Cansick v Cairns Port Authority
[1989] QLC 11
•20 September 1989
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BRISBANE.
20th September, 1989.
Re:Claim for Compensation (A89-14)
Wayne John Cansick and Alia Ellen Cansick
- v -
Cairns Port Authority
J U D G M E N T
(Hearing at Cairns)
This is a claim for compensation from the Cairns Port Authority consequent upon the taking under the provisions of the Acquisition of Land Act 1967 - 1986 of land situated in the County of Nares, Parish of Cairns described as Lot 1 on Registered Plan No. 743818, containing an area of 1.386 hectares and being the whole of the land contained in Certificate of Title, Volume N1312, Folio 140 and Lot 2 on Registered Plan 743818, containing an area of 2.018 hectares and being the whole of the land contained in Certificate of Title, Volume N1312, Folio 141. The land was taken for Cairns Airport purposes and to render safer and more convenient the use of the Cairns Airport for the landing and taking off of aircraft. Notice of Resumption was published in the Government Gazette of 3rd September, 1988 and this is the date at which compensation is to be determined.
The amount finally claimed is the sum $443,550 made up as follows:-
. Land Lot 1 .. .. .. .. .. .. .. .. .. $170,000.00. Land Lot 2 .. .. .. $230,000.00
. Dwelling .. .. .. $ 40,000.00 .. .. $270,000.00
. Disturbance:
Legal Fees .. .. .. $ 400.00
Valuation Fees.. .. $ 3,150.00 .. .. $ 3,550.00
Total $443,550.00
The resumed lands are contiguous parcels located in the northern outskirts of the City of Cairns and about 7 to 8 kms north of the City's Centre. It is near the northern end of the Cairns International Airport and is about 2 kms in a direct line west of the mouth of the Barron River. The parcels are irregular in shape but each has a frontage to the esplanade of about 118.6 metres. They are separated from the Barron River by a 90 metre wide esplanade. The parcels are zoned "Heavy Industry" under the Town Plan of the Mulgrave Shire gazetted on 22nd July, 1978. It is in a designated industrial locality with access from the Captain Cook Highway to the corner of Arnold Street and Greenbank Road being bitumen sealed and then by about 200 metres of earth road to the resumed land. The land is near level to very gently sloping and has generally been cleared. There is a mangrove intrusion in the south-east corner. It is subject to inundation from time to time. The Greenbank Road area of Stratford is used mainly for industrial activities which include Sellars Concrete, T.M. Waco Scaffolding, Council Depot, Dog Pound, and other industrial uses.
Evidence was given by the claimant Wayne John Cansick who says he was born in 1951 and resided in Greenbank Road about 500 metres from the resumed land and remained in the area until 1967. While he was at school his parents were using the subject land for the growing of small crops. He recalls that the land was flooded in 1964 and 1977 but without any salt water intrusion. He said the flood waters did not remain on the land for more than one or two tides. His father did not take any precautions to protect his tractor or machinery against the risk of flooding.
The resumed land was given to him by his parents in 1984 to build a house and reside there. In August 1985 the Local Authority approved an application to construct a caretaker's residence on the land. Mr. Cansick says that with the approval was a note that the land was subject to flooding but there was no direction as to the height limitations so far as the residence was concerned. He was aware at the time that under the zoning of "Heavy Industry" the erection of a dwelling house on the land was a prohibited use. The caretaker's residence was not fully completed at the date of resumption. There was no industrial activity being undertaken on the land. In 1987 an offer was made to sell the land to the Cairns Port Authority. Mr. Cansick says that, at that time, he was having difficulty in ascertaining what activities could take place on the land. He agrees that the reason that reservations were expressed on the matter was because the land is low lying and subject to inundation from Barron River floods in the delta.
Evidence was given by Mrs. Audrey T. Cansick, the mother of the claimant, who says that her husband and she first rented this land from a Mrs. Clacherty to use the land for the growing of vegetables and after renting the land for a couple of years they purchased it in about 1957. She says the only floods of which she is aware during all of that time were the floods in 1964 and 1977. No steps were taken to protect machinery which was just left in the shed.
Mr. Glen J. Coonan, Registered Valuer gave evidence to support the claim. His approach has been to look at each lot as a separate parcel and has valued each on a site basis. Mr. Coonan says that in the market place industrial blocks are usually sold on a rate per square metre basis because what people are looking for is a property to take a certain sized shed, with the larger the allotment the larger the shed. However, in dealing with substantial parcels of a hectare or more, people in the market are buying properties which may have certain disabilities and also certain potentials. He says that he can demonstrate the lack of consistency in using the per square metre rate by reference to two sales on the Bruce Highway at Edmonton. In December 1987 a 1.06 hectare industrial parcel sold for $152,000 ($14.33 per square metre). He says this property had exposure to the Bruce Highway but was not in a recognised industrial region. It required substantial fill. Two months later in February 1988 a nearby 2.62 hectare industrial property sold for $200,000 ($7.62 per square metre). It also has exposure to the Bruce Highway. It is not in a recognised industrial region. It was purchased with adjoining lands for subdivisional purposes. He says that this property is far superior to the 1.062 ha parcel and yet on a per square metre basis a higher rate was paid for an inferior property. Mr. Coonan says these sales demonstrate to him that people are prepared to pay $150,000 to $250,000 for a large industrial site or sites that can be utilized for industrial purposes even though they are located away from the main industrial area but had certain potentials and perhaps some disabilities. He said that the market was rising in the period between the two sales and continue to rise up to the date of resumption. He says that despite the rising market the 2.62 ha parcel only brought half the per square metre rate paid for the 1.062 ha parcel although it was a far superior property and an adjoining owner in the sale. The 2.62 ha parcel on the Bruce Highway at Edmonton has been subdivided for residential and industrial purposes. The buyer obtained an extension of the industrial zone. He has sold some lots in 1989 for about $130,000 ($110 per square metre). He is now developing blocks behind the first subdivision but these do not have highway frontage.
He makes reference to two further sales to support his site basis rather than the per square metre basis. A sale of a 2 ha property at 187 McCoombe Street, Bungalow sold in April 1986 for $245,000 ($12.25 per square metre). He says that it was a low lying property zoned "Open Space Rural" at the time of the sale. He agrees that this is a very old sale. Another sale was of a 1.983 ha parcel of "Rural C" land located off the Bruce Highway at Woree. It sold in April 1988 for $150,000 ($7.56 per sq. metre). It comprised cleared low lying ti-tree swamp country with a gravel road access. He says it has an inferior zoning to the subject land. He says this sale was of a speculative nature of a buyer acquiring "Rural C" zoned land but being aware of the Local Authority's attitude that it could be rezoned for industrial use when the new southern access road into Cairns is completed. Mr. Coonan includes another two sales in his valuation. One of a 2064 sq. metre industrial site at 65 Greenbank Street, Stratford which sold in May 1988 for $150,000 ($74 per sq. metre). It is located in the Stratford Industrial Area and is superior to the subject lands. A 1376 sq. metre Industrial site at 67 Greenbank Road, Stratford sold in May 1988 for $104,000 ($75 per sq. metre). These indicate what smaller properties in a recognised industrial area are bringing in the market place. They demonstrate to him that a buyer who may require a lot of space but not so much shed accommodation can buy larger areas for about the same price as is paid for 2,000 to 3,000 sq. metre industrial sites.
It is common ground that the subject land is subject to inundation by flood waters from time to time. Mr. Coonan says that he did not discuss the question of flooding with the claimants prior to completing his valuation. He had regard to flood maps in his office which showed spot checks of where flooding occurred in 1957, 1977 and 1979. These maps indicated to him that this property would have flooded from time to time. He believes that, while this is a problem, there are many types of industry where the site office would be elevated above flood level and that the risk of flooding over the land is something which could be coped with. The information available to him before doing his valuation suggested that the lands would flood to a depth of 1.5 metres but he believed this was too high and assumed that the height of a flood would be about .6 of a metre. In cross-examination it was put to him that in a one in fifty year flood the land would be inundated to a depth in the order of 2 to 2.3 metres. He does not agree with this but he does agree that the land can rightly be called flood prone. He envisages a buyer filling an area for an industrial shed and leaving the balance of the land at its natural level to be utilized for storage or parking of machinery.
Mr. Coonan agrees that the 1.06 ha parcel at Edmonton is being used for display of caravans and mobile homes and that highway frontage would be crucial for this particular use, but he says that the 2.62 ha parcel at Edmonton also has highway exposure and is a corner site without requiring any filling. He agrees that both have superior exposure and access, but they are not in a recognised industrial precinct. The 1.983 ha property at Woree is located about 600 to 700 metres from the southern access road now under construction. He agrees that there should be no difficulty with rezoning for industrial use, but the inferior zoning is still a restriction. Having regard to the sales he has formed the opinion that each lot would sell for the figure for which he contends.
Evidence for the respondent was given by Mr. Peter Robinson, Town Planner who was at the date of resumption the Planner and Building Surveyor employed by the Mulgrave Shire Council. He speaks of the Barron River Delta Flood Study and the building of a computer model of the hydrology and the hydraulics of the Barron River Delta. Historically the Council was concerned for many years that filling being placed in the Delta in particular areas or general areas would cause adverse effects to other lands either by increasing flow velocities and causing erosion or by increasing the level of inundation. The Council did not have the resources to produce a computer model but in the final result the Cairns Port Authority, The State Government and the Local Authority agreed to share the cost of producing a mathematical model. Under the By-laws it is necessary to obtain Council permission before the level of land is changed either by filling or by excavation. At the date of resumption the Council was asking people with major works to defer applying for such permission until the model was completed. He says the subject land is within what is described in the model as a flow path in the delta. It is the major flow path of the delta in and adjoining the Barron River. It is also in one of the higher velocity paths of that flow. The implications are that it is more difficult to fill land in the flow path and even more difficult to fill land in a higher velocity part of the flow path without causing adverse effects on adjoining lands than it is to fill in a back-water area. He says that the application for the building of a Caretaker's residence on the subject land was approved. It was a highset dwelling, open underneath, above flood levels which would not impede the flood flows.
He says that the sale land at Woree is near the southern access road presently being constructed by the Main Roads Department to take heavy traffic coming into the Cairns Industrial Area and also into the City off Mulgrave Road to alleviate some of the congestion which occurs on that road at the moment and to separate basically commercial heavy truck traffic from ordinary vehicular movements. He believes that the first stage of the road should be completed by late 1990. This sale land is in an area which the Local Authority has identified as a "Future Industrial" area. Mr. Robinson is of an opinion that the land is suitable for that purpose and the Council has in the last 18 months approved two applications in that area for industrial purposes. So far as he is aware the Woree land does not have any services connected but water and electricity supply is connected to the subject land. He agrees in cross-examination that the building up of the Cairns Airport Runway has changed the topography of that whole area with respect to water run-off. He agrees that the subject land should be regarded as flood prone.
Valuation evidence for the respondent was given by Mr. Mark P. Stallman to support his valuation of $250,000 made up as follows:-Land 34,040 sq. metres at
$6.00 sq. metre.. .. .. .. .. $204,240.00
Adopt .. .. .. .. .. .. .. .. .. .. .. .. .. $204,000.00
Value of Improvements - house .. .. .. .. .. .. $ 46,000.00
Total $250,000.00
He acknowledges that there could probably be a claim for disturbance for legal and valuation fees incurred by the claimant up to the date of lodgment of the claim in the Court. This figure has been agreed upon.
Mr. Stallman says that he has investigated the question of flooding of the resumed lands. From all of the information available he has determined that the land would be subject to flood inundation to an average depth of 2 metres based on a one in fifty year flood height on levels determined by the Cairns Port Authority. However he says that the Queensland Water Resources Commission has determined that the flood level would be 300 mm higher. He believes that this higher figure has been accepted by the Local Authority.
Mr. Stallman speaks of the costs and difficulties in obtaining a possible approval to fill all of this land above flood height and concludes that the highest and best use of the subject land is as two sites for low profile industrial use with the construction of two relatively small building pads which would enable the construction of industrial sheds but which would minimise any adverse flooding affects on adjoining lands. The unfilled land could be used for purposes complementary to the industrial activities in the shed. He says that due to the low-lying nature of the land it is obvious to him that the purposes for which the land can be used are extremely limited and this would have an adverse effect on the marketability of the land.
In his written valuation Mr. Stallman lists six sales which include the two (2) sales on the Bruce Highway at Edmonton which have been used by Mr. Coonan. With the exception of these sales the other sales have been included in the valuation as some background to prices being paid for large areas of land but in the result they form no part of the basis used by Mr. Stallman to arrive at his conclusion that the subject land would attract a value of $6.00 per sq. metre. He has looked at the land on this basis because to his knowledge all industrial land in the district is purchased on rate per sq. metre basis.
Speaking about the sale of the 1.06 ha parcel on the Bruce Highway at Edmonton on 20th November, 1987 he comments that it has Bruce Highway frontage and is almost opposite the Queerah Meat Works. The site needed extensive filling and is now used for display and sale of caravans and mobile homes. He has spoken to the General Manager of the purchasing company and confirmed that the purchasers required highway exposure for the retail purpose to be established. He considers that it is superior to the subject land because of the highway exposure.
As to the sale of the 2.624 ha parcel on the Bruce Highway at Edmonton on 24th February, 1988 he says that this is a long narrow site with good highway frontage again almost opposite the Queerah Meat Works. It was purchased by an adjoining owner for amalgamation into a "Residential and Industrial" subdivision. It is not subject to inundation. It has highway exposure and is far superior.
Mr. Stallman makes reference to the sale at Woree which has been referred to by Mr. Coonan. He does not agree that this land is swampy country. It is low-lying but, so far as he is aware, it is not subject to flooding but, in any event, it would be possible to fill this land where this would not be possible with the subject land. While it has an inferior zoning, he accepts that the Local Authority would look favourably on a rezoning to an industrial use. This sale shows $7.56 per sq. metre and overall he considers it is slightly superior to the subject land. In the final result he believes that the sale of the 2.624 ha parcel at Edmonton represents the best evidence to arrive at a value of the subject land.
In cross-examination he acknowledges that he has marked the subject land down in value because of the flooding problems. He says that, while the 1.06 ha parcel at Edmonton required extensive filling, it does not have the inundation problems which apply to the subject. He says that while the subject may not have flooded for some time a prudent purchaser on enquiry would have checked the flooding levels and would ascertain that it would be necessary to fill to 2.3 metres above existing ground level. He agrees that the market was rising during 1988 after the date of the sales at Edmonton. It was put to him that on his rate per square metre he has placed a value of $83,000 on Lot 1 and $121,000 on Lot 2 and that there are no sales of large parcels which would support site values as low as this. He agrees that there would be a difference in the price paid for a block of .5 of a hectare compared to a block of 1 hectare and he agrees also if only one of the lots was being resumed the value would be marginally higher and that if he was to value the two sites in isolation as two separate sites he could be in error in valuing as one large industrial sale. He says that he has looked at the resumed land as one large industrial site and this could be an error if each site fell to be valued as a separate entity.
I turn to consider the proper approach in this matter. Mr. Coonan looks at the land as two separate parcels each capable of being sold to different purchasers. Mr. Stallman has looked at the land as a large industrial site of 34,040 sq. metres which would sell for $204,000. He acknowledges that if only one lot had been resumed it would attract a higher rate than the $6.00 per sq. metre he now applies.
I find that the approach adopted by Mr. Coonan in looking at the sites as separate entities is correct. A similar situation was considered by the Land Appeal Court in the estate T. O'Grady Conroy deceased -v- The Co-ordinator General - resumption for Wivenhoe Dam (1976) 3 Q.L.C.R. 353 where at p.357 the Court said:-
"It is crystal clear to us that the claimant owned four separate portions at the dates of resumption (which were less than two months apart), and that the portions could have been sold singly or in any combination that would give the owner the best total return. Our opinion is that Mr. Conroy erred in valuing the aggregate area as one property which therefore must be notionally sold to a single buyer. We hold that each original portion should be valued on the basis of being capable of separate sale, but that such sales need not necessarily be to different purchasers as the owner would seek to obtain the highest total price for the lands."
I find that at the date of resumption a prudent purchaser would have taken into consideration that each lot is handily situated within the City of Cairns with industrial and kindred businesses established in close proximity. That the land was flooded in 1964 and in 1977 and is properly described as being flood prone. He would anticipate Local Authority approval for the filling of a part of the land for construction of an industrial shed, the balance land remaining at its natural level for uses ancillary to the primary activity for these large areas and that it would not be suitable for intensive development into an industrial estate. I cannot conclude that he would pay a uniform rate per square metre and I prefer the approach adopted by Mr. Coonan of a site value.
The only sales which I propose to discuss are the two sales at Edmonton and the sale at Woree. The sale of the 1.06 hectare parcel at Edmonton is out of line with the other two sales. I find that it was purchased for a retail business with its attraction being its long frontage to the Bruce Highway. It is clearly inferior to the parcel in the second sale at Edmonton and I conclude that it is a high sale. The sale in February 1988 of the 2.649 hectare parcel at Edmonton for $200,000 is a useful guide. As an englobo parcel it is far superior to either of the subject parcels. It is flood free with excellent highway exposure and suitable for intensive subdivision. I am satisfied despite the rising market and the lapse of six months between the date of sale and the date of resumption that neither of the subject parcels would attract this englobo figure. The 1.983 ha parcel at Woree sold in April 1988 for $150,000. I find it is a useful comparison. It has an inferior zoning although it is agreed that with the completion of the new road an application for rezoning for industrial use would be favourably considered. While it may be somewhat low-lying, there is no evidence to suggest that it floods. Its area is fairly comparable to the area of the larger resumed parcel. I find that, if the lands have been resumed at the date of sale, neither resumed parcel would have attracted this sale price. It is agreed that the market was rising during 1988 and to make allowance for this I propose to adopt that sale price of $150,000 as the appropriate figure to apply to the 2.018 ha parcel as at the date of resumption and to apply a figure of $110,000 to the smaller parcel making a total of $260,000.
In his valuation Mr. Coonan has valued the house at $40,000 and Mr. Stallman at $46,000. There is not a great deal of difference between the valuers and resolving the doubts in favour of the dispossessed owners I will adopt Mr. Stallman's valuation and determine the value of the house at $46,000. The remaining item is the item for legal and valuation expenses incurred up to the date of lodgment of the claim in the Court. The parties have agreed the sum of $400 for legal expenses and $3,150 for valuation fees and I determine this head of claim in the agreed sum of $3,550 making a total of $309,550.
I determine compensation payable by the respondent to the claimants under all heads of claim in the sum of $309,550. I order the respondent to pay to the claimants interest thereon at the rate of 12.75% per annum commencing on third day of September, 1988 until the twenty-fifth day of November, 1988 when the sum of $250,000 was paid by way of advance and thereafter on the balance of $59,550 up to an including the day immediately proceeding the date on which the said balance is paid.
President of the Land Court
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