Cupo v The Chief Executive, Department of Transport and Main Roads
[2014] QLC 19
•14 May 2014
LAND COURT OF QUEENSLAND
CITATION: Cupo v The Chief Executive, Department of Transport and Main Roads [2014] QLC 19 PARTIES: Paolo Cupo and Rosa Cupo
(applicants)v The Chief Executive, Department of Transport and Main Roads
(respondent)FILE NO: AQL149-12 DIVISION: General Division PROCEEDING: Application to determine compensation under the Acquisition of Land Act 1967 DELIVERED ON: 14 May 2014 DELIVERED AT: Brisbane HEARD ON: 17, 18, 19, 20, 21, 24 June 2013
28, 29, 30, 31 October 2013
Submissions finalised and decision reserved 18 February 2014HEARD AT: Brisbane MEMBER: WA Isdale ORDERS: 1. The value of the land taken is assessed in the amount of $1,250,000.
2. Costs attributable to disturbance are assessed in the amount of $22,408.48.
3. The parties will be heard on the matter of interest.
4. Any application for costs is to be filed and served and any reply is to be filed and served as directed when the matter of interest is heard.
CATCHWORDS: Acquisition of Land Act 1967
Integrated Planning Act 1997AMP Capital Investors Ltd & Anor v Transport Infrastructure Development Corporation [2008] NSWCA 325, 163 LGERA 245
Arkinstall & Anor v Gold Coast City Council (1997-1998) 17 QLCR 90
Blocksidge v State of Queensland (1991) 2 Qd R 1
Bowers & Anor v Pine Rivers Shire Council (2007) 28 QLCR 196
Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234
Commissioner for Railways v Buckler (1996) 1 Qd R 18
Cupo & Anor v Chief Executive, Department of Transport and Main Roads [2013] QLC 36
De Ieso v Commissioner of Highways (1981) 27 SASR 248; (1981) 47 LGRA 412
Heavey Lex No. 64 Pty Ltd v Chief Executive, Department of Transport (1999-2001) 22 QLCR 177
Haigh v Minister (1994) 85 LGERA 143
Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196
Ipswich City Council v Wilson (2011) 32 QLCR 357
Ipswich City Council v Wilson & Anor [2011] QLAC 6
Jones v Dunkel & Anor (1959-60) 101 CLR 298
Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11
Melwood Units Pty Ltd v Commissioner of Main Roads (1978) 52 ALJR 593, 37 LGRA 387
Minister for Public Works v Thistlethwayte [1954] AC 475
Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177
Mio Art Pty Ltd v Brisbane City Council (2010) 31 QLCR 174
Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226 (29 October 2007)
Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495
O’Kane v The Commissioner of Main Roads (1976) 3 QLCR 331
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91
Spencer v The Commonwealth (1907) 5 CLR 418
State of Queensland v Pajares (2004) 25 QLCR 165
Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd [2005] NSWCA 251; (2005) 63 NSWLR 407
The Crown v Murphy [1990] 64 ALJR 593
Vyricherla Narayana Gajapatiraju v Revenue Division Officer, Vizagapatam [1939] AC 302
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259
Wilson v Liverpool Corporation [1971] 1 WLR 302APPEARANCES: GR Allan instructed by Anderssen Lawyers for the applicants
DR Gore QC and M Williamson instructed by Clayton Utz for the respondent
Background
The applicants were the registered owners as joint tenants of two adjoining parcels of land. The land was described as follows:
(i) Lot 2 on RP 46918, Parish of Enoggera, County of Stanley, having an area of 910 m² and having title reference 17176042;
(ii) Lot 8 on RP 18507, Parish of Enoggera, County of Stanley, having an area of 405 m² and having title reference 17176041.
These two parcels were situated at 34-36 Earle Street, Windsor and there was a single residence erected on them.
Using the Acquisition of Land Act 1967 (the Act) steps were taken by authorised construction authorities to take the land for public purposes. On 7 March 2008 Taking of Land Notices 1421, 1422, 1423 and 1425 of 2008 were published in the Queensland Government Gazette. The effect of these notices was to take the land from the applicants and vest it in the constructing authorities. The rights of the applicants were converted into rights to be compensated fully for what had been compulsorily taken from them. The parties were unable to reach agreement on the sum necessary to compensate the applicants. On 1 September 2008 the applicants lodged a claim for compensation in the amount of $3,342,408 plus interest and costs. On 2 March 2009 an advance against compensation in the amount of $1,350,000 was paid to the applicants and on 30 September 2011 they lodged an amended claim for compensation in the amount of $3,037,350.34 plus interest.
With the absence of agreement persisting, the applicants commenced the present proceedings in this Court on 20 March 2012, for the question of compensation to be determined by the Court.
The taking of the land
With the originating application in the present proceeding a schedule of particulars of the taking of the land was provided. It usefully sets out the purposes for which various parts of the land were taken:
“
| Taking of Land Notice | Purpose | Constructing Authority | Land Taken | Area |
| 1421 of 2008 | Incidental to a road transport purpose – namely, a road embankment and construction site for the Airport Link Project | Chief Executive, Department of Main Roads | County of Stanley, Parish of Enoggera – being part of Lot 8 on RP 18507 Title Reference 17176041 County of Stanley, Parish of Enoggera – being part of Lot 2 on RP 46918 Title Reference 17176042 | About 13 m² About 57 m² |
| 1422 of 2008 | a road transport purpose for the Airport Link Project and a busway transport purpose for the Northern Busway (Windsor to Kedron) Project | the Chief Executives, Department of Main Roads and Department of Transport | County of Stanley, Parish of Enoggera – being part of Lot 8 on RP 18507 Title Reference 17176041 County of Stanley, Parish of Enoggera – being part of Lot 2 on RP 46918 Title Reference 17176042 | About 53 m² About 178 m² |
| 1423 of 2008 | Incidental to a road transport purpose for the Airport Link Project and a busway transport purpose for the Nortern Busway (Windsor to Kedron) Project | the Chief Executives, Department of Main Roads and Department of Transport | County of Stanley, Parish of Enoggera – being part of Lot 8 on RP 18507 Title Reference 17176041 County of Stanley, Parish of Enoggera – being part of Lot 2 on RP 46918 Title Reference 17176042 | About 247 m² About 572 m² |
| 1425 of 2008 | A busway transport purpose for the Northern Busway (Windsor to Kedron) Project | Chief Executive, Department of Transport | County of Stanley, Parish of Enoggera – being part of Lot 8 on RP 18507 title Reference 17176041 County of Stanley, Parish of Enoggera – being part of Lot 2 on RP 46918 Title Reference 17176042 | About 92 m² About 103 m² |
| Total area of land taken | About 1315 m² | |||
”
The land, with its combined area of 1,315 m², was wholly taken for three purposes, namely:
(i) The Northern Busway (Windsor to Kedron) Project;
(ii) The Airport Link Project and the Busway Project;
(iii) A purpose incidental to (i) and (ii).
The task for the Court
The Court is required to resolve the dispute by assessing compensation in accordance with the Act, valuing the loss on the day when it occurred. This requires the Court to find the monetary point at which a fully informed prudent purchaser and vendor would agree on a price for the land. This will include determining how they would assess the land’s development potential but may not necessarily include all of the matters on which they might happen to disagree. As the Land Appeal Court said in Bowers & Anor v Pine Rivers Shire Council:[1]
“Although the learned Member heard from many experts, he did not seek to resolve every issue raised by them. Uncontroversially, he saw his task at para 14 of his reasons as deciding how
‘… the hypothetical purchaser and vendor, properly advised and acting reasonably and prudently would come together at a price for the land … to determine how the prudent vendor and purchaser acting on appropriate advice, would assess the development potential of the land.’ ”
[1](2007) 28 QLCR 196, 199 [18].
Matters relevantly in dispute
The parties are in dispute about what was the highest and best use of the land at the time that it was taken. They are also apart on the connected issue of what regard should be had to a planning document, the draft form of the Lutwyche Road Corridor Neighbourhood Plan[2] in assessing the highest and best use of the land. There is also the question of whether there was any increase in value of the land consequent to the scheme of resumption, a matter characterised as the Pointe Gourde[3] or San Sebastian[4] principle to be considered.
[2]Exhibit 4 tab 22.
[3]Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565.
[4]Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196.
Standing separately to those three inter-related aspects is the disputed question of whether the hypothetical prudent parties striking a bargain for this land would do so on the basis that its value was enhanced by a realistic prospect of it being amalgamated with an adjoining parcel owned by an investor, Dr Harmon.
Matters which would follow these questions will be the selection of the correct valuation methodology and consequent application of the evidence of sales of land.
The remaining area in dispute is the applicants’ claim for disturbance, including substantial legal fees, for the time after the initial claim for compensation and up to the making of the final claim.
The site inspection
At the request of the parties, inspections of the area of the subject land and of a number of properties used by the valuers as comparison sales was conducted on Tuesday 18 June 2013, the second day of the hearing. The view is not itself evidence but may assist in understanding the evidence.
Development potential
In cases such as the present case, this Court does not concern itself with what the local authority would have approved to be built. Its consideration was explained by the learned President in the following way:
“It is not the function of this Court to decide whether the planning authority would approve a particular proposal. Rather it is the function of the Court to determine, having heard the relevant evidence, how the hypothetical prudent purchaser referred to in the judgments in Spencer would have viewed the potential financial return if a proposal were considered that included one or other of the proposed plans.”[5]
[5]Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177, [12], citing De Ieso v Commissioner of Highways (1981) 27 SASR 248; (1981) 47 LGRA 412, 417. This passage was quoted by Fryberg J in Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234, [9].
The concept of value
Under the Act, compensation is assessed in accordance with s 20. By s 20(2) it is provided that:
“(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.”
The “value” referred to in s 20(2) is accepted to be the value to the applicants as dispossessed owners.[6] The word “value” is not defined in the Act, its meaning has been accepted to be the market value determined in accordance with the decision of the High Court in Spencer v The Commonwealth.[7] The relevant passages appear in the judgments of Griffiths CJ and Isaacs J. The learned Chief Justice said:
“In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring ‘What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’ It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not willing vendor would come together.”[8]
Isaacs J said:
“In the first place the ultimate question is, what was the value of the land on 1st January 1905?
All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.”[9]
[6]Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234 per Fryberg J at [31] where His Honour referred to O’Kane v The Commissioner of Main Roads (1976) 3 QLCR 331, 333 and Minister for Public Works v Thistlethwayte [1954] AC 475, 491.
[7](1907) 5 CLR 418.
[8](1907) 5 CLR 418, 432.
[9](1907) 5 CLR 418, 440-441.
The Pointe Gourde/San Sebastian “principle”
The “principle” bears the name of authorities associated with it[10] and is variously described as a “principle”[11] or an interpretation applied by courts of expressions in legislation which refer to the value of land compulsorily acquired.[12] It has been stated by Kirby P in the following form:[13]
[10]Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 and Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196.
[11]For example by Kirby P in Haigh v Minister (1994) 85 LGERA 143, 149-150.
[12]Ipswich City Council v Wilson; Ipswich City Council v Wilson & Anor [2011] QLAC 6, [45].
[13]Haigh v Minister (1994) 85 LGERA 143, 149-150.
“According to the principle, which is one devised by the judges, in valuing land for resumption purposes, any increase in the land’s value which is entirely due to the scheme underlying the acquisition is to be disregarded. The converse of the principle is also accepted. Any diminution in the value of land which is entirely due to the resumption scheme, or to any blight caused by a step in the resumption process, is to be disregarded in determining the value of the land: see Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196 at 214; 37 LGRA 214 at 228. Thus, where it is found that there is a direct casual connection between a restriction on land use imposed by planning and land use legislation and the proposed establishment of the public works for which the land might be resumed, the extent of such restriction on the value of the land must be ignored. Behind this principle lies a search for fair valuation and an insistence upon just procedures. If it were not upheld in the determination of the value of resumed land, it would be possible for a resuming authority to use its powers and influence, in respect of such matters as zoning, to diminish the value of the land to be resumed, to its own advantage and to the disadvantage of the owner at valuation.”
As the majority in the Land Appeal Court noted,[14] quoting the High Court in The Crown v Murphy,[15]
“One purpose of this principle is to ensure that a resuming authority does not employ planning restrictions to destroy the development potential of the land and then assess compensation for its resumption on the basis that the destroyed potential had never existed.”
The majority in the Land Appeal Court went on to refer to “the much-quoted Statement of Dixon J in Nelungaloo Pty Ltd v The Commonwealth[16] as governing the approach to s 20(2)[17] of the Act:
“Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it. You do not give him any enhanced value that may attach to his property because it has been compulsorily acquired by the governmental authority for its purposes (Vyricherla Narayana Gajapatiraju v. Revenue Division Officer, Vizagapatam [(1939) AC 302 at 318]. Equally you exclude any diminution of value arising from the same cause. The hypothesis upon which the inquiry into value must proceed is that the owner had not been deprived by the exercise of compulsory powers of his ownership and of his consequent rights of disposition existing under the general law at the time of acquisition.”
[14]Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91, [40].
[15][1990] 64 ALJR 593, 595.
[16](1948) 75 CLR 495, 571-572.
[17]Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91, [41].
The underlying scheme – the law
It is necessary to identify what is “the scheme underlying the acquisition”,[18] to use the words of Kirby P, or in Dixon J’s words “the same cause”.[19] The majority of the Land Appeal Court in Redland Shire Council v Edgarange Pty Ltd[20] illustrated this by reference to Lord Widgery’s judgment in Wilson v Liverpool Corporation[21] where his Lordship said:
“Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project, compulsory powers of acquisition will not arise at all, and it would, I think, be a great mistake if we tended to focus our attention on the word ‘scheme’ as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the so-called Pointe Gourde rule is to prevent the acquisition of the land being at a price that is inflated by the very project or scheme which gives rise to the acquisition.”
[18]Per Kirby P in Haigh v Minister (1994) 85 LGERA 143, 149-150.
[19]Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495, 571-572.
[20](2008) 29 QLCR 91, [36].
[21][1971] 1 WLR 302, 310.
As the Land Appeal Court said in Bowers & Anor v Pine Rivers Shire Council:[22]
“The first issue for decision was the application of the principle established in Housing Commission of New South Wales v San Sebastian (1978) 140 CLR 196 and developed in The Crown v Murphy [1990] 64 ALJR 593, namely that restrictions on land use as a consequence of a resumption of that land may not be employed to destroy the development potential of the land for the purpose of assessing compensation. It is the corollary of the Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 principle that a project or scheme which gives rise to a resumption cannot be used to inflate the value of the land.”[23]
The Land Appeal Court added that:
“The effect of San Sebastian was refined in The Crown v Murphy (1990) 64 ALJR 593 at 595
‘The principle applies in cases where there is a direct relationship between the planning restriction and the scheme of which resumption is a feature and extends to cases where there is merely an indirect relationship, provided that the planning restriction can properly be regarded as a step in the process of resumption.’ ”[24]
[22][2007] 28 QLCR 196.
[23][2007] 28 QLCR 196, [3].
[24][2007] 28 QLCR 196, [22].
In Mount Lawley Pty Ltd v Western Australian Planning Commission[25] the Court of Appeal noted that whether the effect on value is attributable to ‘the Scheme’ can be a difficult question to answer[26] the Court turned to an example given by Jacobs J, with whom the other Justices agreed in the High Court’s decision in Housing Commission of New South Wales v San Sebastian Pty Ltd.[27] Jacobs J said:
“Assume an area of land on the outskirts of existing settlement, and assume a planning authority concerned to designate land uses in a planning scheme. The land is designated open space. Thereafter it is resumed for the purpose of a public reserve. The fact that the land was zoned as open space may have depreciated its value. Does the resuming authority pay compensation at the depreciated value of open space or at some other value? The question cannot be correctly answered without knowing whether there was any connexion between the zoning as open space and the subsequent resumption. If the zoning was done with the intent or in anticipation that the land should be resumed for a purpose such as a public reserve or if the zoning was proposed or dictated by the resuming authority then s 124 requires that the zoning be ignored. It is only a step in the process of subsequent resumption. But in other circumstances the resumption may be unconnected with the act of zoning. It may be that the resuming authority selects the land for resumption as a public reserve because it is zoned open space; if it does so it is doing no more than ensuring that it, as well as others, conforms to the planning scheme. In those circumstances there is no relevant relationship between the zoning and the public purpose. No public purpose, existing or anticipated, intended, or urged by the zoning authority, leads to the zoning; rather, the zoning leads to the public purpose and consequent resumption.
The Court of Appeal of Western Australia then said:[28]
“The question of what is a ‘step in the process’ in this kind of context has since been discussed in a number of cases. Relatively recently, in Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd [2005] NSWCA 251; (2005) 63 NSWLR 407 [85] (Walker No 1) Basten JA (with whom Beazley JA and Stein AJA agreed), said that the ‘lesson of … San Sebastian … is that no narrow view should be taken of steps which may affect the value of land’. However, he added that ‘it is necessary to distinguish between conduct which constitutes a proper exercise of planning powers irrespective of the ultimate resumption and a use of planning powers in pursuit of a proposed resumption’.”
[25][2007] WASCA 226 (29 October 2007).
[26][2007] WASCA 226, 17.
[27](1978) 140 CLR 196, 206-207 and quoted in Mount Lawley at 18.
[28][2007] WASCA 226, 20.
The legislative structure in Western Australia is different to that presently being considered so the decision of the Western Australian Court of Appeal must be understood in view of the arrangements there, where the resuming and the planning authority will be the same entity[29] and the scheme was defined to be the town planning scheme.[30] The Court of Appeal said:
“29 It is true that a Scheme is ‘a progressive thing’. However, as we have said, the step or occurrence affecting value must be ‘attributable’ to the Scheme itself and not (as we understand s 36(2b)) to some different, or as yet unformed, notion that ultimately led to the creation of the Scheme. A step must be attributable to the Scheme, not the Scheme to a step. That is to say, the step must have been taken in order to bring about the Scheme itself, or a variant of it that is not materially different. As to this last proposition, it seems to us that a step may be attributable to a Scheme even if the form which the proposed Scheme then took differed from that which the Scheme ultimately took, so long as the difference is not such as to lead to the conclusion that the Scheme ultimately created was not substantially that which had been proposed. It also seems to us that the step must be taken with the intention of facilitating the Scheme or for the purpose of creating it, if it is to be attributable to the Scheme. So, for example, some proposed general planning consideration that may or may not lead to a Scheme of the kind ultimately implemented could not be said to be attributable to the Scheme merely because, as matters turned out, a Scheme which adopted that planning consideration was subsequently implemented (cp the approach taken in respect of the different legislation in San Sebastian).
30 Also, the words ‘attributable to the Scheme’ plainly have the consequence that the effect on value of characteristics or location of the land, or other factors affecting the land (such as population pressures), which always had the capacity to enhance, or reduce, its prospects of development and hence its value are not to be disregarded merely because they led, ultimately, to the Scheme. That is so even if they are specifically identified, or otherwise referred to, by the Scheme: see in this respect the approach adopted (albeit in the context of different legislation) by Basten JA in Walker No 1. The same is true of inherent characteristics of, or other facts affecting, land that is adjacent to the subject land, so far as those characteristics or factors are capable, independently to the Scheme (and its steps), of affecting the development potential, and hence the value, of the subject land. Regard to characteristics and factors of either kind might lead a hypothetical, informed purchaser to anticipate, independently of the Scheme and its steps, an outcome similar to that which in fact happened as a result of the Scheme. In such a case the Scheme (or knowledge of steps leading to it) may have no impact on the value of the land.”[31] (References omitted.)
[29][2007] WASCA 226, 4, 5, 6.
[30][2007] WASCA 226, 7.
[31](2007) WASCA 226, 29, 30.
The underlying basis for the decision in Mount Lawley Pty Ltd v Western Australian Planning Commission does not support a conclusion that for a step to be attributable to the scheme it must be taken with the intention of giving effect to it.
In Melwood Units Pty Ltd v Commissioner of Main Roads,[32] on appeal from the Full Court of the Supreme Court of Queensland, the Judicial Committee of the Privy Council considered a case where the resuming authority was different to the planning authority. Their Lordships accepted as a finding of fact the uncontradicted and unchallenged evidence that but for the expressway project an application to develop the whole of the land, including the resumed land, for a shopping centre would have been approved.[33]
[32](1978) 52 ALJR 593, 37 LGRA 387.
[33]52 ALJR 593, 595 RHC, E, F.
Their Lordships said:
“Under the Pointe Gourde principle (see Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands, [1947] A.C. 565) the landowner cannot claim compensation to the extent to which the value of his land is enhanced by the very scheme of which the resumption forms an integral part: that principle in their Lordships’ opinion operates also in reverse. A resuming authority cannot by its project of resumption destroy the potential of the whole thirty-seven acres for development as a drive-in shopping centre, and then resume and sever on the basis that that destroyed potential had never existed. Moreover, in their Lordships’ opinion the principle remains applicable in a case such as the present, notwithstanding that planning permission had not been given for the whole thirty-seven acres and would not have been given, when the lack of such permission was manifestly due to the expressway project, and it is established that, without the expressway project, such planning permissions would have been given for the whole thirty-seven acres. To hold otherwise in this case would enable the acquiring authority to inflict by its project the same injustice at one remove.”[34]
[34]52 ALJR 593, 596 LHC C, D, E.
In the legislation scheme in place in Queensland, it is not necessary that the step be taken by the resuming authority.[35]
[35]Mahoney & Ors v Chief Executive, Department of Transport and Main Roads (No. 3) [2013] QLC 11 [27], [46].
In Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority[36] the High Court considered that “the proposal” was linked, and confined, to that of the resuming authority.[37] What was to be disregarded included:
“(a)any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired … .”[38]
[36](2008) 233 CLR 259.
[37](2008) 233 CLR 259, 277 [54].
[38]Land Acquisition (Just Terms Compensation) Act 1991, NSW s 56(1)(a) (2008) 233 CLR 259, 275 [49].
The headnote correctly records that this provision:
“… linked ‘the proposal’ to the resuming authority and reflected a policy to disregard only the increase or decrease in value for which the resuming authority itself was responsible.”[39]
[39](2008) 233 CLR 259.
This legislation scheme differs from that in Queensland and the limitation identified by the High Court is not part of the law in Queensland, which limits the usefulness of Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority.[40] This was recognised by the Land Appeal Court in Ipswich City Council v Wilson.[41]
[40](2008) 233 CLR 259.
[41](2011) 32 QLCR 357, 366 n. 21.
In AMP Capital Investors Ltd & Anor v Transport Infrastructure Development Corporation[42] the New South Wales Court of Appeal was concerned with the same legislation considered in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority.[43] In that case the Court considered a statutory requirement that compensation not be less than the market value of the land that was acquired, even if there was enhancement in the value of other land.[44] This was because of the legislation being considered[45] which is in this respect dissimilar to the Queensland Act[46] which, by s 20(3) requires any enhancement to be taken into account. It was held, relevantly, that the planning changes should be disregarded for the purposes of the provision which required that enhancement of other land be considered.[47]
[42][2008] NSWCA 325, 163 LGERA 245.
[43][2008] 233 CLR 259.
[44]AMP Capital Investors Ltd & Anor v Transport Infrastructure Development Corporation 163 LGERA 245, 261 [63].
[45]Section 3(1)(a) and s 10(1)(a) which are set out at 163 LGERA 245, 252 [19].
[46]Commissioner for Railways v Buckler (1996) 1 Qd R 18, 25, L2-5.
[47]163 LGERA 245, 268 [100].
The dissimilarity of the legislation being considered in AMP Capital Investors Ltd & Anor v Transport Infrastructure Development Corporation[48] to that in Queensland relevantly relates to the identification of the public purpose for which the land was acquired.[49] The statement by Hodgson JA that:
“The mere circumstance that the public purpose is a contributing factor to changes which in turn affect value is not necessarily sufficient, particularly if the changes depend also on discretionary decisions made by other authorities.”[50]
cannot be understood to leave no scope for circumstances where such a factor will be sufficient to attract the operation of the principle.
[48]163 LGERA 245.
[49]163 LGERA 245, 253, s 55(f).
[50]163 LGERA 245, 268 [99].
In Department of Transport and Main Roads v Mahoney[51] the Land Appeal Court said:
[51][2014] QLAC 1.
“[38]In Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority, the Foreshore Authority resumed land in respect of which, prior to the resumption or proposal for the resumption, the local council had maintained an industrial zoning to prevent development for residential purposes. The High Court held that any change in value referable to the council's actions was not to be disregarded.
[39]As counsel for the appellant conceded, the decision in Walker depended primarily on the wording of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW), particularly ss 56(1)(a) and 3(1)(a). Section 55 of the NSW Act provides, relevantly, that:
"In determining the amount of compensation to which a person is entitled, regard must be had to the following matters only (as assessed in accordance with this Division):
(a) the market value of the land on the date of its acquisition,
…"
Section 56(1) states:
"market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid):
(a)any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and
…"
[40]The High Court said that s 56(1)(a) may be read with the statement in s 3(1)(a) of the objects of that Act. That object is:
"to guarantee that, when land affected by a proposal for acquisition by an authority of the State is eventually acquired, the amount of compensation will not be less than the market value of the land (unaffected by the proposal) at the date of acquisition."
[41] The High Court accepted the following:
"The construction of the market value disregard in [s 56(1)] para (a) for which the Foreshore Authority correctly contends, links "the proposal" to that of the resuming authority. It puts aside anterior discussions or agitations by the Council and others in favour of classifying the Land as public space. In this way there is reflected in the terms of para (a) of s 56(1) a policy to require a disregard only of that increase or decrease (as in this case) in value for which the resuming authority is responsible."
[42]There are no equivalent provisions to s 56(1)(a) and s 3(1)(a) of the NSW Act in the Acquisition of Land Act. The decision in Walker must, therefore, be treated with some caution in Queensland. This was recognized by the Land Appeal Court in Redland Shire Council v Edgarange Pty Ltd. The Court pointed to the need to be alert not to transpose dicta from cases considering different legislative provisions but accepted, nevertheless, that the Pointe Gourde principle continued to apply in Queensland:
"… because, as a matter of statutory construction, the courts have concluded that the legislature may be assumed to be aware of this long-held and widely accepted construction of what is meant by 'value' at the time of acquisition."
[43]We respectfully agree with the reasoning of the Land Appeal Court in Edgarange. Accordingly, we consider that in determining the value of land in accordance with s 20(1) and s 20(2) of the Act, this Court should ignore any diminution in value to the land caused by planning restrictions where there is a direct relationship between the planning restriction and the scheme of resumption or, if there is merely an indirect relationship, where the restrictions can properly be regarded as a step in the process of resumption.
[44]We do not consider that there are any authorities in relation to the application of the San Sebastian decision in Queensland that mandate that the resuming authority must be involved in the decision that affects, whether positively or negatively, the value of the resumed land. There were two alternatives identified by Jacobs J in San Sebastian in discussing the necessary connexion between the rezoning and the proposed public works:
(i) if the zoning was done with the intent or in anticipation that the land should be resumed for a purpose such as a public reserve,
or
(ii) if the zoning was proposed or dictated by the resuming authority,
then the zoning is to be ignored.
The first alternative does not require that the resuming authority be involved in the rezoning.
[45]Nor do we consider that there is any good reason to limit the application of the San Sebastian decision in the way suggested by counsel for the appellant. It is not difficult to envisage a scenario where a higher regulatory authority develops a scheme or policy and directs that the scheme or policy be implemented by a lower level planning authority rezoning the relevant land and, subsequently, a resuming authority resuming it. In such a case, the resuming authority has not been involved in the decision to rezone. Yet clearly that decision is a step in the scheme underlying the resumption, and, in our opinion, such a rezoning is to be ignored in determining the value of the claimant's estate or interest in the land under s 20(2) of the Act.
[46]Questions of fact and degree will necessarily be involved in determining the sufficiency of the connexion between the depreciating factor, in this case the rezoning of the subject land, and the scheme of resumption. Where, as here, there is an unchallenged finding that the resuming authority was not involved in the decision to rezone the land, the question to be answered remains the same, was the decision to rezone nevertheless a step in the scheme of resumption, or was that decision made with the intent or in anticipation that the land should be resumed … .” (References omitted.)
The land and its surrounds
The two lots which together comprised the 1,315 m² land which was taken enjoyed good access from Earle Street with a 29 m frontage and an access from Cedric Street which access was about 1.8 m in width. The irregularly shaped, gently sloping block had views of some of the inner city skyline and was improved with a small dwelling which did not add any value for present purposes, in the joint opinion of the valuers.[52] The land is located around 500 m north of the Royal Brisbane and Womens Hospital and is to the east of Lutwyche Road. Some 250 m to the east of the land and across Enoggera Creek are the Railway Workshops. Around the land were other residential dwellings and there were industrial and commercial activities along both sides of Lutwyche Road. To the south of the land, along the northern bank of Enoggera Creek, there was, and is, a concrete batching plant.
[52]Exhibit 16 p 2, 3.8.1.
Town planning aspects of the land
The local planning authority is the Brisbane City Council. Under the plan in force at the date of resumption, City Plan 2000, the land was within a character residential area and a demolition control precinct.[53] The development intent is for pre 1946 houses and for additional development to be at low intensity at a compatible scale to existing dwellings. The intended rate is one dwelling per 300 m² of site area and that there be “a strict adherence to a maximum gross floor area of 50%”.[54] The town planners, Mr Ovenden for the applicants and Mr Perkins for the respondent, agree that one development option would have been more intensive development consistent with the character residential zoning.[55] The land is in the Grange District Local Plan area and the town planners agree that it generally supports the character residential area planning intent for development.[56]
[53]Exhibit 17 Joint Town Planning Report [54].
[54]Exhibit 17 [58].
[55]Exhibit 17 [60].
[56]Exhibit 17 [64].
The planning possibilities identified
The planners produced seven possible development cases or scenarios which were addressed by the valuers and which the Court must consider. The cases are as follows:
Possible Development Plot ratio Gross Floor Area (GFA) in m² Number of Storeys 1. Four residential units 0.5:1 657.5 2 to 3 2. Six residential units 0.5:1 1010.5 2 to 3 3. Mixed use. Maximum 80% residential or maximum 40% non-residential 1.25:1 1643.75 4 4. As for case 3 1.75:1 3536.75 6 5. As for case 3 1.75:1 2301.25 6 6. As for case 3 2.5:1 5052.5 8 7. Non-residential with ground level retail and offices 1.25:1 1643.75 4
At the date of resumption, the Integrated Planning Act 1997 was in force. The possible developments contemplated in cases 3, 4, 5 and 6 would have required development approval and would have been of a nature considered to be generally inappropriate. They would have been impact assessable, have required public advertising of the application and would necessarily have had to be refused unless sufficient planning grounds were able to be identified in support of the application.[57]
[57]Integrated Planning Act 1997 s 3.5.14.
The planners considered a draft CityShape Strategy 2026 document which was released to the public on 21 February 2006.[58] This draft looks broadly at the possible future need for 145,000 new homes.[59] It clearly states that it is for discussion purposes only and is not Council policy.[60] It may have increased development expectations in the City to Chermside corridor, Mr Ovenden said that it did, but it lacked detail and had not been adopted by the Council or endorsed by the State Government.[61] Mr Perkins was of the view that it would have been imprudent to apply its broad concepts to precisely determine the planning potential for a particular site.[62]
[58]Exhibit 17 [69].
[59]Exhibit 17 [68].
[60]Exhibit 17 [70].
[61]Exhibit 17 [75], [76].
[62]Exhibit 17 [76].
The parties positions
The planning outcome most favourable to the applicants and which is accordingly primarily sought by them is that described as case 6. This assumes an eight storey building with a gross floor area of 5,052.5 m² and a plot ratio of 2.5. This would be a mixed use development with a maximum of 80% of the GFA used for residential units and a maximum of 40% of the GFA as non-residential multi-purpose space. On this basis, the value of the land taken would be $2,670,000. For this development to be realised, the subject land would have to be developed with the adjoining land owned by Dr Harmon as an amalgamated site. It is noted that there is no evidence from either Dr Harmon or the applicants that such a proposal was ever considered by them.
The respondent’s primary case is that the market value of the land should be assessed with the development potential described as case 1. In that situation, the respondent contends for the value of the land at the date of resumption of $1,250,000 or no more than the advance of $1,350,000 already made.
The claimants’ other development possibilities
Cases 2 to 5 are advanced by the applicants as secondary alternatives. Cases 2, 4 and 6 depend on development potential being realised by amalgamation with the adjoining land owned by Dr Harmon (the Harmon land). It is described as Lot 1 on RP 46918 and had an area of 706 m². The alternatives also require an assessment of the extent that the Draft Neighbourhood Plan for the Lutwyche Road Corridor, published on 21 September 2007[63] on the Council’s website would have influenced a prudent purchaser. It was not formally publicly notified by the Council until October 2009.[64] Public submissions and State Government input were still in the future.[65] These cases assume that a purchaser would be satisfied that the draft plan would show how development approvals would be given. It is also necessary to accept for the applicants’ case that development beyond that indicated by the draft plan could be reasonably expected to be achieved by a hypothetical purchaser who is neither excessively bold nor excessively timid.
[63]Exhibit 17 [84].
[64]Exhibit 17 [85].
[65]Exhibit 17 [84].
If amalgamation with the Harmon land is not reasonably in a purchaser’s expectation, then the development cases which depend on it, namely 2, 4 and 6 are not acceptable outcomes for the purpose of assessing compensation. In addition, if a purchaser would not be willing to proceed on the basis that the Draft Neighbourhood Plan will determine the land’s development potential, then cases 3, 4, 5 and 6 are not reasonably in prospect and could not be used either. Case 7, suggested by Mr Perkins for the respondent, also assumes that there would be a degree of reliance on the Draft Neighbourhood Plan and its applicability will be likewise determinative of case 7.
The point of greatest agreement
In view of the Character Residential nature of the area and despite it being in a demolition control precinct, both town planners saw very good prospects of approval for demolishing the existing house and obtaining approval for a multi-unit dwelling with four units and a GFA of 657.5 m².[66] This is case 1. Amalgamation with the Harmon land would make case 2 possible under the then existing planning situation,[67] as a total area of 2,021 m² would be available, a development of six units and 1,010 m² GFA would fall within the one unit per 300 m² of site area and 50% plot ratio set by the existing rules. The plot ratio is expressed as a percentage of site area.
[66]Exhibit 17 [136].
[67]Exhibit 17 [137].
Focusing the disagreement
The respondent does not accept that a purchaser would have proceeded, accepting that amalgamation with the Harmon land was a basis upon which to purchase the subject land, and so accept an enhanced development potential which would be reflected in the land’s value. If this is correct, it rules out cases 2, 4 and 6. It does not impact on case 7, which assumes a GFA 1.25 times the site area of the subject land’s 1,315 m², a maximum height of 16 m and four storeys.[68] The respondent also contends that the values resulting from cases 3 to 7 are unachievable as a prudent purchaser would not have given significant weight to the Draft Neighbourhood Plan in view of its early stage of existence and unpredictable possibilities of amendment. The Pointe Gourde considerations already discussed also are directly applicable. Cases 5 and 6 involve development beyond that contemplated by the Draft Neighbourhood Plan in the form in which it existed at the date of resumption.
[68]Exhibit 17 [176].
The respondent’s valuation in case 1
Mr Kamitsis of Horrigan Kamitsis Valuers, has provided evidence on behalf of the respondent. His report is Exhibit 20. A photograph of the dwelling that was on the subject land is on page 11 of Exhibit 20. He has not considered a rate per m² GFA to be an appropriate method to apply in view of the uncertainty of the site’s development potential.[69] On the basis of direct comparison with the sales evidence which he considered in the context of case 1,[70] Mr Kamitsis valued the land at $1,250,000. Mr Kamitsis carried out the comparison by ascertaining a rate per m² for the sales and applying this to the 1,315 m² area of the subject land. He made adjustments for zoning and planning risk and for the size and location of the sales. The sales which he applied are:
[69]Exhibit 20 [7.3]. He has applied the decision in Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177; (2009) 30 QLCR 213.
[70]Exhibit 20 p 29.
Sale No. Address Price Date Land area Sale Rate
$/m²Plot Ratio 1 645 Lytwyche Road, Lutwyche $860,000 08/07 905 m² $950/m² 50%
*2 33 Stafford Road, Kedron $850,000 07/07 966 m² $880/m² 50% 3 26 & 28 Bradley Avenue, Kedron $965,000 12/07 1191 m² $810/m² 50% 4 11 Lyons Terrace, Windsor $1,500,000 06/07 1629 m² $921/m² 50% 5 15 Burnaby Terrace, Gordon Park $849,000 04/08 825 m² $1029/m² 66%
* Should be 60%. See Exhibit 16 page 62. Zoning is low-medium density residential.
Sale 5 sold with a development approval for the higher plot ratio. Mr Kamitsis considered sale 4 to be “particularly relevant”.[71] It is in close proximity to the subject land[72] and sold at a rate of $921/m² in June 2007. It is slightly larger than the subject, 1,629 m² compared to 1,315 m², is more regular in shape than the subject which has superior topography. The sale is closer to Windsor train station, has light industry opposite and is zoned for low-medium residential use. Mr Kamitsis considered this sale to be slightly inferior to the subject land.[73] He adopted a rate of $950/m² for the subject land,[74] which calculates to a value of $1,249,250 and which he rounds to $1,250,000 exclusive of GST.
[71]Exhibit 16 p 15 6.4.3.
[72]Exhibit 16 p 15 6.4.3.
[73]Exhibit 16 p 16 (g).
[74]Exhibit 16 p 16 6.4.4.
Mr Hulcombe of Herron Todd White prepared the valuation report for the applicants.[75] A photograph of the house on the subject land appears on the cover sheet. He considered $1,100 per m² to be the correct rate to value this land. A calcaluated value of $1,446,500, which he rounds to $1,450,000 is the result. The sales which he applied in case 1 are:
[75]Exhibit 13.
Property Area Date of Sale Sale Price Plot Ratio $/m²
Site
$/m²
GFA1. 11 Lyons Terrace,
Windsor1,629 06/2007 $1,500,000 0.5
(814.5m²)$921
$1,8422. 27-33 Herston Road,
Kelvin Grove807
1,110
1,91731/07/2007 $2,300,000 0.6
(1,150m²)$1,200
$2,0003. 34 Scott Road, Herston 1,099 4/12/2007 $1,050,000 0.5
(550m²)$955
$1,9094. 15 Burnaby Terrace,
Gordon Park825 04/2008 $849,000 0.62
(511.5m²)$1,029
$1,6605. 645 Lutwyche Road,
Lutwyche905 08/2007 $860,000 0.6
(543m²)$950
$1,584
Sales 2 and 4 sold with development approvals in place and sale 5 had a slightly higher development density than the subject land. Sale 3, at 34 Scott Road, Herston, is slightly smaller and a similar distance from the CBD. It has inferior topography, falling steeply from the road. It has similar outlook to the subject land and construction costs would be higher. Mr Hulcombe considered it inferior to the subject.[76] None of those sales was in a Character Residential Area. The sale at 11 Lyons Terrace is at the bottom of Mr Hulcombe’s range of values and his other sales, except for 34 Scott Road, Herston, have higher plot ratios indicating superior development potential.
[76]Exhibit 16 p 18 6.5.4.
Mr Hulcombe’s sales 2, 4 and 5 for case 1 represent value where the land has a greater development potential than the subject and are an inferior basis for comparison than sales with the same plot ratio as the subject land. His sales 1 and 3 have the same plot ratio and do not support $1,100/m² but show $921/m² and $955/m². Looking at Mr Kamitsis’ three sales with the same .5 plot ratio, Mr Hulcombe’s two sales with the same plot ratio as well as the characteristics for 34 Scott Road, Herston and the comparability of 11 Lyons Terrace, Windsor, the most comparable sales, the last two mentioned, provide the most useful guidance. Mr Kamitsis considered the sale at 11 Lyons Terrace to be slightly inferior to the subject and based on it, allowed $950/m² for the subject. Mr Hulcombe saw 34 Scott Road, Herston as inferior to the subject in size, topography and requiring higher construction costs. The sale at 11 Lyons Terrace, Windsor is opposite land used for light industrial purposes. When considering the most comparable sales the superior comparability of the sale at 11 Lyons Terrace makes it the surest guide to finding the value of the subject land which is slightly superior to the land at 11 Lyons Terrace, Windsor. Mr Kamitsis has allowed for that difference by assessing the value of the subject land at $950/m². This calculates to $1,249,500 which, in the interests of the applicants, he appropriately rounds to $1,250,000. The Court finds the value of the subject land under case 1 as $1,250,000.
The Draft Neighbourhood Plan
The highest and best use of the land will be greatly influenced by the weight that can properly be given to the Draft Neighbourhood Plan.[77] The Lutwyche Road Corridor Draft Statutory Neighbourhood Plan dated September 2007 was made available on the Neighbourhood Planning webpage of the Brisbane City Council, which was not the resuming authority, on 21 September 2007.[78] At the beginning of the document the following passage appears:
“At this stage, the Draft Lutwyche Road Corridor Neighbourhood Plan is available on this website for your information only. It is currently with the Queensland Government for appropriate checks. Once Council receives the Queensland Government’s comments and incorporates any required changes, the plan will be placed on public display and you will have the opportunity to formally provide feedback via written submissions. This is likely to occur early in 2008 and we’ll let you know via our website, a newsletter and through the media.
After the community and the Queensland Government have provided input into the Draft Lutwyche Road Corridor Neighbourhood Plan, it will be formally adopted and used to assess applications for new development in the area.
The Draft Lutwyche Road Corridor Neighbourhood Plan is intended to be included in the Brisbane City Plan 2000 document and should be read together with this document.”[79]
[77]Exhibit 4 tab 22.
[78]Exhibit 17 appendix C.
[79]Exhibit 4 tab 22 p 147.
The legislative process in the Integrated Planning Act 1997 required two State interest consultations, public notification in a formal way and consideration of submissions before the draft plan assumed what would be its final shape. This very early step did not represent formal public notification but was, as it stated, for information only. A prudent purchaser would not be willing to proceed on the basis that planning decisions would be made on the basis of what is in this draft document.
Case 6
Even if the purchaser was to give real weight to the draft plan, it provides no comfort in relation to the case 6 development. The plan deals with various precincts. For instance, the Sisters of Mercy Precinct[80] where it refers to residential development up to eight storeys which may be appropriate under certain stated conditions. It has an area of over 5 ha and is located close to the Wooloowin train station. The subject land is in the Corridor Mixed Use Sub-Precinct where the draft states:
“Amalgamation of sites to achieve high density residential development with a mix of commercial, retail and restaurants will be encouraged.”[81]
[80]Exhibit 4 tab 22 p 149 3.6.
[81]Exhibit 4 tab 22 p 150 para 2.
The tables in the draft[82] show that the maximum GFA of the development on the subject land would be 1.25 times the site area.[83] The maximum building height would be four storeys and 16 metres.[84] If it is assumed that the subject land could be amalgamated with the Harmon land, it would be of a size that the maximum GFA would be 1.75 times the site area[85] and the maximum building height six storeys and 23 metres.[86] Case 6, with its plot ratio of 2.5 and eight storeys, is not within the draft plan in relation to the subject land.
[82]Exhibit 4 tab 22 p 161.
[83]Exhibit 4 tab 22 p 161 Table 1.
[84]Exhibit 4 tab 22 p 161 Table 2.
[85]Exhibit 4 tab 22 p 161 Table 1.
[86]Exhibit 4 tab 22 p 161 Table 2.
The underlying scheme – the facts
The respondent was engaged in implementing two projects, the Airport Link and the Northern Busway. On 5 December 2006 the Brisbane City Council formally decided to commence the statutory process to prepare the Lutwyche Road Corridor Neighbourhood Plan. The decision stated, inter alia:
“The key areas of investigation proposed for the neighbourhood plan include:
§capitalising on the proposed Northern Busway and Airport Link;
§developing mixed use, higher density development connecting to the public transport network;
§planning for well-designed medium to high density residential dwellings, taking into account character housing issues;
… ”[87]
[87]Exhibit 9 tab 156 p 2133.
The Lutwyche Road Corridor Draft Neighbourhood Plan takes this up in part 3.2 where it states:
“Windsor East will be revitalised to capitalise on its proximity to the Federation Street Busway station. Development will incorporate a mix of high density residential, commercial and office uses.”[88]
[88]Exhibit 4 tab 22 p 149 3.2.
There follows a reference to Map C which shows the relevant areas with a note showing:
“New non-residential development to integrate with Northern Busway and Airport Link infrastructure.”[89]
[89]Exhibit 4 tab 22 p 169.
The Urban Design and Masterplanning Consultancy Brief for the Lutwyche Road Corridor Neighbourhood Plan[90] states at 1.1:
“Consideration is being given to the opportunities and implications arising from the proposed Northern Busway and Airport Link projects.”[91]
The Northern Busway and Airport Link are also referred to under heading 2.2.3 Proposed major infrastructure projects.[92]
[90]Exhibit 9 tab 157.
[91]Exhibit 9 tab 157 p 2138 1.1.
[92]Exhibit 9 tab 157 p 2143-2144.
One of the project design objectives is stated to be:
“Maximises the mixed use redevelopment and consolidation opportunities presented by the availability of existing and proposed major road and rail infrastructure such as Lutwyche and Albion Roads, the proposed Northern Busway and Airport Link projects, Albion Railway station.[93]
[93]Exhibit 9 tab 157 p 2146 3.2.
Section 4.2.2 “Strategic Analysis” states:
“Lutwyche Road corridor is strategically important in terms of its access to the CBD, RBWH and other major northern inner city resources such as employment, residential, educational, sporting, entertainment and health services. This will be strengthened with the presence of major transport infrastructure including Airport Link and Northern Busway providing high levels of accessibility. An analysis of the area’s significance should be undertaken to inform decisions regarding the future role and function of the area. Specific consideration should be given to how this affects Council’s policy with regard to future landuse (sic) along the road corridor.”
In view of these factors, it is clear that the draft plan is to a significant extent, based on the two schemes.
Intensification of development as contemplated by the draft plan is based upon the opportunities afforded by, inter alia, the two projects which are referred to at the beginning of the planning process, the Airport Link and the Northern Busway. The possible increases in development potential of the subject land beyond case 1, namely cases 3 to 7 inclusive, must be ignored for present purposes.
The traffic engineer called for the respondent, Mr Beard, was of the view that the planning of the North Busway evolved from the earliest record that was obtained, which dated from 1991.[94] He stated that there was a “clear need” for it to be integrated with the Airport Link.[95] Mr Holland, the traffic engineer called for the applicants, was not able to exclude the possibility that the subject land could have been impacted upon by earlier busway design concepts.[96]
[94]T 6-27 L 33-34.
[95]T 6-27 L 46.
[96]T 6-9 L 15-21.
If the Pointe Gourde/San Sebastian principle did not apply, assessing development potential on the basis of the Draft Neighbourhood Plan would not be the course taken by a prudent purchaser due to the early stage of gestation of the plan and, in the case of case 6, it is beyond the scale contemplated in the draft for this land.
Mr Ovenden was of the view that the Council was under pressure to meet the population targets in the South East Queensland Regional Plan and appeared to be “generally open-minded” about considering applications that were outside of existing planning schemes, particularly in inner city locations.[97] Addressing this in the Joint Town Planning Report, Mr Perkins had a different view:
“119.Mr Perkins says Mr Ovenden’s comments about applications being approved in inner city locations in accordance with draft Neighbourhood Plans which have yet to be adlopted by Council fail to account for the specific circumstances applicable to the Lutwyche Road corridor. That is, the proposed land use changes contemplated by the Draft Neighbourhood Plan were a response to the transport improvements proposed by the project. Mr Perkins acknowledges that the site is in an inner city location, at its closest point some 500 metres from a major hospital complex however he says without the busway, the site was, in effect, a residential site, within a Character Residential Area and Demolition Control Precinct, not proximate to a centre, train station or busway station. Mr Perkins considers the site’s development potential is limited to the Character Residential scenario (refer to the following sections of this report for details) unless, or until, the site becomes more accessible by high frequency public transport and the existing Planning Scheme designations are changed.”[98]
The last sentence of paragraph 119 persuasively focuses on the availability of high frequency public transport as an enabler of more intense development.
[97]Exhibit 17 [114].
[98]Exhibit 17 [119].
Mr Ovenden points to the Sisters of Mercy site at Wooloowin where the City Council “initially resisted a development proposal in late 2006 that stepped well outside the City Plan but following the release of the September 2007 version of the Draft Neighbourhood Plan it proceeded to assess and approve a relatively large scale development on the site in a form generally consistent with the provisions of the draft plan.”[99]
[99]Exhibit 17 [115].
In relation to this, Mr Perkins made the following observations:
“(a)each site, and each development application proposed on each site, must be assessed and considered on its own merits, subject to the constraints and unique contextual nature of each site;
(b)the Sisters of Mercy site is a very large site (5.4066 hectares) with four street frontages, which allows a form of development that provides sufficient space to provide an appropriate transition in scale and intensity to nearby residential development, as contemplated by Development Principle 2.3 of the Draft Neighbourhood Plan;
(c)the Sisters of Mercy site is located proximate to high frequency, high quality, line haul public transport (Caboolture and Shorncliffe rail lines stopping at Wooloowin train station [145 metres from the site]); and
(d)the Sisters of Mercy site is not situated in a location likely to be affected by large scale transport infrastructure projects.”[100]
[100]Exhibit 17 [121].
The Draft Plan had the following specific provision:
“3.6 Sisters of Mercy Precinct
Medium density residential development of up to 8 storeys in height may be appropriate on this site subject to the following:-Provision of public parkland with a minimum area of 4,000m² to be located along the Chalk Street frontage,
-Continuation of community services, and
-Managing impacts on the amenity of surrounding residents.”[101]
[101]Exhibit 4 tab 22 p 149.
The contemplated continuation of community services on this very large site, with its area of over 5 ha and its location very close to the train station make it a very different site to the subject land so that it would be unsafe to regard it as a precedent.
Amalgamation with the adjoining land
The prospects of a development able to exploit the benefits of a larger site obtained by amalgamating the subject land with the Harmon land are relevant to cases 2, 4 and 6. If this was viewed positively by the purchaser the value of the land for compensation purposes would be enhanced. The Draft Plan encourages amalgamation of sites.[102] As has already been noted, the plan was at an early stage and reliance on it would not be prudent in view of the significant steps which were yet to be taken before the plan, in whatever its final form became, was adopted. A prudent purchaser would have to weigh paying more for the land on the basis of what might be developed on a larger site against the uncertainty of the potential for such development.
[102]Exhibit 4 tab 22 p 150 para 2.
In addition, there has been no evidence from the applicants that there was any contemplation of a common development purpose by the adjoining owner. Although it would be reasonable for Dr Harmon to seek to benefit from the enhanced prospects available from potential development on a larger site, it is also reasonable that a purchaser would be aware of Dr Harmon’s powerful bargaining position once aware that a higher price had been paid for the subject land because of an expectation that the adjoining block could also be purchased for amalgamation. The subject land must be viewed without any pre-conception that amalgamation with the Harmon land was an agreed or understood circumstance relevant to its development potential. There is simply no evidence of that and a prudent purchaser would consider that paying for the subject land on the basis of its potential which might be realised if the Harmon land was also acquired would be creating increased risk of Dr Harmon utilising the enhanced bargaining position thus gained. A prudent purchaser would be weighing the risks of entering into an unconditional contract for the purchase of the subject land. In that consideration the risk attendant in paying more for the subject land on the basis of possible development enhancement if amalgamated with the Harmon land would have compounded upon it the prospect of enhancing Dr Harmon’s bargaining power once an enhanced price was paid for the subject land. The present circumstances are unlike those in Blocksidge v State of Queensland[103] where the parcels of land were regarded as amalgamated[104] and where one of the claimants stated that to deal with the sites separately was “unthinkable”.[105]
[103](1991) 2 Qd R 1.
[104](1992) 2 Qd R 1, 6 L 15.
[105](1992) 2 Qd R 1, 6 L 33.
In Arkinstall & Anor v Gold Coast City Council[106] this Court dealt with a case where:
“The evidence is that the owners had a longstanding informal agreement …”[107]
for joint development. In the present case there was no such evidence.
[106](1997-1998) 17 QLCR 90.
[107](1997-1998) 17 QLCR 90, 115.
Absence of evidence
By letter dated 13 January 2009 the applicants were informed by their solicitors that they had “spoken to Mr Harmon’s solicitors regarding his claim for compensation”.[108] On 16 May 2011 the applicants’ counsel telephoned their solicitors regarding “town planning report and potential evidence from Mr Harmon”.[109] On 9 June 2011 counsel for the applicants had a telephone conference with their solicitor “re outcome of enquires re Dr Harmon”.[110] There is no evidence from the applicants or from Dr Harmon about any prospects of amalgamation of their land and no evidence of the result of the enquiries made. There is no explanation for the absence of such evidence. In these circumstances it would be proper for the Court to infer that such evidence would not have assisted the applicants, applying the principle in Jones v Dunkel & Anor.[111]
[108]Exhibit 66.
[109]Exhibit 62 p 61 and p 85.
[110]Exhibit 62 p 86.
[111]Jones v Dunkel & Anor (1959-60) 101 CLR 298, 308 per Kitto J.
Conclusion on the prospect of amalgamation
It would not be the conduct of a prudent purchaser to proceed to purchase the subject land on the basis that its price should reflect an acceptance that the land could be economically acquired and amalgamated with the Harmon land. The development cases 2, 4 and 6 should not be accepted by the Court for the purpose of assessing compensation as there was not a realistic prospect of amalgamation shown on the evidence presented for the applicants.
Mr Hulcombe’s valuation approach
Mr Hulcombe’s use of the method of valuing by the rate per m² of GFA enhances the opportunity for error as it depends on the accurate assessment of development potential which, in the present case, is very much in dispute. His report states that the rate per m² method of analysing sales is “an appropriate method of comparison, when there is little or no difference in the allowable development densities”.[112] He is of the view that the rate per m² GFA better reflects differences in development densities.[113] The applicants point to the length of Mr Hulcombe’s experience. Although considerable, it is of much less significance than the particulars of the method he employed in this case.
[112]Exhibit 13 7.2.2.
[113]Exhibit 13 7.2.3.
Assessments of planning risks
In cases 1 to 7, Mr Hulcombe allowed for planning risk at the levels of Nil, Nil, 5%, 7.5%, 15%, 15% and 10% respectively. Amalgamation risk in case 4 was allowed at 10% and in case 6 at 7.5%. In case 3, the small allowance of 5% for planning risk sits starkly against Mr Perkins’ report in which he considers this to have a “significant risk”.[114] He did not consider that a prudent purchaser would accept the planning risk.[115] Mr Hulcombe has estimated quite low levels of risk in circumstances where the planning risk was clearly significant, so much so that in case 3, the risk for which he allowed, 5%, was seen by the town planner as sufficient to rule it out for a prudent purchaser when considered at the date of resumption.
[114]Exhibit 19 [32].
[115]Exhibit 19 [32].
Other valuation points
The Draft Neighbourhood Plan was first released on 21 September 2007. By 7 March 2008 when the land was taken about six months had passed. There was no evidence of the schemes having caused any deterioration of the neighbourhood during that time.
Mr Hulcombe made some use of median house prices[116] in his consideration when reference to unit prices would have been more relevant.
[116]Exhibit 13 7.13.6.6(b).
The evidence does not convincingly explain why the level of amalgamation risk for case 4, 10%, should be greater than that allowed for case 6, 7.5%, or how either of those figures were arrived at. It is not apparent why the amalgamation risk should be different in these two cases.
A maximum of 15% allowance for uncertainty of planning approval appears to be a low allowance when compared to that made by this Court in Arkinstall & Anor v Gold Coast City Council.[117] The Court considered the chance of rezoning “as better, but not significantly so, than the chance of failure”.[118] In that case, the Court adopted a discount of 30% per annum for a deferral period of 1½ years.[119] While each case will be different, there is no convincing basis for the rates which have been adopted.
[117](1997-1998) 17 QLCR 90.
[118](1997-1998) 17 QLCR 90, 111.
[119](1997-1998) 17 QLCR 90, 117.
The disturbance claim
The Compensation Claim signed on 1 September 2008 was originally for land and improvements totalling $3,320,000 and disturbance being legal, town planning and valuation costs totalling $22,408.48. Interest was also sought. The disturbance items were:
i. Anderssen Lawyers $10,737.48
ii. Noris Clark & O’Brien Pty Ltd – Town Planner $5,951.00
iii. Herron Todd White – Valuation $5,720.00
$22,408.48
The Originating Application filed in this Court on 20 March 2012 sought the following:
(i)Compensation under s 20(1) and (2) of the Acquisition of $2,670,000.00
Land Act 1967 (Reprint 5A – in force 1 January 2008) for
loss of the Land
(ii)Compensation under s 20(2) of the Acquisition of Land Act 1967
for disturbance
(a) Solicitor’s fees $159,354.83
(b) Counsel’s fees $129,970.50
(c) Town Planner’s fees $ 45,498.01
(d) KPMG Tax Lawyers $ 7,227.00
(e) Valuer’s fees $ 25,300.00 $ 367,350.34
Total Amount of Compensation claimed (i) and (ii) $3,037,350.34
Plus interest in accordance with the provisions
of s 28 of the Acquisition of Land Act 1967”
The originating application reflects the amended claim provided to the respondent on 30 September 2011.
The compensation sought for the land had decreased by $650,000. The disturbance claimed had increased by $344,941.86. Mr Purcell’s affidavit, Exhibit 62, claims a revised figure of $373,394.14,[120] taking the increase from the original disturbance claim to $350,985.66.
[120]Exhibit 62 [6].
It is not contested that disturbance items can be claimed. As the Land Appeal Court said in Heavey Lex No. 64 Pty Ltd v Chief Executive, Department of Transport
“In our view a claimant can recover for work of a nature and within the scope of that which a reasonable person in the position of the claimant would have done or caused to be done. The fees and charges for the work must also be reasonable.”[121]
[121](1999-2001) 22 QLCR 177, 191 [74].
The applicants sought to provide evidence of the reasonableness of the costs incurred by way of an affidavit from a cost assessor, Mr Bloom. The respondent objected, seeking disclosure of six specified things which were listed in Exhibit 22. Among these things were Mr Bloom’s file and working notes and a “detailed and complex” advice from counsel. An ex tempore decision was given and it was subsequently reduced to writing.[122] The respondent’s objection was allowed such that Mr Bloom’s affidavit would not be admitted until the six items of disclosure set out in Exhibit 22 were made. One of the items was in Exhibit 26. In view of the ruling, the applicants withdrew the affidavit.[123]
[122]Cupo & Anor v Chief Executive, Department of Transport and Main Roads [2013] QLC 36.
[123]T 6-31 L 15-20.
In State of Queensland v Pajares[124] the Land Appeal Court said that:
“Indeed, we hold that the date on which the claim is last served on the Constructing Authority is the cut-off date for this head of compensation.”[125]
The Court went on to add that:
“There can therefore be no warrant for any compensation for professional fees incurred later than that date.[126]
[124](2004) 25 QLCR 165.
[125](2004) 25 QLCR 165, 192 [150].
[126](2004) 25 QLCR 165, 192 [151].
The Land Appeal Court also said:
“… it seems both allowable and of practical benefit that a dispossessed owner have the opportunity to replace a claim for compensation by a later document which also satisfies s.19 in circumstances, for example, where the claimant receives improved advice.”[127]
[127](2004) 25 QLCR 165, 192 [149].
In his affidavit, Exhibit 25, Mr Purcell states that:
“In short, it was clear to me that the basis for the town planning advice as summarised in the Respondent’s letter dated 22 December 2008 had to be thoroughly investigated in order to determine whether it was, in fact, correct.”[128]
The original claim was served on the respondent by letter of 9 December 2008.[129] Much of the disturbance costs now sought were incurred after this point and over a significant period of time.
[128]Exhibit 25 [29].
[129]Exhibit 25 [17].
The applicants must establish the reasonableness of the actions taken and the reasonableness of the charges incurred in taking those steps. A claim for compensation had been made and the respondent’s reply triggered the large volume of extra work. The applicants must show how it is that the steps and their costs were reasonable in the context of making a claim for compensation as distinct from preparing for trial. There was a compensation claim already made so it needs to be considered whether the action taken was the result of “improved advice” as contemplated by, but not defined in the State of Queensland v Pajares.[130] The applicants have chosen not to produce counsel’s advice and advices from Mr Ovenden and Mr Hulcombe, making it impossible for the respondent to exercise the right to test the reasonableness of obtaining them and the costs incurred. A consequence is that the Court is not able to be satisfied of those things so that it could form a view favourable to the applicants in respect of those items claimed as disturbance costs. The asserted claims for disturbance do not amount to uncontradicted evidence but are simply not adequate evidence where the need for improved advice was in issue and the advice was not produced.
[130](2004) 25 QLCR 165, 192 [149].
The situation is illustrated in the cross-examination of the applicants’ solicitor Mr Purcell where the following exchange occurred:
“And I put it to you again, Mr Purcell, the steps that you have taken in stages 2 and 3 as I have defined them are steps that you’ve taken to bolster your client’s claim full stop. That has been the object of the exercise – not to prepare a fresh claim but to bolster the existing one?---No, Mr Gore. All work done was to obtain better advice as I’ve already set out in my affidavit.
You keep saying that but I’m challenging on that and I’m suggesting to you that the facts speak for themselves. That your case was already in the shape that it needed to be in when you lodged the claim on the 1st September 08. It couldn’t get any better than it was in terms of the assumptions that it made. All that could get better was the evidence to prove it?---I reject that, Mr Gore. As I - - -”[131]
[131]T 9-52 L 19-29.
The respondent directs attention to the quantum of disturbance items allowed in other cases, which will be referable to the facts of these cases. The Court does not draw comparisons between the amounts awarded in other cases and the amount claimed in this case.
The applicants have not discharged their onus of proof in relation to the disturbance items and amount claimed. The respondent has conceded that disturbance in the amount of $22,408.48 is not in issue so the Court awards this sum. Consideration of the Goods and Services Tax does not arise in the circumstances.
The parties have indicated a desire to be heard on the matter of interest so that opportunity will be provided to them.
The liberal estimate principle that requires doubts to be resolved in favour of a more liberal estimate will not operate to free the Court of its duty to determine the disturbance claim on the basis of the evidence[132] and does not improve the evidence presented.
[132]Mio Art Pty Ltd v Brisbane City Council (2010) 31 QLCR 174, 191-192.
The applicants drew attention to the conduct of the respondent’s case, asserting a clear breach of the respondent’s duties as a model litigant. The Model Litigant Principles, issued at the direction of Cabinet, do not appear to restrict a litigant in the position of the respondent from appropriately testing all claims. In any event, in view of the jurisdiction which this Court has to exercise, its findings could not be influenced by those Principles.
Orders
1.The value of the land taken is assessed in the amount of $1,250,000.
2.Costs attributable to disturbance are assessed in the amount of $22,408.48.
3.The parties will be heard on the matter of interest.
4.Any application for costs is to be filed and served and any reply is to be filed and served as directed when the matter of interest is heard.
WA ISDALE
MEMBER OF THE LAND COURT
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