Hutchins and Cunnington v Council of the Shire of Woongarra
[1991] QLC 35
•15 November 1991
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LAND COURT, BRISBANE.
15th November, 1991.
Re:Determination of Compensation-Resumption for sewerage purposes. (A91-40)
Rodney Howard Hutchins and Denice Thea Cunnington v.
Council of the Shire of Woongarra
(Hearingsat Bundaberg & Brisbane) J U D G M E N T
On 13th October, 1990, by proclamation notified in the Government Gazette, land described as Lot 1 on RP 175012, County of Cook, Parish of Kalkie, containing an area of
25.552 hectares, being the whole of the land contained in Certificate of Title Volume 6186 Folio 123, was taken by the Council of the Shire of Woongarra for Sewerage purposes.
The land is situated about 7 km south of the Bundaberg P.O. with frontage to Goodwood Road to the west and Three Chain Road to the north. It is zoned Rural and the land comprises the balance area after an earlier resumption (1978) for Sewerage purposes which excised an area of 7.086 hectares from the eastern extremity of the original Three Chain Road frontage. The land subject of the earlier resumption had subsequently been resurveyed with a strip 20 metres wide at the eastern extremity attached to the subject balance area and a further 8094 square metre lot at the eastern end excised and transferred back to the original owner. A Sewerage Treatment Plant was then constructed on the balance of the original resumed area.
The Claim for Compensation served on the Council by letter dated 5th March, 1991, is as follows:
Value of land as at 28th April 1990
($5,000 per hectare) $130,000.00 Valuation fee and expenses 1,500.00 Plus interest to 28th February 1991 (10 months at 17% per annum) 18,416.67 Plus legal fees 1,000.00 Total Claim $150,916.67
By letter dated 5th April, 1991, the claim for valuation fees and expenses was reduced to
$1,320.The claim was then referred to the Court by the Council by letter dated 23rd May, 1991.
I am informed that an advance payment against compensation, in the sum of $35,000 was received by the claimants on 16th May, 1991.
The Claim was based on valuation advice given by Mr C.M. Browning, registered valuer in private practice in Bundaberg. Mr Browning describes the property as "25.552 hectares of cultivatable grazing land intersected by a water course known as The Yellow Water Holes". He values the land in the sum of $130,000 being a rounded result of a calculation at $5,000 per hectare. Mr Browning says that the watercourse traverses the block in a west to east direction with land on either side falling gradually towards the centre. He says it is not a permanent waterway "although it now carries constant run-off from the treatment lands." (An easement encumbers the property for the purpose of the drainage of this effluent from the plant to the watercourse). He describes the south-western (but in fact the north-western) corner as low-lying and timbered whereas the eastern side both north and south of the waterway has scattered timber, is well drained and has land suitable for cultivation. He estimates that 15 hectares in all, is high well drained land while the balance 10.552 hectares "may carry water during peak flood periods". He is of the opinion that, because of its proximity to the city, the property is suitable for rural residential type subdivision, with allotments able to be designed with the house site above maximum flood height and the low-lying land at the rear.
Mr Browning has considered the adjacency of the existing Sewerage Treatment Plant but is of the opinion that, as the original treatment site was acquired from the present dispossessed owners' family, this resumption is an extension of the one scheme and in this matter the existence of the treatment plant, may on legal precedent, be disregarded. For reasons which will be given later, I am unable to agree with that proposition.
His basis of valuation is gained from an investigation of some eighteen sales of property ranging in size and price with the majority in the range of $4,263 per hectare to $5,600 per hectare. His report contained details of eight of the sales which he said were used as a guide. During the course of the hearing, he was informed that the details of one of these sales was unable to be confirmed, and he withdrew it from his considerations. Two of the sales were much smaller vacant rural residential style lots immediately adjoining the subject land. One, of 8094 square metres, is the lot within the area of the original resumption, now adjacent to the treatment works site, which sold in July 1989 for $20,000. The second, with an area of 7523 square metres adjoins the south-west corner of the subject lot fronting Goodwood Road and was sold in August, 1990 for $30,000. Then a large area of 35.76 hectares immediately adjoining the subject
land to the south and running through to a long Douglas Road frontage, being generally sound near level land largely under cultivation, sold in May 1989 for $180,000 which he say shows
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At the completion of the hearing of evidence in Bundaberg I was invited to view the subject property and the relevant sales evidence. While Mr Browning was criticised for using the sales of the two small rural residential sites adjacent to the subject land, they do at least indicate that a market existed for such land in the vicinity of the existing sewerage treatment plant. The adjoining agricultural land is seen to be significantly superior physically to the subject land as is the agricultural land in the New Farm Road and the 10.34 hectare Rubyanna Road sale. The location and environment of the remaining rural homesite properties is somewhat different to that of the subject land, although the sales are of assistance in understanding the overall rural residential site market.
Valuation evidence for the Council was given by Mr N.L. Maddern, registered valuer in private practice. He values the land as it existed at the relevant date in the sum of $45,000 as a rural zoned site. He describes the land as being of irregular shape having a frontage of 20 metres to Three Chain Road in its north-eastern corner and a further frontage to Three Chain Road of
381.17 metres along the north-western boundary. The western boundary along Goodwood Road has a frontage of 453.433 metres, the eastern boundary is 402.65 metres in length and the southern boundary 717.566 metres in length. He says the land comprises mainly gently sloping forest country timbered with gum, wattle, blackwood, ti-tree and other native species, much of the land being quite low-lying. The property is intersected by the headwaters of Yellow Water Holes Creek, with a small area behind the existing Sewerage Treatment Plant having been cleared while the balance of the land comprises green forest with quite thick undergrowth in places. He had made enquiries of the Council with regard to the flooding disability of the
property and had sighted a plan being Drawing No.3341 prepared by the Council's consulting engineers showing that the majority of the land would be inundated during a Q10 storm and "quite a bit of the land" would flood during a Q2 storm. Shortly before the hearing he had been supplied with an amended drawing which indicated a lesser area affected by the Q10 flood height. While this amendment lessened the extent of land subject to such periodic flooding it did not, in Mr Madden's opinion, have any measurable effect in increasing the market value of the property. He states in his report that:
" In view of the location, zoning and low lying nature of the land, I consider that the highest and best use of the site is for rural purposes. It may have some potential for subdivision into two or three rural residential type lots but any subdivision would be restricted by the large percentage of low lying/flooded land on the property. The close proximity of the existing sewerage treatment works severely deters from the attractiveness of the site for rural residential purposes. "
Then in his "valuation considerations" he says:
" There is quite good demand for rural and rural residential land located in close proximity to Bundaberg and having ready access to services. Any potential use of the subject property will be restricted due to its close proximity to the existing sewerage treatment works and the low lying flooded nature of much of the property. "
As a basis for his valuation Mr Maddern submits the evidence of four sales. Although he analyses and comments on the sales on a per hectare value, it is clear from his verbal evidence that his primary comparison is on a site value basis. Brief details of the sales are as follows:
Price Street, 26.34 hectares zoned rural, flat unimproved land adjoining rural residential subdivision, March 1990, $55,000.
Branyan Drive, 16.39 hectares zoned rural, irregularly shaped, gently undulating falling to creek, about 9.8 hectares subject to flooding, elevated building sites available, December 1989, $50,000.
Off Kirby's Road, 38.77 hectares zoned rural, poor access, mostly low lying land subject to tidal inundation, with small areas of higher cleared land, February 1990, $32,000.
Branyan Drive, 26.3791 hectares zoned rural, subsequent approval for partial rural residential subdivision on elevated land, balance low-lying subject to flooding, October 1989, $95,000, resold with rezoning and subdivisional approval, May 1991, $180,000.
Mr Maddern sees the first and fourth sales as having higher development potential than the subject land and as being superior, the second sale as being a smaller but overall superior
rural site and the third sale as an inferior property with limited usage potential (although purchased by an adjoining owner).
Mr R.B. Kernke, the Shire Clerk with Woongarra Shire Council since 1986, gave verbal evidence that the land was required for expansion of the treatment work facilities and to provide land for a proposed effluent irrigation disposal technique. Enquiry was made in 1989 through a real estate agency as to the availability of the subject land for purchase by the Council and an initial offer of $1,000 per acre had been made and rejected. A further offer of $1,200 per acre was made in December 1989 and this was also rejected. These offers were made without formal valuation advice and some urgency was then perceived to exist. Subsequent to the second offer being rejected, a valuation was obtained and resumption action commenced.
Mr J.M. Barton, a civil engineer and project engineer on the augmentation of the treatment works, was then called. He explained why the estimate of extent of flooding on the subject property had been revised and then reduced. He agreed that flood mitigation works were possible on the property but the degree of mitigation would depend on external factors together with internal design criteria. In the absence of specific study he said it was not possible to do other than theorise as to possible mitigation effects or the costs involved. Mr Barton agreed that the augmentation works proposed were an extension of the original plant. Through Mr Barton was tendered Section 12 of the "Guidelines for Planning and Design of Sewerage Schemes" compiled by the Department of Local Government and current as at the relevant date. This section deals with "Treatment Plant Siting and Other General Considerations", Para.06 of Section 12 of the Guidelines reads:
" The community may object to the site of a treatment plant on the basis of odours and unattractive conditions and adjacent residential land may drop in value. Attention to landscaping and architectural treatment of structures can lessen the impact of a treatment plant on the neighbourhood. Proper design can minimise odours but it would be very difficult and expensive to design and operate a plant to ensure no odour problems. The task is made more difficult by the influence of meteorological conditions and topography on locations affected by odours. A treatment plant should preferably be located well away from residential development including future development. As a guide the following distances from the nearest occupied building should be complied with for plants treating domestic type sewerage:
Plant Design Capacity Distance
1000 E.P. 300 m
5000 E.P. 800 m
20000 E.P. 1200 m
There are obvious benefits in having the treatment plant in an industrial area and in town planning on this basis. Even so the designer has a responsibility to ensure that a treatment plant causes minimal environment offence. "
Mr Barton said that at the relevant date of resumption the capacity of the existing plant was in excess of 2500 e.p. (equivalent persons) and that the guidelines would suggest a desirable separation of 487.5 metres between a plant of that capacity and the nearest occupied building.
Such separation would include most, if not the whole of the subject land, based on earlier evidence. The guidelines obviously do not restrict the construction of a dwelling closer than the suggested separation as evidenced by the recent construction of a dwelling adjoining the plant in Three Chain Road.
After consideration of the evidence, I am convinced that the subject land could not reasonably have be seen to have potential for rezoning to allow economic subdivision as a rural residential development as at the relevant date. There is no evidence before me as to the development costs which might have been expected, but the topography of the land, with the location and extent of flood susceptible areas and the severed areas above flood level on either side of the water course, does not lend itself to cost effective subdivision design including the provision of internal access. The quality of the land and again the severed areas above flood level are such that the property could not reasonably be seen as potentially suited to agricultural pursuits of an independent commercial nature. I have concluded that the land would be seen in the market place as a handily located rural zoned site, capable of being used for the construction of a dwelling with several sites available, depending on individual attitudes to access and proximity to the sewerage treatment plant. Although direct access to Goodwood Road is not available and unlikely to be approved, based on the evidence of Mr Maddern who had made enquiries in that regard, the possibility of a service road type access from Douglas Road along the Goodwood Road reservation as has been approved for the rural residential site adjoining, could not in the circumstances, be left out of contention, if limited to that of a single dwelling. The large balance area of the land is seen to be available for limited horticultural or hobby type grazing activities.
With regard to the proximity to the treatment plant, I do not accept the submission that the present resumption should be seen as part of the "Thabeban Sewerage Scheme" which resulted in the original resumption, for sewerage purposes, allowing the construction of the treatment plant in the first place. It is the claimants' submission that to ignore the existence of the scheme is in accordance with the Pointe Gourde principle. Reference was made to the comments of the learned former President of this Court Mr W.F.G. Smith, in The Union Fidelity Trustee
Company of Australia Limited v. The Co-ordinator-General (1988-89) 12 QLCR 82 where in discussing that principle he said at p.84:
" I can state the principle in no stronger language than by referring to the speech of their Lordships in Melwood Units Pty Limited v. The Commissioner of Main Roads - Privy Council - (1978) 5 QLCR 145 at p.153:-
" In their lordships' opinion it is part of the common law deriving as a matter of principle from the nature of compensation for a resumption or a compulsory acquisition, that neither relevantly attributable appreciation or depreciation in value is to be regarded in the assessment of land compensation." "
In the Union Fidelity case supra the President found that there was no cut-off point after resumption for a Scheme as at which enhancement from the Scheme should be allowed to flow and merge with the land taken for the same Scheme many years later. He said, also at p.84:
"Analogy with the reasoning applied by the Land Appeal Court in Zoller
v. Brisbane City Council (1973) 40 CLLR 198 gives support to the proposition that a lapse of time makes no difference to the application of the Pointe Gourde principle and its reverse. This was a case of setting off against compensation, enhancement in the value of the balance land. The resumption from Zoller took place in 1971 - a time much later than 1959 when the first resumptions were made for the Pine Rivers Dam Scheme. The later resumption seems to have been triggered off as it were, as the result of an after thought by the Council. However the Land Appeal Court pursuant to provisions of Section 20 of the Acquisition of Land Act 1967 - 1969 set off against the compensation payable for the Zoller land the value of the enhancement to the balance of his land as a result of the dam scheme. "
His comments then continued (the underlining being mine):
" It would seem that the rationale for the assessment of compensation is that as between a constructing authority and its dispossessed owners no detriment or advantage flowing from a resumption scheme, whatever occurring, may affect the quantum of their negotiations. The matter may well be otherwise if a different scheme of resumption is involved on the later occasion. "
The question of whether this resumption should be seen as part of the original scheme has been raised here. Even so, I would have difficulty in accepting, if the second resumption was seen as part of the one scheme, that the constructing authority should in effect pay twice for the depreciation in value caused by the works, at different dates, just as it would seem unjust for a claimant in effect to have off-set on two occasions the enhancement flowing from a scheme, if those were the circumstances. As Counsel for the respondent says here, the constructing authority was required in terms of Section 23 of the Acquisition of Land Act to compensate at
the time of the first resumption for damage caused by injuriously affecting land severed from the land taken. It must be assumed then that the damage to the severed land has been settled when compensation is paid. The land remaining is then blighted by the injurious affection.
Documents called for and tendered by Counsel for the claimants, being a planning report and a supplement to that report, refer to the subject land as a requirement for the "Proposed Augmentation of Thabeban Sewerage Treatment Works." It seems to me that circumstances subsequent to the original resumption have rendered the original scheme inadequate and the purpose of the second resumption is "to make greater in size" the original works, which is to my way of thinking, a second scheme.
In this matter the effect of the existing sewerage treatment plant would be expected to have been of some significance on a subdivisional development, although there is the evidence of the sale and residential use of a lot immediately adjacent and the sale of another lot in fairly close proximity, at level of value which it is claimed, does not indicate any significant degree of deleterious effect. As a rural site of 25.552 hectares with potential to mitigate against the effect of the existing works by the selective siting of a dwelling while the presence of the works cannot be ignored, it is seen to be a far less significant factor than would have been the case had the potential been for more intense economic subdivision.
Having decided that the subject land should be valued as a rural site, its value in my opinion should be found on a direct site value comparison, not on a unit of area basis. Size is but one factor which will affect the value and its comparison with the sales. The sales evidence before me, which I see as being of sites with simple dwelling potential is then as follows:
1.Three Chain Road - adjoining subject land and sewerage treatment works - 8094 square metres - July 1989 - $20,000.
2.Goodwood Road adjoining subject land - 7523 square metres - August 1990 -
$30,000.
3.Ashfield Road - 6.016 hectares - $68,000.
4.Rubyanna Creek - 8.055 hectares - $61,000 (with water improvement).
5.Price Street - 26.34 hectares - March 1990 - $55,000.
6.Branyan Drive - 16.39 hectares - December 1989 - $50,000.
The location of the Price Street land suggests it has subdivisional potential, yet there is conflicting evidence as to drainage difficulties which might be associated with subdivision
development. At worst, it is capable of use as a single dwelling site. I see the Ashfield Road and Rubyanna Creek properties, while much smaller in size as providing a more desirable residential environment than offered by the subject land. Of all the evidence, it appears to me that the Branyan Drive sale, while having superior features, and a flooding disability of less practical effect than that of the subject, but then with a lesser area, offers the best evidence of value. My only concern with that sale is that it appears to reflect the lower end which might have been expected from the wide range of evidence available to be considered. There is evidence before me as to the rejected offer by the Council but I find this to be of no assistance. I do not see that such offer was, in any event, representative of market value. As Counsel for both the claimant and respondent agree, it is unfortunate that the result of the Council making such an offer would undoubtedly have been to raise the expectations of the claimants. Nevertheless the task before me is to find the market value of the land as at the relevant date.
Mr Maddern's approach to this matter seems to be more practical and market related than that of Mr Browning. There is however a greater area of flood free land than was indicated in the information provided to Mr Maddern at the time he made his valuation, and I am of the opinion that he has over emphasised the effect of both the treatment plant and flooding disability if the highest and best use of the land is limited to that of a rural site. Giving the benefit of doubts which exist, I find the value of the land at the relevant date to be $55,000. Legal and valuation fees in the sum of $2,320 have been agreed between the parties, making a total award of $57,230.
I am not informed as to the date of payment of the legal or valuation fees.
I order that interest at the rate of 12% per annum be paid on the amount of $55,000 from and including the date of resumption up to an including 16th May, 1991, when an advance of
$35,000 was paid, and thereafter on the sum of $20,000 up to and including the day immediately preceding the date that the balance of the award is paid.
(R.E. Wenck)
Member of the Land Court.
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