Shellray Pty Ltd as trustee for the Jonley Unit Trust v Chief Executive, Department of Main Roads

[1999] QLC 101

LAND COURT

BRISBANE

29 SEPTEMBER 1999

Re: Claim for Compensation
Resumption for Road Purposes
Acquisition of Land Act 1967
(A98-27)

Shellray Pty Ltd as trustee for the Jonley Unit Trust
v.
Chief Executive, Department of Main Roads

J U D G M E N T

Background:
This is a claim for compensation for lands resumed under the provisions of the Acquisition of Land Act 1967 (the Act). By proclamation in the Queensland Government Gazette of 5 September 1997, the Chief Executive, Department of Main Roads(the respondent) resumed lands of area 8.510 ha for road purposes, being part of Lot 1 on RP 145221, Parish of Albert. By proclamation in the Queensland Government Gazette of 30 January 1998 the respondent amended the area resumed to 8.525 ha, which is the area of land now claimed for in compensation.
At the date of the proclamation on 5 September 1997 the registered proprietor of the subject land was Shellray Pty Ltd as trustee for the Jonley Unit Trust (the claimant). The date of 5 September 1997 then becomes the date at which compensation is to be assessed.
The Claim:
By Notice of Intention to Resume of 30 June 1997 the respondent issued a notice to the claimant seeking written objection to the proposed resumption, and signalling a willingness to negotiate an appropriate settlement, or failing agreement, to treat as to determination of the compensation to be paid and all consequential matters. The land was resumed for transport purposes or for an incidental purpose, being the construction of a service road along part of the western side of the Pacific Highway, which is currently being upgraded from a four-lane carriageway to an eight-lane carriageway.
On 6 July 1998 a claim was lodged with the Land Court on behalf of the claimant seeking resolution of its claim as follows:
Loss of land, severance and injurious affection  $932,650
Loss of Improvements (signs)  $376,330
Loss of fill material  $134,870
Total  $1,443,850
Plus costs and interest lost to be determined.
At the date of resumption the claimant held the property in its capacity as trustee of the Jonley Unit Trust of 28 November 1988, and had current leases over two highway advertising signs on the land to 3M posters (expiry 20 March 1998), and Cody Outdoor Advertising Pty Ltd (three years plus two) commencing 17 March 1997.
At a Court Callover on 1 December 1998 it was agreed to set a date for hearing in March or April 1999, and with agreement of the parties an exchange of all witness statements was ordered to occur not later than 21 days prior to the hearing. By Court Notice of 7 December 1998 a date for the hearing was established, and it commenced on 27 April 1999.
During the hearing the claim was amended as follows:
(1)Loss of land
(2)       Severance
(3)       Injurious Affection                (Items(1) (2) and (3))        $932,650
(Visual impact, noise and loss of exposure)
(4)       Improvements (loss of signs)  $376,330
(5)       Loss of fill material  $101,813
(6)Costs –
(a)       Legal and Valuation fees  $6,000
(b)      Pursuant to s.27 (to be determined)
(6)Interest (to be determined)
Total     $1,416,793
           Plus interest and costs.
During the hearing both parties agreed on legal and valuation fees of $6,000; and it was also agreed that the quantum of any fill, if relevant, was $101,813. However, the respondent continues to dispute that the fill material was a separate matter for compensation, and claims that it remains part of the overall value of the land resumed. With the agreement of both parties an inspection of the land was undertaken.
Mr A Lyons of Counsel, instructed by JF Connors & Associates, Solicitors, represented the claimant.
           Mr J Gallagher QC, with him Mr R Jones of Counsel, instructed by Crown Law, represented the respondent.
           During the hearing, Counsel for the claimant raised a concern that the final closing comment from the Court on the third day of hearing might be construed as demonstrating some preconceived opinion about the nature of exposure of the subject land. On that basis Mr Lyons was instructed to request of me to disqualify myself from further proceedings on the matter.
           That suggestion was resisted by Mr Gallagher, who saw the remark taken in context to demonstrate an observation that may be useful to the parties, and upon which they might respond. After hearing comments from both Counsel, I ruled that there were no grounds for concern, particularly as the Court had been well informed that exposure was a key issue, and it had been drawn to my attention specifically at the joint inspection of the subject land at the commencement of the hearing. Mr Lyons did not request an adjournment, and I therefore ruled that the hearing should proceed. The claimant did not appeal that procedural decision.
The Nature of the Land –
The subject land comprised a total of 89.68 ha before resumption, and is a large parcel of land immediately to the west of Elderslie Road, which is planned as a service road for the adjoining Pacific Highway, with an approximate 2 km frontage to the service road. The subject land is located between Stanmore and Mulles Road at Yatala, 37 km radially south-east of the Brisbane Central Business District, and a few kilometres south of Beenleigh. The subject land fronts Stanmore Road (402 metres) in the north, and Mulles Road (661 metres) in the south, and is immediately across Mulles Road from the Carlton United Brewery (Lot 10 on SP 105193).
           The subject land was formerly the site of the Bullens Lion Park facility, which after discontinuation for that purpose, was rezoned from "Special Facilities – Lion Park" to "Light Industry" in 1989. Sandy Creek passes across the land about midway between Stanmore Road and Mulles Road, approximately at the location of the common boundary of management Lots 1 and 2 on SP 101442.
           The area to the north of Sandy Creek is generally gently sloping, with a small ridge extending into the northern part along its western boundary. The northern part falls gently to the east towards the Pacific Highway, and to the north towards Stanmore Road. Generally the northern part is suitable for development into industrial lots under the current zoning.
           The southern part south of Sandy Creek comprises management Lots 2 and 3 on SP 101442, and rises from a general level of RL15 metres to the top of two small knolls at RL40 metres, near the common boundary of Lots 2 and 3. The valley between the two knolls is at RL29 metres. Prior to any development of Lots 2 and 3 it would most likely require the levelling of the two knolls and regrading of the site, involving considerable earthworks. Subsequent to the resumption, the lands have been sold to developers who are now in the process of regrading the site in the southern part.
History of the Site –
           The recent history of the site involved the purchase of the land by Mr RA Carr for the claimant in December 1988. Mr Carr is a retired businessman, who had moved to the Gold Coast after selling major businesses in New South Wales, and saw the investment in the subject land as a future development opportunity. Mr Carr had not been a major land developer, prior to his purchase of the subject land. In early 1989 the claimant sought rezoning approval of the Albert Shire Council (the Council) to rezone the land to "Light Industry". Following extensive negotiations, and an appeal to the Planning and Environment Court, a consent order was issued by the Planning and Environment Court on 25 August 1992 to rezone the land to "Light Industry" subject to specific conditions. Each party bore its own costs to the consent order.
           Subsequent to that order, the claimant reviewed the original Council requested development costs, including headwork charges for water ($632,103) and sewerage ($1,147,648), which later were advised to have been reviewed by Council to have increased by an additional $4,200,000 under the consent order conditions (April 1990). As a consequence of that increase, and other problems in dealing with Council, the claimant sought to sell the subject land, and widely advertised the property with many agents, over a period of some five years between 1992 and 1997.
           On 30 June 1997 the respondent signalled his intention to resume 8.51 ha of the land for road purposes, having previously indicated in 1996 an intention of resuming an area of only 3.47 ha for road purposes. It is Mr Carr's evidence that advice to him from officers of the respondent indicated that the additional area was needed in order to reduce costs of construction associated with the relocation of an overhead bridge and roundabout south of the property. As a consequence of discussions between the parties, and on Mr Carr's understanding that negotiations would be more easily finalised if an objection was not lodged against the larger resumption, Mr Carr opted not to formally lodge an objection.
           Mr Carr further argues that following meetings in June and July of 1997, differences arose between the parties in respect of the loss of signage and difficulties with lack of access from the service road. As a consequence of those differences, the period to object (by 1 August 1997) was exceeded, and the respondent commenced compensation proceedings on 12 August 1997. A claim for compensation was lodged with the respondent on 19 September 1997, to which the respondent indicated that, as a consequence of enhancement to the remaining land, no compensation would be applicable.
While those discussions proceeded, there were two expressions of interest to purchase parts of the land, and the claimant arranged for an application to subdivide the subject land into three management lots on 7 October 1997. That was approved by Council on 25 November 1997, with special development conditions for that purpose, involving compliance with the consent order of 25 August 1992, which was to be paid at a later time of further subdivision or building approval stage.
It is Mr Carr's evidence that the approval by Council would appear to have been influenced by discussions between Council officers and Main Roads staff in respect of the conditions to be imposed upon the management subdivision. It had been his prior understanding from his consultants that usually development conditions are not requested where the subdivision is only for management purposes, and not for further development. Subsequently, the three management lots were sold as follows:

Land Date Purchaser Sale Price

Lot 1 05.12.97 Dynacomp Pty Ltd $4,000,000

Lot 2 17.04.98 Springwood Developments Pty Ltd $1,260,000

Lot 3 23.10.97 Gail Stephens as trustee $1,440,000

Total $6,700,000

Costs of the sales, involving commissions and fees total $237,700.
Further subdivision and development of those sites are discussed elsewhere. It is Mr Carr's evidence that, in his opinion, the service road is a requirement of the upgrading of the Pacific Highway, and is not directly related to the future development of the subject land. The purchasers of Lots 2 and 3 are related companies. It is also noted that at the dates of Sales 2 and 3 the resumed land was already owned by the respondent since the date of proclamation at 5 September 1997. Accordingly, the lands sold from Lots 2 and 3 involved areas of 20.92 ha and 16.42 ha respectively. (See plan of survey SP 101442).

Impacts of Planning -
(5.1)Zoning –
The application to rezone the subject land on 15 December 1988 included a preliminary plan of possible subdivision into some 260 lots, and was at that stage still only indicative, and subject to the consent of the registered proprietor. The intent of the plan was to demonstrate the feasibility of a development of a variety of lots greater than the minimum size, and its urgency related to seeking urgent approval of the Council, subject to a lack of any objection. On 6 March 1989, Council advised of its intention to seek rezoning to "Light Industry" subject to specified conditions including, among others:
(1)bonding of headworks for water ($632,103) and sewerage ($1,147,648);
(2) filling of an area subject to flooding;
(3)construction of a kerb and channelling service road from Mulles Road to Stanmore Road, to the satisfaction of Main Roads Department; including upgrading of the existing road and existing timber bridge;
(4)contribution of $215,184 towards upgrading the proposed main road roundabout at Stapylton Road and the overpass at Burnside Road.

The preliminary survey plan of 15 December 1988 was prepared following discussions with officers of the Albert Shire Council, and focused on a range of lot yields. On 21 March 1989 the Council advised that the $215,184 contribution to Main Roads works was as a result of the expansion of industrial uses in the area and the required upgrading of interchanges and overpasses.
On 4 April 1989 the claimant appealed to the then Local Government Court against the bonding headworks charges and the contributions to the Main Roads highway works ($215,184). The claimant did not appeal against the service road as he believed that would provide direct access to new lots. The claimant sought to stage the charges for headworks, and to have the contribution to Main Roads works overturned. On 25 August 1992, after 3½ years of delay, the claimant consented to the Court order which established, among others, all of the conditions formally imposed by the Council, and in particular items (1) to (4) discussed previously. The land was gazetted to "Light Industry" on 17 December 1992.
           As a consequence of a subsequent review of the Council Town Plan (now the Gold Coast City Council) the subject land was rezoned to "Commercial Industry" on 24 February 1995, and effective at the date of resumption. The current strategic plan for the area shows the land in the "core industrial area" of the Stapylton/Yatala Interim Industrial Strategic Plan, which has been characterised in recent times by a general rezoning of "Rural" or "Future Urban" land into "Commercial" and "General Industry" zones.
           Prior to the gazettal of that new plan on 25 February 1995 the existing zoning of the subject land was zoned as "Light Industry", although the claimant had not paid his contributions to water and sewerage, or the upgrading of the service road, or the contribution to the Main Roads works. The subject land was consequently zoned as commercial industry at the date of resumption. The new town plan had no provision for "Light Industry" zoning.
           The question to be asked, therefore, is did the Council amend the zoning to "Commercial Industry" on 25 February 1995 on the basis of the consent Court order then in place, or did it rezone the land for general planning purposes, and thus release the owner of the subject land from any further responsibility under the consent order.
In this regard it is noted that a strategic plan establishes the intent and focus of future land uses, while the actual zoning of the land is a function of formal gazettal of land uses in a planning scheme. The thrust of a strategic plan is more broad scale, showing preferred dominant land uses, while the gazetted zoning of the subject land is specific to that parcel. However, it is also noted that under s.7.1A(4) of the Local Government (Planning and Environment) Act 1990, any decision of the Planning and Environment Court shall supersede any decision of the Local Government, and thus would become the law, subject to the satisfaction of any conditions imposed by the Court. On that basis it would be reasonable for the Council to move to rezone the land, and to seek to recover costs identified in the Court order.
           Mr Carr argues that the reason he was subsequently able to sell the land in management parcels was, in his opinion, that Council has subsequently relaxed its requirements for headworks charges as stage developments, a relaxation he unsuccessfully sought in his appeal to the Planning and Environment Court in 1992. As a consequence of changes to the minimum lot size for industrial uses, subdivision applications of the land subsequent to the resumption, have been for a smaller number of much larger lots.
           Evidence was given by Mr MC Challoner, a consultant town planner, in respect of the objectives of the Strategic Plan (Map 7) for the area, which seeks to encourage heavy industries or industries requiring large sites to locate in the area of the subject land. The core industrial areas are designed for general industry, and particularly food industry locations, with the southern part of the subject land designated in the Development Control Plan as Precinct 1 (food complex), and the northern part as Precinct 2b (food complex support). Precinct 1 is to accommodate food processing, and Precinct 2b to encourage support industries such as packaging, transport and warehousing, etc.
           A current draft plan entitled "Building Sustainable Communities", was open to the public for discussion, and reinforces the current planning regime in the Yatala area. The subject land is also designated as "Industry" under the Development Control Plan (DCP) 5 – Albert Corridor, which provides forward planning for the area. That DCP 5 establishes Stanmore Road as an extractive industry haulage road (where restricted access may be established), and there is an open space corridor along Sandy Creek through the subject land.
           Further applications for subdivisions have been lodged with the Council for 11 lots (on Lots 2 and 3), and 14 lots (on Lot 1). Negotiations on those matters are still proceeding, however, the current advice from Council to the 11 lots (Lots 2 and 3) in respect of Department of Main Roads' requirements is as follows:
"(7)     Direct access to the adjacent State-controlled road will not be permitted. Access to the site is to be via the proposed or existing Council local network." (23 June 1998)
The Council advice for the 14-lot subdivision (Lot 1) in respect of the Department of Main Roads requirements is:
"          The Department has advised Council that direct allotment access to the adjacent state controlled road will not be permitted. A revised proposal plan will be required in accordance with this requirement." (7 July 1998)

In the 14-lot subdivision the owner was again required to fill the small area subject to flooding in the north-eastern corner of Lot 1, generally identifying the need for filling in the area. Mr Challoner also confirmed the likely planning option that access would be denied to Stanmore Road because of its strategic function as an extractive industry haulage route. Other matters associated with water and sewerage headworks charges, park contributions and buffer strips (10 metres), are not contentious in this matter.
However, two areas of planning advice divide the parties. Those are the current status of planning approvals for the service road, and the required contribution towards external roadworks, particularly the Main Roads works. On both of those issues Mr Challoner advises that it would be likely that Council and Main Roads would continue to require completion of the consent order of 1992. However, in this regard Mr Challoner concedes to the traffic advice of Mr Beard, the consultant traffic engineer for the respondent.
There was some speculation between the parties in respect of the wisdom of Mr McAnany's proposal to provide park land at Lot 45 at the south-eastern corner of the subject land in Mulles Road, in view of any loss of exposure for development at that location. However, Mr McAnany advised that he had done so for good engineering reasons in order to minimise development costs to the advantage of the claimant. That low-lying area of the land would have required construction of a major three-cell culvert for about 150 metres at approximately $3,000 per metre. As it is a planning requirement to contribute 10% of the area for park purposes, the most cost effective method was to provide parkland over the watercourse across that area. In the end the location of the parkland has no real impact upon this matter.

(5.2) The Consent Order –
In considering the requirements of the consent order of 1992, the respondent argues that both the Council and Main Roads continue to require contributions in the before situation from the owner of the subject land in respect of the service road and the upgrading of the highway works. Mr Love, for the claimant, notes that part of that consent order in respect of a sewerage pump station (item 3) has already been overtaken as the pumping station was already in existence at the date of resumption. However, he would appear to misread the wording of the consent order in that matter, which defines a "contribution" assessed on a percentage of the catchment area, and therefore completion of the pumping station has no bearing upon the need to meet that obligation.
The completion of the service road by Main Roads, however, poses a slightly different situation. The consent order specifically dictates that the service road is to be completed with kerbing and channelling, apparently a separate requirement of the Council, as Main Roads did not specify the need for kerbing and channelling. The new service road to be built by Main Roads as part of the highway upgrade does not provide for any kerbing and channelling. The impact of the requirement for the service road is discussed later in s.6, and the requirement to contribute to highway works is discussed in s.8.

Implications for Direct Access -
(6.1)The Formal Advices –
A key issue in this matter is the extent of direct access to the subject land which was likely to have had some formal approval in either the before and after situation. It is the claimant's case that as a consequence of the wording of the rezoning approval, which was encapsulated in the consent order of 25 August 1992, it was a reasonable conclusion that in the before situation direct access would be allowed to lots fronting the new kerbed and channelled service road along the then eastern boundary of the subject land. The claimant further argues that in the after situation it is clear from Council responses to subdivision applications in June 1998 and July 1998, that direct lot access to the service road will be denied. The respondent specified no access conditions to the application of 27 October 1997 as it was merely a management subdivision and involved no traffic generation.
           The respondent, by comparison, argues that too much is being read into the wording of the consent order in respect of the service road, and that Council and Main Roads only approved the rezoning of the land pursuant to that order, and that the question of access to the subject land would have been examined at a later time, at either the further subdivision of the land, or in respect of a development application.
           On the evidence before me, it would appear that the original preliminary plan of development submitted by surveyor Walsh in 1989, was conditioned as being indicative only. At that time the Council would have considered the rezoning under the provisions of the then Local Government Act 1936-1985, s.33(6A). The appeal to the Local Government Court was exercised under s.33(7), and the Court order was issued pursuant to s.33(7)(c). While those matters dealt only with an application to rezone the subject land, it may be relevant to note that had a further application been then submitted to subdivide the land under s.34(11), any new opening of road was then to consider, amongst other things:
"(e)      whether or not kerbing, guttering, and footpaths should be provided, and
(g)the classification of the road."

It is also that in such an application to subdivide, whether or not new road is opened, the Local Government shall consider under s.34(12):
"(d) the existing and proposed means of access to each separate parcel."

However, it remains clear that rezoning under s.33 is seen as a separate function of Local Government to that required for subdivision of land under s.34.
           In the pre-resumption situation immediately prior to the relevant date, the land would have been considered by Council under the provisions of the Local Government Act 1993, with date of assent 7 December 1993, and also with reference to the Transport Infrastructure Act 1994, in respect of any dealing with the State-controlled Pacific Highway and its service roads. Under s.40(1) of the latter Act, the council is required to seek the approval of the Chief Executive of Main Roads Department in respect of subdivision, rezoning or development associated with a State-controlled road, declared under s.23(1) of that Act. Under s.3 of the Local Government Act 1993, a road is defined for the purposes of Local Government, but excludes a State-controlled road under the Transport Infrastructure Act 1994. Clearly, the principal authority in respect of the service road adjoining the subject land lies with the respondent, which is demonstrated by the subdivision approvals of 25 November 1997, 23 June 1998 and the request for further information of 7 July 1998.
           If I consider then the matter of the rezoning of the land, I see that occurred by formal gazettal on 17 December 1992. Any further approval for either subdivision or development approval would then be a separate matter for consideration by Council and Main Roads.
           If I return then to the formal advices received by the claimant in respect of the subsequent applications to subdivide, I note that in respect of direct access to the service road, that is specifically and definitively denied. The wording of the official letters leaves no room for speculation. While it may be argued by the respondent that it is the policy of the Department to deal only with the specific terms of any application, and often in response to a "fishing application" by a developer seeking to gain any advantage that he can, that would not be the impression conveyed to an inexperienced property developer.
           There would appear to be some general understanding within the experienced development industry that, although refused, it may be possible to seek a more positive response subject to suitable negotiations. Such applications and responses by Council and Main Roads are seen in the spirit of "bartering", or more commonly referred to as "horse trading", a culture fairly prevalent in the development industry.
           However, it is not the role of this Court to anticipate the mind or the motives of either party in this matter, but to decide on the evidence supplied. In hindsight, it may have been more appropriate had the formal response from Main Roads, and the Council, provided guidance to the claimant that, whilst the application in this current form would not allow any direct access to the service road, some alternative arrangements may possibly have been considered.
           In respect of access from the service road, there is also a difference between the northern and southern parts of the subject land. To the south there is also the physical difficulties of obtaining access because of the now proposed 29-metre batter bank in the after situation. Formerly, the proposed access road to be constructed by the claimant would have been near grade with minimal physical access difficulties.
(6.2)The Evidence of Mr Campbell –

In respect of any former direct physical access from the subject land to the Pacific Highway, Mr R Campbell, project manager (pre-construction) with the respondent, gave evidence that such former access tracks had been formally and physically closed on a number of occasions as part of the respondent's policy of restricting access to the Pacific Highway. While Mr Carr argues that he had in fact used such an access track to the old Bullens Lion Park facility in order to communicate with his caretaker in October 1997, after the tracks were supposed to have been closed, and following the construction of the Computer Road interchange about four to five years previously, that would appear to have not had any legal sanction. I see little weight to the claimant's case from such a perspective.
Another aspect of Mr Campbell's evidence involves advice that drawing No. 10879 shows that the old access to the highway on the west opposite to Burnside Road has now been removed, and a new bridge over the widened highway built alongside the location of the old Computer Road bridge to the south. Mr Campbell also advises that the old overpass at Burnside Road had now been replaced by the upgraded overpass at Computer Road, which virtually replaced the two former overpasses (transcript p.377). There is a grade-separated interchange at the Burnside Road location. As a consequence of that rationalisation, the service road alongside the highway gained more significance from an overall traffic management perspective. The plans for the new highway were finalised in January 1997, and replaced the original development plans formulated in 1988, both of which established a need for the service road. At the date of resumption I believe there was no direct legal access to the Pacific Highway from the subject land.
(6.3)The Evidence of Mr Brameld –

Mr RH Brameld, a consulting traffic engineer for the claimant, argues that in his opinion there is evidence to indicate that in the pre-resumption situation direct access to the proposed service road specified in the consent order, pursuant to the former rezoning, would have been implied. He bases his opinion upon the wording of item 10 of the consent order which states:
"10.The appellant shall construct a kerb and channelled service road from Mulles Road to Stanmore Road to the satisfaction of the Shire Engineer and Main Roads Department, including upgrading of the existing road and replacement of the existing timber bridge."

Mr Brameld then concludes from the subsequent post-resumption applications that direct access to that State-controlled service road would now be denied and "access to the site is to be via the proposed or existing Council local network." (25 November 1997) The later application approval on 7 July 1998 replaced the former direct charge for specified roadworks with a request for a traffic impact assessment.
In arriving at his conclusion that direct access would be allowed in the pre-resumption situation, Mr Brameld draws support from existing direct access to lots and showrooms at Yatala to the north; and from "standard specifications and drawings" by the Gold Coast City Council (Exhibit 23) which show typical cross-sections for industrial precincts for industrial collector roads for traffic volumes of between 3,000 and 12,000 vehicles per day, a figure projected by Main Roads' studies for the subject area service road. The standard showed the need for kerbing and channelling, and graded entrances to properties (maximum grade 1 in 10). Those drawings, in Mr Brameld's opinion, indicate that direct access to such roads would be approved. Mr Brameld also argues that for an anticipated expenditure of providing such a service road at up to $1,000,000, any developer was likely to seek direct access in order to justify his expenditure.
(6.4)Evidence of Mr Beard –

Mr CL Beard, a consulting engineer for the respondent, argues that the development of the service road by the respondent has changed the development potential for the claimant, as it has removed one of the external difficulties confronting staged development of the subject land. He argues that prior to the resumption the requirement of the Court consent order to build a service road and to contribute towards the highway costs totalling $215,184 were key initial financial imposts which inhibited development.
           With the new service road in place, Mr Beard claims the subject land will now have access to a more important traffic route, as the service road is now part of a "system of continuous service roads to carry substantial volumes of traffic making shorter trips within and between areas of urban development".
           In his testimony Mr Beard further argues that, while he has no experience of whether the respondent would have approved direct access to the proposed service road at the time of the rezoning application in 1989, he was confident that in the immediately prior situation in 1997 he believes individual direct access to all lots fronting the service road would not have been approved. However, he concedes that the proposed kerbing and channelling specified in the consent order for the service road is suggestive of some direct access of some form or other. From his extensive experience in negotiating alternative access on other developments, Mr Beard argues that it would have been possible to negotiate some shared access arrangements for lots fronting the service road, in either the before or after situation.
           Mr Beard was also confident that an access would have been approved for the several internal access roads onto the service road in both the before and after situations. Mr Beard bases his conclusions upon his understanding of the heightened sensitivity of the respondent over recent years to the role of service roads in overall traffic generation. Any access approved would, of course, be subject to a developer demonstrating the satisfactory nature of the shared access proposed, as a result of a traffic impact analysis. He further argues that if it was then demonstrated that there was no alternative access available, the respondent invariably insists on one point of access for the entire development (transcript p.302). Mr Beard further supports the view that the requirement for a service road contribution by the claimant was reasonable, even if no direct access was allowed, in view of the overall traffic support that service road provided to the subject land.
           In summarising his opinion, Mr Beard believes that, subject to further negotiation, the two access road intersections, and a restricted number of shared direct accesses would be approved at least for the northern part of the land. He sees the difference between the need for the service road in the "before" and "after" situation is one of gradation. In the before situation with the existing four-lane or six-lane highway, the highway interchanges were relatively closer than is now required in the upgraded eight-lane highway configuration, which also has a higher design speed. For this reason, movements along the new service road will be longer and of greater volumes.
           Mr Beard supports that the wording of the rezoning and subdivision applications, and the official responses from the respondent to the latter, reflects his understanding of the current negotiating arrangements extant in the development industry. However, he concedes that it would have been more appropriate if the responses from the respondent had provided some further indication that access may be considered if it can be demonstrated that "such access would be safe and operationally acceptable". The key to further negotiations was always the submission of a Traffic Impact Assessment, which, in the current matter, would reflect traffic generation figures typical of a medium size shopping centre, and is therefore an important factor for consideration. Mr Beard argues that subject to a suitable Traffic Impact Assessment statement, the majority of development applications are resolved without further legal confrontation.
(6.5)Evidence of Mr McAnany and Mr Just -

Mr MF McAnany, a consulting civil engineer for the respondent, also gave evidence that, in his opinion, prior to the eight-lane highway scheme, it would have been difficult to argue against some form of limited access to the service road, and also for internal access roads to link the service road, and for the linking of the northern and southern parts. Mr McAnany therefore concludes that in the before situation the conditions of the consent order were likely to have been an ongoing requirement for development by Council and Main Roads.
The possibility of the claimant seeking an alternative internal collector road system, if he was unable to negotiate the suitable direct access to the proposed service road, was also canvassed by Mr GJ Just, a consulting civil engineer for the claimant. Such a road could have been achieved by turning the proposed internal roads into cul-de-sacs, and seeking a single point of access to Mulles Road. That would have overcome any need for the developer to seek direct access to the service road, and also provide direct access to both sides of the internal collector and access roads.
It was agreed that such a strategy could be part of any negotiation with Main Roads and Council for some form of access to the service road. Mr Just concludes that it would not be unreasonable for the claimant to "expect Council to meet part of the costs of the local road network", although that had not been included in the consent order for the rezoning. Mr Just, however, concedes that the overall planning advice of the traffic experts would be the critical factor in such a proposal.

Upgrading the Service Road -
The direction for requirements for the upgrading of the service road is to be found in Condition 10 of the Planning and Environment Court order of 25 August 1992 which states:
"10.The applicant shall construct a kerb and channelled service road from Mulles Road to Stanmore Road to the satisfaction of the Shire Engineer and Main Roads Department, including upgrading the existing road and replacement of the existing timber bridge."

At the date of that order the understanding of each party, and the Court, would have been that the northern part of the proposed new service road had been part of the old Pacific Highway which had ceased to be used as a highway for some years. The southern part of the service road was virtually non-existent at that time. It is agreed that the newly constructed road by the respondent is to be a superior standard to that intended in 1992, however, it does not provide for full-length kerb and channelling along its length. There is no disagreement between the parties in respect of the overall length of the service road (about 1.9 km), or that part which was formerly part of the old Pacific Highway north of Sandy Creek (about 0.85 km). It is also agreed that the old existing timber bridge at Sandy Creek would need to be replaced by concrete pipe culverts with wing walls and aprons.
However, the parties diverge in respect of the extent of work involved in the provision of the access road. Firstly Mr Just argues that, because the respondent had reviewed the need for service roads on both sides of the new eight-lane highway, he had accordingly upgraded the standard of road required for the service road, and in Mr Just's opinion the initial primary purpose of the service road had been superseded. He concludes from that observation that it would be inappropriate for the respondent and Council to continue to require the claimant to meet those formerly defined costs, while at the same time prohibit direct access to the new service road. To support his conclusion, Mr Just refers to the "Pacific Motorway Impact Management Plan – Logan Motorway to Pappas Way, Nerang", although he provides no documentation of that plan except for the detailed engineering drawings.
(7.1)The Area North of Sandy Creek (Lot 1) –

There are two approaches to upgrading this part of the service road. Mr Just has concluded that in the before situation the existing pavement for this part of the old Pacific Highway would have continued to be suitable for heavy traffic, and he has allowed to upgrade the old road on the northern part, and completely reconstruct the southern part, with kerbing and channelling on one side. Mr Just based his estimate upon basic unit costs supplied in Mr McAnany's report (Exhibit 6), in order to provide a direct comparison of the relative quantum of work. Mr Just then uses his own estimate of quantities and scope of work based upon upgrading the old pavements, to arrive at his overall costs for the entire basic service road of $748,014, plus professional fees. Both Mr Just and Mr McAnany estimated the costs of a basic service road, and not the superior service road now being built by the respondent, and Mr McAnany adopted tender unit rates achieved on other contracts in the area during 1997. Both engineers excluded other internal development costs and road widening as they would be similar in both the before and after situations.

           In his assessment Mr McAnany allowed for the complete reconstruction of the old Pacific Highway, as he considered the old pavement to have been substandard and in poor condition. Mr McAnany's estimate for the comparable basic service road to that of Mr Just was $947,228, plus professional fees (11%). His major difference with Mr Just lay in the allowance for sub-grade and base courses and the single coat seal under the asphaltic concrete.
           On the photographic evidence supplied, it would appear that the old Pacific Highway was in need of repair, although neither engineer had sought the assistance of borehole samples to justify the divergent opinions on the nature and condition of the old pavement, and whether it had deteriorated such as to need major reconstruction. The weight of evidence would appear to support Mr McAnany's more conservative approach for the intended use as a service road for heavy industrial transport purposes.
           As a further check against the possible costs for less extensive upgrading of the old Pacific Highway pavement, Mr McAnany provided an exercise allowing for an overlay only on the old pavement (Exhibit 40), totalling $844,158, plus professional fees (11%). He confirms that in that hypothetical case he had allowed a premium on the earthworks to reflect the narrowness of the pavement within which the developer would need to work on both sides of the pavement. Any costs of kerb and channelling would be in addition to those costs. In spite of providing that amended figure, Mr McAnany confirms his previous estimate of costs as the most reasonable figure to adopt. However, he concedes that it would be less costly for the developer if the kerb and channelling was installed during the actual construction of the service road, an option no longer available to the developer.
(7.2)The Area South of Sandy Creek –

Both Mr Just and Mr McAnany agree that in the pre-resumption situation the developer would need to fully construct a new service road south of Sandy Creek, with kerb and channelling; and also with road widening and drainage along the frontage of the proposed new Lots 46 and 50 to 53 as shown on the "pre-resumption hypothetical subdivision plan" prepared by Mr McAnany (4034-C1). Accepting that certain items common to both the pre and post development would not change, those have not been costed.
The additional costs associated with the road widening were estimated at $100,917 plus professional fees of 11%, or $115,000. In the post-resumption situation all of the service road costs will be provided by the respondent. It was also agreed by both parties that at all times, both in the pre-resumption and the post-resumption situation, the proposed service road was a State-controlled road under the responsibility of the respondent.
The major disability for the developer in the post-resumption situation in this southern area lies in the very large physical barrier that the new alignment of the service road creates. An approximate 29 metre batter bank virtually eliminates direct access to the service road in that area. In the pre-resumption situation the proposed service road would have been near grade to the adjoining lots, and physical access would have been feasible.

Traffic Impacts –
A key issue in this matter is also the likely contribution to the overall traffic generation in the area by the subject development. In recognition of that contribution the wording of the consent order in Item 11 states:
"11.The appellant shall contribute to the respondent the sum of $215,184 towards the proposed Main Roads Department roundabout at Stapylton and Main Roads Department overpass at Burnside Road, such payment shall be made prior to the respondent being required to either seal any survey plans or issue any building approval in respect of the said land or any part thereof, which ever event is the earlier in time."

The intentions of that order identify that such a payment is only a contribution towards the construction of those highway works, and the timing of any such payment is to coincide with a later action subsequent to the rezoning. As the Court consent order then became the decision of the Council, the rezoning was subsequently proceeded with and formally gazetted on 17 December 1992. The conditions of that rezoning therefore continued to require payment of that contribution towards Main Roads' costs of the highway and its associated works.
A matter which may have some impact upon the requirements of the consent order of 1992 could be the new policy direction of 21 January 1997 issued by the Main Roads in respect of the former collection of developer contribution levies. However, that policy document relates to the former method adopted by Main Roads of seeking development impacts upon the road network on the basis of assessed headworks charges, instead of assessing the specific impacts of the development as a result of a traffic impact assessment. The policy clearly emphasised that the Main Roads was reverting to the original system of individual traffic assessments, as identified in the consent order of 1992 for the subject land. In this matter there was no suggestion that a headworks levy had been applied to the subject land, and the policy statement of 21 January 1997 has no impact upon the conditions of the consent order in that respect.
However, the policy statement establishes the need and procedures for consideration of a traffic impact analysis, and is the guiding policy indication for potential developers and departmental staff, where a State-controlled road is involved, particularly under s.40 of the Transport Infrastructure Act 1994. Section 2.2 of that policy statement establishes the need for a detailed assessment of potential impacts in a Transport Impact Assessment Study (TIAS).
Referral guidelines are contained in s.3 of the statement which notes at p.8:
"It is important therefore that rezoning applications document the proposed development and conditions are carefully framed to allow subdivision stages to proceed wherever feasible without subsequent referrals. However, it is recognised that where the appropriate rezoning has predated assessment of reasonable development conditions then these need to be applied at the subdivision state."

The implications of that latter statement to the current matter clearly indicate that the rezoning of the subject land in 1992 was not the final advice of Main Roads in respect of traffic requirements for the subject land.
           Julie K Schuler, a planning engineer for the respondent, provided evidence that as area engineer (Gold Coast) she was involved with the assessment of development applications on the subject land, although she had not worked in the area at the time of the rezoning application in 1989. Ms Schuler also advised that the existing service road (Elderslie Road) at the northern end of the subject land had been declared an access limited road by Government Gazette of 14 March 1997, prior to the resumption date.
           It was Ms Schuler's evidence that, in her opinion, the respondent was likely to have no objection in principle for access to the service road in either the pre or post-resumption situation by an internal road system, subject to suitable design proposals, as well as some rationalised direct access to lots fronting the service road, in order to reduce the number of conflict points from a safety perspective. She concedes that the physical constraints in the southern part were greater in the post scenario.   Ms Schuler also advised that part of the difficulty experienced in satisfactorily resolving the traffic solutions for the subject land lay in the inadequate traffic impact analyses provided with the application submitted.
           Ms Schuler confirms that under the current policy statement any development application in the pre-resumption situation would require a separate traffic impact analyses, which would have addressed the traffic impacts outlined in the consent order of 1992 ($215,184), and reviewed those in terms of the needs at that time. That was in line with the Minister for Main Roads' decision of 22 November 1996 that the Department was to assess development applications on the basis of individual applications and site specific conditions. (Transcript p.366)
           It was also argued by Mr Brameld that at the date of resumption (5 September 1997) the roadworks specified in the consent order of 1992 had been constructed, and those works would not therefore constitute an individual site-specific requirement at that time. However, he also argues that because of the increase of approximately 17,000 vehicle movements per day, it was likely that there would be a need for further upgrading of the nearby roads, and thus an ongoing need for a contribution. Mr Brameld concludes that the post-resumption situation still left the developer exposed to a contribution of the magnitude of $215,814 estimated in the Court order. However, there was no documentation by either party of the actual quantum of any contribution likely to be required in view of the then current inadequate traffic assessment supplied by the post-resumption subdivision applications.

Exposure –
Another issue is the matter of exposure of the subject land to both passing traffic, and also the noise generated by that traffic. Firstly in respect to the impact of noise on the subject land, it is the unchallenged evidence of Mr Frits Kamst, a consulting engineer with expertise in noise aspects, that noise level predictions indicate little or no difference in the noise level in terms of distance from the eastern boundary in both the pre and post-resumption situations. For the purposes of this matter there are no noise implications involved.
           The key impacts of the exposure of the subject land relate to its comparison with sales of comparable properties, the impact of the loss of signage upon the subject land, and the benefit that exposure to passing traffic might bring to the type of industrial development proposed for the subject land.
           It is agreed by both valuers that the southern part of the subject land has good exposure from the highway in both the before and after situations. The exposure to the northern part beyond Sandy Creek is more restricted through narrow bands of trees until it disappears behind timber to the east of the subject land. It was also agreed that in the pre-situation the impact of the 10-metre buffer strip would have further reduced the exposure to the part north of Sandy Creek.
           However, Mr Wood argues that the southern part, particularly since the earthworks in the post-resumption situation, has even marginally improved the exposure such that from passing traffic on the highway there are good views of most of the southern area. However, he concedes that the exposure of the southern part is physically restricted from the new service road by the presence of the high batter bank (29 metres) along the eastern side of the subject land. It was also agreed that exposure to lots to be developed along the western (or rear) boundary (more than half of the lots) would only have limited exposure, if any, from the highway.
(9.1)Loss of Signage –
Part of the claimant's case also relates to a loss of signage as a consequence of the resumption of land for the new service road. Prior to the resumption there were two major highway signs strategically located on the southern part of the subject land. Both signs had excellent exposure to the highway. The larger sign was a V-splayed sign of dimension 12.6 metres x 3.2 metres, including a panel static sign and a panel trivision sign. The sign was leased to 3M Australia Posters for a term of three years from 21 March 1995 at an annual rental at resumption date of $27,633.24 (indexed by CPI annually).
           The smaller sign was a single sign leased to Cody Outdoor Advertising from 22 February 1995 for two years plus two year option, at an index to market rental which was $10,000 at resumption date. Both signs have existed on the land prior to the claimant acquiring the property in 1989, and the new leasing arrangements were renegotiated quickly in 1995 at increased rentals, indicating continued interest by the lessees. While the claimant now seeks compensation for loss of the signs, it is noted that in response to a request from Main Roads as to whether the claimant wanted to relocate the signs on the subject land, or the resumed land, the claimant advised on 24 October 1997 that he had no wish to have the signs relocated on the property.
           In seeking to estimate the loss of signage Mr Love, a consulting registered valuer for the claimant, capitalised the net income per annum at a higher risk level adopting a capitalisation rate of 20%, and a capitalised loss of $188,000. He based that capitalisation rate of 20% upon the premise that current Main Roads policy would inhibit further competition to the signs, and reflect some risk in gaining subsequent approval to relocate the signs in the event of further subdivisional development. Mr Love saw any ongoing relocation of the signs as an income stream in perpetuity for the owner. Mr Wood, a consulting registered valuer for the respondent, by comparison took note of the escape provisions for the lessee in the leasing contracts, the rights of Cody Outdoor to renegotiate a sale in the event of redevelopment of the site, the possibility of problems in gaining Council approval for relocation of the signs in view of Council and Main Roads reluctance to approve highway signs, and concluded that it would not be prudent to capitalise the rentals in perpetuity. He accordingly determined compensation to represent the present value of the annual rent at $37,500 for three years at 10% or $93,000. Mr Wood based his capitalisation rate of 10% upon comparisons at Oxenford at 20.7%, for an advertising sign; 15% on another Pacific Motorway resumption for a sign, where the owner retained certain rights for his own sign; and another retail sign at Oxenford where a rate of between 14% and 15% was applied.
           The low rate of 10% also reflected (in Mr Wood's opinion) the length of the term and limited risks involved. He saw Mr Love's capitalisation rate of 20% as being at the higher end of the risk spectrum, and assumed perpetuity of the sign, which Mr Wood concludes is inappropriate, in view of the need to relocate the sign at some time due to redevelopment. Mr Wood saw Mr Carr as a buyer whose prime intention was to hold the land for future development, and as such he argues that the rentals for the signs were an advantage to him for that purpose.
           However, Mr Wood was not aware of Mr Carr's decision not to seek relocation of the signs, even though Main Roads had indicated that they would not resist relocation, in spite of their normal policy to do so. It was also the advice of Mr Challoner that he believed from his experience, that Council's policy was likely to have allowed the relocation of the highway signs, in spite of their stated policy to refuse new signs, particularly where there was some action to remove the former signs by actions outside the control of the developer. As it was a policy of the Council, there was some room for latitude in Council's discretion making processes. That was in spite of Council's intention to not only limit highway signs, but also to reduce them. Mr Challoner noted that each case was determined on its own merits.
           Mr Love concluded that if it had been possible to relocate the signs back onto the subject land, then it would affect his post-resumption value, after allowing for a disturbance factor for the period of time that the signs were not available for exposure. Mr Love also concedes that his capitalisation rate of 20% is high, and traditional retail and commercial returns reflect between 10% and 14%. He also notes that in an initial assessment lodged with the claim for compensation, another valuer on 19 September 1997, had originally supplied a rate of 15% and in a revised claim on 29 April 1998 another valuer had applied 10%. Mr Love felt a time frame of five years was appropriate for the sign in view of its lesser investment potential compared to other properties. Mr Love was not party to those earlier assessments of the loss of signage.
Removal of Fill –
There was suggestion that fill material had been removed from the resumed land subsequent to the date of resumption (5 September 1997), and prior to the contract of sale of Lot 3 on 29 October 1997. Mr Carr confirmed that no payment or royalties had been paid to him for any of the fill. Mr Campbell confirmed that subsequently further fill had been taken for use on the highway works.
           The subsequent amended claim for compensation by the claimant in the matter of fill material removed was noted at $101,813. While Mr Gallagher agrees in the quantum of fill material involved at that figure, he argues that there is no concession as to liability for any compensation for that amount as a separate item of compensation. Mr Gallagher further argues that, as there was no demand for fill material in that area in the pre-resumption situation, the fill material should be valued only as integral to the overall value of the land, with all its other potentials.
           The key to determining whether the fill material had any separate marketable value is to analyse the demand for fill in that area at that time. To support his argument Mr Gallagher notes that in the after situation it is not allowable to draw upon the demand for fill material associated with the development needs of the current upgrading of the eight-lane Pacific Highway and its associated works, in accordance with precedents found in the decision of the Privy Council in Pointe Gourde Quarrying and Transport Company Limited v. Sub-Intendent of Crown Lands [1947] AC 565. Clearly, any demand for fill must be associated exclusive of any works on the highway.
           In his assessment of the value of the fill material lost, Mr Love had some discussions with an earthmoving contractor, but made no other investigations as to demand for fill in the pre-resumption situation. In his assessment of the potential demand for fill, Mr Wood concluded that there was no market for fill in the pre-resumption period, following examination of Council approvals for quarrying operations in the area, which are an essential requirement before fill or excavation of major consequence can be undertaken.
           The Council records revealed one excavation approval in 1996; one in 1997 (subsequently withdrawn); and six applications (including the subject lands) subsequent to the resumption in 1998. Of those six applications, one was refused, three were for sand at Jacobs Well, and two, including the subject land, and Sale 7 (the Pace sale) were approved. Demand to change levels totalled one in the before situation and two in the after situation. On that basis Mr Wood concluded no real demand for fill exclusive of the highway works in the before situation. Mr McAnany also discounts that the demand for fill in the Yatala area, or for the Tweed Heads area, could be satisfied from the subject land, in view of deposits at Reedy Creek.
           In support of his contention that, in the absence of demand, there should be no double recovery for the value of the land, and a separate value for the fill material, Mr Gallagher refers to the text "The Law of Resumption and Compensation in Australia" (1998) by Marcus Jacobs QC Law Book Company, p459.   A discussion of that principle is addressed in s.14.
The Methods of Valuation –
Both Mr Love and Mr Wood have adopted the before and after method of valuation to determine loss to the claimant, although the valuers have taken different approaches to analysing those values.
(11.1)The Before Situation –
Mr Love has sought direct comparisons with a range of sales of industrial lands in the Yatala area, noting the rates per m² for the total site areas, and also the analysed lands suitable for industrial development purposes. The key comparison lies with the sale of some 53 ha to the north of the subject land, which is to be developed as the future Brisbane Fruit and Vegetable Markets (Sale 4). Two sales to the east of the highway (Sales 7 and 8) were seen as superior due to size, and in respect of Sale 7 to also have superior exposure. Other peripheral sales in Christensen, Quarry and Burnside Roads were also seen as far inferior and much smaller than the subject land. Mr Love determined a value in the before situation for the 89.68 ha at $9 per m², or $8,071,200. Mr Love made no allowance for the 1.76 ha to be offered for road which he saw as normal type of contributions anticipated by prudent purchasers for development purposes.
           Mr Wood adopted direct comparisons of sales, using mainly the sale of the market land adopted by Mr Love, but analysing that sale at $8 per m². He then determined a "before" valuation of $7,174,400, from which he then deducted an amount of $140,800 for the 1.76 ha of land necessary for dedication for the service road, giving a final before valuation for the subject land at $7,033,600.
(11.2)The After Situation –
Mr Love has sought direct comparisons with the actual sales of the three management lots (Sales 1, 2 and 3 – 81.16 ha) into which the subject land was subdivided in November 1997. Lot 1 was sold to a separate owner, while the southern Lots 2 and 3 were sold to companies with a common director (Stephens), and were therefore seen to be related purchases. After allowing for some minor adjustments for holding costs and subdivision costs, Mr Love valued the combined Lots 1 to 3 at the total sale price of $6,700,000 ($8.25 per m²), which he saw as prudent arm's length transactions. Mr Love made no allowance for any benefit of not having to build the service road due to the lack of any direct access that was to be allowed to that road.
           Mr Love concedes that a prudent purchaser would have been aware of the requirements of the consent order in respect of the service road, but argues that a different internal development would have been achieved if lots could have been afforded direct access to the service road. Because of the now apparent restriction on access to the service road, he provides for no enhancement to the subject land as a consequence of that service road now being provided by Main Roads as part of the highway network. He believes those matters would have been considered by the purchasers of Lots 1 to 3 following the resumption, including the other consent order requirements for headworks charges, etc. He argues that earthworks would be less in the pre-resumption than the post-resumption situation.
Mr Wood, by comparison, rejects use of those three sales of the subject land as he saw those sales as out of line with the market at that time. Mr Wood concedes that normally the best evidence of value is the actual sale of the subject land, and that the three management lots had, in effect, sold not long after the date of resumption (5 September 1997), in October 1997 (Lot 3), and December 1997 (Lot 1), and Lot 2 in April 1998. However, in view of the sales to the east of the highway (Sales 7 and 8) Mr Wood believes that all three sales of the subject land were lower than what should have been obtained.
In his schedule of sales analysed, Mr Wood notes that his Sale 4 (Lot 2) and Sale 5 (Lot 1) appear to be low in comparison to other lands, but he makes no other specific comment in his analysis as to why he rejected those sales of the subject land, a matter discussed later in s.12. In his final assessment of the subject land in the after situation, Mr Wood concluded a value of 81.16 ha at $8 per m² or $6,492,800, to which he then adds certain enhancements as a result of the scheme as follows:
·    Contribution to interchanges  $215,184
·    Construction of service road  $1,051,423
·    Less reduced access to Lots 46 and 51 to 53
estimated at   $75,072
Total "After"     $7,684,335
(11.3)Analyses of Before and After Situations –
Mr Love concludes a loss of $8,071,200 less $6,700,000 or $1,371,200. Mr Wood concludes an enhancement of $7,033,600 less $7,684,335 or enhancement of $650,735.
(11.4)Before and After Hypothetical Development –
To support his estimate Mr Love draws support from an analysis of a hypothetical development of the southern part of the subject land (Lots 2 and 3), which he argues supplies potential returns as follows:

Before
After

Area 45.86 ha 37.34 ha

Number of Lots 17 11

Gross Realisation     $20,311,000 $14,528,000

Less costs of sale etc.         $947,995      $675,760

Profit and Risk      $3,556,470
           (22.5%) $2,308,707
         (20%)

Sub Total     $15,806,535 $11,543,533

Less construction costs, headworks, rates, interest, acquisition costs, holding costs, etc.
Resultant Value of Land
     $3,933,863

$2,736,038

Difference

     $1,197,825

While Mr Love concedes that there would be some diminution in value to the northern part (Lot 1) due to reduction in direct access to the service road, and the increased risk, he concludes that the hypothetical subdivision supports his estimated loss of $1,371,200 as reasonable.
Mr Gallagher, however, rejects such a method of assessing a hypothetical development on only part of the land, which he argues is the best part of the subject land anyhow. He also challenges the predicted demand for industrial lots adopted by Mr Love, who concedes that he had not analysed demand for new lots in that area. Mr Gallagher notes that in the intervening period since the claimant purchased the land in 1989 until the date of resumption, there had only been one failed conditional contract of sale for the subject land in 1994 (Exhibit 39), suggesting little demand in that period.
The matter of potential demand for subdivided lots is a principle to be considered when examining the relevance of the use of a hypothetical subdivision approach. It has been held that the hypothetical subdivision technique should not be used where the land is not immediately ripe for subdivision. That was held in Redeam Pty Ltd v. SA Land Commission (1977) 40 LGRA 151, where Jacobs J said at p.154:

" For reasons which will appear in due course, I have dealt at length and in detail with a description of the subject land and its potential for future subdivision, but the parties and their expert valuers now agree that, for the purposes of valuation, the land should not be regarded as ripe and ready for subdivision at the date of acquisition, or within a short predictable time thereafter, and that it would not be correct to attempt to ascertain the value of the land upon the basis of its value in hypothetical subdivision. The rejection of that method of valuation, in the circumstances of this case, is plainly correct."

That principle was also followed in Crompton v. Commissioner of Highways (1973-76) 32 LGRA 8, where at p.20, Wells J noted the findings of Turner v. Minister of Public Instruction (1956) 95 CLR 245; and also in Brewarrana Pty Ltd v. Commissioner of Highways (No 1) (1973-76) 32 LGRA 170, where Wells J said at p.181
" The evidence leaves me in no doubt that, once again, the question resolves itself into one of degree. Plainly, a calculation based on a hypothetical subdivision will not be vitiated simply because some very slight delay might be experienced before realization could begin, but an inordinate delay of, say, several years could, equally plainly, render the whole undertaking so speculative that a conclusion as to value would be wholly unreliable. In between those two extremes, the skilled valuer will have to decide at what stage the speculative element looms so large that the method becomes unsafe. His decision will depend on all the circumstances of each particular case."

The Full Court of the Supreme Court of South Australia also followed that principle in Cienda Pty Ltd v. South Australian Urban Land Trust (1988) 66 LGRA 360, where the subject land in that matter was seen to have a ready potential for subdivision, but there was still an element of futurity about that subdivision. In examining that difference in the land Jacobs J drew comparison with the decision of Redeam v. SA Land Commission (supra), and found at p.364:
" The present case is different again, for although the subject land has the benefit of residential zoning which was absent in Redeam, the valuers are still agreed that the most reliable approach to valuation is on a 'broadacre' basis rather than upon a hypothetical subdivision, presumably because there is still an element of futurity about subdivision such as to introduce an unacceptable level of uncertainty into a valuation upon that basis."

In view of the apparent lack of demand over a period of several years for the subject land in the current matter, I believe there is also uncertainty about whether it was ripe for development at the date of resumption.
           In simplistic terms Mr Gallagher argues that any impact of any potential loss of direct access to the service road could be seen in the perspective of some direct access at a cost of approximately $1,000,000 in the "before" situation, to build the road, compared to possibly no access to the service road, but a reduced cost of approximately $1,000,000 in not having to build a service road in the "after" situation. Mr Love rejects that comparison which he argues is too simplistic an approach. Mr Love concedes that it is important to demonstrate that a market existed for the subject land in the before and after situation, and argues that the three sales after the resumption demonstrate the latter.
           In the light of such paucity of sales, Mr Gallagher also challenges the profit and risk factor allowed of 20%, which contemplates a rate of sale of one lot each month in the after situation. In cross-examination Mr Love concedes that would appear to be optimistic based upon the sales in the nearby Government estate to the south, or in the smaller industrial estate at Bethania, where there were six sales in 1996. Mr Love concedes that both his profit and risk factors of 20% and 22.5% might be optimistic, but he insists that the risks, while being higher, would not be as great as the 35% to 40% suggested by Mr Gallagher.
           Mr Wood concedes that if no direct access was available to the subject land from the service road, then he would need to reconsider his valuation. However, he was assured by the respondent that such a situation was not the case, in spite of the letters to the contrary. He therefore chose to adopt the enhancement benefit for the service road at $1,200,000 as a quantifiable amount, as distinct from any inchoate benefit that might accrue to the land, in view of direct access being denied to the small percentage of new lots fronting the service road. He notes that the service road had no direct impact upon direct access to the great majority of rear land that would need to have direct access to internal access roads. To provide for any benefit to the claimant, Mr Wood has allowed for a reduction of 20% for loss of direct access, which he believes is very generous. In view of the difficulties identified in the hypothetical development proposal I gain little assistance from that approach.
(12)Comparison of Sales –
To support his analysis Mr Love provides the following sales of industrial lands:
·Sale 1 – (Lot 1 on SP 101442 – Shellray Pty Ltd to Dynacomp Pty Ltd).

This is the part of the subject land (43.82 ha) north of Sandy Creek which sold in December 1997 for $4,000,0000 ($9.13 per m²).

·Sale 2 – (Lot 2 on SP 101442 – Shellray Pty Ltd to Springwood Developments Pty Ltd).
This is part of the subject land (20.92 ha) south of Sandy Creek which sold in April 1998 for $1,260,000 ($6.02 per m²).

·Sale 3 – (Lot 3 on SP 101442 – Shellray Pty Ltd to Gail Stephens).

This is the remainder of the subject land which sold in October 1997 for $1,440,000 ($8.77 per m²).

(Sales 2 and 3 were analysed at $7.23 per m²)
·Sale 4 – (Lot 2 on RP 6835, Lot 6 on RP 80557 and Lot 2 on RP 839016 – Stanmore Road, Yatala).

This is the sale to Landacq Limited for a future fruit and vegetable markets development of 41.64 ha. Allowing for open space contribution a development area of 32.0 ha is available. The land is zoned partly "Rural" and partly "Commercial" industry, and is partly flooded. The sale sold in July 1996 for $2,500,000 ($6 per m²), and was analysed at $7.80 per m².

·Sale 5 – (Old Pacific Highway, Yatala – Lot 19 on RP 815181, Lot 20 on RP 815182 and Lot 21 on RP 815183.

This is a 12.16 ha parcel zoned part "Commercial Industry" and part "Open Space". After allowing for Open Space contributions and flooding the potential development area is 10.9963 hectares. The sale was negotiated to Landacq Limited on 11 October 1996, and finalised on 10 February 1998 at $2,400,000 ($19.74 per m²), and was analysed at $21.83 per m² as an adjoining owner purchase.
·Sale 6 – (Old Pacific Highway, Yatala – Lot 19 on RP 815181, Lot 20 on RP 815182 and Lot 21 on RP 815183).

This is a former sale of Sale 5 which sold to Pace Developments in December 1996 for $900,000 ($7.40 per m²), who then resold the site on as Sale 5. (Sale 6 was analysed at $8.18 per m²).
·Sale 7 – (Pacific Highway, Stapylton – Lot 231 on SP 101450)

This is a 17.0 hectare part "Commercial Industry" and part "General Industry" site, sold to Ritchie Brothers Properties Pty Ltd in December 1997 for $3,500,000 ($20.59 per m²), which was analysed at $20.59 per m². The sale is on the east of the highway at the corner of Burnside Road, and adjoins a major interchange on the Pacific Highway. The sale has excellent exposure.
·Sale 8 – (Pacific Highway, Stapylton – Lot 1 on RP 169920 and Lot 232 on SP 101450).

This is a 19.34 hectare parcel adjoining Sale 7, zoned part "Commercial Industry" and part "General Industry". About 18 hectares is useable, and the balance is lost to floodways. The land has excellent exposure and sold in February 1998 for $2,500,000 ($12.93 per m²), and was analysed at $13.89 per m².

In addition to the above the following peripheral sales were analysed, but were seen to be far inferior and much smaller, and therefore of little assistance:

Sale Location Area Analysed rate per m²

9 Pacific Highway, Yatala 3.914 ha                  $13.16

10 Elliott Drive, Stapylton    10.4 ha                  $ 7.46

11 Burnside Road, Ormeau      9.5 ha                  $10.26

12 Burnside Road, Ormeau    4.18 ha                  $ 7.85

13 Quarry Road, Stapylton    4.18 ha                  $ 8.19

14 Elliott Drive, Stapylton      3.7 ha                  $32.50

15 Pacific Highway, Yatala        4 ha                  $37.50
In support of his valuation Mr Wood supplies the following sales:
·Sale 1 – (Stanmore Road, Yatala – Lot 2 on RP 839016, Lot 2 on RP 6835 and Lot 6 on RP 80557).

This is the same sale as Mr Love’s Sale 4 which is the market sale. The rear land is affected by power easements, and Mr Wood saw the zoning as partly "Commercial Industry" (27.485 ha) and partly "Future Urban" (14.155 ha). However it was later confirmed that part of the future industry zoning was incorrect and should be Rural.
Mr Wood analysed the sale at $8.07 per m², which was seen as comparable, although he agrees it does not have the exposure of the subject land.
·Sale 2 – (Old Pacific Highway, Yatala – Lot 19 on RP 815181, Lot 20 on RP 815182 and Lot 21 on RP 815183).

This is the same sale as Mr Love’s Sale 6 and was analysed at $7.40 per m² and is seen as slightly inferior to the subject.
·Sale 3 – (Old Pacific Highway, Yatala – Lot 21 on RP 815183).

This is a 5.12 hectare part "Commercial Industry" and part "Open Space" land, which sold to Landacq Limited for use as part of the markets site subsequent to rezoning for $1,250,000 in October 1996 (analysed at $29.48 per m²), and was an adjoining owner sale, and is not used for comparison purposes.
·Sale 4 – (Mulles Road, Yatala – Lot 2 on SP 101442).

This is the same sale as Mr Love's Sale 2, and was analysed at $6 per m².
·Sale 5 – (Stanmore Road – Lot 1 on RP 101442).

This is the same sale as Mr Love's Sale 1, and was analysed at $9.10 per m².
·Sale 6 – (Pacific Highway, Stapylton – Lot 1 on RP 169920 and Lot 232 on RP 101450).

This is the same sale as Mr Love's Sale 8, and was analysed at $12.93 per m² and is superior to the subject.
·Sale 7 – (Pacific Highway, Stapylton – Lot 231 on SP 101450).

This is the same sale as Mr Love's Sale 7, and was analysed at $20 per m², and is superior to the subject.
·Sale 8 – (Pearsons Road, Yatala – Lot 3 on RP 108562).

This is a 6.79 hectare site, zoned "Rural" within the Frame Industrial Area, and south-west of the Government industrial estate. There are power easements at the rear of the sale, which was analysed at $4.56 per m², and is inferior and agreed as of no real comparison.

Key to the analyses of Mr Love and Mr Wood is their examination of the markets sale (Mr Love's Sale 4 and Mr Wood's Sale 1). While Mr Wood concedes that he had inadvertently shown part of the markets sale as Future Industry, rather than Rural (along the river), it was agreed that the Future Urban would have needed rezoning to be used for future development of the site. It was also agreed that about 12 hectares of the rural land along the river, 1 hectare of Future Urban land in the east of the sale, and a further 5 hectares in the Commercial Industry zoning were all subject to some flood.
That compares to the subject land where only a small area in the north corner was subject to flooding (Exhibit 32). By that test alone the subject land would be superior to the market sale. Even allowing for the larger area of the subject land compared to the market sale, I believe the subject land rate per m² would be superior to the market sale. If that comparison is coupled with the better exposure of the subject land, it is clearly superior to the market sale. However Mr Wood sees the strategic location of the markets land, near the Stapylton interchange, as an important locational advantage, although he concedes that access to Stanmore Road was likely to be restricted and similar to the subject land. Both valuers concurred that the adjoining owner Sale 3 (Mr Wood) and Mr Love's Sale 5 provide little assistance.

Decision:

(13)Value of the Land –
In their adoption of the "before" and "after" method, both valuers have followed well-established precedents in these matters where it has been determined that the "before" and "after" method is preferred for matters of compensation, particularly where there may be matters of enhancement or appreciation in the value of the land. It has particular relevance where part of the land is resumed in the current matter. However it is always open to a valuer to conclude a valuation for compensation purposes on the basis of direct comparison of comparable sales. In fact the "before" and "after" method was rejected in preference to comparable sales in the special circumstances of Daly v. Manly Municipal Council (1983) 50 LGRA 301, at 307.
In adopting the "before" and "after" method it is fundamental that any impact of the scheme, both positive or negative, is to be ignored in determining the "before" value of the land. However in the "after" situation it is relevant to consider impacts of the scheme, either as a matter of injurious affection, or severance where those impacts are negative; or if the scheme adds to the value of the remaining land, then the matter of enhancement is to be taken on notice.
That is identified in the legislation where compensation is to be assessed under s.20 of the Acquisition of Land Act 1967 which states:
"20.(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of the 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. "
In considering the matter of enhancement I note that in the decision of Parkes Development Pty Ltd v. Burwood Municipal Council (1968) 16 LGRA 6, Hardie J noted at p.11:
" As indicated earlier, I am of the opinion that, in determining the compensation to which the plaintiff is entitled, I should take into account by way of set-off that the value of the unresumed residual area would be enhanced by reason of the fact that the council proposed to convert the adjoining disused brick pit and the other land being resumed into a park."
In assessing the enhancement Hardie J added an amount of $20,000 for that purpose to his assessment of the market value of the remaining land after resumption at $45,000.
The extent of the total scheme of works which resulted in the resumption of the land was also seen to be relevant to the enhancement issue, and not just those "works" which were constructed upon the subject land. That principle was addressed in Brell and Another v. Penrith City Council (1965)11 LGRA 156, where Else-Mitchell J, in dealing with a claim by the appellant that the Court should have regard only to the proposed works upon the resumed land, said at p.159:
"… It would have to shut its eyes to the fact that such works were part of an entire project, and indeed it could not take into account the fact of similar works being undertaken as part of the entire project upon the lands resumed from other plaintiffs. In my view this is a quite unrealistic approach to the question of enhancement and one which is not justified by the terms of the relevant section. I find some support for this view in the judgment of Hardie J in Woollams v. The Minister (1957) 2 LGRA 338, at pp. 344 to 346, but I am content to take the section in its literal terms as requiring the Court to have regard to enhancement caused by construction of any works 'on the land taken' and treating the quoted words as referring to the whole of the land taken by the notification of resumption which included the plaintiffs' land."
On the authority of Brell, I would therefore in the current matter accept any possible enhancement to the subject land which occurred in the "after" situation as a consequence of the wider highway scheme, and not associated only with the new service road construction. That principle was also followed in Zoeller v. Brisbane City Council (1973) 40 CLLR 198, at 204; where the Land Appeal Court found that enhancement had occurred in the "after" situation as a consequence of the influence of the proposed new North Pine River Dam.
As a consequence of that assessed enhancement, compensation for the resumption was assessed at nil, similar to that proposed in the current matter. The Land Appeal Court upheld the decision of the President in the Court below, who clarified the meaning of "enhancement" in his decision on Zoeller v. Brisbane City Council (1973) 40 CLLR 24, at 28 and 29; noting that the Courts "have tended to look at enhancement from the underlying scheme of the resumption as an entity just as applies in the Pointe Gourde rule when the valuation of the resumed land is the subject of consideration" (page 29).
A similar finding was also followed in Gilmour Development Pty Ltd v. Commissioner of Main Roads (1977) 4 QLCR 311, at 327. That matter followed the principle discussed in Zoeller, and adopted the "before" and "after" method of assessment. It also noted that the onus is upon the respondent to prove that enhancement has occurred (see Niall v. District Council of Lacepede (1987) 66 LGRA 32 at 40; Zoeller v. Brisbane City Council (supra), at 203; Emerald Quarry Industries Pty Ltd v. Commissioner of Highways (1976) 43 LGRA 273).

That decision followed guidance in Harvey v. Crawley Development Corporation [1957] 1 All ER 504, where Romer LJ said at p.507:
"The authorities to which our attention was drawn establish that any loss sustained by a dispossessed owner (at all events one who occupies his house) which flows from a compulsory acquisition may properly be regarded as the subject of compensation for disturbance, provided, first, that it is not too remote and, secondly, that it is the natural and reasonable consequence of the dispossession of the owner."
That principle was also followed in JJ and MT Stephens v. Council of the Shire of Albert (1992-93) 14 QLCR 356, at 370.
The fact that disturbance should not be seen as too remote, and that it should be seen as a natural and reasonable consequence of the resumption, was also identified in Universal Sands and Minerals Pty Ltd v. Commonwealth of Australia (1980) 30 ALR 637, where the Federal Court said at p.640:
"Disturbance is not a separate head of compensation. In some circumstances, it is a relevant factor in assessing the value of land or an interest in land to the owner for the use to which he was putting it at the date of acquisition. Where relevant, it is calculated by reference to economic loss which can, or should have been, expected to be sustained, or costs which can or should have been expected to be incurred by the claimant as a natural and reasonable consequence of the acquisition."
In concluding that an amount for disturbance should be considered for any loss of fill, its relevance to the compensation relies upon the likelihood that there was some demand for fill in the "before" situation. The fact that the respondent may use any fill material from the resumed land in the "after" situation for filling upon the highway works is incidental to the resumption, and not a matter for compensation. (See Emerald Quarry Industries Pty Ltd v. Commissioner of Highways [No 2] (supra), at 292.)
If I then consider the evidence in the current matter I find that Mr Love's enquiry to one contractor had some level of superficiality, and I am more comfortable with Mr Wood's enquiry of Council records for the period 1996, 1997 and 1998. On the weight of those records, and noting there had only been some increase in the number of licences to quarry or change levels in 1998, subsequent to the date of resumption, I believe it to be reasonable to conclude that, beyond earthworks for the new highways or for relocation elsewhere upon the subject land, any potential for the use of the fill material would have existed within the overall value of the subject land. I see no basis for the awarding of a further amount for disturbance for loss of value to the owner for any loss of fill material.

(15)Loss of Signage –
Before considering the facts of the signage upon the subject land, I note that there is guidance in respect of the extent to which policy statements of Council should be considered in these matters. I note for instance in Corkill v. Hope (1991) 74 LGRA 33, Stein J at page 41 to 44 discussed the implications of a policy statement by the relevant Minister in respect of implementation of the Heritage Act. The issue in that matter involved the exercise of Ministerial discretion as to whether effective logging could be approved in a State forest; and whether the adoption of a policy statement under the Environment for Planning and Assessment Act was appropriate to replace the exercise of discretion that is required under s.136(1) of the Heritage Act.
In his decision Stein J noted that, "a policy may not fetter the discretion conferred on the decision-maker nor may it be inconsistent with the legislation", and "if it be a lawful policy, cannot exclude a consideration of the particular circumstances of the case" (page 40). Stein J found that the Minister applied the long-standing policy of not adopting the use of the Heritage Act where Government agencies were required to comply with other legislation, such as the Environmental Planning and Assessment Act; and further that he did not examine the merits of the application for a conservation order under the Heritage Act. In deciding that the Minister had not properly exercised his discretion, Stein J followed the decision espoused by the Court of Appeal in Rendell v. Release on Licence Board (1987) 10 NSWLR 499 at 503-504:
"A body upon whom Parliament has conferred a discretion must exercise that discretion in accordance with the legislation. The decision maker must not, for the purpose of the exercise of discretion, take into account extraneous or irrelevant considerations. Nor must the discretion be exercised by reference to general and inflexible rules which pay no regard to the particular circumstances of the case. This is so whether such rules are laid down by the decision maker or an external body. It is of course often useful and sometimes necessary for administrators to adopt guidelines. These may provide guidance to officers in the scattered agencies of the administration. They may ensure that decisions are made in an even-handed and consistent way. But such guidelines must be compatible with the legislation conferring the discretion. They must not purport to usurp the discretion or substitute administrative convenience for the individualised decision if that is what the legislation has provided for."

The role of a policy statement or code was also discussed by Else-Mitchell J in Austin Construction Company (Aust) Pty Ltd v. North Sydney Municipal Council (1966-68) 14 LGRA 154, who said at page 159:
"The code should be treated as 'a considered formulation for general guidance in the determination of individual applications'."
The principle was also followed by Mylne DCJ in Methodist Church of Australasia v. Brisbane City Council (1971-73) 26 LGRA 188, where he said at page 190:
"A policy decision based on the legitimate Local Government considerations is invariably a relevant matter requiring attention and consideration by the council in reaching decisions in later relevant applications and by the Court in determining appeals from decisions of the council …. However, the council would be failing in its duty if it applied a pre-determining policy blindly regardless of the circumstances or merits of the particular case."
If I turn then to the loss of the two major highway signs, I note that it is agreed that both were strategically located upon the subject land, and were currently leased to apparently satisfied lessees. While I note that the claimant had indicated that he did not wish to have the signs relocated following the resumption, I believe that statement should be seen in the context of the matters then unfolding in October 1997. At that time resumption had occurred of the land upon which the signs were erected (5 September 1997), and Lot 3 was the subject of negotiation for sale (October 1997). Prior to the date of resumption the claimant had seen the signs as a steady source of income, certainly during the holding period until development was to occur. In view of those financial considerations, and the excellent exposure of the sign, I believe that at 5 September 1997 it would have been the claimant's intention to continue to lease the signs as they then occurred.
             Another matter for consideration was the likelihood of getting formal approval to replace the signs once the roadworks were completed. It is agreed that it was the current policy of both the Council and the Main Roads Department to limit the number of highway signs along the new highway corridor, a matter which should be taken into consideration.   However it was noted that the claimant had indicated that it would not resist the replacement of the former signs, in spite of its normal policy to do so.
             In seeking to understand what might be the attitude of the Council to the replacement of the signs, I note Mr Challoner's wide experience in these matters and his advice that it was likely, in the circumstances of the removal of the sign for road-widening purposes, that Council would have exercised its discretion and allowed for the signs to be relocated elsewhere on the subject land. Mr Challoner notes that as it was only a policy statement of the Council to restrict the number of signs in those locations, there was some room for discretion by Council. Indeed such an approach by Council would be in line with directions of the courts outlined in Rendell v.Release on Licence Boards (supra), particularly in respect of treating such an application on its merits.
             If I then consider the attitude of Mr Wood and Mr Love in this matter, I find that both valuers have based their estimate of the value lost in the signs on the premise of difficulty being experienced in getting approval from Council and Main Roads. Mr Love capitalised the income from the signs ($37,633 per annum) in perpetuity, calculated over a period of 5 years ($188,165). Mr Wood elected to capitalise the income over a period of 3 years determining a present value of $93,000 for the loss. Mr Love allowed a capitalisation rate of 20% to reflect the higher level of risk; while Mr Wood adopted the rate of 10% in comparison to other properties where signage had been lost which varied between 14% and 20.7%. Mr Wood saw the effective capitalisation rate to be at the lower end of the spectrum in view of the likely shorter period available for on-going use of the sign, due to the eventual need to replace the sign when further development of the subject land occurred.
             In considering first the capitalisation rates adopted I believe Mr Love may have overestimated the risk involved in getting approval, and his rate of 20% is seen by both valuers at the higher end of appropriate capitalisation rates for that type of activity. Mr Wood by comparison has chosen a low rate of 10% when his comparative benchmarks in that area were at a higher level, about 15%. For the purpose of this exercise I will adopt 15%.
             In considering the relevant time period to capitalise the loss of signage, I note that Mr Love concedes that he would reconsider his post-resumption figure if it had been possible to relocate the signs after the resumption. On that basis I believe there is some room to conclude that after the resumption the signs could have been relocated, but following further development of the subject land, there remained a question mark as to whether the Council would accede to a subsequent request to retain the signs. It may of course be possible to have retained the relocated signs within any new development proposal. Allowing for any uncertainties in this matter, I will allow for capitalisation for the signage lost at 15% for four years, adopting a present value for that purpose of:
             $37,500 x 2.855        =         $107,062 (say $107,000)

Impact of the Service Road –
             A major component of this claim lies in the estimated cost of upgrading the proposed service road; and whether those costs, now provided by the respondent, should be considered as an enhancement for the purpose of assessing compensation due to the claimant.
(16.1)The Cost of Upgrading the Service Road –
In assessing costs there are two components to be considered:
·the service road north of Sandy Creek
·the proposed service road south of Sandy Creek.
(i)          The Service Road to the North –
The major difference between Mr Just and Mr McAnany relies in their understanding of the extent of upgrading required in order to bring the old Pacific Highway pavement up to an acceptable basic level, but at a level less than the new service road required as part of the Pacific Highway upgrade to 8 lanes as now proposed. On the evidence before me, and in particular the photographs of the old pavement, although those were taken some time after resumption, I would favour Mr McAnany's more rigorous approach.
Analysis of the estimates reveal that Mr McAnany concludes a figure of $947,228 (for full reconstruction, and $844,158 for a lesser extent of reconstruction of an overlay only of the old pavement). Mr Just estimates $748,014 for a comparable type of reconstruction to Mr McAnany's second scenario. Mr McAnany does not believe that the less extensive reconstruction was adequate for the future heavy traffic demands upon the service road. The major difference between Mr McAnany and Mr Just for this less expensive upgrade lies in the higher unit cost rates allowed by Mr McAnany for the developer needing to work with smaller equipment, in more confined space on both sides of the pavement. Mr McAnany concedes that if the pavement widening for the kerb and channelling was done in conjunction with the other upgrading works, then his costs could be lower.
(ii)       The Service Road to the South –
It is agreed by both Mr McAnany and Mr Just that the major difference in the "before" and "after" situation is the need in the "before" to expend a further $100,917 plus professional fees of 11% in order to widen the proposed service road in order to provide for drainage and access to Lots 46 and 50 to 53. However a matter of disability for the developer in the "after" situation is the very high batter bank which physically inhibits direct access to the lots.
(iii)Assessment of Reconstruction Costs –
If I allow for the concurrent development of the kerb and channelling with the upgrading of the old road pavement, I can conclude from the difference between Mr McAnany's and Mr Just's estimate for the lesser scenario at $844,158 less $748,014, for a reduction of $96,144 for that purpose. If I then deduct that figure from Mr McAnanay's estimate for the more significant upgrade of the old Pacific Highway pavement to the northern part, at $947,228 less $96,144, I arrive at a reconstruction cost of $851,084. However to that construction cost must be added the further cost for road widening in the southern part of $100,917 plus 11% for professional fees or $112,018. That then provides an overall figure for the redevelopment of the service road, in the "before" situation, at $963,102, which I will adopt in this matter.
(16.2)Loss of Access to the Service Road –
While it is argued by Mr Lyons that the advice from Main Roads Department is that access to the service road will not be permitted in the "after" situation, it would be unusual for the respondent to fail to allow a limited number of access points for internal roads to the service road. I accept that it is common for some developers to "test the system" by "bartering" to seek to stretch the resolution of Council and Main Roads to constrain certain conditions of approval. However it would also appear to me to be an unwise procedure for the respondent to categorically advise that future access will be denied, if the respondent was likely to be prepared to reconsider a more suitable application. It is a reasonable assumption by the public that a State authority means what it says in correspondence.
I believe in the then understanding of the role of the service road in 1992, when the consent order issued, that in the "before" situation there would have been some direct access approved in any subsequent application to subdivide the land, although perhaps not as extensive as depicted in the preliminary plan by Mr Walsh. The evidence supports that the role of the service road has subsequently been upgraded in the "after" situation, and direct access to that road, if any, would be severely limited.
However the role of the service road in respect of the subject land could be twofold. Its key function would be to ensure effective local area traffic flows, independent of the main highway, and to channel local traffic to a more limited number of highway interchanges. As such the subject land benefits from the service road, whether or not any direct access is allowed to that service road. On that basis the total area of the subject land gains benefit. A second role of the service road may be to provide some limited direct access to the service road. However as Mr Wood notes that lesser impact would affect only 20% of the subject land, and he has accordingly allowed a further reduction in value for that purpose.
While I have no direct evidence to direct me, if I consider the impact of the service road upon the subject land, I believe that at least 50% could be related to local area distribution; and less than 50% could be related to providing some form of direct access to lots in the "before" situation. If I then assume some shared direct access could be achievable in the "after" situation, I conclude that 20% of that access would relate to lots that front the service road.
On the basis of the total impact of the service road, it would be reasonable to conclude that 20% of the 50% (or 10%) could be associated with any loss of direct access to the service road in the "after" situation. Adopting the cost of upgrading the service road at $963,102 (s.16.1), it can be argued that the developer in the "after" situation would be required to pay an additional premium of $96,310 for construction of the service road, beyond the benefits he may have received in the "before" situation. I could make allowance in the "after" situation for any diminished direct access to lots to a total of $96,310, however I believe that figure would have already been considered by the prudent purchaser of Lots 1, 2 and 3 after the resumption, at an overall rate of $8.25 per m² ($6,695,700). On that basis I make no separate allowance for any loss of direct access, as to do so would be "double dipping".
The Extent of Enhancement by the Service Road, Roundabout and Overpass –

Before considering the merits of the current matter, I seek guidance in respect of whether the upgrading of the service road, and other associated ancillary works, including roundabouts and overpasses, are in fact to be concluded as part of the current "scheme" to upgrade the Pacific Highway. I note that when the Court order was determined in 1992, that order included directions for contributions towards constructing a service road (Clause 10), and also other ancillary works (Clause 11). As a result of the Court direction, the consent order and the proposed change of zoning to Commercial Industry, became the decision of the Council, and the eventual rezoning of the subject land was implemented. The change of zoning was a direct consequence of the agreement by the claimant to meet the requirements of Council, including Clauses 10 and 11. The change of zoning in the revised Town Plan of 25 February 1995 confirmed that understanding.
In seeking then to understand whether the "scheme" as contemplated by the Court order in 1992, could be seen as a progressive development to upgrade the Pacific Highway to its current state of development at 5 September 1997, I am directed by the respondent to the following precedents.
The respondent argues that an overall "scheme" typically progresses and becomes increasingly more widely known and understood. As a "scheme" therefore gains acceptance in the community, it is likely that the benefits of the scheme would impact the marketplace, with resulting increases in demand for sites, and the eventual increase in the value of the land. That was identified by the Court of Appeal in Wilson & Others v. Liverpool Corporation[1971] 1 WLR 302, where Lord Denning said at page 309:
"A scheme is a progressive thing. It starts vague and known to few. It becomes more precise and better known as time goes on. Eventually it becomes precise and definite, and known to all. Correspondingly, its impact has a progressive effect on values. At first it has little effect because it is so vague and uncertain. As it becomes more precise and better known, so its impact increases until it has an important effect. It is this increase, whether big or small, which is to be disregarded at the time when the value is to be assessed. "

In considering that progressive evolution of a major "scheme", such is the current Pacific Highway upgrade, Lord Denning discounted the argument proposed by the appellant that the Pointe Gourde principle was only applicable where a scheme is precise and definite; and he upheld that enhancement of the land in the post-resumption era was to be allowed for in the compensation paid. The Pointe Gourde principle dictates that in the "before" situation any such increase in value in the subject land due to the project underlying the resumption must be disregarded. (See also VH Cox v. Water Resources Commission [1996-97] 16 QLCR 123, at 129; and Sabina Three Gorges Corp Limited v. Chief Executive, Department of Transport, (A96-01) 24 October 1997, unreported, at 15.)
The overall evolution of a "scheme" for the Burdekin River Irrigation Project was also analysed in Steven v. Commissioner of Water Resources (1988-89) 12 QLCR 242, where the learned Member (later President) said at p.256:
"I have considered all of the evidence and submissions and am satisfied that all of these dams and weirs which have been constructed over the years, are an integral part of an overall scheme or project. The Clare Weir taken in isolation would be of little value in an irrigation project. It derives its value by being able to store the flows released from the dam and weirs constructed upstream of Clare. Accordingly, I find that the Clare Weir forms part of the Burdekin River Irrigation Project."
However that decision was overturned by the Land Appeal Court in Steven v. Commissioner of Water Resources (1990-91) 13 QLCR 75, where the Land Appeal Court said at p.82:
"It would appear to us on consideration of the legislative provisions which govern the establishment of schemes of this nature that one could reasonably hold that the scheme at the time of the enhancement (which we think was, at the latest, the completion of the Clare Weir) was not the same as the scheme at the time of the acquisition. At the former time the scheme embraced only existing works, because it could not be said with any degree of confidence what would be the next step in relation to the storage of water. At the latter time, the scheme embraced significant additional works, and was not the same scheme."
The thrust of those decisions highlights the importance of differentiating whether the proposal to upgrade the Pacific Highway, and its associated works, should be seen as an on-going constantly evolving, single "scheme"; or whether the roadworks now contemplated indicated a change of thinking for the project, and therefore a separate "scheme" for consideration.
On the basis of those precedents it could be concluded that the upgrading of the old 4-lane Pacific Highway in 1992 has gradually evolved to the much enhanced 8-lane highway of 5 September 1997. The requirements of the Court order of 25 August 1992 could therefore be considered as part of an evolving "scheme" whose influences upon the marketplace are to be considered in accordance with Pointe Gourde principles.
However such conclusion draws a long bow when it is remembered that the scheme of 1992 was in fact to be later supplemented with a second highway further to the east of the current route. As a result of political imperatives, that second route was subsequently rejected, and the current 8-lane upgrade had its genesis in that political decision. The new 8-lane highway has a much enhanced alignment and design criteria, with more widely spaced entry and exit points, and crossovers. Consequently the needs of a supporting service road network have had to be completely redesigned. To conclude that there has been a gradual evolution of the highway scheme in those circumstances, in my opinion, stretches the application of either Wilson or Steven, and they may be partly distinguished accordingly.
The basis of whether the former contributions directed by the Court order in 1992 should continue to have relevance to the subject land, must also be seen in the perspective of the Minister's policy direction to Main Roads Department of 21 January 1997. That direction reverted to the policy of requiring a traffic impact analysis in terms of the needs at the relevant time. At the date of resumption it is agreed that a service road would have been required; but there are diverging views as to whether the ancillary roadworks for the roundabout and overpass were still outstanding, or had already been constructed. It is noted that the Minister's direction of 27 November 1996, prior to the resumption, had confirmed that developments were to be assessed on the basis of individual site specific conditions. It is Mr Brameld's evidence that while part of the ancillary works of the roundabout and overpass were constructed, and therefore not now required, the increased traffic demand was likely to have further upgrading of the works involved in the post-resumption situation. A further contribution, beyond the former $215,814 could therefore be required, a matter for consideration by any subsequent prudent purchaser of the subject land. Consequently I see no claim for enhancement by the respondent in respect of the $215,814 as detailed in the consent order.

The Impact of the Town Planning Changes –
In seeking to understand any change in the value of the subject land as a consequence of the issuing of the planning consent order in 1992, and the change in the zoning of the land, I am directed to the findings of London Borough of Enfield v. Lavender Garden Properties Limited (1968) 2 All ER 401. In that matter the issuing of a "certificate of alternative development", which had been issued by the Minister of Housing and Local Government, was seen to be a matter which should be considered in assessing the value of the land. In refusing the appeal, and allowing additional compensation, the Court of Appeal noted that there was additional development possible under the certificate from the Minister and that a prudent buyer in the marketplace would have taken that view.
However it has also been held that it is not merely the planning permission that must be considered when assessing the value of the land, but such planning approval must also be supported by demand for the land, including some reasonable expectation of future market demand. That principle was followed in Viscount Camrose and Another v. Basingstoke Corporation [1966] 3 All ER 161, where Russell LJ said at page 166:
"The real point in this part of the case is whether in assessing or forecasting demand, or the probability of turning the assumed residential planning permission to account, it is proper in law to take into account the impact of the town development scheme and its intended influx of population from the London area, or whether the forecast of demand should be based on the normal expected population growth. It is clear that the Lands Tribunal took the latter view. I consider that to be right."
That principle was also followed in Tawharanui Farm Limited v. Auckland Regional Authority [1976] 2 NZLR 230, at 235 and 245.
The history of the subject land in the current matter reveals that, while development would appear to have been restricted for a period of some 9 years, recent nearby developments now support an increase in demand. The sale of the three management lots of the subject land also supports that scenario. The sale of these management lots was on the basis of the new zoning of the subject land as "Commercial Industry", and any developer was likely to have to accept most, if not all, of the consent order conditions, as they relate to the subject land. The only condition which may be altered, in my opinion, would be those works external to the site which may have already been constructed; and which in terms of a traffic impact assessment at the date of resumption, may have been found to be no longer required to be constructed.
Determination of Compensation –
In summary, I direct that compensation due may be summarised as follows:
·    Value of land lost  =  $ 1,375,500
·    Value of fill lost  =  NIL
·    Loss of signage  =  $    107,000
·    Loss of direct access  =  Included in the value of
land lost
·    Cost of legal and valuation fees      =  $       6,000
TOTAL LOST  =  $ 1,488,500
·    Enhancement due to
reconstruction of the service road
by the respondent  =  $   963,102
·    Enhancement due to contribution
to roundabout and overpass           =  NIL
TOTAL ENHANCEMENT                =  $   963,102
TOTAL COMPENSATION DUE      =  $   525,398
Interest –
There is no evidence of any progress payment of compensation by the respondent, or of payment for legal and valuation fees in this matter. It is ordered that interest at the rate of 6 percent per annum be paid by the respondent to the claimant on the amount of $519,398 ($525,398 less the cost of legal and valuation fees $6,000) for the period commencing on and including 5 September 1997, and ending on and including the day immediately preceding the date on which payment of compensation is made.
In addition to interest on compensation awarded, also to pay interest at 6 percent per annum for professional, legal and valuation fees commencing upon the dates the respective award items were paid by Shellray Pty Ltd (if they were paid) and ending upon the day immediately preceding the date upon which final payment of compensation for disturbance is made.
Costs –
In seeking to determine costs in this matter I look to the Acquisition of Land Act and note that s.27 states:
"27.(1) Subject to this section, the costs of and incidental to the hearing and determination by the Land Court of a claim for compensation under this Act shall be in the discretion of that court.
(2) If the amount of compensation as determined is the amount finally claimed by the claimant in the proceedings or is nearer to that amount than to the amount of the valuation finally put in evidence by the constructing authority, costs (if any) shall be awarded to the claimant, otherwise costs (if any) shall be awarded to the constructing authority."
The final amounts argued by the parties, including legal and valuation fees, represent:
· Claimant $ 1,416,793
· Respondent NIL
The amount of compensation determined is nearer to the amount led in evidence by the respondent than to the final amount claimed by the claimant. Costs, if any, should therefore be awarded to the respondent.
In the absence of persuasive argument on costs from the claimant, I intend to exercise my discretion under s.27(1) to order that costs be paid to the respondent. However leave is granted to the claimant, if he so wishes, to present a submission as to why that order should not be made, by filing that submission with the Land Court; and also to be forwarded to the respondent's solicitor to be received no later than 18 October 1999. The respondent will then have until no later than 1 November 1999 to file his reply.
If no submission is received from the claimant before 18 October 1999, it is then ordered that the claimant pay the respondent the costs of and incidental to the hearing and determination of the claim for compensation. The amount of such costs shall be ascertained and fixed by the Registrar of the Supreme Court in Brisbane, pursuant to s.41(9) of the Land Act 1962.
NG DIVETT
MEMBER OF THE LAND COURT

Land	Date	Purchaser	Sale Price
Lot 1	05.12.97	Dynacomp Pty Ltd	$4,000,000
Lot 2	17.04.98	Springwood Developments Pty Ltd	$1,260,000
Lot 3	23.10.97	Gail Stephens as trustee	$1,440,000
Total	$6,700,000

Before	After
Area	45.86 ha	37.34 ha
Number of Lots	17	11
Gross Realisation	$20,311,000	$14,528,000
Less costs of sale etc.	$947,995	$675,760
Profit and Risk	$3,556,470 (22.5%)	$2,308,707 (20%)
Sub Total	$15,806,535	$11,543,533
Less construction costs, headworks, rates, interest, acquisition costs, holding costs, etc. Resultant Value of Land	$3,933,863	$2,736,038
Difference	$1,197,825

Sale	Location	Area	Analysed rate per m²
9	Pacific Highway, Yatala	3.914 ha	$13.16
10	Elliott Drive, Stapylton	10.4 ha	$ 7.46
11	Burnside Road, Ormeau	9.5 ha	$10.26
12	Burnside Road, Ormeau	4.18 ha	$ 7.85
13	Quarry Road, Stapylton	4.18 ha	$ 8.19
14	Elliott Drive, Stapylton	3.7 ha	$32.50
15	Pacific Highway, Yatala	4 ha	$37.50

[1999] QLC 101

29 September 1999