Lisciandro v Chief Executive, Department of Transport
[1999] QLC 91
•3 September 1999
|
LAND COURT
BRISBANE
3 SEPTEMBER 1999
Re: A97-73
Determination of Compensation -
Resumption by the Chief Executive,
Department of Transport, for Transport Purposes -
Acquisition of Land Act 1967 and the
Planning and Coordination Act 1994
Giuseppe Lisciandro
Claimant
v.
Chief Executive, Department of Transport
Respondent
(Hearing at Mackay)
J U D G M E N T
The claimant owned land described in evidence as a rural residential site of 5.463 ha located about 24 km by road from the Mackay Post Office in a locale about 4 km north of the "Leap/Yakapari" area. I refer to that as "the claimant's land" throughout these reasons. The larger geographic area in which the claimant's land is found has cane and cattle grazing carried out commercially, as well as a number of rural residential subdivisions in selected locations.
A Notice of Intention to Resume part of the claimant's land issued on 31 July 1996 and a Proclamation taking an area of 2.083 ha from that land was published on 13 December of that year.
Malcolm Alan Bishopp, a registered valuer, provided valuation evidence in support of the claim for compensation lodged by the claimant, whilst Alan Michael Solager, also a registered valuer, gave valuation evidence on behalf of the respondent. At the request of the parties I inspected the claimant's land, as well as the properties the subject of sales transactions referred to by the two valuers in their respective valuations. Those inspections assisted me in my appreciation of the evidence.
Mr Bishopp described the claimant's land as having about 2.5 ha of elevated easy sloping ridge country of which I understand there to be about 1.7 ha as the highest point or the "knoll". The balance of the land comprises lower lying cleared coastal forest country running down to gullies and watercourse areas. There is a pronounced watercourse on one part of the land. The knoll is described by Mr Bishopp as affording a "fair rural outlook", though Mr Solager's description was less favourable. The Bruce Highway is visible from the land, but is located about 400 metres away and could not be described as a prominent feature of the land's aspect. The land adjoins the North Coast railway line on its southern boundary. Part of that railway line curves around the knoll. That part of the line closest to the knoll is in a cutting and is not visible from the claimant's land. As the railway line emerges to the west from the cutting it becomes visible from the knoll and signage on the line is also visible to the south-east. It cannot be said, however, that the railway line dominates the appearance of the claimant's land nor any view from it, though its presence may be easily observed given the open nature of the country.
Improvements on the claimant's land include a low-set fibro-sheeted dwelling which is not lined or sealed nor improved with internal partitions. There is a skillion carport attached to the dwelling and a large machinery shed is nearby. The dwelling occupies the central point on the knoll, and takes advantage of the aspects available. The land is fully fenced on its boundary and there is a domestic bore on the land.
A Claim for Compensation in the amount of $92,150 dated 16 October 1997 was initially made by the claimant, however, that claim was amended with leave to the following:Land, severance and injurious affection $55,000.00
Dwelling – diminution in value $13,000.00
Shed – diminution in value $8,000.00
Loss of mango tree $150.00
Legal and valuation fees $2,362.50
Fencing of cutting $5,200.00
Total $83,712.50
Subject to what I say later in these reasons concerning the "fencing of cutting" item of the claim, estimates of compensation presented by both parties were predicated on the assumption that the respondent will reinstate full boundary fencing to the pre-resumption standard along the new boundary created by the resumption. My determination of compensation is also based on that assumption.
The respondent did not contest the claim for $150 for the mango tree lost in the resumption and agreed to legal and valuation fees as included in the amended claim. Apart from these matters, the respondent's assessment of compensation was in the amount of $10,000, which included an amount of $5,000 associated with the loss of land and $5,000 with respect to injurious affection associated with the dwelling.
The Proclamation taking the resumed land said that the land was taken "for transport purposes". A more complete description is that the resumption was associated with the upgrading of the railway line which runs along the southern boundary of the claimant's land. The works to be carried out on the resumed land would consist of a reduction in the angle of curvature of the existing railway line, therefore allowing an increase in the speed of trains using the line. The works will therefore bring the line closer to the house and shed after resumption.
In assessing compensation each valuer valued the claimant's land before resumption then the after resumption land with the difference indicating compensation for the loss of land together with severance and injurious affection. Each separately considered the question of injurious affection on the dwelling and shed on the claimant's land as there was not suitable evidence to indicate a value before and after resumption of the land on an improved basis. Before coming to the sales evidence and the valuation approaches employed by the valuers, I should point out that a significant difference between the valuers was how each saw the effect of the reduction in area on the before resumption value. Each agreed that a rural residential parcel of land ought to be valued as a site rather than on a pro-rata valuation approach, however, whereas Mr Solager thought that a variation in area of a rural residential site, all other things being equal, was not a matter which would have a significant impact upon value, Mr Bishopp was of the opposite view. I will consider this issue in some detail later, however, will first deal with the evidence concerning the value of the claimant's land before resumption.
Mr Bishopp said that the land is found "just on the fringe" of the premium rural residential area north of Mackay. The "Leap" is a mountainous geographic feature and it was not in dispute that the prime rural residential area is to be found between that feature and Mackay City. Mr Solager, however, saw the "Leap" as providing a clear boundary of the prime rural residential area, whilst Mr Bishopp felt that the prime area extended beyond that to include the claimant's land. I think the issue is best considered having regard to the particular sales referred to by the valuers and how each compares with the claimant's land.
Mr Bishopp said that the whole of the claimant's land before resumption could be developed for cattle grazing or could be planted to trees and, given the topography, could be easily maintained by mowing. The land is flood free. There is no dedicated access to the claimant's land, with access being provided by about 900 metres of graded earth and gravel track mostly along a cane paddock headland. The access track crosses a road licence and freehold land and the owners have apparently given permission to Mr Lisciandro to utilise that access route. In his valuation Mr Bishopp allowed an amount of $10,000 to cater for the access deficiency and this figure was not contested by the respondent.
Overall Mr Solager saw the before resumption land as constituting a poor rural residential site, whereas Mr Bishopp ranked the land at a higher level than that.
Mr Bishopp referred to eight sales in striking his before resumption land value of $110,000, whilst Mr Solager struck a before value of $65,000 after relying on one sale only. Their after resumption values were $55,000 and $60,000, respectively. I will first consider Mr Bishopp's sales evidence.
Mr Bishopp's first sale is located almost adjoining the claimant's land to the north. The sale land abuts the Bruce Highway and comprises an area of 3.4884 ha, which Mr Bishopp described as being formed from a previous Main Roads' resumption. It owes its poor shape to that aspect of its history. The land sold in September 1994 for $50,000. Mr Bishopp said that the sale land has no rural residential privacy and would be subject to a high volume of traffic noise. He considers that the market has increased since the date of the sale, but suggested that the sale is of some assistance in striking the after resumption value. Mr Bishopp included the sale largely because it is virtually an adjoining property. The purchaser resides on the land and conducts a small panel-beating business there. Whilst Mr Bishopp described the panel-beating business as being a "backyard" operation, Mr Solager said that the purchaser of the land had been in partnership with his father but when his father retired from the business, had decided to purchase the sale land and continue the business there. In Mr Solager's view the purchaser conducts more than a backyard panel-beating business and saw a value in the land for the conduct of the business. On the other hand, Mr Bishopp said that the purchase was undertaken without local authority approval for the business to be conducted there and therefore represented a rural residential value. Mr Solager also pointed to the advantage of a high knoll on the sale land for the location of a house, though it is clear that the siting of a house there would need to take into account the presence of the highway as well as a vehicle wrecking yard which could come more into view from that high point on the sale land.
Mr Bishopp's Sales 2 and 3 involved the sale of highly improved properties selling for $169,000 and $149,000 respectively. He analysed Sale 2 to show a land value of $65,000 and Sale 3 to show a land value of $80,000. He said that Sale 2 did not help a great deal in the process of valuing the before resumption land and I would think that that comment would apply equally to Sale 3. Accordingly, I will set these sales aside as I think there if sufficient evidence in the form of the vacant land sales.
Sale 4 in Mr Bishopp's valuation was improved with a zincalume shed, however, the analysis of that sale to a land value was not a matter of controversy. The Sale 4 land sold in May 1997 for $105,000 which Mr Bishopp analysed to a land value of $87,500. The land has an area of 2 ha and is located a similar distance from Mackay as the claimant's land. The sale land is all usable and, according to Mr Bishopp, has a fair outlook of the Pioneer Valley, though Mr Solager expressed the view that the outlook was better than that available from Mr Lisciandro's property. Mr Solager also said that the sale land was located in a superior rural residential area than is the claimant's land. Certainly the surrounding development is more attractive than that found near the claimant's property. According to Mr Bishopp's valuation, the claimant's land would be superior to this sale property. On the evidence that I heard, I find, however, that on all points of comparison, other than area, the sale land is superior to the claimant's land. I will deal with the matter of area in due course.
Sale 5 in Mr Bishopp's valuation comprises a parcel of 2.063 ha which sold in February 1997 for $62,000. The sale land is located in a fairly new but popular rural residential area and Mr Bishopp said is in a superior location to the claimant's land. The sale land is dominated by a ridge and providing access onto the land would provide a construction challenge. Mr Bishopp said the land has a "fair rural view" but is superior to the claimant's land on my appreciation of the evidence. Lots in the area with greater elevation sold for $90,000, such lots having attractive ocean views. The Sale 5 land is not as usable for what I might term agricultural pursuits as is the claimant's property and would probably therefore be sought out by a different style of purchaser than would be attracted to the claimant's land.
Mr Bishopp placed "a fair bit of weight on" Sale 6 in his valuation. The sale property is well known in the area and has been christened the "Cat's Cradle". The sale land has an area of 6.196 ha and sold in October 1996 for $140,000. The land is a hatchet shaped vacant site with good elevation which affords attractive rural views in most directions. Mr Bishopp referred to this sale not only for the purpose of valuing the claimant's land, but also as a sale which he said supported his thesis that there is a substantial increase in value for larger rural residential sites and that, consequently, a loss of land area will have a substantial effect on land value.
Mr Bishopp was not aware that the sale was purchased by an adjoining owner when he carried out his valuation but, having discovered that fact subsequently, formed the view that the value was not influenced by that factor. He understood from the selling agent that a number of purchasers would have competed to purchase the site at the sale price. Mr Bishopp said that he thought that the sale land did not have future subdivision potential given a narrow laneway entrance to the bulk of the land, however, given that the purchaser owned land on both sides of the sale land, it is clear that that feature would not inhibit the subdivision of the land in the hands of the purchaser. The purchaser grazes land adjoining the sale property and is able to take advantage of the sale land as part of that grazing enterprise. Mr Bishopp was not aware of yards and a dam on the sale property.
Mr Solager said that Sale 6 did not support Mr Bishopp's $110,000 value of the claimant's land. This is a proposition with which I agree. If I were to add the $10,000 for access disability to Mr Bishopp's $110,000 figure, it is clear to me that his comparison with the Sale 6 property does not adequately take into account the poorer location of the claimant's land, its limited views, the proximity of the railway line and its location another 3 km further from Mackay.
Mr Bishopp described his Sale 7 as an average rural residential site. This land sold in May 1997 for $90,000 and involved the sale of an area of 3.518 ha located 23 km north-west of Mackay within the "Leap" area. The sale land rises steeply from adjoining cane land though is quite accessible and its topography provides for a house site which allows for 270º views which, I find, are more attractive than the "fair rural outlook" described by Mr Bishopp. The land does not provide the same area of usable land for agricultural pursuits that is available on the claimant's land so probably places the sale land into the same category as Sale 5 where the style of purchaser is more concerned with the farming atmosphere of the area rather than the farming activity on the purchased land. If Mr Bishopp's Sales 4 and 7 can be taken as a guide, the proposition put by Mr Solager that properties bounded by the "Leap" are superior to the area of the claimant's land has support.
Mr Bishopp's Sale 8 was also the solitary sale used by Mr Solager in his before resumption valuation of the claimant's land. This common sale took place in September 1996 and involved the sale of 6.2436 ha for a price of $80,220. The sale land is located about 2 km north-west of the claimant's property and road access to the land's boundary is mainly bitumen but with about 550 metres of unsealed road. Mr Bishopp described the sale land as being "a big lemon" and well inferior to the claimant's land, whilst Mr Solager drew the opposite conclusion. In his comparison Mr Solager said that the access to the sale property was superior as the claimant's land had no dedicated access and that, as the sale land had an elevated hill overlooking a picturesque creek, it was also superior in that regard to the aspect available on the claimant's property. He added to these observations that the claimant's land had the advantage of having an artificial bore and that both properties were similar in situation.
Mr Bishopp said that the creek frontage available on the sale land, the presence of tropical rainforest and the availability of permanent water were undoubtedly attractions, but that there were significant disabilities confronting the sale land. He said that access onto the land off Zunkers Road was not available during the wet season and that the purchaser of the sale land would need to obtain access over adjoining land. Mr Solager suggested that the disability referred to by Mr Bishopp could be remedied by the construction of a culvert for about $5,000 and that the cost of providing that improved access could be shared with the adjoining owner who would also benefit.
Mr Bishopp said that the elevated, cleared land in the south-east corner of the sale land provided an attractive house site, but that internal access to that site would frequently be cut by flooding for weeks at a time. He described how once one accessed the sale land, one encountered a small flat area which was subject to inundation though not seriously flood prone. He said that the flat section was not particularly attractive as a house site, but Mr Solager said that that was where the purchaser told him that it was proposed that a house be constructed. Whilst Mr Bishopp said that the aspect of the creek and the rainforest from that flat was not particularly attractive, Mr Solager said that the creek and Mt Jukes in the background provided a pleasing view. Mr Solager said that the elevated area in the south-east corner of the sale could be devoted to agricultural pursuits of the type available on the claimant's property.
The two major points of superiority mentioned by Mr Solager in his written valuation as distinguishing the sale land from the claimant's property were related to the availability of the elevated hill and the superior access. Now whilst it is clear that access to the sale land is superior to that to the claimant's property, the internal access onto the house site selected by the purchaser is a disability that I would have thought should feature in the comparison. More importantly, I note that Mr Solager has identified the availability of the elevated hill in the south-east corner of the sale land as a feature of some note, whilst his oral evidence supported the proposition that it was the land on the flat that would be used for the house, whilst the hill would be reserved for agricultural pursuits. I do not understand the availability of agricultural pursuits on a hill to be superior to those able to be conducted on less elevated land.
Another matter that needs to be introduced into the comparison is the evidence of Mr Bishopp that the provision of electricity to the house site referred to by Mr Solager would cost in the vicinity of $4,000, whilst electricity to the south-eastern elevated land would cost about $11,000 according to his advice.
I think that if one were to use this sale as the only basis for comparison with the claimant's land there would be a clear need to adjust Mr Solager's value upwards to take into account the negative aspects associated with the sale not referred to by him in his valuation. In the result, I find that the claimant's land is only marginally inferior to this sale. The sale is visually more attractive and does not have the disability of the existing railway line or lack of dedicated access.
Before drawing a conclusion on the before resumption value of the claimant's land, I need to discuss the question associated with the impact of area, or size, on rural residential values. This issue is of particular significance in striking the after resumption value, but is also of relevance in the before situation. Mr Bishopp said that his Sale 6 showed that there was an increase in value for larger sites. This is undoubtedly so, however, the degree of the increase in value is the real question. He referred to a sale near his Sale 5 with ocean views which sold for $90,000 for a 2 ha area and said there were others which would demonstrate that smaller sites with attractive views selling at around that level. The suggested proposition is that the additional price paid for Sale 6 up to the $140,000 figure was paid for the additional area, that sale having an area of 6.196 ha. One difficulty with placing reliance on Sale 6 is that that analysis does not take into account the fact that the purchase was from an adjoining owner and that the purchase removed any physical impediment for subdivision of the sale land. Mr Solager said that he was aware of sales around the 2 ha mark which sold for much greater than $90,000, thus indicating, in his view, that it is features other than size which are significant in the value of such lands.
Mr Bishopp's Sale 4 has an area of 2 ha and was analysed by him to have a land component of $87,500, whilst his Sale 7, which has a greater elevation though less usable land for agricultural pursuits, has an area of 3.518 ha yet sold for $90,000. A comparison between those two properties would lead to the conclusion that an allowance for area would not be substantial.
Mr Solager included a Sale 2 in his valuation which was relied upon by him for the purpose of striking the after resumption value, however, was also said by him to demonstrate that additional area did not mean a substantial increase in price. That sale took place in September 1996 and involved the sale of 4.452 ha at $70,000. The land comprises an irregularly shaped homesite with a fair rural aspect sloping gradually down to the creek which also borders his Sale 1 (Mr Bishopp's Sale 8). The creek flat area is subject to flooding. There is an elevated house pad in the south-west corner. Access is via Zunkers Road which is gravel for about 550 metres and the sale land is situated about 2 km north-west of the claimant's land. Mr Solager's argument, as I understand it, is that when one compares his 6.2436 ha in his Sale 1 with the 4.452 ha in Sale 2 and the difference in sale price of only $10,000, the conclusion is that differential in area represents a small differential in price only.
Mr Bishopp said that Mr Solager's Sale 2 property had been owned by a soil and gravel contractor. Prior to sale, the vendor had removed large quantities of soil and gravel from the property leaving a small area of high land only. The purchaser was a company whose principal, Mr Chapman, is involved in a Mackay real estate agency. Mr Chapman understood when he purchased the land that the sale included the small set of cattle yards referred to in Mr Solager's valuation report, however, he was mistaken. Mr Bishopp's view is that the cattle yards themselves are not significant, but the high land upon which they stand is of particular relevance in the context of a parcel of land which is largely low lying and subject to flooding. His evidence is that Mr Chapman attempted to on-sell the property but that his intending purchaser discovered that the yards were not included in the purchase and did not proceed. I understand there was some threat of litigation, however, was given no detailed evidence concerning this. Mr Solager was generally aware of the background to the transaction, however, proceeded on the basis that the price paid represented the value seen through the eyes of the purchaser for the sale property. The difficulty with that view is that between the vendor and purchaser there was no meeting of the minds as to what was the subject of the sale. Mr Solager expressed the view that the difference in dimensions of high land represented by the sale yards was not a matter of significance as there was sufficient high land for the purpose of construction of a house, however, that was not a view that was apparently shared by Mr Chapman's putative purchaser who saw the matter as being of such significance that he discontinued the purchase.
Mr Solager's Sale 2 did not involve a cash purchase but took place following an exchange of properties between the vendor and purchaser with a cash adjustment being made for the difference in prices. Mr Chapman told Mr Solager that both the vendor and purchaser were firm on the price of the properties each had for sale and that therefore the transaction represented a meeting of the minds about the price of the sale land. Mr Solager said that Mr Chapman had told him that the transaction was an arm's length one and that a fair price was paid for each property the subject of the exchange. That would not be a surprising comment from someone experienced in real estate matters and wishing to on-sell a property. There is no general prohibition on placing reliance on a transaction involving the exchange of property, however, in this case there was no evidence that Mr Solager inspected the property sold by Mr Chapman as part of the exchange transaction. I do not think it appropriate that a valuer simply rely upon the advice of a party as to the appropriateness of the sale price in such circumstances. Given the state of the evidence, the only thing that I can be certain about is that there was a clear agreement between the vendor and purchaser in Sale 2 as to the difference in value between the properties, the subject of the exchange. Whether the value of each is represented by the price concluded by the parties is a matter of some uncertainty. In these circumstances I would not be comfortable in relying on a comparison between Mr Solager's Sales 1 and 2 as an indicator of the significance of area difference as an influence on value.
Mr Solager did, however, include two other sales in his valuation exclusively to show that area is not a significant factor in rural residential sales. His Sale 3 took place in April 1997 and involved the sale of 3.206 ha for a price of $62,500. The sale land is an irregularly shaped rural homesite partially elevated, with what Mr Solager described as a "fair rural aspect". The land is situated on an all-bitumen road and is located about 12 km west of the claimant's land and about 400 metres north of Sale 4. Sale 4 occurred in December 1996 and was the first sale in the subdivision which includes Sale 3. The Sale 4 property has an area of 2.147 ha and sold for $60,000. It will immediately be obvious that the difference in price between Sales 3 and 4 is not great, though Sale 3 is about 50% larger than Sale 4. The Sale 4 land is also irregularly shaped, partially elevated and with a similar rural aspect to Sale 3 and at the time of purchase was serviced by a bitumen road and about 300 metres of gravel surfaced road. Sale 4 has a creek aspect and in that regard is superior to Sale 3.
Mr Bishopp said that Mr Solager's Sale 4 was the first sale in the subdivision and that there was general surprise amongst observers at the $60,000 price. The subdivision is more remote from Mackay than, for example, the claimant's land and sales are generally slow in the area, according to him. Royston Park subdivision nearby had rural residential lots selling for around $45,000 at the time of Sale 4. Mr Bishopp introduced two sales which he said demonstrated that Sale 4 was a high sale. These were sales of Lots 3 and 4 in the same subdivision, Lot 3 having an area of 2.093 ha selling in April 1998 for $49,500. Lot 4 has an area of 2.106 ha and sold in that same month for $48,500. He described the land in these sales as being similar to that in Mr Solager's Sale 4.
In response to this evidence from Mr Bishopp, the respondent introduced the sale of Lot 6 in the relevant subdivision, that sale taking place in January 1997 for $70,000 for an area of 2.131 ha. Lot 6 has substantial influence from a creek, therefore making it a more attractive block than either Mr Solager's Sales 3 and 4 or the Lots 3 and 4 sales introduced by Mr Bishopp.
The evidence showed that Lot 4 was purchased by RJ, RJ and HM Wright from the vendor Noonland Pty Ltd for the Wright Family Trust. The suggestion from the respondent's side was that the purchaser and vendor might have been related, however, I note that the purchaser of Lot 3 has a quite different name from the vendor and in any event there was no direct evidence that the purchaser and vendor in the case of Lot 4 are in fact related. I suggest that the name "Wright" is not an uncommon name in this State.
It was also suggested in cross-examination of Mr Solager that Mr Bishopp's Sale 5 at $62,000 shows that Mr Solager's Sale 4 must be a high sale given its less attractive topography and remote location. Mr Solager's answer to this was that a poor block in a good subdivision does not necessarily sell at a higher price. Another answer may simply be that in the case of Mr Solager's Sales 3 and 4 a market level was established in 1996 and 1997 and that is supported by the January 1997 sale of Lot 6. This localised market showed a consistency internally, though that level may have been inconsistent with the wider market as perhaps demonstrated by Mr Bishopp's Sale No. 5.
It is difficult to say exactly why the later sales of Lots 3 and 4 introduced by Mr Bishopp were at a lower level than Sales 3 and 4 and the sale of Lot 6 introduced by Mr Solager. Mr Bishopp said that there was a good market demand for rural residential lands between 1994 and 1996 with values steadily increasing. He described the market for the 1997-98 period as being fairly flat. Mr Solager said that there had been a drop in the market in 1997-1998 and that that had been identified quite clearly in a range of data collected by the Department of Natural Resources, his employer, in the process of carrying out statutory valuations. Whatever the explanation, it seems to me to be indicated by the evidence that there were three earlier sales in support of a certain market level and that within that market, difference in area does not appear to be a determinant of substantial price differential. Given this conclusion and my earlier observation regarding Mr Bishopp's Sales 4 and 7 and my rejection of his reliance on his Sale 6, I am comfortable in finding that the rural residential market does not reveal a substantial price difference based upon differences in area. Having said this, I make the observation that in the case of land put to agricultural use or with that potentiality, the attraction of area may be of more significance than in the case of a rural residential site which provides the owner with a rural location without the potentiality or perhaps the inducement to carry out agricultural pursuits. Indeed, Mr Bishopp said at one stage in reference to Mr Solager's Sale 2 that additional area on the creek front land would not have added value. In other words, he sees the value of additional area to be one of utility and not merely one of providing a larger space. Now whilst there is nothing that I was taken to in the sales evidence which directly supports that proposition, nor negates it, it is one to which I will have regard in considering the assessment of compensation in this matter. In so doing, I do not accept the degree of difference in value for area argued for by Mr Bishopp, but will, as I must, lean in favour of the claimant in my consideration of this aspect.
I think that Mr Bishopp's Sales 4 and 7 are the most useful of his sales evidence, though some support can be obtained by reference to his Sale 5, though involving the purchase of a different style of rural residential site. Mr Solager's Sale 1 is of assistance also, however, I will take into account the negative aspects of that sale mentioned by Mr Bishopp. I find that Mr Bishopp's Sales 4 and 7 are superior to the claimant's land having regard to their superior situation and outlook, particularly in the case of Sale 7, though noting that each is smaller in size than is the claimant's land. I have also taken into account the absence of dedicated access to the claimant's land and the presence of the railway line along its southern boundary. I have decided in comparing the claimant's land with Mr Solager's Sale 1 to adopt a more favourable comparison than was proposed by Mr Solager, but not to accept Mr Bishopp's rejection of the sale which I have concluded overstates the disabilities. Following the expenditure of moneys the Sale 1 land is capable of being made into an attractive site with the potential for agricultural pursuits to be conducted if that is the wont of the owner. The prospect of inundation of the house site selected by the purchaser is a disability that would not be economically dealt with. Access to the higher site in the south-east corner would, on the other hand, probably be a very expensive proposition. In the result, I adopt a before resumption value of $78,000.
Mr Bishopp said that, in the after resumption situation, about 0.8 ha of the knoll had been lost on his measurements. Mr Solager was not in a position to dispute this though he treated that suggestion with incredulity. Mr Bishopp's argument is that the knoll is the more valuable part of the claimant's land and that such a disproportionate loss of that area means that the balance land suffers severance damage. That is a proposition which I accept, however, I do not conclude that a significant diminution in value flows from this factor as a substantial area of elevated land remains. I will now consider the issue of injurious affection.
Mr Bishopp estimated that before the resumption the boundary of the railway corridor was some 67 metres away from the dwelling on the claimant's land and after resumption it would be some 31 metres away. He estimated that the actual railway line before resumption is 85 metres away, whilst Mr Solager's advice from the respondent is that the distance was 75 metres. Mr Bishopp estimates that after resumption the line will be 46.7 metres from the house, whilst Mr Solager's advice is that the figure will be 50 metres.
About 20 trains use the railway line each day and there was no evidence of any plans for that number to be altered following the carrying out of the works associated with the resumption. Mr Solager said that new railway engines would be less noisy than those operating before resumption and that there would be less wheel noise because of the straighter railway line, however, acknowledged that the noise source would be closer to the house.
The claimant's land slopes gradually from the knoll down towards the existing railway line. At about the boundary of the pre-resumption railway corridor there is a cutting which Mr Bishopp estimated to have a depth of about 3 to 4 metres. Mr Solager did not venture an opinion on that matter. Accordingly, I accept Mr Bishopp's estimate.
The final engineering design for the railway line upgrade had not been completed, according to a letter from the respondent to the claimant's solicitor dated 16 September 1996, but the "preliminary design" was said in that letter to indicate that the deepest part of the cutting following the construction of the new works would be about 4 metres. On that basis there would be little change from the pre-resumption situation. Mr Bishopp had proceeded, in carrying out his after resumption valuation, on the understanding that the cutting would be about 60 foot deep. The respondent's letter also indicates that the top of the cutting will not be on the boundary of the new railway corridor, but will be some 5 to 6 metres further to the south leaving space for a vehicle track between the boundary and the top of the cutting. I was provided with no evidence from the respondent as to any later design which may have been carried out and there was no evidence of the claimant having sought such information. If I assume that the final design is as indicated in the letter and that the railway line is moved closer to the house and the depth of the cutting is virtually maintained, then given the topography of the land it is clear that the railway line to the west and the east of the cutting, as well as in the cutting itself, would need to be raised. I was provided with no sensible explanation as to why a raising of the line might be considered desirable and given that I would anticipate that such works would involve a substantial cost and the prospect of an increase in the railway track gradient, I am a little perplexed as to what the final design rationale might be. Perhaps there is an easy explanation. I will proceed on the basis, however, of the information contained in the letter and conclude that the railway line would be more noticeable in its exposed parts in the after resumption situation as it would probably be higher.
Mr Bishopp's approach to the after resumption value was to have regard to the sales generally and in particular to his understanding that the sales revealed that an area difference would result in a substantial valuation difference. He made some reference to his Sale 1 as supporting his after value, though acknowledged that it was an early sale and at a lower level in the market according to his appreciation of market trends.
Mr Solager, on the other hand, relied solely on his Sale 2 in arriving at his view of the after resumption value. Putting aside the comments and criticisms that have been made with respect to his Sales 1 and 2, I must express the view that I find it difficult to accept the proposition that the use of a single sale before resumption and a single sale after would be sufficiently reliable to lead one to the view that there was a value reduction to the extent of only 7.5%. Such an approach places undue reliance both on each sale perfectly representing the market and on the process of comparison with the claimant's land before and after resumption exhibiting surgical precision.
The after resumption land is less valuable because of the loss of an area of 2.08 ha, or about 38% of the claimant's land; because part of the knoll is lost and because the railway line is now closer to the knoll, which is the natural location for a house and associated improvements. I am considering the after value of the land without reference to the value of improvements. In so doing, I acknowledge that the railway line is a slightly more prominent feature given the design evidence placed before me and that it will be noisier, but that nevertheless the land was bounded by a railway line in the before resumption. I think that Mr Bishopp was influenced too greatly by the reduction in area in striking his figure of $55,000. My own appreciation of the evidence is that the after resumption value is not as low as the $60,000 settled on by Mr Solager, however, it would not be appropriate for me to take on the role of a third valuer in the matter. Thus, in determining the issue between the parties, I adopt Mr Solager's figure. I therefore find that compensation for the loss of land, together with severance and injurious affection on the after resumption land is $18,000 calculated thus:Value of claimant's land before resumption $78,000
Value of claimant's land after resumption $60,000
Difference $18,000
I will now consider the claim for injurious affection on the dwelling and the shed.
Mr Bishopp considered the question of injurious affection on the dwelling and shed on the basis that the rural residential site has been depreciated as a package and that therefore each of these structures is part of that overall depreciation. He placed a value on the house of $29,750 together with the attached carport at $7,875. Mr Solager valued the house at $26,000 and the carport at $2,000. I see no need to attempt to resolve the difference in house value between the valuers and will adopt Mr Bishopp's figure, however, the carport is another matter. That structure is a skillion steel-framed structure partly enclosed with zincalume steel sheeting with a roof of steel sheeting and a floor which is half concrete, half earth. The structure is supported on one side by the house which also provides the wall on that side.
Mr Bishopp arrived at his value of the carport based on what he described as a standard carport in Mackay which would cost $250 per m² to construct. He allowed for 35 m² of construction at $225 per m². As he described the carport as being in fair condition, I would understand that the lower rate per m² reflects some depreciation. Mr Solager said that a cost of $250 per m² would represent a substantial carport. He did not explain how he assessed his figure of $2,000. He simply describes the carport to be what I would summarise as a somewhat rudimentary structure attached to the house and partially supported by it. Mr Bishopp's view was that the carport could not be constructed for the $2,000 allowed by Mr Solager. Mr Bishopp's carport value is clearly too high given the nature of the structure and, doing the best I can on the evidence, I intend to strike a value for the carport at $3,500 and to value the house and carport together before resumption at $33,250.
Mr Bishopp applied an injurious affection discount of 33% on his valuation of the dwelling, producing a figure of $13,000. Mr Solager, on the other hand, considered a reduction of 10% on his overall dwelling valuation of $28,000 would produce a figure of $2,800 and applying a generous judgment to that figure, he settled on a figure of $5,000. The injurious affection on the dwelling results from the proximity of the railway line to it and the increased noise that might be experienced in the dwelling. In his approach to the question of injurious affection on the dwelling, Mr Bishopp adopted a depreciation rate based on the proposition that any future improvements to the house will suffer from the proximity to the railway line and therefore will be depreciated in value. That is an approach which I consider to be wrong in principle. The only circumstances in which future expenditure on improvements would be discounted in value would be where such expenditure is not appropriate to the use or enjoyment of a property or where the expenditure comprises an over-capitalisation, or both. The after resumption land value would generally be lower than before and in the case of a substantial reduction in value, the level of expenditure on improvements that will add value without overcapitalising , will also be reduced. The reduction in land value, therefore, reflects the changed potentiality of the land including the potentiality for the development of improvements. Returning to the facts of the instant case: I do not see that the provision of structural refinement to the dwelling on the land would constitute an over-capitalisation. Nor do I think that the further development of the after resumption land is so inhibited that it cannot sensibly be improved for its use as a rural residential site without the risk of over-capitalisation.
There is always a risk in the employment of the piecemeal approach that there will be an overlapping of injurious affection loss between land and improvements. Nevertheless, the parties have employed that method in this case. I think that in the circumstances the diminution in value to the house applied by Mr Solager is closer to the mark than the figure presented by Mr Bishopp. This brings me to the question of the injurious affection on the shed.
Mr Bishopp valued the shed on the claimant's land at $48,000 before resumption on the basis that it was a large rural residential shed, not the substantial industrial shed that it really is. The structure comprises two adjoining sheds developed as one working area with a floor area of 309 m² and a wall height to skillion of 4.7 metres in the front section and 3.7 metres in the back section. The building is enclosed on three sides with the front section being open. Mr Bishopp said that the structure would cost about $90,000 new, however, he applied his $48,000 valuation on the basis of the utility of the shed for rural residential purposes. The shed, is used by the claimant as part of his pastime of carrying out car wrecking, specialising in Fiat motor cars, a number of which are located on the site. It is therefore quite suited to his use. Mr Bishopp said that if the shed was viewed as an industrial one, there would be no injurious affection but, given that he valued the structure as a rural residential asset, its value as such is depreciated. He applied an injurious affection discount of about 16% or $8,000.
Mr Solager described the shed as a rusting eyesore, not attractive to the usual rural residential buyer. He said that the shed would have a value to somebody wishing to purchase the property to apply the shed to an industrial-type use similar to that carried out by Mr Lisciandro..
In cross-examination Mr Solager agreed that if somebody wished to use the shed for rural residential hobby pursuits the railway line would generate an increase in noise with its closer location following resumption and that the value of the shed would therefore be diminished. Mr Solager said, however, that the shed is far overcapitalised for a rural residential use and that it is not an attractive structure. He doubted, therefore, that it would be diminished in value following resumption.
I conclude that the shed value of $48,000 is an overcapitalisation for a rural residential site. That simply means that a rural residential purchaser would pay something less for the shed than would someone wishing to put it to a more industrial-type usage. I hesitate in the absence of evidence to suggest what value a rural residential shed ought to have, though I do notice that on Mr Bishopp's Sale 4 he applied a value of $10,000 to a shed there of much smaller dimensions, more attractive appearance and probably of a more acceptable nature for rural residential uses than the shed on the claimant's land. It may be that a rural residential purchaser would remove the shed, as was suggested to Mr Bishopp during cross-examination; however, I think that there is a prospect that in the environment of the claimant's land a rural residential purchaser could be found to pay a price for the shed for non-industrial uses. Perhaps it could be "prettied up" as Mr Bishopp suggested. Nevertheless, I cannot agree with the diminution in value applied by Mr Bishopp.
In the result, I think that, overall, the improvements would be diminished in value by $8,000 following the construction of the railway line and it is that amount which I would award as injurious affection with respect to these improvements.
Mr Bishopp argued that about 80 metres of fencing would be required at a cost of $65 per metre to provide security against children on the claimant's land falling over the new railway embankment and suffering an injury. His original argument was based on the proposition that the cutting would have a depth of 60 feet, not the 4 metres estimated by the respondent, though Mr Bishopp did say that the proximity of the embankment to the house was also a matter of concern. He measured the commencement of the embankment to be 31 metres away from the house, though if I take notice of the intention expressed in the letter of 16 September 1996 from the respondent to the claimant's solicitors that the cutting would commence about 5 to 6 metres inside the railway corridor boundary, the distance of the embankment away from the house would be about 36 to 37 metres. Now that is still a substantial distance, though closer than the 67 metres estimated by Mr Bishopp as the before resumption distance between the house and the commencement of the cutting. I do not think that a similar depth cutting before and after resumption and a distance of 36 to 37 metres between the house and that similar cutting poses such an increase in risk as to visit upon the constructing authority a need to provide a safety fence. A risk was present before resumption which would not have been so different from the after resumption risk that a land owner concerned with the safety of children would not have either constructed a fence around the curtilage of the dwelling or fenced the cutting in the manner proposed by Mr Bishopp.
In summary, I determine compensation at $28,512.50 made up as follows:Land , severance and injurious affection $18,000.00
Dwelling and shed – injurious affection $8,000.00
Mango tree $150.00
Legal and valuation fees $2,362.50
$28,512.50
Under s.28 of the Acquisition of Land Act the Court has a general discretion to award interest.
The claimant seeks an order for the payment of interest by the respondent on compensation as determined. No advance against compensation has been made. The claimant has continued occupation of his land, including the resumed land. It was submitted that the claimant was effectively precluded from gaining income through leasing of land to a primary producer who would seek a secure five-year tenure. There was no evidence in support of that submission. The evidence, such as it was, did not reveal any attempt by the claimant to lease any part of his land for such a use; nor that it had been so leased in the past; nor that the resumed land would be an essential part of such a lease. The evidence leads me to the view that the claimant has been allowed to continue to use and enjoy his land in the same manner after resumption as before – a use consistent with Mr Bishopp's view of the highest and best use of the land.
In the circumstances, the following quotation from Silverton Grazing Pty Ltd v. The Commissioner of Water Resources (1981) 7 QLCR 197 ( at 198-199) is appropriate:"When a dispossessed owner loses possession of his land at the date of resumption interest is usually granted by the Court from the date of resumption to the date of payment. Where the owner continues to reside on or make productive use of the resumed land after the date of resumption I have held that the owner is not entitled to an allowance for interest on compensation during the period he resides or makes productive use of the land rent and rate free but that interest should only be paid from the time he ceases to enjoy such rights. In the Conroy case (supra) at page 363 the Land Appeal Court said that no award of interest would be made because the claimant had continued to occupy the resumed land … … The Privy Council in Inglewood Pulp and paper Company Limited v. New Brunswick Electric Power Commission (1928) AC 492 … said … 'the right to receive interest takes the place of the right to retain possession.' Here I find that the retaining of possession takes the place of the right to receive interest."
In the exercise of the discretion granted to the Court by s.28 of the Acquisition of Land Act 1967, I make no order as to interest.
RP SCOTT
MEMBER OF THE LAND COURT
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