Caloundra City Council v McPherson

[2006] QLAC 26

LAND APPEAL COURT OF QUEENSLAND

CITATION:

Caloundra City Council v McPherson and Anor  [2006] QLAC 26

PARTIES:

Caloundra City Council
(appellant)

v.

Graham E and Judith H McPherson
(respondents)

FILE NO:

LAC2005/1214

DIVISION:

Land Appeal Court of Queensland

PROCEEDING:

An appeal from a decision of the Land Court determining compensation in respect of the compulsory acquisition of land in the amount of $2,699,000 plus interest

ORIGINATING COURT:

Land Court of Queensland

DELIVERED ON:

11 May 2006

DELIVERED AT:

Brisbane

HEARD AT:

Brisbane

JUDGE:
MEMBER

Justice Philippides
Mr JJ Trickett, President of the Land Court
Mr RS Jones, Member

ORDERS:

1.    The appeal is dismissed.

2.    The appellant is to pay the respondent's costs of and incidental to this appeal.  Such costs to be assessed on the standard basis.

CATCHWORDS:

Practice and Procedure – appeal from decision of Land Court assessing compensation pursuant to the Acquisition of Land Act 1967 – general principles applicable in appeals concerning valuation cases – conduct of the parties in the proceedings below – matters not raised at trial which, if raised, could have been the subject of evidence.

APPEARANCES:

Mr M Gynther for the appellant
Mr D Gore QC for the respondents

SOLICITORS:

Garland Waddington Solicitors, for the appellant
Griffith Parry Lawyers for the respondent

1. The Caloundra City Council (the appellant) has appealed against a decision of Mrs MacDonald of the Land Court determining compensation payable by the appellant to Graham McPherson and Judith McPherson (the respondents) in the amount of Two Million, Six Hundred and Ninety-Nine Dollars ($2,699,000) together with interest. 

The history of the appeal

1. By proclamation in the Queensland Government Gazette on 12 December 2003, the appellant resumed from the respondents 73.59 ha of land located at Sunset Drive Meridan Plains, Caloundra.  The land is more properly described as Lot 10 on SP 107372, Parish of Bribie, County of Canning.  The land was resumed for the purposes of sewerage farm disposal and depot works and parks and recreation. 

2. In circumstances where the parties were unable to agree on the level of compensation, the matter was referred to the Land Court for determination pursuant to the provisions of Acquisition of Land Act 1967.

3. As initially formulated the respondents claimed compensation in the amount of $2,700,000 plus interest and costs.[1]  In the proceedings below, the respondents retained the services of Mr Henderson, an experienced registered valuer.  Mr Henderson originally assessed compensation in the amount of $2,640,000, excluding interest and any allowance for disturbance items.[2]  However, on becoming aware of some additional sales evidence, Mr Henderson revised his assessment upwards to $3,050,000 exclusive of interest and disturbance.  The amount of $3,050,000 was the valuation relied on by the respondents at trial.

   [1]            Appeal record (AR 382-384).

   [2]            AR 245.

4. The appellant retained the services of Mr A Carrick, also an experienced registered valuer.  Mr Carrick assessed compensation in the amount of $2,030,000 exclusive of interest and disturbance.[3]  This was the figure contended for by the appellant at trial.

   [3]            AR 385 - 399.

5. Mr Henderson's first valuation was carried out on a "piecemeal" basis and his assessment of $2,640,000 was calculated as follows:[4]

   [4]            Reasons for Judgment RJ, [21].

·    Approximately 6 ha of flood-free selectively cleared land

assessed at $150,000 per ha  $900,000

·    Approximately 59.59 ha of cleared, grassed and drained    

country assessed at $27,500 per ha    $1,638,725

·    Approximately 8 ha of standing scrub assessed at

$12,500 per ha   $100,000 

$2,638,725
              Rounded to  $2,640,000

1. Mr Carrick also relied on a piecemeal valuation approach to arrive at his figure of $2,030,000, calculated as follows:[5]

   [5] RJ [25].

   ·    Value of notional 12 ha house site   $800,000

·    Value of 61.59 ha balance area  $1,231,800

$2,031,800

1. Mr Henderson's second valuation was carried out on the basis of adopting an overall rate of $41,500 per hectare over the entire area of the land taken.[6] 

   [6]            AR 265.

2. For reasons not relevant to this appeal the Learned Member below rejected Mr Henderson's overall approach and adopted the piecemeal valuation approach.  Relying primarily on the sale of Lots 2, 4 and 5 on Registered Plan 97720 which were commonly referred to as the "Leacy" sales, the Member determined compensation in the following way:[7]

   [7] RJ [132].

   ·    7.1 hectares flood free land at $153,000/ha  $1,086,300

   ·    66.49 hectares flood prone land at $23,500/ha   $1,562,515

   ·    which includes 50 hectares pasture improved grazing

   land at $1,000 extra/hectare   $50,000

   $2,698,815

   Rounded to                 $2,699,000

3. There was no appeal against the findings concerning the break-up of the land into the categories of flood-free, flood-prone and improved pasture land.  Nor was there any appeal concerning the Member's decision to accept the so called Leacy sales as reliable sales evidence.

Grounds of appeal

1. Issues in the appeal are relatively straight forward. 

2. First, the appellant says that when applying the Leacy sales to the flood-prone areas of the subject land, there should have been a reduction in the rate per hectare used from $23,500 to $20,000 per hectare[8].  According to the appellant such a reduction was necessary to take account of the circumstances surrounding these sales and the superior nature of the land.  The appellant contended that the sales were superior because they involved: 

   [8]            Ground of Appeal, para 1(b).

   [i]three separate titles in line,

   [ii]land generally superior to the subject

   [iii]land sold effectively as part of one transaction

   [iv]land with river frontage advantages that the subject did not have.

3. Second, the appellant says that based on the sale of adjoining land, referred to as the "Church" sale, the Member ought to have applied a rate of $108,000 per hectare to the flood-free area of the subject land instead of the rate of $153,000 per hectare which was applied.[9] 

   [9]            Ibid, para 2(b).

Issues in the appeal

1. The issues raised by the appellants here are clearly concerned only with matters of fact.  The principles ordinarily applicable to appeals such as this were considered by the majority of the High Court in Warren v Coombes & Anor (1979) 142 CLR 531, where at pp.551-552, their Honours said:

   "There is in our respectful opinion no authority that entitles us to depart from the doctrine expounded in this Court in cases before and including Paterson v Paterson ….  The balance of opinion in cases since Edwards v Noble inclines in favour of adherence to that doctrine.  Shortly expressed, the established principles are, we think, that in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge.  In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion will not shrink from giving effect to it.  …

   Again with the greatest respect, we can see no justification for holding that an appellate court, which, after having carefully considered the judgment of the trial judge, has decided that he was wrong in drawing inferences from established facts, should nevertheless uphold his erroneous decision.  To perpetuate error which has been demonstrated would seem to us a complete denial of the purpose of the appellate process. …"

2. These passages were considered by Ambrose J, with Davies and McPherson JJA agreeing, in Heavy Lex No 64 Pty Ltd & Anor v Chief Executive, Department of Transport[10], where his Honour also had regard to established principles concerning appeals against decisions involving the assessment of compensation or value.[11]  These principles were articulated by Dixon J in The Commonwealth v Reeve & Anor (1949) 78 CLR 410 at 423, in the following terms:

   "In Commissioners of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Ltd, the following passage occurs in the judgment of Latham CJ, Rich and Williams JJ:  'It would not be proper for this court on an appeal of this nature to substitute its own opinion for that of the court below unless it was satisfied that the court below acted on some wrong principle of law, or that the value was entirely erroneous.'  Their Honours then referred to the statement of Lord Buckmaster in Charan Das v Amir Khan … that the 'Board will not interfere with any question of valuation unless it can be shown that some item has improperly been made the subject of valuation or excluded therefrom, or that there is some fundamental principle affecting the valuation which renders it unsound.' 

   The rule thus laid down is almost indispensable to the administration of justice in compensation cases.  For the estimation of a money sum is usually so much a result of judgment and sound discretion and so little the product of analytical reasoning, that, were it otherwise, every appeal would mean an assessment of compensation de novo, without any assignment of error in the reasoning or conclusions of the court appealed from …". 

   [10] Unreported decision of Court of Appeal [2002] QCA 013 at paras [46] to [48].

   [11] Ibid at paras [49] to [50].

The value of the flood-free land

1. For the appellant to succeed on this point it would require this Court to accept that the best evidence of the value of the flood-free land on the subject was the sale of the Church land. 

2. As a part of her reasoning, the Member below at paras 128 to 129 had this to say about the application of this sale:

   "[128]  Mr Henderson's Sale 3 is Mr Carrick's Sale 2.  The sale was analysed by both valuers to $900,000 for 12 hectares which equates to $75,000 per hectare.  Although the claimants' Sale 3 is immediately adjacent to the subject it is difficult to apply the sale to the subject land in any useful way.  The sale is only a sixth of the size of the subject and was purchased for church purposes, a use which does not appear to be permissible on the subject. 

   [129]  Mr Carrick used this sale and his Sale 1 for valuing the subject's notional 12 hectare house site at $800,000 in his piecemeal valuation of the subject.  That approach does not draw a distinction between the flood free and flood prone land either in the sale or in the notional 12 hectare site on the subject.  While it may not be appropriate to draw such a distinction in relation to the sale property, which is a much smaller property with a different use from the subject, I consider that the distinction should be drawn in relation to the subject, given its size and highest and best use.  In other words I consider that the subject should be valued by valuing the flood free land and the flood prone land separately, not by dividing the subject into a notional 12 hectare residential site (which would consist of flood free and flood prone land), and a balance of flood prone land." 

3. It seems clear to us that the Member did not consider the Church sale a reliable basis for valuing the flood free land on the subject.  This no doubt formed a part of her reasoning for relying primarily on the Leacy sales in her determination of compensation.

4. Mr Gynther, counsel for the appellant, conceded that for his client to succeed on this point this Court would have to effectively overturn the findings of fact made by the Member below concerning the Church sale.[12]

   [12]          LAC transcript, p.29 L55 – p.30 L 1 – 10. 

5. As mentioned above, there was no appeal against any of the findings of fact made below concerning this sale.  Further, this Court was not taken to any material which showed that the findings made were unsound, wrong or not reasonably open on the evidence.

6. In these circumstances the appellant fails on this ground of its appeal.  We can see no justification for accepting, contrary to what was found below, that the Church sale was the best evidence available in assessing the value of the flood free land and that therefore the appropriate rate per hectare for this land was $108,000.

The value of the flood prone land

1. Mr Carrick originally rejected the Leacy sales on the basis that, in his opinion, the circumstances of the sales offended the principles enunciated in Spencer v The Commonwealth of Australia (1907) 5 CLR 418. The Member did not accept Mr Carrick's reasons for rejecting the sales and considered them to be the "principle sales to be applied for valuing the subject …"[13].  There is no appeal against these findings by the Member.

   [13] RJ [118].

2. Relying on the Leacy sales, the Member adopted the rate of $23,500 per ha for the flood prone land.  This rate was derived from Mr Carrick's analyses of these sales which were reduced to writing and became Exhibits 20 and 22.

3. As we see it, the circumstances leading up to Mr Carrick carrying out analyses of sales he had originally rejected involved the running of an alternative case on the part of the appellant in the proceedings below.

4. At page 132 of the transcript the following exchange took place during the evidence in chief of Mr Carrick:

   "BY MR GYNTHER:  Exhibit 20 is an exercise that you've carried out, is it not?

   Mr Carrick:  Yes.

   And it deals with Brett Leacy's land and the sale price of that land?

   That's correct.

   Can you just explain for the Member what you attempted to do there?

   It's an analysis of a sale to come back to a grazing value.  It's a normal process that you adopt.

   This is done on the assumption that (if) you used those sales, this is the way you would have approached it?

   That's correct.

   But you don't adopt that?

   No, I don't."

   At page 134 line 7 it was made clear that the comments made in respect of Exhibit 20 were to apply equally to Exhibit 22.

5. The above exchange clearly suggests that it was the appellant's position that, if Mr Carrick's view about the reliability of the Leacy sales was not accepted by the Court, then his analyses of those sales should be preferred to that of Mr Henderson.  This conclusion is, in our opinion, reinforced by the cross-examination of Mr Carrick by Mr Gore QC, counsel for the respondent.  At pages 151, line 40 to 152, line 5, the following exchange took place:

   "BY MR GORE:  Mr Carrick, can we return to Exhibits 20 and 22 which are your analyses of the Leacy sales subject to the qualification you've already given?

   I've only got my copies of them of course.

   That's all right.  I've only got a short question.  I don't think I put it to you earlier.  Is it your position that if the Land Court was to reject your reasons for not using these sales that you would say these are the analyses to be followed in respect of those sales?

   I think that's a fair reading of the position, yes I'd have to say that.  There hasn't been any application made I suppose.  Well the application – no, that's fair."

6. If it were the case that Mr Carrick did not intend the Court to adopt his analyses of these sales and to apply a lesser rate per hectare it is difficult to imagine a more opportune time for the issue to be raised.  Further, there was no attempt during the re-examination of Mr Carrick to identify to the Court and the respondents that it was Mr Carrick's professional opinion that, when applying his analyses of these sales to the subject land, the rate per hectare should be reduced. 

7. The written submissions relied on by the appellant in the proceedings below[14] are consistent with the way the appellant conducted its case in those proceedings.  They urge the Member to reject the "Leacy" sales on the grounds that they did not satisfy the Spencer test.  They then go on to criticise Mr Henderson's analyses and application of the sales and conclude on this topic with a submission at paragraph (40) in the following terms: 

   "Further or alternatively, if the sale (sic) was to be applied, the analysis in Exhibits 20 (Brett's sale) and 22 (Mr and Mr Leacy) reflect a proper approach."

   [14]          Part of Exhibit 3 in the Land Appeal Court proceedings.

8. In this context Mr Gynther was successful in his alternative argument in that the Member below did in fact adopt Mr Carrick's analyses of these sales in preference to those of Mr Henderson.

9. In our view, the appeal in respect of the value of the flood prone land fails for two reasons. 

10. First, in an appeal such as this, generally speaking, the appellant is bound by the conduct of its case below.  The significance of this was considered by the High Court in the unanimous decision of Park & Anor v Brothers[15] where at paras 34 and 35 it was said:

    "34.  This was not a case in which there were formal pleadings.  Nevertheless, the issues at trial were formulated by Points of Claim and particulars, understood in the light of affidavit evidence to which they referred, and by the conduct of the proceedings on behalf of the parties by their legal representatives.  As was pointed out in Whisprun Pty Ltd v Dixon …, even when there are pleadings, to determine whether a party is raising a new point on appeal the actual conduct of the proceedings must be considered.  In adversarial litigation, as a general rule, a party is bound by the conduct of his case.  There are circumstances in which the interests of justice may lead an appellate court to permit a party to raise a point that was not taken at trial, but where the point is one that could have been met by calling evidence below then it cannot be raised for the first time on appeal.

    35.  Leave to file the Notice of Contention should be refused.  The issue it seeks to raise is purely an issue of fact, and if it had been raised at the trial it could have been dealt with by evidence."[16]

    [15] Unreported decision of the High Court; [2005] HCA 73, 6 December 2005.

    [16]See also Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438 per Latham CJ, Williams and Fullagar JJ;  Liftronic Pty Ltd v Unver (2001) 75 ALJR 867 at [44], per Gleeson CJ and McHugh J.

11. The need for a discount in the rate per hectare to be applied to the subject land was clearly a matter which could have been met and dealt with by raising it with the valuers in the case.  The fact that it was not properly raised denied Mr Gore the opportunity to have Mr Henderson give evidence on the topic and to cross-examine Mr Carrick about it.

12. In our view there are no special circumstances which would justify the appellant now raising the point.  The matter should have been pursued by the appellant below but was not.  Further, no reasonable excuse has been advanced to explain the omission. 

13. The second reason why this part of the appeal must fail is that no error in the reasoning of the Member below in her application of the relevant evidence has been identified.

14. In our opinion, it was clearly open for the Member to find that there was no evidence that the sale of the three Leacy lots in one line would have resulted a higher price being paid.[17]  Mr Carrick's evidence on this topic was far too vague to be of any probative value.

    [17] RJ [52].

15. It is also clear that, in reaching her conclusions about the way in which the Leacy sales should be applied when determining the value of the subject land, the Member had proper regard to the different physical characteristics of the land including the river frontage available to some of the Leacy land.  On the evidence available to her it was clearly open for her to prefer the evidence of Mr Henderson about those matters.  In this regard it was particularly open for her to conclude that Mr Henderson was correct in discounting the so called advantages associated with the river frontage because of flooding issues. 

Disposal of the appeal

1. For the reasons expressed above, we are of the opinion that the appeal should be dismissed with costs to be assessed on the standard basis.

ORDERS

1.The appeal is dismissed.

2.The appellant is to pay the respondent's costs of and incidental to this appeal.  Such costs to be assessed on the standard basis.

PHILIPPIDES J

JUSTICE OF THE SUPREME COURT

JJ TRICKETT

PRESIDENT OF THE LAND COURT

RS JONES

MEMBER OF THE LAND COURT