Girgenti v The Commissioner of Main Roads

[1992] QLC 34

[1992] QLC 34

 

LAND COURT, BRISBANE.

August, 1992.

Re: Claim for Compensation A91-97

Rosa Girgenti, Denise Anne Girgenti and Maria Teresa Girgenti v.

The Commissioner of Main Roads

(Hearing at Cairns) J U D G M E N T

This is a claim for compensation consequent upon the resumption by the Commissioner of Main Roads pursuant to the provisions of the Acquisition of Land Act 1967 and that the Main Roads Act 1920 of an area of about 1131 square metres being part of Lot 23 on Plan C19830 County of Nares, Parish of Cairns, contained in Certificate of Title, volume N113, folio 47. Notice of Resumption was published in the Government Gazette of 6th February, 1988, and this is the date at which the value of the land taken is to be determined for the purpose of assessing such compensation.

Background

The land has been resumed in connection with the Cairns Southern Access Road. Prior to the resumption, the land consisted of an area of 19,830 square metres, zoned Rural C under the Mulgrave Shire Council Town Planning Scheme. An area of approximately 6,960 square metres is affected by three QEC easements on the eastern side of the property. The land itself is relatively flat and somewhat low-lying. Before resumption it was situated approximately 8 kilometres via the Bruce Highway south of Cairns and access to the property itself was by means of March Street, a formed gravel access road from the Bruce Highway over a railway crossing. This road connected with an unnamed road to give access to a sewerage treatment plant, situated about 500 metres to the north east of the subject land.

Before the resumption the subject land and most land in the immediate vicinity

was unused apart from the sewerage treatment plant and a number of non-conforming uses tolerated by the Council, including an earthmoving contactors' depot, a sandblasting operation and a truck wrecking business.

After the resumption the access via Marsh Street was eliminated as the Southern Access Road intersects with the Bruce Highway at the approximate position of the former Marsh Street intersection. The resumption took 1160 m2 from the north- west corner of the subject land, in addition to a substantially larger area from the neighbouring property to the west (Tonion).  Access to the subject land is now from the

Southern Access Road via a gravel road from the north-western corner of Tonion's remaining land, which proceeds easterly to the corner of the sewerage treatment plant, then turning southerly before turning westerly to the subject land. The distance by this means of access to the subject land is about 750 metres, compared with only 300 metres prior to resumption. The result is that although the subject land now has frontage to the Southern Access Road, direct access is not available.

Although the property is zoned Rural C, the evidence indicates that the longer term potential of the land is for industrial purposes and there is no disagreement between the witnesses about that. In October 1987, the land immediately to the north- east of the subject land (the Willi K site) received Council approval for rezoning from Rural  C  to  Noxious  and  Hazardous  Industry,  subject  to  compliance  with  certain

conditions, which included the following -

.contribution  towards  the  provision  of  water  supply  headworks  sewerage headworks, an estimated contribution of $14,540

.responsibility for works external to upgrade the water supply to service the site from the Bruce Highway

.        conribution towards provision of sewerage headworks, estimated contribution

$14,025;

.responsibility for works external to connect the site to the sewerage treatment plant

.        upgrading the roads on the frontage to provide a minimum of concrete curb and

channelling in 3.5 metre alignment and 8 metres of sealed pavement, a contribution of $20,000 also to be made towards the upgrading of roads from the Bruce Highway to the site and dedication of any road reservation required in connection with the southern heavy vehicle access.

.          the site to be landscaped and that landscape maintained;

.supply car parking on the site in the order of one parking bay per employee.

All three valuer witnesses agree that the resumption has the following effects:

.        the area of the subject land is reduced by 1160 square metres;

.        access to the subject land is a longer distance and inferior;

.        the subject land has direct exposure to the Southern Access Road.

However, they disagree as to how these consequences of the resumption affect the value of the land.

Valuer Coonan's Approach

Mr Glen James Coonan, registered valuer and a director of HTW Valuers, was the only witness for the claimants. Mr Coonan, as did the other valuer witnesses, approached the assessment of compensation by means of the before and after method of valuation. Mr Coonan considered that before the resumption the highest and best use of the subject land lay in its potential for rezoning for industrial purposes and its potential for subdivision. Before resumption, the subject property was within 300 metres of the Bruce Highway by direct and easy access, there was also a formed road along its western boundary, giving access to the sewerage treatment plant. Mr Coonan said it was practicable to subdivide the subject property into four blocks from that road in such a manner that would allow the area encumbered by the powerline easements to be utilised for parking, landscaping and turning access, allowing maximum use to be made of the unencumbered area.

After resumption, Mr Coonan considers that the subject land has lost it subdivisional potential as it is further removed from a major road, access being now some 750 metres instead of 300 metres, part of it by an inferior road.  In addition, the

resumption eliminates the road on the western boundary and in order to subdivide in the manner previously outlined, a service road would have to be constructed, thereby reducing the useable area of the subject land. As far as the exposure to the Southern Access Road is concerned, Mr Coonan considers that such exposure only gives benefit to those uses that can capitalise on it. He thinks it is extremely unlikely that the subject property could be utilised for purposes that would benefit from that exposure.

There was no subdivisional potential after resumption, he said, because of the increased costs associated with external works and the greater distance of construction of road access. Roads would have to be constructed along two frontages and use would have to be made of part of the subject land for a service road on the western boundary. He considers that the greatest consequence of resumption is the greater distance from the subject land to an access point onto a major road, and this reduces both its useability and its future potential.

To arrive at his valuation before resumption, Mr Coonan prepared a hypothetical development analysis of the subject property, adopting gross realisations which he thought would be achievable at the relevant date. In this respect he had regard to the development of two larger properties, one situated north of Cairns on the Captain Cook Highway and the other in Newell Street at Cairns, with areas of 2.9 hectares and 3.613 hectares respectively.  He then prepared a hypothetical development analysis of the subject property and in this analysis he adopted similar parameters in terms of costs and profit margin, etc. allowing for inflationary factors. Mr Coonan's analysis demonstrated a value of $250,000 or $12.60 per square metre for the subject property, before resumption.

Mr Coonan also looked at the subject land on a site basis and he considered that the best evidence was provided by his Sale No.4, a 2.023 hectare property in MacCoombe Street in Cairns, which sold for $245,000 or $12.11 per square metre in April 1986. He says that this property is inferior to the subject property and considers that this sale also supports his contended figure of $250,000 before resumption.

In assessing the value of the subject land after resumption,. Mr Coonan had regard to three sales, in addition to his Sale No 4, already mentioned.  Sale No. 1, a

1.06 hectare property on the Bruce Highway at Edmonton, sold in December 1987 for

$150,000 or $14.34 per square metre. Sale No.2, also on the Bruce Highway at Edmonton, a 2.62 hectare property sold for $200,000 or $7.62 per square metre in 1988. Sale No.3, a 1.98 hectare property situated off the Bruce Highway at Woree, sold in April 1988 for $150,000 or $7.46 per square metre. With regard to Sale No.4, Mr Coonan considers that the situation is reversed, and that after resumption Sale No.4 is superior to the subject land.

On the basis of these sales Mr Coonan arrived at a value of $150,000 after resumption and considers that there is no longer subdivisional potential. Having arrived at a valuation of $250,000 before resumption and $160,000 after resumption, Mr Coonan's assessment of compensation is $90,000.

It emerged that in his hypothetical development of the subject land before resumption, Mr Coonan had allowed $75,000 for the cost of providing access to the Bruce Highway from Marsh Street.  It was suggested that this was inadequate and that it should have been $225,000, because Queensland Rail would require lights at the rail crossing.  It also emerged that the Mulgrave Shire Council had been trying to establish a development control plan with the agreement of the owners in this area, so that they would make individual contributions to the development of the area. The Girgenti's share of this was to be $129,027. However, no agreement had been reached by the owners and the development control plan appeared to have lapsed. In the absence of such a control plan, the first landowner in the area to subdivide or develop would be required to provide proportionally more of the infrastructure because the others would not be contributing to the costs. This would obviously affect the subdivisional potential of the area.

Following extensive cross-examination on the immediate subdivision potential of the subject land in the before situation Mr Coonan explained how he assessed the

subdivision potential of the property.    To quote from his answer at page 46 of the

transcript -

"I thought there would be a variety of types of buyers who would take a different view to it. I believed that there would be buyers who would look at the property to analyse its potential for immediate subdivision and would be interested in that property. However, when I've compared the property I've really looked at the sales on a site basis and have had regard to this potential for subdivision and whether it be immediate or down the track ... I suppose what it really is is when you look at the property in before situation it was close to this area, ... The Council had indicated that their preferred use of the area was industrial. It was within reasonable proximity to the access point to that area. Someone buying the property at that time would have had that potential in the back of their mind, I believe."

The Evidence of Engineer Elaurant

Mr Scott Andrew Elaurant, Developments Engineer employed by the Department of Transport, tendered a written report indicating that if there had been an application to rezone the subject land prior to resumption, the Department would have required an upgrading of the Marsh Road/Bruce Highway intersection to safely handle the volume of traffic likely to be generated from the proposed site. The Department would have requested this to be included in the conditions of the rezoning by the Mulgrave Shire Council. It is normal practice for the Council to require such access to the declared road system to be upgraded to the requirements of the District Manager of the Department of Transport. Mr Elaurant based his report on the assumption that the rezoning would have resulted in a 2 hectare light industrial site with a gross floor area (GFA) of 8000 square metres. That would produce an estimated 720 vehicle trips per day, or 72 in the peak hour, and taking into account the volume of traffic on the Bruce Highway at that date, the NAASRA Guide to Traffic Engineering Practical (Part 5 Section 5.8), such traffic volumes would require the construction of a Type C intersection.

Mr Elaurant said it was likely that Queensland Rail would also have required the installation of warning signs and flashing lights at the rail crossing on Marsh Road.  The

cost of constructing the access intersection and the rail crossing in 1988 had been estimated at $225,707. Mr Elaurant supplied details and the rationale for his estimate.

Mr Elaurant also said that during construction of the Southern Access Road the subsoil conditions encountered near the intersection with Marsh Street were the worst in the whole of the project. This was with regard both to soil hardness and the problem with water, which was literally springing out of the ground, presumably from subsurface pressure in the area. He declined to say whether the same subsoil conditions would be encountered on the subject land adjacent, but indicated that it was certainly a possibility and it would need to be investigated. If such subsoil conditions were encountered then there would be a problem with any form of heavy construction on the land, as it would require considerable works, such as a significant amount of fill, which would have to settle over a long period before construction of any sort of foundation without risk of subsequent movements. In addition, any sort of pavement of parking area over which heavy vehicles turned, would be likely to break up without some sort of treatment to stabilise it.

Mr Elaurant was cross-examined about to the estimated vehicle traffic generated by the rezoned subject land. He admitted that there were some industrial uses which could general far fewer than 720 vehicle trips per day. He made it clear he was considering the block as one 2 hectare light industrial site and said that, generally speaking, if the land was subdivided the traffic generation goes up slightly, so that you get more traffic from two 1 hectare blocks than you would from one 2 hectare block. However, he said that there would be some light industrial uses which generate more than that number of trips, for example a furniture warehouse. When pressed on the matter, Mr Elaurant said that the design figures which produced these results are the ones which are used throughout the State and they are the ones that would permit a safe operation. Once  you get above 20 vehicles per hour you need a Type C intersection.

When questioned about the railway crossing lights that would be required, Mr

Elaurant said that Queensland Railways were trying harder to control the number of access points across their major routes and it was quite possible they may not have permitted a crossing at Marsh Street at all, in which case if there was another alternative available, they may have requested that that be developed instead of the Marsh Street crossing. He admitted that there were many existing crossings where there are not lights, in any new development it would be considered appropriate that that type of railway crossing should be put in.

The Evidence of Town Planner Robinson

Mr Peter Robinson, consultant town planner to the Mulgrave Shire Council, presented a town planning report which discussed the site and surrounding lands and the locality in which the subject land is located, its physical characteristics and the services and infrastructure that would have to be provided development took place on the subject land. He considered that the intersection of the Bruce Highway and Marsh Street was inadequate for anything but very minor traffic volumes with no tapes or passing lanes available. The crossing of the North Coast Railway line was narrow and rough and of unsatisfactory gradient for a road of other than very low traffic volumes.

Mr Robinson's report also outlined the difficult physical characteristics of the area apart from natural constraints in relation to topography, drainage and soil type, there were others such as the existing pattern of allotments and roads, the electricity easements, limited road access and the proximity to the sewerage treatment plant. The area was never going to be easy to develop and development costs were likely to be high, but the Council indicated in the mid 1980's that the most likely future use of the area would be for industrial uses, probably light industrial. The general Council attitude was that while it was not opposed in principle to rezoning for light industrial purposes, the Council was not prepared to bear any of the cost associated with developing the land, including the provision of road works, sewerage or water supply reticulation.

In mid to late 1989, the Council agreed to fund a study of how access, services and drainage could be provided to the area and the cost apportioned between the

various landholders. Agreement as to funding has never been reached and although the study continues it has not been concluded. The study does however provide a reasonable basis for costing overall development in the area, with the current estimate of basic road works, drainage, water supply reticulation and sewerage reticulation amounting to just under $5,000,0000 for a gross area of around 34 hectares (including an allowance for filling averaging .25 metres at $15 per cubic metre).

Mr Robinson also included in his report details of three applications for rezoning in the immediate vicinity of the subject land. All this rezoning application activity has occurred since the implementation of the Cairns Southern Access Road planning. The first application was lodged in May, 1987 by Willie K Pty Ltd, which has already been discussed. The second is an application by Hallstat Pty Ltd for the rezoning of 3.931 hectares adjacent to the North Coast Railway line, which was lodged in April 1989 and approved by Council in October that year. The rezoning was from Rural C to Light Industry and is currently subject of a Planning and Environment Court appeal in relation to conditions. The third application lodged in January 1991 and approved by Council in April of that year, is for rezoning from Rural C and Light Industry in relation to land owned by Tonion Investments Pty Ltd, the land immediately to the north of the subject land. It is also subject of a Planning and Environment Court appeal in relation to conditions.

Mr Robinson comments that the subject land has potential as future industrial land but it is difficult and expensive to develop. None of the three approvals issued by the Council has been effectively acted upon and two of the owners have appealed against conditions imposed by the Council. In town planning terms he considers the most significant advance to the area has occurred in recent times with the construction of the Cairns Southern Access Road. This road has effectively eliminated the pre- existing problems in relation to an access to the Bruce Highway and a crossing of the North Coast Railway line which were not only severe economic constraints, but also physical constraints, bearing in mind the road pattern and the location of the intersection

with Marsh Street and the Bruce Highway. In a before and after analysis Mr Robinson details the type of works that would have to be undertaken in developing the subject land both in the before and after situation. After resumption, all the difficulties and expense of providing a rail crossing and proper intersection between Marsh Street and the Bruce Highway are eliminated. He ends his analysis by saying that the estimated total cost saving to the applicant of the Department having undertaken all the works associated with the intersection and rail crossing and signalisation is in excess of

$188,000.

Under the heading "Exposure", Mr Robinson said that the most significant change to the attractiveness of the land is in relation to its exposure to large volumes of traffic. Originally it had no exposure to the Bruce Highway and if it had been developed, the only traffic that would pass it would be industrial traffic moving to and from other developments to the east. He said that the site is now highly exposed to traffic moving north-east inbound on the Cairns Southern Access Road and well exposed to outbound traffic, making the site desirable as a location for a quasi commercial venture, showroom, motor yard or the like or any industrial business. He concludes by saying in this regard the property will now have a significant advantage over most other properties in the general locality.

In his summary and conclusions Mr Robinson says that the construction of the Southern Access Road will solve many of the problems Council foresaw in relation to providing access to the area and will allow clearer, more precise conditions to be imposed in relation to access, thus removing some of the uncertainties in relation to development costs. Although he admits the issue is complicated somewhat by not knowing in which order various parcels of land would develop and without the benefit of Council decision, he concludes that "..... it seems clear that the development potential of the subject land has been enhances by the implementation of the Cairns Southern Access Road."

In his examination-in-chief Mr Robinson elaborated further on his report.     He

made it clear that the Willie K site had not gone ahead with the original purpose for which it was to be rezoned. However, very recently in conjunction with a recycling initiative by the Council, the owners of the site have established a vegetation recycling depot which takes garden trimmings etc, and converts them into mulch for sale to home gardeners in the retail landscaping trade. The owners have not yet complied with the conditions for rezoning, but they are aware of what they have to do and Mr Robinson believes they will be making moves to do so in the foreseeable future. It also emerged that the type of conditions that the Council was likely to impose on approval to rezone the subject land, with or without the intention to later subdivide, would depend upon whether the owners of the Willie K site had complied with the conditions imposed upon them, or whether there was a likelihood of them doing so.

Mr Robinson also gave his views of what would be the likely use of the land after resumption, if it was successfully rezoned for industrial purposes. These purposes included uses such as motor vehicle sales, servicing and repair, transport and storage type functions, all of which tend to seek exposure to principal roads with high volumes of traffic. So in the after situation he believed the land will become much more desirable to a much wider range of potential purchasers. Such purposes as those been mentioned would not necessarily seek direct access to the highway or busy road, although they would probably prefer it, but most industrial developments in Mulgrave Shire did not have direct access to major road, but were serviced either by service roads, or from side roads.

Mr Robinson did admit, however, that the after access to the subject land was longer and less attractive as it must go past the sewerage treatment works and the vegetation recycling depot.  With regard to the road construction conditions which might be imposed on the subject land, Mr Robinson made it clear that this would depend on whether there was a likelihood of the Willie K property developers complying with the conditions imposed upon that development in the near future. He pointed out that the situation  would  be  different  in  the  before  situation  because  then  there  was  no

application on behalf of the Willie K block for rezoning, as the application was submitted after the Southern Access Road route was publicly known.

Mr Robinson also explained what he meant by the term "identification of a business". He said that if you have exposure without direct access, public travelling past on a road are able to identify the business in their minds and if you don't have that ready exposure to the public by having a position close to a main road, it means that the business must adopt some other means of bringing itself to the public mind. "Well, if it doesn't have exposure, routine daily exposure to passing traffic then you've got to go to the more expensive means of identification and keeping in people's minds, such as advertising (whatever form that is), television, radio, those sorts of things."

The Evidence of Valuer Goodman-Jones

Mr Patrick Francis Goodman-Jones, registered valuer employed by the Department of Lands, gave evidence for the respondent. He submitted a report and valuation in which the facts in all relevant circumstances are similar to those submitted by valuer Coonan. However, he expressed the opinion that at the relevant date a potential purchaser of the land would be aware of the rezoning potential although it may not have been realised until some future date due to the cost associated with developing the locality in which the subject land is located.

By reference to sales Mr Goodman-Jones arrived at a value before resumption of $200,000 based on the subject land being worth $100,000 per hectare. After resumption his valuation for the lesser area of 1.867 hectares is at the rate of $120,000 per hectare, making a total of $224,000. In other words, Mr Goodman-Jones considers that the effect of the resumption is to enhance the value of the property by $24,000. Therefore compensation was assessed at Nil.

The sales used for the before valuation existed of a 1.06 hectare parcel which sold on 20th November, 1987, for $152,000 or $143,396 per hectare. This property is situated on the Bruce Highway and is zoned Light Industrial. Mr Goodman-Jones considered that this sale is superior to the subject property before resumption.

Mr Goodman-Jones' before Sale No.2 is situated approximately 350 metres south of the subject land, in the same locality, with similar zoning, but he considered it to be inferior to the subject land due to its location and its lesser potential for rezoning. This property of 1.983 hectares sold on 20th April, 1988, for $150,000 or $75,643 per hectare.

For his after valuation Mr Goodman-Jones used five sales. Sale No.1 is of a property of 3.602 hectares which sold on 20th July, 1987, for $1,050,000 or $291,500 per hectare. It is zoned Local Shopping and situated on the Bruce Highway and Mr Goodman-Jones says it is superior to the subject land, due to its location and zoning. His Sale No.2 is the same as Sale No.2 for the before situation and this time Mr Goodman-Jones says it is far inferior to the subject land after resumption due to its location.

After Sale No.3 is of a 1.983 hectare parcel which sold on 29th November, 1988, for $150,000 or $75.643 per hectare. It is zoned Rural C and situated in an unnamed street off Marsh Street, in a very similar situation to Sale No.2. Again Mr Goodman- Jones says it is far inferior to the subject land due to its location. Sale No.5 is situated immediately to the east of the subject land. It is similar to the subject land in its natural state.  It has an area of 1.983 hectares and sold on 16th March, 1989, for $660,000 or

$332,829 per hectare. It is zoned Rural C and filled to a depth of approximately 600 milli metres, which Mr Goodman-Jones estimates at 12,000 cubic metres at $15 per cubic metre of $180,000. In its unfilled state in comparison with the subject land this sale analyses to $480,000 or $242,057 per hectare. Mr Goodman-Jones says that the property was purchased by the Queensland Electricity Commission to build a substation in the future. The land has a similar zoning to the subject and is in a similar location although not exposed to the Southern Access Road. Mr Goodman-Jones said that as with Sale No.4, this sale reflects the effect of the locating of the Southern Access Road through the area. The property is affected by high voltage line easements, but not to the same degree as the subject property.

Mr Goodman-Jones after Sale No.4 is of a property of 3.931 hectares which sold on 26th January, 1989, for $1,230,500 or $313,025 per hectare. It is zoned Rural C and is situated adjacent and to the west of the subject land. It is also adjacent to the Southern Access Road and is superior to the subject, because of its size and location.

Mr Goodman-Jones elaborated on his report in his examination in chief. He described the entry into Marsh Street before resumption as being not very visible from the highway and also dangerous, as was necessary to make a sharp turn to the left, crossing a culvert and then the railway line. He saw the subject land as having potential for rezoning to industrial, but he did not think it would develop quickly, because there was no good access to the site and he considered that there was no potential before resumption for subdivision. However, after resumption although he still considered its highest and best use to be as one site, there may perhaps be subdivisional potential at a later time. He considered that there would be more interest in the site after the resumption than before.

In cross-examination Mr Goodman-Jones said that the $24,000 enhancement after resumption was based entirely upon exposure. He considered that would be the minimum amount, as he tried to resolve doubt in favour of the dispossessed owner and considered that a loading of 20% would be a minimum, it could be more. He considered that exposure to the Southern Access Road offsets the loss of land area by resumption and the fact that there is a further distance to travel to the land from a major road.

He considered that his sales Nos.3 and 4 after the relevant date, particularly Sale No.4, show the impact of the Southern Access Road on the area.

With regard to Sale No.5, Mr Goodman-Jones said that this site was acquired by the QEC on a rising market and that it also was illustrative of the effect of the Southern Access Road. This sale has the advantage of shorter access but not the exposure.

Mr Goodman-Jones made an interesting point regarding enhancement as he said he saw it as a growing thing. "It would start from the fact that the Southern Access

Road was going inland and as that road was constructed enhancement would grow. What I'm saying here is that at that point the enhancement would have been that amount, but probably down the track after the road is constructed and its there, that enhancement could well be more depending on the market at the time." (page 93 transcript)

The Evidence of Valuer Gould

Mr Terrence Joseph Gould, registered valuer with the firm Baillieu Knight Frank, in Cairns, also gave evidence for the respondent. Mr Gould tendered a report and valuation which as far as material facts are concerned is similar to the valuations presented by the other two valuers.

Mr Gould researched sales in the immediate area between 1983 and 1989 to provide a picture of the market over a long term. He listed on a schedule ten sales which occurred between 1986 and 1989. Of the sales close to the relevant date he says that they are all situated in superior locations and do not form an ideal basis. The four sales which occurred after the relevant date are four of the sales also used by Mr Goodman-Jones.

Mr Gould also used the before and after method of assessing compensation. His before valuation proceeds on the basis that the subject land was adversely affected by electricity transmission line easements and would require significant access upgrading and contributions to water and sewerage augmentation, prior to gaining approval for rezoning or subdivision. After considering the sales evidence, he placed the subject land's value before resumption somewhere between $6.62 per square metre and $14.34 per square metre and gave his opinion that a value of about $10 per square metre would be appropriate at the relevant date. For practical purposes he assessed a value before resumption of $200,000.

After the resumption Mr Gould considers that the property would have a highest and best use as a Rural C holding proposition, with moderately good exposure to traffic at highway speeds, but with a poorer situation with regard to access.  He noted that the

town planning consultant's report indicated that rezoning costs would be reduced by about $10 per square metre after resumption, but despite this he thought the land would not be ripe for industrial subdivision, a fact borne out he said by other lands in the area none of which have been rezoned or subdivided some four years after the relevant date. On the basis of sales evidence, he considers that if the property did not have the benefit of the exposure, it would still be superior to his Sale Nos. 7 and 8 both of which showed $7.56 per square metre. With the additional exposure, he thought that the value of the property as a holding proposition would be $12 per square metre. However, he considers it necessary to discount this value in order to allow for the construction of a gravel road to the subject property.   This he estimates would cost

$24,640. The result of his calculations are as follows:

1.867 hectares at $12 per square metre less the cost of gravel road construction of $24,640 is $199,400 which for practical purposes Mr Gould adopts as $200,000.

The before and after valuation therefore provides an assessment of loss at nil.

In his evidence in chief Mr Gould said that the valuation had been made at the request of the Department of Transport. While he was aware that a separate valuation was being made by Mr Goodman-Jones he was asked specifically not to discuss that valuation with him and, apart from exchanging a list of sales data, there was no discussion or contact between the two of them in relation to this matter. In cross- examination, Mr Gould made it clear that he also saw the enhancement in value to the subject land resulting from its exposure to Southern Access Road. He did not think that it was necessary for land to have an immediate access to a busy road, the benefit of exposure is to give a business an identity, it is not for impulse shoppers, but exposure enables shoppers to identify the premises and find them at a later time when the need arises.

The Claim for Compensation

The claimants have lodged a Claim for Compensation dated 12th January, 1990,

using the following words "We claim for loss of land, severance and injurious affection the  sum  of  One  Hundred  and  Twenty  Thousand  Dollars  ($120,000)  total  claim

$120,000." However Mr Coonan has tendered in evidence a report and valuation showing compensation assessment at $90,000 plus disturbance. There was no evidence presented to the Court in relation to disturbance. However, at the closing stages of the hearing, when I drew this to the attention of the claimants, an amount was agreed between the parties of $2,850 for disturbance. There was no break up of what this amount involved, but one could assume that it included valuation and legal fees involved in the preparation of the claim. Mr Durward then sought leave to amend the claim in conformity with these figures. Mr Needham while not objecting to the amendment, sought that it be recorded that the respondent had received no advanced notification that the claimants were seeking any different amount from their Claim for Compensation, as this matter might be relevant to the question of costs.

View by the Court

At the invitation of the parties I took the opportunity to view the subject land and the sales in the immediate area. I did this in company with representatives of the parties and found this view to be most helpful in understanding the evidence of the witnesses. I also gained an appreciation of the locality of the subject land and some of the sales.

Analysis of the Evidence

In this case we have a rectangular parcel of land of approximately 2 hectares, zoned Rural C, situated about 8 kilometres south of the Cairns Central Business District. Before the resumption, it had access from the Bruce Highway via a railway crossing and 300 metres of gravel road. It is common ground that before the resumption it did have potential for rezoning to Industrial sometime in the future. It may also have had longer term potential for subdivision. The market value before resumption is somewhere between $200,000 (Mr Goodman-Jones and Mr Gould) and

$250,000 (Mr Coonan).

Mr Coonan's valuation assumes that the land has immediate potential for subdivision before the resumption. He proceeds on this basis because prior to resumption, the gravel access road to the sewerage treatment work situated to the north-east of the subject land, passed along its western boundary. It would be a simple matter, Mr Coonan reasoned, to subdivide the subject land into four blocks from this western boundary access. He is strengthened in his opinion by the favourable treatment of rezoning application on the Willie K site, adjoining the subject land to the north-east. He reasons that the claimants would share in the development costs with the Willie K applicants and perhaps others. His before valuation of $250,000 is made on the basis of a hypothetical subdivision analysis, working on the assumptions outlined above.

The other two valuers, Mr Goodman-Jones and Mr Gould, arrived at a valuation before resumption of $200,000. Both valuers considered that there was no immediate potential for subdivision and assessed the valuation on the basis of a single Rural C zoned site, with potential for rezoning in the future, on the basis of sales of comparable lands in the area. Both valuers worked on the basis that this was a reasonably isolated site, situated on a gravel road which gave access to a sewerage treatment works, with a dangerous entry point from the Bruce Highway. For the potential of the land to be exploited, considerable upgrading of the access road would be necessary, and they did not see this as happening in the immediate future. Before resumption there was little sales activity in the immediate area and it was only after the Southern Access Road route became well known that the sales in the area began to occur.

The major difficulty facing any purchasers of the subject land for development prior to resumption, either by rezoning or by subsequent subdivision, consisted in the cost of upgrading access and providing the infrastructure necessary for the development of the site.  Although the Willie K site had obtained approval for rezoning, it was subject to fairly rigorous conditions, and there is evidence from the Town Planner, Mr Robinson, that none of these conditions has yet been complied with.  He also gave

evidence that although the general area had been earmarked by the Council for future industrial development, any land owner who wished to proceed first would have to bear the greater part of the upgrading of external roads and other costs. The Council has been endeavouring to arrive at a scheme whereby the costs of provision of access and infrastructure could be spread equitably among the land owners of the area, but without success.

There is also the evidence from Mr Elaurant, the engineer, that the cost of upgrading the access from the Bruce Highway into Marsh Street could be particularly expensive to the extent of $225,000, including the cost of flashing lights at the crossing of the railway line. The cost of upgrading the intersection is made so expensive as Mr Elaurant considers that a Type C intersection must be provided because of the traffic flow that would be generated to the area. Although his reasoning in this regard was questioned, Mr Elaurant remained firm that such an intersection would be necessary to provide reasonable and safe access to Marsh Street.

I am of the view that the evidence that has been provided casts to many doubts on Mr Coonan's assessment of the immediate potential of the subject land before resumption. It would be far safer to have regard to the sales of similarly zoned land of similar size in the area. Although there are no sales immediately prior to resumption, there is the sale of a very similar piece of land, admittedly with worse access, in Mr Goodman-Jones' Sale No.2. This sold in April 1988 for $150,000 prior to the commencement of any construction works on the Southern Access Road. This sale, supported by the other sales mentioned by the two valuers, certainly indicates that a before valuation of $200,000 is more likely than Mr Coonan's assessment of $250,000.

After resumption we have the situation where a triangular parcel of 1,160 square metres is removed from the north-western corner of the subject land. Its access is now totally changed. Instead of being 300 metres of gravel road, it is now directly adjacent to the Southern Access Road, but without immediate access. Access is gained by another gravel road with entry approximately 280 metres north of the subject land,

thence by about another 600 odd metres of gravel road past the sewerage treatments works and the vegetation recycling plant on the Willie K site and finally about 150 metres of earth road, the road becoming increasingly indifferent as the subject land is approached. It is common ground that the access after resumption is inferior to that prior to resumption. The great change as far as the subject land is concerned, is that it is no longer a remote site which cannot be seen from a major road. It now has exposure to all the traffic using the Southern Access Road.

Mr Coonan sees this exposure as being of no benefit whatsoever to the subject land, as any of the uses to which it might be put would not benefit from exposure without direct access. Mr Goodman-Jones and Mr Gould, however, see the exposure as enhancing the value of the balance land, because they consider that the exposure of the site to the traffic, even without direct access, is a tremendous advantage in relation to the types of use that could be made of it. Indeed, Mr Goodman-Jones sees the enhancing effect of the exposure as being considerable, offsetting the longer and more expensive access in the after situation. Mr Gould agrees that the exposure enhances the value of the subject land, but this enhancement would have to be offset by the extra cost of gaining access to the land with the result that the additional costs offset the increase in the value of the land so that Mr Gould's assessment of compensation is Nil.

I am more persuaded by the evidence of Mr Goodman-Jones and Mr Gould than that of Mr Coonan. Although it is admitted that there is longer and more difficult access to the subject land in the after situation, the evidence is that the exposure to the new highway certainly enhances the value of the land and its prospects for development in the future. It is no longer a remote site, it is immediately in the public gaze. There is also evidence that it is not necessary to have direct access as long as there is exposure. The exposure identifies the site and the business to the public, so that they known the location of the business even if access has to be gained indirectly. I agree with Mr Goodman-Jones that enhancement is a growing thing. Starting with the construction of the road, the enhancement would only be potential, until such time as

the use of the road by traffic makes the exposure real. This exposure then increases the value of the land in the eyes of a potential purchaser as time goes on. The sale of the QEC site may well be an example of the growing enhancement in value of land in the area.

But such potential purchaser would not pay as much for the land at the date of resumption as he would when the road is constructed and traffic using it. Mr Goodman- Jones may well be correct and even conservative when he estimates that the enhancement would be from $100,000 to $120,000 per hectare. Indeed, Mr Gould agrees with him, but he considers that a potential purchaser at that time would be careful and discount the enhanced value of the land by the additional cost of upgrading the road. This is the approach that I think a potential purchaser would take in accessing what he would pay to land immediately after resumption.

There are many uncertainties as to the costs of providing the upgraded roads etc. likely to be imposed by the Mulgrave Shire Council as conditions for rezoning or subdivision of the subject land. If this is so some four years after resumption, how much more difficult to access at that time. If the Willi K owners do not comply with the conditions and others in the area do not co-operate, then the subject land may have to bear all the costs. On the other hand, since the construction of the road there has been a flurry of activity in the area. These are things that a prospective purchaser might weigh up at the date of resumption but of which we have the benefit of hindsight.

In the circumstances, I have formed the view that the approach adopted by Mr Gould has much to commend it. At the date of resumption, there is uncertainty as to when the potential of the land, even with its exposure, could be exploited and this must affect the price a prudent purchaser would pay. Even though he can see enhancement growing in the future, he would tend to discount this in the early stages. As time goes on the uncertainties may well be resolved.

I am therefore of the opinion that the value of the land after resumption is enhanced by $24,000 as assessed by Mr Goodman-Jones and Mr Gould. However, for

the reasons outlined above I think a prudent purchaser would discount this by $24,000.

Therefore compensation as a result of the resumption is nil.

Disturbance was agreed by the parties at $2,850, and therefore I determine the amount of compensation payable by the respondent to the claimant under all heads of claim at $2,850.

In accordance with the decision of the learned President of the Land Court in Varitimos v. Queensland Electricity Commission (1990 - 1991) 13 QLCR 1, interest is payable only on such items of disturbance from the date that actual payment of those fees was made, and not from the date of resumption.

Member of the Land Court.