Tilden v The Landsborough/Maroochy Water Supply Board

[1990] QLC 11

[1990] QLC 11

 

  LAND COURT,

BRISBANE.

6th April, 1990.

Re:              Determination of Compensation -
  Resumption for Works for the Conservation
  and Reticulation of Water purposes.
  (A89-68)

J.D. Tilden and Others

v.

The Landsborough/Maroochy Water Supply Board

J U D G M E N T

Falling for determination is compensation consequent upon the resumption by the Landsborough/Maroochy Water Supply Board on 23rd July, 1988 for Works for the Conservation and Reticulation of Water purposes of land described as Lots 5 and 7 on Plan 213267, county of March, parish of Maleny.  Lot 5 comprises an area of 17.17 hectares and Lot 7 contains an area of 1190 square metres.  The resumed lots are but part of what was formerly an 88.762 hectare parcel of land formerly described as Subdivision 2 of Portion 138, parish of Maleny.  The resumed areas aggregate 17.289 hectares and the retention area is 71.473 hectares.  I say resumed areas because the resumption creates two separate retention parcels - Lot 4 on RP 213267 with an area of 8.1438 hectares and Lot 6 on the same plan with an area of 63.33 hectares.  The resumed Lot 5 is on the northern boundary of the original subdivision 2 and it creates the severance.  Resumed Lot 7 is a small area on the eastern boundary of original Subdivision 2.
  The parent parcel, known as "Frogs Hollow", is situated about 5 kilometres north of the Township of Maleny at the end of Wells Road.  At resumption date the parent parcel was zoned "Rural" under the provisions of the Caloundra City Council Town Planning Scheme.
  Consequent upon resumption, and on 13th September, 1989, Solicitors for the respondent Board filed in the Court Registry a claim for compensation dated 14th December, 1988.  This claim was made by four dispossessed owners and is for compensation in the sum of $226,000.  It is made up as follows:-

Land - damage due to severance and damage 
  due to injurious affection  $216,000

Disturbance  $  10,000

Total claim  $226,000
  =====

At the outset of the case, leave was sought and was granted to amend the claim to $228,102 - being $218,102 for the value of the land inclusive of severance and injurious affection, and $10,000 for disturbance.  The amended claim was made to accord with a valuation prepared for the claimants by practising Registered Valuer, Thomas Kinivan. 
  Embodied within the Solicitor's letter of reference is the advice that the respondent had advanced the sum of $80,000 to the claimants.  Subsequent evidence disclosed that this advance was made on 12th January, 1989. 
  Now to say that the resumed land, particularly Lot 5 on Plan 213267 was, at resumption date, attractive environmentally is perhaps an understatement.  It had within it a watercourse known as Bridge Creek which flowed generally in an east to north-east direction and ultimately into Obi Obi Creek where the Baroon Pocket Dam has since been constructed for water conservation as part of the scheme for which the subject land was resumed.  Within Lot 5 was a prominent waterhole known as the Platypus pool which was circular in shape with a diametre of about 30 metres and a depth of about 5 metres.  There was also a natural wading pool.  Water entered the Platypus pool over a rock embankment creating a waterfall.  Bridge Creek is aligned with rainforest which apparently extended to the northern boundary of Lot 5 and the parent parcel.
  The affect of the resumption was well illustrated in a video tape taken by Amanda Gai Wilson, who is one of eight persons in a partnership which ran the "Frogs Hollow" property at resumption date.  Miss Wilson took the video in conjunction with other persons.  It was displayed in Court and received as an exhibit.  The footage covers features of the rainforest and the creek, and laid emphasis on the Platypus pool.  The video display certainly supports the evidence of all the witnesses called in the case as to the idyllic features and superb natural beauty of resumed Lot 5, and of its attractiveness from a conservation and environmental point of view.  One witness described it as a national park in private ownership.  The tape provides ample testimony to the beauty of the area, and exhibits such things as the sounds from the running water in Bridge Creek and the birdlife and fauna in the wilderness. 
  The Baroon Pocket Dam has by now, filled.  The video clip also supports evidence which illustrates the deleterious affect the consequent water ponding in it has on the environment, particularly on land in and adjoining the water storage.  Bridge Creek has been inundated to a depth of some 15 metres with resultant degradation of the rainforest in the ponded area.  The creek is obviously no longer a running stream but a stagnant waterhole and the surface is covered with ferns and rotting vegetation.    Janelle Dianne Tilden, who is one of the claimants, was called in evidence.  Miss Tilden told us she first became interested in "Frogs Hollow" in 1977 and became a joint proprietor in 1978.  She is a Social Scientist and has degrees in Zoology and Psychology.  She recognised the wilderness value of the property with its Platypus pool and the rainforest.  Miss Tilden described the added seclusiveness of the property with the adjoining owner to the north (one Kath McArthur) having set aside her property for the preservation of the wilderness along the same Bridge Creek. 
  The dispossessed owners opened up the rainforest at times for the use of selected groups such as students from the Blackall Range Primary School and for Personal Development workshops, but used the wilderness primarily for their own private use. 
  Miss Tilden informed the Court that not the whole of "Frogs Hollow" was given over to wilderness.  About one third comprises open grazing country and there has, over time, been some development of an orchid and vegetable gardens and a commercial herb garden and the erection of some eight houses for members of the partnership.  A management plan has been prepared for the further development of rainforest and vegetation mainly, as I read the document, for the purpose of controlling the growth of groundsel bush. 
  Miss Tilden describes the subsequent inundation of the land to have caused the severing of the rainforest and as such, the koala population.  She says platypuses are no longer in evidence in the former creek.  The waterfront is now ugly with dead trees.  She confirmed that the foreshore is now muddy as opposed to the good natural frontages in the former creek.  Miss Tilden says that while the Platypus pool did provide an ideal spot for swimming, no one now would be interested in swimming in the dam water.  She tendered a series of still photographs which also betray the natural features of the resumed land and the deleterious post-resumption inundation.
  Mr Kinivan describes the bulk of the Lot 6 retention area as comprising gently sloping forest country partly cleared and partly regrown and partly reafforested.  Lot 4 is very steep and rugged country and he says this parcel is unsuitable for building.  He confirms the principal affects of the resumption to be:-

1.the destruction of the rainforest corridors along the creeks.

2.the drowning of the beautiful swimming pool and rock formations.

3.wave action which will erode steep creek banks.

4.loss of privacy; picnic parties using the dam will poach natural flora, light fires and litter the land with cartons, paper, tins and bottles and;

5.the rising waters will kill timber, resulting in the stark and fetid landscape common to the upper reaches of dams.

Mr Kinivan mentions that the dispossessed owners planned to capitalise on the natural attractiveness of the parent parcel with the development of a convention centre but says that, because of the destruction wrought by the scheme of resumption, it is now doubtful whether there would be a continuing interest in a such a proposal.  He says that in reality, after the resumption, the balance area is reduced to a run-of-the-mill rural site.
  Mr Kinivan assesses compensation using the well recognised "before and after" method of valuation as follows:-

Value before resumption - 88.762 ha @
  $4,000 per hectare  $355,048

Value after resumption - 71.473 ha @
  $2,000 per hectare  $142,946

Value of land resumed   $212,102

Add - cost of fencing resumption boundary -
  1,300 metres at $4 per metre plus $800 for
  signs  $  6,000

$218,102
  =====

Mr Kinivan has included the cost of fencing the resumption boundary since he is of the opinion that privacy for the retention area is at risk due to people using the ponded dam waters for recreational use - mainly canoes.  I note that apart from the activities of the Dam Ranger, the use of power boats on the dam is prohibited. 
  Mr Kinivan stresses that the resumption took place during a land boom which commenced in early 1988.  He has inquired of real estate agents active in the area and has established that buyers in the boom were prepared to pay high prices for land with features such as good views, a rainforest or a creek.  He points to the sale and resale of a property adjoining the subject land which is about half cleared and grassed and about half steep and broken country.  It enjoys good rural views and a view of the Baroon Pocket Dam.  This property is described as Lots 4/6 on RP 203768 parish of Maleny and comprises an area of 62.23 hectares.  It sold originally on 7th January, 1987 for $250,000 or $4,000 per hectare.  The resale took place on 13th April, 1989 for $375,000 - or $6,000 per hectare.  Mr Kinivan spoke to the intermediary party to the transactions (a Mr Carroll) and was advised that on resale, Mr Carroll was unaware that the land was capable of further subdivision.  It was however, eventually subdivided into six parcels.  Mr Kinivan says that sale property is slightly superior to the subject land in access and enjoys far superior views.  However, it does not possess the rainforest and creek features.
  Another of Mr Kinivan's basic sales is that of Lot 5 on RP 214724, parish of Maleny containing an area of 15.89 hectares which sold on 16th March, 1989 for $105,000.  This parcel has no views, but has a pretty creek and rainforest.  Lot 4 on RP 228448, parish of Maleny with an area of 9.097 hectares sold on 23rd March, 1989 also for $105,000.  This parcel has no creek or rainforest but has good views including a distant view of the Baroon Pocket Dam.
  Lot 2 on RP 215944, parish of Maleny sold on 8th December, 1988 for $130,000.  This lot has an area of 63.46 hectares, and is situated about 5 kilometres northwest of the subject property.  It is comparable in size and country with the subject parent parcel but has slightly inferior access. 
  Lot 2 on RP 206568, parish of Maleny (area 18.781 hectares) sold about two months after resumption date on 25th September, 1988 for $195,000 in what Mr Kinivan describes, as aforementioned, a land boom.  There is a structural improvement worth $10,000 on this land.  Mr Kinivan says this site's main attraction is its rainforest and creeks.  It is steep and has some very nice rock formations, and has good ocean views and good access. 
  Mr Kinivan suggests that the aforementioned sales evidence clearly demonstrates the upward movement in the market in the area when compared with other sales he tabulates which occurred during the period 5th November, 1982 to 1st July, 1984.
  Whilst Mr Kinivan has used as primary basic evidence sales which took place after the date of resumption, he is adamant that the 1989 level of value was obtainable in the market place as at 23rd July, 1988.  He says the market took off in March/April, 1988, increased through 1988, ran "out of steam" at the end of 1988, and marked-time during 1989. 
  Alan Francis Carrick, a practising Registered Valuer was called by the respondent Board.  Mr Carrick assesses compensation for the resumption at $105,000 exclusive of any component for disturbance or interest.  Now Mr Carrick sees the potential use of the parent parcel to be as a rural residential site together with hobby farming.  He describes the nature of the country as comprising an area of previously cleared coastal forest and softwood scrub with rainforest on either side of Bridge Creek.  Mr Carrick recognises that the subject land has great natural untouched beauty with rock formations which provide the bed and banks of Bridge Creek. 
  Mr Carrick also uses the "before and after" method of valuation.  He sees compensation as being assessed as follows:-

Value before resumption - 88.76 hectares                
  rural residential site   $250,000

Value after resumption -

8.1438 hectares rural residential site  $ 25,000
   63.33 hectares rural residential site  $120,000           $145,000

Compensation for loss of land, severance
  and injurious affection.  $105,000
  =====

Now it is to be immediately observed that the respective valuer's "after resumption" valuations are very close.  Without going any further, I might now say that I adopt Mr Kinivan's "after resumption" assessment as I ought since dispossessed owners should receive the benefit of a liberal assessment in compensation cases - vide Commissioner of Succession Duties v. Executor and Trustee Agency Company of S.A. (1947) 74 C.L.R. 358. So then, in so far as compensation for the loss of land, severance and for injurious affection is concerned, it is the value of the parent parcel which falls for determination. I now turn to discuss the basis of Mr Carrick's "before" valuation. He relies upon four homesite sales, and to a lesser degree on a settlement resulting from the resumption of the Kath McArthur property as part of the same resumption scheme. More on the settlement later.
  It seems that the principal basis used by Mr Carrick is the sale and resale of the Carroll property.  However Mr Carrick sees the property at resale date as having considerable potential for subdivision.  He is familiar with the circumstances of the sales, having spoken to Mr Carroll and to a Mr Cossins, who is a Developer and Principal Director of the ultimate purchasing company in Civil and Rural Developments Pty Ltd.  Unfortunately Mr Carroll could not attend the Court to give evidence - this would have been most helpful.  However, Mr Carrick says that both Mr Carroll and Mr Cossins are very astute business people.  Mr Carroll listed the property for sale in 1988 with Mr Carrick's real estate agency, and he then said that in time it would be subdivisable and it would have views of the dam.  Mr Carrick says Mr Cossins was also of the same opinion and was aware that it could be subdivided.  He intimated that at worst there was potential for five subdivided blocks and at best six.  In reality six blocks were achieved in subdivision since sale.  Mr Carrick further told us that Mr Cossins had done his homework, and had been to Council prior to contracting with Mr Carroll.  Mr Carrick sees this sale land as having a superior situation to the subject land, being closer to Maleny.
  Mr Carrick also used the sale of Lot 2 on RP 205568 for $195,000.  He emphasises that this land is situated on the Maleny-Montville Road, and falls steeply away from the road frontage to Obi Obi Creek and the rainforest.  He too confirms it has ocean views.
  Mr Carrick disagrees somewhat with Mr Kinivan as to the market value trends in the area.  He accepts that the market improved in late 1987 but doesn't think that it can be suggested that it was really bubbling along at March, 1988.  He claims the market improvement was a little later on in 1988 and this continued to early 1989.
  Mr Carrick describes the McArthur property as very much a national park in private ownership.  It had a long frontage to Bridge Creek and has equal beauty to "Frogs Hollow".  It has bitumen road frontage and potential for subdivision into three sites in accordance with the town plan.  This property, being original portion 137, parish of Maleny, containing an area of 97.736 hectares prior to resumption and 49.38 hectares after resumption, was acquired for $158,000 on 15th July, 1988.  This settlement price was apportioned at between $138,000 for land, severance and injurious affection, $17,250 for interest and $2,750 for disturbance.  This resumption took place on 11th July, 1987.
  Mr Carrick does not feel there is a need to fence the resumption boundary after resumption.  I am in agreement with him especially as it seems the ponded water is rarely used by the public - perhaps a canoeist or two on odd occasions.  In any event, judicial knowledge suggests to me that it would be an exceptional event  for resumption lines to be fenced along dam foreshore frontages. 
  Reference was made during the case on  many occasions to a judgment of the former learned President of this Court in re:  Claim for compensation - R.S. and J.M. Weis v. The Landsborough/Maroochy Water Supply Board.  I have perused this judgment.  Although the property involved in that case had many similar characteristics as the subject parcel, I am not placing any weight on that determination of compensation, mainly for the reason that the resumption took place at the earlier date of 19th April, 1986, and the Weis property did not have such a unique feature as the Platypus pool and its environs.    I am not influenced in this judgment by the evidence of the McArthur settlement.  The Land Appeal Court in re: Murray v. Q.E.G.B. (1984/5) 10 Q.L.C.R. 69 held that there is no principle of law which requires the rejection of settlements, but that they should be used with considerable caution bearing in mind the pending threat of resumption. An additional problem with the use of the McArthur settlement is that Mr Carrick, who also acted for the Board in that case, valued the land mistakenly at the later resumption date in this case. I prefer to rely upon the sales evidence.
  I am satisfied that the Carroll property sale price of $375,000 reflects not only a considerable rise in the property market extending to its sale date of 13th April, 1989, but also a value of land which stood possessed at sale date of much more subdivisional potential than did the subject parent parcel.  It seems clear to me, in view of Mr Kinivan's opinion that there existed no subdivisional potential at sale date, that his "before" valuation of the parent parcel is too high.  I find that it is also excessive in view of his remarks that the market was rising through 1988 and the resumption date was in July, 1988, well prior to his principal basic sale evidence.  On the other hand, Mr Carrick seems to have under valued the land as a rural homesite particularly in relation to the original price  of $250,000 paid by Mr Carroll on 7th January, 1988 in what I accept is a rising market.  The same remarks seem to apply on the basis of the sale of Lot 2 on RP 206568.
  I cannot, on the evidence, favour one valuation over the other, and bearing in mind that both valuers are very experienced, I propose to give the valuations approximately equal weight.  I determine the "before" value of the subject land as a rural homesite and hobby farm at $300,000.  This determination also, in my view, makes sufficient allowance in the market place for the uniqueness and attractiveness of the resumed land. 
  I have already adopted a value of $142,946 in the "after" resumption exercise.  Compensation for the loss of land, for severance and for injurious affection is the difference between the "before" value of $300,000 and the "after" value of $142,946, or $157,054.  I round off this determination to $157,000.
  I turn now to the disturbance component of the claim.  Most of the legal fees tabulated by Miss Tilden were not involved in the preparation and lodgement of the claim for compensation.  It is well established that legal fees expended are only compensable to the point of the claim lodgement.  It transpired in evidence that a sum of $125 was involved in legal fees for the preparation of the claim and the respondent has no quibble with that.  Other costs involved in the preparation of the claim included about $20 for telephone calls, about $10 for postage, and about $150 for typing.  A considerable sum was involved with legal fees in an attempt to abort the resumption.  These fees are not compensable.  Mr Kinivan's valuation fees were $3,500 and that is agreed as being reasonable by the respondent Board.  I award a sum of $3,800 under the head of disturbance, bringing my total award of compensation to $160,800. 

Section 28 of the Acquisition of Land Act 1967 - 1986 provides that the Land Court may order that interest be paid upon the amount of compensation determined by it, and that interest shall not be payable in respect of any compensation advanced under Section 25 of that Act. In this matter, an advance of $80,000 was paid to the dispossessed owners on 12th January, 1989. Accordingly, I order that interest at the rate of 12.75% per annum be paid by the respondent Board to the claimants on the following sums and for the following periods:-

On the sum $160,800 for the period commencing on the date of resumption (23rd July, 1988) and ending on the date of the advance payment (12th January, 1989) and;

On the sum of $80,800 for the period commencing 13th January, 1989 and ending upon the day immediately preceding the date upon which final payment of compensation is made.

Member of the Land Court.