Estate of the Late Clare Mahon v Chief Executive, Department of Main Roads
[1998] QLC 110
•2 October 1998
|
BRISBANE
2 OCTOBER 1998
Re: Claim for Compensation
Resumption for road purposes
Acquisition of Land Act 1967.
(A97-77).
Estate of the Late Clare Mahon
v.
Chief Executive, Department of Main Roads
J U D G M E N T
(Hearing at Toowoomba and Brisbane)
Background:
This is a claim for compensation of certain lands under the provisions of the Acquisition of Land Act 1967 (the Act). By agreement of 29 October 1997, between Helen Denise Higgs and Brenda Mary Burke, on behalf of the Estate of the late Clare Mahon (the claimants), and the Director-General, Department of Main Roads (the Department), the following lands were resumed for future road purposes:
Lots 127, 128, 129 and 130 on Plan A345, containing 7.049ha, 6.988ha, 6.94ha and 7.58ha (total 28.557ha), Parish of Gowrie.
The Government Gazette of 21 November 1997 contained a proclamation of 20 November 1997 vesting the above lands in the State of Queensland, with the Department of Main Roads as the constructing authority. The date, 21 November 1997, then becomes the date at which the compensation is to be assessed.
The Claim:
Claims for compensation dated 3 December 1997 were served on the respondent (the Department) by the claimants comprising the following:(i) Lot 127 (7.049ha) -
Land $103,500
Special Value $ 5,000Disturbance $ 5,000
$113,500(ii) Lot 128 (6.988ha) -
Land $107,000
Special Value $ 5,000
Disturbance $ 5,000
$117,000(iii) Lot 129 (6.94ha) -
Land $102,500
Special Value $ 5,000
Disturbance $ 5,000
$112,500(iv) Lot 130 (7.58ha) -
Land $115,000
Special Value $ 5,000
Disturbance $ 5,000
$125,000GRAND TOTAL $468,000
At the hearing the claimants sought leave to amend the claims to delete any amounts for “Special Value” and, by agreement with the respondent, to amend the claim for “Disturbance (Legal and Valuation Fees)” as follows:
(i) Lot 127 (7.049ha) -
Land $105,000.00
Disturbance $ 638.65
$105,638.65(ii) Lot 128 (6.988ha) -
Land $110,000.00
Disturbance $ 638.65
$110,638.65(iii) Lot 129 (6.94ha) -
Land $107,500.00
Disturbance $ 638.65
$108,138.65(iv) Lot 130 (7.58ha) -
Land $120,000.00
Disturbance $ 638.65
$120,638.65GRAND TOTAL $445,054.60
Mr GR Allan of counsel represented the claimant, instructed by Hede Byrne & Hall, Solicitors. Evidence was called from Mr Peter Payne, registered valuer, Mr CN Holzberger, Mr AA Schloss, and Mr JE Liley.
Mr R Jones of counsel represented the respondent, instructed by the Crown Solicitor, calling evidence from Mr JD Horrigan, a registered valuer.
The Nature of the Land
The subjects are all vacant, and comprise cleared reasonably level to gently undulating grazing land with a few mature trees. There is an old hay shed of no value located to the rear, and an unused water trough in the north-east corner of Lot 130. Lot 130 is the most easterly parcel and is on the corner of Gowrie Junction-Charlton Road and Holmes Road. Gowrie Junction-Charlton Road is bitumen sealed, with overhead electricity and telephone available. Holmes Road is a single width formed gravel laneway providing general all-weather access along the front of the four lots. The gravelling of Holmes Road occurred as a consequence of the local council using the land as a gravel pit for surrounding road purposes, and then spreading gravel along Holmes Road when they cleaned up the site. There is some difficulty with access to Lots 127 and 128 in heavy rain. There is an unformed surveyed road along the western side of the most western parcel, Lot 127, but there is no physical access to it.
All lots have pleasant views, and there is fencing along the eastern, northern and western boundaries. It is agreed that each of the four lots are considered to be ideal for development as a rural homesite lot. The locality of the subjects has been developed for rural homesite/hobby farming purposes of similar size as the subjects. There is a high pressure water main located towards the front of the subjects, but Jondaryan Shire Council and Toowoomba City Council do not allow access to that due to its high pressure nature.
Access and power are considered available from Holmes Road, and cost estimates of those connections were obtained from the respective distribution authorities. Lot 130 has an easterly to northerly aspect, sloping towards Gowrie Junction Road. Lot 129 has the highest elevation, whilst Lots 128 and 127 fall gently towards the west, with a westerly aspect. All four lots are in an elevated position, and each is zoned as “Rural B” under the Jondaryan Shire Council Town Planning Scheme of 1993.
(4) The Proposed Roadworks
The resumption of the subject lands (the subjects) forms part of a proposal by the respondent for the development of a major Toowoomba by-pass road connecting the Warrego Highway east of Withcott, passing to the north of Toowoomba City, and re-joining the Warrego and Gore Highways west of Toowoomba. The proposal is part of the Toowoomba Region Transport Network Study, and has been a matter of public knowledge since it was first made public in 1993. The final corridor was confirmed on 28 April 1995, and there have been some adverse media statements since that time in respect of the potential impact of the road upon real estate activities.
The road proposal passes through the subjects just to the south of an existing partly-formed Holmes Road, before swinging in a south-westerly direction passing beside a “possible freight terminal” area near the intersection with the Warrego Highway. To the east of the subject the road alignment swings towards the north-east passing to the east of a large topographic structure north of Ganzers Road.
Market Trends
Mr Payne claims that as a consequence of public uncertainty in respect of the likely eventual impacts upon properties on or near the final alignment of the by-pass road, there has been a history of caution and resistance to purchasing properties that may be impacted. As a result of that reluctance Mr Payne argues that there has been a major paucity in the availability of comparable sales of vacant lands in the near vicinity of the subjects.
He claims that there have been limited sales of land parcels between private parties in the range 3ha - 16ha for rural homesites in excess of $40,000 in the Scheme’s “zone of influence” since 1993.
During 1996 there were only seven sales, two of which were to the respondent, and a further nine sales in 1997, seven of which were to the respondent. Of the two private sales in 1997, one at Oakey-Cutella Road had an area of 64.75ha, and the other at Warrego Highway had an area of 62.8ha. Both were bought for rural purposes (horses and grain). The area investigated by Mr Payne was Division 1 North of the Department of Natural Resources records of sales. That extends from Spring Creek in the south to the railway line through Gowrie in the north.
Because of this low volume of sales available, Mr Payne concluded that he had to analyse both vacant land and improved sales, and he considered that the purchases by the respondent provided some of the most recent evidence of value. He had excluded sales in the surrounding Shires of Rosalie, Crows Nest and Toowoomba City for a variety of reasons as he felt they constituted a different market to the subjects’ locality. He argues that the nearby area of Gowrie Junction can be distinguished as it has been influenced by odours from the Wetella waste water treatment works and a tannery.
Mr Horrigan also noted the low number of sales in the area of the subjects, but drew comparison with sales to the north in the Gowrie Junction area. He argues that any adverse impact on properties in that area as a result of the former odours from the water treatment works, have since been removed with the upgrading of the water treatment facility in mid-1997. While there had been only two recorded official complaints to Council about the treatment works, it was agreed that there had been public knowledge and apprehension about odours from the area, particularly in the Mt Kynoch area to the east. Because of difficulties in effectively analysing settlements by the constructing authority (the respondent), he preferred to use sales of other “arms length” transactions where they occurred.
Mr Horrigan has analysed his sales 1 to 6 to conclude that there has been a decline in the market in the Gowrie Junction area during 1996-97. He has then extrapolated that decline to the area of the subjects. He agrees that in hindsight, and in the current knowledge of his sales supplied, he would now value the former properties which were the subject of settlements, at lower figures.
However Mr Allan argues that an analysis of a resale of Mr Payne’s Sale 7, together with a resale for Sale 8 (Lot 8 Warrego Highway), revealed an increase in the market between 1995 and 1996. Mr Horrigan was unable to explain that inconsistency. However, he argues that it is too simplistic a conclusion to assume that different types of rural homesites attract an entirely different market. He agrees that buyers for that purpose see different value in cleared or timbered sites, but all, in his opinion, operate in one general market for rural homesites.
The Method of Valuation:
Both Mr Payne and Mr Horrigan have used the method of direct comparison of sales in order to arrive at their determinations. However in undertaking that comparison they have assumed an entirely different approach to assessing the highest and best use of the subjects.
From his analysis of recorded sales Mr Payne has concluded that properties purchased by the respondent were reflecting a slightly higher value in comparison to the rural homesite market. As he is required to determine the value for their highest and best use, he concluded that use to be for sale to the acquiring authority. He also concluded that, because of the public perception of uncertainty within the zone of influence of the new road scheme, the only purchaser likely to acquire the subject would be the respondent.
By comparison Mr Horrigan saw the highest and best use of the subjects as for rural residential purposes, and compared the parcels with sales for that purpose. He also discredited any use of settlements by the respondent in view of uncertainties associated with such sales. He claims, where “arms length” normal transactions occur, particularly of vacant lands, then those are the best evidence of value. In those circumstances he maintains that it is not appropriate to consider the use of settlement agreements by a constructing authority. He further supports his conclusion by noting that in arriving at his valuation he must disregard any influence upon the value by the proposed roadworks.
The valuers have determined the following valuations:
| Subject | Mr Payne | Mr Horrigan |
Lot 127 $105,000 $75,000
Lot 128 $110,000 $75,000
Lot 129 $107,500 $83,500
Lot 130 $120,000 $83,500
Mr Payne argues that, while he valued the land for its highest and best use as for road purposes, he based his assessment upon the understanding that the respondent, as a prudent purchaser, would assess his values on the basis of a rural homesite, considering the features that would apply for that purpose as a guide. He valued each parcel separately, and made no attempt to treat the combined four parcels as a single property for resumption.
A similar approach to the four individual parcels was also adopted by Mr Horrigan. However Mr Horrigan considered the parcels only for their highest and best use as single rural residential purposes.
Support for the adoption of site value, and not on a per hectare basis, for rural home purposes has been established by the courts and may be found in DK Weir v. Thuringowa Shire Council (1980-81) 7 QLCR 72, at 81; AD and ML Murray v. Queensland Electricity Generating Board (1985) 10 QLCR 69, at 77; AT Dewar v. Valuer-General (1980-81) 7 QLCR 112, at 115; and H and E Grahn v. Valuer-General [1992-93] 14 QLCR 327, at 330.
Comparison of Sales:
Mr Payne seeks to support his valuation by the following sales:
· Sale 1 - (Boundary Street -Lot 15 on RP 34896)
(Holzberger to the State of Queensland).
This is an 8.48ha improved rural homesite, zoned “Rural A”. The improvements include a dwelling which was analysed to have an added value of $135,000 and the land at $135,000. The land is gently sloping and Boundary Street is bitumen sealed. The sale is seen as superior to the subjects.
The settlement occurred in August 1997 for $270,000.
· Sale 2 - (Ganzers Road - Lots 391 and 392 on Plan A34873)
(Cardiff to the State of Queensland)
This is a 13.47ha improved rural homesite zoned as “Rural B”. The land is gently sloping and includes a brick dwelling, a metal shed and cattle yards which were analysed at an added value of $186,500, and the land at $120,000 (Lot 392), and $103,500 (Lot 391). Lot 392 was seen to be slightly superior to the subjects.
The settlement occurred in January 1998 for $410,000.
· Sale 3 - (Unnamed road Charlton - Lot 105 on Plan A345)
(Jannusch to the State of Queensland)
This is an 8.09ha vacant land sale, zoned “Rural B”, fronting an unformed road, and behind the Toowoomba Clay Target Club. Access is via unmade roads off Nass Road. The sale is gently sloping and was seen as inferior to the subjects, and was noted as occurring at the time of a marriage breakdown.
The settlement occurred in January 1997 for $82,440.
· Sale 4 - (Ganzers Road - Lot 1 on RP 131191)
(Schloss to Moore)
This is a 13.15ha improved rural homesite zoned as “Rural B”, fronting a bitumen road. The sale is moderately to steeply sloping to the west, and has a southern aspect. The sale is seen as inferior to the subjects. The improvements were analysed at $60,000 and the land at $90,000. However Sale 4 was seen to have been afforded some concession as part of a special arrangement for the parcel at Sale 6 (estimated at $45,000). Accordingly that suggested that the land component of Sale 4 was in excess of $90,000.
The sale occurred in October 1996 for $150,000.
· Sale 5 - (Ganzers Road - Lot 394 on Plan A34873)
(Schloss to Wood)
This is a 13.38ha vacant site zoned “Rural B” of moderate to steep slopes, including a hill to the northern part of the parcel. Ganzers Road is bitumen sealed. The sale has a southerly aspect. The sale was also seen to include part of some concession for the price paid for Sale 6, above the normal market price (i.e. $45,000). The sale was seen as inferior to the subjects, and the land component of Sale 5 was analysed at in excess of $60,000.
The sale occurred in September 1996 for $60,000.
· Sale 6 - (Ganzers Road - Lot 393 on Plan A34873)
(Schloss to the State of Queensland)
This is a 14.04ha improved rural homesite, zoned as “Rural B” comprising moderate to steeply sloping hillside. Ganzers Road is bitumen sealed, and the sale has an elevated easterly sloping aspect. The sale contained a special agreement with the respondent in recognition of the likely subsequent loss in capital value to the vendor for Sales 4 and 5 at $45,000. The analysed value of the land for Sale 6, after allowing for improvements and the special agreement, was $97,000. Because of the interlocking of Sales 4, 5 and 6, Mr Payne agreed that those sales were very difficult to analyse, and he placed little reliance upon them.
The settlement occurred in June 1996 for $205,000.
· Sale 7 - (Warrego Highway, Charlton - Lot 8 on Plan AG 3680)
(Seeto to Bailee and Woody’s Garden Centre Superannuation Fund)
This is a 10.44ha vacant rural homesite, zoned as “Rural A”, fronting the Warrego Highway which is bitumen sealed. The land is gently sloping, and has been partly cultivated. It has an existing dam and an unequipped bore. Access is off a gravel road off the Warrego Highway, which also provides access to a refuse tip, concealed behind the higher land to the north of the sale. The aspect is southerly, although the land falls from the Warrego Highway towards the north, then rises to the rear of the sale.
The sale was seen as inferior to the subject, and was sold in September 1996 for $103,000.
· Sale 8 - (Nass Road, Charlton - Lots 68, 69 and 93 on Plan A345).
(Sondergeld to The State of Queensland).
This is a 24.61ha parcel of three lots comprising 8.397ha (Lot 68), 8.094ha (Lot 69) and 8.122ha (Lot 93). All are zoned “Rural B”, and are gently undulating parcels with selective clearing. Access is off Nass Road which is a gravel road, and the parcels have a westerly aspect. The sale was improved with a brick house, attached workroom, metal garage/workshop, two commercial signs and cattle yards. The added value of the improvements was analysed to leave a total land value of $287,000, being:
· Lot 68 - $ 92,000
· Lot 69 - $ 85,000
· Lot 93 - $110,000
Mr Payne believes that Lot 93 is comparable to the subjects.
The settlement occurred in May 1997 for $471,500.
· Sale 9 - (Willets Road, Charlton - Lot 71 on Plan A341)
(Krautz to The State of Queensland)
This is an 8.09ha improved rural homesite, zoned as “Rural A”, and slopes gently to the south. The sale overlooks the adjoining speedway. Willets Road is gravel, and the improvements include a fibro dwelling, carport, garage, dog runs and sheds. The analysed land value was $85,000, and it is seen as inferior due to its situation.
The settlement occurred on 11 November 1997, for $182,000.
· Sale 10 - (16 Bedwell Street, Cranley - Lot 15 on RP 803180)
(Cardell to Fergusson)
This is a 2ha vacant land sale, zoned “Rural Residential”, with water, power and telephone available. Bedwell Street is bitumen sealed, and improvements include a metal garage and the parcel has a northerly aspect. The sale was provided to indicate what a smaller rural residential lot sells for in that locality. Mr Payne placed no weight upon the sale.
Sale sold in September 1997 for $96,000.
During the hearing Mr Payne also provided the following additional sales:
· Sale 11 - (Troys Road, Charlton - Lot 30 on Plan AG1970)
(Whittingham Family Trust to unknown purchaser)
This is a notice of contract to purchase an 8.08ha vacant rural residential site, zoned as “Rural B” for $90,000 on 28 January 1998. The land was to be purchased with the intent to use it for a transport terminal. It was argued that a public notice on 13 February 1998 had advertised that an application for town planning consent for that purpose had subsequently been lodged with the Jondaryan Shire Council. The contract, while not then finalised, was conditional only upon finance being available.
The use for a higher purpose other than as a rural homesite indicates, in Mr Payne’s opinion, that people pay more for different motivations for the use of land.
· Sale 12 - (Hursley Road, Glenvale - Lot 11 on RP 140417)
(Beutel to Sondergeld)
This is a 2.34ha vacant rural homesite, zoned “Rural Residential”. The sale sold in January 1997 for $140,000. Mr Payne feels this sale reflects the willingness to pay higher prices in that area than for parcels north of the subjects. It was also noted that Sondergeld was the vendor in Sale 8.
· Sale 13 - (Old Goombungee Road, Wetalla - Lot 150 on Plan A346)
(Lloyd to Holke)
This is a 10.12ha improved rural homesite sale zoned “Rural A”. The sale sold in November 1997 for $82,500. The sale is in the Crows Nest Shire and is located near to the waste water treatment works. Mr Payne believes that sale reflects a market cognisance of the problems with odours in that area, and he draws no comparison with it in his valuation.
The claimants also submitted three other sales in the Cowdor area three kms north of Mr Horrigan’s Sales 1 to 6:
· Sale 14 - (Cawdor Drive, Highfields - Lot 2 on RP 826406)
(Zanow Pty Ltd to Henry)
This is a 2.15ha vacant rural homesite, zoned as “Rural A” and sold in September 1997 for $66,000.
· Sale 15 - (Cawdor Drive, Highfields - Lot 7 on RP 826406)
(Zanow Pty Ltd to Highfield Heritage Estate)
This is a 30.41ha vacant site, zoned as “Rural” and sold in December 1997 for $250,000.
· Sale 16 - (Cawdor Drive, Highfields - Lot 12 on RP 883149)
(Zanow Pty Ltd to Yeates)
This is a 12.5ha vacant site, sold in December 1997 for $142,000.
The purpose of providing Sales 14 to 16 was to demonstrate, in the claimants’ opinion, that although the claimants agree those sales are well outside the immediate locality of the subjects, Sales 14 to 16 cast doubt upon Mr Horrigan’s adoption of his Sales 1 to 6 as indicating a trend in the market. The claimants argue that Sales 14 to 16 demonstrate that there is a separate market for parcels in the Gowrie Junction and Highfields areas compared to the subjects. Mr Allan claims that Sales 14 to 16 are further supportive evidence to demonstrate the selective approach taken by Mr Horrigan in adopting his sales evidence.
I also note that Mr Payne’s Sales 2, 11, 15 and 16 all occurred after the date of resumption, but they may be taken into account as long as, in the circumstances, they are comparable. (See Macthie and Others v. Federal Commissioner of Taxation [1944] 69 CLR 1, at 16). That was also followed in Consolidated Development Pty Ltd v. Commissioner of Main Roads (1968) 35 CLLR 109, at 121.
The matter of consideration by the Court of transactions after the date of resumption, if they might be relevant, was also followed by Their Lordships in Melwood Units Pty Ltd v. Commissioner of Main Roads [1979] 1 All ER 161.
In support of his valuation Mr Horrigan drew comparison with the following sales:· Sale 1 - (Junction Road, Gowrie Junction -Lot 64 on RP 901405)
(Ircon Pty Ltd to Lyons)
This is a 7.25ha vacant rural homesite, zoned as “Residential”, in an elevated position with a north-easterly aspect, and good views. There is access to Junction Road to the west which is bitumen sealed, and to Hayden Road to the south. It is considered to have superior views and aspect, and to be comparable to the subjects (Lots 129 and 130). The sale sold in March 1997 for $83,500.
· Sale 2 - (Old Homebush Road, Gowrie Junction - Lot 18 on RP 27323)
(Ircon Pty Ltd to Johnson)
This is a 4.047ha vacant rural homesite, which sold in March 1997 for $60,000.
· Sale 3 - (Old Homebush Road, Gowrie Junction - Lot 19 on RP 27323)
(Ircon Pty Ltd to Mead)
This is a 4.047ha vacant rural homesite which sold in January 1997 for $63,000.
· Sale 4 - (Old Homebush Road, Gowrie Junction - Lot 20 on RP 27323)
(Unknown vendor to Meurant)
This is a 4.047ha vacant rural homesite which sold in February 1997 for $69,000.
· Sale 5 - (Old Homebush Road, Gowrie Junction - Lot 21 on RP 27323)
(Ircon Pty Ltd to Luck)
This is a 3.642ha vacant rural homesite which sold in March 1997 for $60,000.
Each of Sales 2, 3, 4 and 5 were cleared elevated parcels with good views, fronting a bitumen road, with good aspects. Sales 1 to 6 all have electricity available. Sales 2 to 5 are zoned as “Residential” and were seen to have superior views and aspects to the subjects (Lots 127 and 128), but because of their small size were seen as inferior to Lots 127 and 128. While the “Residential” zoning does allow some potential to subdivide into 2,000 square metre lots, because of their relatively recent subdivision any potential for that purpose was not considered.
· Sale 6 - (Shirley Road, Gowrie Junction - Lot 11 on RP 825745)
(Hayden to Ircon Pty Ltd)
This is a 21.70ha vacant rural homesite which is elevated and cleared with some low-lying flats and gullies. The sale is zoned as “Rural Residential”, and was sold in June 1997 for $100,000, and was seen to support Sales 1 to 5.
There was advice that Sale 6 is now back on the market in conjunction with an adjoining parcel (Lot 35 on RP 856493) at an asking price of $375,000 for the total area of 50.79ha.
· Sale 7 - (Gowrie-Birnam Road, Gowrie Junction - Lots 415, 416 and 417 on Plan A34873).
(Minglehill Pty Ltd to Cattell)
This is a 28.64ha vacant site which is zoned as “Residential” and is seen to have subdivisional potential as it adjoins existing subdivisions. However Mr Horrigan did not discount the sale price because of subdivisional potential, and compared the subjects with Sale 7 as a rural homesite. Sale 7 sold in November 1996 for $330,000.
· Sale 8 - (Hayden Road, Gowrie Junction - Lot 66 on RP 883108)
(Minglehill Pty Ltd to Cattell)
This is a 7.33ha vacant site, adjoining Sale 7, zoned as “Residential” and has subdivision potential. The sale sold in September 1996 for $190,000.
· Sale 9 - (Hayden Road, Gowrie Junction - Lot 414 on D361134)
(Castle to Edwards)
This is a relatively flat cleared improved site on a corner and backing onto Gowrie Creek. There is an aged weatherboard dwelling which was analysed by Mr Payne to have an added value of $50,000, and a land value at $90,000. It was also noted that Sale 9 was to an adjoining owner (Edwards).
The sale sold in March 1994 for $140,000.
· Sale 10 - (This is the same sale as Mr Payne’s Sale 5).
· Sale 11 - (This is the same sale as Mr Payne’s Sale 4).
(8) Department of Main Roads’ Settlements:
In seeking to further understand the reliance placed upon the Department of Main Roads’ settlements by Mr Payne, copies of the individual valuation reports for those settlements were provided (Exhibits 27 to 33).
It was noted that Mr Horrigan provided all of those separate valuations, but in some cases he was not privy to the final conference with the former owners, nor any special considerations entered into by the respondent with those owners.
In each case the properties, which were the subject of final agreements with the respondent, were valued on a direct comparison approach on the basis of their being rural residential homesites.
| Mr Payne’s Sale | Lot No | Area | Mr Horrigan’s Market Value | Date | Settlement Amount | Date |
| Sale 1 | 15 | 8.478 | $265,000 | 15/5/97 | $270,000 | 26/ 8/97 |
| Sale 2 | 391 | 4.459 | $270,000 | 20/5/96) | $402,500 | 02/12/97 |
| Sale 2 | 392 | 9.012 | $120,000 | 15/5/97) | - | - |
| Sale 3 | 105 | 8.094 | $81,000 | 07/03/96 | $ 82,440 | 31/01/97 |
| Sale 6 | 393 | 14.04 | $175,000 | 20/05/96 | $205,000 | 26/06/96 |
| Sale 8 | 68,69 & 93 | 24.613 | $471,500 | 20/03/97 | $471,500 | 12/05/97 |
| Sale 9 | 71 | 8.094 | $177,500 | 08/08/97 | $182,000 | 11/11/97 |
In his analyses of the above sales Mr Horrigan then estimated the land components of each sale, and now compares those sales with the subject as follows:
| Sale | Land Component | Comparison on a site basis |
| 1 | $125,000 | Superior |
| 2 (Lot 391) | $103,000 | Slightly Superior |
| 2(Lot 392) | $120,000 | Superior |
| 3 | $ 81,000 | Not Compared |
| 6 | $120,000 | Superior |
| 8 (Lots 68/69 & 93) | $246,000 | Inferior |
| 9 | $ 90,000 | Comparable |
In determining those values for settlements, Mr Horrigan gave evidence that he used all the available sales in the Jondaryan Shire, and the majority of sales in the Rosalie Shire. While there were no detailed sales schedules provided for Sales 1 and 2 (Lot 392), schedules of sales were provided for Sales 2 (Lot 391), 3, 6, 8 and 9. An analysis of the total sales used for those purposes reveals:
| Sale | Common Sales Used | Dates |
| 2 (Lot 391) | 3, 6, 8 & 9 | 1994-95 |
| 3 | 6, 8 & 9 | 1994-95 |
| 6 | 3, 8 & 9 | 1994-96 |
| 9 | 8, 6 & 3 | 1996-97 |
In summary it would be reasonable to conclude that, based upon the sales available at the time, Mr Horrigan had valued Mr Payne’s Sales 1, 2, 3, 6, 8 and 9, between June 1996 and December 1997, as rural homesites on a direct comparison basis with other comparable rural homesites in the Jondaryan locality.
Following discussions with the former vendors, Mr Payne has estimated the legal and valuation fees for those settlements as follows:· Sale 1 - Nil
· Sale 2 - $1,800
· Sale 3 - $1,440 (Mr Horrigan estimated $2,440)
· Sale 6 - Nil
· Sale 8 - $2,500
· Sale 9 - $750
In analysing then the adjusted settlements, allowing for legal and valuation fees, I find the following comparisons:
| Sale | Adjusted Settlement | Mr Horrigan’s Market Value | Percentage Variation |
| 1 | $ 270,000 | $ 265,000 | 98.2% |
| 2 | $ 400,000 | $ 390,000 | 97.3% |
| 3 | $ 80,000 | $ 81,000 | 101.25% |
| 6 | $ 205,000 | $ 175,000 | --- |
| 8 | $ 469,000 | $ 471,500 | 100.5% |
| 9 | $ 181,250 | $ 177,500 | 97.9% |
If I disregard Sale 6 because of the interlocutory nature of Sales 4, 5 and 6, I find that each of those settlements, after allowing for legal and valuation fees, correlate closely with Mr Horrigan’s estimated market values. Such a close relationship indicates that it would be appropriate to place a reasonable level of weighting to the adjusted settlement figures when comparing them to the subject.
Indeed it would be anticipated that such a correlation should exist, as the respondent, as a responsible Government authority, is virtually required by statute to pay the market value of the land. That was noted in Merivale Motel Investments Pty Ltd v. Brisbane Exposition and South Bank Development Authority (1988) 2 Qd R 562, at page 567. In that matter the Full Court of Queensland found that it could be a relevant matter to consider a settlement of a claim by other land resumed in fixing the value of the appellants’ land. Indeed Dowsett J, when considering whether the onus should be upon the claimant to establish the relevant circumstances of the settlement, said at page 567:
“I realise that some of the cases suggest that the onus is upon the person seeking to rely on a settlement to establish the relevant circumstances surrounding it, however I cannot accept that this is so when the resuming authority in respect of that settlement is also a party in the proceedings in question. To put the onus on the landowner to establish the circumstances surrounding the settlement would in such a case be a nonsense as the matter would be peculiarly within the knowledge of the resuming authority.
I can see no justification in principle or in common sense for treating settlements as other than sales, I concede that in certain circumstances there may be problems, but I think they can best be left to be dealt with by appropriate evidence and an adequate application of common sense on the part of the valuation tribunal. ”
Knowledge of the actual amount paid for land as part of a settlement is important, as noted by the learned President in A Varitimos v. Queensland Electricity Commission (A89-90) 20 June 1991, unreported at page 32. The correlations above demonstrate that point and confirm the level of weight applied to the comparisons.
Impact of the Proposed Bypass Road:
As further evidence of the pervasive influence of the proposed bypass road, Mr Payne provided information of an offer to purchase a nearby property to the subjects (Lot 134). That property owned by the claimants had been the subject of repeated enquiries to real estate agents over the last few years. It is claimed however, that once the enquirers became aware of the proposed road, they lost interest. To support that thesis Mr Payne provides evidence of an offer to buy Lot 134, and a contract signed by a potential purchaser for $105,000. Once the potential purchaser became aware of the adjoining proposed roadworks, she had the contract offer withdrawn and destroyed.
In seeking comparison between Lot 134 and the subject, it was agreed that that parcel had a higher elevation, fronted the bitumen sealed Gowrie Junction Road and has telephone and electricity available. However Mr Payne felt that because of the more gentle slopes of the subjects and their northern aspect and views, they were superior to Lot 134. Mr Horrigan disagreed and saw Lot 134 as superior.
There was also an existing old run-down colonial dwelling upon Lot 134, which was seen to provide an added value of $1,000 to $3,000 by Mr Payne. Mr Horrigan later estimated the added value of the dwelling at about $10,500, together with a further $3,500 for a shed. There was some disagreement in respect of the level of disrepair of the dwelling, with Mr Allan arguing that estimates from reliable trades persons had concluded that it would cost $23,500 to restore the dwelling to a habitable condition. Mr Horrigan felt that was a high estimate, but agreed that if added to his added value of the existing dwelling at $10,500, the restored value of the dwelling at $34,000 was to be compared to an estimated cost for the 39 square metre building at $800 per square metre at $31,200 for a new dwelling.
Mr Payne also argues that the four subjects were also informally on the market as rural residential sites at $120,000 each during 1996, and about ten enquiries were received. However, in his opinion, once the proposed bypass road influence became known to the enquirers, they ceased negotiations.
Mr Horrigan countered that by suggesting that the reason why the enquirers did not proceed was because the asking price was too high. He also argues that where a property is likely to be affected by a road, then its potential value to the owner for the purposes of a road in the marketplace would be less than what it would be as a rural homesite in the absence of any roadworks. For this reason he could not agree that the highest and best use of the land could be for road purposes. He also noted that if the subjects had been valued for grazing purposes, then the value, in his opinion, would have been even lower.
While the offer for Lot 134 was not consummated as a sale, Mr Allan sought support that the offer should be given some weight in the findings of the Land Appeal Court in Remanous v. Brisbane City Council (1968) 35 CLLR 249. In that matter the findings of the High Court of Australia in McDonald v. Federal Commissioner of Taxation (1915) 20 CLR 231, were analysed in as much as whether “the line of demarcation is drawn at actual contract” (page 253).
In the Remanous matter, the parties had entered a legally binding contract to purchase the owner’s land but, by mutual consent, that had been rescinded. Subsequently the Brisbane City Council acquired the property at a lower figure, and the claimant then appealed, claiming that the former contract had set the quantum of the value of the land. The Land Appeal Court found that there had been a “binding contract” between the parties (page 253), at a price which reflected the value of the property. However, the Remanous finding is distinguished in the present matter as there was no binding contract for Lot 134 between the parties, and there was no mutual agreement to terminate the offer.
The matter of what weight may be given to an offer was also considered by the Land Court in Hall and Another v. Chief Executive, Department of Transport (A95-33), 14 November 1997, unreported, where the learned Member analysed the findings of Wilcox J in Goold v. The Commonwealth (1993) 79 LGERA 407. In the Goold matter Wilcox J found at page 417:“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 other considerable. ”
The learned Member in Hall went on to consider the precedents in respect of offers, and the significance attached to them, and noted at page 75:
“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.”
In the end the learned Member found only that the terminated contract provided some guidance in respect of the “lowest price that the claimants were willing to accept for a cash contract” (page 76). The weight to be applied to an offer was also considered in Blefaria v. The Minister (1962) 8 LGRA 1, where Else Mitchell J said at page 5:
“It seems clear to me, however, that the probative value of an offer must depend upon its being in the nature of an open offer by a potential purchaser and when an offer is subject to a condition, such as the acquisition by the potential purchaser of other land, its weight would be slight, if not negligible.”
While in that matter the offer included a conditional component in the written offer, in the current matter the offer on Lot 134 by inference, included an unspecified understanding that Lot 134 was free of any possible impacts from other sources. In the end, when the offerer became apprised of the bypass road, the offer was withdrawn. However in all of the above offers the courts were presented with written evidence of the offer, in the current matter only verbal testimony has been provided of the existence of the offer, and I would distinguish it also for that reason.
The lesser weight placed upon an offer when compared to completed sales was also considered in Yates Property Corporation Pty Ltd v. Darling Harbour Authority (1990) 70 LGRA 187, at 211.
Decision:
(i) The Nature of the Land
I turn first to the nature of the land and note that there is agreement between the parties in respect of the physical features of the subjects, and the services available to them. While there is a slight difference of opinion between the valuers in respect of vehicular access to Lots 127 and 128 in heavy rain, that is not really an issue. I note also that it is agreed that the most likely method of providing electricity to the sites for direct comparison purposes would be along Holmes Road at the estimated cost supplied by the South-East Queensland Electricity Commission (SEQEC):
Lot 127 - $ 8,250
Lot 128 - $ 7,180
Lot 129 - $ 5,700
Lot 130 - $ 4,300
The valuers had compared their sales on the basis of electricity being available to each site, similar to that available for Lot 130.
In seeking relativity between the four subjects, Mr Horrigan saw Lots 130 and 129 as of equal value and Lots 127 and 128 to be equal but of lesser valuer than the former. Mr Payne saw Lot 130 to be the highest value, then Lot 128, 129 and 127. Based upon the topography, access, views and availability of services, I believe Lot 130 is the most valuable, reducing then westerly to Lot 127 which is the least valuable.
(ii) The Method of Valuation:
Fundamental to the difference between the parties is the different approach taken by the valuers in determining the highest and best use of the subjects. Mr Payne has analysed matters settled with the respondent for road purposes as reflecting a higher level of value than other sales in the area. Because of a paucity of sales for rural homesite purposes, he has concluded that the highest and best use of the subjects would be as land acquired for road purposes.
In seeking determination of the highest and best use as to be for road purposes, Mr Allan draws guidance from the findings of the Land Appeal Court in AK and SS Gallagher v. Brisbane City Council (1975) 2 QLCR 368, at 380, where the principle of establishing the present value of the present or future potential of the land is discussed. The Land Appeal Court noted that while zoning of land will always affect the highest and best use of the land, it does not create that highest and best use, which remains constant, although changes in zoning may facilitate or inhibit its realisation to the owner. The impact of zoning upon the land was also discussed by Wells J in The Minister v. Petroccia [1982] 30 SASR 333, at page 343.
A matter which bears heavily upon the determination of the present value of the subject is the nature of the marketplace at the time of resumption. As in all compensation matters for the resumption of land, the question to be answered is what is the value to the dispossessed owner of his estate and interest in the land? Mr Allan draws guidance in that matter from Hudson and Sons Pty Ltd v. Commissioner of Main Roads (1981-82) 8 QLCR 150, where the matter of whether winnable clay deposits were to be taken into account as part of the resumption was involved. The learned Member concluded at page 163:“ As I have already said in land acquisition the marketplace with all its associated forces, practices, etc., is the paramount consideration. ”
Clearly the existence of a market for the land necessitates the presence of willing and not anxious vendors and purchasers. It is Mr Payne’s argument that such a market did not exist in the locality of the subject, because of the proposed bypass road. He draws support for the need for continuing demand for the land in Hustlers Pty Ltd v. Valuer-General (1967) 14 LGRA 269, at page 274.
Mr Horrigan argues that there was a demand for rural homesites in the locality, and rejects the use of settlements by the respondent in view of the uncertainties associated with final figures agreed. Mr Jones argues that a demand for rural homesites was demonstrated by the affidavit of Mr RG Caton, the real estate agent who handled the contract for Lot 134 (Exhibit 17). Mr Caton noted that there had been enquiries about Lots 134 and 135 at the rate of one or two calls per week, with asking prices of $120,000 to $150,000 for each parcel. Mr Jones concludes that it was really the asking price which was too dear that mitigated against the sales becoming consummated.
Before seeking guidance from precedents on this issue I note that there would appear to be no specific features of the subjects that would influence the location of the future road upon the subjects, save that they happen to fall within the overall final route chosen. Because of this lack of any particularity and uniqueness in relation to the road alignment, other than its physical location, the subjects may be distinguished from the findings of the Privy Council in Sriraja Vyricherla Naryana Dajapatiraju Bahadur Guru v. Revenue Divisional Officer, Vizagapatam [1939] 2 All ER 317 (the Raja case) on that issue.
However Mr Allan argues that Raja also provides guidance in absence of other sales where Lord Romer said at page 323:“For these reasons, their Lordships have come to the conclusion that, even where the only possible purchaser of the land’s potentiality is the authority that has obtained the compulsory powers, the arbitrator in awarding compensation must ascertain to the best of his ability the price that would be paid by a willing purchaser to a willing vendor of the land with its potentiality in the same way that he would ascertain it in a case where there are several possible purchasers.”
Mr Allan argues that there is no better way to determine what the respondent would pay as a willing purchaser in similar circumstances in the locality, than to analyse previous amicable agreements with other vendors where there was no threat of compulsion.
He cites in support of that thesis the findings of the Land Appeal Court in HKN and S MacDonnell v. The Crown (1940) 18 QCLLR 38, where the Land Appeal Court determined that there was only one possible buyer of the land with a particular potentiality of value to him. In that matter the land was seen to have a value for quarrying purposes, and the Land Appeal Court found that the compensation due to the owner should be “at the sum which the Crown in a friendly negotiation would be willing to pay for the land at the date of resumption in order to acquire them for that purpose” (page 43).
However in determining the highest and best use as to be for road purposes, Mr Payne has the difficulty of running counter to the established principle that any effects upon market value as a consequence of the scheme, are to be ignored. That is a requirement of section 20 of the Acquisition of Land Act 1967, and also defined in Pointe Gourde Quarrying and Transport Company Limited v. Sub-Intendent of Crown Lands(Trinidad) [1947] AC 565, and later upheld by the Privy Council in Melwood Units Pty Ltd v. Commissioner of Main Roads (1979) AC 428, at 434:“ Under the principle in Pointe Gourde Quarrying and Transport Company Limited v. Sub-Intendent of Crown Lands (1947) AC 565, the landowner cannot claim compensation to the extent to which the value of his land is enhanced by the very scheme of which the resumption forms an integral part: the principle in Their Lordships’ opinion operates also in reverse.” (See also [1979] 1 All ER 161, at 165).
That was later followed by the Land Appeal Court in JR Steven v. The Commissioner of Water Resources (1990-91) 13 QLCR 75, at 79, although in that matter the argument centred around the definition of the “scheme” and the fact the scheme at the time of any enhancement was not the same as at the time of acquisition.
In understanding the statutory direction of section 20 of the Acquisition of Land Act, I note that the value to be determined includes any severing of the land (section 21(a)), and any injurious affection (section 21(b)), and any enhancement may be set off or abated against the level of compensation (section 20(3)) but shall not require any payment as a result of any enhancement by the claimant (section 20(4)).
In considering the impact upon the market value of lands in the area of influence of the new bypass road, I note also the findings of the High Court of Australia in Housing Commission (NSW) v. San Sebastian Pty Ltd (1976-79) 37 LGRA 214, where Jacobs J said at page 222:“ A difficulty which arises in the application of this principle is that valuation is in the ordinary case based on market value and, if the proposed public purpose and the possibility or likelihood of resumption therefore has become known prior to the date of resumption, the market value at the time of resumption will probably affect by way of increase or decrease the possibility of likelihood of resumption for that public purpose. Therefore that value cannot be accepted. Yet it is inevitably in most cases the starting point of the process of valuation. With the actual market value at the time of resumption as the starting point it is then necessary to determine whether that value has been depressed or elevated by the market’s foreknowledge of the possible or likely public purpose and consequent resumption. It is therefore inevitable in such circumstances that the public purpose has to be taken into account in the process of valuation but it can be taken into account only for that purpose.”
I note also Mr Horrigan’s valuations which formed the bases of the separate agreements with the respondent for Mr Payne’s Sales 1, 2, 3, 6, 8 and 9, and note that those valuations were based upon comparisons of sales of rural homesites in the open market, and gave guidance to the relative relationship between the then market value and the agreed settlements achieved for road purposes.
In seeking to understand Mr Payne’s concerns that, because of the proposed bypass road, there was no identifiable market in the area of the subject for rural homesites, I note the findings of the High Court in Nelungaloo Pty Ltd v. The Commonwealth and Others [1947-48] 75 CLR 495, at 507:“ In the absence of a market, the value of the property taken must be ascertained by estimating the sum which a reasonably willing vendor would have been prepared to accept and a reasonably willing purchaser would have been prepared to pay for the property at the date of the acquisition. The value of the property is its value to the seller, so that it has been said that the most practical form in which the matter can be put is that the plaintiff is entitled to receive the sum which a prudent purchaser would have been willing to give for the property sooner than fail to obtain it. (Pastoral Finance Association Limited v. The Minister) (1914) AC 1083, at page 1088. ”
However Mr Payne goes on to also provide sales of “arms length” transactions at his Sales 7, 10, 11, 12 and 13, while Mr Horrigan also provides Sales 1 to 11. The presence of these sales helps to distinguish the present matter from MacDonnell (supra). It could therefore hardly be argued that there was no market for rural homesites, although there is argument about the relative weight that should be applied to some of those sales.
However while I believe it would be unwise to merely accept the former agreements (Mr Payne’s Sales 1 to 6, 8 and 9) without some caution, I feel the close relationship between Mr Horrigan’s former valuations and the agreement settlements lends some credibility to Mr Payne’s use of them.
Indeed the highest and best use of land was adopted as for road purposes, where it exceeded the value for any potential subdivisional purposes in LR and DM Barker v. Brisbane City Council (1966) 33 QCLLR 28. In that matter the subject land was acquired by the Brisbane City Council as part of the new cross-river bridge connecting Moggill Road to Jindalee. The learned Member found at page 32:“ At all events, I am of the opinion that the claimants were entitled, as at resumption date, to have any potential in the resumed land for road purposes valued, and if that value exceeds its value as subdivisional land, they were entitled to have compensation determined on the higher basis, remembering that `it is the possibilities of the land (as at that date), and not its realised possibilities, that must be taken into consideration’: (Raja case)(supra) at page 313. From this point of view I hold the opinion that Mr Kidson was right in having regard to the sales of land for road purposes in the neighbourhood. ”
However in the current matter what has to be determined is whether, in the absence of any influence of the bypass road, the subjects would have had a higher value as rural homesites. I believe Barker may be distinguished as the subjects in this matter, but for the existence of the proposed bypass road, had attracted considerable interest to potential purchasers. In the Barker matter the learned Member noted at page 32:
“ Certainly, of all the claimant’s land it was not the best land for subdivisional purposes. Indeed, viewed separately as at resumption date, I think it had not a great deal of subdivisional potential. ”
Indeed in the current matter Mr Horrigan noted that in his view “the value determined for the purposes of road or with a property with no demand would be less than the market value. In other words I would consider that the properties would be affected by the proposed road or the blight caused by the proposed road. I think it is incorrect in principle as well” (T.151).
The matter of whether settlements to a resuming authority may be allowed for comparison purposes was explored in SM Marshall v. The Commissioner of Irrigation and Water Supply (1972) 39 QCLLR 214. In that matter the learned Member sought to distinguish between the potential value to the owner as if the scheme did not exist, and the realised potential to the owner once the scheme was developed. In examining one sale (Walter) in that matter it was noted that the sale occurred retrospectively to the date of resumption and the sale was condition upon an agreement that the Commissioner would offer the land back to the vendors as a retention farm within the scheme.
On appeal to the Land Appeal Court (1973) 40 QCLLR 71, the Land Appeal Court found that “compensation should be determined on the basis of the highest and best use of the land in the hands of the owner at date of resumption with due regard to the special advantages of situation and quality attaching to the resumed land”. However that land was included in a new irrigation scheme area, and the Land Appeal Court said at page 81:“ We find that apart from the constructing authority’s scheme the subject land at date of resumption had no potential for irrigation. Its highest and best use in the hands of the owner was for dry farming in conjunction with cattle fattening. The constructing authority was not the only possible purchaser of the land. ”
The Land Appeal Court went on to say at page 82:
“ In our opinion to make the Commissioner pay any amount based on the land’s use to his scheme, over and above the land’s highest and best use at resumption date would be making him pay a premium for the beneficial effect of his scheme and would give the dispossessed owner a bonus over and above `highest and best use’ market value at resumption date. ”
The analogy between Marshall (supra) and the current matter would suggest that the highest and best use of the subjects would be as rural homesites.
A further matter relied upon by Mr Allan is to be found in Jobis Pty Ltd v. Cambletown City Council (1970) 19 LGRA 134, where Hardy J said at page 138:“ Although the land could not be put to any use at the date of resumption, it clearly had a real market value by reason of its position and potentiality. It was apparent that the land would occupy a key position in the redevelopment proposed in close proximity to the railway station. The prospective purchaser would know this and would negotiate and purchase on the basis that he would be able to sell it for its full value to the authority needing it. .... He would inform himself of what purchase price had been paid for other land in the vicinity, particularly for vacant land with the same or substantially similar zoning prospects. These transactions are few in number and are all purchases by the defendant council. ”
Hardy J went on to note that Woolams v. The Minister [1939] AC302, and (1959) 2 LGRA 338, held that sales of comparable lands to the resuming authority were “properly admissible but that they should be used with caution” (page 138).
In Deam Pty Ltd v. South Australian Land Commissioner [1977] 40 LGRA 151, at 158, Jacobs J also followed the principle that there is nothing in law which requires the Court to reject completely the evidence of sales to the acquiring authority. That was also followed in Celtic Agencies Pty Ltd v. South Australian Land Commission (1978) 40 LGRA 172, where Jacobs J said at page 175:“ There is ample authority, which I need not cite, for the proposition that other transactions with the acquiring authority must be viewed with great caution if they are sought to be used as a measure of market value, but they are not inadmissible as evidence. Particularly is that so where, as here, there is virtually no other evidence of value in the locality at the relevant time, since the advent of the commission seems to have driven private developers from the market. Moreover, where the acquiring authority has itself bought in the open market, or the land has been offered to the authority at a figure about which there is no query, such transactions are relevant: Beard v. Director of Housing (1961) 9 LGRA 74. ”
The use of transactions or settlements by compulsory process was also examined in Nardone v. SA Land Commission (1978) 40 LGRA 164, where Jacobs J said at page 169:
“ The valuers were thus left with some twenty transactions in all of which land was acquired under powers of compulsory acquisition, although it was apparently not necessary in every case to complete all the formal steps in that process. The price disclosed in such transactions is not to be ignored as evidence of market value, particularly where it is the only evidence available, but the cases clearly established that the reliability of such evidence is doubtful, and it must be least be approached with caution. ”
The principle of enhancement or diminution in the value of land resumed was also clarified by the Privy Council in Melwood Units Pty Ltd v. Commissioner of Main Roads [1979] 1 All ER 161, which held that “a resuming authority cannot by its project of resumption destroy the potential of the whole 37 acres for development as a drive-in shopping centre, and then resume and sever on the basis that that destroyed potential had never existed”. (Page 165). Adopting the above principles the best method of determining the value would be to analyse sales of rural homesites if they exist. If Mr Payne’s assumption in respect of the highest and best use was not accepted, then he also agrees that use as rural homesites would be appropriate.
(iii) Comparison of Sales:
In considering the comparable sales provided I will initially restrict myself to Mr Payne’s Sales 7, 10, 11, 12 and 13 and to Mr Horrigan’s Sales 1 to 9. In respect of Mr Payne’s Sale 10 I note that is a smaller rural residential site to which Mr Payne places no weight. I will also ignore it in my conclusions. Likewise, Mr Payne’s Sale 11 was for a different land use purpose, and his Sale 12 was merely to demonstrate that purchasers are paying more for land in the Glenvale area, well south of the subjects.
Similarly Mr Horrigan’s Sales 6, 7 and 8 were purchased with future subdivisional potential in mind, and have some difficulties in direct comparisons with the subjects for rural homesite purposes. That then leaves Mr Payne’s Sales 7 and 13, and Mr Horrigan’s Sales 1 to 5, and 9. It is noted that Mr Payne’s Sale 7 is located 3.8kms south-west of the subject, while Mr Horrigan’s sales are all in the Gowrie Junction area 3 kms north of the subjects, and Mr Payne’s Sale 13 is 4.8kms north-east of the subjects.
I note first that Mr Horrigan’s Sale 1 is seen to have superior views and aspects, and is overall comparable to the subjects. While Sale 1 is zoned as “Residential” Mr Horrigan believes there are development constraints and timing matters which add little to its higher potential for subdivision purposes into smaller parcels. I note that the Town Plan of the Crows Nest Shire shows that “Residential B” land may be subdivided into average size parcels of 3,000 square metres. However, in comparing the area of Gowrie Junction, Mr Payne believes that is a different market to the subjects, and values in that area in his opinion suffer a public perception of being impacted by odours by the water treatment works and a tannery. While the treatment works have subsequently been upgraded, the tannery continues to exist. I believe there is sufficient evidence to indicate that purchasers in the Gowrie Junction area continue to be influenced by the historical nature of the area. Mr Payne’s Sale 13 would appear to support that conclusion.
In considering comparable sales of lands which have a different highest and best use, I note that was discussed by the Land Court in Macuga and Others v. Chief Executive, Department of Lands (V95-64), 8 August 1996, unreported. The learned Member in that matter, where there was a paucity of sales, found at page 12:“ What the authorities I have referred to indicate to me is that whilst it may be appropriate in certain circumstances to strike a valuation by comparing between subject and basic properties having different highest and best uses, the manner of comparison needs to be explicit and must take into account all relevant factors. ”
However because of such uncertainties associated with such comparisons, the learned Member in that matter saw such a comparison “as being useful background”.
When comparing properties with different highest and best uses, even though the two parcels had the same zoning (“Special Facilities”) it was noted in the Land Court in Yalgan Investments Pty Ltd v. Council of the Shire of Albert (A94-94), 8 June 1997, unreported, by the learned Member at page 24:
“ The uses and economic consequences which impact upon value on one parcel may be quite different from the uses on another parcel of land also zoned as `Special Facilities’. I recognise that in the employment of the direct comparison method `adjustments’ need to be made between the sale property and the price finally indicated on the subject land. ”
When comparing comparable sales where there is a paucity of such sales, the risk of the valuer extrapolating an error due to an inappropriate weighting applied to those limited sales, was explored in Waalt Homes Pty Ltd v. Road Construction Authority (1987) 64 LGRA 346, and reported in the Land Court in RT and WL Dare v. Chief Executive, Department of Natural Resources (AV97-173), 12 December 1997, unreported. In considering then Mr Horrigan’s Sales 2 to 5 these are all residential zonings, and each is only about half the size of the subjects. While each sale fronts a bitumen road, and has electricity available, they also suffer the same public perception of the Gowrie Junction area. It is accepted that several expensive homes have subsequently been erected, indicating that the public uncertainty of Gowrie Junction may be dissipating. However the area is separated from the subjects by a railway line and Gowrie Creek and has a separate identity to the Charlton area. The subjects are also only 2 kms north-west of the high quality residential subdivision of Cotswold Hills.
An analysis of Mr Horrigan’s Sale 9 reveals that the sale occurred to an adjoining owner and, while having an analysed land component of $90,000, any direct comparison needs to balance the flat nature of Sale 9, together with its creek frontage, against the higher elevation and better aspect and views of the subjects. Mr Horrigan feels that Sale 9 is probably comparable to the subjects, however he gave evidence that he had placed little weight on that comparison, because of the older age of the sale (1994), and as it was a purchase by an adjoining owner.
Comparisons with Mr Payne’s Sale 7 ($103,000) would appear to provide a reasonable contrast to the Gowrie Junction area in respect of the possible market for rural homesites. That sale is larger than the subjects and has the added value of a dam and an unequipped bore. Mr Payne analysed the land component at $100,000, which he felt had the “same proximity of value”as the subjects (T.15), because of its slope towards the west, its location adjoining the refuse tip, and as access is not directly to the busy bitumen sealed Warrego Highway but from the gravel road to the refuse tip. He concedes there could be some potential for revenue from road signs, although the sale was on the lower side of the highway.
Mr Horrigan did not consider Mr Payne’s Sale 7 in his determination, but had been aware of a previous transaction of that property for $75,000 in January of 1995. He noted that Sale 7 was zoned as “Rural A” while the subjects are zoned as “Rural B”, however that was not really why he had not analysed that sale, but rather that he had just not taken the sale on notice at the time. In hindsight, he acknowledges that he could have analysed that sale, but he felt that there were other sales more relevant at the time. He concedes that in his view “with no consideration for area, its location adjacent to the Warrego Highway could be said to be inferior but there are those factors which have to be considered”. (T.177).
In considering those other factors Mr Horrigan believes that the existing dam and unequipped bore had an analysed value in excess of the $3,000 allowed for by Mr Payne, being more likely approximately $10,000. He did not agree that Sale 7 was inferior to the subjects for the above reasons. Mr Horrigan bases the increased value of the dam and the bore on their use for agricultural purposes, which was the stated objective of the purchasers. However on the bases of its highest and best value as a rural homesite, the added value of the dam and bore for that purpose may be something less. On the evidence before me I would agree that as rural homesites the subjects have at least a comparable value to Sale 7.
In comparing Sale 7 with the subjects, I am aware of the difference in zoning between the parcels. I note that Sale 7 is zoned as “Rural A” and the subjects as “Rural B”. I note that under the Town Planning Scheme of the Jondaryan Shire Council both zonings are intended for the preservation of good agricultural land, and that further subdivision is restricted to a minimum of 80 hectares in “Rural A” and 20 hectares in “Rural B”.
For the purposes as a rural homesite the effect of zoning would be less restrictive on the “Rural B” land, although each of the subject lands is already less than the minimum size allowed, and there is no potential for further subdivision. The difference in zonings would therefore have minimal impact on the highest and best use of either lands.
(iv) Settlements as Evidence of Value:
Having concluded that there is a high level of correlation between the settlements by the respondent, after allowing for legal and valuation fees, and the former market valuations by Mr Horrigan, I accept that Mr Payne’s Sales 1, 2, 6, 8 and 9 each provide a reasonable weighted check against the valuation of the subjects. In applying the appropriate weighting to the opinions of Mr Horrigan and Mr Payne, I note that both have relied as experienced valuers upon sound comparisons of sales of rural homesites. (See Santos Limited v. Valuer-General (1989) 12 QLCR 231).
As a commencing point I will consider Lot 130 initially, and then adjust the relativity between the four subject lands.
Mr Horrigan sees Lot 130 as inferior to Settlement 1 ($125,000), Settlement 2 (Lot 392 - $120,000) and Settlement 6 ($120,000). He believes it is slightly inferior to Settlement 2 (Lot 391 - $103,000). Mr Horrigan also sees it is overall superior to Settlement 8 (Lot 68 - $92,000, Lot 69 - $85,000, and Lot 93 - $110,000). Mr Payne sees Lot 130 as comparable to Settlement 8 (Lot 93 - $110,000). On the basis of those settlements, I would agree with Mr Payne that Lot 130 and Settlement 8 (Lot 93) are comparable.
(v) Disturbance:
In the matter of disturbance for legal and valuation fees it is agreed between the parties that total costs of $2,554.60 are applicable.
(vi) Summary:
On the basis of Mr Payne’s Sale 7 being at least comparable to the subjects, and checking with the above comparisons for Settlements 1, 2, 6 and 8, I would conclude that Lot 130 has a value somewhere between $100,000 and $110,000. I will adopt $105,000. If I then consider the nature of the four subject parcels, the relativity assessed by the valuers, and the level of services available, I determine compensation should be summarised as follows:
Lot 30 = $105,000.00
Lot 129 = $100,000.00
Lot 128 = $ 96,000.00
Lot 127 = $ 93,000.00
TOTAL = $394,000.00
PlusDisturbance
(Legal & Valuation Fees)= $ 2,554.60
TOTAL COMPENSATION= $396,554.60
In accordance with section 28 of the Acquisition of Land Act, the Court may order that interest be paid on the amount of compensation determined. I have no evidence that the claimants have any formal agreement to continue to occupy the subject properties since the date of resumption. Accordingly, I order that the respondent pay to the claimants interest at the rate of 6.5% per annum on the sum of $394,000 (being $396,554.60 less the agreed legal and valuation fees) from 21 November 1997 up to and including the day immediately preceding the date on which final payment of compensation is made.
NG DIVETT
MEMBER OF THE LAND COURT
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