Hope v Brisbane City Council
[2012] QLC 41
•28 August 2012
LAND COURT OF QUEENSLAND
CITATION:Hope v Brisbane City Council [2012] QLC 0041
PARTIES:Roy Hope and Delia Hope
(Applicants)
v.
Brisbane City Council
(Respondent)
FILE NO:AQL856-07
DIVISION:General Division
PROCEEDING: Application to determine compensation under the Acquisition of Land Act 1967
DELIVERED ON: 28 August 2012
DELIVERED AT: Brisbane
HEARD ON: 11, 12, 13 April 2011; 29, 30, 31 August 2011; 1 September 2011; 6, 7, 8 February 2012
Submissions finalised 19 July 2012
HEARD AT:Brisbane
MEMBER:Mr WA Isdale
ORDER/S:1. Compensation is assessed at Two Hundred and Thirty Thousand Dollars ($230,000) in respect of the land compulsorily acquired.
2. Interest is payable at the rate adopted for the relevant year in the table of interest rates published by the Land Court and calculated in accordance with section 28 of the Acquisition of Land Act 1967.
3. Any application for costs is to be filed and served within 14 days of this decision. Any response to such an application is to be filed and served within 14 days thereafter.
CATCHWORDS: ACQUISITION OF LAND-WHETHER UNDER-LYING SCHEME TO RESUME THE LAND
Acquisition of Land Act 1967
Integrated Planning Act 1997
Bowers and Crane v Pine Rivers Shire Council (2007) 28 QLCR 196
Brisbane City Council v Mio Art Pty Ltd and Greener Investments Pty Ltd (In Liquidation) [2011] QCA 234
De Ieso v Commissioner of Highways (1981) 27 SASR 248; (1981) 47 LGRA 412 at 417
Haigh v Minister (1994) 85 LGERA 143
Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196
Ipswich City Council v Wilson; Ipswich City Council v Wilson & Downey [2011] QLAC 0006
Minister for Public Works v Thistlethwayte [1954] AC 475
Mio Art Pty Ltd v Brisbane City Council [2009] QLC 177
Mio Art Pty Ltd v Brisbane City Council; Greener Investments Pty Ltd (In Liquidation) v Brisbane City Council [2010] QLAC 007
Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226
Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495
O’Kane v The Commissioner of Main Roads (1976) 3 QLCR 331
Peter Croke Holdings Pty Ltd v Roads and Traffic Authority (NSW) (1998) 101 LGERA 30 at 50
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91
Spencer v The Commonwealth (1907) 5 CLR 418
Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd [2005] NSWCA 251; (2005) 63 NSWLR 407
The Crown v Murphy [1990] 64 ALJR 593, 595Vyricherla Narayana Gajapatiraju v. Revenue Division Officer, Vizagapatam [(1939) AC 302 at 318].
Wilson v Liverpool Corporation [1971] 1 WLR 302
APPEARANCES: Mr A Skoien of Counsel, instructed by McCarthy Durie Lawyers, for the applicants
Mr M Williamson of Counsel, instructed by Brisbane City Legal Practice, for the respondent
Background
In 1988, the applicants, Mr and Mrs Hope, bought a parcel of land located at the intersection of Green Camp Road and Tilley Road in the Brisbane suburb of Wakerley. It was then 2.0198 ha in area and roughly triangular in shape. Running through it is a watercourse which becomes Lota Creek which empties into Moreton Bay at its confluence with the larger Tingalpa Creek. Although quite close to Moreton Bay, the land is included within the City of Brisbane and therefore subject to its planning rules and conditions.
Acquisition of the land
In the exercise of its power under the Acquisition of Land Act 1967 (the Act), the respondent, which also happens to be the Local Government, acquired part of the applicants’ land for drainage purposes. On 15 August 2003 Notification of Resumption was published in the Queensland Government Gazette.[1] The respondent compulsorily acquired the fee simple estate in part of the applicants’ land. The part acquired is described as Lot 71 on SP 156044. It contains an area of 8,628 m² and was taken from the western side of the applicants’ land.
[1] Queensland Government Gazette No. 90, 15 August 2003, page 1316.
Having lost their land, the Act provides that the estate and interest of the applicants shall be converted into a right to claim compensation under the Act.[2] Compensation is assessed in accordance with s.20. By s.20(2) it is provided that:
“(2) Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken.”
[2] Acquisition of Land Act 1967 s.12(5).
Provision is also made in s.20 for other categories of compensation, such as for the costs attributable to disturbance, a category the content of which is spelled out in sub-section 5 of s.20. In this case, the parties have been able to reach agreement on the costs categorised as disturbance items, reasonably incurred by the claimants as a result of the acquisition of their land and the Court does not need to resolve any dispute about them.
The dispute
The parties have been unable to reach agreement on the value of the land taken and this dispute has been brought before the Court to be resolved.
The positions of the parties
The applicants have claimed $1,080,000 for the land taken, plus interest on that sum from the date of the acquisition. They are also seeking their costs of this proceeding and the disturbance amount that has been agreed to. As the case progressed it developed that the valuer engaged on behalf of the applicants now assesses the value of the land as $850,000 rather than $1,080,000. The valuer who gave evidence on behalf of the respondent assessed the value of the land lost by the acquisition as $150,000.
Payment of an advance by the respondent
On 4 July 2008 the respondent paid the applicants an advance of $192,179.55 being $150,000 plus interest up to the date of the advance. It also paid the agreed amount of disturbance costs, $35,790.09. It says, in effect, that it has discharged its obligation to compensate the applicants for the acquisition of their land. The applicants say that the payment made so far is $700,000 short of what is required to properly represent the value of what they have lost on 15 August 2003 when it is valued at the moment they lost it.
The passing of time
The respondent’s letter dated 9 October 2002 gave notice to the applicants of its intention to resume the land for drainage purposes. As has been noted, this occurred on 15 August 2003. On 13 December 2007 the Originating Application claiming compensation was filed in this Court. The Court case-managed the matter and made a series of orders in order to take into account difficulties which the parties experienced and to progress the matter towards being prepared for hearing. The matter first came before me on 2 February 2011 and again on 8 February 2011 and 17 March 2011. The hearing commenced on 11 April 2011. As the hearing progressed, the parties found it to be necessary to obtain further evidence so additional days for hearing were allocated in August 2011 and in February 2012 when the witnesses were available to give evidence. Evidence concluded on 8 February 2012 and since then the Court has received, and granted, requests for five extensions of the due date for receipt of written submissions on behalf of the parties. The Court set 6 June 2012 as the final day on which written submissions would be received. The last set of written submissions was lodged on 7 June 2012. The parties wished to make oral submissions which were heard on 19 July 2012.
The site visit
At the request of the parties a view of the site and of other properties as agreed by Counsel for the parties took place on Monday 11 April 2011, the first day of the hearing.
From the Hope’s perspective
The applicants’ statement, made on 2 March 2011 by Mr Hope on behalf of them both, became Exhibit 42 in the proceedings. Tendered at the end of day seven of the hearing, it sets out in just over five pages the applicants’ history with this land. Neither of them was called to give further evidence and Mr Hope was not required to enter the witness box for cross-examination which would have been required if the respondent sought to challenge his evidence.
Mr Hope sets out that he and his wife, Delia, bought the land in 1988. It had a weatherboard house, built in the late 1950s and a garage on it. The area was, in 1988, a pleasant rural residential area. There was medium tree cover on the western side and scattered vegetation on the eastern side. “A small watercourse traversed the land from northwest to south east, crossing onto to (sic) Tilley Road, close to the intersection with Greencamp Road. The watercourse has, in all of the time that we have lived there, been mostly dry, but from time to time, it carried stormwater from upstream”.[3]
[3] Exhibit 42, para. 3.
Mr Hope goes on to relate that a search of Council records conducted by solicitors acting for the purchasers showed that the property did not flood. A separate, later, search undertaken by him of Council records did not show any concerns about flooding. In 1989, in connection with some removal of dead trees and long grass a watercourse was excavated for ease of maintenance. The Council’s nursery which then adjoined the western boundary was noticed to be directing excess water onto the Hopes’ land and Mr Hope dug a small pond to contain it so he could use it. The Council subsequently did further and more extensive works including enlarging the culvert under Tilley Road. While a Council officer stated that it was simply a road improvement, Mr Hope is satisfied that it was to take additional stormwater from intended upstream development. It is clear that the Hopes’ relationship with the Council deteriorated over this.
The Hopes, with their two sons, enjoyed their semi rural acreage for many years. Horse riding and other rural activities could be enjoyed on the property that was close to schools, shops, public transport and Moreton Bay.
From about 1999 a shadow was cast over their enjoyment by the Council’s interest in taking all of their land for a stormwater drainage system to assist development in the area.[4] What has eventually transpired is the resumption of part of their land rather than all of it. With the presence of developments nearby and a channel dug by the Council, water now surges onto the Hopes’ remaining land and backs up onto it. Mr Hope concludes by stating that dealing with the Council and then the resumption has been and continues to be very stressful to the family and to the individuals involved.
[4] Exhibit 42, para. 11.
The Court’s task
The Court is required to resolve the dispute by assessing compensation in accordance with the Act, finding the value of what was taken on the date when it was taken. The Court’s task is not necessarily to resolve every issue raised by the parties but it has had the benefit of their statement of the issues they perceived. The Court must find at what monetary point a properly advised and prudently acting hypothetical reasonable buyer and seller would agree on a price for the land. This will include determining how they would assess the land’s development potential.[5]
[5] Bowers and Crane v Pine Rivers Shire Council (2007) 28 QLCR 196 at [18].
The disputed issues
At the Court’s request, Counsel for the parties provided a list of what they agreed were the issues in dispute. It is in the following form:
“LIST OF DISPUTED ISSUES
The issues to be determined by the Court are as follows:
1. The version of the planning scheme (Exhibit 12 as against Exhibits 14 and 19) to be used for the purpose of determining the development potential of the land in the before and after case.
2. The assumption that would be made by the prudent purchaser as to the pad or investigation area/s that could be developed on the land in the before case having regard to:
(a)hydraulic engineering considerations; and
(b)ecology considerations.
3. The assumption that a prudent purchaser would make as to the development potential of the land in the before case having regard to:
(a)the planning scheme determined to apply in paragraph 1 above;
(b)traffic engineering considerations; and
(c)civil engineering considerations.
4. The assumption that a prudent purchaser would make as to the likelihood of securing a development approval/s from the Respondent in the before case to achieve the development potential assumed in paragraph 3 above.
5. The assumption that a prudent purchaser would make as to the development potential of the land in the after case having regard to the planning scheme determined to apply in paragraph 1 above and civil engineering considerations.
6. The assumption that a prudent purchaser would make as to the likelihood of securing a development approval/s from the Respondent in the after case to achieve the development potential assumed in paragraph 5 above.
7. The value of the land in the before case against the background of the findings for paragraphs 1, 2, 3 and 4.
8. The value of the land in the after case against the background of the findings for paragraphs 1, 2 5 and 6.”
Resolving these disputes, the parties submit, will lead to the correct assessment of compensation. Clearly, they are approaching the case on the basis of the value of the land before and after the resumption disclosing the value of what was taken away. The Court’s duty, made patent by s.20 of the Act, is to assess the value of what was taken from the applicants; this is not the same as simply choosing between the amounts contended for by the parties. The task is to find the correct figure, whatever it may be.
The “value” referred to in s.20(2) of the Act is accepted to be the value to the applicants as dispossessed owners.[6] The word “value” is not defined in the Act, its meaning has been accepted to be the market value determined in accordance with the decision of the High Court in Spencer v The Commonwealth.[7] The relevant passages appear in the judgments of Griffiths CJ and Isaacs J. The learned Chief Justice said:
“In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring ‘What would a man desiring to buy the land have had to pay for on that day to a vendor willing to sell it for a fair price but not desirous to sell?’ It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.”[8]
Isaacs J said:
“In the first place the ultimate question is, what was the value of the land on 1st January 1905?
All circumstances subsequently arising are to be ignored. Whether the land becomes more valuable or less valuable afterwards is immaterial. Its value is fixed by Statute as on that day. Prosperity unexpected, or depression which no man would ever have anticipated, if happening after the date named, must be alike disregarded. The facts existing on 1st January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.”[9]
[6] Brisbane City Council v Mio Art Pty Ltd and Greener Investments Pty Ltd (In Liquidation) [2011] QCA 234 per Fryberg J at [31] where his Honour referred to O’Kane v The Commissioner of Main Roads (1976) 3 QLCR 331 at p.333 and Minister for Public Works v Thistlethwayte [1954] AC 475 at p.491.
[7] (1907) 5 CLR 418.
[8] (1907) 5 CLR 418 at 432.
[9] (1907) 5 CLR 418 at 440-441.
This Court’s role concerning development potential
In cases such as the present, this Court does not concern itself with what the local authority would have approved to be built. Its consideration was explained by the learned President in the following way:
“It is not the function of this Court to decide whether the planning authority would approve a particular proposal. Rather it is the function of the Court to determine, having heard the relevant evidence, how the hypothetical prudent purchaser referred to in the judgments in Spencer would have viewed the potential financial return if a proposal were considered that included one or other of the proposed plans.”[10]
[10] Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177 at [12], citing De Ieso v Commissioner of Highways (1981) 27 SASR 248; (1981) 47 LGRA 412 at 417. This passage was quoted by Fryberg J in Brisbane City Council v Mio Art Pty Ltd and Greener Investments Pty Ltd (In Liquidation) [2011] QCA 234 at [9].
The valuation relied upon by the applicants
The applicants rely on the valuation prepared by Mr Allen J Crawford, Certified Practising Valuer and Executive Director of Chesterton Corporate Property Advisors. Mr Crawford has valued the interest lost at $850,000.[11] In relation to the highest and best use of the land he expressed the view that before the resumption the highest and best use would have been for low density residential development such as townhouses or a community title development. He considered that a density of 30% gross floor area could be achieved in relation to the total site area. After the resumption, he expressed the view that a similar style development would be possible on a constructed earth pad with a single lot development of the remainder.[12]
[11] Exhibit 2, Tab 13, p.23.
[12] Exhibit 2, Tab 13, p.15, 4.1.
The valuation applied by the respondents
The respondent placed reliance upon the valuation supplied by Mr Ronald Cervetto, Certified Practising Valuer of the valuation firm Taylor Byrne.[13] Mr Cervetto was of the opinion that the highest and best use of the property both before and after resumption was for a single residence development. The loss of land was worth, in Mr Cervetto’s view, the difference between the before resumption value of $550,000 and the after resumption value of $400,000, that is $150,000. If it was found that this valuation basis is correct, Mr Crawford accepts that the figures are representative of the market, albeit quite conservative, and suggests that a 10% increase to $165,000 would be more appropriate.[14]
[13] Exhibit 8. See also the valuer’s joint report at Exhibit 1, Tab 9 G, p.6 para. 32.
[14] Exhibit 1, Tab 9 G, p.6 para. 33 - Mr Crawford’s opinion is examined in more detail at [75] to [78] infra.
The difference between the valuation approaches
Both of the valuation experts have used the before and after resumption approach to valuing the interest taken. The difference between them reflects their differing views of how the hypothetical prudent purchaser would have viewed the development potential of the land on the date of the acquisition. As the List of Disputed Issues at [16] makes clear, there were ecological, hydraulic engineering and planning considerations. Traffic engineering and civil engineering aspects arise alongside those of planning.
Considerations for the prudent purchaser
Flooding - hydraulic engineering
The most obvious natural feature likely to confront a purchaser would be the susceptibility to flooding. This aspect engaged Mr Hope’s attention as a purchaser and would be a prominent consideration for any reasonable prospective purchaser. In a report prepared for the respondent, Hydraulic Engineer, Mr Neil Collins, addressed flooding of the site.[15]
[15] Exhibit 3, 2-1.
Mr Collins points out that the site is traversed by an unnamed tributary of Lota Creek which has a catchment area of 70 ha. Estimated flood flows are 7.3m³/second in a flood event which has an average recurrence interval (ARI) of 1 year and up to 33m³/second for an ARI 100 year flood. Creek flooding would regularly inundate much of the site, which is rather flat, and the majority of the site is inundated by an ARI 5 year flood. Over 80% of the site is inundated by an ARI 100 year flood. Mr Collins reports that flooding across the site is slow moving and beyond a 30m wide corridor along the main creek channel is generally less than 0.5 m in depth. He concludes that:
“• the site is heavily constrained by flooding;
• site access is constrained by flooding;
• the site is almost entirely within a Waterway Corridor which is protected under City Plan 2000;
• new residential development within a Waterway Corridor is unlikely to have gained approval at the date of resumption;
• a prudent purchaser would have to accept a very high level of risk associated with any proposal for residential development on the site, other than those areas outside the Waterway Corridor, which is beyond the extent of the resumed land.”[16]
[16] Exhibit 3, 6 and Figure 2. See also Exhibit 3, 5 Advice to prudent purchaser.
Ecology - preliminary considerations
Areas of trees and shrubs on the land have been the subject of a Vegetation Protection Order since 31 March 1992,[17] over 11 years prior to the acquisition. The presence of such an order does not indicate absolute prohibition of development but does indicate that there will be a higher level of assessment prior to development being approved.[18] The waterway corridor and environmental considerations had been recognised for some time.[19]
[17] Exhibit 1 Tab 9, D, Appendices B and C.
[18] Exhibit 2 Tab 11, p.2 para.12.
[19] Transcript (T)2-20, Line (L)50.
Development potential under the town planning scheme
The first item on the list of the parties’ disputed issues is which version of the town plan scheme must be used to determine the development potential of the land. The candidates are exhibits 12, 14 and 19.
The planning scheme in force in Brisbane at the relevant time was Brisbane City Plan 2000.[20] The land was located in what was designated an Emerging Community Area.[21] The Plan provides that all land so designated is suitable for urban development.[22] The land was also within the Wakerley Local Plan, which came into force on 1 January 2002.[23] The Local Plan includes a map of “Land Use Intents”[24] on which the subject land is clearly visible. It is shown to be subject to four constraints imposed by the planning scheme. These are:
1. Very low density housing
2. Waterway corridor
3. Natural area corridor
4. Valued vegetation
[20] Exhibit 12.
[21] Exhibit 1 Tab 9, D, p.5 para 21.
[22] Ibid.
[23] Exhibit 1 Tab 9 D p.5 para 22. See also Exhibit 12, Chapter 4, pages 352a to 352l.
[24] Exhibit 12 Chapter 4, p.352l.
The Wakerley Local Plan “contains specific additional local planning requirements. Where it conflicts with the requirements of the City Plan this Local Plan prevails”.[25] The Local Plan states that waterway corridors “exhibit hydraulic, ecological, recreational and aesthetic functions that will be protected by:”[26] inter alia,
“• discouraging any new development within waterway corridors
• ensuring all development adjacent to waterway corridors is designed to minimise impacts on water quality and quantity.”[27]
The land use intents for very low density housing areas provides that the “environmental characteristics will be preserved by” “detached dwellings on large lots”.[28] The Wakerley Local Plan Code takes precedence over more general codes and sets out performance criteria and acceptable solutions for very low density housing.[29] Performance criterion P1 requires that “Residential development in the very low density housing area must be designed to retain and enhance existing native vegetation, minimise impacts on habitat values and landscape character and protect natural area corridors and waterway corridors”.[30] Where development adjoins a natural area corridor and/or waterway corridor the development must be designed and landscaped to protect the various functions of the natural area corridor and/or waterway corridor.[31] An acceptable solution to this includes access to any new lot or dwelling not requiring crossing such a corridor.[32]
[25] Exhibit 12 Ch 4 p.352a.
[26] Exhibit 12 Ch 4 p.352a, 2.3.
[27] Ibid.
[28] Exhibit 12 Ch 4, p.352b, 3.1.
[29] Exhibit 12 Ch 4, p.352g, 6.1.
[30] Ibid.
[31] Exhibit 12 Ch 4, p.352h, 6.3, p.1.
[32] Ibid.
The land is entirely within a waterway corridor[33] and a natural area corridor[34] and has “valued vegetation” on it.[35] These categorisations reflect the historical reality of the existence of those features and of the Vegetation Protection Order in existence since 1992.[36]
[33] Exhibit 12 Ch 4, p.352l and m.
[34] Ibid.
[35] Ibid.
[36] T2-24 L50 - T2-25 L13.
The Wakerley Local Plan identifies areas seen as suitable for development with “mixed and attached housing”.[37] That is not near the land in question.
[37] Exhibit 12 Ch 4 p.352l, Map A.
In this area a proposed multi-unit dwelling development would at the date of acquisition have been required to be impact assessed against the whole planning scheme including the Local Plan Code,[38] in respect to which it has obvious conflicts.[39] At that time, the then Integrated Planning Act 1997[40] relevantly provided:
[38] Exhibit 12 Ch 4 p.352e, 8 and Ch 3, p.5, 2.5.2.
[39] T2-30 L30 - T2-33 L60.
[40] Reprint 4N, reprinted as in force on 1 July 2003.
3.5.14 Decision if application requires impact assessment
(1) This section applies to any part of the application requiring impact assessment.
(2) If the application is for development in a planning scheme area, the assessment manager’s decision must not—
(a) compromise the achievement of the desired environmental outcomes for the planning scheme area; or
(b) conflict with the planning scheme, unless there are sufficient planning grounds to justify the decision.
This required such a development application to be refused “unless there are sufficient planning grounds” for it to be approved.[41] Mr Allan, the town planner called by the applicants, had not addressed this[42] and Mr Ryan, the town planner called by the respondent, was asked if he could identify grounds that he might suggest to a prudent purchaser might warrant approval.[43] He replied that what would be looked for would be a change in circumstances in that area such as would warrant a conflict with the planning scheme.[44] He could not point to any but observed that the development was where it was intended to be, around the centres where higher density was planned to occur.[45]
[41] T2-36 L25-60, Mr Allan, and T2-65 L24-40, Mr Ryan, the town planning experts.
[42] T2-36 L40-50.
[43] T2-65 L26.
[44] T2-65 L 30-32.
[45] T2-65 L35-41.
The highest and best use of the land, upon which the applicants’ valuer, Mr Crawford, has based his valuation, namely a multi-dwelling development, is in conflict with the planning scheme such that an application for that development would be required to be refused unless sufficient planning grounds would justify approval. On the evidence, a prudent purchaser would be aware of that. The hypothetical purchaser would also be aware that they were not in a position to point to any planning grounds that might be sufficient to allow the scheme to be approved. The possibility that there had been a change in circumstances in the locality such that a conflict with the planning scheme would be warranted was not supported since, as Mr Ryan pointed out, there was not “development occurring immediately around or adjacent to the property”[46] which is, understandably, the location where such development would be relevant to and likely to be influential upon a decision made on a development application.
[46] T2-65 L38.
Additional considerations for a prudent purchaser
When considering a development of the sort contemplated by Mr Crawford, the purchaser would understand that it would necessitate placing some fill in the waterway in order to construct the two envisaged pads upon which buildings could be constructed above flood level. The land is entirely with a waterway corridor[47] so proposed filling within it requires the purchaser to be mindful of the Filling and Excavation Code.[48] Performance criterion P3 of this code is that filling or excavation must not cause any increase in flooding or drainage problems. The first acceptable solution is that no filling or excavation be located in any waterway corridor as shown on a planning scheme map and defined in the definitions. Other solutions may be acceptable but filling in the waterway corridor is a sensitive matter.
[47] Exhibit 12 Ch 4 p.352l and 352m. The Waterway Corridor is such because it is so designated on the maps; see Exhibit 28, the definition of Waterway Corridors.
[48] Exhibit 12 Ch 5 p.83 at p.84, P3.
The applicable planning instrument
Reference so far has been to the Wakerley Local Plan, effective on and from 1 January 2002[49] and clearly relevant at the date of resumption, 15 August 2003. The question first posed in the List of Disputed Issues set out in [16] is whether that Local Plan, in Exhibit 12, is to be used to determine the development potential of the land or whether Exhibits 14 and 19 are to be used. The difference is that Exhibit 14 is, and Exhibit 19 contains “Map B: Wynnum/Wakerley South” which shows the subject land to have a designation of “Potential development area” and to have on it a much smaller area of “Environmental and waterways corridor” as compared to the maps in Exhibit 12.
[49] Exhibit 12 Ch 4 p.352a and following. The date of effect is printed at the foot of each page.
Exhibit 14 was in force from October 2000 until 31 December 2001.[50] Exhibit 19 is, relevantly, the Wynnum/Wakerley Local Plan which was in force from October 2000 until 31 December 2001.[51] The map on page 373 of Exhibit 19 is the same as Exhibit 14.
[50] T2-16 L50 - T2-17 L1.
[51] T2-59 L10-L30.
On the face of it, the planning scheme in force from 1 January 2002, that in Exhibit 12, was applicable at the date of resumption, 15 August 2003. It is contended on behalf of the applicants that for present purposes regard should be had to the previous scheme, set out in Exhibit 19, instead. This is on account of the application of a legal principle.
The Point Gourde/San Sebastian “principle”
The “principle” bears the name of authorities associated with it[52] and is variously described as a “principle”[53] or an interpretation applied by courts of expressions in legislation which refer to the value of land compulsorily acquired.[54] Despite the contest over its taxonomy, the content is not in doubt; it was compendiously set out by Kirby P in the following form:[55]
[52] Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 and Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196.
[53] For example by Kirby P in Haigh v Minister (1994) 85 LGERA 143 at 149-150.
[54] Ipswich City Council v Wilson; Ipswich City Council v Wilson & Downey [2011] QLAC 0006 at [45].
[55] Haigh v Minister (1994) 85 LGERA 143, 149-150.
“According to the principle, which is one devised by the judges, in valuing land for resumption purposes, any increase in the land’s value which is entirely due to the scheme underlying the acquisition is to be disregarded. The converse of the principle is also accepted. Any diminution in the value of land which is entirely due to the resumption scheme, or to any blight caused by a step in the resumption process, is to be disregarded in determining the value of the land: see Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196 at 214; 37 LGRA 214 at 228.
Thus, where it is found that there is a direct connection between a restriction on land use imposed by planning and land use legislation and the proposed establishment of the public works for which the land might be resumed, the extent of such restriction on the value of the land must be ignored.
Behind this principle lies a search for fair valuation and an insistence upon just procedures. It if were not upheld in the determination of the value of resumed land, it would be possible for a resuming authority to use its powers and influence, in respect of such matters as zoning, to diminish the value of the land to be resumed, to its own advantage and to the disadvantage of the owner at valuation.”
As the majority in the Land Appeal Court noted,[56] quoting the High Court in The Crown v Murphy,[57]
“One purpose of this principle is to ensure that a resuming authority does not employ planning restrictions to destroy the development potential of the land and then assess compensation for its resumption on the basis that the destroyed potential had never existed.”
The majority in the Land Appeal Court went on to refer to “the much-quoted Statement of Dixon J in Nelungaloo Pty Ltd v The Commonwealth[58] as governing the approach to s.20(2)”[59] of the Act:
“Compensation prima facie means recompense for loss, and when an owner is to receive compensation for being deprived of real or personal property his pecuniary loss must be ascertained by determining the value to him of the property taken from him. As the object is to find the money equivalent for the loss or, in other words, the pecuniary value to the owner contained in the asset, it cannot be less than the money value into which he might have converted his property had the law not deprived him of it. You do not give him any enhanced value that may attach to his property because it has been compulsorily acquired by the government authority for its purposes (Vyricherla Narayana Gajapatiraju v. Revenue Division Officer, Vizagapatam [(1939) AC 302 at 318]. Equally you exclude any diminution of value arising from the same cause. The hypothesis upon which the inquiry into value must proceed is that the owner had not been deprived by the exercise of compulsory powers of his ownership and of his consequent rights of disposition existing under the general law at the time of acquisition.”
(emphasis added)[56] Redland Shire Council v Edgarange Pty Ltd (2008) 29 QLCR 91 at [40].
[57] [1990] 64 ALJR 593, 595.
[58] (1948) 75 CLR 495 at 571-572.
[59] Redland Shire Council v Edgarange Pty Ltd [2008] 29 QLCR 91 at [41].
The scheme
It is necessary to identify what is “the scheme underlying the acquisition”,[60] to use the words of Kirby P, or in Dixon J’s words “the same cause”.[61] The majority of the Land Appeal Court in Redland Shire Council v Edgarange Pty Ltd[62] illustrated this by reference to Lord Widgery’s judgment in Wilson v Liverpool Corporation[63] where his Lordship said:
“Whenever land is to be compulsorily acquired, this must be in consequence of some scheme or undertaking or project. Unless there is some scheme or undertaking or project, compulsory powers of acquisition will not arise at all, and it would, I think, be a great mistake if we tended to focus our attention on the word ‘scheme’ as though it had some magic of its own. It is merely synonymous with the other words to which I have referred, and the purpose of the so-called Pointe Gourde rule is to prevent the acquisition of the land being at a price that is inflated by the very project or scheme which gives rise to the acquisition.”
[60] Per Kirby P in Haigh v Minister (1994) 85 LGERA 143, 149-150.
[61] Nelungaloo Pty Ltd v The Commonwealth (1948) 75 CLR 495 at 571-572.
[62] (2008) 29 QLCR 91 at [36].
[63] [1971] 1 WLR 302 at 310.
The land was stated to be acquired “for drainage purposes by Brisbane City Council”.[64] The question here is the same as that identified by the Land Appeal Court in Bowers and Crane v Pine Rivers Shire Council[65] where the Court said:[66]
“The first issue for decision was the application of the principle established in Housing Commission of New South Wales v San Sebastian (1978) 140 CLR 196 and developed in The Crown v Murphy [1990] 64 ALJR 593, namely, that restrictions on land use as a consequence of a resumption of that land may not be employed to destroy the development potential of the land for the purpose of assessing compensation. It is the corollary of the Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565 principle that a project or scheme which gives rise to a resumption cannot be used to inflate the value of the land.
The Land Appeal Court added[67] that:
“The effect of San Sebastian was refined in The Crown v Murphy (1990) 64 ALJR 593 at 595
‘The principle applies in cases where there is a direct relationship between the planning restriction and the scheme of which resumption is a feature and extends to cases where there is merely an indirect relationship, provided that the planning restriction can properly be regarded as a step in the process of resumption.”
[64] Queensland Government Gazette, No. 90 15 August 2003 p.1316.
[65] [2007] 28 QLCR 196.
[66] [2007] 28 QLCR 196 at [3].
[67] [2007] 28 QLCR 196 at [22].
In Mount Lawley Pty Ltd v Western Australian Planning Commission[68] the Court of Appeal of Western Australia considered an Act the particulars of which do not intrude upon the principle being discussed. Noting that whether the effect on value is attributable to “the Scheme” can be a difficult question to answer[69] the Court turned to an example given by Jacobs J, with whom the other Justices agreed in the High Court’s decision in Housing Commission of New South Wales v San Sebastian Pty Ltd.[70] Jacobs J said:
“Assume an area of land on the outskirts of existing settlement, and assume a planning authority concerned to designate land uses in a planning scheme. The land is designated open space. Thereafter it is resumed for the purpose of a public reserve. The fact that the land was zoned as open space may have depreciated its value. Does the resuming authority pay compensation at the depreciated value of open space or at some other value? The question cannot be correctly answered without knowing whether there was any connexion between the zoning as open space and the subsequent resumption. If the zoning was done with the intent or in anticipation that the land should be resumed for a purpose such as a public reserve or if the zoning was proposed or dictated by the resuming authority then s 124 requires that the zoning be ignored. It is only a step in the process of subsequent resumption. But in other circumstances the resumption may be unconnected with the act of zoning. It may be that the resuming authority selects the land for resumption as a public reserve because it is zoned open space; if it does so it is doing no more than ensuring that it, as well as others, conforms to the planning scheme. In those circumstances there is no relevant relationship between the zoning and the public purpose. No public purpose, existing or anticipated, intended, or urged by the zoning authority, leads to the zoning; rather, the zoning leads to the public purpose and consequent resumption.
The Court of Appeal of Western Australia then said:[71]
“The question of what is a ‘step in the process’ in this kind of context has since been discussed in a number of cases. Relatively recently, in Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd[2005] NSWCA 251; (2005) 63 NSWLR 407 [85] (Walker No 1) Basten JA (with whom Beazley JA and Stein AJA agreed), said that the ‘lesson of … San Sebastian … is that no narrow view should be taken of steps which may affect the value of land’. However, he added that ‘it is necessary to distinguish between conduct which constitutes a proper exercise of planning powers irrespective of the ultimate resumption and a use of planning powers in pursuit of a proposed resumption’.”
[68] [2007] WASCA 226.
[69] [2007] WASCA 226 at [17].
[70] (1978) 140 CLR 196 at 206-207 and quoted in Mount Lawley at 18.
[71] [2007] WASCA 226 at [20].
The task here is as it was before the Land Appeal Court in Bowers and Crane v Pine Rivers Shire Council:[72]
“To ascertain if there was a ‘direct relationship’ or, even, an indirect relationship indicative of a step in a single scheme of resumption of the subject land for rubbish depot, and, ultimately recreation purposes, required an examination and analysis of the planning documents of the respondent. This the learned Member did although he noted at para 30 that despite lengthy testimony and volumes of documents ‘very little evidence was specifically directed at identifying what the relevant scheme was and when it commenced’. The burden lay with the appellants … ”
My previous examination of the planning documents has disclosed what they provide relevantly to the present case. They are illuminatingly put in their context by the report of Mr Allan, the town planner engaged by the applicants.[73] Mr Allan’s report[74] contains the following discussion, which was uncontradicted and unchallenged:
“2.5 In preparation of the new City Plan 2000 an array of investigations of the different water, sewerage, stormwater, vegetation and recreation networks in the city took place. Council realised that Brisbane was expanding quite rapidly in that era and took steps to facilitate the orderly expansion rather than play catch-up and have to retrofit facilities or services at a later stage.
2.6 One of the desired environmental outcomes within the review process, ultimately incorporated into the City Plan 2000, was the treatment of stormwater run-off at the point of its source instead of condoning indiscriminate pollution and sediment laden stormwater passage directly to Moreton Bay.
2.7 As part of the forward planning for the Wakerley area, consideration was given to the method of collecting and treating stormwater from the large catchment.
2.8 There is a large stormwater catchment stretching from Manly Road in the north to Tilley Road in the South. This catchment is part of the Lota Creek catchment and an earlier Lota Creek Stormwater Management study informed the City Plan and Wakerley Local Plan review processes.
2.9 After the introduction of City Plan 2000, Council determined to adopt one of the identified options for stormwater treatment within the Lota Creek catchment and this resulted in the resumption of part of the subject land to facilitate the construction of a water quality treatment facility on that site. In so doing, Council alleviated every other upstream urban development within that catchment from the burden of needing to treat their stormwater on site at the individual source. Although this provided a windfall benefit to every other development within the catchment, it had the effect of restricting and restraining the opportunities for development on the subject land and, in the absence of Stormwater detention facilities, may have presented additional obstacles to development of the subject land.”
[72] (2007) 28 QLCR 196 at [23].
[73] T2-5 L10-20.
[74] Exhibit 2 Tab 12.
Accepting this, as the Court must, it is clear that what is described as a “Lota Creek Stormwater Management study” informed the planning process. Such a study did not form part of the evidence but part of what was described as “the Lota Creek Wetlands Study[75] did.
[75] T5-56 L55. Exhibit 31. The whole document was not produced. T5-57 L10.
The part of the Lota Creek Wetlands Study which became Exhibit 31 shows a proposed artificial wetland on the western portion of the applicants’ land.[76] Paragraph 2.9 of Mr Allan’s report makes it clear that after City Plan 2000 was introduced “Council determined to adopt one of the identified options for stormwater treatment within the Lota Creek catchment and this resulted in the resumption …”.
(emphasis added)
[76] T5-55 L15.
The evidence is that the resumption was one option and it was adopted, resulting in the resumption of the applicants’ land. In view of this, it cannot be concluded that there is a direct relationship between the planning restriction and the scheme of resumption. Neither was there an indirect relationship indicating that the planning changes were a step in a single scheme of resumption of the applicants’ land. The evidence is that the planning changes brought about circumstances in which resumption of the applicants’ land became “one of the identified options” for stormwater treatment. As Basten JA, with whom Beazley JA and Stein AJA agreed, said in Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd[77] it is necessary to distinguish between conduct which constitutes a proper exercise of planning powers irrespective of the ultimate resumption and a use of planning powers in pursuit of a proposed resumption.[78]
The result was the same in Bowers and Crane v Pine Rivers Shire Council[79] where the Land Appeal Court noted that:[80]
“A general reference to rubbish tips and their future development for recreational purposes is insufficient to sustain any relationship with the scheme of resumption involving the subject land so as to constitute a step in the process. The learned Member was correct to find that there was no underlying scheme to resume the subject land for rubbish depot purposes in 1978.”
[77] [2005] NSWCA 251; (2005) 63 NSWLR 407 at [85].
[78] Quoted in Mount Lawley Pty Ltd v Western Australian Planning Commission [2007] WASCA 226 at [20].
[79] (2007) 28 QLCR 196.
[80] Ibid [37].
Answer to disputed issue 1
The version of the planning scheme to be used for the purpose of determining the development potential of the land is Exhibit 12.
Acid Sulphate soils
Investigation has disclosed that acid sulphate soils are not present at this site[81] so a purchaser would not be concerned about any potential restrictions due to that.
[81] Exhibit 24 para 6.
Traffic engineering
The engineers, Mr Douglas and Mr McAnany, in their supplementary joint expert report,[82] agree that, based on a 30 townhouse development, the Brisbane City Council would be most likely to require a widening and sealing of the road shoulder by 2-3 m for a length of approximately 50 m, with 20 m long tapers. As a “worse case” a 3 m widening for 150 m might be required. The cost of this would not be a credit against any Traffic Infrastructure contribution applicable to the development. Internal links to the building pads so as to gain access to the road would also be required.
[82] Exhibit 25.
Civil engineering works
The parties have obtained civil engineering expert reports, thereby implicitly accepting that a prudent purchaser would do so. The third joint expert civil engineering report[83] discloses that the two pads being considered for construction as the building platforms would cost an estimated $29.86/m² for the smaller north-eastern platform, considered for these purposes to have an area of 3,130 m², and $60.99/m² for the larger central-western platform on the basis that its area would be 6,530 m².[84] The construction of both pads could be accomplished for an overall rate of $50.22/m².[85] The central-western platform, the larger one on which the yield of the proposed multi-unit development would most depend, would need to be constructed entirely within the waterway corridor. There is no way to divert water around it while it is under construction.[86] Erosion and sediment control measures would not be able to produce a quality of water coming off the site that would meet the Council’s requirements.[87] The volume of water that comes through the site would be “massive”.[88] A one year recurrence stormwater flow would be expected to produce a discharge of 7.72 m³/second,[89] enough to fill an Olympic sized swimming pool in 5.4 minutes.[90] The flow to be expected with a three month recurrence interval would be about half that.[91] A development application would not be approved until there was a workable plan to deal with this.[92] The civil engineers agreed that construction of the proposed central western platform could only be carried out during periods of dry weather.[93] It is located entirely in the waterway corridor.[94] Mr Fox, the civil engineer called by the applicant, stated that he would advise a purchaser that the risk in obtaining approval for construction of this platform was higher than for a standard development.[95] Mr McAnany, the civil engineer engaged by the respondent, was of the view that there is a “high risk”[96] that approval would not be given for construction of this platform.
[83] Exhibit 44.
[84] Exhibit 44 p.2 1.11 and p.3 1.12.
[85] Exhibit 44 p.5 1(a).
[86] T9-10 L12-22.
[87] T9-10 L40-46.
[88] T9-10 L50.
[89] Exhibit 23A Table 2.1.
[90] T9-11 L20-40.
[91] T9-11 L40.
[92] T8-53 L15-22.
[93] Exhibit 44 p.2 1.8.
[94] T8-49 L25.
[95] T8-50 L8-10.
[96] Exhibit 44 p.2, 1.7.
Ecology – other matters further to those considered in [25]
The applicant obtained the advice of and called Dr Michael Olsen to give evidence. Dr Olsen is a botanist and he identified the vegetation types on the land.[97] His conclusion was that there is no ecological constraint apparent in the proposed developable area.[98] In relation to the size of the buffer that the Council would have required between development and vegetation sought to be protected, Dr Olsen stated that he did not know what the Council would have accepted in 2003.[99]
[97] Exhibit 2, Items 11 and 15.
[98] Exhibit 2, Item 15 p.7, last paragraph.
[99] T5-22 L55-58.
The respondent obtained advice from and called Mr Alan Chenoweth,[100] a landscape architect, horticulturist and environmental practitioner.[101] In relation to the requirement of the Wetland Code[102] that wetlands must be adequately protected from the impacts of adjacent development, Mr Chenoweth was taken to the first acceptable solution to meet that requirement.[103] It states than an acceptable solution would be that development is set back 40 m from the maximum water level of a freshwater wetland. He was of the opinion that “it would have required a lot of convincing by detailed design to reduce”[104] that requirement because it is in a designated waterway corridor.[105] He acknowledged that “the main watercourse had very little ecological value remaining”[106] so the focus would be on “the southern area of wetland or watercourse”.[107]
[100] Exhibits 5 and 6.
[101] Exhibit 5 p.37.
[102] Exhibit 30.
[103] Exhibit 30, Brisbane City Plan 2000 Vol. 1 Ch. 5 p.265 A1.1.
[104] T5-46 L10-11.
[105] T5-46 L16-17.
[106] T5-46 L19-20.
[107] T5-44 L21; T5-82 L35-40.
Answer to disputed issue 2
The prudent purchaser, when considering the building platforms, or pads as they have been called, that could be constructed, would be aware of the hydraulic engineering and ecology considerations to which I have referred. The ecological considerations would be seen as being able to be addressed by a buffer area between development and the wetland. The width of the buffer would need to be negotiated and the precise landscaping arrangements would be a matter to be agreed. This aspect would require detailed work to finalise an acceptable solution but would not be seen to be likely to present a more than ordinary risk to obtaining development approval.
The hydraulic engineering considerations set out in [23] and [24] present, at best, a higher risk than in a standard development or, at worst, a high risk that approval would not be given for construction of the central-western platform. Comparison to a nearby development, the Habitat, would not provide a reason to discount the appreciation of risk as, unlike the present case, the Habitat is not constructed in a waterway corridor,[108] did not require compensatory earthworks[109] and stormwater drainage was able to be set up first to divert stormwater around the earthworks.[110] The applicants’ land would require a sediment and erosion control plan that appeared to work before a development approval would be given.[111] There is no evidence of such a plan or its cost. The purchaser would assume that development approval would not be expected unless and until a satisfactory sediment and erosion control plan was produced. The purchaser would know that there was not yet such a plan and there was no cost estimate for it. It is known to be a matter presenting real practical difficulty.
[108] T8-50 L33.
[109] T8-50 L50.
[110] T8-51 L10-40.
[111] T8-53 L10-25.
Answer to disputed issue 3
In view of the planning scheme which has been found to apply, the prudent purchaser would assume that the contemplated development would have to be refused approval unless and until there are shown to be “sufficient planning grounds to justify the decision” to approve it,[112] since it conflicts with the planning scheme. The prudent purchaser would know that on the basis of the evidence, no such grounds can be pointed to.
[112] Integrated Planning Act 1997, s.3.5.14.
Traffic engineering considerations would be assumed to be manageable and not such as would be expected to impede the proposed development.
Civil engineering considerations
The sediment and erosion control plan referred to in [52] is the civil engineering solution to the hydraulic engineering problem of having to build in the waterway corridor. The prudent purchaser would be aware that there is no such plan and therefore no costings for it. The purchaser would also be aware that this is a matter presenting real difficulty.
Answer to disputed issue 4
The prudent purchaser would assume that there is little likelihood of securing the contemplated development approval because of the planning considerations referred to, which presents the most substantial difficulty and because of the engineering challenge, not yet with a solution, in regard to erosion control and the quality of water leaving the site due to the expected frequency of inundation and the need to build in the waterway corridor.
Answer to disputed issue 5
In the case of after the resumption a prudent purchaser, viewing the planning scheme in Exhibit 12 and the civil engineering considerations would assume that there would be little likelihood of securing the contemplated development. The situation is effectively the same as in [56].
Answer to disputed issue 6
The answer is the same as in [56] and [57].
Disputed issue 7
The value of the land in the before resumption case against the background of the findings in disputed issues 1, 2, 3 and 4.
The applicants have obtained expert valuation opinion from Registered Valuer Mr Allen Crawford of Chesterton Valuations (Qld) Pty Ltd trading as Chesterton Corporate Property Advisors.[113] Mr Crawford also gave evidence. His valuation approach was that in his opinion in the before-resumption case the highest and best use of the land was for low density residential development such as a townhouse or community title type development. As Mr Crawford’s report also considers the after-resumption value it is convenient to deal with disputed issue 8 at the same time as issue 7.
Disputed issue 8
[113] Exhibit 2 Tab 13.
In Mr Crawford’s view, the site, after the resumption, has a higher potential use than as a single residential lot. He is of the view that there is still potential for a similar style development as in the before-resumption case. This is a townhouse or community title type development. His opinion is that a significantly greater risk is involved in this due to town planning requirements.[114] The remainder of the site not used for the townhouse or community title development would be available for a single lot residential development.
[114] Exhibit 2 Tab 13 2.4 and 4.1.
The respondent obtained expert valuation opinion from Taylor Byrne and Mr Ronald Cervetto prepared a report[115] and gave evidence. Mr Cervetto considered that in view of the considerations of flooding, ecology, engineering and town planning that a prudent purchaser would be unwilling to pay anything more for the site than its value as a homesite.[116] He is of the opinion that the only impact on the site as a consequence of the resumption is the loss of the land taken.[117] In the before and after-resumption cases Mr Cervetto has valued the land on the same basis.
[115] Exhibit 8.
[116] Exhibit 8 p.17. Mr Cervetto did not believe that townhouse development was likely to be approved. T10-105 L50-55 and T10-106 L23-28. He was of the view that nobody would have offered more for the land than for environmental protection land. T10-106 L30-35.
[117] Exhibit 8 p.17.
Mr Cervetto has had reference to five comparable sales[118] and applied them to the land. In the before case he has valued the land at $550,000 and after its area has been reduced by the resumption, at $400,000. From this he calculates the loss suffered at $150,000.
[118] Exhibit 8 p.18.
Mr Crawford, on the basis which he applied, valued the land in the before-resumption case at $1,460,000[119] and in the after case at $610,000[120] yielding a calculated loss, and therefore valuation of the land resumed, of $850,000.[121]
[119] Exhibit 2 Tab 13 p.22.
[120] Exhibit 2 Tab 13 p.23.
[121] Exhibit 2 Tab 13 p.23.
Mr Crawford, in preparing his valuation, has relied on the town planning advice he received. In his words, “I’ve assumed there’s very good prospect of getting approval”.[122] He has proceeded on the basis that a prudent purchaser would decide what to pay for the land in view of “its significant development potential”.[123]
[122] T10-40 L28-29.
[123] T10-7 L50.
Mr Crawford acknowledged that if the risk of obtaining approval for the contemplated development materially differed from what he had based his opinion on “then there would need to be some further adjustment to my work”.[124]
[124] T10-40 L20-21.
In view of the planning position created by the applicability of the scheme set out in Exhibit 12, it is not possible on the evidence to accept Mr Crawford’s starting assumption in relation to planning. A prudent purchaser would not be able to hold the view that there was a reasonable prospect of obtaining approval for the contemplated development. The applicability of the planning scheme set out in Exhibit 12 is a sufficient basis for this conclusion. The considerations centred around the need to construct earthworks in the waterway corridor also lead to the same conclusion, again with sufficient certainty to make it impossible for a prudent purchaser to proceed on the basis which Mr Crawford did. Taking both of these matters together only strengthens the conclusion made inevitable by each of them separately.
Mr Crawford did not prepare his valuation on the basis that circumstances were as they have now been found to be.
Mr Cervetto valued the land on the basis that any development proposal, which would be impact assessable, would require vigorous and costly scrutiny from experts as has occurred and “the development application process would be lengthy, costly and with a high degree of risk”[125] that development of the nature contemplated would not be approved.
[125] Exhibit 8 p.17 and Exhibit 1 Tab 9, G, para. 16 of the valuer’s joint report.
Mr Cervetto based his valuation on five sales in the locality.[126]
[126] Exhibit 8 p.18.
Sale 1 of 815 New Cleveland Road, Gumdale on 18 August 2003 for $500,000 was a vacant homesite .9937 ha in area and designated “Environmental Protection”.
Sale 2 of 141 Grassdale Road, Belmont on 10 February 2003 for $370,000 was a vacant 1.005 ha battleaxe shaped site designated “Environmental Protection”. A small area in the north western corner of this site is within a waterway corridor.
Sale 3 of 593 Formosa Road, Gumdale on 27 August 2003 for $535,000 was a vacant corner site of 1.012 ha designated “Environmental Protection”. A minimal area in the south western corner is designated Wetland.
Sale 4 of 462A Chelsea Road, Ransome on 11 August 2003 for $495,000 was a vacant 1.358 ha rear site with easement access designated “Environmental Protection”. Approximately 20% of the site is designated Wetland.
Sale 5 of 383 Formosa Road, Gumdale on 14 March 2003 for $415,000 was a vacant unconstrained site designated “Environmental Protection”.
The Court has the benefit of Mr Crawford’s opinion, provided at the joint meeting of valuers and captured in the report of that meeting, of the value if Mr Cervetto’s approach is applied.[127] Paragraph 33 of the joint report is in these terms:
“On the basis that the site has no potential for development, Mr Cervetto’s assessment of compensation as detailed in his report remains unchanged at a Before Value of $550,000 (excluding improvements). After Value of $400,000 (excluding improvements) and Compensation of $150,000. Mr Crawford does not disagree that these assessments of the before and after are within the parameters of the market albeit quite conservative. He suggests a 10% increase in both assessments would result in compensation of $165,000 which is more appropriate.”
[127] Exhibit 1 Tab 9 G, p.6 para. 33.
and, at paragraph 37 it is recorded, so far as is presently relevant that:
“37. On the basis that the land has no potential for development Mr Crawford assesses the before value at $760,000 … and after value at $530,000 … .”
I note that in this calculation $100,000 was allowed for improvements.
Mr Crawford’s assessment was that he believes that following Mr Cervetto’s reasoning but not doing so as conservatively would lead to compensation of $165,000. He was of the opinion that Mr Cervetto had given insufficient weight to the lot size[128] and his own view was that expressed in paragraph 37, namely that without realisable development potential beyond a single lot dwelling the value of the land resumed was $760,000 - $530,000 = $230,000.
[128] Exhibit 1 Tab 9 G, p.7 para. 36.
In his response report on valuation issues, Mr Crawford has returned to this and made his calculations without any allowance for improvements. He has re-stated his opinion in this way:[129]
“On the basis that the land has no potential for further development the evidence supports a before value of $660,000 excluding the improvements and after value at $430,000 again excluding the improvements.
Therefore on the basis that the land in the before and after does not have any development potential above the single lot development Mr Cervetto ought to have adopted $230,000 loss of value in the land.
[129] Exhibit 2 Tab 19, p.5.
When valued on the basis which the Court has found to apply, the valuers have assessed the resumed land as worth, respectively, $150,000 and $230,000 to a reasonable purchaser. Mr Crawford believes that the lower figure should be increased to $165,000 for the reason to which I have referred. This produces an element of doubt.
Liberal estimate principle
In determining the compensation to be paid for resumed land, doubts must be resolved in favour of the more liberal estimate.[130]
[130] Mio Art Pty Ltd v Brisbane City Council; Greener Investments Pty Ltd (In Liquidation) v Brisbane City Council [2010] QLAC 007 at [122] and the cases there cited. At the date of resumption the residential market was very strong. T10-5 L5-6.
This principle does not require a court determining compensation to necessarily favour evidence led on behalf of the claimant and is not a substitute for the court deciding disputed issues of fact or opinion.[131] It does however recognise that land has been compulsorily taken and that there should be a degree of satisfaction that compensation is correct.
[131] Peter Croke Holdings Pty Ltd v Roads and Traffic Authority (NSW) (1998) 101 LGERA 30 at 50. Referred to in Mio Art (supra) at [123].
The compensation
Applying this principle, I accept the expert opinion of Mr Crawford that the value of the land resumed was $230,000 and assess compensation at that figure.
Interest
The applicant has sought interest.[132] It is reasonable to award interest so as to preserve the value of the compensation. Interest should be payable at the rate adopted for the relevant year in the table of interest rates published by the Land Court on its website (the applicable rate). The applicable rate, for each calendar year, is:
[132] Acquisition of Land Act 1967, s.28.
2003 5.25% 2004 5.50% 2005 5.25% 2006 5.50% 2007 6.00% 2008 5.75% 2009 5.00% 2010 5.50% 2011 5.00% 2012
4.00%
Interest is payable at the applicable rate on $230,000 from the date of resumption namely 15 August 2003. The necessary adjustments will have to be made to take into account the advance that has been paid. Interest will be payable until and including the day immediately preceding the date on which payment of the remaining balance is paid.
Costs of this proceeding
Any application for costs is to be filed and served within 14 days of this decision. Any response to such an application is to be filed and served within 14 days thereafter. Costs will be required to be determined in accordance with s.27 of the Act.
Orders
1.Compensation is assessed at Two Hundred and Thirty Thousand Dollars ($230,000) in respect of the land compulsorily acquired.
2.Interest is payable at the rate adopted for the relevant year in the table of interest rates published by the Land Court and calculated in accordance with s.28 of the Acquisition of Land Act 1967.
3.Any application for costs is to be filed and served within 14 days of this decision. Any response to such an application is to be filed and served within 14 days thereafter.
WA ISDALE
MEMBER OF THE LAND COURT
0
10
0