Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads (No. 2)
[2012] QLC 71
•19 December 2012
LAND COURT OF QUEENSLAND
CITATION:Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads (No. 2) [2012] QLC 71
PARTIES:Ostroco Pty Ltd
ACN 074 629 520
(Applicant)
v
Chief Executive, Department of Transport and Main Roads
(Respondent)
FILE NO:AQL020-11
DIVISION:General Division
PROCEEDING: Application to determine compensation under the Acquisition of Land Act 1967
DELIVERED ON: 19 December 2012
DELIVERED AT: Brisbane
HEARD ON: Remitted by Land Appeal Court on 11 October 2012
Submissions heard on 5 November 2012 and decision reserved
HEARD AT:Brisbane
MEMBER:Mr WA Isdale
ORDERS:1. Compensation is determined for relocation costs in the amount of $319,510.
2.Compensation is determined in the amount of $35,960 for disturbance items in the nature of professional costs.
3. Interest is payable on the sum of these amounts, namely $355,470 at the rates applicable for the relevant years, that is:
2009 5%
2010 5.5%
2011 5%
2012 3.5%
Interest is payable on and from the date of resumption to and including the day immediately preceding the date on which payment of the sum due is paid.
4. Any application for costs is to be filed and served within 14 business days of the publication of these reasons and any reply is to be filed and served within 14 business days of the application.
CATCHWORDS: COMPENSATION FOR ACQUISITION OF LAND — LEASEHOLD ESTATE — RELOCATION EXPENSES — BUSINESS LOSSES — COSTS ATTRIBUTABLE TO DISTURBANCE
Acquisition of Land Act 1967, ss 18(3), 20(1)(b), (2), (5)
Acquisition of Land and other Legislation Amendment Bill 2008
Acts Interpretation Act 1954, ss 14A, 14B
Act No. 5 of 2009
Ananda v Tomar (No 4) (2012) 291 ALR 292
Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2012] QLC 0009
Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2012] QLAC 006
Jensim Family Pty Ltd t/a Bank of Queensland Coorparoo v Chief Executive, Department of Transport and Main Roads [2012] QLC 0058
Springfield Land Corporation (No. 2) Pty Ltd & Anor v State of Queensland & Anor [2011] 242 CLR 632 at 640
Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority [2007] 233 CLR 259 at 275
APPEARANCES: PW Hackett, instructed by H Drakos & Company, solicitors for the applicant
D Gore QC, instructed by Clayton Utz, solicitors for the respondent
The history
The applicant, Ostroco Pty Ltd (Ostroco), carried on business as a real estate agent from leased premises at shop 17, Coorparoo Shopping Mall, 264 Old Cleveland Road, Coorparoo.
The respondent acquired the land pursuant to the Acquisition of Land Act 1967 (the Act). The relevant Taking of Land Notice, No. 1836 of 2009, was published in the Queensland Government Gazette on 31 July 2009. Henceforth, the land became vested in the respondent for use in the Eastern Busway Project. The Act provides for compensation in connection with the acquisition of land.
The claim for compensation
The applicant, as lessee of the property resumed, claimed compensation for:
(i) relocation costs $595,338.00
(ii) economic loss in relation to its business as a real estate agent
(a) prior to the taking of the land $102,486.00
(b) after the taking of the land $ 74,303.00(iii) loss of subletting income for the period 1 July 2007 to
30 June 2011 $309,037.41(iv) disturbance $ 35,960.00
$1,117,124.41This Court decided[1] that Ostroco’s claim was barred due to the operation of section 18(3) of the Act which provides that:
“(3) Compensation shall not be claimable by or payable to a person who is lessee, tenant or licensee of any land taken if the constructing authority upon written application allows the person’s estate or interest to continue uninterrupted.”
[1] Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2012] QLC 0009.
The Land Appeal Court decided[2] that Ostroco’s estate was not allowed to continue uninterrupted and it was not precluded from claiming compensation.[3] The Land Appeal Court remitted the matter to the Land Court to determine Ostroco’s claim for compensation.[4]
[2] Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads [2012] QLAC 006.
[3] Ibid at [25].
[4] Ibid at [28].
The Act
At the date of the acquisition, s.20 of the Act made the following relevant provisions in relation to the assessment of compensation:[5]
[5] Acquisition of Land Act 1967, Reprint 5B, as in force on 23 February 2009.
“20 Assessment of compensation
(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—
(a) to the damage, if any, caused by any of the following—
(i)the severing of the land taken from other land of the claimant;
(ii)the exercise of any statutory powers by the constructing authority otherwise injuriously affecting the claimant’s other land mentioned in subparagraph (i); and
(b) to the claimant’s costs attributable to disturbance.
(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.
…
(5)In this section—
costs attributable to disturbance, in relation to the taking of land, means all or any of the following—
(a) legal costs and valuation or other professional fees reasonably incurred by the claimant in relation to the preparation and filing of the claimant’s claim for compensation;
…
(c) removal and storage costs reasonably incurred by the claimant in relocating from the land taken;
(d) costs reasonably incurred by the claimant to connect to any services or utilities on relocating from the land taken;
(e) other financial costs that are reasonably incurred or that might reasonably be incurred by the claimant, relating to the use of the land taken, as a direct and natural consequence of the taking of the land;
(f) an amount reasonably attributed to the loss of profits resulting from interruption to the claimant’s business that is a direct and natural consequence of the taking of the land;
(g) other economic losses and costs reasonably incurred by the claimant that are a direct and natural consequence of the taking of the land.
Example of costs for paragraph (g)—
cost of school uniforms for children enrolled in a new school because of relocation from the land taken”
Ostroco has not made a claim based upon s.20(2) concerning the estate in land that it has lost, it has made claims for “costs attributable to disturbance”, as contemplated by s.20(1)(b). Sub-section 5 of s.20 sets out what is meant by costs attributable to disturbance for the purposes of s.20.
The learned President considered the effect of Act No. 5 of 2009 in Jensim Family Pty Ltd t/a Bank of Queensland Coorparoo v Chief Executive, Department of Transport and Main Roads[6] (Jensim). That Act, which commenced on assent on 23 February 2009, introduced what is now ss 20(1)(b) and 20(5). The learned President noted that:
“The effect of the addition of the new s.20(1)(b) is that it is now clear that costs attributable to disturbance are a separate head of compensation from compensation for the value of the land taken. Thus while the earlier authorities indicated, where disturbance was not an express or separate head of compensation, that disturbance was awarded as a part of the special value of the claimant's interest in the land, that is no longer the case, at least as regards the elements of disturbance that are expressly identified in subs.(5).”
[6] [2012] QLC 0058, particularly at [66] to [68].
The learned President considered that due to the amendments in Act No. 5 of 2009:
“My opinion is that, given that the principle to be applied is now formulated in statutory form, my primary task is to apply the words of the statute.”[7]
[7] Ibid at [67].
Proceeding in this way, I note that there was no evidence led of the value of Ostroco’s leasehold estate in the land resumed. Ostroco’s compensation will be found within the meaning of “costs attributable to disturbance” in s.20(5). I will deal with the claims made under the categorisations adopted on behalf of Ostroco.
Relocation costs
Ostroco has not identified any of the paragraphs of s.20(5) which it relies upon in this regard. The paragraphs which might potentially apply would be (c), (d) and (g). In the case of each of those provisions, there is a requirement that the costs be “reasonably incurred by the claimant”. The new premises in the present case were not acquired by Ostroco but by Mr and Mrs Weiss as trustees of their superannuation fund, with Ostroco becoming the tenant.[8] Mr Weiss was the principal of the real estate agency.
[8] Exhibit 7C pages 585, 586.
Ostroco’s claim for relocation costs centres on the quotation dated 5 November 2009 from Better Build Constructions Pty Ltd.[9] The total cost for the works proposed is $548,463, excluding Goods and Services Tax (GST). The items include $20,209 for a structural steel awning, roofing $10,954, $35,182 for a carport, $37,561 for air-conditioning and $67,200 for electrical works. All of these building works are to be costs paid by the tenant, none by the owner of the premises. The quote excludes the items set out at the end thereof.[10] These include out of hours work, bitumen repairs to the rear carpark and driveway and excavation of rock. Mr Wright, a real estate agent and the expert in business valuation called on behalf of Ostroco estimated these costs to be approximately $78,000. The evidence for this was however limited to it being stated in a letter dated 6 February 2012 from the solicitors for Ostroco to the solicitors for the respondent that Mr Wright had made that estimate.[11] Mr Wright did not give evidence about those items. The only evidence in relation to them was in the report prepared by Mr Andrew Brady, a quantity surveyor of Messrs Gray Robinson & Cottrell for the respondent.[12] The effect of Mr Brady’s report is that he does not support the need for this allowance. In these circumstances, and for the reasons given in [20] below, I accept Mr Brady’s evidence and do not accept that the approximately $78,000 allowance is reasonable.
[9] Exhibit 7A pages 38-46. It was prepared and signed by Mr Neil Fraser.
[10] Exhibit 7A pages 45-46.
[11] Exhibit 7C page 500.
[12] Exhibit 7C page 469.
Also included in the claim were the fees of Mr Russell Bettenay, a design fit out consultant. Mr Bettenay’s five invoices total $24,960.[13] I accept the reasonableness of both Mr Bettenay’s engagement and his fees and allow the invoiced sum.
[13] Exhibit 3.
During the course of the hearing, claims in respect of an operable wall, $5,240, and for interactive display systems, $33,350, were abandoned.
Mr Brady’s assessment of costs diverged widely from that contended for on behalf of Ostroco. In his opinion, it is typical that the landlord pays for external upgrades such as the structural steel work and roofing. He was of the view that since finishes dictate the colours, there was no need for a colour consultant and that it was because the tenant had chosen a new design that new furniture was required. His photos of the resumed premises[14] show moveable furniture which could be relocated. His evidence that the operable wall, a concertina-style divider, was not in the resumed premises may explain why Ostroco did not press that claim.
[14] Exhibit 7C page 483.
In his evidence, Mr Brady recalculated his estimates, which appear at page 489 of Exhibit 7C, to the following:
Tenant works - existing premises $152,624
Tenant relocation works - new premises $166,886
Landlord works - new premises $175,741When cross-examined, Mr Brady was challenged that he had assumed the existence of a hypothetical new premises that was superior to the premises that actually existed. His response to this was that the lease agreement[15] does not require the landlord to do anything to the premises. He had not seen the lease at the time he prepared his report.[16] The carport was not in the plans that had been drawn and the glazing, for which he had allowed $14,931[17] should, in his opinion, be a cost to be borne by the landlord. Mr Brady’s apportionment of costs between landlord and tenant appears from pages 460 to 467 of Exhibit 7C.
[15] Exhibit 7C pages 585-588.
[16] Exhibit 7C page 458.
[17] Exhibit 7C page 464.
Mr Stewart Cameron, registered valuer and director of Crisp Valuation Services, provided a valuation of the new property, located at 326 Old Cleveland Road, Coorparoo, leased by Ostroco. He assessed the market value at 2007 and 2010 and did not allow for any of the items that Mr Brady referred to as landlord expenditure items. He was “asked to assess the rent in July 2007 and July 2010, on an as is, how is, where is basis”.[18]
[18] Transcript (T) Day (D) 1, page 24 lines (L) 35-38.
Mr Neil Fraser gave evidence that he prepared the Better Build Constructions Pty Ltd quote on the basis of the plans and specifications that became Exhibit 4. At various places in Exhibit 4 the client is shown as L.J. Hooker, Coorparoo, of which Mr Weiss is the principal.
The evidence of the scope and cost of reasonable works
On behalf of Ostroco it was argued that Mr Brady’s evidence of the items which he stated ought to be, wholly or partly, landlord’s costs, should not be accepted. Mr Cameron, the valuer called on behalf of Ostroco, did not proceed that way and his evidence, it was argued, should be preferred. Mr Brady, as a quantity surveyor, was said to not have the relevant expertise. From my observation of Mr Brady when he gave evidence, I am satisfied that he was making his best endeavours to assist the Court and not being partisan at all. I am satisfied that he possesses sufficient industry experience to give the evidence that he gave and which was valuable in ascertaining what, in the industry, is usual in relation to landlord cost items in usual circumstances. The criticism that he lacks the necessary expertise fails when tested against the evidence which he gave which grounded his opinion of what was usual in this area upon his actual work experience.[19] The criticism is also weakened by the acceptance[20] on behalf of Ostroco that Mr Brady had identified two components in the Better Built quotation that were improvements and the concession[21] that they ought to be excluded from the claim.
[19] Ananda v Tomar (No 4) (2012) 291 ALR 292, [22].
[20] Applicant’s Outline paragraph 21.
[21] Applicant’s Outline paragraph 21. The improvements are set out at [14] supra.
Although the Court was urged to prefer Mr Cameron’s approach to that of Mr Brady, Mr Cameron, the valuer, was not asked about the suitability of making the allowances which Mr Brady made for landlord cost items. Mr Cameron simply reported what his instructions were and he valued in accordance with them.[22] There is no real conflict between the evidence of Mr Brady and Mr Cameron on the matter of what is, in effect, reasonable in the industry concerning the landlord cost and tenant cost items and, where there are usually apportionments, what they might be expected to be.
[22] See footnote 18.
Mr Fraser, who prepared the quotation by Better Build Constructions Pty Ltd dated 5 November 2009 for $548,463 also prepared the quotation dated 24 September 2009 by Alliance Interiors. Its total cost was $483,728. In his affidavit,[23] Mr Fraser explains that he ceased working as an estimator for Alliance on 21 October 2009 and commenced employment with Better Build in the same capacity. There were some minor changes to the client’s requirements after the Alliance quote.[24]
[23] Exhibit 7A page 24 paragraph 13.
[24] Exhibit 7A page 24 paragraph 12.
Mr Fraser prepared the quotations from the plans and specifications from Mr Bettenay, Exhibit 4.[25] Mr Fraser was not asked about what ought or ought not be, in usual industry practice, landlord as opposed to tenant costs so his evidence does not conflict with Mr Brady’s on this point.
[25] T 1-39 L 22-30.
The allowance for reasonable cost of tenant works
Mr Weiss, effectively the controlling mind, was on both sides of the transaction to lease the new premises, as landlord and as tenant. He signed the tenancy agreement as one of the landlord signatories and as a tenant’s signatory.[26] Effectively negotiating with himself, the resulting arrangement loaded the building-work costs onto the tenant. Although this in fact occurred, s.20(5) of the Act requires the Court to direct itself to “costs reasonably incurred”. I accept Mr Brady’s assessment of what costs ought reasonably to have been incurred, accepting his opinion of what would have been reasonably landlord costs or shares of costs, based on his industry-relevant knowledge and expertise. I therefore accept that the following allowances should be made:
Tenant works at the resumed premises $152,624
Tenant relocation works at the new premises $166,886$319,510
Economic Losses prior to and after the taking of the land[26] Exhibit 7C page 588.
Paragraphs (f) and (g) of sub-section 5 of section 20 refer to loss of profits and economic losses. Paragraph (f) requires that a loss of profits result from “interruption to the claimant’s business” in addition to the causation requirement. Ostroco claims a loss of profits from the looming Eastern Busway Corridor Project. While the business was not “interrupted” in the chronological sense of the word, it may be open to argue that it was interrupted by being obstructed, in that it came into the shadow of the approaching project which induced a “doldrums” effect on business. In interpreting this Act, concerned as it is to give compensation, such a broader interpretation should be preferred to a more restrictive one where it is fairly open. However, both paragraphs (f) and (g) contain the additional requirement that the loss must be a “direct and natural consequence of the taking of the estate in land”.[27] It was submitted on behalf of the respondent that a consequence of the taking of the estate in land could only be understood to be something occurring after the actual taking on 31 July 2009.
[27] The terms of the legislation are determinative. Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority [2007] 233 CLR 259 at 275 at [47]. Springfield Land Corporation (No. 2) Pty Ltd & Anor v State of Queensland & Anor [2011] 242 CLR 632 at 640 at [18].
While the applicant did not provide arguments to rebut this submission, I do not infer that it accepts it. In closing submissions, Counsel for the applicant said:
“The loss which is claimed, flows directly from the taking of the land both prior to the taking and subsequently.”[28]
[28] T2-73 L7-10.
In Jensim the Land Court considered a resumption in the same shopping centre, on the same date, by the same respondent. In that case, as here, a claim was made for loss prior to the date of resumption.[29] There was no dispute in Jensim that loss prior to the date of resumption had been suffered and was compensable.[30] The dispute was as to the extent of the loss. The submission now made in relation to the interpretation of the expression “a direct and natural consequence of the taking of the land”, as that expression appears repeatedly in s.20(5), was not made in Jensim.
[29] Jensim at [4].
[30] Jensim at [51]. The parties in Jensim agreed on the formula to assess the compensation: see at [52]. The formula factored in the last three year operating period: see at [53].
Section 20(5) states that “costs attributable to disturbance, in relation to the taking of land, means …” (emphasis added) and goes on to use the phrase “a direct and natural consequence of the taking of the land” in sub-paragraphs (e), (f) and (g). A plain reading of those words can only lead to them being understood as meaning that they refer to consequences of the taking of the land as a consequence is normally understood. A consequence can only occur after the taking.
In Ostroco Pty Ltd v Chief Executive, Department of Transport and Main Roads[31] the Land Appeal Court said:
“[17] While ordinarily the natural (or grammatical) meaning of a provision is to be adopted as the meaning intended by the legislature, a number of factors may warrant the adoption of a different meaning, for example, the context, the consequences of a literal construction, the purpose of the statute or the canons of construction. The task of the Court is to give the words of the provision the meaning which the legislature is taken to have intended them to have.”
Also relevant in this regard are sections 14A and 14B of the Acts Interpretation Act 1954. Section 14A(1) provides that:
[31] [2012] QLAC 006 at [17].
14A Interpretation best achieving Act’s purpose
(1)In the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation.
Section 14B provides that consideration may be given to extrinsic material capable of assisting in the interpretation if the provision is ambiguous or obscure or if its ordinary meaning would lead to a result that is manifestly absurd or is unreasonable. Such material may also be used to confirm the interpretation conveyed by the ordinary meaning of the provision.[32] In determining whether consideration should be given to extrinsic material, regard is to be had to, inter alia, the desirability of a provision being interpreted as having its ordinary meaning.[33]
[32] Acts Interpretation Act 1954, s.14B(1).
[33] Act Interpretation Act 1954, s.14B(2).
I am not of the view that the provision in question is ambiguous or obscure or that its ordinary meaning would lead to a result either manifestly absurd or unreasonable in view, for instance, of s.14A(1). It may nevertheless lead to a result that is unfavourable to the applicant.
Section 14B(3) provides examples of relevant extrinsic material which might be used to confirm the interpretation conveyed by the ordinary meaning of the provision. In that regard the Explanatory Notes to the Acquisition of Land and Other Legislation Amendment Bill 2008, which became Act No. 5 of 2009, refer to Clause 14 which contains the amendments to s.20 of the Act. They do not provide any assistance at present.
The Second Reading speech of the Honourable Minister for Natural Resources and Water and Minister Assisting the Premier in North Queensland[34] contains a reference to disturbance items. The Honourable the Minister said:
“Codifying what constitutes compensable disturbance items will provide transparency and will also improve the consistency of payment of compensation among the different constructing authorities.”[35] [emphasis added]
[34] Hansard, 2 December 2008, page 3965.
[35] Hansard, 2 December 2008, page 3966, 14th paragraph.
This tends to confirm the interpretation conveyed by the ordinary meaning of the words used in s.20(5). I must conclude that the Court does not have jurisdiction in respect of Ostroco’s claim of $102,486 for economic loss while trading prior to the taking of the land.
If this obstacle did not exist, both paragraphs (f) and (g) contain the causation requirement which, even if freed from the fundamental limitation which I have just considered, will still apply according to its terms and so will be relevant to the consideration of claims made for the period before, as well as after, the resumption. The busway project was announced in 2005[36] and the resumption occurred in 2009. The property management part of Ostroco’s business did not decline, that was common ground,[37] and the physical access to Ostroco’s business premises was not affected by the prospect of the resumption or the resumption itself. Mr Calabro, Director of Forensics and Valuations of Calabro SV Consulting, who was called by the respondent, applied Mr Wright’s methodology for assessing this category of loss but adopted 2006 instead of 2007 as the starting point. The 2007 year was a boom year for Ostroco in recent years. In 2000 to 2003 house sales were better but by 2007 prices had doubled. The Global Financial Crisis was felt in Australia after the 2007 financial year.[38] Choosing 2007 as the year before there commenced to be an impact from the transport scheme is not however supported by any basis. Its only distinction is that it happened to be a high point for Ostroco’s business. Looking at the number of sales is not an attractive approach. An argument that higher sale prices with fewer sales shows a downturn does not address the requirement in paragraphs (f) and (g) for actual economic, i.e. monetary, loss.[39] Fewer sales, if of higher priced properties, may not necessarily result in a loss of commission revenue. There was no evidence on this point. This aspect does not require further consideration as Mr Calabro calculated loss of profit using Mr Wright’s methodology but adopted the financial year ended 30 June 2006 as the base year for his calculations because 2007 was an abnormally good year which, if used, would bias the calculations.[40] The effect of Mr Wright using 2007 as the starting point was to result in a calculation of economic loss in the following years, simply as 2007 was a higher starting point.[41] Applying Mr Wright’s staring point, Mr Calabro arrived at essentially identical figures to those contended for on behalf of Ostroco, a pre-resumption loss of $102,536,[42] and a post resumption loss of $74,303.[43] By adopting a starting point of 2006, however, that base year results in a calculation that there was no loss of profits in subsequent years.[44]
[36] Exhibit 7C page 408.
[37] Exhibit 7B page 342 at (e) and page 345 at 12.1(b).
[38] T 1-77 L 13.
[39] Exhibit 5 and Exhibit 6, Table 4.
[40] T 1-75 L 33-40.
[41] Exhibit 7C page 425.
[42] Exhibit 6, Table 1.
[43] Exhibit 6, Table 2.
[44] Exhibit 6, Table 4.
There appears to be no evidence for concluding that a depressing affect from the announced busway project had a greater or lesser effect in 2006 or 2007; the evidence does not support selecting one year over the other in relation to this, if indeed it supports such an effect. It will be recalled that it is not disputed that the property management aspect of the business did not suffer any loss, the resumption did not occur until 2009 and in any case had no affect on access to the premises. It does not follow that a project announced in 2005 would have an adverse financial impact on Ostroco’s business only after the good year of 2007.
I am not satisfied that the financial results of 2007 should be left out of account on the basis that it would introduce a bias. It is simply a fact that it was a good year and the calculation should be informed by that fact. In relation to whether 2006 or 2007 should be the starting point, representing a base year for comparison, I am not satisfied that either should be preferred as there is no convincing basis for doing so. Selecting from a choice of two years, both after the announcement of the busway project, is not assisted by any indication that either year could be considered unaffected by it and therefore a valid reference point of the business before the claimed depressing affect. If such an affect could be shown by reference to previous trading, that reference year would not be found, it seems to me, after the project is announced, absent some evidence that the affect did not manifest for some period.
I am not satisfied that it would be valid to use either 2006 or 2007 as a starting point for the calculation of economic loss before or after the resumption. Therefore, should the matter be able to advance to the point where such a decision could be made, I would not be satisfied that the claim for these economic losses has been made out on the evidence presented.
Loss of rental income from new premises for the period 1 July 2007 to 30 June 2011
The amount of $309,037.41 is claimed in this regard. The provision of sub-section 5 of section 20 most likely to be relevant is paragraph (g). It requires that the loss or cost be reasonably incurred by the claimant as a direct and natural consequence of the taking of the land. It seems therefore that it can only apply after the date of resumption and not before. Purchase of the new premises in 2007 cannot come within the scope of paragraph (g) so the Court does not have jurisdiction in respect of this claim.
Should it be necessary to proceed to consider it, were there to be found to be jurisdiction to do so, it would be relevant that Mr Weiss was on both sides of this transaction and it would therefore need to be critically viewed before being accepted as providing a basis for concluding that the amount of rental paid was reasonable. Assistance is gained from the valuation report of Mr Stuart Cameron.[45] Mr Cameron was instructed to assess the rent in July 2007 and July 2010 “on an as is, how is, where is basis”.[46] His opinion is that the rental agreement was at a fair market rent.[47] I would be satisfied that, on this evidence, it is established that this is so. I would also be satisfied that Ostroco acted reasonably to attempt to sub-let these premises while it continued to occupy the resumed land and to mitigate its costs in this regard. As the tenant paid rent until the end of July 2007, one month’s rental, that is $6,250,[48] should be deducted. Therefore if, contrary to my view, there were jurisdiction to allow it, this claim would be reduced from $309,037.41 to $302,787.41.
[45] Exhibit 7C pages 449-453.
[46] T 1-24 L 35-38. See [18] supra.
[47] Exhibit 7C page 453.
[48] Exhibit 7C page 586.
The professional costs claim
The amounts of $7,500 for valuation fees and $3,500 legal fees have been agreed between the parties. The invoiced fees of Mr Bettenay have been referred to above[49] and I consider that his fees of $24,960 were reasonably incurred and should be allowed. The total of this category is $35,960.
[49] At [13].
Interest
Interest ought to be allowed so as to preserve the value of the award. Interest is allowed at the rates set out below on and from the date of the resumption on 31 July 2009 to and including the day immediately preceding the date upon which payment is made. There has been no payment as yet so there is no need to allow for an advance.
Interest rates
The applicable interest rates are:
Year Rate
2009 5%
2010 5.5%
2011 5%
2012 3.5%
Costs
Any application for costs is to be filed and served within 14 business days of the publication of these reasons and any reply is to be filed and served within 14 business days of the application.
Orders
1.Compensation is determined for relocation costs in the amount of $319,510.
2.Compensation is determined in the amount of $35,960 for disturbance items in the nature of professional costs.
3.Interest is payable on the sum of these amounts, namely $355,470 at the rates applicable for the relevant years, that is:
20095%
20105.5%
20115%
20123.5%
Interest is payable on and from the date of resumption to and including the day immediately preceding the date on which payment of the sum due is paid.
4.Any application for costs is to be filed and served within 14 business days of the publication of these reasons and any reply is to be filed and served within 14 business days of the application.
WA ISDALE
MEMBER OF THE LAND COURT
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