Heavey Lex No 64 Pty Ltd v Chief Executive, Department of Transport
[1999] QLC 133
•22 December 1999
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LAND COURT
BRISBANE
22 DECEMBER 1999
In the matters of the determination of the compensation payable consequent upon the resumption by the Chief Executive, Department of Transport, for future road requirements under the provisions of the Acquisition of Land Act 1967 and Transport Planning and Coordination Act 1994 of an area of about 6 hectares being Lot 2 on RP 855863, County of Nares, Parish of Smithfield. (A97-43)
Heavey Lex No 64 Pty Ltd and S Paino
v.
Chief Executive, Department of Transport
J U D G M E N T
Heavey Lex No. 64 Pty Ltd owned a parcel of land of 37.43 ha at Smithfield, north of Cairns. On 23 October 1995 a Notice of Intention to Resume issued under the provisions of the Acquisition of Land Act 1967 (AOL Act) and the Transport Planning and Coordination Act 1994 and a proclamation taking "an area of about 6 hectares … for future road requirement purposes" from that land was published on 22 March 1996. On 7 August 1998 the area of the taking was confirmed by proclamation to be 5.973 ha.
An initial claim dated 21 August 1997 was lodged by Heavey Lex No. 64 Pty Ltd (Heavey Lex) claiming:Land, severance and injurious affection $14,425,000.00
Disturbance $587,771.70
There was also lodged on that date a claim from Salvatore Paino claiming:
Value of palms $8,800,000.00
Severance costs $34,100.00
The claim in relation to the palms related to a large number of palm trees growing on the land owned by Heavey Lex before the resumption. Mr Paino is a principal of Heavey Lex and grew the palms on the land under a lease granted to him by the company. The part of Mr Paino's claim relating to the palms was abandoned by him during the hearing, it having been subsumed by an amendment to the Heavey Lex claim. Both claims were heard together with the consent of the parties. In these reasons I will make reference to Heavey Lex where that is required, however, when reference is made to activities undertaken by Mr Paino, it will be understood that that should generally be taken as a reference to Mr Paino acting on behalf of the company.
During the hearing the Heavey Lex claim was amended on two occasions with the leave of the Court with the result that the claim as finally relied upon by Heavey Lex was reduced to $11,300,000 for loss of land and palm trees. That was based on the reduction of a land value from $11,100,000 before resumption to a figure of $1,477,250 after; and a reduction in the value of palms from $1,734,000 before resumption to $60,000 after. The figure of $11,300,000 for compensation was arrived at after a rounding down of the after resumption values of land and palms. The claim for disturbance by Heavey Lex and severance costs by Mr Paino were not addressed in the evidence heard initially, the claimants wishing to defer consideration of those matters until the question of compensation relating to the loss of land and the palm trees was considered and decided upon.
On 17 June 1999 I provided the parties with my reasons (my "interim reasons") leading to my conclusion as to the amount of compensation that I intended determining with respect to the claim for loss of land and palm trees. I did not, however, make a determination as to compensation on that occasion. The claimant expressly requested that I not do so: a request acquiesced with by the respondent. In due course, further evidence was heard with respect to the claim for disturbance compensation and the claims for compensation further amended in that respect. I have therefore amended my interim reasons by the inclusion of this paragraph; by determining compensation for the loss of land and palm trees; and by determining the amended claim for disturbance and providing my reasons for these determinations.
The respondent constructing authority assessed compensation at $1,420,000 for loss of land, including severance and injurious affection, and with no amount being provided for with respect to the palm trees on the resumed land at the date of resumption.
Throughout these reasons I will refer to the land owned by Heavey Lex either before or after the resumption as the "subject land". I will generally also refer to the claimants in plural.
Smithfield is found to the north of Cairns once one passes over the flood plain of the Barron River. Smithfield is a satellite dormitory suburb situated in what is known as the Marlin Coast area at the foothills of the McAllister Range, which encloses the flat coastal strip of what I might generally refer to as the Cairns region. Smithfield is 16 km north-west of Cairns and is well settled with average to above average residences near the town centre and with large acreage allotments on the more elevated slopes. The suburb boasts the Smithfield Shopping Centre, the emerging Smithfield Town Centre, the James Cook University Campus, a State high school, ambulance, fire and police stations, whilst there is a primary school located in the adjoining suburb of Caravonica.
The subject land is roughly square in shape and is located with its north-western truncated corner fronting the McGregor Road Roundabout. Its western boundary to the Captain Cook Highway is 620 to 640 metres, depending on the point on the truncation from which the measurement is taken, whilst the McGregor Road frontage is about 538 metres. The southern boundary of the land is 611.33 metres and the eastern boundary is 620.22 metres. The resumption takes a belt of land through the subject from the south-east to the north-west, leaving an area of 8.461 ha in a western severance and 22.999 ha in the east.
The subject land has a gradual fall towards the east and south-east away from the highway and McGregor Road. A drain, referred to locally as Chinaman Creek, enters the subject land from McGregor Road at about the midpoint of that boundary, whilst a further drainage area is to be found in the south-west of the land where a drain enters from the highway and traverses easterly and then southerly through that part of the subject land. There is a demountable caretaker's residence, potting shed, greenhouse and other improvements associated with the palm plantation on the subject land, together with some ground-floor slabs associated with the Gemini Park Resort proposed development. None of these improvements is on the resumed area.
Apart from the few structures that I have mentioned, the subject land was vacant at the time of resumption and was bordered on the east and the south by similarly vacant land, either used or intended to be used for cane-farming purposes. To the north of the subject land on the other side of McGregor Road is to be found a single lot residential subdivision area and the Campus Shopping Village occupies the north-east quadrant of land facing the McGregor Road Roundabout. McGregor Road is a two-lane roadway with an eastern section fronting the subject land and a western section travelling past the University Campus. The Captain Cook Highway is a four-lane divided carriageway where it abuts the subject land on the land's western boundary.
This case involved, before the claims for disturbance were addressed, the hearing of evidence and submissions over a four-week period, there being 1,369 pages of transcript and 29 witnesses, some of whom were called more than once. There were 160 exhibits or parts of exhibits. These included a range of voluminous reports from experts including those of three valuers who produced a total of 12 valuations of various parts of the subject land on either a before or after-resumption basis.
The claimants were represented by Mr DR Gore QC and Mr SM Ure, whilst Mr RM Needham led Mr RS Jones for the respondent. The list of witnesses includesSalvatore Paino – a claimant and the principle of the company which is the registered proprietor of the subject land, gave evidence.
Neville James Bates – once the managing director of the North Queensland Daikyo Company and a land development consultant. He was called by the claimants to provide evidence on a number of matters.
Richard Anthony Collingwood Bramley – described in his curriculum vitae as a "tourism analyst specialising in strategic planning, market analysis, project feasibility studies and the management of nature based tourism". Mr Bramley was called by the claimants to give evidence with respect to the tourist potential of the subject land.
Keith Rodley Bryars – a consulting civil engineer gave evidence for the respondent concerning the proposed bypass.
Christopher Gerard Buckley – a town planner, gave town planning evidence for the claimants.
Louis Aaron Challis – an acoustical engineer gave evidence for the claimants on the matter of noise immission from the Captain Cook Highway and the proposed bypass.
Michael Cabella Challoner – a town planner gave town planning evidence for the respondent.
Aldo Costantino – a businessman from Italy gave evidence through an interpreter about an option and contract he had entered into over part of the subject land.
Brian William Cox – a registered valuer gave evidence with respect to the claimed tourist potential of the subject land.
Allen John Crawford – a registered valuer gave valuation evidence for the claimants.
Patrick Vincent Flanagan – a consulting civil engineer gave evidence for the respondent relating to costs of development and to subdivision plans used by Mr Crawford for valuation purposes.
Richard Formby Gillman – a chartered accountant was a co-author of the "Deloitte's Report" a document dealing with the financial feasibility of the proposed "Gemini Park Resort".
Terence Joseph Gould – a registered valuer gave valuation evidence for the respondent.
Robert Charles Holland – a consulting traffic engineer gave evidence for the claimants on the issue of access to the subject land and associated matters.
Ian William Hooley – a commercial real estate agent gave evidence relating to attempts by the claimants to sell the balance land following resumption.
Paul Joseph Johnson – a chartered accountant was a co-author of the "Deloitte's Report".
Frederik Hendrik Kamst – an acoustical engineer gave evidence for the respondent on similar matters referred to by Mr Challis.
Kathleen Killalea – the franchisee of the BP service station located near the subject land gave evidence for the claimants concerning the prospect of a service station development on the subject land.
Bevan Thomas Lynch – an architect gave evidence for the claimants with respect to the design of the proposed "Gemini Park Resort".
Michael Wayne McCracken – a retail analyst, trained as an economic geographer gave evidence for the claimants relating to the commercial potential of part of the subject land.
Alan Charles McPherson – a consulting civil engineer gave a range of evidence for the claimants including costs of development of the proposed "Gemini Park Resort" and subdivision plans relied upon by Mr Crawford.
Jon Mark Norling – a management consultant specialising in the property field gave evidence for the respondent on the topic covered by Mr McCracken.
John William McDonald – landscaper and nursery proprietor gave evidence for the respondent regarding the value of palms on the resumed land.
Kenneth Richard McKay – a golf course architect gave evidence for the claimants concerning the 9 hole par 3 golf course included in the "Gemini Park Resort" concept plan.
Grant Harold Phillips – a licensed surveyor provided evidence for the claimants relating to subdivision payments for the subject land.
Andrew Charles Prowse – a landscape architect gave evidence for the claimants regarding the landscaping of the proposed "Gemini Park Resort" and on matters connected with the value of the palms growing on the subject land.
Randall Wayne Warren – a registered valuer gave valuation evidence for the claimants.
Jeffrey Clifford Weigh – described as having "15 years' experience in the tourism and leisure industry especially in the fields of tourism marketing development and research" gave evidence in response to that provided by Mr Bramley.
William Graham Wilkes – a quantity surveyor gave evidence for the claimants relating to the estimated costs of development of the "Gemini Park Resort".
The purpose of the resumption is to provide land upon which a road bypass is intended to be constructed, servicing north-south traffic and taking that traffic, or at least part of it, away from the presently built-up Smithfield area. It will provide a useful context for the following discussion if I first of all introduce the proposed bypass structure.
THE PROPOSED BYPASS STRUCTURE
According to Mr Challoner's Report the need for a bypass was first recommended by a Connell Wagner Report in May 1980, "Captain Cook Highway (Cairns to Buchan Point) Strategic Plan Update". This was followed by the "Cairns-Mulgrave Regional Transport Study" (1993) which recommended the identification and preservation of a corridor in association with a range of scenarios considered in the study. The need for a bypass was confirmed in "the Captain Cook Highway – Smithfield Bypass Planning Report" (April 1995); called the "April 1995 Bypass Report" below. This report also considered, amongst other things, the possible upgrading of the Captain Cook Highway as an option. Bypass route options were considered in an August 1995 report entitled "Captain Cook Highway – Smithfield Bypass Review of Route Options" called the "August 1995 Bypass Report" below. That report also made reference to the option of upgrading the Captain Cook Highway which would include the construction of an overpass over the McGregor Road Roundabout.
The land resumed for the bypass enters the subject land at a point about two-thirds the way along the southern boundary of the land towards the east, then sweeps in a north-westerly direction and exits around the north-west corner of the land. The bypass then travels over the McGregor Road Roundabout. A plan in evidence shows the "chainages" within the subject land commencing at 3,200, where the bypass enters the land, and finishing at 3,850 at the point of exit. Whilst the term "chainage" was employed, I take the figures to refer to metres. The intention is that the road will be constructed largely at the same level as the surrounding land up to chainage 3,500, where elevation will commence towards the overpass at the McGregor Road Roundabout, however, noticeable elevation of about 1.5 metres will not occur until chainage 3,600, that is about two-thirds of the way into the subject land from the point of entry at the south. At chainage 3,700 the elevation is 5.5 to 6 metres; at chainage 3,800 it is 7.5 metres and at 3,850 it is 8 metres. That elevation is taken from the ground level to the surface of the carriageway. Mr Holland said that the height of the bypass as it travelled over the roundabout was greater than the 5.5 metres that he would have expected. The structure of the bypass as it spans the roundabout is not unlike a bridge, with the existing roundabout travelling between pylons to that "bridge". It will be appreciated from my description of the track of the bypass through the subject land that there is, in effect, a severance of the land into two parcels and an access road referred to later in these reasons as a "link road" is proposed to travel under one of the spans of the bypass connecting McGregor Road to the western severance.
The structure of the proposed bypass, though not finalised in March 1996, as I understand it, provides for two lanes of two-way traffic to be constructed in Stage 1, with Stages 2 and 3 providing for widening to a four then possibly a six-lane divided road, respectively. There is an entry ramp onto the bypass from McGregor Road East for traffic travelling in a southerly direction, though no exit is provided from the bypass in a similar location for north-bound traffic or traffic coming from the north. Mr Holland commented that this was a poor design feature as it would be usual for drivers to anticipate exiting from a bypass in the same location as a point of entry. No entry ramp is provided onto the bypass at McGregor Road for traffic travelling north.
Following the track of the bypass "bridge" structure over the McGregor Road Roundabout, it reduces elevation until at a point about 400 metres north of the roundabout it meets and continues at the level of the existing Captain Cook Highway. Some 600 metres north of that point, or about 1 km north of the McGregor Road Roundabout, a roundabout has been constructed at Reed Road which, amongst other things, allows for traffic travelling in a northerly direction to make a U-turn and head back towards the south. Traffic moving southerly from that point or points further north can exit the Captain Cook Highway about 400 metres north of the McGregor Road Roundabout, then move into McGregor Road or continue travelling along the Captain Cook Highway. An interchange will be constructed at about Catanna Road to the south of the subject land to allow traffic travelling northerly along the bypass to exit there and move towards the Captain Cook Highway. Traffic coming from the north, which remained on the bypass as it passed the subject land, could also exit at this interchange.
Drawings tendered by the respondent show that noise amelioration works in the form of a 2 metre vegetated mound topped with a 3 metre fence are proposed to border the bypass where it travels at ground level through the subject land. As the bypass commences elevation, the effectiveness of that noise amelioration measure would diminish and a 3 metre high solid acoustic fence is proposed for each side of the elevated structure. As I read the drawings, there would be some overlap between the point of commencement of the 3 metre high fence on the elevated structure and the end point of the ground level noise amelioration works. I am not aware whether the specification of those noise amelioration works was known at March 1996.
About 25 metres from the eastern side of the carriageway in the Stage 1, or 2 development, will be the western boundary of the eastern severance of the subject land. At the conclusion of Stage 1 the eastern boundary of the western severance of the subject land will be removed some 60 metres from the edge of the carriageway, however, that distance will be lessened as Stages 2 and 3 are undertaken, whenever that might be.
The Holland Option
Mr Holland acknowledged that the Department of Main Roads was considering two road grade options which are relevant for our purposes in about March 1996, namely the construction of the bypass through the subject land and the construction of an overpass over the McGregor Road Roundabout within the Captain Cook Highway alignment. He acknowledged that anyone visiting and inquiring of the Department at that time would have been told about these two options and would have been advised that it was anticipated that construction would commence during the period year 2000 to 2005. Nevertheless, Mr Holland holds the view that the construction of the bypass, and for that matter an overpass within the Captain Cook Highway alignment, would be an unwarranted response to the traffic management requirements. He said that on the data that he had, the McGregor Road Roundabout in its format at March 1996 provided an acceptable level of service and that that would remain the case until at least the year 2016. He said also that there was a third option to those being considered by the Department, that being the provision of a traffic light controlled or "signalised" intersection in place of the roundabout, which would have allowed a graduated upgrading of the highway to six lanes. A six-lane roundabout would, of course, be impractical.
Mr Holland said that a signalised intersection would be a less expensive solution than either the bypass or the overpass solution and had the added advantage of providing a means for pedestrians and cyclists to move from one side of the Captain Cook Highway to the other. In circumstances where traffic flows freely north/south via a roundabout, that cross-highway access is not safely available. There are other options available to provide for pedestrian access across the highway and, indeed, an underpass has been constructed in the vicinity of the southern end of the subject land. Nevertheless, Mr Holland said that he would have advised a client in March 1996 that his option of the introduction of a signalised intersection and the upgrading of the Captain Cook Highway, as required, to six lanes, would have been sufficient to manage traffic requirements along that corridor for the following 20 to 30 years.
Mr Bryars' firm was involved in the preparation of the April 1995 and August 1995 Bypass Reports dealing with the overpass and bypass options and in the identification of the route for the bypass. He thought the signalised intersection proposal to be a less desirable option, which would generally be found only in urban areas where cost was an inhibiting factor. He said that there was little net gain in moving from a signalised four-lane structure to a signalised six-lane structure, there being much greater gains achievable by the construction of an overpass. His firm had, in a report entitled "Traffic Management Network Study Old Mulgrave Shire districts" (August 1995) (called the "Traffic Network Study" below) proposed the construction of a signalised intersection south of the subject land at Stanton Road, however, in cross-examination said that that option was dictated having regard to the costs of the alternatives. Mr Bryars said that the construction of a bypass would be less disruptive to traffic in the process of the construction than would a signalised intersection and that, in any event, the practice these days was not to adopt a graduated strategy by moving through a signalised intersection approach to an overpass, but rather to move directly to the overpass option. He explained that traffic lights interrupt traffic flow and that the Captain Cook Highway corridor is designed as a free-flowing route.
Importantly, Mr Bryars said that the bypass project is not simply based on the efficiency of the intersection of the Captain Cook Highway and McGregor Road. The bypass provides for other benefits, some of which I have outlined above, whilst the most obvious additional benefit is that traffic using the bypass will not disrupt and clutter up the Smithfield area.
I turn now to Mr Holland's suggestion that the McGregor Road Roundabout would have operated adequately until the year 2016. Mr Holland had regard to 1995 traffic flow data and, based on a 2.6% per annum compounded growth rate, he concluded that volume capacity ratios of 65% during the morning peak hour and 66% during the evening peak hour could be achieved in the year 2016. That is, average delays would be minimal. He said that the level of service would be classified at "A" level and that under those circumstances the intersection would be judged to be operating at an acceptable level of service and delay under 2016 conditions. He explained that only when an 85% to 90% volume capacity ratio was identified would there be an unacceptable level of service.
Mr Bryars said that the 2.6% per annum compounded growth rate was appropriate for the Captain Cook Highway when viewed as at the March 1996 date, but that that figure did not take into account the higher potential growth along McGregor Road both to the east and west, given the high level development opportunities there which would feed traffic onto that road. McGregor Road, he said, was operating at a very low traffic base in March 1996 and a 2.6% growth rate on such a low base would produce an erroneous result. In addition to that point I notice that the 2.6% growth rate is calculated having the traffic counts in 1995 as the start point, compared with predicted traffic counts by Eppell Olsen included in Mr Bryars' tendered statement and which I understand is based on modelling which was carried out some time after March 1996. Earlier traffic counts indicated an average 4.5% to 5.5% growth on the highway since 1986. If I have regard to that evidence which was available in March 1996 and cater for the point that Mr Bryars made about the need to assume a higher level of traffic growth on McGregor Road, then the volume capacity ratios calculated by Mr Holland under the Year 2016 conditions would be higher than the percentages he indicated. What those percentages would be I do not know, however, my appreciation of the evidence is that, viewed as at the time of resumption, Mr Holland would have, equipped with the best information available at that time, predicted an earlier upgrading of the Captain Cook Highway than his evidence indicated would be the case. However, this does not detract totally from the point being made by Mr Holland for I think it would still be valid for him to conclude that any upgrading of the Captain Cook Highway, either by the construction of an overpass or of a bypass, was not imminent in 1996 and that some years would elapse before such an upgrade would be contemplated. Indeed, as I discuss in more detail later, the resumption in the present case is out of sequence, the timing of the present resumption being influenced by the prospect of Mr Paino proceeding with development of the subject land. I am less convinced, however, that a signalised intersection solution is appropriate for the McGregor Road Roundabout, however, I acknowledge Mr Holland's professional view on that matter. A prudent purchaser, considering the acquisition of the subject land in March 1996, would have received advice from the Department of Main Roads that both the bypass option and the overpass option were being considered by that Department and would have independently been advised by Mr Holland that a signalised intersection was, in his view, a suitable option. I return to this matter later. I will now embark upon a discussion of matters of interest in the history of the subject land.
HISTORY OF THE SUBJECT LANDSalvatore Paino is of Italian extraction, having arrived in Australia at the age of 20 in 1949. In due course he moved into the real estate industry, owning his own agency for a number of years. In 1968 he constructed the Gemini Hotel containing 96 rooms, a penthouse, restaurant, shops and conference rooms at Randwick in Sydney, and after some mediocre trading of that enterprise under separate management, he took over the hotel and achieved above average occupancy levels by capitalising on the nearby airport market. For some years he conducted a travel agency business from the hotel. In 1989 he purchased a hotel and motel in Griffith comprising 63 rooms and two self-contained units and again raised the occupancy levels following a refurbishment. He has subsequently acquired a hardware store at Randwick, and purchased 56 acres of beachside land at Narooma on the south coast of New South Wales and a further area at Manyana, south of Sydney. He had planned to develop a convention centre on the Narooma land, however, the town planning approval included conditions which he found to be unattractive.
In 1986 Mr Paino first travelled to Cairns with an eye to acquiring a property there to extend his hospitality interests. I am not sure whether he had been to Cairns previously, however, said that he was impressed with the potential of Far North Queensland as a tourist destination. Initially he sought to purchase land on the Cairns Esplanade in the Central Business District (CBD) where the "Tradewinds" has since been constructed. That transaction fell through so he looked further afield and settled on the subject land at Smithfield. At that time neither the Skyrail nor the Tjapukai Aboriginal Cultural Park (Tjapukai Centre) nor the Australian Woolshed tourist attractions were developed in the area, however, Mr Paino saw the subject land as providing certain advantageous features: the land was flat and relatively flood-free; there was a nice line of trees positioned along the Captain Cook Highway alignment; the land was "centrally located" in that it provided the opportunity for access to the beaches, the Smithfield Shopping Centre, Kuranda, Port Douglas and Cairns and he saw the potential for commercial development on part of the land in the north-west section. Apparently without the benefit of advice from consultants of the type who gave substantial evidence before me, Mr Paino took a 12-month option over the land in 1986 and completed the purchase in July 1987. That was at a time of a very active market in the Cairns region for tourist resort development sites. Mr Buckley described the period as the "heady days" of the 1980's.
Mr Paino said that he had in mind the development of a resort in the eastern section of the land and well prior to the resumption, had a view that such a resort would be marketed to European travellers, particularly Italians. He retained the services of George James, an architect in Cairns, and gave him instructions for plans to be drawn for a 560-room resort which, he said, given its distance from the beaches, "needed to have its own atmosphere". Through a number of design changes which I need not detail here, the size of the resort became that of 550 rooms and on 29 February 1988 an application for consent from the local authority was lodged, with approval emerging on 18 April of that year. He called the project the "Gemini Park Resort" which I will refer to, simply, as the Gemini Resort.
Given the need for extensive landscaping on the land to contribute to the development of the resort's atmosphere and given the considerable costs involved in purchasing mature plants in the marketplace, Mr Paino took advice from a landscape architect, Eugene Herbert, and commenced planting a substantial palm and plant nursery in December 1987.
Later in 1988 the Mulgrave Shire Council applied to rezone an extensive area of land to the east and south of the subject land for the purpose of a General Industry subdivision. Mr Paino objected to that move and was successful in an appeal before the then Local Government Court. An amended proposal subsequently emerged and, in spite of Mr Paino's further objection and appeal, was approved. That second proposal was substantially smaller than the original and Mr Paino became aware that the Shire Council intended to dispose of a large part of its land, excluding the rezoned portion, to Daikyo, a company owned by Japanese interests. Following the purchase of that land Daikyo entered into a conditional contract to purchase the subject land and the palms growing there for $9,400,000, however, that contract was not completed. I discuss the detail of that transaction later in these reasons.
Mr Paino said in the statement tendered that it was his intention to commence construction of the Gemini Park Resort within two to three years after the date of local authority approval. There were, however, certain matters which he said militated against that plan coming to fruition and, indeed, construction was not commenced until 1995 and even then, apparently not in earnest. The reasons which Mr Paino said impeded his construction plans included:·the appeals against the Shire Council in relation to their general industry subdivision proposal;
·the Daikyo proposal to purchase the subject land;
·proceedings in the Land Court in November 1993 relating to the resumption of an area of land fronting the Captain Cook Highway by the then Queensland Department of Transport;
·Mr Paino's ill health which led to a major surgery procedure in 1994.
·persistent rumours that the Department of Main Roads was proposing to acquire part of the land for the purpose of a bypass road;
Mr Paino made contact with the Department of Main Roads in Cairns concerning their proposals and maintained that contact over a period of almost four years. Whilst certain optional road development proposals were mentioned to Mr Paino during this period, nothing concrete emerged. He took advice from Colin Beard, a traffic engineer, who told him that he could not foresee a bypass over the subject land as being a probability. Nevertheless, Mr Paino remained concerned about the prospect of a resumption and, as he put it, being concerned also that his town planning consent may lapse if construction did not commence, he started construction in 1995. As I understand it, construction briefly commenced in March 1995 and then again in about September of that year.
Mr Paino had, in August 1994, made application to the Mulgrave Shire Council to rezone about 5.9 ha of the subject land for the purpose of a Medium Density Residential (MDR) development and that application was approved subject to conditions in December of that year. The MDR land is in the western sector of the property. Mr Paino appealed against certain of the conditions of the approval and on 24 April 1995 a consent order was made in the Planning and Environment Court which included, amongst other things, the following:"7. Exclusion Area
(a) The 'Exclusion Area" is the area (of the subject land) which is shown on Queensland Transport Drawing No. MCG.4, and which is proposed to be resumed or otherwise acquired by the State of Queensland for the purpose of the Smithfield Bypass.
(b) Should the State of Queensland not have acquired by agreement or completed the resumption of the exclusion area within the six (6) month period this condition (save for paragraph (g)) shall cease to have effect.
(c) The applicant shall not construct any structure or commence any development on the Exclusion Area for a period of 6 months from the date of this order.
(d) Within seven (7) days from the date of this order, the applicant will provide to the Queensland Department of Transport a metes and bounds description of the subject land, as outlined in green on the attached copy of Queensland Transport Drawing No. MCG.4. In the event of delay in the provision to Queensland Department of Transport of that description, the period of 6 months referred to in sub-paragraph (b) hereof shall be extended by the extent of any such delay.
(e) ….
(f) In the event that the State of Queensland does resume or otherwise acquire the exclusion area within the period(s) referred to above, an access corridor not exceeding 28 metres in width shall be permitted across the Smithfield Bypass corridor within the acceptable corridor location bandwidth shown on Queensland Transport drawing No. MCG.4."
Now the evidence is not totally clear, however it appears that the metes and bounds description was supplied on about 9 May 1995 thus the six months' period required in the Court's order would conclude on 9 November. I note, however, that the "exclusion area" applies only to the land the subject of the MDR rezoning and not to the area identified for the tourist resort development. Construction on that resort land could, on my understanding, have proceeded unabated. Nevertheless, it appears that Mr Paino did not recommence construction until about September 1995. He said in his statement that he hoped that construction would provoke the Department into making a final decision concerning a resumption, but also that construction was undertaken to preserve his planning approval. He said that he was also concerned to preserve two contracts for sale that he had over interests in the subject land, one with Aldo Costantino and one with Almax Pty Ltd. I discuss these transactions later in these reasons. Exactly how initiating construction would affect these contracts is not clear to me unless the point is that a decision by the respondent to not resume part of the land would have maintained these contracts on foot.
The Notice of Intention to Resume dated 23 October 1995 then issued and was received by Mr Paino shortly after that date. He had commenced construction of five of the accommodation blocks by that time, however, took advice and stopped construction.
Mr Paino's statement records that negotiations proceeded with the Department "in an effort to try and persuade them not to proceed with the gazettal of the resumption". In apparent conflict with this evidence is evidence in the form of a letter from Mr Paino's solicitors dated 27 November 1995 to the Queensland Department of Transport advising "no objection will be raised in connection with the taking of the land". The letter went on to say that Mr Paino was willing to have the land transferred by agreement, which I take to be a reference to an agreement under s.15 of the AOL Act. A meeting was subsequently held in December 1995 attended by Mr Paino, his solicitor and representatives of the respondent. At that meeting Mr Paino confirmed that no objection would be made and he sought assurance from the respondent that the taking of the land would occur as soon as possible. Later on 19 March 1996 Mr Paino wrote a letter to Mr Santoro, a Minister in the Queensland Government, asking that the taking of the land be expedited if the Minister for Transport was convinced that the resumption was necessary. The letter said that Mr Paino would, however, prefer that the resumption did not proceed.
I understand all of this evidence to show that Mr Paino simply wanted an end to the matter, either way. He wanted to know for certain whether the land was to be taken and he was concerned that the ongoing suspension of construction activity could lead to the lapsing of the town planning consent. He understood that consent could lapse in March 1996 so by the time he wrote to Mr Santoro he would have been understandably anxious for a decision.
I will record my observation that the relationship between Mr Paino and the respondent Department appears to have been somewhat strained. Part of that strain was contributed to by the Department taking virtually the whole six month period following the abovementioned order of the Planning and Environment Court in April 1995 to issue the Notice of Intention to Resume. Given the timing of the issue of this Notice, the Department would not have completed the resumption within the specified six-month period, in any event. In addition to this, an officer of the Department had in March 1993 written to the Shire Council seeking the revocation of the resort development consent approval on the misguided understanding that there would be a reduction in compensation flowing from such an action. I am not sure as to when Mr Paino became aware of this letter, however, Mr Paino developed the impression that the Department was postponing resumption action until his town planning consent expired. It is not difficult to form the view that the respondent was motivated by its own interest and with limited regard to the position of the landowner. Mr Gould observed that the taking of the subject land was premature and that it was the only taking thus far for the bypass project. Mr Paino, it seems to me, forced the hand of the respondent which had a concern that development of the land may enlarge compensation.
Gemini Park Resort
Plans showed the proposed resort occupying 28.873 ha over all but the north-west quadrant of the subject land.
Mr Lynch, an architect, provided a description of and commentary on the component parts of the Gemini Park design. Mr James was the original architect, and Mr Lynch was not involved in any part of the design of the resort, nor for that matter in the changes made to that design on a number of occasions, the latest such change being made about three weeks before the hearing of the matter commenced. He was asked by the claimants to review the proposal to develop the Gemini Resort and in pursuit of that brief, he reviewed the drawings prepared in 1987 by the original architect together with subsequent changes and he carried out an inspection of the site. He also had discussions with a representative from the office of the original architect. Mr Paino said that he often had difficulty getting into contact with Mr James who travelled widely, so decided to retain Mr Lynch. From Mr Lynch's evidence I gained the understanding, however, that Mr James' office was still involved in Gemini Resort design matters up to three weeks before the hearing commenced.
Mr Lynch said that the design concept of Gemini Park envisages a tropical resort created by the use of extensive landscaping and he referred to the Sheraton Mirage Port Douglas Resort and the Cairns Colonial Club Resort as examples where extensive and mature tropical landscapes contribute to the presentation of the accommodation facility. He drew attention to the exclusion of cars from the internal areas of the resort, with all movements within the resort being either on foot or by the use of golf buggy style transport. This arrangement is, he said, similar to that of the Hyatt Coolum Resort in the Sunshine Coast area. The description of the facilities proposed within the resort area was as follows:(i)220 luxury units, each unit having an enclosed area of approximately 38 square metres plus an external verandah/balcony. Corner units are larger (42 square metres);
(ii)340 budget/family units, each unit having an internal area of 36.5 square metres plus an external verandah/balcony. Corner units are larger (41 square metres;
(I draw attention to this description indicating that there would be 560 units in total whereas the local authority approval was for 550 units.)
(iii)man-made pools, suitable for swimming;
(iv)refreshment centres and barbecues located throughout the resort precinct;
(v)covered ways connecting all accommodation buildings, reception building, restaurants and bar building, and recreation centre;
(vi)a network of footpaths and bicycle paths throughout the resort, plus required maintenance roadways;
(vii)main reception building incorporating porte cochere, entry lobby, administration offices, lounge areas, bar and dining room facilities;
(viii)convention and restaurant building incorporating separate restaurant and bistro dining areas, bar and function rooms;
(ix)ampitheatre for outdoor entertainment with covered stage area;
(x)entry gate structure for security and entry statement purposes;
(xi)child minding centre incorporating indoor play and sleeping areas and covered external play area;
(xii)manager's residence;
(xiii)management staff accommodation;
(xiv)transport centre;
(xv)workshop, laundry and stores;
(xvi)staff accommodation;
(xvii)nursery;
(xviii)9 hole par three golf course incorporating a water golf practice range;
(xix)tennis courts;
(xx)croquet court;
(xxi)Italian bowls (boccé);
(xxii)lawn bowling greens;
(xxiii)recreation clubhouse;
(xxiv)playground;
(xxv)equestrian track and horse stable facilities;
(xxvi)bird sanctuary;
(xxvii)jogging tracks and resort paths;
(xxviii)central car park for 590 vehicles. (The car park was to be in the open and did not provide any protection in the form of roofing.)
(xxix)an orchard.
Mr Lynch's report noted that there had been certain amendments to the original master plan and these amendments comprised:
· a reduction in the size of the main reception building by removing unit accommodation and retail shops and scaling down other facilities;
· the combining of restaurant and bar building and convention centre into the one building of more modest dimensions whereas previously two buildings were included in the design;
· deletion of an interpretive centre;
· deletion of a management and staff training building;
· a reduction in the size of both the luxury (previously 41 m²) and budget/family units (previously 39.5 m²).
It will be convenient if I mention now that the construction of units, which commenced on the land in 1995, was at the earlier larger size. I am left wondering whether the Gemini Resort design presented to me represents the development that would have resulted had the resumption not taken place and had construction continued to completion. I put that concern aside, however, as it seems to me that the claimants' case is put on the basis that the Gemini Resort as represented in the various plans and other evidence placed before me, or some reasonable variation of that, constitutes the highest and best use of 28.876 ha of the subject land.
Each of these design changes to which I have referred had the effect of reducing the cost of development, however, the changes were appropriate in Mr Lynch's view, either because built spaces such as the convention facility were too large, or because others such as the interpretive centre were of questionable benefit to the overall resort concept. The circumstances leading to each of the changes were not all explained, however, the reduction in the size of the main building was said by Mr Paino to have come about following discussions with Mr Aldo Costantino who had entered into an option agreement then a contract to purchase an interest in the planned resort.
Mr Lynch saw the Gemini Resort as having the following attributes:
· proximity and easy access to Cairns International Airport;
· well located with good exposure to the Captain Cook Highway;
· good road access afforded by the intersection of Captain Cook Highway and McGregor Road;
· creation of a tropical landscaped haven and building accommodation designed to meet two major market sectors; firstly, international European tourists providing large and comfortable rooms, and secondly, spacious family units, fully self-contained;
· a pedestrianised internal environment within the resort with motorised transport limited to buggy transportation provided by the resort;
· a well-planned internal environment utilising tropical landscaping and water bodies;
· a varied and visually pleasant recreation precinct aimed at the European traveller and Australian family; recreation planned to be both aesthetically pleasing and to encourage participation for casual recreation rather than the serious sportsman who would seek out other facilities located nearby eg. Paradise Palms Golf Course;
· creation of a strongly internally focused haven from which guests venture out to explore the tourist attractions of far north Queensland;
· location of the accommodation facilities to achieve appropriate setbacks and buffering from external traffic influences;
· provision of a choice of dining facilities within the resort.
It will be seen that some of Mr Lynch's points agree with comments made by Mr Bramley and which I introduce later in these reasons, though in some respects the language of the architect creates a slightly different perception. I refer, for example, to Mr Lynch's reference to "a strongly internally focused haven from which guests venture out" as being consistent with, though expressed differently from, Mr Bramley's description of the Gemini Resort as providing sufficient attractions on-site to entertain and distract guests once they return from their enjoyment of the tourist attractions that FNQ has to offer.
Mr Lynch was aware that it was intended that the Gemini Resort attract European and domestic guests. Though he did not claim any expertise in tourism marketing, he did say that he thought the resort would be an attractive one being of a standard between the Cairns Colonial Club and the Sheraton Mirage at Port Douglas.
He described the architectural design of the buildings as "relying upon North Queensland design characteristics of large overhangs, verandahs, loggias and lattice work to create a simple and economical construction heavily reliant upon informal building groupings and lush tropical landscape to create an inviting environment." The design showed the guest accommodation in the form of two-storey blocks each containing 20 guest units adjoining a central service corridor through which, at ground level, the electric buggies could be driven. The accommodation blocks are separated and surrounded by extensive landscaping. Each unit has a balcony or a patio. The luxury units have a higher standard of furniture and fittings than the budget/family units and enjoy a more favourable location in the site. The luxury units are clustered in the central to southern part of the site within close proximity to the central reception and associated facilities whilst the budget units are located in the north-east corner of the site, some of which would abut McGregor Road. Mr Lynch agreed that the units were of standard size in the marketplace, but said they would have a better aspect than, for example, the Cairns Colonial Club where the outlook is towards the entrance to the units. Air conditioning is provided in the form of wall-mounted units apparently referred to as "wall rattlers" in the industry. The recreation facilities are located across the southern portion of the land, though the swimming pools and tennis courts are placed near the accommodation.
Mr Lynch was not aware of the details of the proposed staging of the development, though observed that the master plan layout allows for such a staging to take place, balanced against market demand. Mr Lynch was aware of the estimated costs for the development prepared by Mr Wilkes and he said that a staged development having regard to the economy of the type of construction and design, made good economic sense. He referred to the Mirage Port Douglas development as being an example of high cost construction and a single stage development, which makes it difficult to achieve an acceptable return on investment. He also referred to the Cairns Colonial Club which combined "relatively cheap land" with a simple uninspiring architectural design, but with great emphasis being placed on extensive tropical landscaping. He placed the Cairns Colonial Club at a level above the cheaper hotel and motel accommodation available elsewhere in Cairns.
The building designs included in Mr Lynch's report and the other evidence of layouts provided, revealed evidence of changes in design over time, to which I have referred, and it became apparent during cross-examination that other changes and refinements might need to be addressed. For example, the access into the resort area and the porte cochere and entry statement to the resort proper would need to be designed to take into account the access required to the commercial land in the north-west of the subject land and the MDR portion which includes student accommodation, each of which would use the same access taken from McGregor Road. It was also noticed that there had been a change in the skylight design for accommodation buildings and Mr Lynch agreed that some other allowance would need to be made for adequate lighting into the central core of those buildings.
Mr McKay, a golf course architect, had been approached by Mr Paino towards the end of 1993 to design the golf course primarily for the use of resort guests. In Mr McKay's opinion the course is a legitimate nine hole par three course including bunkering and putting greens which are typical of a traditionally sized golf course. Mr McKay budgeted $350,000 in 1996 for the proposed golf course based on his standard fees for the design and construction of greens, tees, watering system, bunkers and the development of fairways in what he said was essentially a scaled-down model of his usual golf course work.
Mr McKay has not visited the subject land, but was provided with a master plan layout, boundary plan and contour plan, had information concerning the soil type and was aware that the land had previously been a cane farm. He was confident that the design that he had arrived at could be accommodated within a $350,000 budget. Indeed, he said that a golf course can be built to almost any budget depending upon the standard required. He said that his practice was to supply a master plan of the course or the layout plan and to then design the particular aspects of the course such as green shape, size and position, bunkering, etc., in the field as construction advanced. In this way he could be sure that the golf course is appropriate to its location and environment. Decisions are taken in the field having regard to the budget of the client.
Mr McKay was cross-examined concerning his costings and was asked a range of questions which led to the suggestion that his $350,000 figure was too low. No witness was produced from the respondent's side positively addressing the question of Mr McKay's golf course costing and given this and his credible response to cross-examination, I am comfortable in accepting the $350,000 figure. I am a little less comfortable about some aspects of the course layout, however, that may be more a matter of my lack of expertise as a golfer.
This may be a convenient point to include reference to some observation made about the facilities in the proposed resort.
Mr Bramley said that the broad choice of onsite activities, attractions and food choices, including restaurants, do-it-yourself cooking options and the opportunity for guests to pick their own fruit would provide guests with a full day's activity without leaving the resort. He said in that sense the proposed resort is fully self-contained. He thought that the Gemini Resort concept would appeal to a broad cross-section of international and domestic markets and that that would give the resort the capacity to attract different markets throughout the year, thereby reducing off-season downturns. Mr Weigh criticised some of the facilities included in the concept design. He was very much focused on two propositions in his criticism. First, he was concerned that facilities should maximise revenue to the resort owner and in this regard said, for example, that self-cook barbecues, and guests picking their own fruit would deny revenue to the resort. Second, he said that it should be acknowledged that guests would seek entertainment in the form of the attractions in the region such as the rain forest and the reef, thus making the range of facilities in the design somewhat superfluous. He stressed that tourists come to FNQ to experience the region's natural features. He added that some of the facilities such as the golf course and the equestrian activities would be expensive to maintain, but with the prospect of limited return. He said also that he doubted that lawn bowls would be a real attraction for the expected clientele. The various facilities offered in the concept design are not generally found in resorts in the Cairns region. This raises in my mind the question of whether they will really act as attractants or whether they will simply become under-utilised facilities which must continue to be maintained.
VALUATIONS
Both sides employed the "before and after" method of valuation, a method which has the advantage of providing an assessment of the loss of land value together with the impact of severance and injurious affection damage resulting from the resumption (see, for example, Brisbane City Council v. Lansbury (1977) 4 QLCR 502).
Valuers from each side prepared "before" valuations based on the three areas or "parcels" of the subject land indicated by the zoning or proposed uses at the date of resumption. Parcel 1 comprised an area of 6.057 ha of land zoned for MDR development, that parcel being located abutting the Captain Cook Highway. To the south of Parcel 1 and to its east across to the eastern boundary and northerly to McGregor Road was Parcel 2 which had an area of 28.873 ha and at the date of resumption was zoned "rural", but had town planning consent which would have allowed the development of a tourist resort. To the north of Parcel 1 was Parcel 3, an area of 2.5 ha fronting McGregor Road to the north and facing the McGregor Road Roundabout and Captain Cook Highway to the west and north-west. Parcel 3 is located on the truncation created by a previous resumption from the Heavey Lex land.
In the after resumption situation the original parcel is cut into two severances. That to the west became identified as Parcel A during the hearing and this has an area of 8.461 ha. The eastern severance was divided into two parcels: the larger one, Parcel B, was identified by both sides for residential development, whilst Parcel C (in the north-west corner of this severance) was nominated for commercial usages. Each party had a different view of the area that might be devoted to commercial uses, so each side had a different view as to size of Parcels B and C respectively. I will, however, throughout these reasons, refer to the parts of the subject land in the before and after resumption scenarios by the "Parcel" identifications that I have employed above.
Mr Gould carried out both the before and after valuations for the respondent. Mr Warren assessed the value of Parcels 1 and 3 on the before resumption basis, whilst Mr Crawford provided the valuation evidence for Parcel 2 before resumption and the combined value of Parcels 1, 2 and 3, relying on Mr Warren's assessments for Parcels 1 and 3 in that exercise. Mr Crawford also carried out the after valuation for the claimants.
Some of the palms on the subject land are located on each of the parcels, however, the valuers approached their task on the assumption that the palms were notionally removed and their value is established separately and discussed later in these reasons. There were some improvements on Parcels 1 and 2 to which neither Mr Warren nor Mr Gould applied a value for the purpose of assessing compensation as they were not taken in the resumption.
Each of the parcels is irregular in shape, but not so unusual in shape as to make any substantial impact on the before resumption valuation. There is, however, some impact on the "after" value, particularly with respect to Parcel A.
It may be useful if I set out the values settled upon by each side in both the before and after situations.For the claimant
Before Parcel 1 $2,400,000
Parcel 2 $8,500,000
Parcel 3 $1,100,000
$12,000,000
Less discount for combination of parcels 7.5% $900,000
$11,100,000
After Parcels A and B $1,270,000
Parcel C $285,000
Less discount for combination of parcels 5% $77,750
$1,477,250
For the Respondent
Before
Parcel 1 $1,962,720
Parcel 2 $3,053,875
Parcel 3 $625,000
$5,641,595
Rounded to $5,640,000
After
Parcel A $l,615,980
Parcel B $2,041,875
Parcel C $562,500
$4,220,355
Rounded to $4,220,000
Mr Warren approached his task by valuing both Parcel 1 and Parcel 3 as independent titles, therefore having assumed dedicated access. He acknowledged in cross-examination that the size of the overall subject land and the time and cost associated with the development of such a piece of land would limit the number of purchasers in the marketplace who would be attracted to and be capable of purchasing the land and therefore there would be some impact on the resultant value of the land. Notwithstanding this, he took into account what he saw as an added advantage or synergy in the development of these parcels together with Parcel 2 on the assumption that the Gemini Resort to be developed there would add value to both Parcels 1 and 3. Mr Crawford incorporated Mr Warren's values for parcels 1 and 3 into his overall before value for the subject land and discounted the aggregate value by 7.5% to take into account that each parcel did not have independent access and status but stood as part of the overall site. In his after valuation a lower discount of 5% was applied given the reduced aggregate value and the fact that he valued Parcels A and B, though separated by the resumed land, as a single residential development. Mr Gould also applied a discount but his rate was 10% and he applied it to the value of Parcel 1 only. I understand that he did this because he saw Parcels 2 and 3 as being purchased by a single developer who would reserve Parcel 3 for possible commercial development as that potential ripened. Each side's approach to the application of a discount is internally consistent and I need not confront the issue of any discount to be applied until I consider the substantive valuation issues. I will now consider the before resumption valuations and will first consider the valuation of Parcel 2 by Mr Crawford.
PARCEL 2 – TOURIST RESORT USEMr Crawford valued this parcel on the basis that it had a highest and best use for tourist resort development. His valuation for Parcel 2 on this basis was $8,500,000. Mr Gould valued the parcel for residential subdivision. Mr Crawford relied on sales evidence in carrying out his actual valuation, and I will come to those sales later, but in identifying the highest and best use of the 28.873 ha of Parcel 2, he placed reliance on the reports of others. He said that he first considered the contents of each report before deciding to accept it, and that he had sufficient expertise on each of the topics covered by the reports to ensure a competent consideration of their contents. Although his report did not say as much, I understand his valuation to be based on the proposition that the Gemini Resort comprised the highest and best use of Parcel 2. I conclude this because of the fact that he relied on the 550 units included in the resort design in the process of his comparison with sales; and because he relied on reports which were directed at the Gemini Resort concept.
He said that he placed reliance on the reports of Mr Buckley and Mr Bramley and on what I call the "Deloitte's Report" later in these reasons. He also took advice from Mr Lynch, however that appears to have been general in nature, only, and need not be further considered here. It will be appropriate then, before I comment further on Mr Crawford's valuations of Parcel 2, that I consider the evidence of Mr Buckley and Mr Bramley as well as the Deloitte's Report.
Planning – Tourism Use
In 1988 the subject land was subject to the 1975 Town Planning Scheme for the then Mulgrave Shire, that Shire subsequently combining with the Cairns City local authority area in late 1995. On 20 April 1988 the Mulgrave Shire gave town planning consent for "accommodation units and ancillary uses" to allow the development of a tourist resort on Parcel 2 of the subject land including 550 accommodation units. The land was then zoned "Rural C" under the prevailing scheme. The language of the town planning consent does not readily indicate a tourist resort usage, however, is consistent with the language of the scheme then in existence. There was some argument between the parties as to whether the town planning approval included certain features such as the golf course and the equestrian facilities in the Gemini Resort plan but both Mr Buckley and Mr Challoner agreed that consent would have been forthcoming had it been required. Mr Challoner expressed the view that the approval applied to the whole of the subject land, however, this opinion did not develop into an issue of substance between the parties as in 1996 Parcel 1 was approved for rezoning to the MDR zone and Parcel 3 would require rezoning to allow commercial use or for part of that land to be devoted to further MDR development.
The application for town planning consent for the tourist resort indicated an intention to double the size of the resort to 1,100 rooms, clearly a substantial size when one considers Mr Buckley's comment that a 550 room resort comprised "one of the larger resort approvals issued". In any event, no action has been taken to expand the resort approval to the size indicated.
Mr Buckley thought that Parcel 2 was land suitable for a tourist resort from a planning point of view, especially given its proximity to nearby man-made tourist attractions. He also saw some support in the form of the town planning history of the subject land. First there was the local authority consent under the 1975 plan. In 1993 the "Rural" zone which had applied to the land in 1988 was continued and under the new scheme the Gemini Resort proposal would have been a consent use. At the date of resumption for the bypass, the 1995 draft scheme had been on display and the local authority was considering submissions. That scheme continued with the "Rural" zoning of the land under which zone a tourist resort development was a permissible use. In addition, however, the 1995 scheme included in a "tourist strategy diagram A-4" a designation of the site as "major future tourist accommodation" and such a designation, in Mr Buckley's view, conveys to those interested in the general area of the subject land the view that the land would be expected to develop as a major tourist facility. There was also included in the 1995 draft scheme a "housing strategy diagram" which indicated that the subject land was suitable for housing. Both diagrams were supported by language in the Strategic Plan indicating suitability of the land for both tourism and residential purposes. Of course, it is a matter of common sense that land may be suitable for more than one purpose in a town planning context. Nevertheless, it was argued from the claimants' side that the designation of the subject land as a major tourism site is evidence relevant to establishing its highest and best use. It was pointed out that the housing strategy diagram was more broad brush than the tourist strategy diagram. This is clearly so as it included existing resorts within the designated housing areas. From the respondent's side it was argued that the designation on the 1995 "tourist strategy diagram" was probably a reflection of the existing town planning consent together with the fact that in November 1994 the claimants had received building approval and had subsequently commenced construction. The claimants' response to these points was to say that the Daikyo land to the east of the subject land was also designated for major tourism accommodation, but was not the subject of town planning consent nor a building approval. I note that this Daikyo land had initially been thought of as a tourist resort site, however, the evidence was that Daikyo had changed its plans and decided to develop this land as residential land in association with a golf course. I note also that the designation on the tourist strategy diagram also applied to a number of sites including the Trinity Cove Resort site at False Cape on which the establishment of a tourist resort appeared quite remote at the date of resumption of the subject land.
The local authority did not choose to designate the subject land as a tourism site in the planning scheme which came into existence in 1993, a scheme which marked the subject land as a discrete residential area, a designation quite inappropriate for the development of major tourism facilities. Of course, at that time the town planning consent for Parcel 2 was in existence, however, the building approval had not issued.
The zoning of land in a town plan, or identified support for a particular use within a planning scheme is not an indication by itself of the highest and best use of the land. Certainly in the instant case the local authority has clearly indicated its support for the development of the Gemini Resort on the subject land, both by way of the grant of consent and the building approval, and by the designation of the land as a major tourist accommodation site in the tourism strategy diagram which was part of the 1995 draft scheme. In Gallagher v. Brisbane City Council (1975) 2 QLCR 368 the Land Appeal Court said:"Now, while the zoning of land pursuant to a town plan will always affect the highest and best use of land at a particular date, and to that extent the value, it does not create that highest and best use. It may facilitate the immediate realisation of that highest and best use or, at the other end of the scale, it may totally prevent such realisation. In between these two, zoning may work to postpone, or defer, full or any realisation of the value of the highest and best use, until some intermediate action is taken and completed. But, in our view, the highest and best use remains the same throughout, and, on the basis that the highest and best use on resumption date is different from the permitted use as of right of the land under the zoning on that date, the dispossessed owner is entitled to receive the present value of that highest and best use of the land on resumption date, so long as such present value exceeds the permitted use as of right value on that date, where the zoning provisions prevent the immediate realisation of the highest and best use value." (at 381).
The existence of town planning consent or the identification of a supportive local authority is evidence relevant to the establishment of the highest and best use of land, for without local authority approval, or the prospect of it, a proposed highest and best use may be nothing more than a forlorn hope. Equally, it is not the case that such local authority support is conclusive of an acceptance in the marketplace that the economic highest and best use is consistent with the local authority's planning views. Indeed, as I relate later in these reasons, there are numerous examples of local authority approval for tourist resort development not being acted upon or even replaced by zonings permitting residential development. If I direct my mind to the evidence that I have outlined above concerning the town planning history of the subject land, I cannot conclude anything other than that the local authority did indeed support the development of the Gemini Resort on the subject land, however, would probably have also supported residential development on Parcel 2 of that land. Indeed, both sides readily assumed that local authority approval for residential subdivision of Parcel 2 would have been forthcoming.
THE BRAMLEY REPORT
Visitation
Far North Queensland (FNQ) is a popular tourist destination attracting both domestic and international visitors wishing to experience the Great Barrier Reef, the rainforest, the Atherton Tableland, including the small town of Kuranda in particular, and various adjunct activities such as those provided by the Skyrail Cableway.
The Skyrail facility comprises a cableway carrying a number of gondolas which each seat up to six people and which convey passengers over the canopy of the rainforest between the Smithfield terminal and the terminal at Kuranda on the Atherton Tableland. Passengers are able to alight at stations along the way to walk into the rainforest along constructed pathways. There is also an exciting few minutes when the gondola travels high over the Barron River. An expansive view of the coastline to the north and south of Cairns from the Skyrail is also had. The Tjapukai Centre is located adjacent to the Skyrail Smithfield terminal and provides a range of visual cultural experiences focusing on Aboriginal culture. The Freshwater connection is an old railway station where tourists can board old-fashioned railway carriages and travel up to Kuranda or, alternatively, disembark at Freshwater if returning from Kuranda by train. Kuranda is a small town on the Atherton Tableland and features a variety of tourist attractions. The Australian Woolshed theme attraction which was proposed for development at the time of resumption is now to be found about 2 km south of the subject land along the Captain Cook Highway and apparently replicates a similar facility located at Ferny Grove in Brisbane. Tourist accommodation is supplied in the Cairns CBD and in other locations on the coastal strip, particularly northerly from the city.
Mr Bramley's terms of reference were "to assess the suitability of the Heavey Lex site for a proposed resort (Gemini Park Resort)" and "to provide an opinion on the impact of the road resumption … on the original resort concept". I can say in summary that his conclusion was favourable to the development of the Gemini Resort. Mr Weigh was called by the constructing authority to deal with this topic. He does not support the view that the development of the resort on Parcel 2 of the subject land would be prudent.
Both Mr Bramley and Mr Weigh provided statistical data of the historical visitation trends and forecasts for the Far North Queensland (FNQ) area. This data came from a variety of sources and was presented in the form of a large number of tables, which I will not reproduce here. Their various data tables led these gentlemen to paint a picture of the historical visitation to FNQ in quite positive terms. There were some differences between the data each of those witnesses supplied, however, the trends indicated were similar so I will largely refer to one set of data only: Mr Bramley's. Notwithstanding the similarities in the historical data, each of these experts had different views as to what the future might bring for the Gemini Resort.
Mr Bramley produced figures showing that international visitor numbers to FNQ for the years 1989 to December 1995 had increased at an average 14.1% per annum and 6.6% for visitor nights during that period. The demonstrated trends are better than either Australia or Queensland as a whole. Domestic visitations have grown at a lesser rate than for international visits, however, for the period 1988-89 to 1993-94 the average annual rate was 6.1% for visitors numbers and 3.6% for visitor nights. Again the FNQ figures are higher than the national or Queensland averages. Domestic data after the 1993-94 year is not easily compared with the earlier years, given a different collection and processing methodology.
Mr Bramley recorded that growth in the number of international visitors to Australia has been largely attributable to an increase in holiday travellers, however, this increase is of less significance in FNQ where the holiday component of total visitations has been historically high. He mentioned figures of 88% visitations comprising the FNQ holiday segment in 1989 and 92% in 1994. Domestic holiday growth to FNQ grew from 60% of total visits in 1989-90 to 77% in 1993-94 when at the same time the figures were stable elsewhere in Queensland as a whole, but had fallen nationally.
Averages, it is appreciated, may often conceal a more detailed picture. In the case of the increase in international visitations there was not a gradual trend from 1989 to 1995, there being a substantial increase in visitors between 1991 and 1992 of 393,000 to 508,000; a nil increase through to 1993; an increase to 589,000 in 1994; then a flatter increase to 605,000 in 1995. The average duration of stay in hotels and motels in FNQ by international visitors during that period showed a similar unevenness and demonstrated a reduction in average length of stay down to about four nights around the date of resumption. This length of stay is somewhat shorter than earlier years and, in Mr Bramley's opinion, is a result of an increase in the number of Japanese visitors who usually stay for shorter periods than other international visitors. The domestic trends are similarly uneven and actually show a reduction between 1991-92 and 1992-93, with an upward movement in 1993 and 1994 in visitor numbers, but still not back to the 1991-92 level. Domestic visitor nights showed a similar trend and again a reduction in the duration of stay.
International air services arriving at the Cairns Airport brought an increased number of passengers to FNQ with an annual average increase in numbers of 28.3% for the 1986 to 1995 period on Mr Bramley's figures. Domestic services for the period 1985-86 to 1994-95 showed an average increase of 13.6% per annum in passenger arrivals, though the absolute number of domestic visitors arriving by air was higher being more than double the international arrivals (778,000 to 329,000 respectively) in the 1995 year.As I have said, somewhat different interpretations were placed on the data by the respective experts and the topic of air passenger arrivals provides a suitable focus to discuss that difference in viewpoint. If I take, for example, a table presented by Mr Bramley concerning international arrivals, this notes an increase from 87,000 passengers in 1988 to 145,000 in 1990, 287,000 in 1992, 366,000 in 1994, then a move downwards to 329,000 in 1995. Domestic passenger arrivals reveal a more undulating picture, with 248,000 arriving in 1985-86, 387,000 in 1987-88, 268,000 in 1989-90 up to 589,000 in 1991-92, then 931,000 in 1993-94 and down to 778,000 in 1994-95. Both Mr Bramley and Mr Weigh agreed that the conclusion of the domestic airline pilots' strike in 1990, of which we are all aware, contributed to the substantial increase in domestic passengers in the following year, however, Mr Bramley was of the view that the 1991-92 increase reflected a continuation in growth, as well as a release of pent-up demand. Mr Bramley suggested that the increase in domestic arrivals in 1993-94 resulted largely from the deregulation of domestic airlines, which led to the introduction of the Compass 1 and Compass 2 Airlines and a level of fare competition and fare reduction, which increased the number of passengers. He conjectured that by 1994-95 fares had returned to the previous levels and that this had brought about a reduction in the number of domestic visitors.
Mr Bramley's explanation for the variation in international passenger arrival largely focused on what he termed "capacity constraints" in accommodation in the FNQ area. He did say that the airline pilots' strike may have contributed to some extent to the variation in figures as intending arrivals may have been concerned as to domestic connections, however, that was not a matter that he spent a lot of time on in evidence. The "capacity constraints" argument, as I understand it, says that the number of arrivals did not grow, indeed it went down, between 1994 and 1995 because intending visitors could not secure accommodation . He said, and Mr Weigh agreed with this, that the peak month in FNQ for hotel and motel occupancies is August when these establishments operate at close to capacity. Actual occupancy levels may not be 100% for that month because of cancellations by wholesalers and individual "no-shows". Such late cancellations militate against the prospect of other wholesalers taking up the spare capacity or in individual arrivals matching their accommodation requirements with that which becomes available. Historical data indicates that supply appears to outweigh demand in terms of actual occupancies during this August period and certainly for the balance of the year, however, Mr Bramley's argument is that there is unsatisfied demand in the form of potential visitors who simply did not come to FNQ because accommodation was not known to be available. He cites support for this rationale in the November 1995 Rider Hunt publication which deals with tourism, amongst other things, and which refers to a "slow down in tourism growth due to a shortage of hotel rooms for overseas visitors". This reference, I might add, is to Queensland as a whole and is not specific to FNQ.
It is important to note that Mr Bramley's views concerning "capacity constraints" is a deduction which he draws from the evidence and does not comprise direct evidence. As I understand the proposition, it is contrary to other evidence which he gave that the drop in occupancy rates in FNQ expressed as a percentage is explained by an increase in the supply of rooms above the increase in demand. Indeed, Mr Weigh wrote in his report that "at 22 March 1996, there had been five consecutive quarters of declining occupancies for hotels in Far North Queensland". Mr Bramley's proposition also appears to me to be in conflict with the fact that the number of international arrivals has dropped in absolute terms during the period from 1994 to 1995, a trend which would appear to me to release pressure on accommodation supply coming from that particular sector of the tourist market. There is also the observable fact that there was a new substantial resort development which had taken place around the date of resumption was at Treetops in Port Douglas and the poor occupancy rates achieved there did not reveal that that particular facility was able to readily soak up any excess demand.
Reference was made by the respondent to the repetition of work done in preparing an estimate of the costs of development of the Gemini Resort and the detail of that work, the suggestion being that the advice on construction costs provided by Mr Lynch, which was then not relied upon, would have satisfied the Spencer test, whereas the evidence finally relied upon went beyond the level and reliability of information which would ordinarily be available to the prudent purchaser. Reliance was placed on my discussion of this proposition in Hall and Hedge (ibid.) at 306-308. I do not intend repeating here all that I said on that occasion, but two points are worth mentioning. First, I was essentially concerned with evidence being adduced which ran the risk of leading to a result different from one supported by the Spencer formulation, for example, by reducing the risks associated with an intending development because of the level of detail relied upon in Court which would not normally be available in the marketplace. Second, I acknowledged in Hall and Hedge (ibid.) that "the exigencies of preparing evidence suitable to a contest in Court" may mean that evidence in the form of professional reports need to be provided in a more sophisticated form than would usually be available in the marketplace.
I think that the question of whether evidence falls outside the province of that which is implied in Spencer v. The Commonwealth (ibid.) is, in itself, a question of evidence in that a Court needs to act, not on some assumed universal view as to what might or might not happen in the marketplace, but on evidence as to what might have happened in the particular case in question. For example, there may be evidence that a hypothetical vendor would not allow a purchaser the opportunity to carry out certain inquiries or investigations without the benefit of a conditional contract; or, on the other hand there could be evidence that it is the practice in the marketing of properties of the type under consideration and in the locality concerned, for vendors to prepare and provide, as a marketing tool, certain information about the properties, the subject of sale. Now in the absence of evidence pointing to what happens in the marketplace, there is, unless the matter is self evident, no secure means whereby a Court can decide whether particular evidence offends valuation principle in the manner discussed in Hall and Hedge (ibid.) I have evidence here in the form of admissions from Mr Robertson, then Mr McPherson, to the effect that Mr Lynch would have had sufficient material upon which to base an estimate and that an estimate of that type would probably have satisfied a prudent purchaser. On that reasoning Mr Lynch's fees for providing cost estimates would be allowed in lieu of those of Obersky & Jarmey. What I have in the case of the item presently under discussion is, however, a figure which appears to me to be appropriate for the standard of work which would be expected in the provision of such an estimate whereas I have no specific figure for Mr Lynch's fees for this work. The claimed amount of $2,300 is therefore allowed. Similarly, fees in the amount of $310 charged by JB Design for obtaining copies of plans and providing architectural advice to Obersky & Jarmey are allowed.
E - James Architects
A statement from George Charles James, registered architect, explained how Mr James had had discussions with Mr Robertson and Mr Lynch regarding their respective professional tasks and he also redesigned his original 1987 resort design to modify the entry building and the convention centre. I accept that, given my view of Mr Lynch's professional task in this matter, part of Mr James' fees ought to be the subject of compensation, however, I do not think it appropriate that the respondent have to pay for modified design work which might have been appropriate for tendering at trial but would not have been necessary for Mr Lynch to form an appreciation of the resort design. I have decided to allow $800 instead of the claimed amount of $2,269.
F - Tourism Analyst
Mr Bramley's firm charged the claimant $21,889.95 for advice concerning the Gemini Resort and advice to other consultants of matters within Mr Bramley's expertise. I will not detail Mr Bramley's activities, however, suffice it to say that the report finally tendered in evidence reveals the nature of his work. In addition, however, Mr Bramley made the inquiries from South America, Italy and the United Kingdom, which I have mentioned earlier, and participated in what I have concluded earlier were activities suited to the preparation for trial. Mr Bramley quoted to Mr Paino a fee of $15,750 for the preparation of his report and he charged that amount together with $1,639.95 disbursements. I will allow these amounts. He also charged $525 for his inquiries in Italy and London and $3,000 for the provision of an additional chapter to his original report. That original report had been completed and provided to the client on 16 September 1996, yet it took until 15 January 1997 for the additional chapter to be requested. As I understand it, the new chapter did not alter the outcome of the report. A further amount of $975 was charged by Mr Bramley for his attendance at a meeting on 19 May 1997 and subsequent work on room rates apparently for the benefit of Deloittes. I allow this amount but will not allow the other two amounts which bear the characteristic of being excessive and associated with preparation for trial. Accordingly, I will discount Mr Bramley's fees to $18,364.95.
G - Modelling, Photography and Artists' Fees
Peter Sands Architectural Models prepared a model showing the constructed bypass project on the subject land. An amount of $3,635.60 is claimed for the model said by Mr Robertson to be designed to assist the consultants in ascertaining the impact of the constructed bypass on the proposed uses on the land after resumption. Mr Robertson had inspected the subject land on 15-17 April 1996 and soon after that he requested that a scale model be constructed. That model was apparently not adequate and a second model was constructed which was thought to better show the visual effects of the bypass. Mr Robertson said in evidence that he needed to be convinced that a resort did not comprise the highest and best use of the retained land after resumption and that the model was of assistance. He said also that the model served the other purpose of ensuring that all of the consultants saw the scheme for the bypass through the same eyes.
It seems to me that a model was not needed to demonstrate to consultants of the expertise who appeared before me, the nature of the injurious affection on the suggested resort land, as it would have been readily apparent to them that a resort use after resumption would not have been appropriate. I think also that the use of such models for consultants considering injurious affection on the MDR and commercial lands is a clear case of "over egging the pudding". None of the consultants called by the claimant appeared to me to need the model to support their view before me. I think that the production of the models to assist in the preparation of the claim was not reasonable. I am also of the view that the models were probably prepared with the conduct of the case in Court in mind. This item is disallowed.
G - Photography
The photography claim is in the amount of $1,000. This item of claim is concerned with a number of photos of the subject land and the Novotel Resort which were taken on the initiative of Mr Robertson. The photographs were apparently taken from a helicopter and were presented in a proof format, which allows the selection of photographs for enlargement as required. No claim for enlargements was made, though four photographs tendered in evidence appear to me to be enlargements of four of the proof photographs. The photographs were requested by Mr Connor soon after a meeting of 28 August 1996 which records in its minutes what appears to me to be a discussion about use of such photographs at trial. Following this meeting, a letter to the photographers on 11 September 1996 made it quite clear that the photographs were needed for "Court proceedings". Nevertheless, Mr Connor said that he thought the photographs would allow consultants who did not live in Cairns to refresh their memory from time to time. The evidence in support of that use of the photographs is flimsy. Mr Connor said that the proofs were given to Mr Robertson who did not, however, recall that, though did say that he had seen the proofs. There was no evidence of them being viewed by or supplied to other consultants. This item of claim is disallowed.
G - Artist's Impression
An artist's impression in the form of a large colour picture portrayed the whole of the subject land as if developed to the MDR and Gemini Resort usages, but with a commercial component left vacant. This attractive picture was tendered in evidence during the hearing and was utilised by both sides as a convenient reference document on many occasions. An earlier version of the picture had actually become evidence in the Land Court hearing regarding the earlier resumption of land. The picture was obtained at Mr Robertson's request in order, he said, that all of the consultants were proceeding with the same vision of the resort in mind. Now each of the consultants would have, I assume, skills and experience in reading plans and could easily form a view as to the concept involved in both the MDR land development and the Gemini Resort. I do not think it reasonable that the claimant obtain such a picture in preparation of a claim and I think that as with the photographs and the architectural models, the artist's impression was obtained with a view to the anticipated contest in Court. This item is disallowed.
I will add here that Mr James (Architect) also charged the claimant a fee of $85 for professional fees incurred in assisting the model maker in the construction of the model. Consistent with what I have said above, this amount is also disallowed.
I - Town Planning Fees
The respondent acknowledges the need for a firm such as Mr Buckley's to be retained to provide town planning advice to assist the claimant in the formulation of a claim for compensation, but says that the expenditure goes beyond that which was required to formulate the claim, being directed in large part to preparation for hearing. Mr Buckley's fees were in the amount of $14,291.80, together with disbursements of $700. It is clear from Mr Buckley's evidence, to which I referred earlier, and also on general observation of the manner in which the claim "project" was managed that Mr Buckley's work was also colourably concerned with preparation for trial. A briefer report was warranted. I will allow a figure of $9,000 employing a broad-axe approach.
L - Landscaping Consultant's Fees
This is a claim described as being for fees incurred in obtaining advice from a landscaping consultant (Mr Prowse) for the purposes of formulating and lodging the claim for compensation. Mr Prowse had been first approached by Mr Paino in the middle of 1994 in relation to the landscaping of the resort land and had provided a planting strategy (also described as a landscaping strategy in Mr Prowse's statement) and a costs estimate for the hard and soft landscaping for the Gemini Resort. The invoices provided for this work show that Mr Prowse prepared a concept master plan and the evidence was that the standard of work done would have been such that a developer could have utilised Mr Prowse's reports to immediately commence landscaping on the ground, as it were. None of the costs associated with this work was claimed as a disturbance item, however, I needed to relate this evidence to address a concern raised by the respondent that the level of work undertaken by Mr Prowse was such that it would have exceeded the implied standard in Spencer v. The Commonwealth (ibid.) as discussed by me in Hall and Hedge (ibid.).
Included in the claim for compensation was a claim for work done in relation to the disposal of palms on the land retained by the claimant company. Mr Prowse provided a statement which said that in August 1996 he had been approached by Mr Paino who said that he wished to undertake a sale of the palms on the retained land. It is important that I stress that Mr Prowse was not approached simply to provide an opinion on the value of the remaining palms. In accordance with his instructions, he proceeded to conduct a tender process which I have described earlier in these reasons and charged an overall amount of $18,944.81 for that work. I mentioned at the introduction of this item that the amount claimed was said to be concerned with the formulation of the claim for compensation, yet the evidence points to Mr Prowse undertaking work for a completely different purpose. Let me dispose of that issue first of all. First: I cannot reconcile a claim for the costs of the disposal of the palms with a claim dealt with elsewhere in these reasons for the cost of the installation of an irrigation system designed to maintain the palms. Second: a decision by the claimant to dispose of the palms was apparently not taken through to conclusion. This may be because the purpose of retaining Mr Prowse was not in fact to effect a sale, but rather to obtain evidence to support a claim for compensation. Now I acknowledge that it was the evidence of Mr Prowse which arose out of the tender process upon which I based my conclusion concerning the value of the palms. It does not follow, however, that the actual costs of conducting that tender process should be allowed as disturbance expense incurred in the preparation of the claim. After all, it is the palms on the resumed land that were taken, not those on the retained land. My utilisation of the tender price for the remaining palms was simply a matter of utilising the best evidence available. Third: a decision by the claimant to dispose of the palms on the balance land is a decision taken by him, not as a natural and reasonable consequence of the resumption (Harvey v. Crawley), but rather one taken as a business decision. The costs of implementing that decision ought not to be the subject of compensation.
There was much ado from the respondent's side concerning the manner in which palms on the resumed land were counted. It appears that Mr Paino agreed with the respondent that both parties would be represented at the palm count, however, Mr McDonald, for the respondent, conducted the count alone it seems. Subsequent to Mr McDonald's work, the figures were supplied to Mr Paino who passed them to Mr Prowse, who retained a botanist, Andrew Mitchell, who then conducted a count for the claimant. Mr Mitchell charged $670 for his work and Mr Prowse charged $255 in professional fees in addition, totalling $925. It was suggested by the respondent that had Mr Paino adhered to the original agreement that the counting be conducted in tandem that the costs would have been less. Of course, that would only have been the case had Mr Cranston, Mr Paino's nursery man, been involved in the count, not the consultants, Mr Mitchell and Mr Prowse. Mr Paino did not, however, trust Mr Cranston to provide an accurate figure and he preferred to have Mr Prowse and Mr Mitchell do that work. Mr Smith (Financial Controller) thought Mr Cranston to be quite suitable to conduct a count, however I think that Mr Paino had a greater personal awareness of Mr Cranston's skills. As it turned out, Mr Mitchell did discover some errors in Mr McDonald's count although they were "relatively minor" in Mr Prowse's view. I think I should not labour the point further and on balance will allow the claimed amount of $925.
There is a claim for $300 with respect to Mr Prowse providing advice concerning the estimated pool construction costs and $5,886 in relation to the preparation of detailed calculations of landscaping costs for the resort. These costing exercises were required as inputs for the Deloittes report. There was evidence that Mr Lynch had supplied indicative costings for landscaping and I assume for the pools as well, yet Mr Prowse had been retained well before Mr Lynch came onto the scene. The respondent suggested that Mr Lynch could provide cost estimates to an adequate standard, whilst Mr Prowse supplied advice to such a standard that a developer could have taken his reports and commenced construction the following day. As I have indicated earlier, I think that part of the reason for Mr Prowse's standard of work being so high followed from the work that he had done prior to the resumption. Nevertheless, I think that the overall charge of $6,186 on account of this item is excessive and involved Mr Prowse undertaking very detailed investigations. Using a broad-axe approach and doing the best I can, I will allow $3,000 for this item.
The claimant also seeks compensation with respect to advice Mr Prowse provided concerning the market value of the palms on the resumed land. There is no separate amount that I can discern from Mr Prowse's statement of evidence and attachments which deals with this point. His statement does, however, refer at one stage to a figure of $3,686, described as being for "undertaking sale by tender and advising generally as to the value of the palms", given that I have already made an allowance for the counting of these palms and have noted that Mr Prowse would have had information concerning the value of the palms in providing his advice concerning landscaping costs, I will allow a figure of $1,000 for this item.
M – Property Consultants
Payment to JLW Transact in the amount of $18,700 is claimed with respect to the attempt by the claimants to sell the retained land. Mr Paino said that the attempted but unfruitful sale was undertaken in an effort both to effect a sale and to attempt to establish the value of the land following resumption. According to Mr Connor, Mr Paino wished to end his troubled investment in the Smithfield land.
Mr Gore submitted that the land sought to be sold after the resumption in this case was land of a character quite different from the land before resumption. It was not, in effect, the land the claimant invested in, but a mere remnant of that. As such, he submitted, the costs of sale ought to be the subject of disturbance compensation. He acknowledged that the subject land before resumption would have been subject to selling costs in order for its value to be converted into cash and that, therefore, perhaps some reduction of the selling costs of the retained land might be justified. He submitted, however, that some award should be made. I do not agree. I think that the item of claim must be rejected as being inconsistent with what Denning LJ said in Harvey v. Crawley (ibid.) at 507:"Supposing a man did not occupy a house himself but simply owned it as an investment. His compensation would be the value of the house. If he chose to put the money into stocks and shares, he could not claim the brokerage as compensation. That would be much too remote. It would not be the consequence of the compulsory acquisition but the result of his own choice in putting the money into stocks and shares instead of putting it on deposit at the bank. If he chose to buy another house as an investment, he would not get the solicitors' costs on the purchase. Those costs would be the result of his own choice of investment and not the result of the compulsory acquisition."
In my view it matters not whether the claimant decides to buy a replacement property or to sell the balance land which he now sees as an unsuitable investment. The choice is his and the cause of the expense is his choice. See also George v. The Crown (1979) 6 QLCR 89 at 93-94.
Whether a sale of balance land, if successful, is a benefit in establishing the after-resumption value is not a relevant consideration, in my view. Compensation for professional fees reasonably incurred in the preparation of a claim is allowed and the decision by the claimant to attempt to obtain such supporting evidence is not embraced by the principle which supports the award of compensation for professional fees incurred in the formulation of a claim.
K - Director's and Employees' Time
This is a claim in the amount of $99,059.10 being for director's and employees' time in the preparation of the claim for compensation. Mr Paino is the director concerned and the claim in that respect is for the expenses for himself and his wife, who accompanied him frequently both as a confidant and someone who would assist in the management of his health. Mr Paino was intimately involved in the claim preparation project, as I discuss elsewhere in these reasons. I have perused the material provided in respect of this particular item of claim and have noticed that the material reveals that much of Mr Paino's time was concerned with matters other than the formulation of the claim and I refer, for example, to attempts to reverse the resumption decision and, on the basis of Merivale, Land Court (ibid.) such matters would not be compensable. The more important consideration, is, however, that the award of compensation for the balance of the claimed item is not supported by principle.
Mr Gore recognised that the Queensland cases deny recovery of costs of the owner or, for that matter, of a director of a company which owns the relevant land (Shann v. Commissioner of Water Resources (1987) 11 QLCR 194; Hill v. Department of Transport (1992) 14 QLCR 205; Thirty-Fourth Philgram (ibid.); Pejama Pty Ltd v. Commissioner of Main Roads (1991) 12 QLCR 278; and Gumsert Pty Ltd v. Commissioner of Main Roads (1982) 8 QLCR 181). He submitted, however, that there is an inconsistency between these Queensland authorities and authorities in Victoria (Benton v. Road Construction Authority No. 1) (1992) 2 VR 489; Mario Piraino Pty Ltd v. Roads Corporation (No 2) (1993) 1 VR 130 and King v. Minister for Planning and Housing (1993) 1 VR 159), in New South Wales (West v. RTA (NSW) (1995) 88 LGERA 266) and the United Kingdom (Smith v. Birmingham Corporation (1974) 29 P & CR 265). Mr Gore said that the Queensland cases are largely based on the reasoning that "the position would appear to be akin to a vendor in the marketplace seeking to recoup from a purchaser his expenses for the time he spent in consulting an agent and in other activity to negotiate a purchase price". (Shann at 224-225).
His submission is that there is a defect in this reasoning and that a compensation case ought to be treated differently from a voluntary purchase. He made particular reference to Benton at 494 where it was said:" At one stage the authority voiced strong opposition to such claims unless something in the nature of an actual outgoing, for example, for substitute or extra replacement labour could be verified. But too rigid an attitude scarcely seems in the best interests of the authority. The court is in effect being invited to say to an owner that he cannot recover for any part of his own time spend in responding to the acquisition, for example, by ascertaining cross-over or access points unless he actually engages someone at a cost to replace him. If the court did that, then it would be proper for the court to point out that the owner could have declined to involve himself in any dealings with the authority and could have engaged someone to act on his behalf, e.g. a consultant and then claimed for the costs of such assistance as being direct pecuniary loss."
As I understand the facts of Benton, His Honour was not referring to costs of the claimant incurred in the preparation of a claim for compensation, but with "direct pecuniary loss" arising out of the claimant's working of his farm and the cost of dealing with the requirements of the resuming authority with respect to such matters. It also appears to be the case that in Benton the Road Construction authority did not in the end dispute the right to compensation under the relevant statute, the argument being more concerned with the state of the evidence in support of the claim. It seems then that what His Honour said was obiter dictum. Mario Piraino was referred to in Melbourne City Link Authority v. Teford Pty Ltd [1999] VSC 106 at 6 where Her Honour said:
"The limited findings there by Gobbo J turned on the evidence in that case and are not of direct relevance to the question before me."
Indeed, in Mario Piraino the Court was more concerned with the matter of a town planning consent relevant to enhancing the value of land purchased by the claimant, rather than in the preparation of a claim for compensation. In Smith the matter was one where the Lands Tribunal was concerned not with the owner's time involved in the preparation of the claim for compensation, but in the owner's time and those of his employees in "effecting the removal of a going concern … to new premises". Such expenses would frequently be compensable in Queensland, though the reasoning in that case is of no assistance in the facts presently confronting me. The case of King is similar to Mario Piraino in that the claimant incurred professional costs and expenses and expended substantial amounts of time in connection with attempts to secure resolution of the planning status of the land in order that an agreed purchase price could be calculated pursuant to the provisions of the Victorian Land Acquisition and Compensation Act 1986. I would similarly confine the case of King to its facts and hold that it is not applicable in the present context. West appears to have been cited in error. That case was concerned with compensation for owner's time associated with removal from the resumed land and in locating a replacement property; and with the payment to a person to carry out selected business tasks which would ordinarily be performed by the claimant. Talbot J did not allow the first of these items on the basis of his construction of the relevant statutory provision, but did allow the second as comprising an actual pecuniary loss. In Thirty-Fourth Philgram (ibid.) the learned President said at 52:
"I feel that it is well established that such costs are not compensable and I do not propose to allow the claim."
Nothing in the submissions of the claimant erodes the finality of what the President had to say. In these circumstances, I will not allow the claim for compensation with respect to the director's time which is treated as owner's time (Gumsert (ibid.)).
The claim with respect to the employees' time was associated with the employees in the claimant's Sydney office retrieving records. Whilst it is not totally clear what the records were that were being retrieved, it is apparent to me that most if not all of them would have been associated with the nursery costs or the resort costs and given that these claims have been disallowed, it would be inappropriate for the costs of assembling the claim to be allowed. After all, the disturbance claim was prosecuted after the claimant had been provided with my interim reasons. In such circumstances it would not be appropriate to decide the matter on the basis which allows full valuation fees notwithstanding a failure of the claimant to have the highest and best use of the land determined in its favour. (See Merivale (ibid.) Land Appeal Court). Apart from this, it is my view that employees' time ought to be characterised in the same manner as claimant's time and that such time involved in the preparation of the claim for compensation should not, consistent with Queensland authority, be allowed.
In summary, the following items and amounts will be determined as disturbance compensation for Mr Paino and Heavey Lex, respectively:
Mr Paino
A. New Irrigation System $5,000.00
B. Plant removal costs $3,376.56
C. Legal fees for lease $444.83
D. Fencing Nil
E. Maintenance of palms Nil
F. Wasted survey costs Nil
Total $8,821.39
Heavey Lex
A. Solicitors $30,000
B. Barristers $2,480.00
C. Valuers John Robertson $28,848.70
Taylor Byrne $455.00
Keith Brady $3,000.00
D. Accountants Deloittes $25,000.00
Pritchard Adams NilE.Architects and
Builders McKerrell Lynch $8,000.00
Obersky & Jarmey $2,300.00
JB Design $310.00
James Architects $800.00
F. Bramley Tourism Analysts $18,364.95
G. Modelling, photography, artists Nil
H. Economists $5,507.00I. Town planning $9,000
J. Interpreters $435.00
K. Directors and employees' time Nil
L. Landscaping $4,925.00
M. Property consultants Nil
N. Resort construction costs Nil
O. Liaison consultant $500.00
P. MDR - rezoning costs Nil
- appeal costs $16,000
- miscellaneous $2,437
Q. Wasted legal costs $2,000.00
R. MSC appeal costs Nil
S. Miscellaneous resort costs Nil
$160,362.65Conclusion
In conclusion, I determine compensation for loss of land and palms at $3,335,000. I also determine disturbance compensation payable to Heavey Lex in the amount of $160,362.65. I determine disturbance compensation payable to Mr Paino at $8,821.39.
RP SCOTT
MEMBER OF THE LAND COURT
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