Christensen v The Crown
[1991] QLC 24
•31 July 1991
LAND COURT, BRISBANE
[1991] QLC 24
31st July, 1991
Re:Claim for Compensation - Resumption for School purposes - A90-64.
Roy Frederick Christensen v.
The Crown
J U D G M E N T
This is a claim for compensation for the taking by the Crown for School purposes under the Acquisition of Land Act 1967-1988 of a parcel of land in the County of March, Parish of Urangan, of 6.45 hectares being Lot 6 on Plan 230599 (a plan intended for registration in the Office of the Registrar of Titles) and being part of the land contained in Certificate of Title, Volume 1053, Folio 4. The land was taken on and from 14th April, 1990.
The claimant had duly filed a claim on the Crown in the sum of $309,648. In the hearing of the matter leave was granted to amend the claim to $201,750 made up as follows:
Land $ 193,500 Severance 1,000 Valuation fees 1,770 Legal fees 800 Engineer's fees 4,680
This assessment was based on a valuation written by Mr N.L. Maddern, registered valuer. He valued the land as an englobo parcel at the rate of $30,000 per hectare as potential residential A land. The valuation he produced in Court included an exercise in hypothetical subdivision and sale of the resumed land as a separate parcel in Residential A sized lots. This exercise reflected a land value of about $19,500 per hectare. These workings included development costs which were assessed by Mr B.D. Parkinson, a senior civil engineer with the firm Barlow Gregg Abercromby and Associates Pty Limited. Mr Parkinson gave evidence. Mr
J.R. Humphreys, consultant town planner, also gave evidence. His evidence dealt with the
question of the suitability of the land for rezoning to Residential A from its current zoning of Rural B. The valuation finally put in evidence by the Crown was an assessment made by Mr
D.N. Meiers, registered valuer and Land Commissioner in the employ of the Department of Lands. He valued the land at $9,500 per hectare or $61,275. This valuation was made on the basis that the highest and best use of the land was for subdivision as Park Residential land. Mr
G.E. Short, registered valuer in the employ of the same Department, also gave evidence on behalf of the Crown.
An advance against compensation in the sum of $62,000 was made on 17th October, 1990. Valuation and legal fees incurred in the preparation and lodgment of the claim are accepted as claimed. The remaining items are in dispute and there is also a dispute as to whether interest should be paid on compensation.
The parcel from which the subject land was taken comprises an area of about 39.5 hectares which is situated about 4 kilometres south-west of the shopping centre and Post Office at Pialba. The parcel is roughly of triangular shape with Dundowran Road along the northern boundary, the old Maryborough Road along the southern boundary and Christensens Road on the western boundary. At the date of resumption the land was zoned Rural B and was used primarily for growing sugar cane. The resumption took an area of rectangular shape from the Dundowran Road-Christensens Road corner with dimensions of 215 metres to the former road and 300 metres to the latter road. About 1.8 hectares of the resumed area was under cane at resumption. The resumed land rises generally southerly and easterly from the Dundowran Road frontage where contours are around 4.5 metres to a high of 9.5 metres in the central-southern area. It is agreed that the resumed land may be taken as representative of the whole parcel prior to resumption so that when comparisons are made of basic sales put in evidence they will be made on that area and not with the resumed land as if it were an entity separate and distinct from the parent parcel. This approach is necessary in order to follow the principles outlined by the Privy Council in Maori Trustee v. Ministry of Works (1958) 3 All. E.R. 336. There is no argument that the land as land has the physical capability for subdivision into either Park Residential or Residential A sized lots nor is there argument that services could be provided. It may also be said on my
consideration of the evidence that the contour of the land for either of these purposes would be a positive rather than negative attribute in the land. The issue as to valuation turns upon the highest and best use of the land at the relevant date. It is therefore appropriate to begin with the evidence of Mr Humphreys which may be summarised briefly in the conclusions he made at the
end of his report which are as follows:
"If an application to rezone the land to the Residential A zone was made at the time of resumption, it would be likely to have been approved on the basis that:
(i)the site is physically suitable for residential development;
(ii)the site can be connected to services infrastructure (water, sewerage, electricity, telephone);
(iii)the site is within close proximity to existing and future residential areas, and shopping facilities;
(iv)the site has easy access to shops and other facilities;
(v)if the Condor Lakes Development and Eli Waters Estate were to be developed the site would be contiguous with the extended urban area;
(vi)the intents of the Residential A Zone and Park Residential Zone are such that the Residential A Zone would be the preferred zone for the site;
(vii)other areas with similar characteristics have been rezoned from Rural B to Residential A;
(viii)the site being designated 'uncommitted' on the Development Control Plan
- 1 Map does not preclude its development for residential or other uses;
(ix)Inasmuch as the draft Development Control Plan - 2 was in its early stages, and it was likely that the area surrounding the site would be shown as urban residential, and likewise that the Strategic Plan would also show the site for urban residential purposes, such a rezoning would not have been inconsistent with the Council's planning for the area.
Thesite therefore has the potential to be rezoned and developed for urban residential purposes. "
The Condor Lakes Development is immediately to the north of the subject land on the opposite side of Dundowran Road. This proposal was envisaged to contain detached housing, a retirement village, tavern, tourist and recreational facilities, caravan park, shopping centre and medium density housing. To date only the shopping centre has been built on the Maryborough-Urangan Road frontage. This centre is within 1 kilometre of the resumed land and about 500 metres from the nearest point of the parent parcel. Mr Humphreys said that the land for this proposal was rezoned in 1986 and that since then the original proposal had changed although he is of the opinion that any future development is likely to incorporate similar uses to those first proposed. The Eli Waters Estate covers a mass of land (north of Condor Lakes) to the east and west of Eli Creek and running through (west of Eli Creek) to the ocean frontage. This proposal involves canal development including low and medium density housing, shopping and business areas, community facilities, tourist facilities, a retirement village, hotel and marina. Mr Humphreys said that an environmental impact statement is currently being prepared and that Council's decision on whether to approve such an application is pending that statement and development control plan 2 which has been prepared for the area. Land to the south and west of the subject land is primarily used for agricultural purposes. Adjoining on the east - on a small triangular piece of land with frontage to Dundowran Road and the main Maryborough-Urangan Road - is a service station. Residential subdivision begins with an older estate generally opposite the Condor Lakes shopping centre and thereafter intensifying as one proceeds easterly along Boat Harbour Drive. The principal access to the C.B.D. of Pialba from Boat Harbour Drive which runs from west to east is Main Street. The subject land is about 3 kilometres from this intersection. The key to Mr Humphreys' opinions is found in his last comment. Whilst the growth in residential development in Hervey Bay and the direction that growth is taking may lead to a conclusion (which is not seriously in dispute) that the subject land will at some time become Residential A land the ripeness of the land for that purpose is another matter. Both Mr Meiers and Mr Short are of the opinion that in economic terms the land is not yet ripe for Residential A subdivision. This is why Mr Meiers valued the land as potential Park Residential land. Mr Short who has resided in Hervey Bay for about seven years said that the growth pattern
in Residential A subdivision is towards the south and south of Boat Harbour Drive where there is generally speaking nice elevated land with a northerly aspect. Mr Short had this to say about
the prospects:
"Q. Using your knowledge of the area, what do you consider to be the best use for the subject property as at the date of resumption?
A.At the date of resumption I would say park residential, long term, possibly residential somewhere down the track but my view for that is I believe there still is ample land suitable for residential development in a much superior location to the subject land. If you take my map there where I've marked that subdivision on the corner of the Maryborough-Urangan Road, to the east of that there's the - there approximately 150 hectares of undeveloped land. Now that excludes the Bay Central development. That's both sides of Nissan Road and extends up to Main Street which immediately adjoins the Hervey Bay College. So basically surrounding the Hervey Bay College, in that block, excluding the Bay Central commercial integrated development, there's probably about 150 hectares there which a large part is suitable for development and in fact on my map there, in Nissan Street there the parcel immediately to the east, 57.75 hectares, it's owned by Mr Pedersen, I believe, and that was actually contracted in August 1989 for about $20,000 per hectare and the prospective purchaser was the principals of Tropical Palms Estate, Allan and Robert Mackay but that sale subsequently fell through. They were proposing a residential development of 300 allotments, average size 800 sq. metres. "
That the land is not ripe for Residential A development at the relevant date is clear in the supplementary evidence. Mr Parkinson produced a subdivisional layout of the resumed land in Residential A sized lots with an average area of 666 square metres. He obtained 68 lots. He then estimated the costs of the development including headworks charges. In his hypothetical subdivisional exercise, Mr Maddern priced the lots at an average of $25,000 or $1.7 million as gross realisation. After deducting development costs as estimated by Mr Parkinson and the other usual allowances made in an exercise of this nature, he obtained a land value of about $19,500 per hectare. Mr Parkinson said that if the exercise had been performed over the whole of the land before the resumption development costs per lot would be less. He conceded that if the whole of the land were the object of the proposal, augmentation of the current sewerage and water supply would be required. He had not pursued this exercise nor had he consulted Council as to its requirements were such the proposal. On enquiry of the Council, Mr Meiers ascertained that
augmentation would be required and that costs could be of the order of $400,000 to $500,000. The effect of such costs was not translated further by Mr Meiers. He and Mr Short were of the opinion that an average selling price of $25,000 would not be achieved. Mr Short believes that an average of $20,000 would be more realistic. Without going into the finer details of the exercise, it is obvious that development at the relevant date would be uneconomic. I am of the opinion that a prudent purchaser armed with the information put before the Court and knowing what Mr Humphreys said about the land including the position where the land lay in terms of the proposed development control plan 2 would not contemplate immediate development for either Residential A or Park Residential. The difference between these forms of subdivision is that under Park Residential the minimum lot size is 2,000 square metres with an average of 4,000 square metres. Reticulated water is necessary but not sewerage. If the subject land were so subdivided, Mr Meiers is of the opinion augmentation of the current water supply would be required. Under a Residential A subdivision the minimum lot size is 600 square metres and both water and sewerage are necessary ingredients to the subdivision. If subdivision of the land for Residential A purposes is within the foreseeable future (and this seems to be the opinion of the Council), the prudent person would in my opinion hold the land for that purpose rather than to restrict (or destroy) that potential by endeavouring to achieve an immediate subdivision for Park Residential purposes. I am therefore inclined to the view that the highest and best use of the land at the relevant date is as a holding proposition for Residential A development.
I turn now to the basic sales evidence. Here it is convenient to begin with the sales considered by Mr Meiers. His sales 1, 2, 3, 4, 5, 6 and 8 are of land to the north-west of the subject land and comprise lands which were in at sale or have since sale been included in Park Residential zoning. The range of values is as follows:
S1 - 13. 1.1989 - 6.955 ha - $12,509 per ha S2 - 25. 2.1989 - re-sale - $16,535 per ha S3 - 30.11.1988 - 15.24 ha - $16,404 per ha S4 - 15.11.1988 - 24.22 ha - $12,800 per ha S5 - 15.11.1988 - 22.88 ha - $16,390 per ha) ocean S6 - 22. 1.1989 - re-sale - $20,760 per ha) frontage S8 - 6. 2.1989 - 246.5 ha - $10,142 per ha)
Sales 9, 10 and 11 comprise land forming the Eli Waters development. Sale 9 comprises an area of 137.7 ha with ocean frontage. The land was purchased for $13,072 per hectare in November, 1988. In the same month sale 11 was effected covering an area of 130.668 hectares at $16,835 per hectare whilst in November, 1989, the land in sale 10 comprising 116.481 hectares was purchased for $9,449 per hectare. It is principally on these sales that Mr Meiers values the subject land at
$9,500 per hectare. What is proposed for the Eli Waters Estate is dealt with in the report of Mr Humphreys. A canal development is envisaged. The proposed uses are multitudinous and in no way can a comparison be made with confidence with the subject land which, it is agreed, if subdivided would be put into conventional residential subdivision whether as Park Residential or Residential A. The remaining sale (sale 7) is a common sale and will be dealt with later herein. Mr Maddern considered some five sales of englobo parcels. These comprise the sale of land in Boat Harbour Drive (sale 1) and just to the west of the Main Street junction with Boat Harbour Drive which reflected on sale in April, 1990, a price of $33,529 per hectare. He said that the land which was zoned Rural B at the time of sale was purchased with a view to rezoning to allow for a wide variety of uses including fast food outlets, tavern, medical centre, service station, shopping centre, retail warehouses and other uses which have not yet been specified. Whilst the sale land in contour and elevation may have some elements of comparison with the subject land, I find that it is of no assistance in valuing the subject land. This is what Mr Short said in answer to a
question as to the relevancy of the sale:
" Q.How relevant is that sale as a comparison to the subject zoned Rural B?
A.Sale 1, I believe, is fairly irrelevant to the whole exercise mainly because the sale No 1, that was purchased as a commercial integrated development and there's a number of rezonings going through. It's broken up into a number of parcels fronting Boat Harbour Drive. It extends from retail warehouses, consulting rooms, retail exhaust repairs, replacement centres, shopping centre, indoor tavern, transport terminal, fast-food outlet and service station and I believe any value in that sale - or I see the main value in that sale to the purchaser is that frontage, that retail exposure along Boat Harbour Drive and he has said that at some time down the track he may develop residential blocks at the rear adjoining the Hervey Bay College which would seem fairly logical. "
The land contained in sale 3 is situated on Boat Harbour Drive and Shelley Street, Scarness. The area purchased comprised about 12 hectares of Rural B zoned land. The land was purchased in February, 1989, for a consideration reflecting a price per hectare of
$24,882. Application for rezoning of the land to Residential A has been made for a subdivision comprising 83 lots ranging in area from 660 square metres to 1900 square metres. The sale land is part of an estate known as Tropical Palms which is 4.5 kilometres from the subject land. Parts of this estate are well elevated with views of the sea. When purchased, the land adjoined residential subdivision and very limited external works were required. Sale 4 covers the purchase from a mortgagee in possession of the area known as Condor Lakes. The sale reflected in February, 1991, a consideration of $22,666 per hectare overall. A variety of uses were envisaged in the proposal first put before the Council. The area purchased was 39.7 hectares. Mr Maddern says that the purchaser will not be proceeding with development approval for several of the zonings. In his opinion the subject land is superior on a per hectare basis due to the high cost of Council charges, the large area of unusable land (he estimates that 32.6% of the sale area will be set aside for park or lake purposes) and to the fact that the sale was effected by a mortgagee in possession. He also sees the subject land as possessing better contours. He said that the sale land was zoned
as follows:
"Special Facilities (Tavern) - 2.4 ha Special Facilities (Tourist and
Recreational Facilities) - 2.408 ha Special Facilities (Retirement
Village) - 12.14 ha
Residential A - 9.806 ha Public Park or Public Lake - 12.9525 ha
39.7065 ha "
Notwithstanding that it is accepted that development may not strictly follow the zonings (Mr Humphreys evidence), any comparison between the subject land and the sale land suffers the defect that the comparison is not one of like with like in any relevant sense. Mr Maddern's sale 5 comprises the sale of a parcel of 8,620 square metres which is situated on the
corner of Boat Harbour Drive and Old Maryborough Road, Pialba. The land sold for $162,500 in October, 1988. The land was zoned Future Urban at sale but was subsequently rezoned to Light Industry, subdivided and sold. This evidence was given for the purpose of "comparing the price paid for a small parcel of land in the general area". The sale was disregarded by the Crown on the basis that it was purchased for industrial use and had been designated as Future Industry under the Development Control Plan. Further, no worthwhile weight can be given to the sale in view of the fact that the exercise before the Court is not to ascertain what the resumed land may have fetched in the market place at the date of resumption as a separate parcel but rather to quantify in money terms the loss of the resumed land as part of the parent parcel - see Maori Trustee. I come then to the common sale which comprises an area of 9.665 hectares. This land is situated at Pialba opposite the Golf Course. The sale took the form of a consolidation of six titles. This land was zoned Future Urban at the date of sale. It was surrounded by bitumen roads. The proposed development envisaged a Residential A subdivision which would include the closure of two intersecting roads. The consideration paid was $253,000 or $26,176 per hectare. The contract was executed in January, 1989. All amenities were available to the site. External works would be limited to the widening of the pavements and the installation of kerbing and channelling on the external roads. The plan which accompanied the application for rezoning provided for 119 lots (with the closure of the unformed intersecting roads). It is agreed that the sale land has residential development beside it, is within as residential precinct and is close to Hervey Bay High School. The sale land is much closer to the C.B.D. of Pialba than is the subject land and is within walking distance of the sea. The sale land is seen by Mr Meiers as having at sale an immediate potential for Residential A development. He and Mr Short see the sale land as a much superior property to the subject land. On the evidence I find that they are correct in their reasoning. The sale land in my opinion had a better location for subdivision at the relevant time, it was obviously ripe for subdivision, zoning was favourable for such development, services were available and external roads were in place (subject to some works). Mr Maddern is of the opinion that values for englobo land would have increased between 1989 and 1990. The other opinions are that values for englobo land remained static over the period. In short, the opinion of the Crown
valuers is that the market for good quality englobo land ripe for subdivision into Residential A development at the date of the resumption was of the order of $25,000 to $26,000 per hectare. The sale just discussed and the sale of Mr Maddern in Boat Harbour Drive and Shelley Streets (sale
3) appear to confirm that reasoning. My conclusion on the evidence is that if the subject land were in a comparable location to these sales with comparable surrounds and services, a value per hectare of $25,000 to $26,000 would be appropriate. The pattern of Residential A development in the area is generally following the course southerly beyond Boat Harbour Drive, where Mr Short said there remains a substantial body of suitable land available for development. It can be expected that it will take some time before growth spreading from this area westerly will put sufficient pressure on the potential in the subject land for like development so as to render it capable of economic development. In these circumstances a prudent purchaser would, in my opinion, ascertain the purchase price by discounting prices paid for comparable Residential A land at the date of resumption. In A.H. and A.J. Raynbird v. Southern Electric Authority of
Queensland (1968) 35 C.L.L.R. 267 at p. 275, the Land Appeal Court in ascertaining the present value of land which was not expected to be ripe for development for a number of years due to the likely time required to obtain an appropriate zoning and for other matters futuristic in kind, discounted the value of the land if ripe for subdivision at the time of resumption at 15% for 3.5 years. On the evidence in this case including some prospects of ripeness being assisted by the proposed uses for Condor Lakes and Eli Waters, a purchaser could reasonably conclude that this land could be economically ripe in about 5 years. The present value of $26,000 payable in five years at say 12% (which seems reasonable in the circumstances) is about $15,000 and I would assess compensation at that rate per hectare except for the slight impetus of the sale lands purchased for Park Residential development - it being admitted by Mr Short that if Eli Waters went to Residential A development (more so the areas comprised in sales 9 and 10), those areas would be slightly behind the subject land in ripening. In resolving all doubts in favour of the claimant, I find that a reasonable purchasing price for the parent parcel at the date of resumption is at the rate of $17,000 per hectare. There is no evidence that the taking of the resumed land from the parent parcel will affect the value of the balance area for that purpose.
The question of enhancement was raised by the Crown but was not quantified. The claim of
$1,000 for severance cannot be allowed. This claim is related to the effect of the resumption upon the current use of the land, which is a lower and inferior use to that upon which compensation has been assessed (see Horn v. Sunderland Corporation (1941) 2 K.B. 26). In the circumstances, the value of the land taken will be determined at $17,000 per hectare or $110,000 in round figures. Legal and valuation fees have been accepted and these will be allowed. The services of Mr Parkinson were engaged for the purposes of the hearing. His fees must follow the event (see Szirtes v. Pine Rivers Shire Council (1969) 36 C.L.L.R. 103 and Merivale Motel Investments Pty
Ltd v. Brisbane Exposition and South Bank Redevelopment Authority (1984-85) 10 Q.L.C.R. 175 (L.C.): 26 8 L.A.C. Compensation is therefore determined in the sum of One hundred and twelve thousand, five hundred and seventy dollars. ($112,570).
I come then to the matter of interest. The claimant at resumption elected to remain in possession of the resumed land and to harvest the sugar cane crop. Mr Meiers said that arrangement was specific but that no specific arrangements were made for possession subsequently. The circumstances are similar to those in G. Santalucia v. The Crown (1976) 3
Q.L.C.R. 94, discussed by the learned Member at p. 111. I accept what the learned Member said. I find that interest is not payable during the period from the date of the resumption to the date of harvesting of the crop which for this purpose I will accept as 17th October, 1990 (the date when the advance was made). Accordingly, interest at the rate of 12 percentum per annum is ordered to be paid on the sum of $50,570 from and including 18th October, 1990 up to and including the day immediately preceding the date this sum is paid.
Member of the Land Court
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