Van Byron Pty Ltd v Chief Executive, Department of Main Roads
[2011] QLC 65
•11 October 2011
LAND COURT OF QUEENSLAND
CITATION: Van Byron Pty Ltd v Chief Executive, Department of Main Roads [2011] QLC 65 PARTIES: Van Byron Pty Ltd
(applicant)v. Chief Executive, Department of Main Roads
(respondent)FILE NO: AQL565-09 DIVISION: General Division PROCEEDING: Claim for compensation for compulsory acquisition of land DELIVERED ON: 11 October 2011 DELIVERED AT: Brisbane HEARD AT: Toowoomba PRESIDENT: CAC MacDonald ORDER: 1. Compensation is determined in the sum of Ninety-six Thousand Dollars ($96,000).
2. The respondent is ordered to pay interest to the applicant at the rate of 5.5% per annum on the sum of $85,000 for the period commencing 22 July 2005 up to and including 22 February 2010.
3. The respondent is further ordered to pay interest to the applicant at the rate of 5.5% per annum on the sum of $60,000 for the period commencing 23 February 2010 up to and including the day immediately preceding the date on which the amount is paid by the respondent.
4. The respondent is further ordered to pay interest to the applicant at the rate of 5.5% per annum on the disturbance items paid by the applicant for the period commencing on the days, to be proved by the applicant, on which the applicant paid each amount up to and including the day immediately preceding the date that the respondent pays these amounts to the applicant.
CATCHWORDS: Injurious affection - whether claimable for lot not adjoining resumed land - lot adjoins balance lot (from which resumed land taken) - 2 lots in common ownership - but highest and best use as separate rural residential lots - severance necessary to activate s.20(1)(b) [injurious affection] - meaning of "such other land" under s.20(1)(b) - criteria for severance - "connecting factor" between lots despite separate highest and best use.
Injurious affection - uncertainty as to location of proposed works - uncertainty likely to have adverse impact on mind of purchaser of balance land - present detriment at date of resumption - compensable.
Use of sales - data base of sales information showing median sale prices showing percentage increase - not acceptable evidence - increase should be shown by sales and resales of same properties - averaging techniques not standard valuation practice.
Injurious affection - discount to be allowed a question of fact to be determined on evidence of each case - cannot use allowances in other cases to suggest some guiding principle.
Principles of valuation - valuation not an exact science - small difference between valuers one of professional judgment - compulsory acquisition - benefit given to claimant.
Interest - when payable on award - claimant remained in possession - but minimal benefit in so doing - bulk of award referable to injurious affection, not value of resumed land - full interest allowed.
APPEARANCES: Mr GR Allan of Counsel, for the applicant
Mr EJ Morzone of Counsel, for the respondentSOLICITORS: Hede Byrne & Hall for the applicant
Clayton Utz for the respondent
These proceedings concern a claim for compensation by Van Byron Pty Ltd (the claimant) under the provisions of the Acquisition of Land Act 1967 (the Act) in respect of the compulsory acquisition of land under the provisions of that Act. The land was taken for the purpose of transport, in particular road purposes, as from 22 July 2005 and vested in the Chief Executive, Department of Main Roads (the respondent) as constructing authority for the State of Queensland, for an estate in fee simple.
The land taken was part of Lot 14 on Registered Plan 34896 in the County of Aubigny, Parish of Toowoomba. Prior to the resumption Lot 14 had an area of 9.5635 ha. An area of 1.257 ha was resumed leaving a balance of 8.3065 ha.
In addition to Lot 14 and as at the date of resumption, the claimant owned Lot 5 on RP 34896 which has an area of 3.324 ha. Lot 5 adjoins part of the southern boundary of Lot 14. No land was resumed from Lot 5 but the claim for compensation includes a claim for injurious affection to Lot 5. The respondent has resisted the claim for injurious affection to Lot 5 on the ground that there had been no injurious affection to that lot within the meaning of s.20(1)(b) of the Act.
The amount of compensation finally claimed by the claimant was set out in an amended claim handed to the Court on the first day of the hearing. That claim was -
Loss of land and injurious affection: Lot 14 on RP 34896 $80,000.00
Injurious affection: Lot 5 on RP 34896 $25,000.00
Costs attributable to disturbance:
(a) valuation fees $5,280.00
(b) barrister's fees $1,897.50
(c) solicitors' fees $2,970.54
(d) outlays $218.42
(e) town planners' fees $950.00$11,316.46
Rounded to $11,000.00
$116,000.00
Less advance received by applicant 23 February 2010 $25,000.00
Total amount of claim $91,000.00
Plus interest in accordance with the Land Court ruling rates.The respondent contended that the amount of the compensation payable in regard to Lot 14 was $40,000 exclusive of disturbance items. The respondent did not adduce evidence as to any impact of the resumption on the value of Lot 5.
Valuation evidence was given by registered valuers Mr S Walker (for the claimant) and Mr C Kamitsis (for the respondent).
Mr Walker described Lot 14 as a near regular shaped inside allotment with an eastern frontage of approximately 200m to Boundary Street. The land falls slightly to moderately from the street alignment to a gully that traverses approximately two-thirds into the site, then rises slightly to the rear. Another gully runs from approximately the middle of the land at the street alignment down to the traversing gully. The land drains towards the northern side. The land had been predominantly cleared as at the date of resumption and was vacant apart from a wind-driven pump and perimeter fencing.
Mr Walker described Lot 5 as a near regular shaped inside allotment located on a bend in Boundary Street. The land has an eastern frontage of approximately 195m to Boundary Street. The land falls moderately down to a traversing gully and rises slightly up at the south-west rear corner. The land has a slight cross slope. Approximately 60% of the land is traversed by a gully that runs from the south-east front corner to the north-west rear corner. The land drains towards the northern side. The land had been predominantly cleared as at the date of resumption and was vacant other than for perimeter fencing.
Boundary Street is a dual-lane bitumen sealed carriageway that carries a light volume of traffic. Satisfactory vehicular access was available, Mr Walker said, for the highest and best use of the lots.
The lots were used together as at the date of resumption for grazing approximately 10 to 15 head of cattle and had been used for a similar level of grazing since the claimant acquired the properties in 1991. However, the parties are agreed that the highest and best use for each lot in both the before and after situations was as separate rural homesites.
The land was resumed for the purpose of constructing part of the proposed Toowoomba Bypass. Mr Walker described the proposed highway and its impact as follows - the width of the road corridor adjacent to and including part of the subject land was approximately 230m; a four-lane divided road with route lighting was proposed, with an upgrade to six lanes if required; the road design enables speeds up to 110 kph; the surface of the carriageway will be approximately 9m higher than the existing land level and culverts will be constructed under the highway to enable stormwater drainage from the carriageway and associated works, and to prevent inundation on the residual subject land; an interchange at the intersection of the highway and Boundary Street is proposed; traffic projections along the highway adjacent to the subject land are as follows -
Year Heavy vehicles per day All vehicles per day 2011 1,483 4,320 2016 1,915 5,439 2026 2,756 7,593
Mr Walker's evidence as supported by Exhibit 1 was that for traffic travelling in an easterly direction along the proposed highway, egress from the highway would be across the land immediately to the north of Lot 14. Access on to the highway from Boundary Street by traffic travelling in a southerly direction would be across land to the east and north of the subject land.
Mr Walker also said that because the whole of the land adjoining to the north of Lot 14 had been resumed, Lot 14 now had a side alignment of approximately 492m to the highway corridor although the carriageway would be between 80m to 170m away from the boundary of Lot 14. Mr Kamitsis' opinion was that although the subject property will adjoin the corridor, the highway itself moves away to the north as shown on plan TB1 B09.
Any increase in the volume of traffic along Boundary Street has not been calculated but Mr Walker anticipated that there would be an increase if the interchange at the Boundary Street and Highway intersection were constructed.
Mr Walker considered that the location of the proposed interchange adjacent to Lot 14 indicated that future upgrade works would be required along Boundary Street. The extent and timing of any works was unknown but, in his opinion, that uncertainty further reduced the potential demand for and the value of Lot 14 and Lot 5. Mr Kamitsis disagreed with this. In his opinion those potential impacts were too remote to be included within an assessment of compensation at the relevant date and any loss should be compensated if there were a resumption in the future. Further, the upgrade of Boundary Street and access to the bypass road from Boundary Street would improve accessibility to the area and could increase demand for this location.
The evidence as to any proposed interchange affecting Boundary Street to the south of the proposed Highway did not establish, with any degree of certainty, whether and where such interchange might be located. However I have accepted that the uncertainty was likely to have an adverse impact on the mind of the prudent purchaser of Lots 14 and 5. That uncertainty was a present detriment as at the date of resumption for which the claimant is entitled to be compensated.
The valuers agreed that the rural residential amenity of Lot 14 will be adversely affected by traffic noise from the highway, potential traffic fumes and dust, potential increase of traffic along Boundary Street, visual blight and reduction of privacy because of the elevation of the highway and the impact of route lighting. They also agreed that the location of the highway will reduce demand for and the value of Lot 14 given that it had previously enjoyed a relatively quiet rural/semi-rural environment.
Mr Kamitsis considered that the new highway, together with nearby ingress and egress access points would improve accessibility to Lot 14. While some purchasers would be deterred by the impacts injuriously affecting the land, others would be attracted to the improved amenity of the location. Mr Walker considered that there was no enhancement in value as a result of the resumption and associated works.
Mr Walker said that Lot 5 was also injuriously affected, to a lesser degree than Lot 14, because of the impediments outlined above, with the qualification that Lot 5 would not suffer from a reduction in privacy.
Compensation principles
As at the date of resumption,[1] s.20 of the Acquisition of Land Act provided that -
[1]Compensation is to be assessed in accordance with the legislation in force as at the date of resumption (22 July 2005). The reprint of the Acquisition of Land Act 1967 in force at the date of acquisition was Reprint 4C. Section 20(2)(c) of the Acts Interpretation Act 1954 provides that the repeal or amendment of an Act does not affect a right, privilege or liability acquired, accrued or incurred under an Act. In Maxwell v Murphy (1957) 96 CLR 261 at 267, Dixon CJ said that -
"the general rule of the common law is that a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events."
20 Assessment of compensation
(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also 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 addition to its claim for compensation in respect of the value of the land resumed, the claimant submitted that it had suffered damage caused by both severance and injurious affection within the meaning of s.20(1)(a) and 20(1)(b) of the Act. The claimant contended that the severance damage to Lot 14 was caused by its reduction in size by approximately 13% and a change in shape from a near regular shaped allotment to an irregular shaped allotment. The injurious affection to Lot 14 was identified as loss of rural residential amenity and loss in demand for the lot as a result of the location of the planned highway.
The claimant also submitted that Lot 5 had been injuriously affected for the same reasons but to a lesser degree than Lot 14. Accordingly, the claim included an amount for injurious affection damage to Lot 5.
The respondent accepted that the effect of the resumption had been to reduce the area of the subject property and that the balance area of Lot 14 was injuriously affected by the road scheme. However the respondent did not accept that Lot 5 had been injuriously affected within the meaning of s.20(1)(b) of the Act and, accordingly, submitted that there should be no compensation payable in respect of any damage to that land.
The parties are agreed that the appropriate valuation methodology for Lot 14 is the before and after method of valuation. The advantage of that method is that the difference in value established by that process will take into account the value of the land taken and the damage suffered by the claimant as a result of severance and injurious affection.
Both valuers adopted the direct comparison method of valuation in determining the before and after valuations, relying on comparative sales evidence. Both have adopted a site value comparison and not a rate per hectare.
The claimant has applied the same valuation methodology to assess the effect of the injurious affection it asserts in relation to Lot 5.
I have accepted that the methodology adopted for assessing the compensation payable in respect of Lot 14 is appropriate for Lot 5, if compensation is payable in respect of any damage to Lot 5. That issue is discussed immediately below.
Injurious Affection and Lot 5
It is convenient to consider initially the question of whether the claimant is entitled to claim compensation for the alleged injurious affection to Lot 5 under s.20(1)(b) of the Act. The difference between the parties turns on whether Lot 5 is "such other land" within the meaning of s.20(1)(b) of the Act. The claimant says that it is, the respondent that it is not.
Counsel for the respondent, Mr Morzone, submitted that the words "such other land" in s.20(1)(b) referred to the land mentioned in s.20(1)(a), that is land that is severed from other land of the claimant. Accordingly there must be a severance before a claim for injurious affection can arise. Whether there had been a severance was ultimately a question of fact, but for there to be a severance there must have been a common use or purpose and common unity of ownership in respect of the relevant land held by the claimant, prior to the resumption. In this case, although Lots 14 and 5 were used together for grazing cattle prior to the resumption, that use did not reflect the highest and best use of the lots. Their highest and best use was as two separate rural residential allotments and, therefore, there was insufficient common use or purpose between the two lots, prior to the resumption, Mr Morzone said, relying on the decisions in Cowper Essex v Acton Local Board[2] and Suntown Pty Ltd v Gold Coast City Council.[3] There was no severance of Lot 5.
[2] (1889) 14 AC 153.
[3] (1979) 6 QLCR 196
In Cowper Essex, land was taken for sewerage works. The claimant sought compensation for the land taken and for injurious affection to other land (about 30 acres) retained by him. Part of the 30 acres was separated from the land taken by other land owned by the claimant for which no compensation was claimed, and the rest by a railway line. Pursuant to the provisions of the Lands Clauses Consolidation Act 1845 (UK), it was held that the claimant was entitled to compensation for injurious affection, including the injurious affection to the land which did not adjoin the land taken.
In Suntown, part of the claimant's land was resumed for rubbish depot purposes. The compensation claim included a claim for injurious affection to the balance land which was across the road from the resumed land. The Land Appeal Court said that the effect of s.20(1) of the Act was that there must be a severance - a separation of the resumed land from the retained land of the claimant - before a claim for injurious affection can arise.[4] The Court accepted that, for there to be a severance, there must have been a relationship or affinity, prior to the resumption, between the resumed land and the retained land. Section 20(1) did not require that the claimant's retained land must be contiguous to the resumed land, worked or held therewith or contained therewith in a parcel separately described for the purposes of the Real Property Act.[5] It was sufficient if there were a proximity of situation and a unity of ownership or control which could ensure that what was done on either would protect, advantage and not depreciate the value of the other.[6]
[4] At 208.
[5] At 209.
[6] At 209.
The decision in Crisp & Gunn Co-operative Ltd v Hobart Corporation[7] is also relevant. In that case the land compulsorily acquired was one of three parcels used by the appellant in its timber merchant business. The parcels were not contiguous - one parcel was separated by a street from the second parcel which in turn was separated by another street from the third parcel (the resumed land). The appellant's claim for compensation included a claim for severance and injurious affection although the Court said that this claim was actually for disturbance of the appellant's business. Relevantly, the High Court found that the three parcels, together, constituted the business premises of the appellant and that they were exclusively and in common devoted to the purpose of the business, and held that there was a severance even though the three parcels were not contiguous.
[7] (1963) 110 CLR 538.
In Cowper Essex, Suntown and Crisp & Gunn, the resumed land did not adjoin the retained land prior to the resumption and the issue was whether there could be a severance in those circumstances. In the present case, the balance of Lot 14 adjoined the resumed land prior to the resumption and Lot 5 adjoined Lot 14. It is arguable therefore that the facts in those cases can be distinguished from the present facts.
However in Gold Coast City Council v Halcyon Waters Community Pty Ltd,[8] the Land Appeal Court said that common ownership of adjoining parcels may not be sufficient to establish severance within the meaning of s.20(1)(a). In that case, the issue was whether the resuming authority was entitled to set off against the compensation payable for the compulsory acquisition of land under the Act, alleged enhancement to the value of other land resulting from the carrying out of the works or purpose for which the land was taken. This required the Court to consider the meaning, in s.20(3) of the Act, of the words, "land adjoining the land taken". In the course of determining whether the "enhanced" land was land adjoining the land taken, the Court also considered the meaning of the expression "land … severed" (from the land taken) in s.20(3).
[8] [2011] QLAC 0003.
The Court said that the decisions in Cowper Essex and Crisp & Gunn had established authoritatively that a claim for compensation for damage resulting from the severance of resumed land from other land of a claimant (under s.20(1) of the Act) was not confined to damage suffered in respect of land which was contiguous with the resumed land. Moreover, something more than common ownership, a "connecting factor", was required to establish that the resumed land had been severed from the retained land.[9] The Court went on to observe that it was difficult to think that the legislature in s.20(3) intended to adopt a different concept of severance from that which underpinned the relevant part of s.20(1)[10] and then said[11] that -
"It follows that enhancement of value might be relied upon in relation to land of the claimant from which the resumed land might be said to have been severed, even if the retained land and the resumed land are not contiguous; provided that there is present a "connecting factor", previously referred to. Indeed, it is conceivable that a landowner might own two parcels of land which are contiguous, where the resumption of one may not result in severance, there being no "connecting factor". That might be a consequence of a number of factors, such as topography, difference in physical characteristics, or differences in planning controls, such that the ownership of one parcel provides no advantage to the owner of the other parcel."
[9] At [20].
[10] At [21].
[11] At [22].
Because the Land Appeal Court considered that it was likely that Parliament had adopted the same concept of severance in s.20(1) and s.20(3), it could be said that, in a case such as the present, the contiguity of Lots 14 and 5 was not sufficient to establish that there had been a severance - rather it was necessary to establish that there was a connecting factor between the two lots.
It is clear from the decision in Suntown that there must be a severance within the meaning of s.20(1)(a) of the Act before a claim for injurious affection can succeed under s.20(1)(b). However, in my opinion, Counsel for the respondent has misdirected the focus of the severance enquiry. The effect of the submission that there had been no severance because Lots 14 and 5 were separate several residential lots is that the respondent is applying the "connecting factor" test as between Lot 14 and Lot 5. That is the respondent has asked whether there has been a severance of Lot 5 from Lot 14. Section 20(1) provides that regard shall be had to the damage caused by "the severing of the land taken from other land of the claimant" and any injurious affection to such other land. In this matter the resumed land was taken from Lot 14. The question to be asked, therefore, is whether there has been a severance of the land taken (part of Lot 14) from the remaining land of the claimant (the balance of Lot 14 and, the claimant submitted, Lot 5).
The respondent has not contended that there was no severance of Lot 14. Indeed, the respondent has accepted that the balance of Lot 14 was injuriously affected by the resumption. It necessarily follows that the respondent has accepted that the balance of Lot 14 is "such other land", within the meaning of s.20(1)(b), that is that there was a sufficient connecting factor between the resumed part of Lot 14 and the balance remaining after the resumption.
The remaining question is whether Lot 5 is also included in the phrase "such other land".
Counsel for the claimant, Mr Allan, submitted that Lot 5 was "such other land" within the meaning of s.20(1)(b). The word "land" as it appeared in the phrase "such other land" included both Lot 14 and Lot 5 because both lots, each of them, fall within the definition of "land" in s.2 of the Act which defines land to mean "land, or any estate or interest in land, that is held in fee simple, but does not include a freeholding lease under the Land Act 1994". Further, he submitted, the word "land" was not synonymous with the word "lot" and the words "such other land" in s.20(1)(b) should not be construed so as to limit a claimant's entitlement to compensation where the "other land" was held in more than one lot.
In State of Queensland v Springfield Land Corporation (No 2) Pty Ltd[12] P McMurdo J considered the meaning of the phrase, in s.20(3) of the Act, "any enhancement of the value of the interest of the claimant in any land adjoining the land taken". The question was whether the phrase "in any land adjoining the land taken" referred only to the lots immediately adjacent to the land taken or whether it included the whole parcel of land owned by the landowner including those lots. It was held that the terms "land" and "lot" were not used synonymously in the Act and in particular in s.20(3).[13] Further the purpose of s.20(3) should be unaffected by whether the adjoining land consisted of several parcels, each capable of separate disposition, or but one parcel.[14] Consequently the enhancement to be taken into account was the enhancement of the landowner's whole parcel of land adjoining the land taken, including the lots which were not immediately adjacent to the land taken. The decision of the Supreme Court was affirmed by the Court of Appeal in State of Queensland v Springfield Land Corporation (No 2) Pty Ltd[15] and by the High Court in Springfield Land Corporation (No 2) Pty Ltd v State of Queensland,[16] although the "adjoining" point was not in issue before the High Court.
[12] (2009) 169 LGERA 284.
[13] At [32] - [33].
[14] At [34].
[15] (2009) 171 LGERA 38.
[16] [2011] HCA 15.
In the Court of Appeal in Springfield, Keane JA said that the text of s.20(3) did not reveal any concern as to the means whereby a claimant for compensation evidenced its ownership of the land. It is the value of the land adjoining the land taken which is significant, not the evidence by which ownership of that land is proved. Further a purposive approach to s.20(3) indicated that it was impossible to attribute to the legislature an intention that the amount of compensation payable to a landowner might vary depending on whether the balance of the land retained by the landowner was contained in one or a hundred titles.[17]
[17] (2009) 171 LGERA 38 at 55.
The Courts in Springfield were construing the phrase "any land adjoining the land taken" in s.20(3) of the Act. The question is whether that reasoning should be applied in construing the word "land" in the phrase "other land" in s.20(1) of the Act. I consider that it should, for a number of reasons. In s.20(3), there is to be set off 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 on purpose for which the land is taken to be set off. Springfield held that "any land" adjoining the land taken was the landowner's whole parcel of land adjoining the land taken. It necessarily follows, in my opinion, that in considering whether there has been enhancement of the value of "any land … severed therefrom", within the meaning of s.20(3), the whole of the landowner's balance parcel severed from the land taken is what is referred to.
Moving then to s.20(1)(a), and remembering that in Halcyon the Land Appeal Court said that it was difficult to think that the legislature intended to adopt different concepts of severance in s.20(3) and s.20(1),[18] it would follow that, in referring to the "severing of the land taken from other land of the claimant", the words "other land" in s.20(1)(a) are to be construed with the same meaning as "any land" in s.20(3), that is they refer to the whole of the landowner's balance parcel.
[18] Gold Coast City Council v Halcyon Waters Community Pty Ltd [2011] QLAC 0003 at [21].
This is consistent with the rule of statutory construction that, so far as possible, words are to be given the same meaning throughout an Act.[19] There is no reason to give the word "land" in the phrase "other land" in ss.20(1)(a) and 20(1)(b) a different meaning from the word "land" in the phrase "any land" in s.20(3). Further, as with s.20(3), I can see no reason to attribute to the legislature an intention that the amount of compensation payable to the landowner under s.20(1)(b) might vary depending on whether the balance of the land retained by the landowner is contained in one or a hundred titles.
[19] D'Aguilar Gold Pty Ltd v Gympie Eldorado Mining Pty Ltd [2008] 1 QdR 56 at [26].
The effect of the respondent's submission is that the severance test is to be applied to each lot in the landowner's remaining parcel of land. Section 20(1) does not say that severance must be established between various parts of the remaining land. Once it is accepted, as it has been here, that the balance of Lot 14 is "other land" within the meaning of s.20(1)(b), there is nothing in the section or the authorities to indicate that it is necessary to establish that any lots that adjoin the "other land" are to be treated separately from that "other land". Rather the decision in Springfield is to the contrary.
My conclusion is not affected by the fact that the highest and best use of Lot 14 and Lot 5 was as separate rural residential lots. In the same way as the Act is not concerned with the way in which the ownership of the other land is established, there is nothing in the Act which indicates that part of the owner's remaining parcel of land is to be excluded from the scope of the compensation for the impact of any injurious affection because its highest and best use is as a separate parcel of land. Nor does my conclusion mean that the whole of the claimant's "other land" is to be valued as an aggregation. For the purpose of determining compensation, the claimant's "other land" is to be valued at its highest and best use which, in this case, is as two separate parcels of land.
If I am wrong in my conclusions above, and it were considered necessary to consider each lot in the claimant's balance land as a separate parcel, I consider that it would be appropriate to infer that there was, prior to the resumption, a sufficient connecting factor between Lot 14 and Lot 5 to entitle the claimant to an award for injurious affection. Despite the fact that the highest and best use of each lot was as a separate parcel, there was a proximity of situation and a unity of ownership or control between the two lots which could ensure that what was done on either would protect, advantage and not depreciate the value of the other.[20]
Valuations
Appellant
[20] See Suntown Pty Ltd v The Gold Coast City Council (1979) 6 QLCR 196 at 209.
Market value before resumption $270,000
Market value after resumption $190,000
Compensation payable $80,000
Lot 5
Market value before resumption $150,000
Market value after resumption $125,000
Compensation payable $25,000
Respondent
Lot 14
Market value before resumption $240,000
Market value after resumption $200,000
Compensation payable $40,000
Lot 5
The respondent did not lead evidence as to the value of Lot 5 either before or after the resumption because, as discussed above, it was considered that no compensation was payable in respect of the injurious affection damage alleged to have occurred to that land.
Mr Kamitsis undertook a check exercise to confirm his conclusions as to the compensation payable. He considered that the difference in market value between Lot 14 in the before and after was nominal with respect to the value of the land loss alone. He therefore attributed the difference in value in the before and after cases largely to injurious affection. Although his before and after valuations had been made on a direct comparison basis only, the compensation he had assessed, $40,000, represented, after making a nominal allowance of $5,000 for the land resumed, an allowance of approximately 15% for injurious affection.
Mr Kamitsis noted a decision of the Land Court in Hamzah Pty Ltd v Department of Main Roads[21] where an allowance of 17.5% was made for injurious affection caused by the impact of visibility of the proposed roadworks and of the nature and extent of injurious affection caused by traffic noise. Mr Kamitsis also referred to a decision of the Land Appeal Court in Kabale Holdings Pty Ltd v Chief Executive, Department of Transport,[22] where the Land Appeal Court assessed the impact of injurious affection caused by noise and visual impact from a road corridor as a diminution of 12.5%. Mr Kamitsis sought to rely on these decisions to say that he considered that the injurious affection allowable to Lot 14 would be no greater than 15%.
[21] (2009) 30 QLCR 158.
[22] (1997-98) 18 QLCR 166.
In my opinion this was a misguided exercise even as a check. The discount to be allowed for injurious affection is a question of fact and is to be determined on the evidence in any particular case. Each case is to be treated on its individual facts and it is not appropriate to use decisions in cases with different facts to suggest that there is some guiding principle as to an appropriate quantum of the discount to be ascertained from them.
Sales evidence - Before Valuation - Lot 14
The appellant's valuer, Mr Walker, relied on three sales in support of his valuation of both Lots 14 and 5 and two additional sales to support his valuation of Lot 5. The respondent's valuer, Mr Kamitsis, relied on two sales, one of which was the same as the appellant's Sale 2, in support of his valuation of Lot 14.
Sale 1
Sale 1 is a 15.52 ha property situated at 291 Glencoe-Yalangur Road, Glencoe and zoned Rural. The property sold on 8 August 2005 for $323,000. Mr Walker said that approximately half of the land was slight/moderately sloping; the other half sloped steeply. At the date of sale, the property was improved with a 1930s lowset hardwood weatherboard detached dwelling, a single metal garage and fencing. Mr Walker apportioned the land component at $260,000.
Mr Walker considered that, compared with the subject properties, the sale was in an inferior location with inferior topography to Lot 14. The sale property is further removed from amenities than the subject. The sale, Lot 14 and Lot 5, have similar highest and best uses. Overall he considered that the sale was comparable with Lot 14 and superior to Lot 5.
This sale was used by Mr Walker only. Mr Kamitsis did not rely on this sale because it was an improved sale and therefore, in his opinion, not comparable with the subject.
Sale 2
This sale was relied on by both valuers. The 16.19 ha property is located on the Gowrie-Glencoe Road, Glencoe and sold on 21 March 2005 for $242,500.
Mr Walker described the sale as a regular shaped vacant allotment with predominantly slightly sloping land. A portion of the land is moderately sloping and a watercourse traverses the middle of the property. Approximately two-thirds of the land are cleared and one-third is selectively cleared. There is fencing on the property.
Mr Walker said that the sale had similar topography to Lot 14 but was in an inferior location. A piggery is located opposite the sale property within approximately 130m. Subsequent evidence revealed that 130m is the distance between the south-west corner of the piggery property and the north-east corner of Sale 2. The distance between the piggery building and the house subsequently constructed on Sale 2 is 670m. Both the sale and the subject have a similar highest and best use, but the sale is further from amenities than the subject. Mr Walker's overall comparison was that the sale was inferior to Lot 14 and superior to Lot 5.
Mr Kamitsis described the sale as good quality agricultural land sloping to the south. The property has good access with two large street frontages to bitumen roads. It is approximately 70% larger than the subject and has more useable land. The sale has a pleasant rural outlook. Mr Kamitsis considered that the sale had superior topography as compared with the subject because there were no gullies. It was further removed from amenities but, overall, he considered the sale to be superior to Lot 14 in the before situation. In his opinion, this sale reflected the upper limit of value for the subject and supported a before value for the subject land of no more than $240,000.
Sale 3
Sale 3 is a 7.51 ha property situated at 33 Jannuschs Road, Gowrie Mountain, zoned Rural. The property sold on 4 October 2005 for $387,000. Mr Walker described the property as a near regular shaped allotment improved with an approximately 20 year old brick detached dwelling. There are minor outbuildings and fencing. The land falls slightly to the rear and has a slight cross slope. The access road is graded and unsealed. Mr Walker apportioned the land component at $260,000.
Mr Walker considered that the sale was in an inferior location as compared with the subjects. The sale is located further away from amenities than the subject. The sale had similar topography to Lot 14 and a similar highest and best use to both Lot 14 and Lot 5. His overall comparison was that the sale was inferior to Lot 14 and superior to Lot 5.
Mr Kamitsis did not consider this sale because the property was improved as at the date of sale.
Sale 4
This 8.07 ha property is situated at Jannuschs Road, Gowrie Mountain. The property sold on 5 June 2004 for $173,000. The property is zoned Rural. Mr Kamitsis described the property as an irregular shaped allotment which sold as vacant land. Surrounding development consists of smaller rural residential allotments and large rural land parcels to the west. There is a good rural outlook to the west. The land falls from street frontage towards the rear of the allotment. The property has been improved, since sale, with a modern lowset detached dwelling. Mr Kamitsis noted that the sale had a narrow frontage and that it was reasonably well located to amenities. Overall, Mr Kamitsis considered that the sale was inferior to the subject in the before situation.
Mr Walker did not rely on this sale because, he said, it was dated and the market had risen between the date of sale and the date of resumption.
Conclusions as to value of Lot 14 before resumption
Mr Walker valued Lot 14 in the before case at $270,000. Mr Kamitsis valued it at $240,000 so that the difference between them is $30,000.
Although it was said in evidence that there were plenty of sales available, it is apparent from the different sales relied on by the valuers that they had some difficulty in finding sales that were comparable with the subject property. Sale 2 was the only sale common to both valuers. This sale is discussed in some detail below. Mr Walker's other two sales were sales of improved properties which he analyzed to determine the value of the land component. The difficulties with analysing an improved sale are well known. Mr Kamitsis chose not to rely on the improved sales and turned to an unimproved sale that took place on 5 June 2004, that is some 13 months before the date of resumption. Mr Walker did not adopt that sale because he considered that the sale was dated and did not provide useful evidence of value as the market had increased between the date of sale and the date of resumption.
On a direct comparison basis, I consider that Sale 2 provides the most useful evidence of the value of Lot 14 in the before case. The other sales are of limited assistance because the evidence concerning those sales and their comparability with the subjects was not persuasive.
Sales 1, 3 and 4
Mr Walker attributed $63,000 to the value of the improvements on Sale 1 and there was no evidence to contradict that assessment although there was evidence that Mr Walker had failed to take into account a dam on the property in his assessment of the value of the improvements. The land component of that sale was assessed at $260,000. Mr Walker said in his report that the sale was comparable with Lot 14. However in his oral evidence Mr Walker conceded that the sale was not directly comparable with the subject. The sale is approximately 60% larger than the subject, has an area suitable for cultivation, a fair component of the sale is very steep and it is considerably further from amenities than the subject.
Mr Walker did not venture a final opinion as to the overall impact of these differences on his assessment of the comparability of the sale with the subject. The consequence is that his evidence was incomplete as it did not establish whether, ultimately, he considered the sale to be inferior or superior to the subject.
The result of the evidence is, I consider, that the sale does not support a value of $270,000 for Lot 14 in the before case. The additional features of the sale identified by Mr Walker in his oral evidence indicate to me that the sale is not comparable with Lot 14 - its larger size and additional area of land able to be cultivated are superior features, but the very steep land and location are negatives. On balance I have formed the view that the sale is superior to Lot 14.
Mr Walker analyzed Sale 3 to a land value of $260,000, attributing $127,000 to the value of the improvements in which, I have accepted, he included a double garage. However, it became apparent in the cross-examination of Mr Walker that, in assessing the added value of the improvements on the sale property, he had not taken into account cattle yards and two sheds on the property. Mr Walker's evidence as to the effect of his failure to take these improvements into account was unsatisfactory. Having been shown photographs of these improvements in the witness box, he said that the sheds were worth $20,000 and the cattle yards $5,000. However he did not agree that his valuation should be adjusted consequentially, saying that he had not carried out a piecemeal assessment of the value of the improvements. I do not accept that. It is clear that the value of the sheds and cattle yards should have been taken into account and there is evidence that the analysis of Sale 3 should be adjusted by adding an amount to the value of the improvements. If $25,000 were added to the value of the improvements, the land component would become $235,000. However Mr Walker's assessment of these improvements was done quickly on the basis of photographs, a process which has left some considerable doubt in my mind as to its accuracy. In the circumstances I am not prepared to place any reliance on this sale.
Sale 4 took place on 5 June 2004, some 13 months before the date of resumption. Both valuers said that the market had increased between the dates of sale and resumption. Mr Walker sought to quantify the market increase by producing a table which he had prepared from a data base of sales information which showed that the median sale prices of "vacant large home sites" in the Toowoomba Regional Council area had increased by 20% in the period 2004 to 2005. The median land area ranged from 8,422 m² to 1.24 ha. In the six month period surrounding the date of valuation, the median sale price of such properties had increased by 33%. In addition, Mr Walker said, the sale at Wirths Road, Wellcamp could be used to demonstrate the increase in the market. A good quality property at Jannuschs Road had sold for $173,000 in 2004 as compared with the Wirths Road sale (Sale 5) in 2005 for $185,000. The sale at Rody Burke Road (Sale 8) showed a 1 ha site selling for $179,000 in 2005 as compared with an 8 ha site in 2004 selling for $173,000.
Mr Walker's evidence was clear that the table was intended as a guide only and not to identify a percentage increase to be added to the Sale 4 price. In my opinion, the table is of no assistance and it should not be used to attempt to establish the quantum of the market increase. If that increase is to be established, it should be done by using sales and resales of the same properties. The use of averaging techniques is not standard valuation practice. Moreover the criterion adopted, "vacant large house sites" of .85 ha to 1.24 ha does not, in my opinion, provide an appropriate comparison with Lot 14 which was 9.5 ha in area. While it is accepted that rural residential sites are to be valued on a site basis rather than a rate per hectare, there was no evidence to establish that properties with an area of approximately 1 ha are comparable with those of 9 ha.
My conclusion is that all that is established by Sale 4 is that Lot 14 before resumption is to be valued at a higher rate than $173,000, the sale price of Sale 4.
Sale 2 - The Piggery Sale
Mr Walker said that overall, Sale 2 was inferior to Lot 14 whereas Mr Kamitsis considered it to be superior.
Mr Walker's opinion that Sale 2 was inferior to the subject was based on a number of factors including the sale's location some 9 km further by road from Toowoomba than the subject and its close proximity to the piggery. The piggery had a lawful use for approximately 1540 standard pig units. Mr Walker said that in his experience as a valuer of 25 years standing the perception of potential purchasers in the market place would be that the proximity of the piggery was a detriment to the sale property. He also disagreed with Mr Kamitsis' statement that the sale property comprised good agricultural land because, Mr Walker said, about 5.5 ha of the land was rocky and unsuitable for cultivation. Further there was no electricity connected to the sale property at the date of sale, whereas electricity was available to both Lots 14 and 5 at their frontages.
As noted above Mr Kamitsis' conclusion that Sale 2 was superior to Lot 14 in the before was based on a number of factors. One was that the topography of the sale was superior to Lot 14, because of the elevated home site on Lot 14 and the quality cultivation land to the north of the property. The watercourse on the sale property was insignificant compared with the steep and wide gully on Lot 14. Another factor was that he did not agree with Mr Walker that the sale was in an inferior location. While Mr Kamitsis accepted that the sale was further removed from Toowoomba, the Glencoe area is well received by buyers, he said, and it is well located to local shops, medical centres etc. It was Mr Kamitsis' opinion that the piggery was not a major influence in the sale. Further, Mr Kamitsis considered that Mr Walker had placed too much emphasis on the cost of connecting electricity to the sale property. Mr Kamitsis considered that the price paid for the property was fair.
Mr Walker's opinion that the price paid for the sale property was adversely affected by the proximity of the piggery was reinforced by conversations he had with the purchaser of the sale property and the real estate agent who brokered the sale.
The purchaser of Sale 2, Mr P Rummenie told Mr Walker that he had positioned the dwelling on the subject land approximately 200m from the street alignment to distance the dwelling from the piggery. Mr Rummenie had found out there were local concerns about the piggery from the minutes of a Council meeting which he had read online. Mr Rummenie had also stated to Mr Walker that there was no electricity connected to the property at the time of purchase. The nearest available connection was approximately 250m from the land and Mr Rummenie said the cost of connecting the power to the dwelling that was subsequently constructed was about $30,000. He had paid about $12,500 and the power company had borne the balance. Mr Rummenie also said that approximately 5.5 ha of the land was too rocky for cultivation.
The respondent called Mr PG Rummenie, the purchaser of Sale 2, and provided a written statement by Mr Rummenie. In his written statement Mr Rummenie said that at the date of sale the property was vacant rural land. He was aware of the piggery but was not deterred by it and it did not influence the price he paid for the sale property. He considered that, compared with other vacant sites for sale at the time of purchase, the price he paid was indicative of general property values. He was attracted to the sale property by its size, its suitability for rural uses and cultivation, the availability of a functional bore with clean water, bitumen road access on two sides, new perimeter fencing, proximity to Toowoomba and Highfields, and the elevated house site from which good views were available. He had chosen the location of the house footprint to maximize the views, maintain privacy and create distance from the road. He considered the house site he had chosen to be ideal, irrespective of the piggery. The cost of providing electricity to the house was directly related to the location of the house site within the property. Mr Rummenie said that he could have significantly reduced the price of the electricity connection had the dwelling been located closer to the road frontage on either side of the property. At the time he purchased the property he was unaware of the likely cost of providing electricity to the house site. Ergon Energy had covered approximately $19,000 of the connection costs of $30,000.
Mr Warren Inch of Inch Realty told Mr Walker that the piggery was a concern for a lot of people and had turned them away. He added that only people of a rural background showed any interest in the property.
The respondent called Mr Inch to give evidence and also provided a written statement from him. Mr Inch said in his written statement that in his opinion the price of the sale property was not discounted due to the proximity of the sale property to the piggery but was indicative of property values at the time. The buyers were attracted to the size of the sale property, its suitability for use for rural purposes, its elevation and views. The sale did not experience any protracted or extended selling period due to its relative proximity to the piggery.
Mr Inch's understanding of the purchaser's reason for siting the house was that that the better quality soil on the property was to the front of the property and the rear was the most elevated position. The rear was the most logical place for the house to be positioned because it was further away from a T intersection and obtained better views. The purchasers, he said, were people who clearly had chosen the property for a rural aspect and rural lifestyle.
Mr Inch said in the witness box that that he only had a somewhat hazy recollection of his brief telephone conversation with Mr Walker. He understood that there were two properties discussed during the conversation, one directly opposite the piggery which had a house on it at the time of sale and the other, Sale 2, which did not. Mr Inch said that his comments to Mr Walker that the piggery was a concern for a lot of people and turned them away, would have related to the property next door to Sale 2, which was directly opposite the piggery. He said that both that property and Sale 2 had been marketed at the same time by the same vendor either as an aggregation or separate properties. The properties were sold on separate dates. The one with the house on it (opposite the piggery) sold in July 2005. Mr Rummenie's property was purchased in March 2005. Mr Inch had no recollection that he had told Mr Walker that the siting of the house was important to get away from the smell of the piggery. He had no recollection of making any comments as to the location of the house, that he had said that the piggery was a concern for a lot of people or that only people of a rural background showed any interest in the property. He did not recollect that he had said to Mr Walker that the prevailing wind was from the north-east. When pressed under cross-examination, he said that it may have been a possibility that he could have made that statement.
Mr Inch did not recall saying to Mr Walker that there was no power connected to Sale 2 at the date of sale although he conceded that he could have made that statement and did not remember. He did not recall making any statement that some of the land on Sale 2 was too rocky to use although again he conceded that that statement could have been made.
Mr Inch had no recollection of discussing any details with Mr Walker about the structure of the new piggery building, that the steel pins in the piggery were rusty, that the piggery had a concrete slab floor and that there was an enclosed shed. He had no recollection of Mr Walker asking him whether there had been complaints by the neighbours about the piggery, nor that he (Mr Inch) had responded by saying that he could not remember whether there had been any complaints. Again Mr Inch could not exclude that that conversation took place. Mr Inch had no explanation as to why Mr Walker would make up or wrongly record the conversation that he had with Mr Inch.
The inconsistencies between Mr Walker's evidence as to his conversation with Mr Inch and Mr Inch's evidence are apparent from the summary set out above. Mr Inch's memory failure about the content of his conversation with Mr Walker did not assist his credibility and I have placed little weight on his evidence. However, Mr Walker's evidence is also inconsistent with Mr Rummenie's evidence. While I have no reason to think that Mr Walker invented his account of his conversation with Mr Rummenie, Mr Rummenie impressed me as an honest and truthful witness and I have accepted his evidence that the existence of the piggery did not influence his decision to purchase the property nor the price he paid. I also accept his explanation for the location of his house and that that location increased the costs of electricity connection.
Although the piggery did not affect Mr Rummenie's decision to purchase Sale 2 I consider that there was credible evidence, from Mr Walker, that the presence of the piggery would be regarded in the market generally as a detriment to the sale property. In that respect the sale property is inferior to the subject. However, in other respects, I consider that the sale property is superior to Lot 14. It is 70 % larger than the subject. Although rural residential properties are to be valued on a site basis, the larger size of the sale is significant because it provides a larger area of land able to be cultivated. The sale property has superior topography to Lot 14. Although further from Toowoomba than the subject, there are local shops and facilities available. On balance then, I consider that the sale property is comparable with or slightly inferior to Lot 14.
As discussed above, with the exception of Sale 1, the other sales evidence is not of great assistance. On the basis that Sale 1 at $260,000 is superior to the subject, and Sale 2 at $242,500, is comparable or slightly inferior, I consider that the value of Lot 14 in the before case was $250,000.
Sales evidence - After valuation - Lot 14
Three sales were relied on by Mr Walker in support of his after valuations of Lot 14 and Lot 5. Mr Kamitsis relied on the same three sales to support his after valuation of Lot 14.
Sale 5
This property of 9.21 ha is located at Wirths Road, Wellcamp. The property sold on 19 April 2005 for $185,000. It is zoned Rural.
Mr Walker described the property as a slightly irregular shaped vacant allotment comprised of slightly sloping land which was predominantly cleared. Access to the property is unformed. A creek which is subject to partial flooding forms the northern boundary to the property. The property lies within 90m of the Charlton Speedway and close to industrial land. An area of 7,576 m² at the north-west corner of the sale property was resumed, after the sale, for the Toowoomba Bypass Road corridor. A rail line is proposed within the corridor. The purchaser advised that he was aware at the time of purchase of the intention to resume and that he would receive compensation. He was subsequently paid approximately $25,000 compensation.
Mr Walker considered that the property was in an inferior location with inferior access as compared with the subjects. The sale is less sloping. It is affected by the road corridor and subject to partial flooding but had a similar highest and best use to the subjects. Overall he considered that the sale was inferior to Lot 14 but superior to Lot 5, in the after situation.
Mr Kamitsis agreed generally with Mr Walker's description of the sale property. He considered that the sale was in an inferior location as compared with Lot 14 with far inferior access. The Toowoomba Bypass Corridor lies in close proximity to the sale land, he said, with part of the property resumed for that purpose. He considered that the sale was inferior to Lot 14 in the after situation.
Sale 6
This property of 11.16 ha is situated at Willett Road, Wellcamp. It sold on 6 September 2005 for $180,000. The land is zoned Rural.
Mr Walker described the sale property as a regular shaped vacant allotment of slightly sloping predominantly cleared land. Access was unformed. A creek traverses the middle of the land which is subject to partial flooding. The Charlton Speedway adjoins the northern side of the land which is located within 260 m of the Toowoomba Bypass Corridor.
Mr Walker considered that the sale land was inferior in terms of location, access and topography. It was subject to partial flooding. It had a similar highest and best use to the subjects but he considered that the sale was overall inferior to Lot 14 and superior to Lot 5 in the after situation.
Mr Kamitsis considered the sale to be in an inferior location with far inferior access. It is close to the proposed Toowoomba Bypass Corridor. Overall he considered the sale to be inferior to Lot 14 in the after situation.
Sale 7
This property of 7.37 ha is located at Paulsens Road, Gowrie Junction. The sale took place on 5 August 2005 for $175,000. The property is zoned Rural.
Mr Walker described the land as a wedge shaped allotment with a wide frontage to Paulsens Road. The land is cleared and falls gently to a creek at the rear boundary. The land is subject to partial flooding and is located opposite a railway line which carries 25 freight trains (predominantly coal in uncovered wagons) per day, each of 39 to 42 wagons. A graded earth road provides access to the property, however, access was reported by a local resident to have been prevented twice, for several hours, within the last 4 years, due to flooding. Truck access would not be available. The sale property lies within approximately 600 m of the Toowoomba Bypass Corridor. The purchaser was aware of a potential future resumption of part of the land for rail corridor purposes. Queensland Transport subsequently acquired all of the land due to hardship circumstances.
Mr Walker considered that the property was inferior in shape and had inferior access as compared with the subjects. The sale was affected by the rail line. It was less sloping than the subject but subject to partial flooding. The sale and the subjects had similar and highest best use. Overall he considered the sale to be inferior to Lot 14 and superior to Lot 5.
Mr Kamitsis' description of the sale property was generally similar to Mr Walker's but he added that the land is good quality agricultural land used for cultivation. He said that the sale had an inferior location with inferior access. Overall he considered the sale to be inferior to Lot 14 in the after situation.
Conclusions as to value of Lot 14 After Resumption
Mr Walker valued Lot 14 in the after case at $190,000. Mr Kamitsis valued it at $200,000 so that the difference between them is $10,000.
Mr Kamitsis considered that Sales 5 and 6 were clearly inferior to the subject in the after case. The sales reflected the market value for a rural home site impacted by the Toowoomba bypass road as they were purchased with full knowledge of the proposed scheme. They were also impacted by noise from the Charlton Speedway and nearby industrial land uses. Further and more significantly, there was no practical access to either property. He considered that a prudent purchaser would make at least a $20,000 allowance between those sales and the subject property in the after case for issues of access and location.
Mr Walker disagreed that Sales 5 and 6 were clearly inferior to the subject land in the after situation. In the after situation, he said, Lot 14 would have approximately half a kilometre of frontage to a highway corridor which will be up to 9m in elevation above the existing land levels. Further the effect of the resumption after sale was that the purchaser had paid $160,000 for Sale 5 for a site of approximately 8.5 ha. Mr Morzone put to Mr Walker that the purchaser of Sale 5 was paid $15,000 compensation for the land compulsorily acquired and $7,000 disturbance. Further the purchaser would not have known, at the time of purchase, how much compensation would be paid. Mr Walker was not prepared to adjust his price.
Mr Walker said that Sale 7 was located approximately 260m away from the highway corridor, whereas the subject property had the entire side boundary fronting the corridor. In addition the elevation of the carriageway next to the subject land was an issue as well as the route lighting along the carriageway. Mr Kamitsis considered that the impact of the railway line on this site was significant and that the detriment caused was worse than the impact of the proposed highway on the subject.
The difference between the valuers in their after valuations of Lot 14 is $10,000. As that difference is comparatively small, approximately 5%, it is surprising that the parties were unable to reach agreement on this issue prior to what became a three day hearing. A significant amount of time was spent at the hearing on evidence as to the comparative advantages and disadvantages of the sales and subject properties. The valuers relied on the same sales in support of their after valuations and each supported their conclusions with sound reasoning. It is well known that valuation is not an exact science. Ultimately I have formed the view that the difference between them is one of professional judgment and this being a compulsory acquisition case, I consider that the benefit of any doubt should be given to the claimant. I have therefore determined the value of Lot 14 in the after case at $190,000.
The compensation payable in respect of the loss of land, severance and injurious affection to Lot 14 is $60,000.
Lot 5
As noted above, Mr Walker relied on Sales 1, 2 and 3, as well as two additional sales, described here as Sales 8 and 9, to support his valuation of Lot 5 in the before case at $150,000. Mr Walker considered that Sales 1, 2 and 3 were superior to Lot 5 in the before case.
For the reasons set out previously in relation to Lot 14, I do not consider that Sale 3 provides reliable valuation evidence in comparison with Lot 5. I concluded above that Sale 1 was superior to Lot 14 and that Sale 2 was comparable with or slightly inferior to Lot 14 in the before case. I have accepted Mr Walker's opinion that Sale 2 is superior to Lot 5, but I consider that some adjustment is necessary to reflect my conclusions as to the general quality of Sale 2.
I also note that the sales are considerably larger than Lot 5. As observed previously, I am doubtful therefore whether they are comparable with the subject, although it is acknowledged that rural residential sites are to be valued on a site basis.
However, Mr Walker's valuation of Lot 5 was supported by two additional sales.
Sale 8
Sale 8 is a 1 ha property situated at 8 Rody Burke Road, Gowrie Junction. The property sold on 12 November 2005 for $179,000. It is zoned Rural Residential. Mr Walker described the property as a near regular shaped vacant allotment, moderately sloping and elevated, with extensive views. It is located in a modern rural residential estate improved with predominantly good quality detached dwellings.
Mr Walker said that the sale had superior topography as compared with the subject lots. It was surrounded with superior quality dwellings. The sale has a similar highest and best use to the subject. Overall he considered that the sale was superior to Lot 5.
It is noted that Sale 8 took place in November 2005, some 4 months after the date of resumption. While after sales may, in appropriate circumstances, be used as evidence of value as at the date of resumption, there was no evidence adduced to demonstrate that this was a case where an after sale could be relied on. Such evidence as there was showed that the market was rising up to the date of resumption. In the absence of any evidence that the market had levelled thereafter, I do not consider that this sale should be used in the valuation.
Sale 9
Sale 9 is a 2.494 ha property situated at Moseley Road, Glencoe. The property was sold on 15 January 2005 for $122,000. Mr Walker described the property as an irregular shaped vacant allotment predominantly slightly sloping, although in parts deep sloping down from the road. It is located further from amenities than the subject.
Mr Walker considered that the sale had superior topography as compared with the subject but was in an inferior location. It had similar highest and best use. Overall the sale was inferior to Lot 5.
There being no other evidence as to the value of Lot 5 in the before case, I have accepted Mr Walker's application of sales 9 and his valuation of Lot 5 in the before at $150,000.
Mr Walker relied on Sales 5, 6 and 7 for his after valuation of Lot 5 at $125,000. Mr Kamitsis pointed out that the sales properties were significantly larger than the subject and that Lot 5 has access whereas two of the sales do not and the third has only poor access. Further, the lowest value shown by the sales was $175,000 whereas Mr Walker has valued Lot 5 in the after case at $125,000.
I have accepted Mr Walker's reliance on those sales in the after valuation of Lot 14 as it appears that there were no more suitable sales available. There being no evidence to contradict his application of the sales to the after valuation of Lot 5, I have accepted Mr Walker's valuation at $125,000.
The compensation payable in respect of injurious affection to Lot 5 is determined at $25,000.
The total compensation in respect of Lots 14 and 5 is determined at $85,000.
Disturbance
The items claimed under this heading are properly claimable as disturbance costs. There has been no challenge to the quantum claimed and therefore, the sum of $11,000 is allowed.
Determination of Compensation
Compensation is determined as follows:
Lot 14 $60,000
Lot 5 $25,000
$85,000
Disturbance $11,000
Total $96,000
InterestThe claimant has sought an award of interest on compensation in accordance with the Land Court ruling rates.
Section 28 of the Acquisition of Land Act provides -
"28 Interest
(1) Subject to subsection (2), in respect of the period or any part of the period commenced on and including the date on and from which any land is taken and ending on and including the day immediately preceding the date on which payment of compensation is made the Land Court or, upon appeal, the Land Appeal Court may order that interest be paid upon the amount of compensation determined by it.
(1A) Such interest shall be at such rate per centum per annum as the Land Court or, upon appeal, the Land Appeal Court, deeming reasonable, fixes by the order.
(1B) Interest so ordered to be paid shall be payable as if it were part of the compensation in question and shall be added to the amount thereof and be payable by the constructing authority accordingly.
(2) Interest shall not be payable in respect of any amount of compensation advanced under section 23."
The respondent submitted that although an owner is ordinarily entitled to interest, an award of interest was not appropriate where the owner has not been dispossessed and has occupation and use of the land until the date of determination of compensation. In this case the owner has remained in possession of the resumed land and has continued using the land for cattle grazing since the date of resumption.
In Alex Gow Pty Ltd v Brisbane City Council[23] the Land Appeal Court said -
"The usual practice of the Land Court has been to order that interest be paid on compensation from the date of resumption until compensation has been paid by the resuming authority. However, as discussed in VH Cox v Water Resources Commission (1996-97) 16 QLCR 66, that long established practice has been subject to two exceptions -
· Where there has been unreasonable delay in lodging the claim for compensation and/or in pursuing that claim; and
· Where a dispossessed owner remains in possession of the land (16 QLCR 273)."
There has been no submission that the claimant has been unreasonably dilatory in progressing the claim in this matter. The only issue is therefore whether the claimant should be deprived of an award of interest because it has remained in possession of the resumed land.
[23] (1999-2001) 22 QLCR 292 at 303.
The combined area of Lots 14 and 5, prior to resumption, was 12.8875 ha. An area of 1.257 ha, (9.75%) was resumed from the total landholding. Dr CF Carey, who is a director of the claimant company, filed an affidavit in which he said that when the resumption occurred he and his business partner had decided to discontinue the business they carried out on the land (grazing cattle as part of a stud breeding program) and Dr Carey leased the property to a third party for grazing purposes for $1,500 per year on a periodic month to month basis. Dr Carey also said that he had never been approached by the respondent regarding fencing off the resumed portion of Lot 14. He considered that any commercial benefit he may have derived from the respondent's failure to fence the resumed land was negligible, being about $150 per annum (rounded).
While there is authority that an interest award may be proportionally adjusted to reflect the value of rent-free occupation by an owner who remains in possession,[24] I do not consider that such an adjustment should be made in this case, for two reasons. One is that the reason that the landowner has remained in possession is that the respondent has not fenced off the resumed land. The second reason is that the bulk of the compensation on which interest is to be paid is awarded for injurious affection to the retained land. On Mr Kamitsis' figures, the value of the land taken was about $5,000 which is approximately 5% of the total compensation awarded. Any adjustment would be minimal and is not warranted in the circumstances.
[24] Laerksen v Gold Coast City Council (1997-1998) 17 QLCR 120 at 122.
Orders
1.Compensation is determined in the sum of Ninety-six Thousand Dollars ($96,000).
2.The respondent is ordered to pay interest to the applicant at the rate of 5.5% per annum on the sum of $85,000 for the period commencing 22 July 2005 up to and including 22 February 2010.
3.The respondent is further ordered to pay interest to the applicant at the rate of 5.5% per annum on the sum of $60,000 for the period commencing 23 February 2010 up to and including the day immediately preceding the date on which the amount is paid by the respondent.
4.The respondent is further ordered to pay interest to the applicant at the rate of 5.5% per annum on the disturbance items paid by the applicant for the period commencing on the days, to be proved by the applicant, on which the claimant paid each amount up to and including the day immediately preceding the date that the respondent pays these amounts to the applicant.
CAC MacDonald
PRESIDENT OF THE LAND COURT
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