Doolan Properties Pty Ltd v Council of the Shire of Pine Rivers
[1997] QLC 204
•24 December 1997
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BRISBANE
24 December 1997
Re: Claim for compensation - Acquisition of Land Act 1967
Council of the Shire of Pine Rivers
(A96-07)
Doolan Properties Pty Ltd
v.
Council of the Shire of Pine Rivers
OUTLINE OF JUDGMENT
Page
Introduction 3
Assessing the amount of compensation payable -
the statutory criteria 5
The claim for compensation 5
The subject land 6
. Features 6
. Rezoning 7
Highest and best use 9
. Rezoning conditions 10
. Other features 12
. Scale of development 14
. Development potential after resumption 15
. Development potential before resumption 24
. Development potential before and after resumption compared 34
Assessing the amount of compensation payable - two approaches 35
. The claimant’s approach 35
. The Council’s approach 41
. Determining the appropriate approach 41
Sales Evidence 42
. Claimant’s sales 42
. Council’s sales 47
. Assessing the sales evidence 55
. The appropriate valuation method 57
Enhancement 60
. The issue 60
. Cost and value of roadworks 62
Disturbance 68
Conclusion and order 70
LAND COURT
BRISBANE
24 December 1997
Re: Claim for compensation - Acquisition of Land Act 1967
Council of the Shire of Pine Rivers
(A96-07)
Doolan Properties Pty Ltd
v.
Council of the Shire of Pine Rivers
JUDGMENT
Introduction
Doolan Properties Pty Ltd (the “claimant”) owned three contiguous parcels of land which together comprised a corner block with frontages to South Pine Road and Queens Road, Everton Hills (the “subject land”). The properties were amalgamated into one lot, Lot 3 on RP 864243 being the whole of the land described within Certificate of Title 50079378. The total area of the subject land was 6,106 m².
Three notices dated 16 November 1994 (Exhibit 1) informed Mr William Edward Doolan, then the owner of the subject land, that the Council of the Shire of Pine Rivers (the “Council”) intended to take for road purposes the following parcels of land in the County of Stanley, Parish of Kedron:
part of Lot 2 on RP 847806 containing an area of approximately 858 m²;
part of Lot 1 on RP 847806 containing an area of approximately 199 m²; and
part of Lot 809 on SL 11078 containing an area of 95 m².
The notices were given under the Acquisition of Land Act 1967 and the Local Government Act 1936.
Letters dated 17 November 1994 from the Shire Solicitor which enclosed the Notices of Intention to Resume stated that the land was required "for future road widening and intersection improvement works". The Council was proposing to widen South Pine Road from Queens Road to Camelia Avenue and to upgrade the intersection of Queens Road and South Pine Road.
By Proclamation dated 17 August 1995 and published in the Government Gazette on 18 August 1995, the Governor declared that some 1,071 m² (or 17.6 per cent.) of the subject land (the “resumed land”) was taken by the Council for road purposes and vested in the Council for an estate in fee simple from 18 August 1995, which is the relevant date for determining compensation. The resumed land is Lot 6 on RP 881938, a strip of varying widths along the road frontage. The land retained by the owner after resumption, Lot 5 on RP 881938 (the “remaining land”), has an area of 5,035 m².
In January 1996 the claimant lodged with the Council a claim for compensation pursuant to the Acquisition of Land Act 1967. The claim was amended on 12 February 1996, and on 13 February 1996 the claimant’s solicitors referred the claim for compensation to the Land Court for hearing and determination. A total amount of $1,790,026.80 was claimed, comprising $1,556,000.00 for land and injurious affection and $234,026.80 for disturbance (being reasonable legal and valuation costs). At the hearing, the claimant amended its claim and sought $1,077,700.00 in compensation for land and injurious affection together with $93,772.97 for disturbance and interest (Exhibit 19).
The Council estimated that the difference between the value of the subject land before resumption and the remaining land after resumption was $85,680.00 (Exhibit 16, page 9), but that the value of the remaining land was enhanced in value by the cost of roadworks of about $89,700.00. Consequently, no compensation is payable.
At the hearing, the claimants were represented by Mr DR Gore QC. Mr RS O'Regan QC represented the Council. On the first day of the hearing, the Land Court and counsel representing the parties inspected the subject land and various other parcels of land to which reference was made in valuation reports. Each party relied on sales or other evidence about some of those parcels to support certain valuations of the subject land as at the date of resumption and the remaining land after resumption.
Assessing the amount of compensation payable - the statutory criteria
The Acquisition of Land Act 1967 provides:
“Assessment of compensation
20(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (if any) caused by either or both of the following, namely -
(a) the severing of the land taken from other land of the claimant;
(b) the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.
(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.
(3)In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.
(4)But in no case shall subsection (3) operate so as to require any payment to be made by the claimant in consideration of such enhancement of value.”
The claim for compensation
The claim as made had two components, a claim for loss of land and injurious affection and a claim for reasonable legal and valuation costs, described generally as a claim for disturbance.
The key issues raised in this case are as follows:
(a)What was the highest and best use of the subject land immediately before resumption and the highest and best use of the remaining land after the resumption? More specifically, what was the development potential of the land in the before and after resumption situations?
(b)What method (or methods) should be used when analysing sales evidence for the purpose of valuing the relevant parcels of land before and after resumption? More specifically, should the sales evidence be analysed by reference to the value per square metre of gross floor area achieved at the time of sale or by reference to the value per square metre of the site area? Should calculations based on hypothetical developments on the land, before and after resumption, be relied on in determining the value of the land?
(c)When determining what compensation, if any, should be paid to the claimant, should any allowance be made for any enhancement to the value of the remaining land by the carrying out of certain roadworks on the resumed land?
(d)What amount should be allowed for disturbance to the claimant, by way of legal and valuation and other costs, as a consequence of the resumption?
The subject land
Features: The subject land comprised two narrow rectangular parcels and an irregularly shaped parcel which together formed an irregularly shaped block which slopes steeply away from the frontage of the land to the north-western corner of South Pine Road and Queens Road. The land is of broken contour, cut by a number of gullies running into dams at the rear of the property.
The resumed land is a strip along the elevated front portions of the subject land.
The subject land was substantially cleared but had no structural improvements other than stock fencing which added no value to the land. A small drain enters the site along the South Pine Road frontage.
Services available to the subject land include electricity, town water, telephone connection.
The subject land is approximately ten kilometres north-west of the Brisbane GPO and two kilometres north-west of the Brookside Shopping Centre. Other shopping centres are located at Everton Park (two kilometres away), Ferny Hills (four kilometres away) and Arana Hills (two kilometres away).
Access to the subject land was available from South Pine Road and Queens Road, sealed bitumen surface roads which follow a ridge line. Queens Road has a central concrete pedestrian strip which returns around the corner to portion of the South Pine Road frontage. Both roads are classified as Urban Arterial Roads by the Council. The South Pine Road frontage accommodated a bus stop and associated shelter and a pedestrian crossing adjacent to the western boundary. These limited vehicular access to the property from South Pine Road.
At the date of resumption the subject land was zoned Commercial (one lot with frontage to South Pine Road) and Home Industry (two lots with Queens Road frontage). Land to the west is generally included in the Commercial Zone and the Service Industry Zone. Land to the north of the site is included in the Home Industry Zone.
Land adjoining the western boundary of the site is used for an indoor swimming pool and gym, and the next property along South Pine Road is developed with a child care centre. The precinct is dominated by the large industrial buildings in Timms Road. To the north-east of the site the deep allotments with frontage to Queens Road contain detached houses generally located at the front of the land. Opposite the subject land is residential land.
In the Hills District Development Control Plan No. 1 (the “DCP”) the subject land is included within Precinct 3 - Industrial Area - Timms Road. The land is not listed on the Contaminated Sites Register.
At the date of resumption and at the hearing the subject land was vacant.
Rezoning: In March 1994 Mr Doolan lodged with the Council a combined rezoning and 3B application. The first component of the application was to have the subject land excluded from the Commercial and Home Industry zones and included in the Special Facilities (Shop, Late Night Shop, Craft Shop, and Column 3A and 3B Uses in the Commercial Zone) zone. The various purposes for which premises may be erected or used are listed in the Town Planning Scheme for the Shire of Pine Rivers (Exhibit 20 pages 222, 232). Following discussions with the Council and amendment of the application, the Council advised Mr Doolan in November 1994 that the rezoning and 3B components of the application were approved subject to certain conditions. The Council approved use of the land for Offices, Restaurant, Medical Centre and “uses as per zoning description to be indicated on site plans to be submitted and approved by Council”. The 3B approval was not to come into force or effect until the rezoning of the site was gazetted (but was to lapse if the use was not commenced within a period of two years from the date of the approval, being the date of Gazettal of the Rezoning).
The rezoning conditions included the following:
“3.04 Future Road WideningDevelopment shall not be permitted to comprise the area designated for Future Road Widening on Pine Rivers Shire Council Drawing No. 6/00778/A2 adopted by Council on 31 October, 1994 (MP 94/4265). This land is required by the Council for Road Purposes in the future. The Developer agrees that no development shall occur which would in any way prejudice or compromise the future widening.”
The rezoning conditions also included the following:
“4.01 If not completed by others, the applicant shall complete the interim frontage roadworks to the South Pine Road frontage of the subject land by providing:
(a)Kerb and channel on an approved alignment, and
(b) Sealed pavement widening to the new kerb and channel, and
(c)Reinstatement or relocation of the existing pedestrian crossing and bus stop, and
(d)Any associated drainage, signage, linemarking, and lighting that may be required to comply with Council’s standards.
4.02 Site Access
The applicant shall construct accesses to be fully compatible (line and level) with the ultimate frontage roadworks to the satisfaction of the Director Works and Services.
The applicant shall note that Queens Road and South Pine Road are designated as Urban Arterial roads and that all turns access to the site will not be permitted ultimately. The applicant shall also note that Council intends upgrading the intersection of Queens Road and South Pine Road in the future and it is likely that this upgrading will incorporate a central median along the full frontage of the subject land to both Queens Road and South Pine Road.
Notwithstanding the above, Council’s Director of Works and Services may approve temporary or interim ‘all turns’ access to the site having due regard to Council’s planning for the frontage roadworks upgradings and safety issues. ...
...
4.04 Frontage Roadworks and Intersection ContributionThe applicant is required to contribute towards the ultimate upgrading of the Queens Road and South Pine Road frontages and the intersection of Queens Road and South Pine Road based on traffic generated (including turning movements) from the site against total traffic using the frontage roads. ... The cost of upgrading the intersection and frontage roads shall be as per Council’s cost estimates or in the event that the work has been completed the actual costs shall be used. ...”
The same conditions (although numbered 10.01 - 10.04) attached to the 3B approval.
The claimant anticipated that, upon development of the property for a neighbourhood shopping centre as proposed, access to the property would be restricted to the eastern bound lanes only of the roads.
The land is now within the Special Facilities (Shop, Late Night Shop, Craft Shop, and Column 3A and 3B Uses in the Commercial Zone) zone. At the date of resumption, however, it was still zoned partly Commercial and partly Home Industry.
Highest and best use
Mr Doolan purchased the subject land (and two neighbouring lots immediately to the north of the subject land) from the Public Trustee in 1993. He paid $310,000.00 for the five lots and immediately on-sold the two northern lots which he thought had more potential for residential use than commercial use. He purchased the land for the purpose of developing a shopping centre. In his opinion, the Public Trustee did not see that there was “any real commercial flavour to this property”. As far as he was aware, commercial developers were not at or involved in the auction and most if not all purchasers at such auctions are “residential buyers”. Before entering into a contract to purchase the land Mr Doolan held discussions with consultants and the Council to obtain preliminary views about the viability of the site for a shopping centre and the likelihood of an application for rezoning being looked upon favourably. In January 1995, after the notice of intention to resume but before the date of resumption, Mr Doolan sold the subject land to the claimant.
At the time when Mr Doolan purchased the land and at the date of resumption, the subject land was vacant land in the Commercial and Home Industry zones with a potential for rezoning to a Special Facilities zone, in particular, for rezoning to the Special Facilities (Shop, Late night Shop, Craft Shop, and Column 3A and 3B Uses in the Commercial Zone) zone. That potential, although not realised at the date of resumption, was well demonstrated by the conditional approval given by the Council in November 1994. Accordingly, at the date of resumption, a purchaser could reasonably have expected that the rezoning would take place.
For the claimant, Mr Gore submitted that it was common ground that in both the before and after resumption situations the highest and best use of the land was for development for a retail and commercial use, specifically a neighbourhood shopping centre. The valuation report prepared for the claimant by Mr Kevin Walsh, a registered valuer, described the development potential of the land for a neighbourhood shopping centre (Exhibit 6, para 4.5).
Mr O’Regan for the Council also submitted that the highest and best use of the subject land at the date of resumption had to be determined having regard to planning and all other relevant factors affecting its present and future potential. He noted that the potential of the land was represented by the Council’s conditional approval for rezoning, which ultimately led to the rezoning of the land to Special Facilities. Although the rezoning took place some months after the date of resumption, the process was “well in train” at the date of resumption. The principal evidence in support of the Council’s submission came from Mr John Wood, a registered valuer, who, in the valuation report prepared for the Council, stated that the highest and best use of the property “is for a mix of commercial/retail development in accordance with the rezoning that has been approved by Council” (Exhibit 16 page 8), that is, the Special Facilities zoning.
Before considering the submissions of the parties on the extent of the development potential of the land, it is appropriate to look, first, at the relevant conditions on which the Council gave rezoning and 3B approval in relation to the subject land and, second, at some of the features of the land which are directly relevant to its development potential. Both Mr Walsh and Mr Wood described the development potential and highest and best use of the remaining land by reference to that conditional rezoning approval.
Rezoning conditions: The rezoning approval described the layout as depicted on the Concept Plan (Drawing No SK.CO1) received in September 1994 as “generally acceptable” but “not approved”. That plan proposed a four storey building - a ground level, one storey above ground level and two levels below ground level. The Council required the applicant to prepare a concept plan to the satisfaction of the Council for inclusion in the Rezoning Deed. That concept plan, when approved by the Council, would be the Plan of Development and development of the site shall be in accordance with that plan.
The rezoning conditions provided that the Plan of Development would contain various specified components, including the area of the site required for future road widening, and shall be generally in accordance with the Plans SK01/B, SKO3/B, SKO4/B by Rhonan O’Brien, architects, submitted with the rezoning application and SKO2/F, SKO5/C and SKO6/B received subsequently as amended by the rezoning conditions.
Both the rezoning and 3B approvals have the same conditions relating to matters such as the location of retail components, building setbacks, provision of carparking and landscaping. In summary:
(a)The Special Facilities Shop, Late Night Shop and Craft Shop component shall be located on the South Pine Road ground floor level only.
(b)In accordance with concept plan SK.CO1 the Building shall be setback at least 5 metres from the northern boundary and 6.5 metres from the western boundary. The Council may give consideration to the relaxation of this requirement at the time of approval of the plan of development for rezoning of the site.
(c)Carparking shall be provided on the site at a rate of 1 space/15m² of gross floor area (“GFA”) for the ground level uses of the building; a sealed loading and unloading area which is readily accessible to all tenancies on the site shall be provided on the ground storey level; the carparking area shall be designed to accommodate turning manoeuvres of service vehicles; and the basement level carpark shall primarily be used by employees.
(d)Landscaped strips, with a minimum width of 2 metres, shall be planted along the frontage of the site between the carpark and the “ultimate road alignment”. A minimum area (15 per cent. of the site) located predominantly along the road frontages shall be landscaped, although the area required may be relaxed by the Council having regard to the physical constraints of the site and the amount of road widening required to the frontage.
As noted earlier in these reasons for decision, condition 3.04 of rezoning approval was that the development does not prejudice or compromise the area designated for Future Road Widening on a Drawing adopted by the Council on 1 October 1994. The condition stated: “This land is required by the Council for Road Purposes in the future. The Developer agrees that no development shall occur which would in any way prejudice or compromise the future widening”. Mr Feros agreed that the condition imposed a substantial restriction on the uses to which the area could be put, but specifically nominated landscaping and manoeuvring of motor vehicles for the land on the front apron of the development as possible uses.
Other features: In addition to the conditions of approval imposed by the Council, the location and physical features of the site influence its development potential both before and after resumption.First, the land, both before and after resumption, is in what Mr Walsh described as a “high exposure” position because it faces a fairly major intersection and high volumes of traffic pass it. That was one of its “prime advantages” in terms of its potential for development as a shopping centre. The volume of traffic passing the land, however, might “present a degree of difficulty” to someone wanting access to the land by motor vehicle. He thought that pedestrians, including people from the nearby light industrial estate, would also go to the shopping centre.
Mr John Wood, a valuer called by the Council, agreed that it is a “high exposure ... prominent site” and that prominence can be an advantage for a retail development. He said, however, that in his experience difficulties can arise on heavily trafficked fronting roads, particularly curved roads, unless there is ease (and perceived ease) of ingress and egress.
Mr Wood also agreed that the site has the advantage of being proximate to an industrial area, and that the advantage can be reflected in day time patronage from employees at and visitors to industrial premises. It could also attract early morning trade to some of the proposed tenants, as well as evening and late night customers and some customers who would travel from beyond the immediate neighbourhood to patronise particular specialty stores. Mr Christopher Shaw, a valuer and property developer called by the Council, also identified different types of customers for the different stores and services which were proposed to be provided on the developed site. Daytime users, including those from the industrial estate, might provide patronage for takeaway food. Other businesses, such as the medical centre and video store, would rely on people other than nearby workers.
Second, although the location and exposure of the site commend its development for a neighbourhood shopping centre, the slope of the land makes it somewhat unusual for such a development. Most shopping centres are built on level or nearly level sites and the subject land would create some challenges for a builder. Mr Shaw stated that, as a general rule, suburban convenience retail should be restricted to one level with the majority of car parking on grade and directly accessible to the majority of shops (Exhibit 26 page 5). The slope of the land, however, allowed the architect to incorporate a floor at road level and a car parking level below road level. Mr Walsh referred to the advantage of a lower level being able to be developed without excavation. Mr Victor Feros, a town planner called by the claimant, expressed the opinion that, because of the location, scale and nature of industrial land use to the rear of the subject land, the height and appearance of the rear elevation of the development is not a constraining factor. In other words, “issues of amenity aren’t pertinent to the degree that they might otherwise be” (Exhibit 4 page 8). Although the topography of the site has the advantage of permitting different levels and a greater gross floor area for a relatively small site, Mr Feros and Mr Walsh agreed that the slope adds to the costs of development, and Mr Wood described it as a “difficult site” because of the contour and the drain line through it.
Third, it may be that, because most of the parking would be under the building rather than at the front, some potential users may be deterred from driving onto the site. Mr Feros thought that because what was proposed was more in the nature of a local or neighbourhood centre it would attract return users who would become familiar with and undeterred by the parking arrangements. Mr Walsh suggested that the existence of some ground level parking would be sufficient to attract a user and the under cover parking, with its shade and protection from rain, would be attractive to people who drove onto the site. Mr Shaw, however, stressed the need to have a site with exposure and a level (or the impression of a level) site. In his opinion, a successful suburban retail development is “almost entirely dependent upon convenience (accessibility and parking) and exposure” (Exhibit 24). People need to be able to get shopping trolleys conveniently from the stores to their vehicles, and parking must be “easy and direct”. In his opinion, it is very difficult to identify any comparable development where retail has worked on a level under the main level because, even though low levels may have access for parking, they do not have visibility. Mr Alan French, a valuer called by the Council, considered that convenience centres and shopping centres work best where the potential customer can see both the shops and where they are going to park their vehicles. For a site such as the subject land, a deck could be constructed, with additional construction costs, to support both car parking and tenants. Mr Russell Lister, an architect in the ETS Group called by the claimant, said that it is “very important that people driving past are able to see that there is quick, easy parking”, rather than driving down several levels.The proposals for the subject land and the resumed land show that such concerns can be largely met with some parking at road level and additional undercover parking beneath the retail level. Such undercover parking, though not visible from the road, may prove attractive to returning customers seeking a car park sheltered from sunshine and extremes of weather.
Fourth, Mr Doolan described the dams on the subject land as “future retention basins”. They will be stabilised, with overflow being discharged ultimately into the stormwater system that crosses neighbouring parcels of land. Drainage approval had been sought and Mr Doolan did not anticipate any problems in obtaining it.
Scale of development: The parties have, in effect, agreed that the land, in both the before and after resumption states, had potential for retail and commercial development, specifically a neighbourhood shopping centre that would meet the conditions on which rezoning was approved. The dispute between the parties relates to the scale of development. The claimant relies on drawings prepared by the ETS Group of architects as showing the highest and best use of the site before and after resumption. The Council contends that the concepts shown in the ETS Group’s drawings represent an over-development of the land both before and after resumption.
To help put the issue in a town planning context, Mr Feros noted that under the DCP the preferred uses on land fronting South Pine Road are commercial uses and retail uses up to 650 m² GFA. In considering and approving the combined application in November 1994, the Council accepted:
(a)that the designated retail area on the Precinct Map is indicative only, and that other sites, such as the subject land, are appropriate for a local retail use consistent with the DCP; and
(b)that the limit of 650 m² GFA is not appropriate given that a need exists for local convenience shopping facilities, which cannot be met at other nominated sites due to a lack of available land for expansion (Exhibit 4 pages 9, 14).
Mr Feros also noted that the Town Planning Scheme does not rely on plot ratios or maximum building heights. As a result, the development intensity on any particular site is indirectly controlled by the requirement to meet car parking ratios and building setback requirements (Exhibit 4 page 13).
Because a Plan of Development was approved by the Council in relation to the resumed land it is easier to assess the scale of the development potential of the subject land and the remaining land by considering first the potential of the remaining land.
Development potential after resumption: As noted earlier, the Council had considered a concept plan SK.CO1, prepared by Rhonan O’Brien, architects, to be “generally acceptable” but was “not approved”. The ETS Group, engaged by Mr Doolan, submitted amended concept plans (SPO2E, SPO3E, SPO4A, SPO5B) to the Council in March 1995 and the Council sought “further clarification and/or amendments” to the plans in relation to specified issues.
In October 1995 the Council advised Mr Doolan that ETS Group’s Plan No. 96645 SP01 Issue ‘B’ had been approved by the Council as the Plan of Development. That proposal envisaged a two storey development containing 2,133 m² of GFA with provision for 120 car parking spaces and the required landscaping (Exhibit 14). A GFA of 2,133 m² for the 5,035 m² of the remaining land gives a GFA density of development of 42.36 per cent., a relatively high density when compared with the density of development on the seven sale blocks listed in Mr Walsh’s valuation report, and discussed later in these reasons for decision. Six of those sale blocks showed a density in a range between 21.5 and 35 per cent., and one showed a density of 41 per cent. The slope of the remaining land, however, permits a higher density of development than might be available on a level site of the same size, and the claimant’s proposal should be considered in that light.
The claimant’s case was put on the basis that designs prepared by the ETS Group provided the best indication of the potential of the remaining land.
The ETS Group was retained by the claimant to prepare a design for the development of the subject land. The brief included evaluating alternatives, advising on the “optimum solution” and developing drawings sufficient for submission for building approval. After initial discussions and preparation of several design alternatives a concept was selected for development in January 1995. Mr Lister said that, when they first became involved with the project, the ETS Group was told by the Council about the resumption and so prepared designs on the basis that the resumption had taken place. The plan provided for a two level development - the ground level being at road level and having the key retail uses, and the lower ground level including the medical centre and associated car parking. The structure would extend above the sloping land and would be supported by columns.
In its written report on the proposed development (Exhibit 12), the ETS Group contrasted its proposal with the plans for the site prepared previously by Rhonan O’Brien and which had been submitted to the Council. It is apparent from the ETS report that:
The ETS Group had previously prepared a proposal for Seymour Developments in relation to the subject land. The ETS proposal had “significantly reduced floor areas” when compared with the proposal prepared by Rhonan O’Brien because Seymour Developments believed the O’Brien scheme “was not commercially viable”.
The amended concept plans were prepared for the claimant without reference to the plans of Rhonan O’Brien.
The plans were prepared on the basis that there would be a resumption of 10 metres along the frontage to the subject land.
The design reduced the building from four floors to two floors, with integrated parking at each level.
In the ETS Group’s opinion, the revised development “is a more commercially viable use of the land”.
The original Rhonan O’Brien plans provided for a gross floor area of 2,768 m². The gross floor area of the revised development is approximately 2,132 m².
Although there is a reduction in the floor area, it was the ETS Group’s opinion that the revised development “is more commercially viable” because:
- parking areas were simplified;
- upstairs spaces previously designated for certain purposes were deleted (because market rentals for those spaces did not give adequate return on development costs and were potentially likely to suffer a lower occupancy rate) which allowed the required carparking to be contained within two building levels, thus adding further economy;
-the layout of retail spaces enabled optimum depth/width ratio for tenancies and enabled greater flexibility for subdivision into smaller spaces.
Mr Doolan said that based on advice from the ETS Group, he was “satisfied that the design as proposed by the ETS Group represents the most efficient use of the remaining land taking into account the topography of the land and the commercial viability of developing a shopping centre”, even though the design results in less GFA than was provided in the original Rhonan O’Brien design. In his opinion, “the centre as currently proposed will be more viable in terms of the obtaining of tenants” (Exhibit 5 para 44).
Not surprisingly, it is apparent that the assessment of the commercial viability of the proposed development was the result of an exchange of views between developers and their technical advisers. Mr Lister said that the assessment came initially from the ETS Group’s association with Seymour Developments, who previously were interested in the subject land. The conclusion that the revised proposal is “more commercially viable” than the Rhonan O’Brien design was made on the basis that his firm’s client wished to proceed and that he was convinced that it was viable to put a shopping centre on the site. The ETS Group “reduced the project down to something that was more in line with the location of the development”.
The ETS Group’s plans (96645 DD01(B), DD02(B), and DD03(B) - Exhibit 14) show the following results allowing for the land resumption:
Area | GFA | NLA | CARS |
| Ground Level Shops | 1,162m² | 1,128m² | 78 |
| Lower Level Shops | 970m² | 500m² | 13 |
| Medical Centre | N/A | 350m² | 24 |
| Total | 2,132m² | 1,978m² | 115 |
The claimant submitted that the proposed development of the remaining land as shown on Plan No. 96645 SPO1 Issue ‘B’ cannot be characterised as an over development of the site from a town planning viewpoint because in 1995 the Council had approved it as the Plan of Development for the site (Exhibit 15 part 36). I agree.
The chief point of attack, however, was the Council’s submission that the approved development is an over development from a commercial viewpoint.
Mr Doolan, who was committed to proceed with the development, gave evidence of a level of tenant interest which demonstrated that, in his view at least, the project was worth pursuing. He said that a 40 to 60 per cent. pre-commitment from prospective tenants indicates that a development is a “goer”. Mr Doolan estimated that the leases, agreements for lease, and “softer forms of pre-commitment such as letters of intent” showed pre-commitment in the order of 75 to 85 per cent. Although letters of intent do not bind a person to become a tenant, some people had proceeded from such letters to leases and agreements to lease. Leases were more likely to be entered into as building was underway. Construction was expected to commence within four weeks after the hearing.
Information about the identity and level of commitment of prospective tenants was given by Mr Doolan (Exhibit 5) and Mr Walsh (Exhibit 6). In summary, it is apparent that at the time of the hearing there were two executed leases (for the Mahoney Coffee Shop and Abeck Captain Snapper - seafood), letters of intent in respect of eight others (Clarke and Hardcastle - pharmacy, Rebel Liquor - bottle shop, Nightowl - convenience store, Subway - takeaway food, Brumby’s Hot Bread - bakery, Medico Centre - medical centre, Sklavos - dentist and Hartwell - Video-Ezy) and indications from three others that they would proceed to tenancy (Baskin and Robbins - ice cream shop, Rocksports - rock climbing, Brodies Chicken & Burger - takeaway food). The shop spaces covered by those leases or other communications were nominated as shops 1, 2, 3, 3A, 4, 9, 10, 13, 14, 15 on the ground level, and shops 1/2/3, 4 and 5/6 on the lower ground level (Exhibits 5, 6). The two leases were each for five years with an option to renew for five years.
The Council sought to cast some doubt on the likelihood of a pharmacy being located in the proposed shopping centre. Mr Shaw suggested that, because of the approval which is required for new chemist stores, it is unlikely that a chemist would be secured for the site. More specifically he understood that the only way a chemist could be secured would be if the pharmacy in Camelia Avenue was induced to relocate to the site. His inquiries indicated that the chemist would not relocate. Mr Shaw suggested that if a chemist is not secured, the viability of the medical centre may be affected (Exhibit 24 pages 5, 7). Mr Doolan explained that he was “very familiar” with the conditions applying to new chemist shops and was confident that the pharmacists with whom he had negotiated would be signing a lease even though there was a pharmacy located at Camelia Avenue, less than two kilometres from the subject land. He did not know whether the relevant permission had been obtained but was confident that Clarke and Hardcastle would overcome any difficulties. I am satisfied that serious negotiations had taken place to secure a pharmacist tenant and that there was a real possibility of a pharmacy being secured for the development.
When calculating the rental for the proposed premises, Mr Walsh included a restaurant with an area of 213 m² on the ground level, paying rent at a rate of $400/m² (Exhibit 6 page 6). By the time of the hearing a restaurant had not been secured. Mr Doolan suggested that a restaurant would not necessarily be put on the site. In his opinion, a restaurant is “as good a use as a number of others”. The area could be divided into two or could be let to a different type of tenant.
Mr Walsh listed the rents to be paid by different tenants for different areas in the building as if the premises were fully tenanted (Exhibit 6 page 6). He based his hypothetical development analysis on the assumption that there had been genuine pre-commitments by all the tenants identified in his report
Mr Shaw, whose McDowall Village Shopping Centre is a direct competitor of the claimant’s development, gave evidence about his experience in getting people from letter of intent stage to a signed lease. At the time of the hearing, the McDowall Village Shopping Centre had prospective tenants at various stages from letters of intent, agreements to lease, and offer and acceptance. Construction was expected to commence in October 1996. Mr Shaw said that it is “not a difficult process”, indeed it is “normally quite easy”, to get someone to sign a letter of intent. It is “a far more difficult process” to get someone to sign a lease. He also pointed to the different circumstances surrounding negotiations with franchisors who need to have a franchisee before the franchisor will commit to a lease. A developer can be more confident where discussions between franchisor and franchisee demonstrate their keenness to be involved. Ultimately it is a signed lease or firm commitment which will satisfy a developer and, it seems, the developer’s financier.
Although letters of intent are not legally binding, Mr Walsh understood that it is the practice in developments such as this to use such letters to consider what level of commitment is likely to be achieved. In his opinion, as a project develops and people can see what is going to materialise, the level of commitment would increase. He agreed that it is possible, however, for people to decide not to become tenants and for other prospective tenants to take their places.
Based on the information in Mr Walsh’s report, Mr Shaw calculated the proposed rental structures as:
Ground floor level: $403 per square metre gross or $372 per square metre net
Lower level: $297 per square metre gross or $266 per square metre net.
Mr Shaw described the achieved net rents at this level as “optimistic”. In his opinion the most reasonable and realistic assessment of net rents is a maximum of $325.00 to $350.00 per square metre for the ground level and $200.00 to $250.00 per square metre for the lower level. That opinion was based on rentals for specialty stores (which are typically average in the range of $350.00 to $385.00 per square metre net) achieved at other shopping centres, all but one of which are anchored by a supermarket. By comparison, McDowall Village has more than twice the GFA of the claimant’s development, with Franklins as the anchor tenant and a McDonalds store. It was apparently on target to achieve specialty rents of approximately $350.00 per square metre net. Mr Shaw also queried the rental levels which some prospective tenants were said to be willing to pay for space at the claimant’s proposed shopping centre, and suggested that an appropriate relativity between the rentals for the two levels should result in a significant discount to the rates on the lower level (Exhibit 24 page 6). Mr Shaw believed that higher rents might be considered reasonable if a smaller scheme was proposed (Exhibit 24 page 5).
Mr Doolan, however, gave evidence about the rental levels achieved and the forms of lease incentives offered to some tenants. He said that the rents had been “generally well received” by prospective tenants and were “right on the button” given the location of the site and the relatively low outgoings. Tenants would be charged gross rents. The claimant would absorb the cost of outgoings, which he estimated would be $22/m². Although costs of outgoings in the range of $40/m² to $56/m² are “quite commonly charged to tenants”, the $22/m² was calculated, in part at least, by reference to the scale of the proposed development which would attract lower costs than smaller developments. Rents were tailored to the special fit out requirements of at least one tenant (Rocksports). Because fit out costs were substantial and the medical centre will make very close use of the amenities, such as the lift, the rent is higher for the medical centre than for the dentist. The rate for Brodies was apparently proposed by the tenant. That evidence supports a finding that although the rentals are at or near the upper end of commercial rates, it is likely that they will be achieved on the proposed centre when leases are signed.
Mr Doolan described the types of lease incentives being offered to some, though not all, potential tenants. They included assistance with fitout, the costs of which would be amortised against leases over one to three months. He said that none of the incentives was other than standard commercial practice for a development of this kind.
The commercial potential of the proposed development was questioned in other respects. In Mr Shaw’s opinion, medical centres now ideally require and demand as much retail exposure as any other tenant, and a video store operator (particularly the likes of Video Ezy) also requires high exposure and retail space. Accordingly, he queried the likelihood of success for tenants trading in the lower level where there is no exposure (Exhibit 24 page 6). Mr Doolan, however, described video stores as places which require relatively cheap rental. Because they are destination tenants they require good positioning and good car parking facilities. He referred to video stores which are operating successfully on lower ground floor car parking levels at Greenslopes and Sunnybank. Mr Doolan argued that medical centres do not require high exposure (because most of the users are repeat users) but do require a high standard of amenity, which would be provided by the proposed development. He suggested that the high exposure provided by the site would overcome any difficulties that the form of access and egress and the nearby roundabout might provide. He also pointed out that the lower level premises would not be subterranean but would be above ground level with the benefit of good natural light on three sides. Although the site presents difficulties in providing prominent signage for motorists (especially those travelling from the west along South Pine Road), tenants may use signs on the premises to notify potential customers or users of the location of the video store or medical centre. The proposed development would provide 115 parking spaces, of which 53 would be at ground level and the remainder at the lower level, providing convenient under cover parking for people using the medical centre and a lift from that car park.
The Council criticised the claimant’s submissions on two bases. First, Mr Walsh’s analysis was speculative and neither his nor Mr Doolan’s experience in neighbourhood shopping centre development matched the experience of Mr French and Mr Shaw. Second, Mr Shaw and Mr French gave evidence to show that the proposed development was not commercially viable.
Mr Shaw described the Brisbane suburban retail market as “extremely buoyant” in the period from the early 1990s until early 1995 when “sales and leasing activity have abated and very soft conditions now characterise the market”. That market was characterised by a number of new convenience shopping centre developments, typically in the range of 500 m² to 1,500 m² of net lettable area. These were driven by “strong leasing inquiry” from a number of major franchise operators (including those who had expressed interest in tenancies in the proposed development of the remaining land). A combination of factors including economic uncertainty and its effect on the retail industry, a shortage of good development sites and, more particularly, the acknowledged downturn in the retail sector of the property market had caused a “significant decline” in this type of development activity. The market for the next 12 to 18 months, including the date of resumption, was then characterised by subdued levels of leasing and reduced investor confidence causing investment yields to deteriorate (Exhibit 24 page 2).
In Mr Shaw’s opinion, the schemes proposed by the claimant for the site before and after resumption represent an overdevelopment of the site because:
(a) market demand does not demonstrate a need for a retail facility of the size proposed; and
(b)more importantly, the cost of development is prohibitive and demonstrates that the project would not be viable in its proposed form.
On the first point, Mr Shaw acknowledged that the pre-commitments by a number of leading retail tenants is “good evidence that demand exists for a retail facility”. The size of the development would need to be determined by reference to further market research and inquiry from other tenants. Mr Shaw identified a number of competitive retail facilities in the primary and secondary catchment area of the land. The existing centres which generated competition were located at Camelia Avenue, Everton Hills; Stafford Road, Everton Park; Flockton Village, McDowall; and Chinook Street, Everton Hills. He also identified potential new sources of competition at the McDowall Village Shopping Centre at the corner of Beckett and Hamilton Roads (in which, as a director and joint owner of the developer, he has an interest); the Woolworths Marketplace at Albany Forest; a neighbourhood centre at Saturn Close, Bridgeman Downs; and the proposed $6,000,000.00 expansion of the Everton Park Shopping Centre. A preliminary overview of the catchment area for the proposed development suggested, in his view, that local shopping need is satisfied by a majority of these developments as well as the proposed expansion of Everton Park. The probable development of the McDowall Village Shopping Centre will reinforce the situation. In light of that information, Mr Shaw considered that there is qualified support for a lesser development than that proposed by the claimant (Exhibit 24).
On the second point, Mr Shaw referred to the dilemma with developments where construction costs become excessive and rents obtained from the lower level are not sufficient to recover the cost of construction. Typically a developer would be aiming to have construction costs in the range of 30 to 40 per cent. of gross realisation, but it would be a much higher percentage in this case.
As already noted, the slope of the land poses challenges for a developer, though more GFA may be achieved than on a level site. The construction of a building on the land is more expensive than on a level site and that cost is relevant to an assessment of the commercial viability of the project.
Mr Andy Steele, a quantity surveyor, estimated that the development costs would be $3,969,840.00 ($1,204/m² GFA) in the before resumption situation and $2,689,700.00 ($1,261/m² GFA) after resumption (Exhibit 8). The reduction in costs was about 32 per cent., a figure consistent with the reduction in possible GFA of about 35 per cent. between the GFA of the ETS Group’s pre-resumption development and the approved development for the remaining land. Mr Steele based his calculations on scenarios for Mr Walsh and by reference to plans prepared by the ETS Group and drawings prepared by Ove Arup.
Mr Shaw also queried whether the development would succeed in the long term and suggested that, given the nature of the prevailing real estate market, the leasing of such a shopping centre would be protracted. In his opinion, a combination of factors (such as the price range, location and concerns about the durability of the income stream because rent levels may not be maintained and a high level of vacancy could be expected) would mean that demand for the investment on completion would be somewhat limited (Exhibit 24 page 8).
Despite cogency of some of the doubts raised and the force of the Council’s submission, I am satisfied that the scale and type of development approved by the Council constitutes the highest and best use of the remaining land. According to Mr Doolan, the claimant had carried out market research and some of the prospective tenants, who are experienced operators, may have made their own assessments based on the demographics of the area. Mr Doolan also stated that the proposed development of the remaining land was the largest venture in which he had been involved on his own to date, three times the size of developments he had attempted before this project and it is clear from his evidence that he is seeking to maximise the financial return from the development. But he is operating in a commercial environment and has to consider what is achievable by reference to such matters as the types of tenants who would be suitable for and attracted to the site. He sought and had accepted expert advice about what was the most commercially viable and efficient use of the land rather than attempting to maximise its building potential. Although the ETS Group did not state that the proposed development would necessarily be commercially viable, it opined that its proposals were “more commercially viable” than larger developments on the resumed land. Furthermore, the claimant accepted the conditional rezoning approval, entered into a rezoning deed on 12 February 1996 which incorporated the Plan of Development for the site, and elected to submit a Plan of Development for 2,132 m² despite the fact that the rezoning conditions allowed for a larger development. There was a significant level of pre-commitment from a range of apparently sound, experienced tenants of the appropriate type. The number and type of tenants and the proportion of the floor area in which they had shown a degree of interest or commitment compared favourably with the level of pre-commitment to the nearest potential competitor, McDowall Village Shopping Centre, which was at a comparable stage of development. Indeed, Mr Shaw acknowledged that the pre-commitments by a number of leading retail tenants is good evidence that demand exists for a retail facility (though not necessarily of this size).
Although I am willing to accept that the rents achieved may be at the levels stated by Mr Doolan and Mr Walsh, there has to be a question, especially in light of evidence regarding the state of the market in 1995, whether it is safe to assume that all the premises would be tenanted on a long term basis. But that qualification does not influence the finding about the highest and best use of the remaining land.
In summary, the scale of development for the highest and best use of the remaining land is the development as approved by the Council and shown on the plans prepared by the ETS group.
Development potential before resumption: The assessment of the possible scale of development on the subject land before resumption involves questions of what would have been permitted on the land and what might have been commercially viable.
Scale of permitted development: The first issue involves a consideration of whether a development on the subject land should be considered as being subject to rezoning restrictions with building lines or set backs referrable to future road widening proposals (the Council’s approach), or whether any such development should be considered as if there was no road widening scheme immediately before the date of resumption (the claimant’s approach).
The ETS Group prepared plans showing the scope of a possible development as if the resumption had not taken place. The removal of the resumed land requirement enabled larger lettable floor space but necessitated adding a level of carparking to accommodate another 40 cars. To have provided additional carparking space on the other two levels would have reduced “dramatically” the lettable floor space on those levels. Even with the additional car parking area, the majority of cars would be on the other two levels.
The plans (96645 RO1(C), RO2(B), and RO3(D) - Exhibit 14) show:
| Area | GFA | NLA | CARS |
| Ground Level Shops | 1,715m² | 1,688m² | 114 |
| Lower Level Shops | 1,580m² | 748m² | 16 |
| Medical Centre | N/A | 738m² | 24 |
| Total | 3,295m² | 3,172m² | 154 |
In the opinion of the ETS Group, it “would not be commercially viable” to redesign the proposed shopping centre by adding a level of offices and a restaurant. Increasing the GFA of the ETS Group’s scheme to that indicated in the Rhonan O’Brien drawings “would not provide a correct comparison with the scheme that is planned for construction” on the remaining land (Exhibit 12). Nor would it give a realistic indication of the commercial potential of the land, assuming that the Rhonan O’Brien concept plan for the remaining land was, as described by another experienced developer, Seymour Developments, who was apparently interested in commercial development of the subject land, “not commercially viable”.
The extent of potential for development on the subject land was limited by planning constraints such as the location of the building line for land along Queens Road (see Pine Rivers Town Planning Scheme clause 86 - Exhibit 20). The form of potential development was influenced by such things as the Development Control Plan which required that “car parking, driveway and landscaping is to be provided between the proposed commercial or retail buildings and the South Pine Road frontage of the land” (see Precinct 3 - Industrial Areas, Timms Road section (4)(d)(iv) - Exhibit 20). Mr Feros described the requirement as being consistent with common design practice for developments with frontage to Main Roads to ensure that on-site car parking is visible to motorists and to therefore encourage its use (Exhibit 4 pages 15-16).
Mr Feros described the ETS Group’s plans for the potential development of the subject land, when considered from a town planning point of view, as “a practical and reasonable retail and commercial centre” which is in conformity with the relevant site development parameters and conforms with the concepts accepted by the Council in dealing with the combined rezoning and 3B applications. (Exhibit 4 page 17)
In making his assessment, Mr Feros proceeded on the assumption that the Council would have approved such a development, including partly waiving the building line requirement. He agreed that no such development was approved by the Council and, although there was a reasonable expectation that the land would be rezoned Special Facilities, there was a constraint on the use of the 10 metre depth of frontage to the land. At no time was a GFA specified in association with the conditions for rezoning and 3B approval. Yet he was satisfied that the development proposal shown in those plans was a logical exercise in light of what had been accepted by the Council for the remaining land. Similarly, Mr Lister noted that the proposed GFA is permissible under the town plan. He was willing to assume that there was no reason why the Council would have felt constrained to apply further conditions or otherwise modify the plans. Mr Walsh also was willing to assume that the same type of development as proposed for the remaining land “would have expanded proportionately to use the area that it would have had in the before situation”, without the restrictions on the use of the road frontage land which were linked to the road widening scheme, and that such development would have been approved by the Council. He also assumed that the additional floor area would be as readily lettable as the area for the approved development.
As noted earlier, one condition of rezoning approval was that development shall not be permitted to compromise the area designated for Future Road Widening. Mr Gore did not dispute that the condition was proper, nor did he dispute that it attached to the land. In his submission, those factors are irrelevant because the condition was imposed as part of a resumption scheme and those circumstances attract the Point Gourde principle in reverse. He relied on a passage from the decision of the Privy Council in Melwood Units Pty Ltd v Commissioner of Main Roads (1978) 52 ALJR 593 at 596 which he adapted (as indicated) for the purposes of this case as follows:“A resuming authority cannot by its project of resumption destroy the potential of the whole (6,106 m²) for development as a drive-in shopping centre, and then resume and sever on the basis that the destroyed potential had never existed. Moreover, ... the principle remains applicable in a case such as the present, notwithstanding that planning permission had not been given for the whole (6,106 m²) and would not have been given, when the lack of such permission was manifestly due to the (road widening) project, and it is established that, without the (road widening) project such planning permission would have been given for the whole (6,106 m²). To hold otherwise would enable the acquiring authority to inflict by its project the same injustice at one remove.”
In Mr Gore’s submission, the scheme in this case could be described as the road widening works or could be described more broadly to include the roundabout. In either case, the scheme affects the subject land.
Disturbance
As part of the award of compensation, the claimant sought an amount for disturbance constituting “reasonable legal and valuation costs”. The original application to the Court identified town planning, architect, quantity surveyor, valuer, proprietor, engineer, barrister and solicitor costs totalling $234,026.80 (Exhibit 3). The amended claim identified town planning, architect, quantity surveyor, valuer, engineer, barrister and solicitor costs totalling $93,772.97 (Exhibit 19). Documents were tendered providing itemised accounts for the disturbance items (Exhibits 7, 8, 9, 10, 11, 12, 13, 21, 23).
At the end of the hearing there was an issue about the amount of disturbance costs which should be awarded. It was submitted that the issue might be resolved by the judgment in relation to the claim for compensation or, if not, should be the subject of submissions after judgment is delivered. As I understand it, the Council contends that, if the claimant is unsuccessful to the extent that this Court does not accept its before resumption case, the claimant is not entitled to recover the disturbance costs referrable to the preparation of the before resumption scenario or, as Mr O’Regan expressed it, the “costs associated with buttressing that methodology”.
The claimant did not accept the basis of the Council’s argument. Mr Gore submitted that the claimant’s entitlement to recover disturbance costs is not contingent upon the claimant demonstrating that the claim is sound. He agreed however, that if the Court found against the claimant on that submission and on the before resumption case it would become necessary to isolate which costs are recoverable.
In support of the claimant’s entitlement to recover costs incurred in preparing the claim, Mr Gore referred to the “ordinary rule” that professional costs incurred in the preparation of the claim are recoverable notwithstanding that the valuation approach on which the claim was based is later held to be incorrect, provided only that that approach is not frivolous or lacking in bona fides. He cited the decision of the Land Appeal Court in Stanfield v Brisbane City Council (1990) 70 LGRA 392 where the Court (at pages 416-17) quoted with approval the following passage from the judgment of the Land Appeal Court in Merivale Motel Investments Pty Ltd v Brisbane Exposition and South Bank Redevelopment Authority (1985) 10 QLCR 268 at 288:“Our charge as judicially interpreted is to compensate for items which are the reasonable and not too remote consequence of the resumption (Harvey v Crawley Development Corporation [[1957] 1 QB 485; (1957) 55 LGR 104]). Dispossessed owners are entitled to seek professional advice and assistance in order to comply with the requirements of the Acquisition of Land Act insofar as lodging claims for compensation are concerned. Providing the valuation advice is not frivolous or lacking in bona fides, a fee based on the claimant’s valuation should be reimbursed. To refuse this would be lacking in fairness and generosity to the claimant and too restrictive of its personal right of choice irrespective of whether or not the claim is successful.”
The Land Appeal Court in Stanfield went on to note that it had been the practice of the Land Court and the Land Appeal Court to allow a dispossessed owner as an item of disturbance the costs incurred for legal and valuation fees during the period from receipt of the notice of intention to resume up to the date of lodgment of a claim in court. The Court considered that there may be cases where some adjustment of a claim for such fees may require variation, but no such grounds applied in that case even though the Court had determined that the valuation approach on behalf of the claimant was not the proper approach.
Mr Gore submitted that in the present case the claimant had adopted a conventional before-and-after valuation approach. It involved reference to a technique which the Council’s witnesses said could not be ruled out. Even if the approach is not accepted by this Court, it could not be found to be frivolous or lacking in bona fides or completely untenable from the beginning. Accordingly, he submitted, the claimant’s disturbance costs should be recovered in full.
Mr O’Regan used the first sentence of the passage just quoted to submit that costs are only recoverable if they are reasonable. The Court’s discretion is not limited to rejecting only those claims which are frivolous or lacking in bona fides. He agreed that one way of doing justice in this case might be to award a proportion of the amount for disturbance which the claimant sought.
Given the way in which this issue was argued by the parties, the fact that there are findings in favour of and against each party in relation to different issues dealt with in this judgment, and the fact that there is an award of compensation for the taking of the resumed land, it is appropriate that the representatives of each party be given an opportunity to make submissions about the amount to be awarded for disturbance.
Conclusion and Order
For reasons given earlier I have come to conclusions which are summarised as follows:
(a)At the date of resumption, the subject land (that is, the land immediately before resumption), and the remaining land (after the resumed land was taken) had potential for retail and commercial development, specifically a neighbourhood shopping centre that would meet the conditions on which rezoning was approved. Because, at that date, the subject land was zoned Commercial (one lot) and Home Industry (two lots) and conditional approval had been given to rezoning but the land had not been rezoned, the land had unrealised potential for its highest and best use. Accordingly, the land must be valued in the before and after resumption states in accordance with the zoning at that date but with the unrealised potential for development.
(b)At the date of resumption, the scale of development of the remaining land to achieve the highest and best use was the proposed development as submitted to and approved by the Council and described on plans prepared by the ETS Group showing a gross floor area of 2,132 m². The scale of development on the subject land to achieve its highest and best use was probably larger than that proposed for the remaining land but was not of the size described on plans prepared by the ETS Group showing a gross floor area of 3,295 m².
(c)In all the circumstances of this case, the appropriate method of determining the amount of compensation for land taken and any injurious affection or severance suffered by the claimant is the before and after method relying on a comparison of the subject land and the resumed land with sales of comparable land on a rate per square metre basis.
(d)Subject to the findings made about the value of off site roadworks done on the resumed land consistently with a condition of rezoning approval, I am satisfied that the subject land, with unrealised potential for development as a neighbourhood shopping centre, was worth $145.00 per square metre, a total of $885,370.00. The resumed land, with unrealised potential for the same purpose, was worth $130.00 per square metre, a total of $645,000.00.
(e)The cost of complying with the condition on rezoning that certain off site roadworks be undertaken was $89,700.00.
(f)I am not satisfied that the value of the remaining land was enhanced by the off site roadworks. Rather, the undertaking of the works was a condition of rezoning and 3B approval and the cost of carrying out those works is a cost which would probably have been borne by the owner of the subject land as the cost of obtaining consent to develop the land to its highest and best use. That cost would have been taken into account by a prospective purchaser of the subject land who would have factored it into the purchase price by deducting it from the amount which the purchaser would otherwise have paid for the subject land. The value of the land ($885,370.00) less the cost of the works ($89,700.00) gives a land value of $795,670.00.
(g)The amount of compensation for the loss of land and for any injurious affection or severance suffered by the dispossessed owner is, in round figures, $142,000.00.
(h)Given the way in which the parties addressed the issue of the amount to be paid for disturbance, the fact that there are findings in favour of and against each party in relation to different issues dealt with in this judgment, and the fact that there is an award of compensation for the taking of the resumed land, it is appropriate that the representatives of each party be given an opportunity to make submissions about the amount to be paid for disturbance.
Compensation payable by the respondent Council to the claimant is determined in relation to the value of the land taken, injurious affection and severance in the sum of one hundred and forty-two thousand dollars ($142,000.00).
I will hear submissions from the representatives of each party in relation to
(a) the rate of interest payable on the amount of compensation;
(b) what amount should be awarded in relation to items of disturbance;(c)whether any of the disturbance costs have been paid by the claimant and, if so, when they were paid and the rate or rates of interest payable in relation to the various costs; and
(d) any application for costs.
GJ NEATE
MEMBER
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