tuft or Mrs Chudek disagreed. We cannot accept Mr Gibson's submission that even if there was a drop in the water level of the dam the outbreak of the blue green algae was purely co-incidental and in no way related to such a drop.
In his report (Land Court Exhibit 7) Doctor Johnson said that the lowering of the water level increased the potential for algal blooms. An algal bloom can be triggered by a very minor operation in a key parameter; adequate water quality can deteriorate rapidly to a toxic state if conditions such as turbidity, nutrient level, temperature or mixing vary by only a small amount. The conditions in the dam were suitable for algal growth at the time of the bloom. In particular nutrient levels (phosphorus and nitrogen) were relatively high and the water temperature was elevated. However the presence of suitable conditions does not guarantee that uncontrolled algal growth will occur. In particular it is a common occurrence that algal blooms appear to be triggered by some, often minor, alteration in climatic or water body conditions. This would appear to be the case here. Conditions which had previously been in balance to the extent that water quality was acceptable were altered when the water level dropped.
In his second report (Land Court Exhibit 19) he said that the sudden reduction in water level which occurred could have triggered the blue green algae by increased nutrient concentrations. Changes in water level, particularly rapid alteration, are very likely to directly stimulate algal growth.
We accept what Doctor Johnson says in his reports. We also accept the evidence which he gave in the Court below.
He said that blue green algae are a very common occurrence in farm dams and are present in almost all fresh water supplies. It is probably very true that the cyanobacteria was simply lying dormant in the dam sediments or within the dam and it merely required a certain combination of conditions for them to be activated, some form of triggering mechanism. A sudden drop in the water level combined with turbulence induced in the water body by the animals causing a release of phosphorus from the sediments could have caused the outbreak. If cyanobacteria is seeding in the water body and there is an increase in the concentration of phosphorous that is all that is required for cyanobacteria floating at the surface to bloom very quickly. All the conditions were present which could have precipitated the bloom. What caused it was the dropping of the water level thus bring the phosphorous laden sediments close to the
water surface. He then gave this evidence:
"And is that something that would only be brought about by that condition occurring over some periods of time or could it occur very quickly with the drop of the water level?-- If it occurred very quickly there's obviously more potential for there to be a sudden increase in the phosphorous level. If the water level had dropped slowly it's unlikely there would have been a lot of turbulence induced into the water in one case. Secondly, as the water level drops slowly, that part of the bed which is contaminated with phosphorous only becomes available to the epilimnion (ie. the upper region of the water body) and the well-oxygenated water slowly. Therefore, although phosphorous is going to be released by that type of phenomenon, it's going to occur at a much slower rate than would occur if the water level drops quickly. Again, you can postulate that if it happens slowly the phosphorous which is being released can be taken up by the exiting algae without there being a massive increase in phosphorous concentrations."
He said that relatively minor changes can cause an algal bloom to occur provided that conditions are right; a massive change is not necessary.
In cross examination he conceded that conditions were prime for the growth of blue green algae, that conditions were certainly suitable for a potential growth. His view was that the relatively quick reduction in the water level of the dam presented itself as a reasonable hypothesis as to why a bloom may have occurred; it was the most likely trigger. As to other
potential explanations for the development of the bloom at that time he said:
"A significant degree of mixing in the dam, such that the stratification event which was set up was terminated in some way whether by mechanical mixing or wind mixing or some mechanism of that type, increased water temperatures as a result of any source, a general change in the nutrient status, whether there was a large hit of phosphorous entering the pond at one time, a series of possibilities none of which seem to correspond with what actually took place."
He said that it is most typically the case that some trigger causes the switch over from relatively stable conditions to conditions where blue green algae bloom. Conditions were present and were suitable for the growth but no blue green algal bloom had occurred before. He further
said:
"It depends on the balance between the productivity of the lake and the nutrient inflow. If you've got the situation where the amount of phosphorous in particular and nitrogen coming into the lake is balanced by the productivity of the lake in terms of its production, in terms of both algae and other types of vegetation, then you would - it'd be considered to be a steady state condition where things might not get - they'd stay at that status."
He conceded that the equilibrium could have been upset by the removal of a number of head of stock from using the dam and conversely by an increase in the size of the herd. Whether the equilibrium is disturbed depends on any number of factors that might trigger the bloom. Each bloom requires a trigger of some type, some change in the environmental factors.
In her report (Land Court Exhibit 14) Doctor Tuft said that blue green algal blooms are generally the result of a combination of promotion factors. A pulse increase in the concentration of available nutrients can provide a stimulus. If inflow to the dam was substantially reduced (as a result of a substantial drop in the water level) it is possible that nutrient concentration could have increased as the water level was reduced.
In an earlier draft of her report (Land Court Exhibit 75) she said an increase in nutrient concentration via evaporation could have promoted a bloom of blue green algae as could temporary or permanent changes in the local hydrology. These statements were omitted from Exhibit 14. She was mistaken also about the time when work was carried out in the vicinity of the dam and the time it took for the bloom to develop thereafter. In her draft she proceeded on the basis that the work was completed several months before the bloom occurred. References to this time gap were deleted from her final report but one is left with the feeling that they may nevertheless have influenced her conclusions, notwithstanding that she said in evidence that she did reassess that whole situation once she had the correct information. See also her evidence at pages 821 - 822.
Further, part of the conclusions she expressed in the draft report - that if the work did contribute to the bloom it could not be considered the sole or even a major contributor but a minor factor just sufficient to tip a delicately balanced situation in favour of the blue green algae
- was not repeated in Exhibit 14 and is also subject to her misunderstanding as to relevant times.
In her report and in her evidence she appears reluctant to accept that the water level could have dropped in the manner described by Mr Barns and this reluctance appears to translate to a reluctance to even consider that scenario as a likely triggering mechanism. For example, she said in her report that changes in surface drainage may have contributed to stimulation of the relevant organism - microcystis - if resulting in substantially reduced water flow into the dam "but such changes are considered unlikely". She said though that an alteration in nutrient levels could have contributed to the algal bloom.
She did not identify any likely triggering mechanism notwithstanding that Doctor Johnson was of the view that an algal bloom having occurred it was therefore likely that there was a trigger of some type.
In her report she said that a drop in the water level per se would have no effect on nutrient levels or blue green algae. Doctor Johnson in his second report disagreed with her. In his evidence he expressed his reasons for disagreeing with her and we find those reasons to be compelling. Likewise we agree with his criticism (Land Court Exhibit 19) of Doctor Tuft's opinion that an increase in the water temperature associated with the drop in the water level could not have contributed to the development of the algal bloom.
It was when she gave evidence that it became apparent that there is not a significant difference in her opinions from those of Doctor Johnson. She said that blue green algae can grow in bottom sediments and in the lower areas of a water body. This can be relevant to the development of blue green algae if the phosphorous is released in a form which is available to the algae. It does not necessarily follow that because blue green algae is found to exist in the given water body that a bloom will inevitably result. It has to have a favourable environment. It may happen quickly but it can also happen as a very gradual process. Every dam is a separate ecosystem which has its own characteristics and may be at different stages of populations dynamics. A combination of conditions coming together produce a bloom. A sudden increase in the concentration of nutrients can provide a stimulus. A general lowering of water tables throughout the region is another mechanism.
Notwithstanding the evidence of Mr Barns about the drop in water level and the
development of the algal bloom, she said:
"Even though algal blooms can occur within a small number of days I find unlikely the whole event could happen within that short period of time."
The fact of the matter though is that it did. This is illustrative of her reluctance to accept that events occurred as stated by Mr Barns and conveys the impression that she was concentrating on other aspects.
She said that blooms can develop as a result of a trigger or gradually over a period of time; they can occur suddenly or gradually.
She said that the road works would be a possible trigger factor if the surface drainage was involved but then said:
"In the hypothetical event that there was a drastic change in the level of the dam through
hydrological changes at the time then there is a possibility that the blue green algae could have been encouraged by that event in the manner as indicated by Doctor Johnson."
She said that in examining the ways the motorway construction could have had a role in the blooming she found no evidence of any connection, but in our view this was because she proceeded on the basis that the water level did not in fact drop as described by Mr Barns.
She said that a bloom could have happened at any stage and would be expected within ten years of such a dam being in existence. Doctor Johnson proceeded on the basis that the dam was approximately eighteen months old, "a young pond".
Finally there was the report (Land Court Exhibit 48) of Mrs Elizabeth Chudek and her evidence. Reading her evidence we have some reservations about the extent of her expertise in this particular area and her qualifications to express some of the opinions she did.
In her report she said it is possible to obtain a greater concentration of nutrients by reducing the volume of water but it is difficult to conclude that a sudden drop in water level and subsequent concentration of nutrients was a triggering factor for the algal bloom. She did not however give any reasons for this opinion. All she said was that other factors existed which could have caused it. She said that no single factor is crucial to the growth of blue green algae population; a number of criteria have to be satisfied. Doctors Johnson and Tuft agreed with this.
We do not read her evidence at pages 144-5 as excluding a sudden drop in the water level of the dam as the triggering factor for the bloom. She agreed with Doctor Johnson that blue green algae are present in all water bodies and said that it is just a matter of proportions for a bloom to develop. She said that the work being carried out in the area was coincidental to the development of the bloom but conceded in cross examination that it is possible that the drop in water level caused the sediments to come closer to the surface in the manner indicated by Doctor Johnson.
As we read the evidence of the three witnesses, Doctor Johnson was of the opinion that the drop in water level was the probable cause of the development of the algal bloom and this was conceded by Doctor Tuft and Mrs Chudek to at least be a possible view. There is in our
view in these circumstances and having regard to all of the evidence, ample room to conclude that it is probable that the drop in the water level as described by Mr Barns did cause the algal bloom. See for example EMI (Australia) Ltd -v- BES (1970) 2 NSWR 238 referred to by counsel for the appellants. In fact Mr Gibson submitted that both Doctor Tuft and Mrs Chudek conceded that the drop in water level could have been the trigger which caused the development of blue green algae. He agreed that it was a matter for us to analyse the evidence of the three experts and draw our own conclusion. We have endeavoured to do this. He also submitted that the water body in the dam was like a time bomb ticking away and the sufficient coalescence of the physical circumstances of weather and other factors themselves would have been sufficient for the blue green algae to manifest itself. In our view a trigger was required and that trigger was the drop in the water level of the dam.
Mr Gibson submitted that some discounting should be applied for the risk that the blue green algae may have developed in any event. We think there is substance in this submission and we did not understand Mr Deihm to seriously contest it. Mr Gibson submitted that if the causal issue was resolved against the respondent we should apply a discounting factor to the quantum of compensation for the loss which is assessed as being compensable. He was not able to assist with a figure.
We think the evidence establishes that there was a risk of the blue green algae blooming in any event and we think it would not be inappropriate to reduce the compensation payable to the appellants for stock and related losses as a result of this risk by some 15%. This figure takes into account all of the evidence of the three relevant witnesses, the age of the dam and the particular evidence of Doctor Tuft (which was not contested by the appellants) that she would have expected an algal bloom to have developed spontaneously as a result of a sufficient coalescence of relevant conditions within ten years of such a dam being in existence.
Claim for Stock Losses - Compensable ?
Sections 12(5), 20(1) and 20(2) of the Acquisition of Land Act 1967 (ALA) are in the following terms:
"12(5) On and from the date of the publication in the Gazette of the proclamation .... the
land thereby taken shall be vested or become Crown land ...... and the estate and interest of every person entitled to the whole or any part of the land shall thereby be converted into a right to claim compensation under this Act ...".
"20. (1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (if any) caused by either or both of the following, namely -
(a)the severing of the land taken from other land of the claimant;
(b)the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.
(2) Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken."
On the "assumption that a causal link could be established between the construction activities and the algal bloom" the Land Court decided that "the Court did have the necessary jurisdiction to determine the question of stock losses and the side issue associated with the algal bloom." The Court did not however categorise the claim. In fact, the question is not whether the Court has jurisdiction to consider the claim but whether the claim is compensable. This was the way the matter was approached on appeal.
The claim which the appellants made below and before us was:-
Crayfish $ 3 000 AlpacasandLlamas: Deaths: 6Criaat$10000 $60 000 1YearlingFemale 20 000 1Buck 30000 $ 110 000 Herddepreciation
32at$16000 $ 512 000 AngoraGoats:DepreciatedValue 3Bucksat$1750 $ 5 250 5Doesat$950 $ 4 750 The dam and the animals were located on land retained by the appellants.
We have already concluded that it was the respondent's work which caused the water level in the dam to drop which in turn led to the algal bloom which caused the stock losses.
The appellants contended that s.20(1)(b) does give "a right to compensation for damage arising out of the injurious affection." They submitted that the land had been injuriously affected by the drop in the water level of the dam which led to the algal bloom and that the stock losses - damage - followed from the injurious affection and $14.500 were therefore recoverable. This was their principal argument.
Alternatively, the appellants submitted that the claim could also be seen as one for disturbance in the sense of "disruption of or interference with a business or other activity carried on or proposed to be carried on, on the retained land." (Our emphasis)
Disturbance
It is convenient to deal with the claim under this heading first.
Notwithstanding that there are some apparently curious anomalies, disturbance is a claim in respect of the land resumed or taken and not a claim in respect to damage caused to the balance or retained land as a result of the activities of the resuming/constructing authority. See eg. Commonwealth -v- Milledge (1953) 90 CLR 157; Horn -v- Sunderland Corporation [1941] 1 All ER 480; Universal Sands and Minerals Pty Ltd -v- Commonwealth (1980) 30 ALR 637; R-v- Corbould (1986) 11 QLCR 50; Murray -v- Queensland Electricity Generating Board (1984) 10 QLCR 69 and Thirty-fourth Philgram Pty Ltd -v- R (1993) 14 QLCR 13. The anomalies arise from the linking of the claim to the market value of the land resumed.
We do not think that the decision in Crisp and Gunn Co-operative Ltd -v- Hobart City Council (1963) 110 CLR 538 suggests another approach. Compensation was there assessed on the basis of the market value of the land resumed. £4 000 was claimed for disturbance of the business which was carried on on 3 separate parcels of land used in combination one of which was resumed. This was not allowed because the market value of the land resumed exceeded the "present use" value by an amount in excess of £4 000; and this was in a case where the statute provided that in determining the amount of compensation regard should be had, not only to the value of the land and other specified items, but also to "disturbance and any other matter not directly based on the value of the land". The decision is certainly not authority for the proposition that business losses cannot, in the appropriate case, be recoverable as disturbance. In fact we think that if the market value of the land resumed was £4 000 less than the "present use" value, £4 000 would have been allowed separately for "disturbance of the appellant's business".
We agree with the respondent's submission that to be compensable as disturbance the damage claimed must be consequent upon the actual taking of the land (and not be too remote); Halsbury's Laws of England (4th Edition) Volume 8 paragraph 322 was referred to. Reference was also made to R -v- Corbould, supra, as authority for the proposition that disturbance is compensable only if it can be properly characterised as being a direct and natural (or natural and reasonable) consequence of the taking of the land and/or the final use made of the land taken. For our part we would be prepared to find that the loss claimed before us was a direct and natural consequence of the activities of the respondent but we have some difficulty characterising it as also a consequence of the taking of the land. We appreciate the line of reasoning that there is no distinction between the taking and the purpose for which the land is taken, that the purpose of the taking defines the taking and that no distinction should be drawn between the taking and the implementation of the purpose of the taking (see eg. Konowalow and Felber -v- Minister for Works [1961] WAR 40 at 43 - 44) but we think it is distinguishable from the circumstances of the present case. In one sense the stock losses suffered by the appellants were caused by the purpose of the taking - the construction of the motorway. They were not however suffered in respect of the land taken. It is not said by the appellants that the stock losses occurred as a result of the resumption or taking of the land per se; on the contrary they occurred on the balance land as a result of the carrying out on the land taken of work associated with the construction of the
motorway. When the land was taken the stock were not injured, did not die. When the land was taken the appellants' "exotic" animal business (which was conceded by Mr Gibson to be a commercial activity) did not suffer loss. In this sense the loss suffered by the Appellants was not "directly consequent on the taking of the land", "the consequence of the compulsory acquisition" or a "loss sustained by a dispossessed owner which follows from a compulsory acquisition" (Harvey -v- Crawley Development Corporation, supra at 506 and 507 per Denning L.J. and Romer L.J.) It is not as a result of "the disruption of or interference with some business or process of living or other activity carried on on the subject land" (Brewarrana Pty Ltd -v- Commissioner of Highways (No.2), supra, at p 247 per Bray C.J.) or on both the land taken and the balance land. It is not a claim by "the former owner for the loss of his land" or something located on it (Murray -v- Queensland Electricity Generating Board, supra at p.78). It is not a claim in respect of a business destroyed by the resumption (The Commonwealth -v- Reeve (1949) 78 CLR 410).
Brown, "Land Acquisition" (4th Edition), at page 117 describes the claim as one referable "to the loss or damage which a dispossessed owner incurs when he or she moves from the land," and as embracing "loss which is the natural and reasonable consequence of the dispossession."
The appellants submitted that the claim for disturbance "is for disruption of or interference with a business or other activity carried on or proposed to be carried on on the retained land" and relied upon the remarks of Bray C.J. in Brewarrana Pty Ltd -v- Commissioner of Highways (No.2), supra, at 247. His Honour's remarks however related to such an activity on the subject (ie the resumed) land and not the retained land.
Notwithstanding that many of the authorities refer to a claim for disturbance as "part of the special value to the owner" which can be dealt with as part of the value of the land to the owner or as a separate head of compensation provided it is not duplicated, the fact is that some of the claims assessed under this heading - legal and valuation fees for example - are difficult to accommodate in such a description. This is the anomalous situation to which we referred earlier. Mr Gibson submitted that "the seminal point of principle" is that a claim for disturbance "is a claim in respect of the diminution in value of the owner's interest in the land." That may be how it is described in many of the authorities but that is not how it is applied in practice; it is not in fact confined to "a diminution in value" but extends to "all damage directly consequent on the taking of the" land "in addition to the open market value of the land" (per Denning L.J., Harvey - v- Crawley Development Corporation, supra, at p 506 and we do not think the fact that it was a separate statutory claim in that case is a sufficient point of distinction in this respect).
Like the 1845 Act considered by the Court of Appeal in Horn -v- Sunderland Corporation, supra, section 20 ALA contains no express provision giving compensation for disturbance. Scott LJ said at page 492:
"If I am right in saying that the Act expressly grants only two kinds of compensation to
an owner who has land taken - namely (i) for the value to him of the land, and (ii) for injurious affection to his other land - it is plain that the judicial eye which has discerned that right in the Act must inevitably have found it in (i), that is, in the fair purchase price
of the land taken, and that conclusion is consonant with all the decisions, so far as I can discover."
Section 49 of the 1845 Act related to the assessment of compensation and required separate verdicts for the purchase money
"... and for the sum of money to be paid by way of compensation for the damage, if any, to be sustained by the owner of the lands by reason of the severing of the lands taken from the other lands of such owner, or otherwise injuriously affecting such lands by the exercise of the powers of this or the special Act, or any Act incorporated therewith."
Scott L.J. continued at page 493:
"The definition of `the damage that may be sustained ... by reason of the execution of the works,' for which compensation is payable, is still further defined in this section by limiting it to the case of `other lands of such owner.' ...
These extracts from the only relevant sections show clearly that a claim for disturbance connected with the land taken must be made as part and parcel of the claim for purchase money. It cannot come under the head of compensation for severance or for injurious affection to the other lands of the owner, and the statute knows no tertium quid in the way of compensation. None the less, the owner in a proper case - namely, in a case where he really does incur a loss of money by disturbance due to the taking over and beyond the loss for which he is to be reimbursed in respect of the land taken - is entitled, because it has to do with the land, to have that element of personal loss taken into the reckoning of the fair price of the land, as has been held by the courts from a very early stage."Thefollowing passage in Brown, op cit, at page 121, perhaps highlights the dichotomy: "Disturbance is a different concept from special value to the land (the Pastoral Finance Association Ltd -v- The Minister [1914] AC 1083 principle). It is common ground in both concepts that the land has a market value. The market value is determined by objective criteria under the Spencer principle. In the hands of the dispossessed owner the land may have a special value over and above its market value. Alternatively, the land may have a market value but in addition have a `disturbance value' which arises out of the displacement and is reasonable. The special value and the disturbance value may differ and the claimant is entitled to whichever is the greater. They are both doctrines which have been grafted onto the statutory compensation provisions. When they have been included within the compensation provisions, there is an immediate problem of interpretation as to whether the words used in the statute reflect the common law concept or whether they modify, amend or alter the judicial concept."
"Spencer" is a reference to Spencer -v- The Commonwealth (1907) 5 CLR 418.
The appellants contended that a loss of farm productivity is a compensable loss under this heading and that "it should be no less when the stock are effectively destroyed." They relied upon James -v- The Commissioner for Railways (1976) 3 QLCR 396. In that case the Commissioner for Railways resumed land for railway purposes. Erected on the retained land and
close to the constructed railway line was a commercial piggery. A claim was made for loss of
production. The Land Court found that such a claim was recoverable being -
"attributable largely to stress caused to all pigs in the claimants' piggery by the disturbance engendered by the use of heavy motorised equipment and the accompanying servicing, maintenance and repairs."
The compensation determined by the Court included $3 500 for "loss of production" as a separate heading and separate amounts for "land", "severance" and "disturbance". Claims for loss of income from the piggery business were also made - under the heading of injurious affection - but were dismissed because the Court concluded that the piggery business had not been a viable undertaking from inception. The claim for loss of production appears to have been included as part of the claims for loss of income but it is not entirely clear though on what basis the claim for loss of production was allowed.
The respondent submitted that regardless of how the Court in James characterised the compensation awarded it was in error; the loss of livestock is something entirely beyond the scope or purview of the legislation: "The value of the stock in that case, or in this case, could not be attributed to the value of the land, nor could it be described or regarded as being part of the value of the land. It is something extraneous to the value of the land and therefor is not properly compensable pursuant to s.20." Subject to one reservation we agree if the submission is confined to disturbance. We do not agree that the loss claimed here or in James cannot come within the injurious affection category.
"All foreseeable damage to an owner's other lands expected to arise from the authorised purpose for which part of his land has been taken must be included in the claim for compensation."
These passages or some of them were relied upon by the respondent for the following written submission:
"The death of the animals and/or depreciation of the herd cannot properly be categorised
as falling under the heading `injurious affection'. Section 20(1)(b) contemplates that the injurious affection is to be limited to the damage, if any, caused by the lawful activities of the constructing authority to the retained land. The death and/or depreciation in the value of the herd cannot be properly identified as being associated with the depreciation in the value of any retained land."
It follows from what we have already said that we cannot accept this submission. The appellants' submission was that to construe section 20(1)(b) as giving a right to compensation for injurious affection simpliciter as opposed to damage arising out of the injurious affection is to misconstrue the section. We agree. We also agree with their submission that by providing an entitlement to compensation for damage arising out of injurious affection, the legislation provides a remedy which is broader than compensating for the mere effect on the value of the retained land.
Before us Mr Gibson submitted that compensation is only awarded in respect of injurious affection if the value of the interest of the landowner in the land is depreciated as a consequence of the resumption or of the use to which the resumed land is put. We cannot agree with such a submission; it ignores, with respect, the way in which the matter is expressed in section 20(1)(b). We should however mention that during argument Mr Gibson submitted that if a business which is conducted on the land, attached to the land, is so affected by the resumption or the post- resumption construction activities or the subsequent end user of the land, then that is compensable and the measure of compensation may be indicated by the business losses which have followed; it is compensable as part of the market value of the land because the hypothetical reasonable and prudent purchaser would have regard to diminution in profits in determining what he would pay for the business. He would though not readily agree that in the present case, absent the llamas, there would be a diminution in the value of the business which would result in a diminution in the value of the land. He said it would depend on what was the highest and best use of the land. He then agreed that it would be "allowed as an item of injurious affection or diminution in value" not both. This perhaps highlights the problem; many cases cannot be comfortably accommodated if recovery is dependent solely upon a link to market value.
The matter is, we think, better expressed in Fricke "Compulsory Acquisition of Land in Australia" (2nd Edition) as follows:
"In valuation practice, severance, injurious affection and disturbance expenses are
broadly classified as consequential losses and form part of a total claim for compensation." (page 335)
The first sentence of the following paragraph however:
"Injurious affection, in the context of compulsory acquisition, indicates some anticipated depreciation in the value of the remaining land due to the construction, carrying out and use of the public works pursuant to the exercise of statutory powers",
suffers from the same complaint as the passages referred to from Brown and Rost & Collins.
It is interesting to observe that the following claims are said by Rost & Collins, op cit, at 502, to be encompassed by injurious affection:
"(a)Diversions of surface water by road formations, embankments, or other works
which cause damage to a claimant's land through flooding, waterlogging, or erosion.
(b)Damage to land within a holding by an authorised authority - Shire, Road Department, etc., caused by the excavation and removal of soil, gravel, sand or clay. Payment may be made for the material taken but compensation for consequential damage is, in many cases, disregarded.
(c)Damage by fire. Fire might spread on to a claimant's property from a neighbouring property, from a public road, from Crown lands, or from a railway. Burning-off operations by other landowners, railway gangs and others during unsuitable weather; failure to extinguish camp fires, and lack of care by road users are instances of the negligent use of fire which can give rise to claims for compensation."
Returning now to Howard -v- The Commissioner for Railways, supra. This decision is entirely consistent with the approach we have suggested notwithstanding the difference in the respective statutory provisions. In the case of retained lands, damages (compensation) for injurious affection during the course of construction activities were allowed (in discrete amounts not referable to land values) in respect of:
-loss of cattle productivity (195 - 196)
-loss of plant production as a result of an inability to plant land which had been prepared for wheat (201)
-loss of stock (201)
-loss of cattle productivity (207, 209)
-loss of cattle carrying capacity (214)
-loss of stock and loss of condition of stock (214)
-loss of production and extra labour costs (223)
-loss of production and extra labour costs (224 -231)
The Court applied the test in Harvey -v- Crawley Development Corporation, supra. See at page 152.
In assessing compensation for injurious affection it is permissible to "adopt a piecemeal approach, assessing each item of compensation separately" (Fricke, op cit, at page 336). That was the approach adopted in Howard -v- the Commissioner for Railways, supra.
We are satisfied that the appellants claim for compensation for stock losses is within the terms of section 20(1)(b) and should be allowed. It relates to injury/damage resulting from the legal and proper exercise of statutory powers, not from improper or negligent acts. See Fricke, op cit, at page 336, Pegoraro -v- South Burdekin Water Board [1972] Qd R 306 at 309 and Metropolitan Water Sewerage and Drainage Board -v- O.K. Elliott Ltd (1934) 52 CLR 134 at 143.
The resolution of this issue is not easy because to adopt the words of Barwick C.J. in The Commonwealth -v- Morrison (1972 127 CLR 22 at 40, in none of the cases referred to, with the possible exception of Electricity Commission of NSW -v- Kater, supra, Howard -v- The Commissioner for Railways, supra, and James -v- The Commissioner for Railways, supra,
"was the Court deciding the case faced with a set of facts comparable with the facts of the
present case or with the precise legal problem which it is said that this case presents."
Most of the authorities to which we were referred do not bear directly upon the precise question with which this case is concerned.
We agree with the appellants' written submission that the claim in relation to stock losses is compensable. The submission was further put this way:
"Injurious affection may often be measured by a depreciation in value by, e.g. the
placement of the road, noise, etc. But that is just one form of measuring the loss, and what the appropriate form is depends on the nature of the damage sustained. Assuming all the necessary factual matters, the exercise of statutory powers by the constructing authority injuriously affected the land in that there was an outbreak of blue-green algae in the dam. The damage caused by that injurious affection includes not only costs of remedial steps and devaluation of the land that might be caused by having a blue-green algae infested dam, but also the loss of stock which flowed."
Before us Mr Diehm submitted that the issue between the parties is whether or not section 20(1)(b) extends beyond damage actually suffered to the land to damage consequential upon the land having been injured. We consider it does.
He further submitted that the stock losses would not have occurred but for the land having become injuriously affected. That is also the conclusion we have reached.
In our view it does not matter how the claim of the appellants is categorised - stock losses or business or commercial losses - it is a claim which falls within the provisions of section 20(1)(b). We are satisfied that the evidence establishes that the loss claimed is not too remote and is the natural and reasonable consequence of the work carried out by the respondent. In any given case it is a question of fact whether any particular item of loss or damage or expenditure comes within that test. See Harvey -v- Crawley Development Corporation, supra, per Sellers
L.J. at page 508. Mr Gibson conceded that business losses, in principle, may be recoverable and that it is not necessary that the respondent foresee the precise mechanics by which that loss is suffered. In our view the respondent could or should have foreseen that if the appellants' land was injuriously affected, damage - not the specific type of damage suffered - could be caused to,
suffered by the appellants. In fact Mr Gibson conceded as much when he agreed that in civil proceedings for damages for negligence against the constructing authority, the losses now claimed by the appellants would be recoverable as being reasonably foreseeable. His point was that they are not recoverable under the ALA.
The Valuation Evidence
Before us, the appellants challenged the findings of the Land Court in respect of the valuation evidence. No further evidence in that regard was adduced, the appellants relying upon the record of the court below. It is therefore necessary to refer briefly to that evidence.
In the Land Court, the appellants' valuer, Mr Henderson, gave evidence that he had valued Lot 1 before resumption at $706,000. He valued approximately 8.25 hectares fronting the Yandina-Coolum Road, which he called "grazing land as approved Tourist Facility land" at
$40,000 per hectare and approximately 11.6 hectares of "rear cane land as approved Tourist Facility land" at $20,000 per hectare, but deferred 18 months as the cane land was leased. He included $3,000 as the nominal value of the lease. He valued the dwelling, cottage and stock sheds at $100,000 and the leased stock feed premises at $45,000 and the leased nursery premises at $23,500.
In arriving at his valuation of Lot 1 after resumption, Mr Henderson had valued the north-east severance of approximately 6.25 hectares at $36,000 per hectare and the southern severance of approximately 8.415 hectares at $12,500 per hectare, both again being described as "approved Tourist Facility land", with the value of the lease being a nominal $2,000. The value of the dwelling, cottage and stock sheds remained the same in his "after" valuation, but he reduced the value of the stock feed premises to $28,500 and the value of the nursery premises to
$14,500.
His total "after" resumption value of Lot 1 was $462,500. The difference between his "before" and "after" valuations of Lot 1 was $243,500.
Mr Henderson assessed the value of Lot 2 before resumption as 19.137 hectares at
$12,500 per hectare, or $256,500, based on its value as cane land but including its potential for expansion of the tourist activities. He deferred that figure for 18 months to allow for the lease of the cane land. He valued the lease at a nominal $6,000.
After resumption he valued approximately 8.145 hectares of the southern severance at
$11,250 per hectare (again deferred for 18 months) and approximately 8 hectares of front land with severe drainage problems at $5,000 per hectare. The small north-east severance of approximately 2,945 square metres he valued as a homesite at $25,000, while he included the value of the cane lease at $3,000. His total "after" resumption value for Lot 2 was $188,500. The difference between his "before" and "after" valuations of Lot 2 was $68,000.
Mr Henderson arrived at a "before" valuation for Lot 3 of 13.213 hectares of cane land at
$10,000 per hectare (again deferred for the lease), a nominal $3,000 for the lease and $51,500 for the dwelling, a rounded total of $171,000. After resumption, he reduced the value per hectare to
$9,500 (deferred for the lease). The value of the lease and the dwelling were unchanged with the total "after" valuation of Lot 3 of $165,000.
The difference between the "before" and "after" valuations of Lot 3 was $6,000.
The result of Mr Henderson's "before" and "after" valuations for the appellants' land was
$317,500.
However, in addition to this, Mr Henderson also separately assessed "severance and disturbance items" at $1,207,616, which the learned Member of the Land Court referred to as "the contentious aspect of this matter".
The Approach of the Respondent's Valuer
On the other hand, the valuer for the respondent, Mr Carrick, valued Lots 1, 2 and 3 before resumption as 52.549 hectares of assigned, cultivated and drained sugar cane land at
$9,000 per hectare (excluding improvements), or $472,941.
After resumption he valued the combined southern severances of Lot 1 and Lot 2 as 22.7 hectares of assigned, cultivated and drained cane land at $7,500 per hectare ($170,250) and 1.7 hectares as unsuitable for cane production at $3,000 per hectare ($5,100). The 6.662 hectare north-east severance of Lot 1 was valued by Mr Carrick as a separate rural site at $80,000 and the 3,280 square metre north-east severance of Lot 2 as a separate rural site at $20,000.
His after resumption valuation of Lot 3 remained the same as the "before" at $118,917.
The difference between Mr Carrick's "before" and "after" valuations was $78,729. In addition, he assessed the loss in value of the dwellings on each of Lots 1, 2 and 3 at a total of
$15,000, but was of the opinion that none of the other farm buildings was affected.
Mr Carrick's assessment of compensation was $95,000.
The Findings of the Land Court concerning the Valuation Evidence.
The principal difference between the approaches adopted by the two valuers was with regard to what they considered to be the highest and best use of the land, both before and after resumption. Essentially the Land Court rejected Mr Henderson's opinion that the Commonwealth Government permit to run llamas, combined with the Maroochy Shire Council consent for the use of Lot 1 and complemented by the situation and attributes of the land, gave it an enhanced value for tourism purposes.
However, neither did the Land Court accept the approach adopted by Mr Carrick, that the land should be valued before resumption simply as a cane farm, with no enhancement in value because of its potential for tourism. Instead, the Member found that Lot 1 with the permit for development of the limited tourism facilities "identifies much more closely with the base 'Rural A' level of value than the level of value suggested by Mr Henderson". He found that the evidence of Mr Henderson relating to the value of Lot 1 for "low key" tourism facility use was not convincing.
The learned Member found a "before" resumption value of Lot 1 of $12,500 per hectare,
or $252,550, and a "before" resumption value of Lot 2 of $9,000 per hectare, or $172,250, a total "before" resumption valuation of $425,000.
In the "after" resumption situation, he found that the value for the north-eastern severance of Lot 1 was $80,000 and the value of the north-east severance of Lot 2 was $20,000. He found the value of the combined south-eastern severances of both Lot 1 and Lot 2 was $6,750 per hectare, or $165,000, which he concluded from the evidence was the value for the land zoned "Rural A", with sugar cane assignment, injuriously affected by shape, working disabilities, with concentrated drainage discharges under roadworks and some internal access disabilities.
The total after resumption value found by the learned Member was $265,000. The difference between the "before" and "after" valuations was $160,000.
The learned Member accepted Mr Carrick's evidence that there had been injurious affection to the dwellings on Lots 1, 2 and 3 of $15,000. However, he disallowed the injurious affection claim to the stock feed and nursery premises.
Apart from the agreed disturbance items of legal and valuation fees of $6,417.80, the learned Member disallowed all other severance and injurious affection claims.
Having found that the highest and best use of the southern severance of Lot 1 was not for the extension of the grazing facilities, the learned Member concluded that the appellants' claim for items of reinstatement to replace the grazing potential which had previously existed, should not be allowed. He found that such reinstatement as proposed by the claimants "lacked economic practicality". Similarly, the claims for transportation of stock and management disabilities had been considered in his site value approach to the north-eastern severance of Lot 1.
The claimants had also included an item of compensation for drainage rectification works of $155,000, for the after resumption effects of drainage on Lot 1 and Lot 2. However, after considering the evidence in relation to that matter, the learned Member decided that the matter of drainage should appropriately be taken into account (together with other matters) by discounting the after resumption value per hectare for the southern severances of Lot 1 and Lot 2. He concluded:
"With consideration to the probability of market reaction to matters such as the
shape and working difficulties of the balance severance areas, drainage arrangements as they are concentrated in the after resumption situation and potential for effect of drainage on internal access to the southern severances in aggregation, I will discount the after resumption valuation to $6,750 per hectare over the total area of 24.4 hectares. "
The Appellants' Argument
Before us the appellants submitted that the findings of the Land Could should be set aside and that the valuations submitted by Mr Henderson should be accepted. Mr Henderson had concluded that the highest and best use of Lot 1 included potential for tourism and that this
potential extended to Lot 2.
The appellants argued that the Land Court was in error in rejecting Mr Henderson's approach. However, we are also of the view that his rates per hectare for Lot 1 were not soundly based. Indeed, the respondent argued with some force that the land should be valued both before and after resumption simply as cane land, with the approval for development adding no value.
After considering the whole of the argument and referring to the record of the Land Court, we find that there is no basis for the appellants' submission that the Member below misdirected himself or failed to appreciate the evidence. It was entirely a matter for him as to which valuation he accepted. In the main he preferred that of Mr Carrick, but not entirely so. He heard the evidence of the valuers and the other expert witnesses and it was open to him to take the approach that he did.
In the circumstances, we can find no reason to interfere with the findings of the Member below in relation to the valuation evidence.
Losses Sustained by Appellants.
As a result of the development of blue-green algae Mr Gibson, on behalf of the respondent, conceded that if the causal point was resolved against the respondent, then plainly an entitlement to compensation is disclosed. If the drop in the water level was a causative factor, it would be necessary to show that it was a necessary causative factor, one without which the blue- green algae outbreak would not have manifested itself.
The evidence was to the effect that blue-green algae was present in the dam and that there was a risk of an outbreak at some time. As it was put at the time, "... the actions of the respondent turned a chance into a certainty and accelerated the occurrence of an event".
Mr Gibson submitted that a discounting factor should be applied to the loss of stock. It was a question of the valuation of the loss of that chance. As previously explained, we have decided that the stock and associated losses should be discounted by 15 percent (15%).
Stock Losses.
The appellants' claim for stock losses is set out earlier in these reasons and we need not repeat it here.
A similar claim for stock losses was also reproduced in the statement of the appellants' valuer, Mr Henderson, but it was clear that those figures did not come from Mr Henderson.
Mr Barns relied upon Mr Rickard's estimate of value of lost crayfish at $3,000. He relied upon Mr Dunn's assessment of the herd depreciation generally of $16,000 per animal for the alpacas and llamas, and also in relation to the depreciation in value of the angora goats.
The respondent contended the claim for the loss of crayfish should be reduced by 50 percent (50%) because of the risks associated with flooding and predators. However, having regard to the evidence of Mr Rickard in the Land Court, we think the claim for $3,000 should be allowed.
With regard to the loss of alpacas, llamas and goats, the appellants relied largely upon the
evidence of Mr Dunn, an auctioneer and stock and station agent with experience in selling cattle, sheep, horses, goats and deer.
In the Land Court Mr Dunn gave evidence that he believed the llamas would be valued at
$20,000 each if a "breeding soundness certificate" could be given for each of them. His estimate of their depreciated value was based mainly on the fact that no guarantee could be given as to their breeding soundness. With no breeding soundness guarantee, he considered that their value was virtually only for fibre, or sale to someone prepared to speculate on the possibility that a number would breed successfully. He felt that such a speculator would offer only 20 percent of each animal's original value, or $4,000 each.
Mr Dunn also gave evidence in relation to the depreciated value of the angora goats which had been affected by the blue-green algae toxins. Based on prices obtained at a sale at Stanthorpe in February 1994, he considered the bucks would have been worth $1800, and the does $1,000 each. Because no guarantee could be given of their soundness, he believed that a speculator would be prepared to gamble on them only to the extent of $50 per head "and take the risk".
It was clear from his evidence in the Land Court that Mr Dunn had extensive experience in selling angora goats and his reasoning and estimate of depreciated value for the appellants' affected goats of $10,000 is accepted. However, it was equally clear that Mr Dunn's experience in relation to alpacas and llamas was much more limited. His estimate of value of $20,000 for a healthy animal appeared to be based largely on an article in the Queensland "Country Life" newspaper of 14 April 1994, about the prices obtained at an auction sale of alpacas in New South Wales, and the asking prices for female alpacas contained in an advertisement in the same newspaper of 28 April 1994.
Mr Dunn had not auctioned either llamas or alpacas. However, he contended that the market for alpacas and llamas was much the same.
Mr Dunn had not inspected the affected animals until 30 June 1994. He had not seen any of the dead animals, except for the buck, which he had seen prior to the outbreak of blue-green algae. He had not attempted to value any of the animals separately, but had agreed that Mr Barns' estimate of the six dead cria of $10,000 each was, as he put it, "an acceptable figure". Mr Barns had assessed the value of the yearling female at $20,000, which was Mr Dunn's standard figure.
Mr Barns had attributed $30,000 to the buck llama because it was, he said, the best stud male they had on the property. He thought the figure of $30,000 was highly conservative and below replacement cost. Although he had not valued the animal, Mr Dunn agreed with the assessment of $30,000, because he thought it was of better quality than the average.
Mr Barns was not cross-examined in the Land Court about his assessment of the stock losses. Although Mr Dunn was cross-examined in the Land Court and his assessments were criticised both there and before us, the respondent called no evidence by way of contradiction of either Mr Barns or Mr Dunn relating to the value of stock lost or the extent of depreciation to the remaining stock.
In the circumstances, therefore, we are prepared to accept Mr Barns' assessment of the value of the yearling female at $20,000 and the value of the buck llama at $30,000. However, in the absence of further evidence, we are not prepared to accept that the value of the six lost cria should be 50 percent (50%) of the value of a healthy adult animal. We are of the opinion that 25 percent (25%) of that value would be more realistic and will apply $5,000 per head to the six lost cria.
We turn now to the aspect of herd depreciation. During the course of his evidence, Mr Dunn explained that although he had attributed separate values to each animal (the figures for which were not produced), the average depreciated value was $4,000, so instead of including his detailed figures, he made an assessment of the herd depreciation based on the average depreciation of $16,000 per head, or $512,000 for the 32 animals on the property at that time. We cannot accept that approach.
From the evidence that he gave in the Land Court, it seems that Mr Dunn's evidence can be put no higher than that he formed an opinion based on the "Country Life" article and advertisement that each doe in respect of which a breeding soundness certificate could be produced would have been worth $20,000. Of the 25 does on the property at the relevant time, his observation of their condition on 30 June 1994, had disclosed that "six seemed to be infertile and would have little or no value, eight were too young and eleven appeared to be alright". He agreed that time may prove that breeding soundness certificates could be provided in respect of each of them. Of the seven bucks, three had health problems and four seemed to be healthy. Mr Dunn did not know if any of them was infertile.
Mr Dunn concluded that even the healthy animals would be de-valued because they were from the same herd that was experiencing health problems. However, we consider that is inconsistent with his insistence upon the importance of a breeding soundness certificate to the value of each animal.
Mr Gibson submitted that the onus of proving their loss was upon the appellants and that therefore only those animals suffering health problems should be depreciated. We accept that argument. Therefore, we are of the view that it is only in respect of the six does that seemed to be infertile and three bucks that were unhealthy that the depreciation in value should be allowed. From the evidence, they would seem to be virtually unsaleable and we will allow the full value of $20,000 for each of these nine animals. The appellants chose to call Mr Dunn as an expert on the value of alpacas and llamas. Having regard to his evidence, we are not satisfied that apart from those animals suffering health problems the balance of the herd should be depreciated in value. With respect to the nine unhealthy animals, we accept the evidence that they were exhibiting the effects of exposure to blue green algae and would have little or no value.
Mr Gibson submitted that there should be no compensation payable in respect of the lost yearling female, which had died in October 1993, and the buck, which had died in December
1993. He argued that those losses were incurred long after the initial outbreak of blue-green algae in early 1993. We do not accept that argument. Quite apart from the evidence of the possibility of toxins remaining in the dam from the time of the initial outbreak, there is the evidence of Mr Barns that the yearling female commenced to exhibit weakness shortly after the blue-green algae problem first appeared and that the buck exhibited weakness mainly in the latter part of 1993.
The total compensation for stock losses and herd depreciation will be as follows:
Crayfish $ 3,000 Alpacasandllamaslost: 6cria@$5,000each $ 30,000 1yearlingfemale $ 20,000 1buck $ 30,000
Herd depreciation
9 @ $20,000 $180,000
Depreciated value of angora goats
3 bucks @ $1,750 each $ 5,250 5 does @ $950 each $ 4,750 TOTAL $273,000
Rectification of the Existing Stock Dam.
The appellants claimed an amount of $46,739 for works to the llama dam to prevent the recurrence of blue-green algae. They are itemised in Mr Henderson's valuation and include the connection of power, the installation of suitable pumps for on-going water recirculation, running costs of the pumps in perpetuity and the cleaning of water hyacinth in perpetuity.
Mr Gibson submitted that the appropriate course would be simply to dig another dam and fill the existing one in. There was no evidence of the cost of digging a new dam. The existing dam had been dug under circumstances that did not cost the appellants anything, because they had an arrangement with a contractor who took the fill.
Even if a similar arrangement could not be made, another dam could be dug for much less than $46,000.
Mr Gibson contended that if the Court found that an allowance should be made under this head, a figure of $24,260 would be more appropriate as it provides for the cost of a replacement dam, the connection of power and the running of a pump and the cleaning of water hyacinth when necessary.
There was some evidence given in the Land Court of the cost of $10 to $12 per cubic metre for fill (the evidence of Mr Murphy). An amount of about $20,000 would allow for the digging of a dam of some 1800 cubic metres.
We accept that the construction of such a dam would be preferable to the rectification approach set out in Mr Henderson's valuation and we will adopt the figure conceded by the respondent of $24,260.
Summary of Determination of Compensation
Value of appellants' land before resumption Less
Value of appellants' land after resumption
$425,000.00
$265,000.00
Add
$160,000.00 Injurious affection to dwellings on
Lots 1, 2 and 3
$ 15,000.00
Add
$175,000.00 Disturbance -
legal and valuation fees as agreed
$ 6,417.80
$181,417.80
Add
Losses sustained by appellants resulting from the actions of the respondent injuriously affecting their land
Stock losses $ 273,000 Rectification of dam $ 24,260
$ 297,260
Discounted by 15% $ 44,589
$ 252,671
$252,671.00
$434,088.80
Total Compensation adopt $434,100.00
Interest
The Land Court was informed that an advance against compensation of $95,000 was paid to the appellants on 23 April 1993. The Court was also informed that part of the legal fees, being an amount of $900 was paid on 9 March 1992, and that part of the valuation fees, being an amount of $1,785 was paid on 7 April 1993. Interest was not sought on the balance of those fees.
We will adopt the same approach as that adopted by the Land Court and calculate interest from the date of the date of resumption of the major area of the appellants' land on 14 August 1992.
Orders
The appeal is allowed. Compensation payable by the respondent to the appellants is
determined at Four hundred and thirty-four thousand, one hundred dollars ($434,100).
We order the respondent to pay the appellants interest at the rate of 8.5 per cent per annum as follows:
On the sum of $428,582 (being $434,100 less agreed legal and valuation fees at $6,418, plus legal fees of $900 paid on 9 March 1992) from 14 August 1992, up to and including 23
April 1993 (the date of payment of the advance) then on the amount of $335,367 (being
$428,582 less advance of $95,000 plus valuation fees paid on 7 April 1993 at $1,785) from 24 April 1993 (the date on which the advance was paid and shortly after which the appellants paid part of the valuation fees) up to and including the date upon which final payment of compensation is made.
We give the parties liberty to apply on five days' notice to the other in respect of any of the compensation and interest calculations.
(JJ Trickett) President of the Land Court
(CF Wall Q.C.)
Judge of District Courts and Member of the Land Court
ANNEXURE
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