Davidson v Beaudesert Shire Council
[2004] QLC 55
•15 July 2004
LAND COURT OF QUEENSLAND
CITATION: Davidson v Beaudesert Shire Council [2004] QLC 0055 PARTIES: Neville Charles Davidson
(claimant)v. Beaudesert Shire Council
(respondent)FILE NO: A2002/0374 DIVISION: Land Court of Queensland PROCEEDING: Claim for Compensation for Resumption of Land DELIVERED ON: 15 July 2004 DELIVERED AT: Brisbane HEARD AT: Beaudesert MEMBER: Mr RP Scott ORDERS: 1. I order that the respondent pay to the claimant compensation in the amount of Three Hundred and Twenty Thousand Five Hundred Dollars ($320,500).
2. In the exercise of the discretion granted under s.28 of the Acquisition of Land Act 1967, I order that interest be paid by the respondent at the rate of 5.75 per centum per annum on the amount of $297,500 from 9 June 2000 up to and including 3 February 2002 then on the amount of $160,500 from 4 February 2002 up to and including the day immediately preceding the day of payment.
CATCHWORDS: Resumption - Determination of compensation - Potential deferred beyond 10 years - "bottom up" method used
Resumption - Determination of compensation - Part of land resumed - Valuation of resumed land incorrect approach - Before and after method preferred.
Valuation - Purchaser made no useful inquiries - Contract not settled - Terminated by vendor - Not suitable basis
Valuation - Very large area with industrial potential - No sales of similar area
Valuation - Averaging of sales purchased for public use - Unacceptable in resumption case
APPEARANCES: Mr SM Ure for the claimant
Mr RM Needham for the respondentSOLICITORS: Johnsons, Solicitors, for the claimant
Corrs Chambers Westgarth for the respondent
The claimant, Neville Charles Davidson, is a long-term resident of the Beaudesert Shire and owns large areas of land there including the "parent parcel" which is described as Lot 2 on RP 858124, Parish of Bromelton, having an area of 334.2398 ha. Mr Davidson purchased the parent parcel in 1960.
Pursuant to the provisions of the Acquisition of Land Act 1967 (AOL Act) a Notice of Intention to Resume was served on the claimant on 6 October 1999 proposing to take part of the parent parcel. On 9 June 2000 a notice was published in the Government Gazette expressed as taking 61.03 ha of the parent parcel:
"for the purposes of waste treatment processing, disposal and associated activities, land fill, rubbish depot and roadworks associated with the constructing authority's central land fill facility at Bromelton …"
Compensation is to be assessed as at 9 June 2000 - the relevant date. The area taken has since been corrected by notice to be 61.6409 ha. The balance land was surveyed as 272.7ha in area.
The resumed land lies along the western boundary of the parent parcel and is the most elevated in the parcel with good views to the east towards the town of Beaudesert. The balance land is mainly lower, though some elevated area is retained towards its west.
Together with counsel I inspected the resumed land and the balance of the parent parcel, as well as various sales properties referred to by the valuers called by the parties. I also viewed the waste facility which has been developed by the respondent. These inspections assisted me in my understanding of the evidence.
This matter came before the Court by way of an originating application filed by the claimant on 29 July 2002. A claim for compensation satisfying the provisions of the AOL Act dated 9 February 2004 sought compensation as follows:
"61.53 hectares @ $7,500/ha $461,574.00
Add diminution in value of remaining land
2130m boundary to land fill site x 100m x 1/3 = 7.1 ha x $7,500 $53,250.00
Disturbance being:
Valuation Fees $7,645.00
Engineering Fees $991.65
Town Planning Fees $6,039.00
Legal Fees $17,817.31 $32,492.96$547,316.96 "
The area of 61.53 ha mentioned in the above quotation appears to have been adopted from a valuation report provided to the claimant by Kerry Cameron Herron, Registered Valuer, who was called to give evidence. During his evidence Mr Herron corrected the resumed area with the result that his assessment of compensation became:
61.6409 ha @ $7,500/ha $462,306
Add diminution in value of remaining land $53,250
$515,556
Rounded to$515,000
This rounded figure is the same as that which appeared in his report before correction of the area.
The respondent called John Joseph Olive, Registered Valuer, who in his valuation report assessed compensation at $123,280.
The parties agreed to a figure for disturbance in the amount of $23,000 which encompasses various professional fees. I have been provided with invoices relevant to the disturbance claim and have concluded, based on the dates of payment of the various invoices, that interest on disturbance should run from 4 February 2002.
An advance was made against compensation pursuant to s.23 AOL Act in the amount of $160,000 on 4 February 2002.
The Land
The parent parcel is located about 6.5 km westerly from Beaudesert and is accessed by way of the Beaudesert/Boonah Road which borders the southern side of the land. Prior to the resumption the parent parcel had access to that road via a road in the south-west corner of the parcel. That access has, in effect, been reinstated by the works carried out by the respondent. Mr Davidson, who gave evidence, said that traffic from Ipswich and beyond utilises the Beaudesert/Boonah Road as an access route to the Gold Coast and its hinterland. I understand that it is a well-used route.
Prominent land uses in the area include rural residential, hobby farms, cattle grazing, dairy farms, horse studs, poultry raising and some grain growing and cropping. There are also some industrial uses to which I refer below.
An operational feedlot had been located on a parcel of land adjoining the southern side of the Beaudesert/Boonah Road opposite the parent parcel. This operation closed down before the date of resumption, however structures associated with that use remained there until after the relevant date when some were removed.
To the west of the parent parcel and separating the parent parcel from the Brisbane to Sydney railway line is a hide works. The respondent's waste facility is now located to the east of those works. The hide works may have been visible from the parent parcel at its highest point, but does not appear to be visible from the balance land.
Further west again from the railway line there is a site used for the prefabrication of large concrete products such as bridge elements.
Some distance to the south of the parent parcel and fronting the west side of the railway line is a rendering works.
Some distance to the south again, there is a gelatine factory.
There was mention of a worm farm which had operated for a period on land to the south of the parent parcel.
Whilst the various industrial uses mentioned in the preceding paragraphs tend to convey in their written form a perception that the parent parcel is to be found in an industrial environment, such a perception overstates the position. The dominant ambience is rural, in effect, though is detracted from by the hide works, the disused feedlot and the concrete works in that descending order of impact. The rendering works are sufficiently distant to have a less obvious impact. I return to this topic under the heading "Injurious Affection".
Electricity was connected to the parent parcel at the time of resumption and a telephone service was available. There was no reticulated water, though for its rural use the land was adequately watered by a well, two bores and some dams. The boundaries were fenced with a good stock-proof fence. Some old buildings were located on the parent parcel, though add no value.
At the date of resumption the parent parcel was being used for cattle-grazing purposes in conjunction with other lands. The balance land has continued to be so used.
The parent parcel comprised gently undulating coastal forest with mostly easterly/northerly aspects including good views to the east from its most elevated parts. In his valuation report Mr Olive wrote that apart from the elevated section to the west, the remaining area is "generally low-lying land that has been subject to flooding in the past. The lower land would not be suitable for the construction of buildings or any future industrial type use." That statement was clarified in evidence and in a document of agreement/disagreement executed by the two valuers in which it was agreed that "the land taken is flood free and that the balance land would most likely be flood affected in a Q100 flood event."
An aerial photograph revealed a distinct drainage line through the middle of the balance land running in a north/south direction. Mr Herron described this as a broad waterway. He also referred to a small gully in the south-west of the parent parcel, that is on the resumed land. He said the broad waterway and some melonholes in the north-east of the balance land would probably hold water after heavy rain. He said these parts would not be the "best industrial land", a proposition that appears to be at one with Mr Olive's opinion. A Q100 flood line is significant in that it can be taken to indicate a level below which structures cannot be built unless the floor level is elevated to at least the Q100 level.
Mr Davidson said that he had consulted a long-term resident in the area and was told that the parent parcel had not flooded in at least 60 years. He observed that there is a residential development to the east of the parcel which he thought to be no more elevated than the eastern part of the balance land.
The Waste Facility
The resumed land has been utilised in part by the respondent, together with other lands as the location of the waste treatment facility. The respondent has constructed and dedicated a road aptly named Waste Facility Road which enters along the eastern boundary of the resumed land. Recycling Street provides an exit through portions of land to the west. Part of the "hole", as waste facility aficionados term the central waste receiving pit, is to be found on the resumed land.
The waste facility was opened in 2002. Evidence as to its method of operation was given by Kylie Alison Crouch, the Acting Waste Management Coordinator with the Shire Council. In brief, that involves the excavation of the hole site which waste is received. The excavated material is then placed on top of the deposited waste and a new adjacent hole is excavated. In this manner the hole might be said to migrate in a northerly direction.
Town Planning
The parent parcel is located in the local authority area of the Beaudesert Shire Council and is zoned "Rural" under the town planning scheme. In the Strategic Plan it is shown as lying within the Bromelton "Major Industrial Area". That designation was first adopted by the Shire Council in its Strategic Plan of February 1976 and has continued in the Strategic Plans of 1985 and 1996. Mr Olive has been advised by Council officers that the Council Integrated Planning Scheme under the Integrated Planning Act 1997 (IPA) under preparation at the relevant date would continue that strategic designation. The Major Industrial Area covers about 930 ha.
It appears that the adoption of that strategic designation was not preceded by a Strategic Study. A Bromelton pre-feasibility study was carried out in 1991 and Bromelton's potential for industrial uses was recognised in the South Regional Organisation of Councils Economic Development Study of 1995.
An Economic Analysis was carried out resulting in a report published in December 1998 as a background document to the draft Bromelton Strategic Industrial Study (Strategic Study) published in January 2000. The draft Bromelton Development Control Plan (DCP) was published on the same day.
The draft DCP and the draft Strategic Study were placed on public display during 1999. The draft DCP was referred to the Department of Local Government and Planning in May 2000 for comment. It was not processed by the Department within the usual timeframe, with the result that the Department adopted the position that it would be preferable for the DCP to be made part of the new IPA scheme currently in the process of preparation.
A precinct plan in the draft DCP shows the parent parcel as falling into three precincts. The elevated area to the west, which appears to include the resumed land, is identified as "Landfill Precinct", whilst that part of the balance land immediately to the east of the resumed land and up to a line identified as the Q100 approximate flood level, is designated as "Central Precinct". The remaining part of the balance land to the east and below the Q100 flood line, lies in the "Buffer Precinct".
It is abundantly clear that the designation of part of the parent parcel as Landfill Precinct is associated with the scheme of resumption and, therefore, ought to be disregarded (Pointe Gourde Quarrying and Transport Co Ltd v. Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565). I will proceed on the basis that for the purposes of considering compensation, the designation of Central Precinct would encompass all of the land between the Q100 approximate flood level line to the western boundary of the parent parcel.
In s.3.4.2 of the draft DCP the planning intent of the Central Precinct is expressed thus:
"The Central Precinct is intended to be used for General, Noxious, Offensive or Hazardous Industries, which require large lot sizes and which have moderate air emissions. The area should not be used for smaller light or service industries, which would otherwise take up land required for larger industries in the future. Access to the railway line should not be precluded in the long term. A portion of this area could be used for rail related industry if required in the future.
Provision for a sewerage treatment facility and possible water treatment plant in the south eastern part of the precinct is recommended."
The planning intent for the Buffer Precinct is set out under heading 3.8.2 of the draft DCP:
"The intent of this area is to provide a buffer between the industrial development and surrounding land uses. The precinct is intended to retain the existing rural character of the area by remaining undeveloped except for rural related activities. These include rural uses, and associated buildings and animal husbandry. Certain recreational activities may be considered in this area, however, cognisance of the proximity of industrial uses should be recognised.
Residential development other than farm houses are not intended for this area, and the further subdivision of allotments is not permitted unless it enhances the viability of the industrial area.
Other uses which are not considered suitable for the buffer precinct are uses which compromise the use of the area as an industrial precinct, community services, accommodation and all types of industrial and commercial development."
Highest and Best Use
In their primary valuation reports both Mr Herron and Mr Olive identified the parent parcel as having a highest and best use at the date of resumption for grazing but with potential for industrial development. Differences lay between them, however, as to the worth of the land for grazing purposes - and I used the word "worth" with purpose - and the extent of its industrial potential. Those differences led to their respective selection of sales evidence.
Mr Herron said that the industrial potential of the parent parcel would emerge in the medium to long term. He employed the term "medium" to mean five to 10 years and "long" as representing a period beyond 10 years. He saw the land being put to rural pursuits in the meantime and acknowledged that such pursuits would need to be such as to not jeopardise the industrial potential of the land.
In his primary valuation report Mr Herron said, "The land is well suited for industrial use and has most services available, although additional water is required (depending on individual industrial uses)". He went on, "Alternatively, the land would also suit a rural/residential/hobby farms style of development. The Shire has been promoting Beaudesert as a highly desirable area for all kinds of horse sports and horse studs; the land is also well suited for that type of use as it provides good well-drained flood-free land with good elevation for residences and mostly with an easterly aspect to the town of Beaudesert and it has good exposure from the main Beaudesert/Boonah Road. The racecourse, existing and proposed polo fields are located between the subject land and Beaudesert." He also said, "If used for rural pursuits, the land would still retain its industrial potential". Mr Herron's reference to "the land" is a reference to the resumed land.
In his valuation report Mr Olive expressed the view "that the current grazing use is the highest and best use of the land, and hence the basis of the valuation." However, he said in applying the sales evidence selected by him that his adopted rate "is in excess of the rates shown by sales and takes into account the long-term potential of the site for industrial development and the proximity of the site to the town of Beaudesert." Mr Olive thought that the industrial potential of the parent parcel would emerge in the long term which he put at 10 years plus.
In addition to his primary valuation report, Mr Herron had prepared an earlier report which was filed on 2 September 2003. The claimant did not place reliance on that report. In that report Mr Herron expressed similar views to those in his primary report about the rural residential hobby farms style of development, saying that it would be the highest and best use in the short to medium term. He used what I would describe as more circumspect language in describing the land's industrial potential than in his primary report. He said, for example, that "It is likely that industrialisation will be a slow process. Some industries do not require much water, however it is inevitable that (a) larger water supply scheme would be required."
He approached his valuation task on that occasion on a "before and after basis" and employed the hypothetical subdivision method. In that, he assumed three lots would be produced in the before scenario, valued them at $5,000/ha, then assumed two lots after resumption valued at $4,000/ha, the reduced rate both being reflective of his view that the waste facility would injuriously affect the value of the balance land and that the better higher land had been lost.
The net result of his valuation on that occasion was that a reduction in value rounded to $416,000 for loss of land and injurious affection was assessed.
Mr Herron acknowledged that his primary valuation report reflects a more optimistic view about the industrial potential of the claimant's land than he took when carrying out his 2003 valuation. A major reason for his having placed a greater emphasis on the industrial potential lay in a contract entered into for the sale of the balance land on 2 October 2003. It will be convenient to discuss that contract and others at this stage.
The Buckley Contracts
Mr Herron said that a "major reason" for placing greater emphasis on the industrial potential of the resumed land in his primary valuation compared with his valuation of September 2003 lay in a contract entered into for the sale of the balance land on 2 October 2003. I can discern no other reason for his change of position He described that contract as Sale 7, however I think it preferable to call it Contract 7. Following the completion of his primary valuation report, Mr Herron became aware of two other transactions, which I will call Contracts 8 and 9, the latter comprising a lot possibly carved out of the parent parcel originally and now Lot 60 on WD3009 containing 62.768 ha, whilst the former is Lot 1 on RP 164114 containing 91.52 ha and is on the southern side of the Beaudesert/Boonah Road to the east of what I have, below, called the 2004 sale.
The contract price in the case of Contract 7 was $1,900,000 plus Goods and Services Tax (GST) and was subject to the purchaser obtaining sufficient finance to complete the transaction and to the local authority providing approval, effectively, for the use of the land for general industry purposes. A $5,000 deposit was paid initially; a further $45,000 was paid later in accordance with the contract and then $68,000 as a payment in consideration for the deferral of the contractually agreed settlement date.
Contract 8 was entered into on 29 January 2004 for a purchase price of $850,000 plus GST. A total of $42,000 was paid as a deposit. That contract was similarly subject to a special condition concerning local authority approval, though was not subject to finance.
Contract 9 was entered into on 23 March 2004 for an amount of $600,000 plus GST. An amount of $30,000 was paid to the vendor in accordance with the contract, this amount being described as a "non-refundable" amount. This contract is due to settle on 11 June 2004.
An extra $40,000 had been offered by the purchaser for a further extension of the time for settlement of Contracts 7 and 8.
The buyer in each of the contracts under discussion was described as "Christopher Robert Buckley and/or nominee". Mr Buckley, who gave evidence, described himself as a Developer/Retail Consultant and an Associate Director of a firm called Ray White Retail, a division of Ray White. He explained that his firm has experience in retail developments and has recently become involved in a residential development in the town of Jimboomba. He spoke of his involvement in commercial/retail developments in particular and said that he had no experience in industrial developments excepting for one at Yatala where his firm assisted the developer there to sell portions of it. Prior to Contract 7 he had not been involved in the purchase of industrial land.
In his evidence Mr Buckley revealed:
· He had made no inquiries as to sale prices of industrial land in the Beaudesert Shire before entering into the contracts.
· He took advice from the vendor's selling agent as to the appropriateness of the sale price asked by the vendor in the case of Contract 7.
· He obtained no independent valuation before entering into the contracts and had not obtained one at the time of giving evidence.
· He had, through his solicitor, obtained verbal advice that finance would be available, from a source he could not presently identify, for the settlement of Contract 7. It appears that the financier was not originally provided with a written proposal concerning the land, but one was now required. Mr Buckley said that the financier was concerned only as to whether there was an "exit" strategy for the development.
· He had not approached the local authority to seek planning approval or advice in respect to Contract 7 and, as I understand, Contract 8.
· He said that he had spoken to two friends - a surveyor and a town planner - about the Contract 7 land.
· He was not aware of the potential cost of supplying water and sewerage services to the Contract 7 land, though said he had spoken to a surveyor in the area "about what possibilities were involved and costings".
· The only document prepared concerning the Contract 7 land was the contract of sale, there being no record taken of inquiries undertaken by him with his friends nor has any study, such as a feasibility study, been prepared.
Settlement of Contracts 7 and 9 did not take place on the extended due date of 4 May 2004. By letter of 5 May the vendor notified the purchaser that he elected to terminate the contracts and forfeit the deposits. Pursuant to an undertaking, this information was conveyed to the Court by the claimant's solicitor after the conclusion of the hearing.
Mr Olive expressed the view that Contract 7 was not a bona fide transaction, however there was no evidence that this contract and Contracts 8 and 9 were other than at arm's length. Indeed, the substantial amounts put at risk in the form of deposits indicate the bona fides of the parties as to the contract. Whether the price revealed by the contract is one that can be said to have been prudently arrived at, such that the contract can be used in determining a value in accordance with Spencer v The Commonwealth (1907) 5 CLR 418, 441, or the highest and best use of the parent parcel, is quite another matter.
To the aphorism about laws and sausages it might be added that one should not observe a contract being made. Indeed, there would be many land sales, I would think, that would not meet the Spencer formulation in all its purity. The process of finding a value in a case such as this is not one, however, of finding and utilising evidence of sales that are perfect in terms of the Spencer test. Rather, the process is one of finding sales whose imperfections are not so great as to make them unreliable in applying that test.
The contracts entered into by Mr Buckley are, in my view, clearly unreliable. The vendor has demonstrated the requisite prudence both in the sales price sought and in the deposits garnered and in due course said to be forfeited to him. The purchaser, however, has demonstrated a comprehensive lack of prudence. Whilst much of the cross-examination focused on Contract 7, there was no evidence to the effect that the other two transactions were approached in a prudent way.
The question of the extent to which reliance may be placed on an offer to buy land in circumstances such as the present has been considered in a number of cases including Freestone v Parramatta City Council (1974) 34 LGRA 35, 49; Yates Property Corp. Pty Ltd v Darling Harbour Authority (1990) 70 LGRA 187; Goold v The Commonwealth (1993) 42 FCR 51, 57-60; Henderson v Amadio Pty Ltd (1995) 140 ALR 391, 501-502; Hall & Hedge v Chief Executive, Department of Transport, (1997-1998) 18 QLCR 284; see also Brown "Land Acquisition" 4th ed para 4.12.
In Goold Wilcox J summarised what fell from the cases in the following quotation from 60:
"Of course, before placing reliance upon a mere offer, a court must consider carefully the question of its genuineness. The offer might be a sham, designed to prop up an inflated compensation claim or to reduce rates and taxes; in either case without any cost to the offerer. It might be an attempt to manipulate the market for some other ulterior purpose, perhaps a purpose extraneous to the litigation. If the offer was genuine when made, it might not have led to a concluded contract, even if resumption had not intervened. The offer might have been withdrawn. The purchaser might have failed to complete the transaction. Because of matters such as these, even a genuine offer cannot be regarded as direct evidence of value. But it seems to me that, once the court is satisfied about genuineness, an offer by an arms-length party to purchase the land under valuation is something that the judicial valuer ought to take into account in considering the possibility of a sale at a price different from that indicated by conventional evidence, such as an analysis of comparable sales, or of a hypothetical development, or a calculation of the capitalised value of the rental return. How much weight should be given to such an offer is a question to be determined by reference to the facts of the particular case. In some cases, the appropriate weight may be minimal; in others considerable."
In Hall and Hedge at 336-337 the Court said:
"The level of reliance which may be placed on an offer or a contract which is not settled turns on whether it is concerned with the resumed land or other land; whether negotiations were of a usual or unusual nature; whether a price and contractual terms were agreed to; whether the terms of the contract are unusual in any material way; and in the case of a determined contract the circumstances surrounding its extinguishment."
The circumstances surrounding extinguishment in the present case differ from those in Remanous v Brisbane City Council (1968) 35 CLLR 249 where there was an enforceable contract but by mutual consent that contract was extinguished. In the present case the determination of Contracts 7 and 9 arose by apparent default of the purchaser and on the initiative of the vendor. I do not know and ought not to conjecture on the circumstances which gave rise to the failure to settle, however that failure is simply another matter which points to the unreliability of these contracts as evidence of the ripening of the industrial potential of either the parent parcel or the balance land.
Whilst I have focused on Contract 7 in these discussions and Contract 9 in part, I notice that Contract 8 has yet to reach its stated date for settlement. Nevertheless, in the circumstances that apply to the other two contracts, I think it would be imprudent of me to proceed on the assumption that Contract 8 will settle.
The Market - Indication of Industrial Potential
The Buckley contracts were preceded by a number of years of limited market activity in the Bromelton area. Mr Herron's Sales 4 and 6 discussed below took place in 1995 and 1994 respectively for an intended abattoir development that had not been constructed by the time of resumption. An existing abattoir closed in 1997 during a period of general contraction in the industry.
In the Economic Analysis Report dated December 1998 the following appears:
"The current level of demand for industrial land at Bromelton is limited, although this could be improved by providing the necessary infrastructure, particularly water and sewerage services. However there are alternative areas of vacant industrial land in South East Queensland, many of which are better suited for general industrial development than is Bromelton. Nevertheless, Bromelton has the potential to be a major location for industrial development in future. The scale and timing of demand for this development is, however, uncertain.
Given the limited demand and the availability of alternative industrial land, it is expected that it would not be viable for a developer to provide the infrastructure to the area. State government may, however, support the development of the water and other infrastructure as part of its strategy for industrial development in the region."
The Economic Analysis Report went on to say.
"The Bromelton area continues to be a location suited to food and rural product processing and in particular, animal processing industries. Bromelton provides a good location for animal processing and other noxious industries, because it has a rural environment, is separated from residential area and has reasonable transport links. The development strategy, previously identified in several reports, for Bromelton, continues to be appropriate."
Notwithstanding the mention of animal processing industries, I notice in the draft DCP that there is no express inclusion of such industries, though they may arguably be encompassed by the language of the broader planning intention for the Central Precinct.
Both Mr Olive and Mr Herron observed the need for a water supply if Bromelton is to develop overall as an industrial locale, though Mr Herron said that some industries need little water, whilst some purchasers would be resourced sufficiently to provide their own water service. Presumably that would have been the case had the abattoir proposed for Mr Herron's Sales 4 and 6 properties proceeded. There was evidence that the AJ Bush plant further to the south is serviced by its own water infrastructure.
In the Economic Analysis Report the authors said:
"It would be preferable to defer investment of infrastructure and development for some years until demand increases. A feasibility study is required to determine the cost of services (water, sewerage and roads) and the resulting cost of industrial land. The larger the demand for land the greater the ability to spread the fixed infrastructure costs across the industrial users:"
There was no evidence of any intention of the local authority or the State to develop water infrastructure, though the authors of the Strategic Study under heading 3.5.5 provided some suggested strategies for supplying water to the Bromelton area. Those strategies covered the short term (2003-2005), the medium term (till 2005-2010) and the long term (2010-2020). Under heading 3.6.2 a preferred strategy for sewage disposal is discussed.
Counsel for the claimant suggested that Council would not have gone to the trouble and expense of developing a draft DCP which has a shelf life of, say, five to seven years unless it had an intention of facilitating development of infrastructure.
For that proposition to have any weight, it would need to be one that has either been demonstrated by example or one that would be attributed to a hypothetical prudent purchaser (Spencer).
It has not been demonstrated by example, nor do I accept that such a proposition would be accepted by a hypothetical prudent purchaser.
For Council to invest in such infrastructure, it would need to be convinced that the level of demand is such that purchasers would be attracted to the land and would be prepared to make a capital contribution to infrastructure costs as a normal development condition.
It seems that there is sufficient industrial land in Beaudesert itself to satisfy present end user demand. Sale of land for industrial uses at Bromelton would only be for development purposes or to those end users such as abattoirs which emerge relatively rarely. A sale to such an end user might occur on occasions, but a prudent purchaser of the parent parcel would not pay a price dependent on such purchases dominating the market in the short or medium term. The price paid would, I think, be predicated on sufficient end user demand emerging at Bromelton to warrant the provision of infrastructure, namely water and sewerage, whether by a developer or in conjunction with the local authority or perhaps the State.
Mr Herron's view as to the industrial potential of the claimant's land was in his primary valuation influenced greatly by the Buckley contracts which he said "proved up" the industrial potential. His opinion of that potential when he wrote his 2003 valuation report was more subdued. On the evidence that I heard, particularly on my rejection of the Buckley contracts as providing evidence of a prudent purchaser in the marketplace, I think Mr Herron's 2003 opinion on the industrial potential of the land was not only closer to the mark, but also seems to be similar to the opinion expressed by Mr Olive.
Highest and Best Use - The Grazing Element
Whilst the land could have been used as a single grazing parcel, Mr Herron said that subdivision into a maximum of three grazing lots was feasible, though he did not present a hypothetical subdivision exercise on this occasion.
The rural pursuits Mr Herron had in mind included those of an equestrian type such as horse breeding and horse spelling. He saw a particular advantage in the exposure of the land to the Beaudesert/Boonah Road and, therefore, to prospective customers.
He suggested that improvements for an equine use would have to be of a type that could readily be dismantled and removed when the industrial potential ripened. He could cite no example, however, where such an approach had been employed in practice.
As I understand Mr Herron's reasoning, he put equestrian uses at a higher level - or "worth" - than grazing of cattle, as the land had been used in the past. Mr Davidson described that use as fattening bullocks and breeding.
Mr Herron said that whilst buyers would pay high prices for land particularly suited to intensive development for equestrian purposes, the standard of development for this use ranged between ordinary to the very very good. Mr Herron has personal experience in equestrian matters including equine breeding.
Mr Herron has attempted to paint a picture of the types of uses that would take advantage of the location of the parent parcel 6.5 km from Beaudesert and fronting the Beaudesert/Boonah Road. It is not hard to envisage that any purchaser of the land for grazing purposes would see an advantage in its location and access, even if it was a purchase simply for the fattening of bullocks. The attribute of exposure carries with it, however, a different proposition - one concerned with attracting business to the land, just as a well-located service station will attract more custom than one in a side street.
The attribute of exposure carries with it, also, an element of permanency. By this I mean that it would be a feature that one would pay more than a nominal amount for if it is thought to contribute on an ongoing basis to the enterprise to be conducted on the land. The difficulty I have with Mr Herron's proposition is that it involves uses that would usually be conducted on an ongoing basis, whereas his argument is that such uses would terminate once the industrial potential ripened.
The type of uses anticipated in the Central Precinct would be ones that would detract from the continuing operation of some elevated grazing use such as horses or stud cattle than they would for a simple cattle-grazing operation.
In addition I consider that such industrial uses as were in the environs of the parent parcel at the date of resumption detract from the land's attractiveness for the uses suggested by Mr Herron, though not for fattening bullocks.
My conclusion is, therefore, that the parent parcel has a present highest and best use as a grazing property, though with some potential for subdivision for that use. I think it improbable that a prudent purchaser intent on any equestrian use would pay any premium for the land for that purpose above its grazing value.
Valuations
The before and after method is generally acknowledged as the most suitable method in a case of a partial taking of land (Brisbane City Council v Lansbury (1977) 4 QLCR 502). The advantage of this method is that it includes severance and injurious affection, as well as loss of land in the assessment of compensation. However there is another aspect of this method which I think is particularly pertinent in the present case. That is that it is not appropriate to simply value the land taken as if it were a separate lot, but the value of that land needs to be identified as part of the whole (Zoeller v Brisbane City Council (1973) 40 CLLR 24 at 31).
In his primary valuation report Mr Herron placed a value of $7,500/ha on the land taken to which he added an allowance for injurious affection. In truth I do not know whether Mr Herron employed an approach to valuation often referred to by valuers as either the summation, piecemeal or classification method. The language he employed, however, both in his primary valuation report and in his oral evidence, indicated that his reasoning was largely influenced by a block-to-block comparison between his adopted sales and the resumed land. He did not in his primary valuation place any value on the balance land whether as part of the parent parcel or on an after resumption basis. The difficulty with Mr Herron's approach in the present case is that the line of reasoning which is supposed to give to the resumed land a value as part of the parent parcel is difficult to identify if, indeed, that is what he did.
Perhaps in anticipation of some criticism of his approach Mr Herron provided a before and after approach orally:
Before:334.24 ha @ $5,250/ha $1,750,000
After:272.6 ha @ $4,500/ha $1,225,000
Difference$525,000
In cross-examination Mr Herron said that as the resumed land was worth $7,500/ha before the resumption, the balance at that time would have been worth a rounded $4,750/ha. That would lead to a figure of $68,150 for injurious affection or a figure greater than the $53,250 for this head of compensation in his primary valuation.
If nothing else, these figures provide me with some points for comparison with Mr Olive's valuation in which he employed the before and after method, the method that I will adopt.
If I put aside for the moment the topic of injurious affection, I note that Mr Olive has applied the same per ha value before and after, that is $2,000/ha. In other words, he made no allowance for the elevation of and outlook from the resumed land and the fact that it was well above the Q100 flood line.
The resumed land would provide a good site for structures if the highest and best use is confined to grazing. Once industrial potential is considered, then a large part of the balance land suffers from susceptibility to Q100 floods and therefore is limited in terms of structures that might be placed on it, without expensive ground works. In addition, that proportion of the parent parcel in the Central Precinct in the draft DCP has been reduced in the after scenario. The area below the Q100 flood line is in the Buffer Precinct. I recognise that the resumed land is the closest to the hide works, but I accept Mr Davidson's evidence that it has had minimal physical impact on the parent parcel over the years. My concluded view on this point is, therefore, that based on land quality alone there must be a differential in the before and after per ha value.
Sales Evidence - Mr Herron
The sharp point of distinction between the valuers' opinions lay in the sales to be employed. Criticisms of each other's sales focused on issues both specific to the sales and issues associated with the application of the sales, particularly concerning the industrial potential of the claimant's land.
Mr Herron conveniently presented his sales in two groups. Group A comprised sales of three adjoining properties located to the north of the parent parcel and across a partly made road. The purchaser in each case was the respondent who purchased these lots for the same purpose as the resumption from the claimant.
The sales took place in 1993-95 and involved lots of 50.761 ha, 22.895 ha and 17.386 ha respectively. Mr Herron analysed the sales to $6,895/ha, $7,772/ha and $8,340/ha respectively. He calculated an aggregate per ha value of the three sales at $8,800/ha, though all of these figures included improvements on at least two of the properties each of which is used for rural residential purposes. The remaining property would also have a highest and best use as a rural homesite in the hands of the vendor.
It is appropriate to take into account the average price that a purchaser pays for a number of lots improved or otherwise in circumstances where the purchaser intends using those lots for some higher use, for example, house lots becoming a shopping centre. However, that approach is applicable only where the valuation task is that of valuing the aggregated parcel for its higher use. Thus, in Valuer-General v Fenton Nominees Pty Ltd (1982) 150 CLR 160, the High Court approved of a method whereby in valuing land as a shopping centre the valuation took into account the prices of the individual house lots, including improvements, purchased for the purpose of developing that centre.
Now in the present case the three lots referred to by Mr Herron were purchased for development as part of a landfill waste facility. It is not appropriate to value them as such as that would involve a valuation of the land in the hands of the constructing authority and not in the hands of the individual vendors. In Re Lucas and Chesterfield Gas and Water Board (1908-1910) All ER 251 Fletcher Moulton LJ said at 255:
"The principles upon which compensation is assessed when land is taken under compulsory powers are well settled. The owner receives for the lands he gives up their equivalent - i.e., that which they were worth to him in money. The property is, therefore, not diminished in amount, but to that extent it is compulsorily changed in form. But the equivalent is estimated on the value to him, and not on the value to the purchaser, and hence it has from the first been recognised as an absolute rule that this value is to be estimated as it stood before the grant of the compulsory powers. The owner is only to receive compensation based upon the market value of his lands as they stood before the scheme was authorised by which they are put to public uses. Subject to that he is entitled to be paid the full price for his lands, and any and every element of value which they possess must be taken into consideration in so far as they increase the value to him."
It may be appropriate to conduct a valuation on the basis of the constructing authority being the only purchaser of land for its highest and best use (Sri Raja Vyricherla Narayana Gajapatiraju Bahadur Garu v. Revenue Divisional Officer, Vizagapataam (1939) AC 302), however it would be an error in principle to adopt the purpose of the resumption as the highest and best use, except where that use involves the conduct of a commercial or quasi-commercial enterprise (see Bezjak v Blacktown Municipal Council (1969) 18 LGRA 281 at 287).
These three sales in Mr Herron's Group A must, therefore, be viewed as individual transactions and their suitability as valuation evidence considered on that basis.
The area of each of these sales is so much less than that of the parent parcel that comparison on a block-to-block basis cannot easily be made.
Other criticisms of these sales raised by the respondent included: their distance in time from June 2000; the issue of whether prices paid were based on market value or whether such allowances as disturbance were include; and the fact that at least two of the sales were improved and were in occupation.
Each of these criticisms has merit: the first because I have no evidence of the market trend in rural residential site values; the second because of the lack of evidence on this issue; and the third because Mr Herron erroneously, in my view, disregarded the value to the vendors of the improvements on the land. I reject reliance on these sales also on the basis that, as Mr Olive said, the highest and best use of them indicates that the sale prices would probably represent site values as distinct from values per ha.
Mr Herron's Sale 5 was part of his Group B clutch of sales within the Bromelton industrial area. The sale property is described as Lot 991 on SP 154614, is opposite the parent parcel on the southern side of the Beaudesert/Boonah Road and sold for $352,000 on 14 April 2003. The area of the sale land is 74.23 ha which leads to an analysed price of $4,742/ha.
Mr Herron said that the sale land adjoins the railway line, which I would understand from the evidence provides it with an advantage and it has a creek along the southern boundary. It has two dams on broad gullies and some lower lying land and there are large areas of concrete left over from the previous feedlot use and some steel left over from the cattle yards. Mr Herron also said that the sale land was contaminated from its previous use as a feedlot, however Mr Olive said that the contamination had been cleaned up - before the sale took place, as I understand it. He observed also that all of the sale land is above the Q100 flood line and that its smaller size made it very difficult to compare with the parent parcel.
Mr Olive said that the sale property was so much later than the relevant date that it was in a different market environment from that which prevailed in June 2000. He said that property values Australia wide had risen between 2000 and 2003, but could point to no sales evidence demonstrating that this had occurred in the relevant market under discussion. Mr Herron questioned that the market environment had changed. He suggested that it had remained flat. On one view a comparison between this sale and Mr Herron's Sales 4 and 6 supports his opinion. Sales 4, 5 and 6 are in the Bromelton Industrial Area.
The critical difficulty in applying the Sale 5 transaction lies, however, in its size in comparison with the parent parcel. In such a comparison the quality of the sale land, assuming it to have been decontaminated by the date of sale, is superior to that of the parent parcel on an overall basis. That superiority lies in the smaller area of the sale, its location above the Q100 flood line and its proximity to the railway line.
Sales 4 and 6 in Mr Herron's valuation were both purchased by Consolidated Meat Holdings Pty Ltd for the purpose of development of an abattoir; that is, a specific use by an end user with an apparent intention to turn the land to that use following purchase. The purchaser applied to the local authority for development approval but allowed that application to lapse as a downturn in the meat processing industry became apparent. Both properties were used for grazing purposes at the time of sale and continue to be so used.
Sale 4 comprises a block of 63.308 ha (Lot 1 on RP 45234) which sold on 28 June 1995 for $425,000 or $6,713/ha. The land adjoins the Sydney/Brisbane rail line and is much closer to the AJ Bush rendering works than the parent parcel, so would suffer odours from that source. I could not imagine an abattoir user being offended by this.
Sale 6 includes Lot 2 on RP 168389 and Lot 3 on RP 45232 fronting Sandy Creek Road and the railway line. The sale land has an area of 66.43 ha and sold on 13 July 1994 for $359,772, which calculates to $5,416/ha.
It is Mr Herron's comparison with these sales that points to the difficulty in the valuation approach that he has employed and to which I have adverted in [83] and [84]. He said that in comparison with the resumed land the Sale 6 property has a "fair amount of lower lying land and a bit of creek in it" and that therefore it would be of lesser value. It seems that that reasoning led him to apply a figure of $7,500/ha for the resumed land. In his before and after exercise at para [85] he applied a lower value per ha to the parent parcel.
Mr Olive pointed out that the railway line would be a distinct advantage to an abattoir user. Mr Herron's response to that was to say that as both Sales 4 and 6 fronted a railway line, the purchaser would not need that service for both properties, though he did acknowledge their proximity to the rail was an advantage. It seems to me that if a vendor was aware of the advantage of the rail line to, say, Sale 4 that the price for Sale 6 would not be discounted on the basis that the same purchaser purchased that property.
Mr Olive said that a comparison between the parent parcel and either Sale 4 or Sale 6 was particularly difficult. He said that allowances would need to be made for the railway line and the immediacy of the industrial development use on the sale land compared with the longer term industrial potential which each of the valuers identified as being appropriate for the claimant's land. He said that since the dates of contract in Sales 4 and 6, the abattoir submarket had been removed from the marketplace, therefore the value of these two sale properties would have dropped. In his view, the level indicated by these sales is well above that of the parent parcel overall.
If I were to lean in favour of the claimant and accept Mr Herron's view that the market had remained flat between the dates of Sales 4 and 6 and the relevant date for assessing compensation, the following analysis emerges.
In comparison between the sales and the parent parcel the sales are much smaller and on that basis alone would exhibit a higher per unit area value. The sales also had an immediate industrial potential in comparison with the deferred potential of the parent parcel. All other things being equal, the value of the parent parcel would need to be discounted substantially, taking these two factors into account. Whilst there is low-lying land on the sales' properties, none of the sale land lies below the Q100 flood line nor is part of the Buffer Precinct.
During oral evidence Mr Herron introduced a further sale which he considered added support to his Contracts 7, 8 and 9. The sale has settled, so in his view would not suffer the criticism that might be levelled at the three contracts.
That sale, which I call the 2004 sale, comprised Lot 992 on SP 154614, having an area of 22.04 ha. The sale took place on 10 January 2004 at a price of $270,000. Mr Herron said that the sale land is better drained than the Contracts 7, 8 and 9 land. He observed that it is much smaller than the subject property (which I take to be a reference to the resumed land and not the parent parcel) and that the price of $12,250/ha is higher partly because of the area differential.
The central question that arises concerns the highest and best use of the 2004 sale. Mr Herron did not venture an opinion on that, nor was there evidence of the purchaser's intention as to the use of the land.
In a printout provided under the banner of Australian Business Research (Exhibit 18), the land use of the sale land is described as "vacant/large housesite", though I am not aware of whether this is a use supplied by the purchaser or some independent opinion. I notice that the owner is described in Exhibit 18 as Hencorp Pty Ltd - a name that I infer indicates an entity involved in the poultry industry, though in what respect I could not say.
From the draft DCP Precinct Plan it seems that the sale land is all above the Q100 flood line and is in the Service/General Industries Precinct, there being no part of it in the Buffer Precinct.
The size of the sale land compared with the parent parcel, the land quality, its draft DCP designation and the question over its intended use make the sale a most difficult transaction to compare with the claimant's land either before or after resumption. Neither Mr Herron nor Mr Olive attempted to provide any meaningful comparison.
The date of the sale provides another major problem in that it took place 3½ years after the relevant date and both Mr Herron and Mr Olive expressed the view that the relevant market had grown appreciably between 2003 and 2004.
I conclude that the 2004 sale cannot, given the state of the evidence, be relied upon as a basis for valuation purposes, nor that it supports a view that the claimant's land has an industrial potential that approaches that suggested at one stage as being evident from the circumstances of Contracts 7, 8 and 9.
Sales Evidence - Mr Olive
Mr Olive referred to four sales in his valuation report, but relied on three only which I will mention. The first of these, Sale 2, located on Christmas Creek Road, Christmas Creek, comprised a sale of eight titles covering an area of 415.1 ha which was transacted on 14 December 1998 for $820,000. The sale property is a working dairy farm with a milk quota and is improved by a dwelling, a dairy and various outbuildings. The parties apportioned the sale by allocating $200,000 to the improvements and $620,000 to the land which would result in a calculated land value of $1,493/ha on a treated, fenced and watered basis.
I am not comfortable with Mr Olive having merely adopted the sale apportionment as provided by the transacting parties without expressing an independent view as to the value of improvements. Mr Herron said that it was a very difficult sale to analyse. Having said that and bearing in mind that I had the advantage of viewing the improvements as part of the inspection, I would think that it would be difficult to accept a lower figure on the improvements and milk quota than that supplied by the contracting parties.
The sale property has a large area of cultivated creek flats and a frontage to Christmas Creek. Mr Olive said that the sale land is inferior in location to the parent parcel, being 22 km to the south of Beaudesert, though thought it to be superior in land and in water supply. He acknowledged that it has no industrial potential.
Mr Olive's Sale 3 is 30 km to the south of Beaudesert, has an area of 205.6 ha and sold for $300,000 on 29 September 1997. According to Mr Olive, about a third of the sale property comprises fertile creek flats which are under cultivation and it has extensive frontage to permanent water in Christmas Creek. The property is improved by a low-set timber dwelling and timber sheds and some fencing on which he placed an added value of $80,000 overall leading to a calculated price of $1,070/ha treated, fenced and watered. In his view the sale property is superior to the parent parcel in terms of land quality and water supply, though inferior in location and in not having any industrial potential.
It is Mr Olive's Sale 4 that he identified as being the most comparable to the parent parcel. This sale property has an area of 256.46 ha which sold for $600,000 on 11 February 1997. He apportioned the value of improvements at $150,000 leaving the land component to represent $1,754/ha treated, fenced and watered. The sale land is 13 km to the south of Beaudesert and on that account is inferior to the parent parcel, in Mr Olive's opinion, though he thought the sale land to be superior in land content and in not having a history of flooding. Whilst the parent parcel does have land that lies below the Q100 flood line and has a broad depression running through it which has carries water following heavy rain, I would not think that inundation of that nature would be considered a major disadvantage to a property from a grazing perspective only. The issue of the Q100 flood line really arises only in the context of the land's industrial potential.
Another aspect of the sale land not mentioned by Mr Olive in his valuation report is that it does not have direct bitumen road frontage, but has access via a gravel track that gives all of the appearances of being a track through a private paddock, but is in fact a dedicated road. The sale land, again, has no industrial potential.
I agree with Mr Olive that his Sale 4 is the best of his sales for direct comparison with the parent parcel. All of his sales have an advantage over those of Mr Herron's of being more proximate in time to the relevant date but, more importantly, of a size that makes direct comparison easier. If I put aside the concern as to the apportionment of Sale 2, it seems to me that Mr Olive's Sales 2 and 3 do provide support to the level of value evidenced in Sale 4, such that it is comparison with sale 4 only that needs to be undertaken.
In his comparison Mr Olive said that the adoption of a rate of $2,000/ha takes into account the long-term potential of the parent parcel for industrial development and its proximity to town. He was not asked what his valuation would have been were he to compare purely on a rural use grazing basis, however it seems to me that an allowance for distance and main road frontage would lead to an application on the parent parcel of a value approaching $2,000/ha.
Also, it is clear from the evidence that some subdivision of rural sites is taking place in the area of the parent parcel but that, as Mr Herron said, the area south of Beaudesert is in a population backwater. Having regard to that element and those of distance from town and road frontage I will strike a value of the parent parcel at $2,000/ha as grazing land.
Now the question of industrial potential of the parent parcel is a difficult one, however it is quite clear that Mr Olive's sales have no such potential. In comparison with his Sale 4, notice needs to be taken of the fact that not only is the parent parcel in the Bromelton Industrial Area, but it has some industrial uses in its vicinity and a history (albeit patchy) of land being sold for industrial purposes.
In view of this differential in industrial potential between Mr Olive's sales and the parent parcel, I will add a 30% allowance and determine the value of the parent parcel before resumption at $2,600/ha. That is, I prefer to use the "bottom up" method rather than the "top down" given that the industrial potential of the parent parcel is deferred for greater than 10 years from June 2000.
The $2,600/ha figure also takes into account the level of value indicated by Mr Herron's Sales 4 and 6. In comparison with these sales the parent parcel is much larger; has a substantial area below the Q100 flood line; does not front the railway line; has a large area within the Buffer Precinct within the draft DCP; and has a deferred industrial potential compared with the immediate potential of Sales 4 and 6 when transacted.
Mr Olive said in evidence that he would discount the price of Sales 4 and 6 by $2,000/ha each for the rail line and the deferred industrial potential factor before making adjustments for other relevant points of comparison. That opinion appears to me to have been an off-the-cuff one but it does represent evidence of a comparison between Sales 4 and 6 and the parent parcel.
I do not intend adjusting Mr Olive's opinion on this matter in a refined way taking into account the relevant factors I have listed above, however the matters requiring further adjustment indicate to me that a figure of $2,600/ha for the parent parcel is not inappropriate. It also sits comfortably with Mr Herron's Sale 5 to the extent that a comparison can be made.
Accordingly, I strike a value of the parent parcel at a rounded figure of $870,000.
Injurious Affection
In his valuation report Mr Herron said:
"2. The land taken is being used as the shire's major land-fill site, which injuriously affects the balance land.
The Environmental Impact Statement prepared for the Council on the central land-fill site originally required for this purpose by Council discusses noise, visual impact, odour, wind blown litter and dust, land-fill gas, flies, night soil, asbestos, empty pesticide containers, biomedical waste and dead animals.
Offal has already been dumped at the waste site.
The gas released from the land fill is suggested at 18,000 cu.m. per day (but could be much higher). The report also discusses rodents, flies, vermin and birds, and the height of the land-fill as being 10 metres. These are undesirable but inevitable consequences of such use, far worse than that from other industrial uses.
3. The EIS, recognising at least in part some of the above, recommends a buffer zone of at least 500 metres from any dwelling; this distance encompasses the remainder of the high land on Lot 2 (the balance land). The use also affects industrial uses, albeit to a lesser amount."
Mr Herron said that the landfill area would be unsightly. I accept that this is so. He also expressed concern that as the landfill becomes bigger and more waste is dumped there, landfill gases and associated odours may be produced. Ms Crouch said that any odour would be confined to the dump face area. She considered odours from the hide works and the rendering plant to be more offensive than those that might be produced from the waste facility. I do not think that opinion arose from a sense of pride in her work, but reflects a view about the real potential of modern waste facility management. Be that as it may, I think that there would be a perception in the marketplace that is a little closer to the opinion expressed by Mr Herron on this issue.
In contrast to the bleak picture of the impact of the waste facility on the balance land presented by Mr Herron, the evidence I heard from Mr Davidson and Ms Crouch painted a more benign scene. The first point to note is that the respondent has no record of Mr Davidson complaining about any matters that might be said to injuriously affect the balance land. The major present concern seems to be with plastic shopping bags which blow onto the balance land, particularly when the westerly wind blows or in storms. There would also be litter that blew or fell from vehicles accessing the waste facility. Mr Davidson said also that wash from garden waste has been known to flow through the balance land. He is concerned that seeds may be deposited on his land.
A fence has been constructed by the respondent to catch plastic bags and other flighty objects, however it cannot stop them all given its height relative to the source of litter. Indeed when it does catch a lot of bags, the fence itself would present an unsightly feature.
Council officers supervise the waste facility seven days a week, monitor the volume of litter blowing onto the balance land and record those occasions when 10 or more objects are sighted, though only in the area abutting the fence. Mr Davidson said that bags travel quite some distance onto the balance land. Ms Crouch said that between April 2002 and February 2004 there were eight reported instances of litter entering the balance land. She acknowledged that there may have been other instances when fewer than 10 pieces of litter entered the property. The Council officers regularly go onto the balance land and pick up rubbish that has blown there. Presumably they will continue to do this as long as it is needed.
As the waste facility is utilised, the "hole" will migrate to the north away from having a shared boundary with the balance land. That process will take some years. It may be, therefore, that over time less litter will blow onto the balance land. Mr Davidson said that he would expect less litter if the "hole" was located more northerly of the balance land.
Mr Herron assessed the injurious affection by taking a 100 metre wide strip along the 2,130 metre boundary that the balance land has with the resumed land and reducing the value of that strip which he said to be $7,500/ha by a discount of one-third. He thought that a stand of trees could possibly be established in that area, both to inhibit windblown litter and to act as a visual barrier. That suggestion would be reasonable for a long-term rural residential usage, but there was no evidence of its being appropriate in the case of an intermediate grazing use or an industrial use of the type that both parties predict will probably take place on the balance land, at least above the Q100 flood line.
That method appears to value the affected part of the balance land at the same level as the resumed land which was said to be (and accepted by me as) the best part of the parent parcel. Nevertheless, the part of the balance land nearest to the resumed land is clearly the best part of what remains.
The method used by Mr Herron gives the impression of precision, whereas the product is in truth a figure that is nothing better than a subjective though considered view. In his 2003 valuation where he described the suggested injurious affection in similar language to that now employed in his primary valuation, Mr Herron employed a broad-brush allowance for injurious affection in his overall value of the balance land. That is the approach that I will employ here.
Mr Olive made no allowance for injurious affection in his valuation on the basis that :
"… prior to the resumption surrounding land uses included industrial properties of limited visual appeal, the location of the Transfer Station has not injured the appeal of the site any more than existing surrounding uses.
I have been advised that some rubbish has blown onto the balance land on 5 occasions since the landfill opened on 15 April 2002; the rubbish was cleaned up immediately. Since that time management practices have changed and barriers have been erected to ensure no further rubbish blows onto the balance area. I have been advised by council officers that no further instances have occurred since September 2002. I have inspected the property on 6 separate occasions since the opening of the landfill and did not observe any rubbish contamination."
He wrote this valuation in June 2003. Other evidence, including that of Mr Davidson, was to the effect that windblown litter had invaded the balance land subsequent to September 2002.
I neither share Mr Olive's views that the massive waste facility now on the resumed land is simply another addition to an already sullied environment, nor that what emanates from it is of no concern.
On the other hand I think that Mr Herron's injurious affection figure is too high and is based on a worst case scenario. It also seems to fail to acknowledge that whilst the injurious affects spoken of would be major issues in a residential precinct, they are of less impact on a grazing property and in the case of industrial uses of the type included in the draft DCP for the Central Precinct. These industries would emit moderate emissions only, however it is doubtful, in Ms Crouch's opinion, that the emissions would be greater from the waste facility. The opposite would probably be the case, I would think, if the whole of the parent parcel were to become a general industry area. I will make an allowance of injurious affection based on these concluded views.
Summary and Conclusions
In his valuation report Mr Herron also referred to the fact that the frontage of the parent parcel to the Beaudesert/Boonah Road has reduced from about 420 metres to about 343 metres. That issue was not pressed before me presumably because access is still available via the new Waste Facility road.
The other effects of the resumption on the balance land arise from the loss of a large part of the high land in the Central Precinct, which leaves the lower valued land in the hands of the claimant. It retains some of its industrial potential, but will have the grazing use continue into the future for a large part of that land. Taking these matters and the injurious affection into account and in comparison with the value of the parent parcel, I conclude that the balance land has a value of $2,100/ha or $572,500 rounded.
In the before and after valuation figures provided by Mr Herron at [85], the reduction per ha in value of the parent parcel calculates to a little over 14% of the before value. That difference takes into account injurious affection and the disproportionate and higher value of the resumed land as part of the whole. In his valuation report of 2003 Mr Herron placed a value on the parent parcel of $3,580/ha, whilst in the after the figure calculates to $2,865/ha, a reduction of just under 20% which included an allowance for injurious affection.
There seems to me, therefore, to be a breakdown in reasoning where in Mr Herron's primary valuation he attributes a higher value to the industrial potential of the claimant's land and in that respect sees the resumed land as being particularly endowed with that potential. Whilst I might imagine reasons why this differential in reduction in value appears, there is no reason in the evidence that I could find which explains it. Nevertheless it transpires that the reduction in per ha value included by me is closer in percentage terms to that adopted by Mr Herron prior to his discovery of Contract 7 than it is in his primary valuation.
Compensation for the loss of land including injurious affection is therefore calculated as follows:
Before Value $870,000
After Value $572,500
Loss of land and injurious affection $297,500
That figure calculates to $4,826/ha for the loss of the resumed land from the parent parcel including injurious affection. That figure sits comfortably, in my view, with the prices revealed in Mr Herron's Sales 4, 5 and 6 taking into account the points of comparison with those sales discussed by me earlier.
Orders
1.I order that the respondent pay to the claimant compensation in the amount of Three Hundred and Twenty Thousand Five Hundred Dollars ($320,500).
2.In the exercise of the discretion granted under s.28 of the Acquisition of Land Act 1967, I order that interest be paid by the respondent at the rate of 5.75 per centum per annum on the amount of $297,500 from 9 June 2000 up to and including 3 February 2002 then on the amount of $160,500 from 4 February 2002 up to and including the day immediately preceding the day of payment.
RP SCOTT
MEMBER OF THE LAND COURT
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