Wanless v Brisbane City Council

[2001] QLC 139

LAND COURT

BRISBANE

21 DECEMBER 2001

Re: A01-01
Determination of Compensation -
Resumption by Brisbane City Council
Acquisition of Land Act 1967
Dulcie Isobel Wanless

Claimant

v.

Brisbane City Council

Respondent

J U D G M E N T

The claimant owned three contiguous parcels of freehold land located at Selhurst Street, Coopers Plains, on the southern side of the City of Brisbane. The lands comprised Lots 6, 7 and 8 on RP 38042 with Lot 6 being to the west and Lot 8 to the east. Lot 6 had an area of 26,411 m², Lot 7, 20,325 m² and Lot 8, 20,331 m², with the total area being 67,067 m². I will refer to the claimant's land as either the subject lots or subject land.
Each of the lots was of rectangular shape with the northern boundaries fronting Selhurst Street from which access was gained. The subject lots were generally flat and low-lying, there being a Flood Regulation Line (FRL), which swung in a broad arc across Lot 8 entering about midway along its eastern boundary and exiting into Lot 7 near the north-western corner of Lot 8. The FRL then exited Lot 7 on its northern boundary near its north-eastern corner, leaving a small portion of about 142 m² in Lot 7 above the FRL. In Lot 8 about 6,232 m² was above the FRL. The balance of Lots 7 and 8 and all of Lot 6 were below the FRL. Lands above the line may be improved by the importation of fill and development of buildings. Lands below the line may not be so improved and developed.
The southern boundary of each of the subject lots fronted Gay Street, however, practical access from that street was unavailable. There was a gully located at the southern end of each of the subject lots and another parallel to that on the Gay Street road reserve. I will refer to these gullies as the southern gully and the Gay Street gully, respectively. These gullies inhibited access onto the subject lots from Gay Street.
A gully cut through the north-eastern corner of Lot 7, then for about half its length, ran roughly diagonally across Lot 8 in a position more or less parallel to the FRL. It then ran to the south-eastern corner of Lot 8 to the southern gully. This "diagonal" gully had limited effect on Lot 7, but effectively cut Lot 8 into two sections. The north-east section included the land above the FRL and a little lower land, whilst the south-west section was all below the FRL. That south-west section abutted the boundary separating Lots 7 and 8. It appears that the southern and Gay Street gullies and the diagonal gully were man made.
Commencing some time in the 1950's the subject land was put to use as a motor vehicle wrecking yard. A workshop shed was constructed straddling the boundary of Lots 6 and 7, whilst another was constructed within Lot 7 and quite close to its boundary with Lot 8. Land external to these sheds was improved with the construction of a hardstand, which extended to that land in Lot 8 to the west of the diagonal gully. The hardstand area was used for the open-air storage of vehicles and component parts in the process of disassembly and sale. The extent to which the Lot 8 hardstand area may have been used for the purpose of vehicle wrecking is discussed further below. I had the advantage of inspecting the subject land in the company of counsel. All of the above improvements were constructed well before the FRL was identified.
By Notification of Resumption published in the Government Gazette, the respondent took parts of each of the subject lots on 18 September 1998 pursuant to the provisions of the Acquisition of Land Act 1967 (the "AOL Act") . The respondent took land from the south of each of the subject lots in the area I earlier called the southern gully. That land was taken for drainage purposes and included the taking of 4,847 m² from Lot 6, 3,202 m² from Lot 7 and 3,202 m² from Lot 8. The larger area taken from Lot 6 was a product of a truncation in the shape of the land taken, apparently to accommodate water flow to the west, as well as the larger size of that lot compared with Lots 7 and 8.
A narrow parcel of land comprising 160 m² was taken for road purposes from Lot 8 at its frontage to Selhurst Street. This land was taken to become a "blocking strip" inhibiting access onto Selhurst Street from that part of Lot 8 retained by the claimant. The respondent also took for road purposes, a corridor of land running roughly parallel to and all but adjoining the FRL. This resumption cut Lot 8 into two lots, the one in the north and largely above the FRL, having an area of 6,232 m² (now Lot 22), whilst the one in the south was left with an area of 7,765 m² (now Lot 20).
Lot 7 was also cut by the road corridor resumption. An area of 142 m² was left in the north-eastern corner above the FRL (now Lot 23), and the net area of the balance of the previous Lot 7 became 15,265 m² (now Lot 25). Lot 6 was left with an area of 21,564 m² (now Lot 30). Each of these lots is identified on Survey Plan 106880, part of which I have reproduced below to aid in an understanding of my narrative description of the land taken and the land remaining.

It may also be useful if I also present a table showing the various areas taken and remaining.

Before	Taken	After
Lot 6 26, 411 m²	4,847 m² (drainage Lot 29)	Lot 30 21, 564 m²
Lot 7 20,325 m²	3,202 m² (drainage Lot 28) 1,716 m² (road Lot 24)	Lot 25 15,265 m² Lot 23 142 m²
Lot 8 20,331 m²	160 m² (road Lot 26) 2,972 m² (road Lot 21 ) 3,202 m² (drainage Lot 27)	Lot 22 6,232 m² Lot 20 7,765 m²

The action giving rise to this judgment was commenced by way of an Originating Application lodged by the claimant on 2 January 2,001, together with a claim for compensation prepared in accordance with s.19 of the AOL Act. That claim sought compensation from the respondent as follows:
1. Loss of land, severance
and injurious affection $590,000

2. Disturbance: legal, valuation and other
fees (estimated) $15,000

$605,000

At the commencement of his opening address, counsel for the claimant sought and was granted leave to amend the above claim. Now it was discovered during the proceedings that the original areas of Lots 6, 7 and 8, as recorded on the Certificate of Title, were in error when checked against a survey carried out by Alexander Ronald Pollock, Licensed Surveyor, for the respondent. As a result the after resumption areas relied upon by the parties were also in error, leading to consequential errors in the valuations prepared. I resist the urge to record all of the calculation adjustments and errors made during the process of making those adjustments and will merely record that the final claim became, with leave of the Court:
Item 1 Compensation for loss of land, severance
and injurious affection $373,940.00

Item 2 Disturbance
  Legal fees (Solicitor)  $12,808.96
  Legal Fees (Counsel)  $7,084.00
  $19,892.96

Item 3 Other professional fees
  Buckley Vann Town Planners             $2,998.15
  Taylor Byrne Valuers  $3,732.60
  $6,730.75

TOTAL AMOUNT OF CLAIM $400,563.71

I should also record that the various areas before and after resumption that I have set out above (para. [9]) were taken from the corrected "exhaustive areas" included in Mr Pollock's report tendered in evidence.
The respondent conceded that some disturbance compensation in the form of professional fees incurred in the preparation of the claim for compensation ought to be allowed, however, it assessed compensation for loss of land at nil on the basis that any loss that might otherwise be claimable was offset by enhancement arising from the works carried out. I detail those works below. Such an offset is provided for in s.20(3) and (4) AOL Act. Section 20 provides:
"(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."

The respondent called the following witnesses:
Rory John Kelly, a Senior Town Planner with the Development Assessment Team (South) in the Brisbane City Council.

Evan Ross Caswell a Senior Engineer, Water and Environment with the Brisbane City Council.

Craig Ronald Ehlers, a registered valuer.

The claimant called the following witnesses:
Kevin Patrick Walsh, a registered valuer.

Christopher Gerard Buckly, a consultant town planner.

Both valuers employed the "before and after" method which, as its implies, involves the valuation of the land before resumption, then the retained land after, with the difference representing any reduction in land value brought about by the loss of land, severance and injurious affection, offset by any enhancement in value. That method of assessment of compensation was approved by the Land Appeal Court in Zoeller v. Brisbane City Council (1973) 40 CLLR 198.
Both valuers relied on comparison with sales of land in striking their respective before and after values. In company with counsel, I inspected the more significant sales properties relied on by the valuers.
Mr Walsh observed that a building was located straddling the boundary of Lots 6 and 7 which were used together as a vehicle wrecking site. That use is covered by the term "scrap yard" in the relevant Brisbane City Council Town Plan that applied at the date of resumption, so I will employ that term in these reasons. Mr Walsh valued this scrap yard land at $20 per m². The total before resumption value of Lots 6 and 7 in his opinion was, therefore, $934,720. He identified Lot 8 as having a higher potential than use as a scrap yard. He valued the whole of that lot on the basis that it would be readily rezoned to a "General Industry" zoning and developed in accordance with the allowable uses in that zone. I will detail his valuation approach shortly and will simply say at this point that his overall value of Lot 8 before resumption was $751,000. His total before value was therefore $1,685,720.
Mr Ehler's approach differed from Mr Walsh's in that he placed a before value on the whole of the land above the FRL, then separately on the whole of the land below it as if the individual lots ought to be viewed as a single site. Taking into account the land on Lots 7 and 8 above the FRL totalling 6,374 m², he applied a value of $75 per m², calculating a figure of $478,050. He placed a value of $10 per m² on the balance of the site below the FRL, that is 60,693 m² at $10 per m², totalling $606,930. His total before value was therefore $1,084,980 which he rounded up to $1,100,000.
The first question which I need to consider is whether it is appropriate to view the subject lots as an overall site, as Mr Ehler did, or in the manner employed by Mr Walsh. Both parties referred me to O'Grady Conroy v. The Coordinator-General (1996) 3 QLCR 353. The facts in the Conroy case were that before resumption the claimant owned four portions which were used as an aggregation for the grazing of cattle. The resuming authority, through a valuer coincidentally named Conroy, valued the Conroy land before resumption on the basis that it existed as a single aggregated entity, whilst the claimant took into account that the aggregation comprised four portions, each having its own title and each capable of independent sale and use.
The Land Appeal Court said at pp.357-358:
"It is crystal clear to us that the claimant owned four separate portions at the dates of resumption …, and that the portions could have been sold singly or in any combination that would give the owner the best total return. Our opinion is that Mr. Conroy erred in valuing the aggregate area as one property which therefore must be notionally sold to a single buyer. We hold that each original portion should be valued on the basis of being capable of separate sale, but that such sales need not necessarily be to different purchasers as the owner would seek to obtain the highest total price for the lands."

In arriving at that view of the matter, the Land Appeal Court said that it derived support from Canberra Freeholds Ltd v. Queanbeyan Municipal Council (1971-73) 27 LGRA 134 where at p.137 Else-Mitchell J said:
"As I see the position, it is a question of fact for determination by the tribunal assessing compensation in the light of the circumstances of each resumption, whether one should assume the immediate sale of the entirety of the land resumed to one purchaser or the sale of individual subdivided lots to several purchasers; and according to whichever assumption is made it will usually be necessary to consider also how far the market price would be affected and to what extent any delay in the sale of all the subdivided parcels might ensue."

I understand the Land Appeal Court to have been expressing the view that in ascertaining the value of a number of parcels of land held by a single owner, that value must be determined on the basis of the highest and best use of the land. Now the question of what the highest and best use of a lot or a number of lots of land in single ownership may be is a question of fact, taking into account facts relevant to that inquiry with the assumed inquirer being the abstract prudent purchaser of Spencer fame (Spencer v. The Commonwealth (1907) 5 CLR 418). That hypothetical individual may take into account such things as the prospect of rezoning (Gallagher v. Brisbane City Council (1975) 2 QLCR 368), the costs, delay and risk of achieving such a change (Gill v. Queensland Ambulance Services Board (1989) 12 QLCR 186), and the prospect of development with a neighbouring parcel (Blocksidge v. State of Queensland (1990) 2 QdR 1), to cite a few examples. One assumed fact would remain constant, however, and that is the proposition that the owner of the land must be assumed to be seeking the most advantageous price available in the marketplace. Conroy is not authority for the proposition that sale of the lots individually must be assumed – as Mr Walsh suggested.
Now the respondent did not raise a real obstacle to Mr Walsh's proposal that Lot 8 be considered as being able to be disposed of independently of Lots 6 and 7. The whole of the subject lands was the subject of a lease between family-related parties. Mr Walsh was not challenged with respect to his opinion that, for the purpose of assessment of land value and compensation, that lease could be disregarded. There was evidence that the part of Lot 8 to the west of the diagonal gully had been used as part of the scrap yard on occasions. Aerial photography indicated that use was not as intensive or as consistent over time as in the cases of Lots 6 and 7. Mr Walsh understood that some "spillage" of vehicle bodies onto Lot 8 had occurred in the past. However, it is apparent that the diagonal gully inhibits full integration of Lot 8 into the scrap-yard use, though an old plan included in the evidence appeared to show the scrap yard as having extended well to the east of Lot 8 at one time. According to Mr Ehler Lot 8 was not used as part of the scrap yard at the relevant resumption date, though the whole of the land was subject to the lease which permitted the operation of the scrap yard on Lot 8, as well as Lots 6 and 7. Putting it at its highest it is clear to me that it would only be that part of Lot 8 to the west of the diagonal gully that would have been a practical use as an adjunct to the scrap yard. I do not, therefore, understand Lot 8 to have been so essential a part of the scrap-yard operation that a hypothetical prudent purchaser would not have been willing to give up such use of it as had occurred or could occur in return for its disposal in whole or in part for some higher use.
In his valuation of Lot 8 as a separate site, Mr Walsh proceeded on the basis that it would readily be rezoned from its zone as "Future Industry" land to the "General Industry" zoning and that the costs associated with achieving that rezoning would be $50,000. That figure was supplied to him by Mr Buckley, a town planner, who gave evidence for the claimant. The evidence of that assessment of costs was not seriously challenged by the respondent. Following rezoning, that part of Lot 8 above the FRL would be available for the construction of an industrial building. Mr Buckley calculated that on the basis of the relevant site coverage provisions of the town plan the likely building which could be constructed would be 5,976 m² in that area above the FRL. He also calculated that based on such a building and the requirements for parking, a maximum of 10,000 m² of Lot 8 would be seen as contributing to the realisation of this higher use. Mr Walsh applied a value to that 10,000 m² at $80 per m². The balance 10,331 m² of Lot 8 was surplus to development requirements and Mr Walsh valued that at a nominal figure of $1,000.
Mr Ehler valued all of that part of Lot 8 below the FRL (together with Lots 6 and 7 below the FRL) at $10 per m². He did not distinguish between the value of the Lot 8 land from that on Lots 6 and 7 having regard to the presence of the diagonal gully on Lot 8. I can only assume that he took that aspect into account in valuing the land below the FRL overall. Now in the case of Lots 6 and 7 his valuation proceeded on the basis that the highest and best use would be in the form of their continued use as a scrap yard. He, therefore, agrees with Mr Walsh in that regard but with one qualification.
In his valuation of the land above the FRL Mr Ehler valued a total area of 6,374 m². That is, he included the area above the FRL on Lot 8 (6,232 m²) and the 142 m² in the north-east corner of Lot 7 above the FRL. He applied a value of $75 per m² to that total area, therefore, I infer, saw that area as having a higher use than a scrap-yard use. The manner in which he employed his sales evidence supports that inference. In the supplement to his valuation report he said:
"the highest and best use of Lot 8 prior to resumption is industrial development or alternatively to be utilised in conjunction with Lots 6 and 7 as a 'scrap yard'".

He said that it was difficult to settle on a particular highest and best use - a difficulty I can acknowledge; however, it leaves me in a position of not being able to fully understand his line of reasoning. I do not intend to suggest that a valuer will always be able to reduce to oral expression all of those matters that go to the application of his professional expertise. At the very least, however, the broad structure of his reasoning ought to be apparent and should flow from one fundamental premise: his considered view of the highest and best use of the land. As Jacobs J said, "The first task of the valuer is to determine what that use is and then to value the land on that basis" (Adelaide Clinic Holdings Pty Ltd v. Minister for Water Resources (1988) 65 LGRA 410 at 415).
Another difficulty I have with the above quotation from Mr Ehler's valuation supplement is that it is expressed in terms of Lot 8 viewed as a separate lot, whereas his valuation proceeds on the basis of Lots 6, 7 and 8 being viewed as an aggregated whole. There is, therefore, in his own reasoning so far as it can be identified, a conflict that was left unexplained.

Notwithstanding Mr Ehler's ambivalence on the question of highest and best use, I will proceed on the basis that for the land above the FRL he perceived a higher use than that below this line and that for the land below he valued it as if it was all part of a scrap-yard use. In deciding to proceed in that manner, I have put aside another possibility: that the higher value he applied to the land above the FRL arose simply out of the fact that it was less flood prone but it was part of a scrap-yard use. I cannot conclude that such a small factual difference would lead to values as disparate as $10 per m² and $75 per m². I also note that Mr Ehler did recognise that land above the FRL was open to development.
I need to make it quite clear that in proceeding on the basis outlined in the above paragraph I am not leading to a conclusion concerning the validity of Mr Ehler's valuation overall. In the absence of that fundamental premise - his firm opinion as to the highest and best use – I am unable to reach such a conclusion. What I am able to do, however, is to employ that much of Mr Ehler's evidence as is relevant in my consideration of Mr Walsh's valuation. I will now return to consider Mr Walsh's before valuation in detail and will start with his valuation of Lots 6 and 7.
Apart from the 142 m² area of land in the north-east corner of Lot 7 which Mr Ehler included in his valuation of the land above the FRL, both he and Mr Walsh valued Lots 6 and 7 as scrap-yard land. Mr Walsh included a schedule of sales in his valuation, four of which were relevant to striking the scrap-yard value, in his view. Two of those he saw as erecting a "ceiling" to the value of that land, their overall superiority lying in his opinion that whilst their development potential was some way off, their use would ultimately be superior to the subject Lots 6 and 7. The first of these "ceiling" sales which I will identify as Sale W1, was of a property at 97 Coulson Street, Wacol, which took place in December 1998. The sale land had an area of 3.24 ha and sold for a price of $1,200,000, which calculates to a sale price of $37 per m². Mr Walsh's Sale W2 was at 64 Tile Street, Wacol, had an area of 1.619 ha, and sold for $625,000 in July 1999. That sale price calculates to $39 per m². Each of these sales was zoned "Future Industry" at the date of sale.
The other two sales, which Mr Walsh relied on as providing a "floor" to his value of the scrap-yard land, were quite distant from the subject property. Sale W3 is located at 222 Elliott Road, Banyo, where an area of 7.28 ha of land zoned "Sports and Recreation" was sold in April 1988 for $765,000. Mr Walsh assessed improvements included in that sale at $100,000, so calculated a land price of $9.13 per m². About 2.78 ha of the sale land is below the relevant FRL. His Sale W4 is located at 445 Lytton Road, Morningside and comprised the sale of 1.723 ha in November 1998. The sale price of $300,000 calculates to $17.14 per m². This land is all below the relevant FRL and was purchased for use as playing fields.
In his consideration of the value of the scrap-yard land, Mr Walsh took into account the fact that the scrap-yard use was in place, as were the associated buildings, which would not be permitted at the relevant date given that the lands were below the FRL. He acknowledged with respect to his Sales W3 and W4 that there may be a larger market for land to be used as sporting fields, but considered that the established use on the subject Lots 6 and 7 gave them an advantage. A scrap-yard use may not be attractive to some neighbours who may object to such a use starting up there.
Mr Ehler's Sales 13 to 16 inclusive are relevant to the present discussion. His Sale E13 is located at 64 Bandara Street, Richlands, a flood-free property zoned "Future Industry". That sale took place in July 1997 for a price of $230,000, which calculates to a sale price of $22.72 per m². Sale E14 was of a 5.99 ha aggregation of "Future Industry" flood-free sites at 492 to 514 Boundary Road, Richlands. The sales took place in March, April and June 1996 for an overall price of $1,350,000, which calculates to $22.54 per m². Sale E15 is located at 735 Boundary Road, Richlands, a transaction which took place in October 1998. The sale price was $850,000 for 3.24 ha of flood-free "Future Industry" land. The sale indicates a price of $26.23 per m². Sale E16 at 68 Teraba Street, Richlands, occurred in May 1998. The purchase price was $206,000 for 1.016 ha of "Future Industry" flood-free land. Mr Ehler analysed that price to $20.27 per m².
Mr Ehler considered each of his Sales E13 to E15 to be superior to the scrap-yard land and in so concluding paid particular regard to their being flood-free. He provided no comparison with Sale E16. Mr Walsh acknowledged that each of Mr Ehler's Sales 13 to 16 had superior development potential to the subject scrap-yard land, but he noted that at the time of sale their development was some way off. Sales E13 and E16 were undeveloped at the time of hearing of evidence in October 2001. These sales are closer geographically to the subject scrap-yard land than Mr Walsh's Sales W3 and W4. They are, I conclude, somewhat better basic properties for valuing the scrap-yard land than Mr Walsh's Sales W1 and W2, but his Sales W3 and W4 indicate to me that a value of $10 per m² for the scrap-yard land is much too low. I also note that Mr Ehler saw his Sale E6 at $9.77 per m² as representing "the lower parameter value associated with 'the subject land below the FRL". His $10 per m² figure seems, in my view, to be an ungenerous application of that comparison. I think that a level something less than $20 per m² is indicated when I take into account the presence of the Gay Street gully which renders part of each lot unusable; and the level indicated by Sales E13 to E16. Some value is, however, to be accorded the subject land by reason of its existing use. I will adopt $18 per m² as being the value of Lots 6 and 7 before resumption. I will apply that to the whole area of Lots 6 and 7 less 142 m² to produce a before value of $838,692, which I will round to $838,690 (4,659 m² x $18). The reason for my deduction of 142 m² will become clear upon reading of para.[84] and following. This now brings me to a consideration of Mr Walsh's valuation of Lot 8 before resumption.
In that valuation he relied on the proposition that the rezoning of that land to the "General Industry" zone could be safely assumed. Mr Buckley gave evidence in support of that assumption which, apart from an associated point of significance which I will come to shortly, was not seriously challenged by the respondent. I accept that Lot 8 ought to be valued on the basis of that assumption. I now come to the significant point of difference between the parties with respect to Lot 8.
The respondent argued that in the before situation the intending developer of Lot 8 could not anticipate a use of 10,000 m² of that land in the manner proposed by Mr Walsh and Mr Buckley because there would be a need to accommodate the extension of Lensworth Street in a similar fashion to that now in place following the resumptions. Evidence was given by Mr Kelly in support of that submission. I will present that argument as I apprehend it in skeletal form:
_·In order that the development of that part of Lot 8 above the FRL may be available the land would need to be rezoned from a "Future Industry" zone to a "General Industry" zone or another industry zone.
_·Rezoning approval may be made subject to conditions.
_·A criterion for considering a rezoning application is whether the rezoning and subsequent development would be consistent with "orderly development" of the area.
_·The extension of Lensworth Street from its position abutting the eastern boundary of Lot 8 to Selhurst Street is required for the purpose of orderly development of the area.
_·That requirement would be met by a condition excluding the required road corridor from development, at a minimum, or possibly requiring the surrender of the land needed for the road.
_·A precedent for the imposition of such a condition is to be found in the rezoning of three lots to the east of Lot 8 (discussed further below).

The claimant called on the High Court decision in Housing Commission (NSW) v. San Sebastian Pty Ltd (1978) 140 CLR 196 (San Sebastian) in support of a submission that the prospect of an imposition of the type proposed by Mr Kelly ought to be disregarded. In that case the Court was concerned with the question of a land use zoning being placed on the resumed land as part of the process leading to resumption. In considering this issue Jacobs J, with whom the other Members of the Court agreed, said this:
"Restrictions on land use, so that, explicitly or practically, use is restricted to a use for a public purpose for which the land might be resumed, are commonly imposed as a result of consultation with or direction by the public authority concerned with the carrying out of the particular public purpose. In such a case where there is a direct relationship between the restriction on land use and the proposed establishment of the public works the effect on value of the zoning or restriction ought to be ignored." (at 206)

The type of fact situation which confronted the Court in San Sebastian is relevantly different from the facts of the instant case. No restriction on land use has been imposed on Lot 8. The matter in issue arises out of the opinion expressed by Mr Kelly that the local government would require the accommodation of the road corridor as a condition of rezoning. Now that opinion is based on two facts: the fact that Lensworth Street is actually constructed to a stub road, not a cul-de sac end, meeting the eastern boundary of Lot 8; and the fact that the provision of Lensworth Street to that point was a condition of the approval of a development to the east of Lot 8 which involved the rezoning of land from "Future Industry" to "General Industry" zoning and subsequent subdivision into 14 lots. I will return to consider these facts shortly, but will first outline what I see to be the relevant law to apply to the facts before me.
Pointe Gourde Quarrying and Transport Co. Ltd. v. Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565, is authority for the proposition that the value of the resumed land may not, for compensation purposes, be increased having regard to any enhancement resulting from the scheme of which the resumption is part. In Melwood Units Pty Ltd v. Commissioner of Main Roads (1978) 5 QLCR 145 the Privy Council said in reference to the Pointe Gourde principle as it has become known:
"In their Lordship's opinion it is part of the common law deriving as a matter of principle from the nature of compensation for resumption or compulsory acquisition, that neither relevantly attributable appreciation nor depreciation in value is to be regarded in the assessment of land compensation." (at 153)
Both the Pointe Gourde and Melwood Units cases were concerned with a project involving some form of positive act on the part of the resuming authority in the form of a project which would have a public benefit, these projects being a naval base and a highway respectively. There is a stream of cases in which the Pointe Gourde principle has been considered relevant where projects such as a hospital, school, highway or such like have been involved and in such cases the project has been held to be the "scheme" whose effect on value of the resumed land had to be disregarded. The concern in such cases is that there is a potential that some foreknowledge of the scheme would have an effect on the value of the resumed land and that, therefore, not only the scheme but such foreknowledge ought to be disregarded. In other words, the dispossessed owner is entitled to have her land valued in accordance with a method and assuming a market environment which would produce a price that the land would expect to achieve in the marketplace as if it was being offered for sale untainted by the presence of the scheme associated with the resumption. The Pointe Gourde principle is therefore designed to preserve the right of the dispossessed owner to compensation which is consistent with the measure of her loss had the scheme not been thought of and the resumption had therefore not taken place.
What the Pointe Gourde principle requires me to do is to put out of my mind the "scheme" of which the resumption is part. I need to now consider, for present purposes, what that "scheme" is.
Useful reference may be made to Wilson v. Liverpool City Council [1971] 1 All ER 628 where Widgery LJ said at 635:
" The extent of the scheme is a matter of fact in every case, as is shown by the decision of Fraser v City of Fraserville [1917] AC 187 at 194, to which Lord Denning MR has referred. It is for the tribunal of fact to consider just what activities - past, present or future - are properly to be regarded as the scheme within the meaning of this proposition. The scheme will always exist in some shape or form by the time the notice to treat is served. It must, indeed, be in some shape or form at the confirmation of the compulsory purchase order itself, and then, as Lord Denning MR says, it may develop almost from day to day, and the ultimate question for the valuer is to decide to what extent the dead ripe value of the land on the day on which the valuation is to be made has been increased by reason of the existence of the scheme."

And I would add - or reduced by reason of the existence of the scheme.

In a statement put into evidence, Mr Ian Sturdy, an Engineer, described the project which necessitated the resumption as being "to alleviate traffic congestion at the intersection of Boundary Road and Beenleigh Road, Coopers Plains". The idea was to divert traffic off Beenleigh Road and onto Lensworth Street. He said that design plans for the project were finalised in about October 1997 and involved, amongst other things, the extension of Lensworth Street as it existed, abutting the eastern boundary of Lot 8, to connect with Selhurst Street so that traffic would then flow through Halt Street.
Evidence in Mr Kelly's report shows that the idea of alleviating traffic congestion as described above pre-dated the 1997 design plans referred to by Mr Sturdy. Mr Kelly's report reveals that Wanless Investments Pty Ltd applied to rezone land to the east of the subject lands, that application being decided by the City Council on 24 June 1986. This application had initially, with the consent of the present claimant, included the subject Lots 7 and 8, but these were later deleted. The land finally included in the application was Lots 9 to 11 of Sub. 2 of Portion 184, Parish of Yeerongpilly, containing 6.07 ha. The Council approved the application to rezone the land on the recommendation of the manager of the Council Department of Planning and Coordination. That recommendation took into account:
"… the fact that the developer has agreed to construct a majority of the link road between Halt Street and Beenleigh Road which is required by Council to relieve problems at the Beenleigh Road/Boundary Road intersection …"

Mr Kelly said that Council endorsed the survey plans dedicating part of the link road now known as Lensworth Street in 1987. The alignment of this road, he said, was in accordance with the rezoning conditions, there being no requirement to end the road by making provision for a cul-de-sac.
I have no difficulty in concluding that the scheme of which the subject resumptions were part was concerned with the alleviation of traffic congestion at the intersection of Boundary and Beenleigh Roads and that the scheme was in existence prior to 24 June 1986. The form of the scheme involved the construction of the link road which has now become Lensworth Street and associated works - drainage and blocking strip to limit traffic access onto Selhurst Street.
In accordance with the Pointe Gourde principle, I am required to put out of consideration the scheme that I have identified. I must remove from view Lensworth Street constructed and dedicated from Beenleigh Road and abutting Lot 8 on its eastern boundary. Having removed this from view, I have taken out of consideration one of those matters which provided the foundation to Mr Kelly's conclusion concerning the imposition of a rezoning condition requiring the preservation of a road corridor on Lot 8. The need for the road corridor to be protected by a rezoning condition to allow "orderly development" no longer applies as there is no evidence that, absent Lensworth Street as constructed at the date of resumption, the construction of that street was an immutable element of orderly development in the area. Indeed, Lot 8 could be developed quite suitably by the imposition of a condition that required an appropriate upgrade of that part of Selhurst Street that it fronted. Such a condition had been imposed on other developments along Selhurst Street. The previous rezoning and subdivision into 14 lots to the east of Lot 8 is not a suitable precedent to apply to the rezoning of Lot 8. The development of an industrial building on a single lot cannot be said to give rise to the need for an interurban link such as Lensworth Street.
It follows that I do not accept the view put by the respondent that the area of development land available on Lot 8 should be considered to be constrained by the need to extend Lensworth Street.
Mr Buckley, as I have said, gave evidence that an industrial building of 5,076 m² would be allowable on a site of 10,000 m², thus the valuable part of Lot 8 was limited to that area, even though part of that 10,000 m² would be below the FRL. No buildings could be built on that lower portion, but it could be developed for open car parking required to service the building. I accept Mr Buckley's calculations and consider it appropriate for Mr Walsh to have relied on them.
I also accept Mr Walsh's reasoning that that part of Lot 8 below the FRL which contributes to optimising the use of the land above the FRL, should be considered as part of the value of the development land, as I will call the 10,000 m² area. In my view Mr Ehler's method of valuing land by reference to the position of the FRL only, suffers in that it does not lead to the highest achievable development value.
In placing a value of $80 per m² on the 10,000 m² development component of Lot 8, Mr Walsh relied on eight sales, one of which, Sale W12, indicated to him support for his view that the balance 10,331 m² would attract a nominal value only which he put at $1,000. I will return to this nominal value question in due course.
I have considered all of the sales referred to by Mr Walsh and Mr Ehler in their respective valuations of the development land. I note in Mr Ehler's comparisons that he used sales zoned as "General Industry" - I refer to his Sales 3 and 4. I mention this in support of what I said earlier (para [29]) in respect of my appreciation that Mr Ehler valued the land above the FRL at a higher use than a scrap-yard use. I will not set out either Mr Ehler's or Mr Walsh's sales in detail here because there is little difference between Mr Walsh's $80 per m² and Mr Ehler's $75 per m². Indeed, if I take into account that Mr Walsh has allowed a deduction of $50,000 to cater for costs associated with rezoning, whereas in striking his figure of $75 per m² Mr Ehler has not, the $5 per m² difference between them applicable to Mr Walsh's 10,000 m² of development land is exactly catered for. I will therefore adopt Mr Walsh's net figure of $75 per m² for the development land on Lot 8 identified by him.
Now it is clear that the conclusions that I have arrived at as to the value of Lots 6, 7 and 8 before resumption on the basis of the valuation of Lots 6 and 7 as scrap-yard land and the valuation of Lot 8 as including development land, yield a higher value than the figure that would be produced if I were to adopt Mr Ehler's approach. My figures to this point are:
Lots 6 and 7 (ex 142 m²) $838,690
Lot 8 (10,000 m² development land) $750,000

Total $1,588,690

I will address the question of the value of the balance 10,331 m² of Lot 8 as part of my discussion of the after resumption value.
Before I turn to discuss the after valuations in detail, it will be of benefit if I describe the works carried out following the resumption.
Evidence with respect to the project which necessitated the resumption was given in the form of statements provided by Mr Caswell and Mr Sturdy, both civil engineers employed by the respondent. The resumption of the corridor of land for road purposes was for the extension of Lensworth Street from the point where it butted into the eastern boundary of Lot 8 to a point on Selhurst Street, which would allow traffic to flow directly into Halt Street which entered Selhurst Street from the north. After the completion of construction, the previous T-intersection represented by Halt Street abutting Selhurst Street was changed into a four-way intersection whereby Halt Street, in effect, became a continuation of the new Lensworth Street. The object of the project, as I have said, was to alleviate traffic congestion at the intersection of Boundary and Beenleigh Roads further to the east of the subject land. Lensworth Street would take traffic directly from Beenleigh Road. The small (160 m²) road resumption from the north boundary of Lot 8 was taken so there could become a so-called "blocking strip" precluding legal access from the after resumption Lot 22 onto Selhurst Street, forcing it to utilise Lensworth Street. Selhurst Street was upgraded and sealed through to the frontage of Lot 6 which previously had no practical access directly onto Selhurst Street. Access had been gained through the adjoining Lot 7 at a point almost directly opposite Halt Street where it joined Selhurst Street. Following the resumptions that entrance point was shifted to a point where the previous Lots 6 and 7 (now balance Lots 25 and 30) met, a little further west along Selhurst Street from its original position. I gather that this change in the entrance point was carried out by agreement with the claimant. As part of the construction of the Lensworth Street extension, the stormwater system was extended using culverts under the new road. That drainage system was constructed to receive flow from the after Lot 22.
Lensworth Street was constructed to a full-width bitumen standard with two lanes running each way, the outer lane on one side being wider to accommodate a future bikeway. The street was kerbed and channelled, footpaths were constructed on each side and it was landscaped. Street lighting was provided. The intersection of Selhurst and Halt Streets was upgraded to facilitate a right-hand turn into Selhurst Street for traffic travelling south which could then gain access onto the claimant's retained land. Mr Sturdy indicated that this upgrading which involved use of a median strip and a short right-hand turn lane would generally be used by trucks, however, Mr Walsh said that given the small size of the right-hand turn lane, it was difficult for one or more semi-trailers to conveniently and safely make that turn without backing up other traffic heading south along Selhurst Street.
The land resumed for drainage purposes was developed into a substantial open drain connected to a drain to the east and flowing to the west. That drainage work was needed as part of the roadworks scheme, as I understand Mr Caswell's statement. The small Gay Street gully road reserve was filled in and the southern gully on the subject lots was enlarged. Construction of this drain commenced in April 1999, whilst other works, including the roadworks, followed.
During the construction work the whole of the diagonal gully in Lots 7 and 8 was filled. On my estimate about half of the length of that gully was contained in the corridor land resumed for road purposes and was therefore filled as part of the road construction project. The remaining half of the gully was on land not resumed from the claimant. That half was fully contained in the after resumption Lot 20. I was not informed as to whether the filling in of that half of the gully outside the resumed land was a necessary part of either the road or drainage works and cannot discern by inexpert observation that it would be, though the gully did branch off the Gay Street gullies pre-resumption. I am also unaware of the authority, right or dispensation which allowed the respondent to enter onto the claimant's land and carry out the work in the form of the filling of that part of the diagonal gully located there. It is clear from the evidence, however, that the filling of the gully was an advantage to the Lot 20 land as it substantially increased the usable area of the flat land. That increased area included both the land previously occupied by the gully and the land to its east which had previously been severed. I return to this issue when I consider the question of enhancement.
Lensworth Street was constructed to achieve a minimum Q30 flood immunity. I understand the term "Q30" to refer to the size of flood that might statistically be expected at no greater than one-in-30-year intervals. The new Gay Street drainage channel was designed to accept a Q30 flow, but appears to have achieved a higher standard than that on Mr Caswell's observation of a particular rainfall event. He suggested that the standard was perhaps higher than a Q50 standard. In any event it is clear, in his view, that the combined effect of the new drainage and roadworks has been to provide an improved flood immunity to the after resumption Lots 20, 25 and 30. In his written report he said that the flood immunity of the lots would become Q20, whereas Mr Ehler said that Mr Caswell had advised him that the standard would be Q30. I can only assume that, given the Q30 minimum standard that would apply to the new Gay Street drain, the standard that would apply to the lots would be Q30 - the mention of Q20 in Mr Caswell's statement being an error. Prior to the resumption each of the subject lots in the areas below the FRL had a very low flood immunity leading from something of the order of Q2 in the south to a maximum of around Q20 in the north near Selhurst Street. The practical effect of the improved immunity following completion of the works had no impact on the position of the FRL. What this means in practical terms is that those parts of the claimant's land below the FRL following resumption would be inundated to a lesser depth given a particular rainfall event.
A critical element of Mr Ehler's valuation of the retained lands after resumption lay in his appreciation of the extent to which the value of those lands was enhanced by the carrying out of the works for which the land was taken. I will first consider the land below the FRL which now includes three individual lots: 20 and 25, which have frontage to the new Lensworth Street and Lot 30, which does not. In Mr Ehler's valuation he departed from his pre-resumption approach of valuing the land below the FRL as a whole and, notwithstanding my appreciation that he valued all of that land as scrap-yard land with at least Lots 25 and 30 being used in conjunction, he did not apply any enhancement to Lot 30. In his valuation he applied a value of $12.50 per m² to Lots 20 and 25, but maintained the value of $10 per m² for Lot 30. This means that for Lots 20 and 25 Mr Ehler saw an enhanced value of $2.50 per m² or 25% of the pre-resumption value. Mr Walsh maintained his before valuation figure of $20 per m² for Lots 25 and 30.
In his valuation report and in the supplement to that, Mr Ehler does not record a highest and best use for Lots 20, 25 and 30 after resumption, though apart from one small qualification (see para [65] below) it is tolerably clear to me that he has proceeded on the basis of the scrap-yard use continuing. One suggested item of enhancement which he had regard to was the greater exposure to passing traffic afforded by the new Lensworth Street. It was not disputed between the valuers that Lots 20 and 25 had greater exposure after resumption than before.
Mr Walsh did not accept that the improved road frontage enhanced the use of the claimant's land for scrap-yard purposes. He said that the scrap yard had operated successfully since the 1950's without good exposure and was not the sort of use that would benefit from improved exposure. In short, it did not benefit from passing trade, rather being a commercial destination. I accept that view. It would be a different matter, for example, if complete vehicles were displayed for sale along the new road frontage, however, I do not understand such a use to be contemplated in the town planning description of a scrap yard, nor was this a proposition raised by the respondent. After all, it is for the respondent to demonstrate enhancement. In Zoeller v. Brisbane City Council (1973)40 CLLR 24 the then President of this Court said:
" I think the onus is on the constructing authority alleging enhancement to prove to the Court's satisfaction not only the existence of enhancement but also an indication of the degree of enhancement. The standard of proof required would, in my opinion, be no more than one of reasonable probability." (at 28)

This view was endorsed by the Land Appeal Court (at 203).

Mr Ehler said under cross-examination that Lot 20 could have been put to use of "something along the lines of an outdoor sales area", though such a use did not appear in his original valuation report or the supplement to it. He did not say what products might be made available for sale, nor whether the achievement of that use would have involved a rezoning. On my reading of the table of development for the "Future Industry" zone, it would have at least required development consent. The prospect of obtaining such consent was not addressed by the parties. Mr Ehler applied the same value of $12.50 per m² to Lot 20 as he did to Lot 25, indicating that whatever use might be applied to Lot 20 it would not, in his view, be a use that took its value beyond its use as part of the scrap yard. It will be convenient if I conclude my discussion of the highest and best use of Lot 20 before returning to the enhancement topic.
Mr Walsh had valued Lot 20 separately from Lot 22 in the after on the basis that Lot 20 could not provide the same advantage to the land above the FRL as that part below the FRL had in the before (Lot 8) situation. In the before, of course, each was part of Lot 8, whereas in the after Lots 20 and 22 are separated by the Lensworth Street construction. Mr Buckley could not accept a suggestion that it would be open to Council to consider Lot 20 along with Lot 22 in a development of the latter. Even if such an approach is available in a planning sense, there would clearly be considerable practical difficulties in developing any part of Lot 20 for, say, car-parking purposes along with Lot 22. In any event, I was not provided with a valuation of Lots 20 and 22 on this basis and cannot fill such a large gap in the evidence by becoming the third valuer inter partes. Mr Walsh placed a nominal value of $1,000 on Lot 20 - the same as in his before valuation. Whilst that approach bears the imprint of consistency, it fails to recognise the changed circumstances, in my view. Lot 20 is no longer part of the Lot 8 development site, but is an independent lot whose value should be considered as such - and in considering it I should proceed on the assumption that the owner of this lot would seek to maximise its value.
For reasons that I give below (para [74]), I view Lot 20 as still being cut by the southern part of the diagonal gully. This means that the land to the east is of no identified practical use until that gully is filled at a cost unknown to me. The land to the west is able to be used in conjunction with the scrap-yard operation on Lots 25 and 30, each of which has been reduced in size of usable land by an area that, on my understanding of the evidence, would be a little less than the usable area of Lot 20. Given the past use of part of Lot 8, it seems probable that Lot 20 could be devoted to a use as part of the scrap yard or an associated use. A prudent owner of Lots 20, 25 and 30 would seek to do that in my view, rather than to see Lot 20 as simply being an area of surplus land. This takes me back to the before situation.
In the before situation I would think that the prudent owner would act to utilise that part of Lot 8 which is surplus to the development land in a similar way to what I have described in the above paragraph. This could be achieved by rezoning the required 10,000 m² only or of obtaining consent to the use of the surplus 10,331 m² for scrap-yard purposes - a permitted use within the "General Industry" zone. Of course, only that land to the west of the diagonal gully that had been so used in the past could be practically put to that use without filling of the drain. On the reasoning that I have adopted, this land would be worth something less than the scrap-yard land proper on Lots 6 and 7 for two reasons. First, the presence of the diagonal gully presents a physical impediment to a full use of the land. Second, whilst it may be used in conjunction with the scrap-yard land proper, it was not an essential continuing part of that use leading up to and at the date of resumption. Nevertheless I proceed on the basis that either the claimant as the developer of Lot 8 or another party to whom she may sell that parcel, would seek to make some productive use of this 10,331 m². No development of the parcel is needed for that use to be effected. I would have thought it appropriate to take into account the proportion of land affected by the Gay Street and southern gullies in comparison with Lots 6 and 7, however, I note that neither valuer mentioned this aspect. I should properly disregard it. I will settle on a figure of $12 per m² for the 10,331 m², that is $123,972 overall, which I round to $123,970. Putting aside for the moment the issue of enhancement, the same value would, I think, apply to Lot 20 in the after. Before enhancement the value of that lot would therefore be $93,180 (7,765 m² x $12 = $93,180). I should explain that I have settled on the figure of $12 per m² by comparison with the $18 per m² placed on Lots 6 and 7. I earlier (para. [52]) mentioned Mr Walsh's Sale W12. I saw no use in relying on this sale as the balance land in that case was all rear land and did not have the potential of being put to use together with adjoining lands, as did Lot 20 and the balance land in Lot 8. I return now to my discussion of the after resumption valuations, focusing particularly on the issue of enhancement.
Mr Ehler said that he also took into account the improved flood immunity of the land in his consideration of his allowance for enhancement. I have described earlier how that improvement was from a very low level of immunity to a level which I understand to be at Q30.
There were other suggested items of enhancement raised from the respondent's side and I will come to those shortly. I need at this stage, however, to point to a difficulty in my appreciation of Mr Ehler's valuation approach. In his after valuation he has maintained a value of $10 per m² for the Lot 30 land and has apparently concluded that this land is not enhanced because, as he writes, it has "no frontage to new road". I infer from this that either his assessment of enhancement has been confined to exposure to the new road, or that other potential enhancement items such as improved flood immunity are confined to the lots with new road frontage (Lots 20 and 25). Given his discussion of these other items of suggested enhancement, I am driven by logic to adopt the second option identified by me. It follows that I should accept Mr Ehler's opinion that Lot 30 has not been enhanced and that its before value should be maintained. That is, Lot 30 has a value of $388,152 (21,564 m² at $18 per m²). I will continue my discussion of the enhancement items said by Mr Ehler to be referable to Lots 20 and 25.
Mr Walsh did not accept that the improved flood immunity would be of value to the scrap-yard land. The FRL has not been moved and the processing of vehicle wrecks would not change - they were out in the weather before and would be after. He acknowledged that inundation of office equipment would be unwelcome, but understood that not to have been a regular event.
I am of the view that the reduced prospect of flooding would have an impact on land value. Less frequent inundation to lower depths which would drain away more quickly would be of some advantage to the ability of staff and customers in their movement about the scrap yard. There would be less downtime. Office equipment and records would be at less risk of damage or dislocation.
Mr Ehler did not say explicitly in his valuation report or in oral evidence that the filling of that part of the diagonal gully on Lot 20 featured in his consideration of the after value. I am concerned, however, to make it clear that if he considered this filling in the context of his overall appreciation of improved flood immunity then that would be an error, in my opinion. I have earlier outlined the relevant facts (para [60]) and have said that I cannot conclude on the evidence that the filling of this gully was part of the scheme which gave rise to the resumption from the claimant's land. I understand from the statements of Mr Sturdy and Mr Caswell that the construction of the Gay Street drainage channel was associated with the construction of the roadworks, including the making of the extension of Lensworth Street, though I did notice that the resumed lands were separately resumed for either road or drainage purposes. Nevertheless, the respondent, who bears the onus of proving enhancement has not made it clear to me that the filling of the diagonal gully was associated with the road and drainage scheme.
Apart from that evidential difficulty, I would find it difficult to conclude that works done on the claimant's land pursuant to some arrangement not made known to me should be considered in the context of an assessment of compensation for the loss of land. It may be, for example, that the filling of the diagonal gully was part of a quid pro quo for the claimant allowing the respondent to use her land during the process of constructing the scheme or that the gully was a convenient place to dump surplus material. I simply do not know. If there was a quid pro quo, then the landowner has already provided consideration and ought not to be required to provide it again in the form of enhancement as a set-off to compensation.
During cross-examination of Mr Walsh it was suggested to him that the scrap-yard land had been enhanced by the construction of a new industrial crossover from the Lensworth Street extension and from improved access to the site of the scrap yard following the upgrading of the nearby roads and intersection. I understand the relocation of the access point arose out of the need to move it away from its proximity to the newly constructed intersection. To this suggestion Mr Walsh had two responses.
First, he said that he could not agree that the new industrial crossover, as such, had enhanced the site. It is just a different entrance, in his view, with no practical benefit. That is a view that I must accept. There was no evidence of the nature of the access pre-resumption, nor how the new access would improve the value of the land. No enhancement from this source has therefore been demonstrated. Apart from that, I must say that whilst enhancement arising from the relocation of the entrance may be an appropriate matter for consideration in assessing enhancement in a particular case, I doubt that any suggested enhancement arising from the design or standard of the new crossing should properly be taken into account. The new structure is probably a form of accommodation works constructed by the constructing authority in lieu of compensation that would otherwise be payable. This brings me to another difficulty I have in the present case.

I do not know under what arrangements the entrance was relocated. Was there an agreement between the claimant and the constructing authority? Assuming there was, then similar difficulties to those identified by me in para. [74] arise, though it is clear to me that the need for the relocation of the entrance was part of the scheme underlying the resumption.
Mr Walsh's second response was: that whilst the improvement to Selhurst Street was of advantage to the claimant's land after resumption, this improvement was offset by the difficulty in southbound semi-trailers turning right into Selhurst Street and accessing the scrap-yard site (discussed at para [58] above). He did not know how many trucks would come into the scrap yard on a daily basis, nor what percentage of these would be semi-trailers. I can, however, appreciate the difficulty described by Mr Walsh, having viewed the new roadworks in a completed state. I am prepared to hold, therefore, that viewed on a net effect basis there was no enhancement to the scrap-yard land arising from this source. I note also that Mr Ehler has not made any allowance for enhancement arising out of the modified entrance or changed road arrangements.
I am now in the position of being able to consider the after value of Lot 25, which together with Lot 30 forms the scrap-yard land proper. Both valuers started from the base of valuing this land after resumption at the same level as before, but with Mr Ehler providing for enhancement in the manner I have described above. Based on my conclusion as to the before value of Lots 6 and 7, the after value of Lot 25, before any allowance for enhancement, would be $18.00 per m². Such enhancement as there is, is confined to the improved flood immunity on my conclusions. Having regard to Mr Ehler's enhancement figure of $2.50 per m², which Mr Walsh described as being not a large figure; and coping as best I can with the apparent internal inconsistency in Mr Ehler's reasoning, I would apply a figure less than $2.50 per m² or 25%. I will adopt an allowance of 10% for Lot 25, as well as for Lot 20, which I have valued separately. In the result, the after figures become:
Lot 30, 21,564 m² @ $18 per m²          $388,152     rounded to $388,150
           Lot 25, 15,265 m² @ $l8 per m²
             plus 10%  $302,247     rounded to $302,250
           Lot 20, $93,180 plus 10%  $102,498     rounded to $102,500

I will now consider the value of Lot 22, that is that area above the FRL which was previously part of Lot 8 but now stands as a separate lot. Both valuers have placed a value of $100 per m² on this land with the increase in value arising from enhancement arising from the works. In particular, the lot may now be developed without the need to construct a road frontage, kerbing and channelling and drainage. Notwithstanding this apparent agreement, there are two differences between Mr Walsh and Mr Ehler concerning this after value. First, Mr Walsh has deducted a figure of $50,000 to cater for the costs associated with rezoning this land. This is a similar cost to that applied to Lot 8 in his before valuation. The effect of that cost on the 6,232 m² of Lot 22 is to reduce the $100 per m² to a net $91.97 per m².
I reviewed all of the sales in an attempt to ascertain whether this small difference in value can be reconciled. What appeared to be the best sale for this purpose was Mr Ehler's Sale 2, which is located at 69 Selhurst Street on the other side of that street from Lot 20. Unfortunately, this sale appears to have been the product of a transaction between related parties. In those circumstances, I decline to rely on it. I am not able to discern from the other sales and the comparisons provided by the valuers any line of reasoning that leads me to a conclusion that either valuers' final figure is more valid than the other. In such circumstances, I resort to general principle and resolve the difficulty I have in favour of the claimant's figure. In so doing I adopt the guidance of Dixon J (as he then was) in Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Co of South Australia (1947) 74 CLR 358 at 374. The value of Lot 22 is therefore $573,157 (6,232 m² x $91.97 per m²) rounded to $573,160.
The second difference between the two valuers lay in Mr Walsh having adopted the area of Lot 22, that is 6,232 m², as being the development land after resumption, whilst Mr Ehler included Lot 23 in his combined figure of 6,374 m². Lot 23 is only 142 m² in size, is almost triangular in shape and one corner of the triangle is truncated. Mr Walsh accepted that it could be used in conjunction with Lot 22 but, as counsel for the claimant explained to me, thought that he should remain consistent with his understanding of the Conroy case by valuing it as a separate site. He placed a nominal value of $1,000 on it. This is to be contrasted with the notional figure of $2,840 that would have applied to that land before resumption in his valuation (142 m² x $20 per m²).
I think that a prudent owner of Lots 22 and 23 would consider combining those lots for development unless Lot 23, independently, can be found to command a higher price in the marketplace than it would combined with Lot 22. There was a suggestion from the respondent that this small lot might be used, for example, as a kiosk, a site for advertising hoarding or a mobile phone tower, however, no values were suggested for such uses. Nevertheless, I would think that the value of Lot 23 for such uses would be greater than Mr Walsh's nominal figure of $1,000. Mr Buckley acknowledged that the addition of Lot 23 to Lot 22 may be of benefit in terms of the size of building that could be developed overall, but was not able to conclude that this would be the case, given the poor shape and small size of Lot 23. Nevertheless, it is inconceivable to me that a prudent owner of Lot 23 would retain it for some use of a nominal value. Inclusion with Lot 22 is the sensible course and a purchaser of Lots 22 and 23 would seek to extract the maximum potential from the inclusion of Lot 23 in their development. It is sound land above the FRL and it occupies a prominent corner position. It would add value to a development on Lot 22.
If the 142 m² of Lot 23 had potential for inclusion with Lot 22 with the result being an enhancement in value of Lot 22 for development purposes, then the same potential existed with respect to the same 142 m² before resumption. Mr Ehler appeared to recognise that as he valued the whole of the 6,474 m² in his before valuation at the same figure. The only difference, it seems to me, is that in the before situation there would have been a cost in subdividing that small area of Lot 7 and amalgamating it with Lot 8. Unlike the situation with the southern 10,331 m² of Lot 8 where the use as part of a scrap yard would be a use without development, this 142 m² would, I think, need to be treated on the basis of an assumed sale to another party (Gollan v. Randwick Municipal Council [1961] AC 82).
Assuming that the addition of this 142 m² would have a pro-rata effect on the value of Lot 8, the following calculations emerge:

5,076 m² of building (before) = about 81% of 6,232 m² of land above the FRL.
If land above the FRL is 6,232 m² plus 142 m² = 6,374 m², then the building size could be 5,162 m² (i.e. 81% of 6,374 m²).
If a building of 5,076 m² needs a developable area of 10,000 m², then a building of 5,162 m² needs a developable area of 10,169 m², say 10,170 m².
Thus the inclusion of 142 m² from Lot 7 leads to an additional 170 m² having a value (before) of $75 per m², that is $12,750. I have no evidence from the parties as to subdivision costs, however should not avoid completion of the exercise that I have embarked upon because of this. Clearly both Mr Ehler and Mr Walsh agreed that the 142 m² area was capable of inclusion in the development land, however, the implications of that view were not taken through to conclusion in the evidence. I will, for the sake, of determining appropriate compensation, estimate subdivision costs in the amount of $2,750. The net value of the 142 m² of Lot 7 before resumption would be in the order of $10,000. In the after, Lot 23 would, on the assumption of its full development potential, be worth $91.97 per m² net, that is $13,060. The gain in the after situation is therefore in the order of $3,000, a figure that I will adopt. Given the approach that I have decided to apply to this area of 142 m² both before and after resumption, I will not adjust the before value figures determined by me, but will simply include this $3,000 allowance in my final calculations.

Final Calculations
My final calculations are therefore:

Before Value

Lots 6 and 7 (ex 142 m²)  $838,690
           Lot 8 (10,000 m² development land)  $750,000
           Lot 8 10,331 m²  $123,970

$1,712,660

After Value

Lot 22  $573,160
           Lot 30  $388,150
           Lot 25  $302,250
           Lot 20  $102,500
           Plus gain with respect to the 142 m² area  $3,000

$1,369,060

Before Value $1,712,660
Less After Value $1,369,060

Net $343,600

This net figure represents the compensation flowing from loss of land offset by enhancement.

The parties independently of the Court agreed to some items of disturbance being costs associated with the preparation of the claim for compensation. These amounts and the dates of payment were:
03.07.00  $1,968.71
           19.09.00  $1,081.40
           19.09.00  $750.00
           11.04.01  $1,228.20

In addition to these items, the claimant sought an award of disturbance compensation for a number of additional payments made after the date of the filing of the originating application together with the claim for compensation on 2 January 2001. These payments were for professional fees said to have been incurred in the provision of advice to the claimant with respect to the amendment of her claim. I was told that at least some of the considerations going to amendment of the claim arose out of the fact that the scheme of works was not completed until June 2000. If that was the case, then I would have expected the amounts to have been paid before September 2001, the dates of payment of these additional payments. Perhaps the completion date was June 2001 - it matters not, given my reasons below.
Counsel for both sides referred me to Merivale Motel Investments Pty Ltd v. Brisbane Exposition and Southbank Redevelopment Authority (1985) 10 QLCR 175. In that case Mr Barry considered the question of disturbance compensation for professional fees in detail and gave comprehensive reasons concerning the date up to which costs incurred in the preparation of the claim for compensation would be allowed under the heading of disturbance. He concluded:
" I find that costs incurred after the date of lodgment of the claim in the Court are costs of the action and fall to be considered in terms of the provisions of section 27 of the Acquisition of Land Act 1967-1979." (at 206)

Counsel for the claimant, Mr Allan, submitted, however, that the reasoning in Merivale does not expressly say that the claim under consideration should be confined to the original claim. What the learned Member said on that occasion seems to me, however, to be quite clear and that is that the cut-off date for disturbance in the form of professional fees is the date of filing of the claim in the Court. I should mention that there was an appeal from the decision of Merivale at first instance to the Land Appeal Court, then the Full Court of the Supreme Court, however, Mr Barry's conclusions on this issue were not disturbed. Since the decision of the Land Court, the Land Court Rules 2000 have been enacted. Rule 7(1) provides:
"7(1) A proceeding is started by filing an originating application with the registrar of the court.
(2) an originating application may be filed by facsimile."

The language of that rule reinforces the reasoning of Mr Barry. It is further reinforced, in my view, by s.24(2A) AOL Act which provides:
"(2A) The claimant shall make the reference by filing in the office of the registrar of the Land Court copies of the claim delivered by the claimant to the constructing authority and of the notice of intention to resume and a gazette copy of the proclamation or, as the case may be, notification of resumption taking the land."

Counsel for the claimant raised the prospect of there being a conflict between Rule 7(1) and those provisions of the AOL Act which refer to a claim for compensation, however, I think there is no conflict. Rule 8(1) provides:
"8(1) An originating application must comply with any requirements of the Act giving jurisdiction for the proceeding to the Court."

The form of contents of a claim for compensation is provided for in s.19 AOL Act which I need not set out and Rule 8(2) provides for that form of contents to be supplemented to the extent necessary. The rule, therefore, creates a clear complementarity between the Statute and the Rules.
Mr Allan observed that a claim was open to amendment and on that basis submitted that the cut-off date for a disturbance claim of the type under debate here ought to be the date of the final claim considered for determination by the Court. It was suggested that many claims filed in the Court are subsequently amended, the implication being, as I understand it, that it therefore followed that professional expenses involved in the lead-up to such amendments ought to be liberally allowed.
The provision of the AOL Act concerned with amendment of claims is s.24(3) which provides:
"(3) The claimant shall not amend the claim filed by the claimant in the office of the registrar of the land Court except upon leave granted by that court (which leave the court may grant upon such terms as it deems just, including terms with respect to the payment of costs)."

It will be readily understood that a claim served on the constructing authority and not yet filed in Court will be freely open to amendment unless settled. What this provision also makes clear, in my view, is that once a claim is filed the Court is seized of the matter - the action has commenced. It follows from this that costs incurred thereafter are costs of the action, having lost the character of disturbance. It is not relevant to the question that the Court might traditionally adopt a liberal stance in considering applications to amend a claim. In Brisbane City Council v. Lamont (1980-81) 7 QLCR 120 at 127 the Land Appeal Court made it clear that professional fees properly expended up to the date of filing of the claim bear the character of disturbance and I would infer not thereafter. Mr Barry in Merivale relied on the reasoning of the Land Appeal Court in Lamont. I intend to follow this line of authority and to disallow the award of compensation for the additional professional fees.
Section 29 of the AOL Act grants to the Court a discretion to order interest on compensation monies. I consider it appropriate that the respondent pay interest to the claimant on compensation determined by me and on the disturbance items agreed to by the parties (see para. [87]). In respect of those disturbance items I have settled on the date of 1 October 2000 as being the date from which interest should be paid on the total amount of $5,028.
Determination
           Compensation for the resumption of the claimant's land is determined in the amount of Three Hundred and Forty-three Thousand Six Hundred Dollars ($343,600).
Orders
(i)     I order that the respondent pay the claimant compensation in the amount of Three Hundred and Forty-three Thousand Six Hundred Dollars ($343,600).
(ii)     I order that interest be paid by the respondent to the claimant on the amount of Three Hundred and Forty-three Thousand Six Hundred Dollars ($343,600) from 18 September 1998 up to 1 October 2000, then on Three Hundred and Forty-eight Thousand Six Hundred and Twenty-eight Dollars ($348,628) up to and including the day immediately preceding the date of payment; interest in each case being paid at the rate of 6.0 per centum per annum.

RP SCOTT
MEMBER OF THE LAND COURT

[2001] QLC 139

21 December 2001