Turner v The Commissioner of Water Resources
[1992] QLC 7
•25 February 1992
|
LAND COURT,
BRISBANE.
25th February, 1992.
Re: Determination of Compensation:-
Resumption for a purpose of the Irrigation
Act 1922-1986 viz Burdekin River Irrigation
Project.
(A90-43 and A90-44)
LJJ and EE Turner
v.
The Commissioner of Water Resources
J U D G M E N T
The above matters are before the Court for the purpose of the determination of compensation consequent upon two resumptions of adjacent parcels of land fronting the Haughton River in the Clare District near Ayr. Details of the resumptions are:-
A90-43 -An area of 243.6 hectares being part of the land contained in Lot 2 on Plan GS572 and an area of 11.68 hectares being part of the land contained in Lot 2 on Plan GS572 - GHFL No. 44/3147 - County of Gladstone, Parish of Barratta - Date of resumption 22nd March, 1986.
A90-44 -An area of 2932.024 hectares being Lot 2 on Plan GS955 - GHFL No. 44/3147 - County of Gladstone, Parish of Barratta - Date of resumption 20th June, 1987.
The dispossessed owners filed with the resuming authority two claims for compensation both dated 22nd June, 1987. Details of the claims are:-
A90-43 -A claim for $239,601 made up as follows:-
Land $229,226
Improvements - fencing $ 5,000
Disturbance $ 1,000
Valuation Expenses $ 4,375
TOTAL CLAIM $239,601
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A90-44 - A claim for $2,696,072 made up as follows:-
Land $2,638,822
Improvements (yards) $ 38,250
Disturbance $ 1,000
Valuation Expenses $ 18,000
TOTAL CLAIM $2,696,072
======
Both cases were heard together in Townsville and in Brisbane. The resumed parcels constitute a grazing property known locally as "Camerons".
At the outset of the hearing, Senior Counsel for the Claimants sought and obtained leave to amend the claims as follows:-A90-43 -A claim for $92,282.55 made up as follows:-
Land $76,584
Disturbance - legals $ 1,500
Other $11,006.47
Valuation Expenses $ 3,192.08
TOTAL CLAIM $92,282.55
======
A90-44 - A claim for $1,039,390.10 made up as follows:-
Land $ 879,600
Improvements (yards) $ 28,800
Disturbance - legals $ 1,500
Other $ 115,417.38
Valuation Expenses $ 14,072.89
TOTAL CLAIM $1,039,390.10
========
Many witnesses were called by both parties in the case. It was a lengthy hearing and the transcript of evidence and submissions runs to some 400 pages. I propose to deal in this judgment only with the evidence which I consider relevant to my task of the determination of compensation.
The first witness called in the case was Lyndel Isabel Owens, who is a daughter of the claimants. Mrs Owens is a qualified accountant and she presently resides on Majors Creek Junction Station which is owned by the claimants and is situated immediately across the Haughton River from "Camerons". Up until the time of the resumption, Majors Creek Junction Station and "Camerons" were used together for cattle grazing. "Camerons" was purchased by the claimants in 1980. Since this time the properties have been run on the basis of breeding on Majors Creek Junction Station and growing out and fattening on "Camerons". Mrs Owens says that by 1986 there were up to 1,000 head of high grade brahman breeders on Majors Creek Junction Station, with the progeny being transferred to "Camerons" as weaners for growing out and fattening
Mrs Owens told the Court that when her parents purchased "Camerons" there were no improvements on the land whatsoever. A set of yards have since been constructed, a watering point installed (equipped bore) and subdivisional fencing erected which creates five main paddocks
It is the contention of the claimants, through Mrs Owens, that after the resumption on "Camerons", it was no longer possible to continue with the breeding and fattening operation on Majors Creek Junction Station alone. A decision was taken to purchase additional country in the vicinity to replace "Camerons", but enquiry did not disclose any nearby suitable properties to have been on the market. Then the claimants looked further afield at larger properties in the Charters Towers District. These were too expensive for the claimants. The search ended when it was established that a property in the Gulf known as "Mittagong" was on the market. It was purchased by the Turners on 17th March, 1988 for $2,050,000. At that time there were 8,000 head of cattle on "Mittagong" which were, along with horses and working plant, apportioned within the sale contract at a value of $1,096,000, leaving an apportioned land and improvement value for "Mittagong" of $954,000.
The purchase of "Mittagong" signalled a big change in the style of the grazing operation at Majors Creek Junction Station. Instead of breeding there, it was decided to take the breeders to "Mittagong" to improve the herd there, and to transfer steers from "Mittagong" to Majors Creek Junction Station for growing out and fattening. I might say here that "Mittagong" is quite a large station of some 150,000 hectares with a carrying capacity said to be about 12,000 head of cattle. It is located 1684 kilometres by road north from Majors Creek Junction Station.
Now the amended claim for disturbance has, apart from a claim for legal fees, been prepared by Mrs Owens. In general terms it is based on the cost of the purchase of and the additional cost of running "Mittagong" as a replacement property for "Camerons". Details of the disturbance component of the claims are:-Legal fees on lodgement of claim
First resumption $1,500
Second resumption $1,500 $3,000
Purchase of "Mittagong"
Stamp duty $38,325
Legals (scale) $ 8,754
Outlays $ 1,106.70
Mortgage costs
Stamp duty $ 4,385
Legals (scale) $ 4,213
Establishment fee (53.46% of
$5,000) $ 2,673 $59,456.70
Moving cattle to "Mittagong"
Mustering 450 head @ $5 $ 2,250
Transport $10,975.54 $13,225.54
Additional cost of Management $53,741.61
Total Claim for Disturbance $126,423.85
=======
The claim for disturbance was then apportioned between the two resumptions on a pro rata area basis as follows:-
(1)A90-43 - 8.706% or $ 11,006.47
(2)A90-44 - 91.294% or $115,417.38
$126.423.85
I should here comment that the claim for legal fees for the preparation and lodgement of the claims is agreed between the parties as to $1,000 for each claim.
Mrs Owens produced copies of statements from Dalgety Winchcombe FGC for the relevant months in 1988 (year of purchase of "Mittagong"), copies of accounts rendered by transport companies and other relevant documents in support of her claims for cost outlays involved in the purchase of "Mittagong". All outlays were apportioned as between the value of the land and the value of the livestock and plant so that the costs claimed are only those involved in the purchase of "Mittagong" land and improvements. So that for example $74,100 was the total cost of the stamp duty but only $38,325 was claimed.
The claim for the additional cost of management is for what Mrs Owens regards as the necessity for one Ronald Herbert Norris, who is the current manager of Majors Creek Junction Station, and who since 1982 was the manager of both that station and "Camerons", to visit "Mittagong" regularly to check on what is going on there and to report back to Mr Turner. Mrs Owens has tabulated the number of trips made by Mr Norris in the financial years ending 30th June, 1988 to 30th June, 1991. There were three trips in 1988, six in 1989, four in 1990 and thirteen in 1991. Mrs Owens calculates the costs of those trips on the basis of the published taxation allowance for motor vehicle operations in the respective years. An estimate of additional phone calls between the two properties of $500 per annum is added, and when these additional costs are averaged they produce an annual figure of $7,262.38. This calculation is then capitalised in perpetuity at the rate of 13.5% per annum to produce the claimed sum of $53,741.61.
As for the claim for mustering the cattle, Mrs Owens has furnished the estimate herself which she considers to be conservative at the rate of $5 per head.
The Mortgage costs as prepared by Mrs Owens were incurred since the purchase of "Mittagong" was wholly financed by Dalgety Winchcombe. It transpired in evidence that an advance was paid against compensation by the respondent Commissioner for both resumptions to a mortgagee holding security over "Camerons" for an overdraft commitment. Once again the claim for mortgage costs is apportioned as between the value of the land and improvements on "Mittagong" and the value of the livestock and plant.
The cost of moving cattle to "Mittagong" was supported in the main by documentary evidence. Some copies of relevant invoices were missing, one segment of the claim was payment in exchange for rodeo cattle and horses. Where the transport of cattle was up to "Mittagong" and back from "Mittagong" to Majors Creek Junction Station, only the half of the cost is claimed.
Now Mrs Owens agrees with the proposition that the scale of the Turner grazing operation escalated considerably upon the purchase of "Mittagong", and that "Mittagong" is scarcely a comparable property with "Camerons". "Mittagong" and Majors Creek Junction Station were both advertised for auction in 1990. Neither property was sold.
Mr Norris told us that he grew up on Majors Creek Junction Station. His father was the manager. He left the place in 1971 when his father retired. After about 10 years, when he obtained work elsewhere, he returned to Majors Creek Junction Station to take over the management of it and "Camerons". Mr Norris confirmed that Majors Creek Junction Station was used for breeding and "Camerons" for fattening. Although Majors Creek Junction Station can also fatten, bullocks would not mature as early as on "Camerons". Majors Creek Junction Station has more clayey country and shorter grasses.
Mr Norris informed the Court that the bore which was sunk on "Camerons" in his time produces a good supply of good quality stock water. It was equipped at resumption date with an engine and pump and had the capacity to deliver 5,000 gallons per hour (6.25 litres/sec). There is another bore or spear with a windmill on it which is joined into the system and supplies water to two water tanks in times of sufficient wind, but the second supply has less volume at about 1,000 gallons per hour (1.25 litres/sec).
Mr Norris describes the standard of improvements on "Camerons" as being very advantageous for cattle management. The bore is centrally located and there are numerous paddocks radiating out from the bore. He says this makes for easier cattle mustering than it would otherwise be if there were separate watering points in each paddock. The Haughton River frontage is fenced out and so is a natural waterhole near the southern boundary known as Oaky Hole so that for the most part cattle water on the centrally located equipped bore. There is year round road access to "Camerons" from the Clare-Giru road, and Mr Norris has been able to take advantage of better cattle markets when the sale yardings are down due to wet weather. Often the Turner cattle topped the market on a price per kilogram liveweight basis. Mr Norris is of the opinion that the carrying capacity of "Camerons" is one beast to five acres (1 beast to 2 hectares) on a mixed herd basis, but says that the property can carry between 800 and 1100 grown bullocks taking into account the additional country on Special Leases.
Mr Norris confirms that the cattle breeding and fattening program on the two properties was badly affected by the resumption of "Camerons". He says the resumption "knocked our legs from under us" and they started selling off breeders in 1988.
Mr Norris visited "Mittagong" before a decision was made to purchase that property. He took a video and inspected the property with the then manager, a Mr Les Pickering. He reported to Mr Turner on his return. Since its purchase, he has been up to "Mittagong" with Mr Turner and on a number of occasions by himself. After each visit he reports back to Mr Turner. On his trips he usually carries materials and equipment up in his truck, and returns with a load of killers and equipment for repair so he has a pay back load. The present manager, a Mr Ron Lawson, takes suggestions from Mr Norris and the property is running smoothly with cattle coming down all the time. Mr Norris says that Mr Lawson is managing the property quite successfully. Mr Norris has taken part in musters at "Mittagong" since the present manager was appointed.
Valuation evidence for the claimants was called from registered practicing valuer Russell Geoffrey Brown. Mr Brown values A90-43 parcel (255.28 hectares) at $76,584 and A90-44 parcel (2932 hectares) at $908,400 making his total valuation of the resumed lands $984,984. Included in his valuation of A90-44 parcel is a value of $28,800 for the cattle yards and this valuation is not in dispute. What is in dispute is the value of the land and other improvements. To illustrate the point, registered valuer Robert Joseph Moloney, who is in the employ of the respondent Commission, values A90-43 parcel at $49,792 and A90-44 parcel at $588,404 - making his total valuation of the resumed property $638,196. More about Mr Moloney's valuation later.
Mr Brown describes "Camerons" as being all gently sloping to level land interspersed with low depressions and small creek systems with a large hollow running from west to east through the property which comprises an old riverbed of the Haughton River. Soils vary from sandy loams to heavier poorly drained clay loams, all of an alkaline nature and in some instances suitable for dry land cropping. The soils have been the subject of a study by McGowan International Pty Ltd, and Mr Brown says that firm has assessed the property as having a land capability for rainfed arable pursuits of 64%. William Patrick Thompson, who now is a principal of a firm called Resource Planning Services Pty Ltd, but who was from 1982 to 1989 on the permanent staff of McGowan International Pty Ltd, had prepared the report relied upon by Mr Brown. Mr Thompson was called by the claimants and I will also deal with the relevant aspects his evidence later.
Mr Brown describes the vegetation on "Camerons" as being a mixture of an open forest to semi-open forest of bloodwood, moreton bay ash, poplar gum and cabbage gum with areas of pandanus and cocky apple. It is grassed with spear grass, kangaroo grass and tall blue grass with good areas of indian couch. The is some chinee apple and rubbervine infestation. Mr Brown suggests an area of some 800 hectares on the property has been cleared of standing timber as the property was heavily cut for timber during the days the Invicta Sugar Mill utilised steam driven trains. This information may be to some extent correct, especially as Mr Norris is of the same belief, but subsequent evidence leads me to the understanding and finding that the open areas on "Camerons" were, for the most part, naturally open with no effective timber treatment or at lease no timber treatment of added value.
Mr Brown points to the availability of permanent natural water in the Haughton River with holes being semi-permanent in Oaky Creek. It is to be noted as aforesaid that management chooses not to use the Haughton River or Oaky Hole.
Mr Brown's estimate of carrying capacity is of one beast to 3.6 hectares (880 head) on a mixed herd basis and he also says that "Camerons" is suitable for fattening. He regards the highest and best use of "Camerons" to be for fattening with potential for the development of rainfed agriculture or improved pasture. Mr Brown sees an inherent potential for short to medium term subdivision into farms at the frontage to the Clare-Giru road.
Mr Brown says that the property is well fenced and subdivided into five paddocks. The bore is 85 metres deep and was sunk in 1986. It was equipped with a 5 horse-power 3 phase submersible pump powered by a three cylinder lister engine connected to a 13.5 kva generator delivering through 1.5 kilometres of piping to 2 x 22,500 litre concrete supply tanks and 5 sets of concrete troughing. Mr Brown also describes the windmill set up previously discussed by Mr Norris.
Mr Brown valued "Camerons" on a fenced and watered basis in the belief that the resuming authority would also value it on that basis since previous Land Court determinations appeared to adopt a fenced and watered valuation method. Mr Brown stressed in evidence that his valuation of "Camerons" is $300 per hectare and he apportions this as to 2,040 hectares (64%) potential arable country and at $340 per hectare and 1147 hectares of grazing land at $185 per hectare. He then adds a value of $60 per hectare for the 800 hectares of timber treatment and a value of $28,800 for the yards. Mr Brown then breaks up his valuation as to $300 per hectare for A90-43 parcel and $300 per hectare plus the value of the yards for his valuation of A90-44 parcel.
The principal basis for Mr Brown's valuation is the sale of a nearby property known as "Dingo Park". This property is described as Portion 2v, Parish of Woodstock and contains an area of 3863.331 hectares. It was sold on 29th April, 1985 from PJ Hannon as mortgagee to SR and M Goodsell for $765,000. Mr Brown has analysed the sale to show a value of $682,000 ($177 per hectare) on a fenced and watered basis or $737,000 ($190 per hectare) on a treated, fenced and watered basis. Mr Brown apportions his fenced and watered analysed value as between 1,738 hectares undeveloped land with some arable potential at $240 per hectare and 2,125 hectares grazing open forest at $125 per hectare.
Mr Brown informed the Court that "Dingo Park" had been previously sold by Mr Hannon on 28th June, 1982 to a company known as Axoa Pty Ltd for $954,650. The then purchasing company had plans to subdivide the property but these were not proceeded with and it failed to honour agreements for the payment of monies owing. Mr Hannon then resumed possession of the land as registered mortgagee. Mr Brown was not influenced in his valuation of "Camerons" by the evidence of the earlier sale of "Dingo Park" since it was purchased primarily for rural residential subdivision. His enquiries revealed that Mr Goodsell is an experienced grazier in the locality and the Goodsells purchased "Dingo Park" for grazing purposes. Mr Brown says that "Dingo Park" was in a run down condition when it was sold to the Goodsells with the waters in particular requiring maintenance and the yards in need of repair.
Mr Brown describes the country on "Dingo Park" as comprising semi-open and open undulating forest country timbered with poplar box and gum, moreton bay ash and some ironbark and cabbage gum. He says that about 1100 hectares has been treated by tordoning. Grasses are spear, some forest mitchell and general native pastures with some areas of indian couch. Mr Brown sees the highest and best use for "Dingo Park" as being for breeding, growing out and fattening. His estimate of carrying capacity is one adult beast to six hectares. There are permanent waterholes in Majors Creek and in the Haughton River but the property is predominantly watered by 8 equipped bores. There is a waterworks license (No. 45021) for irrigating 80 hectares from the Haughton River but this license has not been utilised.
Mr Brown sees "Camerons" as being a superior property to "Dingo Park" and has applied a higher value than the sale reflects upon analysis. This is in part because the sale of "Dingo Park" took place 12 months to 2 years prior to the resumption of the subject land in what Mr Brown describes as a steadily rising market. Further "Dingo Park" was run down and the improvements were neglected in comparison with those on "Camerons". Mr Brown regards the country on "Camerons" to be superior to that on "Dingo Park" mainly because of its better soil types. He says his advice is that "Camerons" had a greater area available for rainfed agriculture. In his opinion it also has a higher carrying capacity. "Camerons" also has superior access since "Dingo Park" has about 12 kms of gravel and formed earth road.
A secondary method of valuation used by Mr Brown is an examination of property market trends since "Camerons" was purchased by the claimants in May, 1980. Mr Brown says this sale of the subject property reflects a value for the freehold lands (the land resumed) of approximately $168 per hectare on a treated, fenced and watered basis. Mr Brown referred to three grazing properties in the area which have sold and resold to examine market trends. Details are incorporated within his valuation report. He says this market evidence, although not of properties strictly comparable with "Camerons", suggests the market increase for a property like "Camerons" between May, 1980 and the date of resumption would be about 78% - a factor which, he says, when applied to the 1980 sale level of "Camerons", justifies his valuation of $300 per hectare for the subject resumption. In addition, of course, there is the value of improvements erected in the meantime (fencing, water and yards) to consider.
Mr Brown is aware that the sale of "Dingo Park" was presented as a valuation basis before the Land Court in re: Claim for compensation - G and M Zandonadi v. The Commissioner of Water Resources. That matter involved the resumption by the Commissioner of an area of 2644 hectares of mainly grazing land described as Portions 107 and 108, Parish of Leichardt Downs. The resumption was for the same purpose as for these resumptions, and took place on 16th November, 1985. However, Mr Brown prefers to rely upon the sale of "Dingo Park" rather than on the Zandonadi judgment since "Dingo Park" is a closer property to "Camerons" and he believes it constitutes more direct market evidence. Mr Brown knows the Zandonadi property and is of the opinion that 50% of that land is inferior to "Camerons" and overall he thinks the Zandonadi land is also inferior to "Camerons".
Mr Brown believes that the purchase of "Mittagong" by the dispossessed owners is a logical and reasonable extension of the resumption even though it is a long way from Majors Creek Junction Station. He was informed about the claimants having failed to purchase a suitable fattening block in the subject area.
Mr Thompson, who is a soil scientist, was formerly a Land Resources Officer in the employ of the Department of Primary Industries. He was appointed to the Burdekin area at the commencement of the investigation into the suitability of lands for what it now known as the Burdekin Irrigation Area. He was responsible for conducting a soil survey of the area running from the Burdekin River to the Elliot River and running back to the Bowen River and across to the junction of the Haughton River and Majors Creek. His mapping then ran to the boundary of "Camerons". He was instructed by the valuation firm Herron, Todd, White to prepare a soil report on "Camerons" and on "Dingo Park". This report is in evidence. It was prepared in October, 1986. Mr Thompson's evidence is that in overall terms "Camerons" represents one of the most highly suited single deed parcels of land within the Burdekin command area, but I feel this remark is made on the basis of the irrigation potential of the land. This, he says, is due to the high content of levy type soils which comprise 43% of the block. He regards "Camerons" to be superior in soil type to "Dingo Park" which has only 11% levy type soils. Mr Thompson identifies 39% of "Camerons" land as being suitable for rainfed cropping, whereas his assessment for "Dingo Park" is for 25% suitable for rainfed cropping. Mr Thompson also considers "Camerons" to be superior to "Dingo Park" in grazing potential on both native and improved pastures. Mr Thompson saw little evidence of overgrazing on "Camerons" and noticed a higher incidence of woody weed and chinee apple on "Dingo Park".
Mr Thompson sets out in his tendered report in some detail the results obtained by him from his research of the differing soil types on each property.
Mr Thompson has made a study of a water sample taken from the bore on "Camerons" and concludes that it is suitable for domestic consumption and suitable for all livestock consumption.
Mr Thompson has previously mapped the soils on the Zandonadi property. This survey was done between 1974 and 1977. He broadly describes the Zandonadi property to be quite severely inferior to "Camerons". There are a lot of soils with what he calls an extreme amount of short range variation which is very difficult to handle under any circumstances. Soils vary from deep sand to a reasonable surface soil going into clay at depth and this type of variation occurs in 50 to 100 metres three or four times. In the circumstances, Mr Thompson does not see any soils on the Zandonadi property as being suitable for rainfed cropping. From a grazing point of view, Mr Thompson also regards the Zandonadi property to be inferior to "Camerons" for the reason that the Zandonadi property has a reasonably high content of the heavier textured clay and the pastures are significantly inferior to those on "Camerons".
Now Percy John Hannon, who was the mortgagee vendor of "Dingo Park", was called in evidence by the claimants. Mr Hannon is a grazier of long experience in the area. He owned the property for about 23 years. Mr Hannon told us that "Dingo Park" is not a good fattening property. He is somewhat familiar with "Camerons" and he also says "Camerons" is a better block than is "Dingo Park". There are nine windmills on bores on "Dingo Park" and there are two unequipped bores. Two of the bores supplied good quality water but the balance provided saline water which was only suited to stock. Mr Hannon also points out that "Dingo Park" is susceptible to flooding and he describes the access road at the time of his sale to the Goodsells as being poor. It has since that time been improved. Mr Hannon describes the best country on "Dingo Park" to be on the eastern boundary. He did not use the Waterworks License as his understanding was that he could only pump on average for about two months of the year while the Haughton River was running, and Mr Hannon did not regard it as an economic proposition to pump water from the position in the river bed since the water flow was on the other side of the river. Waterworks License No. 45021 is in evidence. One of the conditions is that pumping from the river is authorised only to occur when the river flow is overtopping the Giru Weir or when the flow has ceased at a gauging station adjacent to Portion 1, Parish of Barratta.
Mr Hannon confirmed that the improvements on "Dingo Park" were suffering from lack of maintenance when he took possession of the property as mortgagee. The windmills were allowed to deteriorate and white ants had infested the yards. Some fences had been washed away in floods and others had not been repaired.
The respondent Commissioner called in evidence Raymond Francis Nicholls, who is regional stock inspector for North Queensland for the Department of Primary Industries. Mr Nicholls has held that position since 1980 and holds a diploma in Animal Husbandry. He says that he has a working knowledge of "Camerons", "Dingo Park" and the Zandonadi property. Mr Nicholls expressed the opinion that each of the properties would have a carrying capacity of one beast to six hectares on the basis of a fully grown 2 year old beast. He says "Camerons" is probably better improved than the other properties but he says it has presently insufficient water to make the most use of the country. He considers the central water point, while very advantageous for mustering and handling cattle, is not advantageous to the use of the country as stock have a tendency to flog areas adjacent to watering points. Mr Nicholas considers the country on all three properties to be only marginally suited for fattening. He commented that when he saw "Dingo Park" in 1987, it was over-grazed with the fencing in poor condition and the water supplies were not maintained.
Kenneth John Day, who is regional manager in the North Queensland Branch of the Department of Primary Industries also furnished evidence. Mr Day also is a soil scientist and he was involved in the soil mapping of considerable areas for the Burdekin Scheme since 1985. This information was provided to assist The Water Resources Commission with planning and subdivision and farm design within the scheme. Mr Day has been personally responsible for detailed soil surveys and land suitability assessments in two parts of the Burdekin River Irrigation area. One is in the Leichardt Downs relift area and the other is west of the Burdekin Agricultural College in an area known as Haughton Stage 1 and this area includes part of the resumed land.
Mr Day's evaluation of the soils was for both irrigated cropping and for potential for dry land cropping. The irrigation cropping evaluation is not relevant to the determination of compensation here, and the same applies to the irrigation cropping assessment made by Mr Thompson. The parties here agree that compensation assessment for the resumptions is to be based purely on the basis of rainfed cropping and grazing.
Mr Day says that the soil types on most of "Camerons" have been mapped in detail by a number of departmental officers during the period 1987 to 1990. He produces a table indicating his assessment of the types of soil on "Camerons", and suggests that the area suitable for rainfed cropping (or dry arable) on A90-43 claim land is 114.18 hectares (45%). On A90-44 claim land his assessment is 1197.5 hectares - or 40.8%. Over the whole of "Camerons", his assessment of dry arable land is 41.2%. The balance area is suitable for grazing. If follows that there is very little difference between his estimate and that of Mr Thompson in respect of rainfed cropping.
Mr Day has inspected "Camerons" and has observed the soil types where there is no timber cover. The soils here are called sodic duplex soils and the tree cover on these soils is quite sparse and there is a considerable amount of sodic duplex soil on "Camerons". Mr Day saw some tree stumps in places but that was the limit of his observation of clearing.
Mr Day has made an assessment of the area of land on "Dingo Park" which is suitable for rainfed cropping from soil maps. It is 30% as opposed to Mr Thompson's estimate of 25% - again only a relatively small divergence. He has also examined a soil map of the Zandonadi resumed land which was tendered in that case. This map shows an area of 41% of the Zandonadi resumed land as being suitable for rainfed cropping.
Peter James Elliot who has been stationed at Ayr as an Extension Agronomist with the Agriculture Branch of the Department of Primary Industries since September 1985, has made an evaluation on "Camerons" of estimates of pasture production which can be achieved on the different soil groupings provided to him by Mr Day. He has conducted a similar exercise on the Zandonadi land and on "Dingo Park". Mr Elliott has looked at carrying capacities on improved pastures and on native pastures. He is of the opinion that all three properties are very similar in carrying capacity on native pasture productivity - his estimate for "Camerons" is one beast to 5.7 hectares, on the Zandonadi land one beast to 5.1 hectares, and on "Dingo Park" one beast to 6.2 hectares. His carrying capacity estimates are based on the carrying of two year old steers. On an improved pasture basis, Mr Elliot sees "Camerons" as having the potential to carry one beast to 3.5 hectares, the Zandonadi land one beast to 3.7 hectares and "Dingo Park" one beast to 4 hectares. It is to be noted that Mr Elliot has not inspected "Camerons", that he has driven through the Zandonadi land to a sub-research station on that property and he has not been to "Dingo Park". He readily concedes that it is difficult to estimate the carrying capacity of a property without being aware of the state of development of the property, but says that his carrying capacity estimates are based on what a local beef cattle husbandry officer and himself believe to be sustainable levels for the soil groupings on the properties on an average season basis.
Brief evidence was also called by the respondent from Leon Malcolm Leach, who is a hydrologist employed in the Water Resources Branch of the Department of Primary Industries. Mr Leach told us that in the vicinity of "Camerons", Barratta Creek forms a divide between two types of sediments. A major feature of the sediments in the "Camerons" area is the pronounced lack of saturated high permeability sand and gravel beds resulting in poor overall availability of groundwater. Mr Leach says that with one exception there are no known existing irrigation bores between the Haughton River and Barratta Creek.
Mr Leach informed the Court that prior to September, 1987 two bores were in existence on "Camerons". Since that time, and following a request by Mr Turner, the Commission agreed to allow the Turners to carry out groundwater investigations on the resumed land. Seven test holes were drilled by January, 1988 and they penetrated the entire thickness of the sediments. No highly permeable sands were found except in one hole. An attempt was made to case that hole and an air test was conducted at about 2 litres/sec for 1 hour. Mr Leach concludes that the prospect of obtaining a sustainable irrigation supply of more that 15 litres per second was very remote.
Mr Leach has made a groundwater assessment on "Dingo Park". He says there have been 14 private bores put down on the property, none of which provides an irrigation supply. He says stock supplies are readily obtainable and with very little development expense as demonstrated by the evenly distributed bores on the property. Mr Leach collected water samples from 12 bores on "Dingo Park" on 19th November, 1991. All samples proved on testing to be suitable for stock as with the bores on "Camerons".
It can be said in view of the nature of the case that the principal witness called by the respondent was Mr Moloney. He describes the nature of the land on "Camerons" as being open to moderately timbered forest country broken at close intervals by watercourses and the Haughton River flood out channels. He says that soils comprise a mixture of sandy and clay loams in the vicinity of the watercourses with the balance comprising mainly clay soils. Mr Moloney assesses the present carrying capacity of "Camerons" at one beast to five hectares with a potential carrying capacity of one beast to 3 hectares. As with Mr Brown, Mr Moloney sees no land as suitable for irrigated cropping due to the lack of suitable quantities of groundwater. He adopts Mr Day's estimate of 1313 hectares (41%) as being suitable for some form of rainfed arable pursuit. Mr Moloney values each parcel as follows:-
A90-43 land
115 hectares clay soils with some
form of arability in rainfed
conditions at $250 per hectare. $ 28,750
140.28 hectares forest country suited
to grazing only at $150 per hectare $ 21,042
$ 49,792
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A90-44 land
1198 hectares clay loam soils with some
form of arability in rainfed
conditions at $250 per hectare. $299,500
1734.024 hectares forest country
suited to grazing only at $150 per
hectare $260,104
$559,604
Structures (claim admitted) $ 28,800$588,404
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Mr Moloney relies for his valuation of "Camerons" upon the Land Court judgment of compensation for the taking of the Zandonadi land. The Land Court determination was for a value of land suitable for rainfed cropping at $220 per hectare fenced and watered and a value of land suitable for grazing at $140 per hectare fenced and watered. It is to be observed that Mr Moloney has applied slightly higher values to the same classifications of land on the subject "Camerons". He describes the Zandonadi land as comprising mainly open to undulating forest timbered with ironbark, poplar gum and moreton bay ash. About 50% comprises fair quality forest, the remainder is forest country and flooded natural plain country. This land was used for growing and fattening cattle and a small area grew mangoes. Mr Moloney saw the carrying capacity of the Zandonadi land to be one beast to five hectares on a fenced and watered basis with a potential of one beast to three hectares.
Mr Moloney describes "Camerons" as being better situated than the Zandonadi land and it has superior access since the Zandonadi land had 2.5 kms of dirt track access. They are similar in that neither property has underground irrigation water. Mr Moloney sees "Camerons" as being inferior to the Zandonadi land in stock water supply as Zandonadi had an equipped bore, an equipped well, 4 earth dams and a natural waterhole in Cassidy Creek with access to several artificial supplies on adjoining land. Mr Moloney regards the carrying capacity of each property to be the same on a fenced and watered basis. He says the subject land is inferior to the Zandonadi land in arability (41% as opposed to 50%). He does not see any country on "Camerons" as having been cleared or timber treated, and overall he regards the subject land to be superior to the Zandonadi land mainly due to its better situation and access.
Mr Moloney obviously disagrees with Mr Brown's estimate of 64% of "Camerons" as being arable. He endeavoured to calculate the arable area for himself and arrived at a figure of 37% but in the end adopted Mr Day's estimate.
Mr Moloney says that the property market was depressed from the mid 1980's up until December, 1987 due to the severe drought in the area. He believes there was no rise in the property market between 1985 and 1987.
Mr Moloney knows "Dingo Park". He sees its carrying capacity as being potentially one beast to three hectares, not as stated by the Commission's valuer who analysed the sale for the Zandonadi case, who estimated its potential carrying capacity at one beast to 2.5 hectares. Mr Moloney agrees with the previous valuer in that the present carrying capacity of "Dingo Park" is one beast to 4.5 hectares. It is to be noted that the "Dingo Park" sale as analysed and presented in the Zandonadi case showed $183 per hectare fenced and watered - a figure close to that analysed by Mr Brown. Mr Moloney sees "Dingo Park" stock water to be considerably superior to that on "Camerons" in so far as the number of bores is concerned and their location. He also points to the advantage of the Waterworks License. Mr Moloney says "Dingo Park" is marginally better situated than is "Camerons". He considers that "Dingo Park" overall is marginally superior to "Camerons" and certainly does not agree with Mr Brown's valuation of "Camerons" at so much higher a rate per hectare than his analysis of "Dingo Park" ($177 per ha fenced and watered) discloses.
Mr Moloney considers the resumption of "Camerons" as being a resumption of one parcel as an entity. He expressed the view that if the dispossessed owners are fairly and justly compensated for its loss by resumption, then the money can be used as the dispossessed owners choose. It well may be that they would not choose to buy a property such as "Mittagong", and in any case he says that "Mittagong" is a totally dissimilar property to "Camerons", being massively larger.
Now the evidence of the soil scientists received a lot of attention in this case. Much of the material furnished by them is fairly technical and certainly it is precise and detailed but in the end, it seems to me that for the most part and from a practical viewpoint, especially in valuation terms, their evidence is not the subject of any serious anomalies. There is one thing though which can be elucidated from Mr Thompson's evidence, and that is that not 64% of "Camerons" is suitable for dry land cropping under average management. It is true that one of his tables (Table 3 - Land Suitability Rankings) shows that a total of 64% on "Camerons" is suited to rainfed cropping but this includes 39% of rank 3 soils, and 25% of rank 4 soils. Rank 3 soils are said to be moderately suited to arability but rank 4 soils have limited suitability. In addition Mr Thompson says that rank 4 soils are either unsuited to arability or suited only to a manager with expertise in managing different soils.
I propose to now deal with matters about which there is agreement. Firstly, it is not in dispute that the highest and best use of "Camerons" is for a combination of rainfed arable use and for grazing. This is no doubt as a result of the failure to prove up suitable groundwater for irrigation on the property as outlined by Mr Leach. There is near enough as to agreement between Mr Thompson and Mr Day as to the arability of "Camerons" and "Dingo Park". There is agreement between the valuers that "Camerons" is a more valuable property than is the resumed Zandonadi land.
I propose to take into account the evidence of the sale of both "Dingo Park" and the Land Court determination of compensation for the Zandonadi land. I am satisfied on the evidence that "Camerons" on a watered and fenced basis is a considerably superior property to both "Dingo Park" and the Zandonadi land. In so finding I am influenced by the evidence of Mr Hannon, especially as he appears to be a party completely independent to these proceedings. But this superiority has to be measured in terms of value. I am satisfied that there is no timber treatment on "Camerons", or at least no timber treatment of added value. But what has to be appreciated is the added value of the land where it is naturally open, since no timber treatment is necessary for it to maintain the pasture growth. It is to be noted that in Mr Brown's analysis of "Dingo Park", a value of $55,000 was placed on timber treatment, at this reflects $14.23 per hectare overall. In the Zandonadi judgment, timber treatment was determined at $375,360 and that figure represented the considerable sum of $142 per hectare overall. I find also that "Camerons" on a fenced and watered basis has advantages over "Dingo Park" in so far as the quality of the water and fencing improvements is concerned, especially as "Dingo Park" was so run down at time of sale.
I find that Mr Brown's valuation of "Camerons" was influenced to a considerable extent by his over-estimation of the proportion of land as being suitable for rainfed cropping, notwithstanding his explanation that his classified values as between dry arable and grazing as having only been for the benefit of the Court. Certainly a value of $300 per hectare treated, fenced and watered for "Camerons" is simply not, in my view, sustainable on the evidence the Court has as to its comparability with both "Dingo Park" and the Zandonadi land. On an overall basis, $300 per hectare represents increased of 70% in value per hectare over the value of "Dingo Park" ($177/ha), and a little lower increase over the value of the Zandonadi land ($180/ha). This, on the evidence, is a much greater increase than is warranted.
On the other hand it should be said that Mr Moloney does not seem to have fully appreciated the advantages "Camerons" has over the Zandonadi land. He certainly recognises the advantages of better situation and access, but I am persuaded, especially on the evidence of Mr Thompson, that the land on "Camerons" is significantly superior.
Taking all the evidence of the witnesses into account, I find that "Camerons" has a value of $230 per hectare on a fenced and watered basis - or $733,074. To this has to be added the agreed value for the yards of $28,800. Compensation for the loss of land and improvements in both claims is therefore determined at $761,874.
If it is of assistance, I should here indicate that my finding as to a land value on a fenced and watered basis of $230 per hectare could be apportioned as follows:-
1313 ha rainfed arable at $300 per hectare
1874 ha grazing land at $180 per hectare.
It remains to apportion this sum as between the two claims. Mr Moloney's value of Parcel A90-43 land on a fenced and watered basis averages $195 per hectare and his valuation of Parcel A90-44 averages $190 per hectare - an insignificant difference. Mr Brown sees the parcels as having the same value per hectare. I propose to apportion my finding as to compensation for the loss of land equally as between the parcels on a direct pro rata area basis. It follows that my determinations of the value of the resumed land and improvements for each claim is:-
A90-43 parcel - Land $ 58,714
A90-44 parcel - land $674,360
Yards $ 28,800 $703,160
Total value $761,874
=====
Before considering other aspects of the claims, I should refer to a submission by the respondent for a capital sum equating to the costs to pay out freeholding moneys owing to the Crown on "Camerons" as at the time of resumption should be deducted from the compensation determined as being owed to the Crown. Mr Moloney has ascertained that the pay out figure on the freeholding lease as at 31st May, 1987 was $89,785.28.
Now in my view it would be inequitable to make such a deduction for two reasons. The first is that it was not necessary for the claimants to pay off such a capital sum if their ownership of the freeholding lease was not disturbed by the resumption. In that event it was open for them to continue with their interest free payments on an annual basis for whatever was left of the long term freeholding lease. The second, and probably the more persuasive reason is that both valuers assessed compensation for the resumption of the freeholding lease as such and valued it as a lease and neither made any deduction (or mention of a deduction) from their respective valuations because of the tenure.
Now I look at other aspects of the claim. With respect to the valuation expenses, it is well established in this jurisdiction that valuation fees expended by dispossessed owners for the purpose of the preparation and lodgement of a claim for compensation are compensable as long as the valuation itself is not frivolous or vexatious (Vide claim for compensation - Merivale Motel Investments Pty Ltd v. Brisbane Exposition and South Bank Redevelopment Authority (1984/5) 10 Q.L.C.R. 268 p288). Now the valuations sought for the preparation of the claim were prepared by the valuation firm Herron, Todd, White. A copy of them is in evidence. They are dated 30th April, 1987 and compensation for the loss of the property "Camerons" is set at $2,906,825. The total compensation originally claimed for the loss of the land and improvements incorporating the property "Camerons" is $2,906,298 so is can be said that the claims are based on the valuation provided. Evidence from Mrs Owens is that a fee of $2,756 was paid to Herron, Todd, White on 3rd December, 1987, and a further fee of $9,500 was paid on 25th May, 1988.
Now it transpired that the valuation of Herron, Todd, White was not relied upon by the claimants in this case. The reason for this appears to be that it proceeded on the wrong basis, and it is clear from perusing the documents that the resumed land was valued taking into account potential for irrigation and dry land farming in conjunction with cattle fattening on improved pastures. In the event it was Mr Brown's valuation of the subject land at $984,984 which was relied upon.
Senior counsel for the claimants urge the Court to allow the claim for valuation expenses. Mr Turner took expert advise from both Mr Thompson and Herron, Todd, White. There are passages in Mr Thompson's report which indicate that the soil types are the types which suggest there should be a suitable underground water supply for irrigation.
Senior counsel for the respondent submits that valuation fees, if allowed, should be assessed on the basis of a partial resumption, or secondly that the fee as claimed should be disallowed as it proceeded on the wrong basis and was never relied upon by the claimants, or if a fee is allowed, it should be allowed at a lower rate.
Now I certainly cannot find that the valuation of Herron, Todd, White was vexatious or frivolous. It certainly proceeded on the wrong basis and for this reason it was never used. But to deny the claimants any compensation for valuation fees incurred for the preparation and lodgment their claims for compensation seems to me to be unjust. While it is widely recognised that it is a most unlikely event that valuers would agree in the matter of the assessment of compensation, it is perhaps imaginable that if Herron, Todd, White has proceeded on the correct basis, then a valuation of "Camerons" in the vicinity of the figure as assessed by Mr Brown may well have resulted. In the end, I find that the claimants are entitled to compensation for valuation fees. Using the scale of recommended fees issued by the then Australian Institute of Valuers at the relevant time (a copy of which was placed in evidence), and using Mr Brown's assessment as a starting point and allowing something for travelling expenses for Herron, Todd, White (the valuation was done in their Townsville Office), I determine compensation for valuation expenses at $5,000. This is apportioned as between the claims on an area basis as follows:-A90-43 - $ 400
A90-44 - $4,600
The fee rendered and paid for the McGowan International report was $5,008.97. Now the McGowan report was made as to soil suitability on "Camerons", "Dingo Park" and another property called "Cox" (the latter is not relevant in this case) for irrigable arable, dry arable and grazing. It seems to me that if the drilling program had been carried out prior to the lodgment of the claim for compensation, then the component part of the report which refers to irrigation potential need not have been prepared.
A copy of the McGowan International Pty Ltd memorandum of fees is in evidence. It reads:-Professional services
GD Hunter - 6 days @ $500/day $3,000
Expenses -
Airfares $426
Air photos $ 71.70
Typing, photocopying etc $358.85
Water analysis $ 90
Drafting/computer time $500
Car hire $275.42
Per Diem - 4 nights @ $50 $200
Taxi & fuel $ 87.00 $2,008.97
$5,008.97
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Now I simply have no evidence as to what the fee would have been if the irrigation segment had been left out. I do propose to determine compensation for the McGowan International fee on that basis. I find for 3 days for GD Hunter at $500 per day, the $426 for air fares, the $71.70 for air photos and an amount of $350 for typing, photocopying and communication, $90 for water analyses, $450 for drafting and computer time, $275.42 for Car hire, $200 for Per Diem and $87 for taxi and fuel. This I total to $3,450 and compensation for the McGowan International Pty Ltd component of the valuation fees is determined accordingly. This fee is apportioned as between the claims again on an area basis as follows:-
Claim A90-43 $ 276
Claim A90-44 $3,174
Now we come to the claim for disturbance. In re: Harvey v. Crawley Development Corporation (1957) 1 AER 504 Romer LJ at page 507 said:-
"The authorities to which our attention were 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 to compensation for disturbance, provided, first, that it is not too remote and, second, that it is the natural and reasonable consequence of the dispossession of the owner."
Now as I see this claim here, the evidence is clear and unequivocal that the "Mittagong" property was purchased to continue with the grazing business which had already been established on "Camerons" and on Majors Creek Junction Station. Attempts were made to secure a property in the subject location but they proved fruitless. Now it must be conceded that "Mittagong" is not in any sense a property comparable with "Camerons". It is very considerably larger with a much higher carrying capacity, it is in a situation very remote from "Camerons". Nonetheless, when looked at in value terms for land and improvements it is not so remote. In the circumstances of this case I find that the purchase of "Mittagong" to operate in conjunction with Majors Creek Junction Station is a natural and reasonable consequence of the dispossession of the owners' use of "Camerons", and that compensation for some of the monies outlayed and for some of the items claimed is sustainable. I deal with them in turn.
Legals on lodgement of claim.
These are agreed at $1,000 per claim.
Purchase of "Mittagong"
The stamp duty and legal fees and outlays associated with the purchase of the "Mittagong" land and improvements as set out by Mrs Owens are claimable and proven. I see no justification is making an award of compensation for mortgage costs. They are costs too remote from the resumption and come about only due to the special position in which the claimants found themselves in that they required total finance to buy "Mittagong". For the resuming authority to compensation claimants for mortgage costs is unreasonable.
The cost of moving the cattle from Majors Creek Junction Station to "Mittagong", together with Mrs Owens' estimate of the mustering costs are compensable and proven although it must be said that some attack was made during the hearing of the case on the cost of $5 per head for mustering the cattle.
I now come to the claim for the additional cost of management of "Mittagong". Now this claim is only brought as "Mittagong" is so remote from Majors Creek Junction Station. I see it as being an unreasonable claim since on the evidence, the trips made by Mr Norris included the transportation of material and equipment, but the main reason I find it is not a sustainable claim is that to capitalise the additional cost of management in perpetuity means what is says - it assumes the ownership of "Mittagong" and Majors Creek Junction Station being retained by the claimants in perpetuity and that the use of the properties in conjunction also be retained in perpetuity. We have evidence of the attempted sale of both properties in 1990. Should compensation be awarded for this additional cost of management then, it is clearly an unjust imposition on the resuming authority, especially if the properties were to have sold in 1990 or for that matter at any time within the foreseeable future. No award for disturbance under this head of claim is made.
I now summarise my finding at to the compensation under the heading of disturbance.
Legals on lodgement of claim
$1,000 for each resumption $ 2,000
Purchase of "Mittagong"
Stamp duty $38,325
Legals (scale) $ 8,754
Outlays $ 1,106 $48,185
Moving cattle to "Mittagong"
Mustering $ 2,250
Transport $10,975 $13,225
$63,410
====
I apportion the determination for disturbance as between the claims as follows:-
A90-43 Legal fees $ 1,000
Other (8% of $61,410) $ 4,913
$ 5,913
====
A90-44 Legal fees $ 1,000
Other (92% of $61,410) $56,497
$57,497
====
My determination of compensation in the matters is therefore:-
A90-43 Claim
Land $58,714
Valuations Expenses
Herron Todd White $400
McGowan Int. Pty Ltd $276 $ 676
Disturbance $ 5,913
Total award of Compensation $65,303
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A90-44 Claim
Land $674,360
Yards $ 28,800
Valuation Expenses
Herron Todd White $4,600
McGowan Int. Pty Ltd $3,174 $ 7,774
Disturbance $ 57,497
Total award of compensation $768,431
=====
Now Section 28 (1) of the Acquisition of Land Act 1967 - 1988 provides that the Land Court may order that interest be paid on the amount of compensation determined by it. The subsection further provides that interest shall be at such rate percentum per annum as the Land Court deems reasonable.
An advance against compensation was made on 29th June, 1987 in the sum of $636,100. There is in evidence a copy of an agreement to occupy as between the dispossessed owners and The Commissioner of Water Resources dated 1st September, 1987. The agreement is for 12 months and covers an area of about 2830 hectares being part of Lot 2 on Plan GS 955, Parish of Barratta. The occupation fee payable by the licensees (claimants) is $8,500 per annum, to be increased to 1½% of the settlement figure for compensation for the lands resumed. The evidence is that there was a dispute between the parties as between the continued occupation of the license area by the claimants after the expiry of the 12 month period, and also a suggestion about the non payment of rental. Mr Moloney says there is a sum of $13,458.33 outstanding in rent, but I do not see this as being a relevant issue in deciding whether there should be an award for interest.
Senior counsel for the respondent submits that no interest should run from the date of resumption to the date when the Turners vacated the resumed land in March, 1990. And further that since that time, there has been a great deal of procrastination in bringing the claim to Court on the part of the claimants. Accordingly it is submitted that no additional interest should be paid.
It is contended by the claimants that interest should be awarded, mainly for the reason that although the dispossessed owners remained in occupation of "Camerons" after the resumption, rent was either paid or there remains a liability to pay rent. In addition there is evidence from Mr Norris about difficulties experienced during the occupation of the land because the Commission was also making some use of the land.
It seems to me that this is a case for awarding interest. Certainly if resumed land is occupied after resumption rent free then no interest on compensation awards is payable. But that is not the case here. As for the suggested procrastination by the claimants, I should say Mr Turner has been and still is ill, and this no doubt caused much of the delay in bringing the claims to Court.
Now for the determination of the period during which interest is to run, it is necessary to make a few observations. Firstly, the A90-43 resumption was promulgated on 22nd March, 1986 and the A90-44 resumption was made on 20th June, 1987. The advance of $636,100 was paid on 29th June, 1987. The agreement to occupy is dated 1st September, 1987. The valuation expense account was paid as to $2,756 on 3rd December, 1987 and $9,500 on 20th May, 1988. The disturbance costs in relation to the purchase of "Mittagong" seem to have been paid by Dalgety Winchcombe FGC in March and April, 1988. How then does one compile an interest award?
I do not propose to award interest on compensation payable before the date of the agreement to occupy since it must be assumed that the dispossessed owners remained in possession of the resumed land until then on a rent free basis. I think it is fair to award interest from the date of the agreement to occupy the resumed land on the value of the resumed land and improvements. Then I propose, for the state of simplicity, to award interest on the determination for disturbance, valuation fees and legal fees from 1st March, 1988.
Interest is accordingly calculated and determined as follows:-
Compensation for the resumed land and $761,874
improvements
Compensation for legal fees, valuation fees and
disturbance $ 71,860
On the sum of $125,774 ($761,874 less advance of $636,100) at the rate of 12.5% per annum for the period commencing 1st September, 1987 and extending to the day immediately preceding the date upon which final payment of compensation is made and;
On the sum of $71,860 at the rate of 12.5% per annum for the period commencing 1st March, 1988 and extending to the day immediately preceding the date upon which final payment of compensation is made.
Member of the Land Court.
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