Kabale Holdings Pty Ltd v Director-General, Department of Transport
[1995] QLC 69
•11 August 1995
|
BRISBANE
11 August 1995
Re: Claim for Compensation -
Resumption for Road purposes -
Acquisition of Land Act 1967.
A94-34.Kabale Holdings Pty Ltd
v.
Director-General, Department of TransportJ U D G M E N T
By Proclamation published in the Government Gazette on 1 October 1993, the Director-General, Department of Transport (DOT) as constructing authority, resumed as from that date for road purposes, a strip of land containing about 9.05ha (9.02ha on survey) and being part of the balance of Lot 3 on RP 209833, C/T, Volume 6999, Folio 221, county of Ward, parish of Coomera. At the date of resumption the subject land was in the fee simple ownership of Kabale Holdings Pty Ltd (Kabale).
The land was acquired under the provisions of the Acquisition of Land Act 1967 (the Act) and the Transport Infrastructure (Roads) Act 1991. It will become part of a road corridor referred to as the Eastern Transport Corridor (ETC). The land was at all material times within the local government area of the Albert Shire Council (ASC). Lot 3 was part of an aggregation of adjoining parcels purchased by Kabale in 1988 having an aggregate area of about 175ha. The parcels making up the aggregation comprised:Lot 3 RP 209833 - 73.52ha
Lot 5 RP 209833 - 1.471ha
Lot 6 RP 209833 - 4.056ha
Lot 5 RP 188582 - 96.03ha
An access easement in favour of Lot 65 which adjoins Lot 5 (RP 188582) on the east, is registered as Easement A on RP 172632 over Lots 5 and 6 on Plan 209833. These lots comprise a strip of land which runs along the southern boundary of the remaining two parcels and extending westerly for some distance into an area to the south of an estate known as "River Downs".
Under the Act, an owner of land may agree to the taking, subject to compensation being determined by the Court -s.15. In the subject case, an agreement was executed by the parties on 30 August 1993. Clauses 2, 3 and 4 of the agreement provide:
"2.The Director-General agrees that should the land be taken by him, he will, at his own cost and expense-
(a)carry out any survey necessary to excise the land taken;
and
(b)effect any necessary correction of title to the owner's remaining land arising as a result of the taking.
3.The owner shall offer no objection to The Director-General taking the land.
4.The parties acknowledge and agree that this agreement does not pass any interest in the land to The Director-General nor does it prejudice the right of any person to use, enjoy or dispose of his interest in the land."
The area agreed to be taken was unsurveyed and stated as being approximately 9.05 hectares. The proclamation issued in October 1993 taking the area which, on survey, was reduced to 9.02 hectares. The resumed land runs along the western boundary of Lot 3 adjoining a railway reserve. This reserve was acquired from the former owners of the aggregation in 1986 for the purposes of the Beenleigh to Robina Railway. The railway is expected to be operational in 1995. Works on the construction of the railway where it adjoins the subject aggregation were being carried out at the date of resumption and during the hearing of the case in late 1994.
At the date of resumption, the aggregation was zoned "Residential A" and subdivision of the land into residential lots was in progress, with some lots sold, some under contract of sale and others in the process of development. The estate is known as Monterey Keys.
A claim for compensation dated 26 November 1993 was served on the respondent and filed in court on 28 March 1994 by Messrs Clarke and Kann, solicitors for Kabale. The claim was made in accordance with the provisions of s.19 of the Act. The claim was as follows:
LAND
Loss of land due to ETC including severance $1,250,000.00
Injurious affection $1,201,650.00
Disturbance (loss of sale price on lots sold) 163,600.00
$2,615,250.00
DISTURBANCE
Revised Bridge design $ 314,776.51
Foot bridge design and construction $ 96,581.00
Intersection redesign and construction $ 533,323.42
Survey redesign fees thrown away for bridge redesign
and subdivision redesign $ 159,972.15
Town planning fees thrown away $ 48,183.22
Costs to prepare compensation claim $ 101,832.00
$1,254,668.30
Damages for delay and loss of opportunity $11,117,094.22
TOTAL $14,987,012.52
On the matter being called on for hearing, the claim was amended as follows:
LANDValue of land resumed (including severance) $ 1,300,000.00
Injurious affection and disturbance $ 1,350,000.00
$ 2,650,000.00
DISTURBANCE (as per Exhibit 12)
1.Revised Bridge Design, Foot Bridge Design and
Construction $ 185,979.55
2.Intersection re Design and Construction $ 340,434.48
3.Fees Thrown Away for Survey and Subdivision re
Design $ 109,332.54
4.Costs to Prepare Compensation Claim $ 77,859.74
5.Damages for Delay $ 6,872,694.15
6. Special Damages $ 134,182.12
$ 7,720,482.58
TOTAL $10,370,482.58
The sums claimed under Items 1 - 4 and 6 were further amended during the proceedings. I will come to these amendments in due course.
Rules governing an assessment of compensation on the compulsory taking of land are found in s.20 of the Act. I will consider first those matters which are of principal concern in terms of the section.
The sum claimed for land, severance and injurious affection was the result of a valuation exercise written by Mr PS Murphy, registered valuer of Herron Todd White (HTW). This firm has had a reasonably long association with Kabale and Mr Murphy had done a number of valuations of the property for Kabale's bankers. A report covering these issues was written on behalf of DOT by Mr LJ Hamilton, registered valuer of Taylor Byrne. From his workings he derived an estimate of compensation in the sum of $1,185,000.
Monterey Keys was purchased by Kabale for a consideration of $12 million. The land was in a vacant englobo state. Consideration for the purchase came from funds borrowed by Kabale and the Dalley family (Mr RRE Dalley and Mr JT Dalley, his son, being directors of Kabale) and secured by mortgage over Monterey Keys and property of the family. Prior to purchase Kabale had for some time been in negotiations with the former owner (Glenrain) about purchase and about the manner in which the land should be developed. The contract of purchase was conditional on obtaining approval for subdivision of the land into residential allotments (stage 1 and stage 4 - broadly speaking the whole of Lot 3 - were approved prior to settlement). Annexure A is an cadastral plan of the area taken from the report of Mr Hamilton. The plan provides a fair representation of the area prior to development. In speaking to the plan, the property having the benefit of the easement for access purposes is Lot 65. Monterey Keys comprises the two adjoining portions to the west. Lot 65 has an area of about 161 hectares. This site was purchased in 1988 with a view to the development of an integrated residential resort. In Mr Hamilton's report it is said that the most recently announced plans for the site (Oyster Cove) detail a residential estate at 220 wet and 420 dry lots with amenities such as golf course, shopping centre and ocean-link lake and marina. He says further that the site will provide an access bridge over Saltwater Creek directly to Hope Island on the north. (Both Oyster Cove and Monterey Keys have parkland (Environmental Reserve) to the south. To the west of Monterey Keys is an estate known as River Downs. This estate is a rural residential type subdivision with average lot sizes of 4,000 square metres and lies directly north of the Helensvale Estate from which access is gained by Discovery Drive from Helensvale or from the Pacific Highway by Helensvale Road. Immediately to the north of River Downs and north of Saltwater Creek is the Oxenford (Pacific Highway) Hope Island road which affords access to Southport via Boykambil and Paradise Point as well as providing access to Sanctuary Cove. The subject land lies about 1.6kms from the Pacific Highway with access available in this direction. The alternative access from the highway is via Helensvale Road. The Helensvale Estate having Discovery Drive as the main through-road, is an established conventional residential estate with services such as primary and secondary school, sub-district shopping centre, professional and medical services, etc. In the planning of Monterey Keys, it was intended that access to the Pacific Highway via the Oxenford-Hope Island Road would be gained with the construction of a bridge across Saltwater Creek towards the west of the property and preferably on the boundary in parallel with the railway line. Alternative access from the south was originally planned to come from Helensvale Road and in the location as shown on the annexure. In 1992, construction and subdivision of Monterey Keys commenced. A bridge was constructed across Saltwater Creek in the general location of the original intent but further to the east so as to allow for the ETC. Subdivision commenced in this north-western section with entry statement, etc., leading from the bridge and the estate was marketed as having an affinity with the resort developments on Hope Island and other developments such as Sanctuary Cove which lies to the north of Hope Island. The north-western section of the estate had another advantage in that it generally contained some higher land in comparison with the overall nature of the estate which is described by the valuers as being low-lying, poorly drained and flood prone. Development of such lowlying land involves the excavation of land for lake systems which also provides land fill to raise housing lots above the 1:100 year flood level. Overland flood flow paths were also required. Approval for the development was obtained in December 1991. The nature of the then intended development may be seen on Annexure B. This plan was the subject of a consent order of the Planning and Environment Court given on 12 December 1991 subject to conditions. It was subsequently changed as development progressed. It may be observed that the plan makes provision for a proposed transport corridor. It may also be observed that "island" sites were considered in the southern part of the area and that Helensvale Road was relocated to the south and the original extension thereof to the western boundary of Monterey Keys renamed Warrego Way. Conditions of consent included the provision (or preservation by easement) of access to Helensvale and east to Oyster Cove. It follows that, on development, access to the Pacific Highway can be taken either by the Oxenford-Hope Island Road or through Helensvale. Later Helensvale Road was relocated as a boundary road with lots in Monterey Keys backing on to it.
A proposal to duplicate the Pacific Highway between Brisbane and the Gold Coast (later referred to as the ETC) became known to Kabale (Mr Dalley, Snr) in late-1989. A paper inviting public discussion and participation in the selection of a crossing of the Coomera River to the north of Monterey Keys was published in August 1990 by Sinclair Knight and Partners acting for DOT. The paper showed a number of possible crossings and correspondingly possible routes. Route 1 had the crossing in parallel with the railway and for its continuation in parallel with the railway (adjoining) through Monterey Keys. An alternative had it proceeding through Monterey Keys from north-east to south-west and one missed Monterey Keys entirely. In November 1990, a further paper was published in more detail, inviting advice and comment from the community. Route 1 was shown as Route A in this paper. Alternative routes remained but for Monterey Keys it was either in parallel with the Railway or far to the east and away from the estate. The paper contained, among other things, detail, not only of location but of works proposed by DOT to attenuate noise and visual impacts. With Monterey Keys the paper provided profiles of the cuttings and development of both the railway and the ETC and a pictorial of the scene with buffer and landscape works in place. As the ETC will pass through Monterey Keys the carriageway will run through a cutting for some 220 or so metres, then for a distance slightly above ground level and then again via a cutting and lastly progressively raised to a level of about 10 metres so as to clear Helensvale Road. A grade separated interchange allowing for egress and ingress will be positioned at the junction of the ETC with Helensvale Road. The visual and noise abatement treatments include timber fencing adjacent to the carriageway generally 1.8 to 3.5 metres in height, landscaping with trees and shrubs and earth mounding with more timber acoustic fencing. The evidence is that the ETC will not be open before the year 2000 whereas the railway was under construction and due for opening in 1995. Development of Monterey Keys began in the early part of 1992 commencing with the construction of a bridge over Saltwater Creek connecting the estate to the Oxenford-Hope Island by a roundabout. The first stages of the estate were released for sale in November 1992. It is agreed that the estate was presented well, that lots were competitively priced and that it was well received in the marketplace. At the date of resumption in October 1993, lots had been sold, others were under contract and development works were generally proceeding along the lines of a concept which is depicted in a plan taken from the report of Mr Murphy and attached as Annexure C. In the period, however, between the floating of an ETC publicly in 1990 and the commencement of construction of Monterey Keys in 1992 changes occurred in a number of ways which are relevant both to the principal issues and to the claims for disturbance. The majority of these issues are relevant to the claims for disturbance. They, however, brought with them a number of witnesses and much documentary evidence. Besides Messrs Murphy and Hamilton, the parties called the following witnesses. For Kabale - Mr RRE Dalley and his son, Mr JT Dalley, both directors of Kabale; Mr JP Ballantyne, town planner and director of McKerrell Lynch which firms is retained by Kabale as town planners and project managers for the development of Monterey Keys. Mr Ballantyne's involvement with Monterey Keys began in December 1991. Mr BD Dallow, a director of Monterey Keys Marketing Pty Ltd. This firm has been the sole marketing agent retained by Kabale since July 1994. Mr WK Morton, civil engineer and a director of Morton and Associates Pty Ltd, civil engineers and project managers. Mr Morton was in the employ of the ASC as subdivision engineer between the years 1989 and 1991 when he left the ASC to form Morton and Associates. He was retained by Kabale as consulting engineer on leaving the ASC.
Mr William Leighton, civil engineer and principal of William H Leighton Pty Ltd which company is in the business of consulting structural and civil engineers. Mr Leighton had an association with Monterey Keys beginning in 1986 (when the land was owned by Attica Pty Ltd) and ending in 1989. Mr MF Winders of Max Winders and Associates, consulting engineers and environmental scientists. The evidence of Mr Winders was about the impact of the ETC on the acoustic amenity of Monterey Keys.
Mr RC Franklin, licensed surveyor of Ross C Franklin and Associates. His involvement with Monterey Keys began in the early 1980s when he was involved in a limited partnership with Attica of which he was a director and shareholder. His association with Monterey Keys ended in 1991. Mr EA Kann, solicitor, of Clarke and Kann. His association with Monterey Keys began in October 1990 when he received instructions to advise on matters relating to subdivisional approvals and continued through to the carriage of the action before the Court. For the respondent: Mr JR Humphreys, planning and environment consultant with Brannock Humphreys. His evidence, although relating the history of planning approvals etc., for Monterey Keys, was principally directed towards the effect the landscaping and buffer works proposed by DOT would have on ameliorating visual and noise impacts. Mr FH Kamst of Kamst and Simpson, environmental and acoustic consultants, who spoke about noise impacts. Mr DBL Arbon, shire planner with the ASC. Mr ARF Chenoweth, landscape architect. Mr Chenoweth's firm prepared the landscape plans and design recommendations on behalf of DOT for the ETC. His evidence covered these plans in detail. Mr DH Steele, engineer and manager, pre-construction services for the South Coast Hinterland District for DOT. Mr C Vucas, real estate salesman. Mr Vucas related his experience and opinions in selling land on and off railways and road corridors. Mr RG Higgins, engineer and manager, Infrastructure Delivery, DOT.Mr MF McAnany, consulting engineer with Kavanaugh McAnany. Mr NC Calabro, chartered accountant.
The purchase of Monterey Keys by Kabale was settled in August 1988. The rezoning of the land from rural A, rural B and Open Space to residential A had been obtained in January 1988 and Kabale's contract was conditional on subdivisional approval being obtained over roughly the western half of the site which is now taken up in stages 1 to 10 of the current approvals and development proposals. The original planning approvals for the estate featured a central lake separated from Saltwater Creek by a weir lock system, a local commercial centre, park land of regional significance and a marina. Access was to be obtained from the Oxenford-Hope Island Road by a bridge across Saltwater Creek and otherwise via Helensvale Road as then known and later named Warrego Way. The concept is shown on Annexure D (drawn in 1988 by Ross Franklin - Franklin) and referred to in evidence as the J plan. This may be compared with the nature of the product as at the date of hearing (Annexure C - taken from the report of Mr Murphy). As at the resumption date, in the words of Mr Hamilton, "the estate has established a good reputation in the market" for reasons which he listed as follows:
•initially keen pricing in Stages 1 and 2
•making a limited percentage of sites available to builders on terms
•ensuring adherence to building covenants
•promotional emphasis on proximity to Hope Island and Sanctuary Cove
•early establishment of display homes on Monterey Keys Drive
• entry statement
•coordinated and consistent advertising on radio, television and newspapers.
Over a 14-month period from November 1992 to and including December 1993, sales averaged 10.5 per month. To October 1994, the rate of sale was about 15 lots per month. At the date of resumption some 60 lots had been sold, another 60 were under contract of sale and 81 were on the market. Kabale in its development of the estate had used the land proposed to be resumed by removing an estimated 29,000m3 of soil which Mr Higgins would say was worth about $10 per cubic metre. The lake (the western part) was excavated and in the final stages of construction at the date of hearing with Stage 10 being released to the public.
The statutory provisions governing an assessment of compensation are contained in s.20 of the Act which I repeat."(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage, if any, caused by either or both of the following, namely -
(a)the severing of the land taken from other land of the claimant;
(b)the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.
(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.
(3)In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.
(4)But in no case shall subsection (3) operate so as to require any payment to be made by the claimant in consideration of such enhancement of value. "
At the outset I may repeat what has been said many times previously and that is that compensation is to be assessed according to the value of the estate or interest of the claimant in the land taken on the date the land was taken. Such follows on from the provisions of s.12 of the Act which defines the effect of the Proclamation as divesting the claimant of its estate or interest in the land on and from the date of resumption and converting such estate or interest into a claim for compensation. Secondly, under s.20, regard is also to be had to damage caused by severance and injurious affection in arriving at the value of the land taken on the date when it was taken. In the context of Monterey Keys comprising a number of adjoining parcels intended for development in conjunction with each other, it is appropriate to look at the estate as a whole when considering such matters and not by real property description (see Suntown Pty Ltd v. The Gold Coast City Council (1979) 6 QLCR 196). Injurious affection is however restricted to the effects of works done on the land taken from Kabale (Edwards v. Minister for Transport (1964) 2 Q.B. 134) unless the circumstances of the case may allow an application of the principles contained in South East Queensland Electricity Board v. Beaver Dredging Pty Ltd (1984-85) 10 QLCR 166; see also The Crown v. RH and JM Corbould (1986-87) 11 QLCR 50; TM and JG Treston v. Brisbane City Council (1984-85) 10 QLCR 247; Ernest Glen Baillie v. Commissioner for Railways (1986-87) 11 QLCR 95; Syme v. Commissioner for Railways (1988-89) 12 QLCR 98; Van Hoff Pty Ltd v. The Commissioner of Main Roads (1992-93) 14 QLCR 331 and Suntown. In the last case the Land Appeal Court said at p. 207:
"Injurious affection, in the terminology of the Act, is the type of damage to the retained land which flows from the exercise of any statutory powers by the constructing authority otherwise (i.e. than by severance) injuriously affecting the retained land. This type of damage is related to uses of, or activities on, the resumed land by the constructing authority as a result of the resumption and the consequent depreciation in the value of the retained land. "
It may also be said that the scheme of works or purpose of resumption (in this case the provision of the ETC) is relevant only to the question of enhancement - see Zoeller v. Brisbane City Council (1973) 40 CLLR 25 (LC) and 198 (LAC) and further that the principles of Edwards case are relevant in all matters falling for consideration under s.20. This is evident in Corbould where at pp. 57/58, the Land Appeal Court said:
"...It might also be noted the principle of Edwards case (supra) is applicable equally to severance, injurious affection and in ascertaining damage due to disturbance for it is implicit in the exercise that, except where circumstances warrant an application of the principle of the Beaver Dredging case (supra) which is not relevant on the facts of this case, compensation is allowed under the heading of disturbance only for the taking of the subject land and the use made of it. "
In this context, Edwards case is of assistance in considering remoteness.
DOT contends in this case that enhancement is relevant. It is submitted that apart from an area within about 140 metres from the boundary of the ETC the balance of the estate including an area designed as a potential shopping site will be enhanced by the scheme. Mr Murphy and Mr Hamilton were assigned the task of estimating the combination of these effects. Their exercises had nothing to do with the particular separate claims for disturbance. Conventional valuation principles would say that the appropriate means of testing these factors is by a valuation exercise before and after the resumption. Notwithstanding that the estate may ultimately comprise approximately 1168 homesites and be developed in some 18 stages over a period of seven to ten years, the valuers preferred to consider the effects of the ETC directly in relation to lots in the area covered by stages 1 - 10 and to look at the eastern section of the estate as englobo residential A land. Whilst this may seem odd in view of the planning of the estate and to the fact that Mr Murphy performed his before and after exercise upon a "discounted to cash flow method", I have come to the conclusion in the circumstances of this case having regard to the time frames put forward for development and sale of the entire area; and the constant movement and adjustment of plans to meet changing market conditions that it is a prudent course to adopt.
I find it convenient to at first discuss the valuation written by Mr Hamilton. The summary of the report contains these paragraphs:"The subject land forms a corridor generally sixty metres wide but ranging from 24 metres to 124 metres that will accommodate up to six lanes of traffic. Egress and ingress to the planned roadway is proposed at the south-west corner of the subject property.
Monterey Keys residential estate is planned to be a "Residential A" estate with both dry and water frontage allotments totalling approximately 1,168 home sites to be developed in 18 stages during the next 7-10 years.
At the date of resumption part of the estate not resumed was approved for subdivision and subdivided into five stages having 60 lots sold, 60 lots under contract and 81 lots retained. The balance of the estate was zoned 'Residential A' but not yet subdivided. The development and sale of the estate was proceeding in stages.
The taking of the land will have a detrimental impact upon the value of the property. There was a net loss of approximately eighty four potential dry lots as well as injurious affection to part of the balance lands due to their proximity to the corridor.
As well there will be an enhancement to the estate by the proposed provision of an exit/entry ramp to the estate at Helensvale Road intersection. "
Mr Hamilton points out that the railway corridor but for the resumption would have resulted in a loss of visual amenity, noise and vibration to those lots in reasonable proximity to it. On this particular point he and Mr Murphy agree that such effects would not extend in a market sense beyond a depth of 60 metres from the boundary of the rail reserve. Mr Vucas would agree. Mr Hamilton then said that consideration should be given in valuing the land before the resumption to -
•the requirement for a 4 metre wide easement along the rail corridor;
•approximately 50% of the resumed land would require filling;
•the elevated land was scarred by works completed;
•two gullies traverse the site.
The evidence shows that the easement (whether effected by easement or dedicated as park or something else) was required to be 10 metres wide. The necessity for it was eliminated by the resumption. For the remaining points Mr Hamilton made little of them, other than, it seems to me to remove any gloss that the resumed land was unique or exceptional in the overall context of the estate. In his exercise, he did not take into account the effect public knowledge of the scheme had on the selling prices of the 60 lots sold, whereas Mr Murphy made such an allowance. The depreciation resulting from the ETC applied by Mr Hamilton comprised a reduction in value of 20% for lots adjoining, 12% for lots one removed and $2000/$5000 per lot for lots within reasonable proximity. Generally speaking, the limit of depreciation coincided with a line running south to north through the estate on the western side of Monterey Keys Drive - about 140 metres from the boundary of the ETC. The exercise performed by Mr Murphy took this depreciation to a line running south to north from and including one lot on the eastern side of Monterey Keys Drive - about 200 metres from the boundary of the ETC. He also depreciated the remainder of the estate, whereas Mr Hamilton saw the remainder of the estate as being enhanced by the ETC. In speaking about the impact of the resumption on the entry statement coming into the estate from the Oxenford-Hope Island Road. Mr Hamilton listed these points for consideration:
•road bridge will not be constructed for at least five years after the date of resumption at which time, based on current progress, work will be well advanced on the eastern section of the estate.
•the railway bridge was under construction during the sales period of Stages 3-5 which would have exacerbated the impact of the bridge.
•the railway bridge detracts from the entry statement and signals to potential buyers the existence of the planned railway although the roundabout is offset from the railway corridor.
•the Oxenford-Southport Road entry will become secondary to the new access point to Helensvale and the future access via Oyster Cove.
At the date of hearing the sales office had been relocated and set up on the southern area of the estate on the corner of Monterey Keys Drive with Helensvale Road. The relocation may be taken as an indication that the northern entry has served its purpose and that as relocated the office is more convenient and accessible to intending purchasers of Stages 9/10 and subsequent stages to the east. There is a further advantage. There is evidence that at the date of hearing, Oyster Cove was in the process of development (accessed by Helensvale Road). In other respects the only real impact from works other than speculation were the works involving the railway. Caution would therefore seem to be the message Mr Hamilton intended to put across. He spoke about the roadside treatment proposed by DOT and published in the papers and evidence to which I have referred. Nevertheless as a valuer and in applying the principles of his profession, he is in agreement with Mr Murphy that it is the perception of buyers in the marketplace which determines the issue. In this respect, his opinion and that of Mr Murphy outweigh the opinion of Mr Vucas who, with qualification, would limit the effects of the ETC to the lots adjoining. Conclusions drawn by Mr Hamilton were taken from sales of land within the estate and sales of land in the Helensvale Estate which has this rail and road corridor through the estate. Mr Murphy applied evidence coming from within the subject estate and sales of land within the Parkwood Estate bordering the Smith Street connection to Southport from the Gaven Way. Mr Hamilton then addressed the issue of enhancement which he considered would flow from the scheme to the estate, including enhancement to the commercial site which is positioned in the south-western corner adjoining the ETC. His exercise was performed by applying a value to the unsubdivided land before and after the resumption, taking into account the size of the aggregation at the resumption date, the level of development, the reputation of the estate and the rate of sale of developed lots. In the valuation of the land before the resumption, he adopted a diminution factor of 15% for a strip of land adjacent to the railway 60 metres wide which approximates 8 hectares. He valued the englobo land adjacent to the existing development at $135,000 per hectare and the land contained in the eastern section (96.03ha) at $75,000 per hectare. The valuation follows:
45.97 hectares @ $135,000/ha = $6,205,950
8.0 hectares @ $135,000/ha @ 15% diminution in value = $ 918,000
96.03 hectares @ $ 75,000/ha = $7,202,250
150.0 hectares $14,326,200
A value of $14,325,000 was adopted which equates $95,500/ha overall.
In valuing the land after the resumption he adopted a 10% diminution factor for all unsubdivided land within 140 metres of the boundary of the ETC, equating about 10.64 hectares. He sees the interchange on the Helensvale Road as providing an easy access amenity to the estate which will, with the provision of buffer works, enhance the value of unsubdivided land by about 2%. This calculation followed:
34.31 hectares @ $137,000/ha = $ 4,700,470
10.64 hectares @ $137,000/ha @ 10% diminution in value = $ 1,311,912
96.03 hectares @ $77,000/ha = $ 7,394,310
140.98 hectares $13,406,692
He adopted a value of $13.4 million. The exercise yielded compensation in the sum of $925,000.
He checked these calculations and opinions by applying a piecemeal approach. From his sales evidence, he considered it reasonable to adopt an undeveloped value of $13,500 per lot and based on plans provided by McKerrell Lynch (SKO7 and SKO8 provided to him in September 1993), a loss of 84 lots is calculated which @ $13,500 per lot, less 10% diminution in value for proximity to the railway, yielded the sum of $1,020,600. To this sum he would add injurious affection resulting from the ETC to some 81 lots varying from 20% for 25 lots, 12% for 6 lots and 5% for 50 lots, yielding a sum of $110,970. Enhancement is calculated at $281,960. The resultant sum is about $850,000 which is less than the sum derived under the former method. He then addressed injurious affection to the developed but unsold lots at the date of resumption. He classified such lots into -
(a)adjoining the ETC - 5 dry lots - 3 wet lots (the latter do not in fact abut the ETC. They front Saltwater Creek and Monterey Keys Drive immediately on entering the estate);
(b)lots one removed - 5 dry lots - 1 wet lot (wet lot hatchet shaped on Saltwater Creek and Monterey Keys Drive);
(c)lots in reasonable proximity - 16 dry lots.
The range of allowance included in the first category -
(a)Lot 1 - dry lot backing onto ETC - selling price $65,000 - estimated full value $80,000;
(b)Lot 51 - wet lot - sale price $120,000 - full value $145,000.
In the second category -
Lot 4 - sale price $77,000 - full value $85,000.
In the third category -
Lot 10 - sale price $82,500 - full value $86,500.
The various allowances resulted in an estimated gross loss of $265,000 which, after allowing 4% for cost of sales, yielded a net loss of $254,880 which he rounded off in the sum of $260,000. And so, loss of land plus injurious affection is calculated in the sum of $1,185,000.
I may digress briefly from further consideration of these exercises to clear a few matters which in the end are of little consequence. The prospect of an ETC became known to the public in some distinct form in the latter half of 1990 when public participation was invited in the selection of a crossing of the Coomera River. By the end of 1990 it was known that buffer works would be included in the development. Issues listed in the paper (November 1990) included - noise, visual amenity, local access, effect on land values, river navigation and impact on the natural environment. The paper included profiles at two locations within Monterey Keys. In the evidence before the Court, buffer works will include timbered acoustic fencing, mounding and treed landscaping. Somewhat similar buffer works are currently being placed by DOT along the South-Eastern Freeway in the suburbs of Brisbane and at other locations on transport corridors. The Court was shown photographs of such works and invited to inspect them. This process of attenuating noise/visual impacts is a recent innovation and no doubt in the course of time will remove some of the doubts and anxiety associated with the prospect of residing near or abutting a proposed road or rail corridor. The expert witnesses called in relation to these effects included Mr Vucas, Mr Humphreys, Mr Chenoweth, Mr Winders and Mr Kamst. Notwithstanding the expertise displayed in their evidence, and notwithstanding that the publication of November 1990 was available to all intending purchasers of land within Monterey Keys the issue at the end of the day comes down to one of market value; that is, what is the perception shown in the marketplace? The valuers have the expertise to gauge this and they did so by reference to sales within Monterey Keys and by looking outside the area. Mr Hamilton went to Helensvale estate where the ETC will also parallel the railway and compared sales of lots near the ETC with sales of lots away from the ETC. Mr Murphy went to Parkwood estate and considered sales of lots backing on to Smith Street, otherwise known as the Smith Street connection, with sales away from Smith Street. Smith Street, however, can be described as an old-established connection possessing no buffer works except for some works carried out by the developers and with little comparability to those proposed with the ETC. At Helensvale purchasers are left with much the same perception which may apply to Monterey Keys. Each exercise possessed difficulties in that in making the comparisons, allowances had to be made for factors other than adjacency or no adjacency to the disturbing feature. What became apparent after hearing evidence of these expert witnesses and having inspected the areas, is that attenuation factors such as cuttings, valleys and buildings, etc., are relevant and real and that a deal of imagination is required in the extrapolation of likely effects upon englobo land proposed for subdivision. These considerations have been reflected in some redesign of Monterey Keys adjoining the ETC. On the advices of McKerrell Lynch, lot design in a northern cul-de-sac was changed without loss of lots but to minimise the visual and acoustic impact of the railway and the ETC.
Mr Hamilton has taken depreciation in value from the ETC to a depth of 140 metres from the boundary. Mr Murphy has extended depreciation to a depth of 200 metres and generally allowed for depreciation over the balance of the estate. They differ in degree of depreciation and of course in the number of lots affected. The assessments were made on different lines but some guide may be taken through the allowances made for developed but unsold lots within these respective bands. Mr Hamilton applied a net loss on sale in round figures of $260,000 for 30 lots or an average of $8,700 per developed lot. To 44 lots, Mr Murphy applied a sum of $154,000 or $3,500 per developed lot. When dealing with the valuation of the land before the ETC but with the railway injuriously affecting land to an agreed depth of 60 metres, Mr Hamilton applied a 15% diminution factor to a land value of $135,000 over 8 hectares for a sum of $162,000. Assuming a development yield of 10 lots per hectare, the allowance equals $2025 per lot. The allowance made by Mr Murphy can only be taken from estimated selling prices contained in his discounted cash flow which is shown as an average over dry lots in stages 1, 8 and 9. In stage 1, lots are reduced on average by $500 - from $70,000 to $69,500 which over 89 lots reflects a loss on sale of $44,500. The average in stage 8 over 46 lots is $2,500 per lot or $115,000 and for stage 9 the average is $1500 per lot for 88 lots or $132,000. The sum is $291,500 or about $1307 per lot. If we then look at the opinions on the effect of the ETC on the value of unsubdivided land, Mr Hamilton has estimated the effects over 10.64 hectares @ 10% on a value of $137,000/ha (including enhancement) or $13,700/ha. In section 9 of his report, Mr Murphy has an exercise before and after the ETC which includes severance and injurious affection. This exercise yielded a sum of $1.8 million excluding the effects upon unsold lots and the englobo land in the east. A measure of the allowance may be taken from the estimated selling prices in the cash flow analysis. In stage 8, for example, average selling prices are reduced from $75,500 for 46 lots to $66,000 for 32 lots. In stage 9, the average is taken from $81,000 for 88 lots to $73,000 over 56 lots. If one assumes that but for the ETC these 32 lots and 56 lots would have sold for prices of $75,500 and $81,000 respectively, the average allowance per developed lot is about $8,400 which may relate favourably with the allowance made by Mr Hamilton to developed but unsold lots ($8700) but does little to assist in resolving the issue otherwise. In valuing the unsubdivided land in the western section Mr Hamilton by a process of application of sales formed the opinion that the land had a value of $135,000 per hectare without the ETC. The exercise performed by Mr Murphy showed a residual land value of $11,250,000 which he applied to 84 hectares, revealing a land value of about $134,000 per hectare in round figures. His residual land value with the ETC in place (ex injurious affection) is $9,950,000 or about $133,000 per hectare. The analysis made in section 9 of his report with consideration being given to injurious affection and severance left a residual land value of $9,450,000 or $126,000 per hectare. If this value is put beside the area of 10.64 hectares diminished at a rate of 10% by Mr Hamilton, a land value of around $123,000 is derived. Mr Murphy had, however, taken his allowances to a greater distance than had Mr Hamilton.
Before proceeding further, I may speak generally to the workings of Mr Murphy. The workings included estimates of development costs with and without the ETC. Costs were shown to be dearer after the resumption than before the resumption. The resumption altered the balance between wet and dry lots. Severance is alleged. However, I can make no firm conclusions on this point for reasons that the number of lots said to be lost varied in evidence between 84 and 96 and whilst the ratio of wet lots to dry lots has been altered, the weighing of the balances would include such factors as the depreciation the rail line would have had upon the lots and their selling prices. The land value obtained by Mr Murphy over the western section of the estate (Stages 1 to 10) seems to have been obtained upon the physical position which would have existed had the resumption taken place immediately before the commencement of the development of the estate. The analysis performed in section 9 would end in the sum of $1.8 million for loss of land plus severance and injurious affection and by addition thereto the allowance which he contended for in respect of the depreciation of the land contained in the eastern section of the estate. The analysis has not been made in accordance with the facts as they existed at the date of resumption, although it does prove in my opinion that the valuation made by Mr Hamilton is reasonable in the circumstances.
The case put for Kabale has injurious affection from the ETC spreading over the whole of the estate. The evidence includes a bundle of depreciatory effects, all of which are alleged to result from the ETC. They include expected increases in traffic on Monterey Keys Drive and on Helensvale Road. In the period of development and sale to the date of hearing, progress of the estate has been successful and no doubt there is in this some reflection of anxiety and economic pressures to get the estate rolling and homes constructed. The rate of sale got to some 15 lots per month. Sales were made not only to individual purchasers but also to spec builders - they taking 60 lots or so to January 1994. With progress, prices have been rewritten. Average lot sales for dry lots in stage 1 were of the order of $70,000. In his cash flow exercise, Mr Murphy priced dry lots in stage 10 at $85,000. The price list for this stage (Exhibit 44) has dry lots backing on to Helensvale Road (for example, Lots 415 to 420) priced at $86,000. Helensvale Road through this area is a non-access road. When the approval for development was obtained in 1988 (Plan J) access from the west was to come from Helensvale Road as it was then known (later Warrego Way). The design carried this road through the estate to the boundary of Oyster Cove but not by way of Lots 5 and 6. The approval stated that the layout will require amendment to make the Helensvale Road extension to the eastern boundary of the subdivision a major through-road, classified then as a minor arterial road - 30 metres in width. In March 1990, when application was made for rezoning of the land to Special Facilities, provision was made for Helensvale Road to enter the estate in the south-west corner. In 1990, when approval for an extension of Stage 4 was given, access from the west was required to be via Lot 5 on RP209883. In this same month, a traffic study commissioned by ASC was provided by Eppell Consulting into the impact of a number of proposed developments (east and west of the highway including Monterey Keys and Oyster Cove) in the Helensvale area upon the Helensvale interchange with the Pacific Highway. Under the heading of network proposals, the ETC is mentioned with possible interchanges at the Oxenford-Southport road at Boykambil and the Gold Coast Highway at Arundel. This was followed by a statement that the planning horizon for such connections was considered to be too remote to explicitly allow for it in the assessment. The road was classified as an arterial road 38 metres wide. The location and specifications for the road were changed following the consent order of the Planning and Environment Court in 1991 (refer Annexure B) which was preceded (13.2.91) by Kabale nominating Helensvale Road as the preferred interchange location were Route 1 adopted. The location of the regional playing fields was also changed from the south-western section to the eastern section of the estate. Oyster Cove is to the east. The proposed development is in the nature of an integrated resort. The site is planned to have access to the Oxenford-Southport Road by bridge over Saltwater Creek connecting with that road near Boykambil. The connection to me is logical and indeed prudent for the successful development of Oyster Cove. The effect which follows is that the connection will be of benefit to the subject estate particularly to lands in the eastern section in accessing the sea/Southport. The evidence of Mr Arbon contains a statement that one of the reasons for the relocation of the through-road to Lot 5 was because the residents of River Downs were not in favour of it.
Helensvale Road is the responsibility of the ASC. It connects with the Pacific Highway at the Helensvale Road or Cades County interchange. It is alleged, and it is reasonable to conclude, that when the connection is made to Boykambil the road will carry a greater density of traffic. In fact, Mr Hamilton seems to be of the opinion that such access will be preferred to the Oxenford-Southport Road. It is contended that the ETC will also have an effect on traffic density on this road. The ETC is said to have been the cause of the relocation and its specifications. Using hindsight to confirm foresight, someone as naive as myself may ask - Would the position with Helensvale Road have ended any differently had the ETC not come into existence? The ETC will not replace the Pacific Highway nor close down the Cades County interchange. It is reasonable to assume that usage of either the Pacific Highway or the ETC will depend upon destinations. I appreciate the reasoning of Mr Hamilton that the ETC will provide a convenient facility for usage by residents of Monterey Keys and it can be expected to be used by residents of Oyster Cove and those easterly and northerly thereof. Some forethought on location of the road may have been influenced by the ETC but that, in my opinion, is too remote from the resumption to become a matter for consideration, whether in general terms or in terms of severance or injurious affection. This finding is equally applicable to the evidence of anticipated effects on Monterey Keys Drive which in the Eppell report is included as a network proposal (connection between Helensvale Road and the Oxenford-Southport Road). Refer Corbould (supra) at pp. 58-9. I have thus concluded that compensation for injurious affection is confined to noise/visual impact and that the limit applied by Mr Hamilton is reasonable. The enhancement applied generally by Mr Hamilton over the balance of the estate has, in my appreciation of the evidence, a few problems, not the least of which is the question of foreseeability. The ETC is not expected to be in operation before the year 2000 and then, on present thinking, with a limited capacity in terms of on-off ramps. The enhancement which is said to flow from the scheme is also expected to enhance the value of the proposed commercial land in the south-western section. This site is positioned on entry to the estate from Helensvale. It is shown in the cash flow exercise of Mr Murphy as having a value of $1 million. Mr Dalley, Jnr, was of the opinion that at the date of hearing, the site would not have a value in excess of a residential value. The potential of the site for development can be expected to mature with growth of the estate. One would think that should the estate proceed as it is expected at resumption, this site will be up and running before the ETC is constructed. Whilst the ETC may add to the viability of the site, I agree with the submission of Kabale that this enhancing factor would not be of significance in money terms at the relevant date. Enhancement, which it is submitted, will flow to the balance of the estate is again subject to the question of foreseeability and seems to be caught up in other factors which may enhance the estate apart from the ETC, for example, the extension of Helensvale Road through Oyster Cove. This issue I propose to resolve in favour of the claimant and dismiss enhancement as having no demonstrable effect in money terms at the date of resumption.
In the exercises performed by Mr Murphy, the best value he obtained for the western section, unsubdivided by the resumption was at the rate of $134,000 per hectare (Exhibit 72). Mr Hamilton has applied a value of $135,000 per hectare. I propose to follow his method and his reasoning to the areas he calculated at the date of resumption (being factual at that date) and by omitting a value of the eastern section which value, as I see it, will remain unchanged. The results are as follows:
45.97ha @ $135,000/ha $ 6,205,950
8 ha (rail affected) @ $115,000/ha $ 918,000
= $ 7,123,950
After the resumption, the exercise becomes:
34.31ha @ $135,000/ha $ 4,631,850
10.64ha @ $121,000/ha (rounded down) $ 1,287,440
= $ 5,919,290
= $ 1,204,660
or $ 1,205,000
The allowance Mr Hamilton made to lots in the ownership of Kabale at the date of resumption but unsold, is in the sum of $260,000. This allowance is more favourable per lot to Kabale than the assessment made by Mr Murphy and will be adopted. I find that the claim for injurious affection to lots sold prior to resumption has no support in law and is accordingly disallowed. This part of the claim will be discussed again later.
In the circumstances, compensation for land, severance and injurious affection will be determined in the sum of One million, four hundred and sixty-five thousand dollars ($1,465,000).
I come now to the claims under the heading of disturbance.
Mr Dalley, Snr, said that he heard of the prospects of an ETC in late 1989. An invitation by DOT for public participation in investigations of alternative crossings of the Coomera River and alternative routes was issued in about August 1990. Of the six possible crossings, two were of direct relevance to Monterey Keys - Route 1 in parallel with the railway and Route 2 coming through the estate from the north-east to the south-west. Prior to this paper reaching the public, Kabale, by application dated 30 May 1990 applied for rezoning of the estate to "Special Facilities" to incorporate a resort/residential/golf links concept. Approval was given in June 1990 subject to conditions, one of which (Condition 29) said -
"Provision of land for the East Arterial Road if required."
A condition of this kind is found in later approvals dealing with applications for extensions of approvals given for Stages 1 and 4 which were approved in 1988. Nothing was resolved until Kabale applied by application dated 22 October 1992 to subdivide into 96 lots the land which in the following year was resumed. That application was refused on grounds that -
"the site has been identified as part of the future eastern corridor transport route. "
Kabale appealed to the Planning and Environment Court against the refusal. The Court, in delivering judgment on the matter in April 1993, held that there was not sufficient certainty of resumption for the proposal to become a relevant matter in the appeal. The appeal was allowed. With some further prompting by Kabale by way of inclusion of part of the area in Stage 8A and liaison between the ASC and DOT, the agreement for the taking was executed in August 1993 and the land taken by Proclamation on 1 October 1993.
It is interesting to note that in these circumstances the agreement under s.15 takes the place of a "notice of intention to resume" which would otherwise issue under s.7 of the Act and second that clause 4 of the agreement specifies that the agreement does not pass any interest in the land to DOT nor prejudice the right of any person to use, enjoy or dispose of his interest in the land. The clause mirrors s.15(1C) of the Act which provides as follows:-
"(1C) An agreement which purports or is properly to be construed to pass any interest in land to a constructing authority or to prejudice the right of any person to use, enjoy or dispose of the person's land shall not be an agreement within the purview of subsection (1). "
It is sufficient authority to excuse Kabale for excavating and removing soil from the land prior to the issue of the Proclamation and it has, as I will find, other consequences.
I propose now to put down in chronological order some detail of the history of events.
03.02.1987William H Leighton Pty Ltd (Leighton) writes Ross C Franklin and Associates (Franklin) re alternative locations of bridge over Saltwater Creek to Oxenford-Hope Island Road. One option is in parallel with the railway.
23.03.1987Application made for rezoning in principle - Plan 80.100-04A. Proposed development called "Lake Placid" - Approval in principle received 31 March 1987.
22.05.1987Leighton writes DOT re widening of existing bridge over anabranch of Coomera River to Hope Island and relocation of watermain.
04.06.1987Leighton writes Gold Coast Waterways Authority (GCWA) seeking approval for navigational clearances for bridge over Saltwater Creek.
02.07.1987GCWA writes Leighton saying that Authority prepared to approve bridge and specifying clearance "in a navigation span with a minimum width of 15 metres".
01.10.1987ASC writes Franklin approving application for rezoning subject to conditions. Conditions include -
7 -provision and dedication of 20ha of parkland
11 - provision of a road access to Hope Island Road or upgrading of Helensvale Road to four lanes from Discovery Drive to the Pacific Highway as required.
04.12.1987DOT writes Leighton. Agrees to layout of intersection with Oxenford-Hope Island Road (T intersection) from the estate as per drawings submitted by Leighton.
18.01.1988Railways write Leighton advising "as discussed" that bridging and intersection arrangements satisfactory; confirming that additional costs will be imposed on Railways "by virtue of the amended railway grading and altered bridge spans"; acknowledges an acknowledgment that Leighton's client would be liable for these additional costs.
23.01.1988Gazettal of site to "Residential A".
27.04.1988 Kabale contracts to purchase Monterey Keys.
12.05.1988Leighton (on behalf of Kabale) writes Franklin commissioning survey from Hope Island Road to Monterey Keys. When done, asks Franklin to forward to Soil Surveys and Exploration Pty Ltd for drilling tests.
24.05.1988Application to ASC for approval of subdivision, drawing 80-100-4D-Stage 1 - similar to plan 04J and essentially a lake (wet lot) development.
27.05.1988Leighton commissions Soil Surveys to investigate bridge site and to provide report on foundation.
20.06.1988Leighton writes Kabale, speaks about samples and conclusions of soil surveys re the estate land: says the position and heights of bridge over Saltwater Creek have already been approved by DOT, ASC, Railways and GCWA. Says that foundation drilling for the main bridge has been completed "which shows satisfactory founding levels for piles at fairly shallow depth". Other matters included earthworks, flood mitigation, foreshore treatment, lock and weir system, dredging over Saltwater Creek, auxiliary services, lake flushing.
22.06.1988Franklin writes ASC enclosing plan 80.100.4E seeking approval for subdivision of Stage 4 - res A type lots (dry).
28.06.1988ASC writes Franklin saying 1) that overall development plan deferred for report by ASC on conformity with flood flow paths; 2) without limitation the proposed layout will require amendment to make Helensvale Road extension to the eastern boundary of the subdivision the major through road; 3) Stage 1 approved in part subject to conditions - include designation of Helensvale Road from western boundary to roundabout as minor arterial road 30 metres width, road to Hope Island - road classified as collector road and also road to marina proposed in north-east of the estate. Playing fields (as shown on plan) to be dedicated free of cost to ASC. Major field to be dedicated in Stage 1 and development to include construction of fields and toilet block. Compliance with requirements of DOT re intersection with Oxenford-Hope Island Road.
28.06.1988 ASC writes DOT re approval.
12.07.1988DOT replies - no objection in principle - says access to Hope Island Road should not proceed until engineering drawings and arrangements for supervision of construction have been approved by DOT.
03.08.1988ASC advised Franklin of approval for Stage 4 subject to conditions including "rising main easement against railway to be dedicated as park strip 4 metres wide", road specifications remain, park provisions remain.
24.08.1988Franklin writes Kabale enclosing drawing 80-1004H - seeks approval to proceed with road and lot calculation.
05.09.1988ASC write Franklin advising that park strip adjacent to railway to be 10 metres wide - to accommodate future additional mains.
06.09.1988Franklin writes ASC forwarding plan 80-100-4H.
26.10.1988GCWA writes Leightons re height and width clearances of navigation spans of proposed bridge acceptable. Says:
" Prior to GCWA considering the granting of approval for the construction of the bridge, it would be appreciated if you could please provide us with the following:
(a)Written confirmation from the Albert Shire Council that it approves the construction and the location of the bridge.
(b)Written advice on ownership of the bridge after construction completion. If the developer is to retain ownership of the bridge, it will be necessary to take out a lease of the area of seabed over which the bridge is constructed. If, alternatively, the bridge is to be dedicated as public road, then no lease of the seabed will be required.
(c)Completed application form for approval to construct the bridge, together with a cheque in payment of GCWA's Scheduled fees. For your convenience an application form is enclosed together with a schedule of fees.
When you have provided GCWA with all of the above, consideration will be given to your request for approval to construct the bridge over Saltwater Creek. "
02.11.1988Franklin writes ASC enclosing drawing 80-100-04J replacing 80-100-04H. Says lot yields will be made after flood flow paths have been determined.
29.12.1988ASC writes Leightons saying amended proposal including whole of Stage 1 approved.
Late 1988Kabale decided to proceed - tenders called by project managers (Gardiner Willis) for all of the development works for Stages 1 and 4 including the construction of the bridge.
30.12.1988Railways write Leighton re additional costs of constructing railway bridge - seeks acceptance of responsibility of the additional costs on behalf of Kabale.
08.05.89ASC writes Leighton re engineering drawings on bridge - says drawings to be approved by GCWA before commencement of construction.
15.05.1989Leighton writes Kabale. Says bridgeworks approved by ASC. Says approval in principle has been received by GCWA. However, they require further information and payment of fee.
Second halfTenders received for development Stages 1 and 4 - $18 million. Decision made not to proceed - prefer to develop in stages (Mr Dalley Snr). Tenders called for construction of bridge only.
31.10.1989Gardiner Willis write GCWA re bridge - say inter alia "issue of bridge ownership has yet to be resolved".
08.11.1989GCWA write Gardiner Willis. Says in part -
"1.Written confirmation of your intention to proceed with dedication of the bridge as a public road.
Item 5 Damages for Delay
This is a claim for interest on funds borrowed by Kabale over a period from April 1990 to February 1992 in the sum of $6,785,874.95 and for rates and land tax as follows:DATE PAYEE ITEM AMOUNT
10.09.90 Albert Shire Council rates 27,854.00
10.09.90 Commissioner of Land Tax land tax 3,257.20
27.03.91 Albert Shire Council rates 27,854.00
Sept 91 Albert Shire Council rates 27,854.00
TOTAL $86,819.20
The interest component is made up of (a) interest on first mortgage funds of $9.6 million at the rate of 21.5% (April 1990) which remained constant to January 1991 when the rate was 14.10% and thereafter to and including February 1992 at 14.5%; (b) interest on loan account up to $5.9 million at 14.5% for the entire period; and (c) interest on loan account above $5.9 million which varied from 21.5% in April 1990, reducing to 10.49% in February 1992. Total interest for the month of April 1990 amounted to $299,391.53, which total reached a peak of $351,356.90 in October 1990 and generally fluctuated between $200,000 and $300,000 per month. These figures are taken from a spreadsheet provided by Mr JT Dalley. The claim is based on the submission that Kabale could have commenced construction in the early part of 1990 which would have enabled development work within the estate to commence in mid-1990. It is said that the shadow of the ETC halted this work in the first half of 1990. The end of the period for which interest and holding charges are claimed follows the consent order of the Planning and Environment Court of December 1991 under which Kabale consented to make provision for the ETC.
The month of April 1990 is taken as the commencing date and coincides with the application made by Kabale (through Franklin 25.4.90) to extend the approval given in 1988 with respect to Stage 1. In his statement of evidence, Mr Dalley says:"In April 1990 Kabale was ready to commence construction of the development of Monterey Keys. The bridge components had been ordered and paid for. Tenders for the construction of the bridge had been received and Kabale was in the process of identifying a contractor to construct the bridge. Kabale was also having discussions with several contractors for the design and construction of the whole of the Monterey Keys development in accordance with plans which had been approved by Albert Shire Council. "
At this time, the possibility of an ETC was in the air. In the months which followed, Forgan Smith on 30 May 1990 applied for rezoning of the land to "Special Facilities". On 20 June, Railways wrote GCWA re pier alignments of rail and proposed road bridge. On 21 June application was made for extension of Stage 4 approval. On 29 June rezoning to "Special Facilities" was approved subject to conditions, one of which - Condition 29 - read: "Provision of land for the East Arterial Road if required". On 27 July, ASC wrote Hanger Tardent, surveyors (Franklin), deferring the matter of Stage 4 extension of approval for further consideration regarding the location of the collector road. On 27 August 1990, extension of the approval for Stage 4 was granted subject to conditions, including a condition that access from the west was to be via Lot 5 (south-west corner) and for the provision of a 40 metre road reserve adjacent to the railway reserve if required for an ETC. ASC on 28 September wrote Kabale advising that application for an extension of Stage 1 was deferred until four particular matters specified in the letter had been resolved. These were:
1.Review of direct access to the Oxenford Southport Road is to be reviewed.
2.Access from the west is to be via Lot 5 R.P. 209833.
3.Location of regional playing fields.
4.The route of the future north-south arterial road to Brisbane.
At the time of deferral, possible routes for the ETC had been published in August which, in terms of crossings of Saltwater Creek, affected Monterey Keys at two points. In October 1990, ASC wrote Franklin regarding the application for extension of approval of Stage 1 requesting further discussion with the applicant "regarding preparation of a revised plan indicating the need for playing fields in close proximity to Helensvale and River Downs". In November 1990, the second publication is made with respect to the ETC - the one showing possible routes with profiles. One is adjacent to the railway through Monterey Keys and the other (in terms of crossings of Saltwater Creek) is well to the east of Monterey Keys. In February 1991, Kinhill Cameron wrote DOT saying, among other things, that
"Kinhill Cameron McNamara in conjunction with HTW Consulting Services and the Hulbert Group are currently undertaking a land use review of the site for the owners Kabale Holdings Pty Ltd. "
The letter says, among other things, that the preferred location for the ETC is a route away from Monterey Keys and that of the two possible routes which traverse Monterey Keys the route adjacent to the railway is the preferred route. Also, in terms of an interchange, the letter says that the preferred location for an interchange, if one is to be built in the vicinity, is on the extension of Helensvale Road to the south of the site rather than on the Oxenford-Southport Road to the north of Saltwater Creek. The letter says, further, that Kabale is currently applying to DEH (the successor to GCWA) for approval to construct the bridge. DEH advised Kabale in May 1991 of certain clarifications required before a Section 86 sanction of the Governor in Council would be sought under the Harbours Act. In July 1991, Kinhill Cameron advised ASC regarding the extension of approval for Stage 1 and saying:
"Kabale Holdings Pty Ltd now wish to proceed with the Monterey Keys development. It is submitted that in the period since Council's deferment of a decision to extent the Stage 1 subdivision permit, significant negotiation has been undertaken, particularly with regard to the proposed eastern corridor alignment (and thus influencing all access matters), which now facilitates a firm decision by Council. Similarly, it is considered that a suitable period of time has passed for Council to have established its position regarding regional playing field location."
In the same month (27th) the file of ASC records minutes of a meeting with Kabale attended by Mr Dalley and other advisers re a revised plan for Monterey Keys providing for a golf course in the eastern part of the site (about 73 hectares) with the balance of the area as Residential "A" land. Discussions included the need to look at what area is required for playing fields. On 6 August 1991, Kinhill Cameron wrote ASC in some detail regarding the four grounds for deferment of Stage 1 extension of approval. The letter refers to the meeting with ASC towards the end of July. It refers to the unsuitability of certain land within the eastern part of the estate for residential development due to geotechnical advice and for a more logical placement of playing fields.
Approval for the extension was given on 27 August 1991, subject to conditions, a number of which were challenged and resolved by consent by the Planning and Environment Court in December 1991. Several conditions were subject to further negotiation with ASC and resultant amendment; and the possibility of the ETC remained to the date of the Proclamation. The actions taken by Kabale in the months following the application for the extension of Stage 1 approval in April 1990, are inconsistent with the statement made by Mr Dalley that at that time Kabale was ready to commence construction of development of Monterey Keys. In particular, I refer to the application (and the grounds stated) for rezoning to "Special Facilities" which immediately followed that application; to the meeting in July 1990 countenancing development in part of the area for "Residential A" and in part for "Golf Course" purposes and to the land use review being undertaken by Kabale in the first half of 1991. It is submitted that these actions were normal commercial transactions and were consistent with an original intent of developing the land for "Residential A" purposes. I find, however, to the contrary. I find that such actions including preservation of the original approval by extension would be consistent with commercial thinking in retaining the land as englobo land for sale for alternative uses but inconsistent with the unequivocal statement made by Mr Dalley. Were that the case, the application made in April 1990 may have been made for approval of a plan of subdivision for Stage 1 or part thereof.
In the period under discussion other circumstances prevailed which no prudent businessman would ignore. The purchase by Kabale had been followed by a recession in the industry. Market conditions subsequently improved. Mr Murphy, in examination-in-chief, said:"I've put our reference in here to the transactions - and, as everybody will note, they're not necessarily all completed sales - very much to show that during the period leading up to the date of resumption in say the 12-month period from October 1992 up to 1993 and indeed the period thereafter that we had quite a rising market for in globo land and hence any sales that occurred with any time lapse prior to October 1993, that there was a danger in using anything that's perhaps upwards of a year old because the market had moved and that the market continued through that period and there are some subsequent transactions that we can allude to that will very much demonstrate the movement in the market. "
Later conditions showed the original plans of a predominantly lake development to be unrealistic. Conditions clearly pointed in the direction of fewer waterfront lots and more dry lots and with smaller lot size. These changing conditions may be seen to have become more pronounced subsequent to the consent order of the Planning and Environment Court in 1991 which, but for the north-western section, bears little resemblance to what in fact followed in subsequent years. The changing market conditions brought with them better prospects of viability and land values increased. An attempt was made by the Court to test these countervailing circumstances against this part of the claim by providing a cash flow exercise based on Plan J and that which eventuated. What was returned was a submission that the planners would have been gifted with the foresight to implement in advance the ultimate proposal or, alternatively and in some desperation, that had Stage 1 commenced (in smaller stages) the trend would have been evident by the time consideration was given to the subdivision of later stages. There is no plan in evidence to support the first proposition nor can I accept the second, assuming that Kabale was ready to commence construction in April 1990. Had that been done and based on Plan "J", Mr Ballantyne conceded that the development would have run into difficult times. The evolution of market conditions does not appear to have reached maturity until sometime in or prior to 1994, when during that year Mr Murphy summarised the changes in an article published in the "Valuer and Land Economist" dated August 1994. These changing influences on marketing and market value were to the good of Kabale. They are reflected in the valuations applied by the valuers to the land at the date of resumption. Were this a case of a landholder biding his time with englobo land awaiting the optimum time to subdivide and market the land and assuming that he was not operating on borrowed funds, the earning capacity of his investment over the period would be geared not by way of interest the capital investment may yield if put elsewhere, for example gilt edged security, but to rises or falls in the market value of the land. In the subject case that interest component is reflected in the market value of the land when the resumption (compulsory sale) took place.
I may return then to the submission of Senior Counsel for the respondent which, simply stated, is that over the relevant period delay was not inextricably bound to the possibility of the ETC. The evidence confirms his submission, which I find cannot be dismissed simply by saying, which appears to be the submission, that other matters of constraint or consternation could have been resolved promptly with the ASC or other relevant authority. Were the possibility of the ETC and the reflection of that possibility in the conditions contained in approvals obtained from ASC critical to the exercise and all other matters inconsequential in terms of resolution or time for resolution, there stands an argument that had Kabale challenged the condition when first included in approvals, subsequent events prove that it would have been successful. Second, on the authorities I have discussed compensation for this factor (assuming that there were no other constraints) is not a matter directly related to the resumption but to a scheme, or perhaps a number of schemes, for resumption under a common umbrella but with ambulatory shadows on the ground and that position has been accepted to the date of the issue of the Proclamation. The cause of complaint seems to have more to do with indecision than it has to do with the issue of the Proclamation. The remedy, assuming that a case for damages can be made out, is not, in my opinion, covered by s.20 (and the principles which apply in the application of the section) nor in any other part of the Act. Third, the cases cited dealing with the question of value to the owner are permeated by reasoning that what is done by the owner and said to add value to the land for which he as a hypothetical prudent purchaser would recognise must add value in a demonstrable rather than an abstract sense. This is reflected in my reasoning with respect to the claim for loss of plans. Loss of interest on borrowed funds does not fall within this reasoning. See also Brewarrina Pty Ltd v. Commissioner of Highways (1973-76) 32 LGRA 240. Further the claim, it appears to me, possesses elements of double dipping which have not been explained or reconciled in the evidence. In the circumstances, this part of the claim is rejected in full.
Item 6 Special Damages
This claim covers fees paid Clarke & Kann for actions (2) taken in the Planning and Environment Court about
1)the application for extension of subdivision approval for Stage 1; and
2)the application to subdivide the land which by consent had been reserved for the ETC.
The claim is in the sum of $138,155.12 covering such matters from the date Clarke & Kann were engaged to advise Kabale on the position with respect to Stage 1 approval beginning with the question whether ASC could lawfully impose additional conditions when approving an extension of approval. The initial action culminated in the consent order of the Planning and Environment Court in December 1991. The second action culminated in the judgment of the Planning and Environment Court of 19 April 1993 when the Court found that there was insufficient evidence of resumption for it to become a relevant matter in the appeal - the resumption being only a possibility at some future time. Various authorities were cited by the Court in support of this conclusion.
That challenge was open to Kabale from the date of the approval of the application for the rezoning of the land to "Special Facilities" on 29 June 1990 or in terms of development of the land for "Residential A" subdivision on 27 August 1990 when the application for extension of approval for Stage 4 was given.
On my reasoning, these issues cannot be brought within the scope of s.20 and under the principles stated by the Court in Merivale supra. Accordingly, the claim is rejected.
AWARD
Compensation under all headings is determined in the sum of One million, five hundred and thirty-nine thousand, eight hundred and seventy-eight dollars ($1,539,878).
INTEREST
An advance against compensation of $1 million was made by DOT on 17 December 1993. In the circumstances, it is ordered that the interest on the award at the rate of ten percentum per annum (10%) be paid from and including the date of resumption to and including 16 December 1993 and thereafter at that rate on the sum of $539,878 to and including the day immediately preceding the date this sum is paid.
President of the Land Court
ANNEXURE D
ANNEXURE D
ANNEXURE C
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