[1997] QLC 189 LAND COURT
BRISBANE
2 December 1997
Re: Determination of Compensation - Resumption for Future Road Requirement purposes under the provisions of the Acquisition of Land Act 1967 and the Transport Infrastructure (Roads) Act 1991 - Ref. A96-24.
Parkside Development Pty Ltd v. Director-General, Department of Transport (now Department of Main Roads)
(Hearing at Townsville)
J U D G M E N T
By agreement under the provisions of Section 15 of the Acquisition of Land Act 1967, the respondent Director-General, Department of Transport, resumed on 25 March 1994, certain lands with an aggregate area of 9.2686 hectares from the claimant Parkside Development Pty Ltd (Parkside) in the County of Elphinstone, Parishes of Ross and Coonambelah, for Future Road Requirement purposes. The real property descriptions and areas of the lands resumed are: (a)an area of 3.875 hectares being the whole of Lot 101 on Plan 860270 contained in Certificate of Title Volume N1504, Folio 244;
(b)an area of 8,966 square metres being the whole of Lot 102 on Plan 860270 contained in Certificate of Title Volume N1504, Folio 244; and
(c)an area of 4.497 hectares being the whole of Lot 12 on Plan 860271 contained in Certificate of Title Volume N788, Folio 103.
While the Proclamation describes the resumed parcels as separately surveyed lots, they are in reality part of two larger parcels of land owned at Proclamation date by Parkside and which were then described as Lot 2 on RP 724190, Parish of Ross, containing an area of 22.5671 hectares and the balance of Lot 100 on RP 812595, Parish of Ross, containing an area of 61.8816 hectares. From this it can be seen that the aggregate area of the parcels from which the resumed land was taken was 84.4487 hectares. Lot 2 is free of detrimental encumbrances, while Lot 100 is encumbered by a power transmission line easement and several easements for drainage purposes. The parent parcels of land are situated within the City of Thuringowa lying within the established low density residential suburb of Condon, about 11.5 kms south west from the Townsville City Centre. They are located at the closest point within 500 metres of "The Willows" regional shopping centre and Thuringowa Central Post Office. The parcels comprise 2
level coastal forest country - free from flooding, and are generally unimproved vacant residential in-globo land except for the full development of Stage 10 of "The Palms" residential subdivision which included roadworks, sewerage, water reticulation, power and subdivisional earthworks for sixteen (16) subdivided lots. The land was resumed as part of the land which was required as a corridor for what is described as the Townsville By-Pass Road, and effectively severs the aggregate parent parcel so as to leave a northern severance area of 18.07 hectares (described as Lot 11 on RP 860271) and a southern severance area of 57.11 hectares (still balance of Lot 100 on RP 812585). In so far as it directly affects the retention areas, the proposed By-Pass Road involves the construction of a major interchange with Upper Ross River Road (on the eastern boundary of the parent parcels), an overpass over the existing Upper Ross River Road, a two-lane bridge across the Ross River and a Road Connection through to Angus Smith Drive. Part of the northern retention area, described in evidence as a mushroom shaped lot containing 8501 square metres is located in the east of the severance close to and accessed from Upper Ross River Road and severed from the balance area by the resumption, will be adjacent to and surrounded by clover-leaf style access ramps at the major intersection. On 3 June 1996, the claimant Parkside filed a claim for compensation in the Land Court registry dated 5 May 1994, in the sum of $1,958,775 which is made up as follows: Land $ 770,920 Improvements NIL Disturbance $ 20,800 Injurious Affection $1,167,055 TOTAL CLAIM $1,958,775 At the outset of the hearing of the matter, Counsel for the claimant Parkside sought and was granted leave to amend the claim for compensation to $1,473,742.69 made up as follows: Land, injurious affection and severance $1,263,000.00 Disturbance $ 210,742.69 TOTAL CLAIM FOR COMPENSATION $1,473,742.69 The claim for disturbance was further amended, as the evidence of the claimant unfolded, to a sum of $213,839.69. More about this aspect of the claim later in this judgment. The amended claim for compensation in the sum of $1,263,000 for land, injurious affection and severance is based upon an assessment of compensation made by practising Registered Valuer Geoffrey William Eales. To indicate the extent of the dispute in so far as compensation for loss of land is concerned, another practising Registered Valuer Bernard James Duncan, who was called in evidence by the respondent Constructing Authority, assesses compensation, exclusive of that for disturbance in the sum of $535,000. Both valuers used the "before" and "after" method of valuation, which is widely recognised and accepted as being the most suitable method when the valuation task at hand is to assess compensation for the partial taking of land, especially as it results in a compensation assessment which includes compensation, if any, for injurious affection and severance. 3
Mr Eales assesses compensation having regard to the effect of the resumptions on each of the parent parcels. He values Lot 2 on RP 724190 (called during the case "Riverside North" Estate) before resumption in the sum of $1,543,500 and after resumption in the sum of $1,051,500. He values balance Lot 100 on RP 812595 (called during the case "The Palms" Estate) before resumption at $2,436,000, and after resumption in the sum of $1,665,000. His assessed compensation for the loss of land, severance and injurious affection is then calculated as: Loss in value of "Riverside North" Estate $ 492,000 Add Loss in value of "The Palms" Estate $ 771,000 TOTAL CLAIM FOR LOSS OF LAND, INJURIOUS AFFECTION AND SEVERANCE $1,263,000
Mr Duncan has assessed compensation for the resumption on the basis of its effect on the value of the parent parcels as a whole. He values the aggregate parent area of 82.5 hectares, along with 16 developed residential lots in "The Palms" estate, prior to resumption in the sum of $4,215,000 and the retention area of 73.23 hectares, along with the 16 developed lots, post resumption, in the sum of $3,680,000. It is from these valuations he derives his compensation assessment using the "before" and "after" method of $535,000. It is, I think, helpful if I here indicate the zonings of the parent parcels, and that of the retention areas, which are relevant under the provisions of the Town Planning Scheme for the City of Thuringowa, which was gazetted on 20 October 1988, and which, the evidence suggests, was under review at the date of gazettal of the "Parkside" resumptions. Lot 2 on RP 724190 was zoned "Residential A" while the balance of Lot 100 on RP 812595 was zoned in part "Residential A" and in part "Residential B". The total area of the parent parcels zoned "Residential A" was 43.24 hectares, with 41.21 hectares zoned "Residential B". Subsequent to the resumption, 18.07 hectares of the retention area (being the whole of the northern severance - "Riverside North") - was zoned "Residential A". The southern severance retention area ("The Palms" Estate) was zoned as to 13.95 hectares "Residential A", and 41.21 hectares "Residential B". In addition to these in-globo lands, the 16 developed residential lots referred to in Mr Duncan's valuation with an aggregate area of 1.95 hectares were, of course, zoned "Residential A". The hearing of the matter was lengthy, occupying 13 sitting days, and the issues complex. The complexity was brought about mainly by the valuers using different methods of valuation. Mr Eales used the valuation method in both of his "before" and "after" compensation assessments of hypothetical residential subdivision, whereas Mr Duncan's method was to value the land both "before" and "after" using a value per unit area (hectare) method related to in-globo sales evidence. Mr Duncan did produce a valuation of the parent parcels and the retention areas using a hypothetical residential subdivision method, but discarded it since it produced an off-line (low) compensation assessment when compared with that derived from his in-globo valuations. It is also appropriate to indicate here that Mr Eales gained comfort for his before valuation on the hypothetical residential subdivision method by 4
comparison with "in-globo" sales evidence. Apart from the valuers, numerous witnesses were called and it is perhaps useful if I now indicate who they were. The claimant called: Russell Richard Clarke - a practising Civil Engineer and Associate Director of Cardno and Davies Queensland Pty Ltd, Consulting Engineers
Anthony Russell Brown - a practising Acoustical Engineer and Principal Consultant, Ron Rumble Pty Ltd
Timothy Dunstan Brazier - a practising Licensed Surveyor of Brazier and Motti, Licensed Surveyors and Town Planners
Marcus David Williams - Manager of Tropical Homes Pty Ltd (a related home constructing company of the claimant, Parkside Development Pty Ltd).
Ian Cramb Hamilton - a practising Civil Engineer and Director, Cardno and Davies Queensland Pty Ltd, Consulting Engineers
Eric John Keenan - the Financial Controller/Company Secretary of the Parkside Group of companies, and
Wilfred Anthony Tapiolas - a Director of Parkside Holdings Pty Ltd.
The respondent Director-General called:
Peter Ernest Honeycombe - Director of The Honeycombe Group of companies
John Jack Rowlands - a Licensed Surveyor of Rowlands Surveys Pty Ltd
Phillip Alexander George Dance - a Consultant Town Planner
Frederik Hendrik Kamst - a Scientist specialising in Environmental Acoustics
Robert Arnold Henwood - Director of Planning Services for the City of Thuringowa
Leslie Cecil Johnstone - a Civil Engineer and a Principal of the firm LC Johnstone and Associates Pty Ltd
Colin Bruce Horman - a professional Traffic Engineer, and
Roger Humphrey Brameld, a professional Engineer specialising in Traffic Engineering and Land Development.
Now, as is the usual situation in a long trial, there is so much evidence that it is not possible, or indeed profitable for me to refer to it all in this judgment. The transcript of proceedings alone runs to 723 pages and the exhibit list numbers 89. I simply say that I will refer to such parts of the evidence which lead me to my ultimate finding in the matter. In so 5
doing I am conscious that I might put in reference to evidence I may have left out, or worse still, might leave out reference to evidence which I should have put in. Be that as it may. But firstly, I should briefly and broadly comment that it has been a long established valuation principle that the best basis for valuation of in-globo lands which are ripe for residential subdivision is a sale, or sales, of land with a similar development potential, if they are available. The reason, of course, is obvious. Valuation by the process of hypothetical subdivision carries with it inherent risks and factors of variance, the input of which within the parameters of the valuation exercise, can dramatically affect the resultant in-globo land valuation. Examples are differences in gross lot realisations, profit and risk factors, development costs, development periods, and the interest rates used in the valuation calculations. I am indebted to Senior Counsel for the respondent for reminding me that these matters were the subject of comment by Wells J. in Brewarrana Pty Ltd v. Commissioner of Highways (1973) 32 LGRA 170 p.181-2, and by Gobbo J. in Re: Coastal Estates Pty Ltd v. Bass Shire Council (1992-3) 79 LGRA 188 p.198. A comment made by Wells J. is that in using the hypothetical subdivision method of valuation, it must be borne in mind that any of the items that together constitute the likely costs and expenses are in themselves imprecise, uncertain, and even conjectural; that is, they are subject to error, often quite marked error. Gobbo J. said in Coastal Estates (supra): "There is one particular aspect about the use of the hypothetical analysis method that increases the uncertainties associated with its use. One of the key ingredients has always been the allowance for profit and risk. The choice of this figure was traditionally supported by evidence as to what minimum figure professional subdividers expected from the particular kind of development, with different rates being sought according as to whether the subdivision was an industrial, residential or resort subdivision. The rate so arrived at might then be modified, according as to whether the time lines were especially long or short. This sensible and practical approach has been somewhat obscured and even distorted by an increasing practice, manifested in this case, of analysing particular purchases of broad acre lands suitable for subdivision by reference to what the purchaser was said to have had in mind when it purchased the property. This was not related to an actual formal analysis but to narratives, often garbled, of what was said to be in the purchaser's mind. This is productive of much dispute and is an unfortunate trend in valuation practice. It serves to illustrate vividly why reliance on comparable sales, even where limited in number is to be preferred to the hypothetical analysis method if it creates so much uncertainty and speculation. " (emphasis added).
A case in this jurisdiction in which comment was made upon the use of the hypothetical subdivision method of valuation was Myer Realty Ltd v. Commissioner for Railways (1980) 7 6
QLCR 87 where, at page 92, a former President of this Court, Mr Barry (he was then a Member) said:-
"Once again, it is brought home to me, the problems which continue to arise when the hypothetical subdivisional method of valuation is relied upon as the basis presented to the Court as acceptable to determine an award of compensation. I have grave doubts as to its practical utility in other than the most simple of cases. The result should always be compared, if possible, with some sales. "
So that in this case, it is clear that for a meaningful decision to be made as to an award for compensation, the valuation evidence must be carefully weighed and examined so that a decision can be made as to what is the best basis of valuation - both before and after resumption - the in-globo sales evidence relied upon by Mr Duncan for his "before" and "after" resumption valuations, or the hypothetical subdivision method used by Mr Eales in both his "before" and "after" resumption valuations (checked in his "before resumption" valuation by reference to in-globo sales evidence). I think it is expedient to now include details of the valuers' compensation assessments. But before so doing, I should say that it is a critical assumption in both of the assessments that suitable traffic noise amelioration fencing be installed at the expense of the Department of Transport on or near both the northern and southern boundaries of the road resumption. By way of endorsement of this arrangement, a written undertaking under the hand of ID Rose (District Engineer - Townsville - Department of Main Roads) dated 22 August 1997 was tendered during the proceedings. In this document the State of Queensland undertakes to erect at no cost to the registered proprietor (Parkside Development Pty Ltd) a noise barrier to the standard employed by the Department of Main Roads at the time of the road construction, along or parallel to the common boundary of the acquired land and the balance land, or at such other location if any (within the road corridor) as may be considered to be more effective. It follows then, that my determination of compensation in this case is subject to and dependent upon the erection of such an appropriate noise amelioration barrier at no cost to Parkside especially as compensation determinations made by this Court for resumption under the provisions of the Acquisition of Land Act 1967 are on a "once and for all" basis.
Mr Eales' valuation reads: 7
BEFORE RESUMPTION "RIVERSIDE NORTH" ESTATE PARCEL A
Gross Realisation
190 lots as set out in Schedule (Annexure XIII) $ 8,189,000
Less, Selling Costs Advertising $23,750 Legals $66,500 Commission $290,225 $ 380,475 $ 7,808,525 Less, Profit & Risk Allowance 25% $ 1,561,705
$ 6,246,820 Less, Development Costs Subdivision Application Fees $11,780 Headworks 190 lots @ $2919.74/lot $554,751 Parkland $ - External Works Contribution Drainage $320,931 Bohle Mitigation 190 lots @ $400/lot $76,000 Development Costs $2,283,000 TCC Supervision 2.5% $73,121 Engineering $1550/lot $294,500 Survey $730/lot $138,700 NORQEB Street lights $90/lot $17,100 Capital Guarantee/190 lots $171,000 Sealing of Plans $5,700 Telecom $ - Title Documents $11,214 Contingencies (5% of Development Costs of $2,677,052) $133.853
$4,091,650 Interest on Development Costs for 9.5 Stages over 6.3 years @ 7.95% (2/19 of $4,091,650) $ 107,858 $ 4,199,508
GROSS LAND VALUE $ 2,047,312
Less, Holding Costs Rates & Taxes - Say $41,095 8
Interest on Land and Acquisition Costs @ 7.95% over half the development & selling period of 6.3 years $401,789 $ 442,884
LAND VALUE INCLUDING ACQUISITION COSTS $ 1,604,428
Less, Stamp Duty and Legals on Purchase $ 60,891
$ 1,543,537
ADOPT $ 1,543,500
AFTER RESUMPTION "RIVERSIDE NORTH" ESTATE
PARCEL A Gross Realisation
143 lots as set out in Schedule (Annexure XIV) $ 5,885,500
1 lot @ $50,000 $ 50,000
$ 5,935,500
Less, Selling Costs Advertising $18,000 Legals $50,400 Commission $213,187 $ 281,587
$ 5,653,913
Less, Profit & Risk Allowance 25% $ 1,130,783
$ 4,523,130
Less, Development Costs Subdivision Application Fees $8,866 Headworks 144 lots @ $2919.74/lot $420,443 Parkland $ - External Works Contribution Drainage $314,746 Bohle Mitigation 143 lots @ $400/lot $57,200 Development Costs $1,639,000 TCC Supervision 2.5% $48,844
9
Engineering $1550/lot $221,650 Survey $730/lot $105,120 NORQEB Street lights $90/lot $12,870 Capital Guarantee/143 lots $128,700 Sealing of Plans $4,320 Telecom $ - Title Documents $8,499 Contingencies (5% of Development Costs of $2,002,590) $100,130
$3,070,388
Plus Cost to Develop Lot 13 $41,590
$3,111,978
Interest on Development Costs for 7 Stages over 4.75 years @ 7.95% (1/7 of $3,111,978) $ 83,940 $ 3,195,918
GROSS LAND VALUE $ 1,327,212
Less, Holding Costs Rates & Taxes - Say $28,281
Interest on Land and Acquisition Costs @ 7.95% over half the development & selling period of 4.75 years $ 206,302 $ 234,583
LAND VALUE INCLUDING ACQUISITION COSTS $ 1,092,629
Less, Stamp Duty and Legals on Purchase $ 41,199
$ 1,051,430
ADOPT $ 1,051,500
10
BEFORE RESUMPTION "THE PALMS" ESTATE
PARCEL B
Gross Realisation
361 lots as set out in Schedule (Annexure XIII) $14,423,500 Lot 1 @ $150,000 $ 150,000
$14,573,500
Less, Selling Costs Advertising $ 45,250 Legals $126,700 Commission $527,237 $ 699,187
$13,874,313
Less, Profit & Risk Allowance 25% $ 2,774,863
$11,099,450
Less, Development Costs Subdivision Application Fees $22,382 Headworks 86 lots @ $2592.04/lot $222,915 73 lots @ $2919.74/lot $213,141 202 lots @ $4346.74/lot $878,041 Parkland $ - External Works Contribution Drainage $487,069 Bohle Mitigation 361 lots @ $400/lot $144,400 Development Costs $4,600,000 TCC Supervision 2.5% $127,177 Engineering $1550/lot $559,550 Survey $730/lot $263,530 NORQEB Street lights $90/lot $32,490 Capital Guarantee $ - Sealing of Plans $10,380 Telecom $25/lot $9,025 Title Documents $21,306 Contingencies (5% of Development Costs of $5,214,246) $ 260,712 $ 7,852,568
11
Interest on Development Costs for 9 Stages over 4.6 years @ 7.95% (1/9 of $7,852,568) $ 159,538 $ 8,012,106
GROSS LAND VALUE $ 3,087,344
Less, Holding Costs Rates & Taxes - Say $ 90,432
Interest on Land and Acquisition Costs @ 7.95% over half the development & selling period of 4.6 years $ 463,275 $ 553,707
LAND VALUE INCLUDING ACQUISITION COSTS $ 2,533,637
Less, Stamp Duty and Legals on Purchase $ 97,736
$ 2,435,901
ADOPT $ 2,436,000
AFTER RESUMPTION "THE PALMS" ESTATE
PARCEL B
Gross Realisation
312 lots as set out in Schedule (Annexure XIV) $12,263,500 1 lot @ $150,000 $ 150,000
$12,413,500
Less, Selling Costs Advertising $39,125 Legals $109,550 Commission $451,187 $ 599,862
$11,813,638
Less, Profit & Risk Allowance 25% $ 2,362,728
$ 9,450,910
12
Less, Development Costs Subdivision Application Fees $19,344 Headworks 106 lots @ $2919.74/lot $309,492 206 lots @ $4346.74/lot $895,428 Parkland $ - External Works Contribution Drainage $484,254 Bohle Mitigation 312 lots @ $400/lot $124,800 Development Costs $4,252,000 TCC Supervision 2.5% $118,406 Engineering $1550/lot $483,600 Survey $730/lot $228,490 NORQEB Street lights $90/lot $28,080 Capital Guarantee $ - Sealing of Plans $9,420 Telecom $25/lot $7,825 Title Documents $18,532 Contingencies (5% of Development Costs of $4,854,660) $ 242,733
$7,222,404
Interest on Development Costs for 8 Stages over 4 years @ 7.95% (1/8 of $7,222,404) $ 143,545 $ 7,365,949
GROSS LAND VALUE $ 2,084,961
Less, Holding Costs Rates & Taxes - Say $78,572
Interest on Land and Acquisition Costs @ 7.95% over half the development & selling period of 4 years $ 275,251 $ 353,823
LAND VALUE INCLUDING ACQUISITION COSTS $ 1,731,138
Less, Stamp Duty and Legals on Purchase $ 66,143
$ 1,664,995
ADOPT $ 1,665,000
13
COMPENSATION PAYABLE
Parcel A "Riverside North"
- Before Resumption $ 1,543,500
- After Resumption $ 1,051,500
$ 492,000
Parcel B "The Palms"
- Before Resumption $ 2,436,000
- After Resumption $ 1,665,000
$ 771,000
TOTAL COMPENSATION - LAND $ 1,263,000
Mr Duncan's compensation assessment of $535,000 is derived from the following valuation:
Direct Comparison Valuation
Before Valuation
41.29 hectares Residential A Englobo Land Net of Stock @ $52,000 per hectare $2,147,080
31.25 hectares Residential B Englobo Land @ $45,000 per hectare $1,406,250
9.96 hectares Residential B @ $10,000 per hectare Say $ 100,000
82.50 hectares Total Valuation $3,653,330
For Practical Valuation Purposes Adopt $3,655,000
(Equates to $44,303 per hectare overall).
Add, In Line Value 16 Developed Lots (1.95 hectares) $ 560,000
Total Valuation $ 4,215,000
After Valuation With Deed of Agreement in Place for Noise Amelioration 14
14.12 hectares Residential A Englobo Land Net of Stock @ $55,000 per hectare $ 776,600
.8501 hectare mushroom lot Allow $ 15,000
10.85 hectares Residential A Englobo Land @ $50,000 per hectare $ 542,500 6.2 hectares Corridor Residential A Englobo Land @ $45,000 per hectare $ 279,000
31.25 hectares of Residential B Englobo Land @ $45,000 per hectare $ 1,406,250
9.96 hectares Residential B @ $10,000 per hectare Say $ 100,000
73.23 hectares
Total Valuation Englobo Land $ 3,119,350
For Practical Valuation Purposes Adopt $ 3,120,000
(Equates to $42,605 per hectare overall.)
Add, In Line Value 16 Developed Lots (1.95 hectares) $ 560,000
Total Valuation $ 3,680,000
Compensation Payable
Before Valuation $4,215,000
After Valuation $3,680,000
Compensation Payable $ 535,000
Now it is to be immediately observed that the valuations placed in evidence do not significantly differ in quantum in the "before" resumption situation. Mr Eales values the parent parcels before resumption in the sum of $3,979,500 ("Riverside North" @ $1,543,500 and "The Palms" @ $2,436,000), whereas Mr Duncan values them at $4,215,000. This is notwithstanding the differing methods of valuation. But the valuations differ slightly in detail. Mr Eales' gross realisation is based on a subdivisional survey plan prepared by Mr Brazier (Exhibit 15) which includes 16
15
developed lots in Stage 10 of "The Palms" estate while Mr Duncan's valuation treats the valuation of these lots not as part of the hypothetical subdivision, but as retail lots, since he says that by the date of resumption Stage 10 development had been completed with the plan of subdivision sealed by Council. Of course, had Mr Eales valued Stage 10 lots similarly, then his before resumption valuation would have been higher, and on my estimate, quite a deal closer to that of Mr Duncan. It is recognised in evidence that although there is a quantum gap between the valuers in their respective "before" resumption valuations, it is relatively minor and an acceptable one in valuation terminology as each valuation can be, and has been supported with reference to the available in-globo sales evidence. In these circumstances, and bearing in mind that in cases of this nature, any doubt as to the amount payable by way of compensation should be resolved in favour of "liberal estimates" (vide Dixon J in re Commissioner of Succession Duties (SA) v. Executor Trustee and Agency Company of SA Limited (1946-47) 74 CLR 358 p.374), I find that for the purpose of this decision, the value of the parent parcel before resumption is $4,215,000. It follows then that the remainder of this judgment in respect of the determination of compensation payable for the loss of land, injurious affection and severance is mainly concerned is directed to the respective "after" resumption valuations of the land.
The Claimant Parkside's Valuation - Mr Eales Mr Eales told us that Parkside has been a well established and significant subdivider of land in the Townsville/Thuringowa region for over 20 years. In addition, he says that Parkside has been one of the largest builders of homes in the region during that period of time operating under the business name of "Tropical Homes Pty Ltd". Parkside's practice was to subdivide land for the purpose of the construction of new homes by "Tropical Homes". As a result, sales of vacant residential land by Parkside to other home builders was severely restricted with only occasional lots being sold. At the time of the resumption, Mr Eales says Parkside had completed the development of Stage 9 of "The Palms" estate which comprised 34 lots and which commenced selling on 10 August 1993, along with Stage 10 comprising 16 lots which commenced selling on 4 January 1994. Some development works had been carried out for Stage 11. Mr Eales told us that generally each lot sold included a separate building contract for the construction of a new dwelling house by "Tropical Homes". For these reasons, and particularly given the history of the subdivision of the "The Palms" estate land, and the development experience of Parkside, which was actually seeking approval to develop the land at the time of the notice of resumption, Mr Eales believes the correct method of valuation (both "before" and "after" resumption) is on a hypothetical subdivision basis. Mr Eales tabulates the attributes of the land for residential subdivision. They are: 16
•being located close to an existing High School and proposed Primary School.
•being located opposite a developed park and nature strips along an attractive reach of Ross River.
•being located within 500 metres at the closest point of a major regional shopping centre and associated commercial developme nts.
•the provision of easy access to the main feeder and arterial roadways.
•being adjacent to existing medium to good quality built up residential areas.
•the immediate access to the services infrastructure of the previously developed subdivision eg: sewerage, water, telephone and drainage.
•the extensive promotion which had been carried out on "The Palms" Estate establishing it as a well defined product in the market with proven acceptance.
•the potential purchasers from two residential markets - first home market and the brick/block 115m2 covenant market.
Set out in Mr Eales' tendered valuation document are comprehensive lists of vacant residential lot sales within the suburbs of Deeragun, Kirwan, Annandale/Murray, Rasmussen, Garbutt/Mount Louisa, Kelso, Condon and Mount Low. These recorded sales took place during the Calendar Years 1992, 1993 and 1994. The purpose of the tabulation by Mr Eales of these listings is twofold. Firstly, he believes that the lot values applied by him when developing his hypothetical subdivision gross realisation values are supported by the sales evidence. Secondly, he draws comfort from the sales material for his estimated selling period of 4.75 years. More about the selling period soon, but I should say that Mr Eales' hypothetical subdivision lot values appear to be well supported by the sales evidence with the possible exception of those along or near the resumption boundary where he applied a considerable value reduction factor in his post-resumption hypothetical subdivisional valuation exercise. I think it could be fairly said that apart from these corridor affected lots, and perhaps some lots facing the potentially busily trafficked Beck Road, there was no serious challenge to the lot values applied by Mr Eales in his hypothetical subdivision valuations. Mr Eales told us during the course of his evidence that he has had regard to the potential for residential subdivision of "Riverside North" and "The Palms" both before and after resumption as separate parcels (or residential estates) when preparing his hypothetical subdivision valuations of the land, particularly in respect of his estimate for the selling period. He suggests that the parent parcels had the potential at resumption date to have been subdivided 17
into 551 Residential "A" and Residential "B" lots and one large Residential "B" lot (190 lots in "Riverside North" and 361 lots in "The Palms"). Post resumption, Mr Eales says that the subdivisional potential is reduced to 455 subdivided lots after resumption (143 lots in "Riverside North" and 312 lots in "The Palms"). In this respect, Mr Eales has adopted the lot yields from a subdivisional lay-out prepared by Mr Brazier. The regard for the subdivisional potential of each parent parcel viewed individually, and not collectively is an important factor in Mr Eales' valuations as he postulates that both in the "before" and in the "after" resumption, a developer could aim the developed lots into two different markets - "Riverside North" into an up-market brick/block covenant 115 square metre market with relatively high lot values, and "The Palms" into a first home-buyers market with lower lot prices. The influence of this on his valuation is that both the estates could be marketed at the same time and not necessarily competing in the market place with each other. This is a factor of vital influence upon the estimated selling period used in his hypothetical valuation calculation after resumption of 4.75 years for "Riverside North" and 4 years for "The Palms". Mr Eales contends that under what he calls the favourable market conditions prevailing at the date of resumption, it is reasonable to anticipate that the development and selling period could be calculated on the basis of 108 lot sales per annum (30 sales from "Riverside North" and 78 sales from "The Palms"). In support of his adopted selling rate (108 lots per annum), Mr Eales outlined details of the market share of various developers in the first home-buyer market and in the brick/block 115 square metre covenant market. Patrick & Hansen gained 59 sales per annum (or 11.5% of the first home-buyers market segment) in an estate at Deeragun from a commencement date of 1 December 1992. In the same market Ochad Pty Ltd (an associated company of Patrick & Hansen) gained 46.4 sales per annum (or 9% of market segment) at Glenrock. Townacre Development Pty Ltd gained 44 sales per annum (or 8.5% of the market segment) in a development at Kelso from a commencement date of 16 September 1992, at Mount Louisa. Bayswater Village Pty Ltd gained 35 sales per annum (or 6.8% of the market segment) at Mount Louisa from a commencement date of 7 October 1992, and Amalgamated Holdings Pty Ltd gained 53.6 sales per annum (or 10.5% of the market segment) in a development also at Mount Louisa. Mr Eales believes that it would be reasonable to expect a market share greater than in any of the above estates in the first home market unit at "The Palms". Accordingly, he adopts a selling rate of 78 lots per annum, (or a market segment of 15.2%) for "The Palms". As for the brick/block 115 square metre covenant market in "Riverside North", Mr Eales refers to the following achievements by developers: Kern Bros Pty Ltd148.8 sales per annum (or 30.1% of market segment) at "The Willows"
Annandale Estates Group213.6 sales per annum (or 43.2% of the market segment at Annandale), and
Townacre Developments Pty Ltd60.6 sales per annum (or 12.3% of market segment) 18
from a commencement date of 4 September 1993 at Kingsmead - located behind Kirwin.
As a result, and considering the market share of lots held by developers, Mr Eales believes "Riverside North" Estate would achieve lot sales of 6.1% of market share - or 30 lots per annum. By way of support for his adopted selling rates, Mr Eales produced a schedule showing the number of vacant residential sales in the previously mentioned suburbs during each half of the year during the period from 1 January 1992 to 30 June 1994. I might here comment that while the schedule statistically shows the overall number of sales, it also shows that the total number of sales in the suburbs actually dropped from the second half of 1993 to the first half of 1994 from 596 to 486. This is of significance when the state of the market for residential lots in Townsville/Thuringowa as at the date of resumption is discussed later in this judgment. Mr Eales stressed during the course of his evidence that the road works proposed for the resumed land will detrimentally impact on the retention area lands owned by Parkside, principally due to noise pollution, and especially on the value of potential lots immediately to the north and south of the proposed By-Pass and interchange. He says this impacts on the saleability of lots in the vicinity of the interchange and on a band of land which in the post resumption situation is bounded by the By-Pass and the existing powerline transmission line easement which runs diagonally across the balance of Lot 100 retention area to the south of the resumption. As well, Mr Eales suggests that the proposed roadworks will cause a significant diminution in the value of the retention area lands in close vicinity to the By-Pass route. It is for these reasons that Mr Eales has discounted the value of 107 lots adjacent to or in close proximity to the resumption boundaries in both "Riverside North" and "The Palms" Estates post-resumption in comparison with his pre-resumption lot values. He discounts the value of 17 lots by a factor of 20%, two by a factor of 17.5%, 34 by a factor of 15%, 17 by a factor of 10% and 37 by a factor of 5%. His greater discounts are for lots adjacent to the resumption lines, and the Clover Leaf Interchange, and the lesser discounts are for lots located within 75 metres of the resumption lines. The evidence mainly relied upon by Mr Eales in support of his corridor lot value reductions due to noise pollution is of residential lot sales in the suburb of Annandale situated adjacent to and of other lots well removed from University Road, which is a busy thoroughfare, the pavement of which has been duplicated of recent times. There is a noise amelioration barrier along University Road but its effectiveness has now been called into question since the more recent roadworks which have elevated the road surface. Mr Eales points to the sales of Lot 11 in Jondaryn Court on 12 December 1994, for $43,000, of Lot 7 in Niall Court also on 12 December 1994, for $43,000, and to Lot 6 in Niall Court in September 1994 for $44,000. These three lots abut University Road. He compares these prices with prices achieved for lots in Glendhill Court, which is well removed from University Road, and accordingly removed 19
from the road noise pollution and which were then selling for in the order of $49,000 to $50,000 - or at a premium of 10%-12% over the University Road lots. Mr Eales believes his allowance for profit and risk (a factor of 25%) is justified in his hypothetical valuation exercises for several reasons. They include that, firstly, Parkside is a long established residential subdivision development company with an excellent track record and with proven success at "The Palms". He says Parkside has succeeded in gaining Local Authority approvals for its subdivision and that it could have expected to have obtained on-going approvals from Thuringowa City Council for the further subdivision of its land, but for the intervening resumption. Also known to Parkside at relevant date were the development costs, selling prices, and it would have been in a position to pass on all this experience and the benefit of his consultant's work to an assumed hypothetical purchaser of the unsubdivided land. As a result then, Mr Eales believes that, in this case, the profit and risk factor allowance of 25% is virtually all profit, as he sees the risk factor to be virtually negligible. Mr Eales claims further support for his profit and risk allowance from his analyses of three sales of in-globo land parcels each with potential for residential subdivision. They are: •Highland Park Estate, Rasmussen - deduced profit and risk factor 25.23% •The Willows Gardens, Kirwan - deduced profit and risk factor 22.65% •Annandale Grammar School site - deduced profit and risk factor 25.49% Details of Mr Eales' comprehensive analyses are in evidence (Exhibit 17). I do not feel the need to include details here or to further comment upon them. As earlier foreshadowed, Mr Eales offered his view as to the state of the residential land market in the area at the date of resumption. He says at that time there was no reflection in the sales statistics previously mentioned in this decision which would show a major downturn in the volume of sales at that time, but he says there is no doubt that in the second half of 1994, they show a reduction in the volume of vacant land sales. Mr Eales says that at the date of the resumption, the lot market volume was lower than at the high point of 1993, but it had not fallen much below the previous normal average. But this seems to be at odds with the statistical information supplied by him as included in his tendered valuation document (Exhibit 4) - an unnumbered page between pages 19 and 20. Mr Eales gained comfort for his before resumption valuation by the process of hypothetical subdivision from comparison with in-globo sales evidence. He listed three such sales, but I do not find the need to refer to this evidence here as I have already found for a value of $4,215,000 for the parent parcels before resumption. But Mr Eales has found no in-globo sales which he says are comparable to the parent parcels after resumption. He says for in-globo sales to be comparable they would have to be of a similar type of land in a similar area with a similar type of by-pass severance to give some valuation guide, and he is at a loss as to how to establish the severance and injurious affection allowance factor in his valuation of the balance land after resumption and the effect it would have in the marketplace, without comparable sales evidence. This, he says, is the reason why 20
he relies solely upon the hypothetical subdivision valuation in the after resumption situation.
Evidence of Other Witnesses Called by the Claimant As already mentioned, it is Mr Brazier who prepared the subdivisional plans used by Mr Eales in his valuation exercises. Mr Brazier told us that he received instructions to prepare the plans so that they would accord with the requirements of the Council of the City of Thuringowa, comply with its subdivision By-Laws, and provide for drainage requirements as advised by Parkside's engineers - Cardno and Davies. Provision was made for parkland in accordance with the By-Laws of the City of Thuringowa, and this was done also in accordance with his instructions. It is noted that, apart from an early parkland provision, it has not been Parkside's policy to provide parkland in "The Palms" estate subdivision - rather a parkland contribution in lieu has been made. But nothing turns on this, as parkland has been provided by Mr Brazier in both his before and after resumption subdivisional designs, so as to maintain a consistent parkland provision policy. Mr Brazier offered some criticisms of the plans of subdivision prepared by Mr Rowlands who was called by the respondent Department of Transport. He says in the "before" resumption subdivisional plan for Lot 2 on RP 724190 ("Riverside North"), four allotments were less than the minimum area of 600 square metres, 15 allotments failed a 15m x 15m building envelope template test, a cul-de-sac with a width of 20 metres is not in accordance with Council requirements, and inadequate provision has been made for surcharge water flows into the northern main drain. Mr Brazier offered a design revision of Mr Rowlands' plan under which it could be modified to comply with Council requirements, and so as to provide a similar lot yield as does Mr Brazier's plan (190 lots) - after adjusting the number of yielded lots for parkland contribution. As for Mr Rowlands' after By-Pass plan for Lot 2 on RP 724190, Mr Brazier suggests that 14 lots are less than 600 square metres, 13 lots failed the template test, and again there is inadequate provision in respect of the main northern drain. Once again, Mr Brazier has redesigned Mr Rowlands' plan so as to again comply with Council requirements, and again after adjusting the lots lost to parkland, suggests the amended yield would be 145 lots when compared with Mr Brazier's yield of 143 lots. Mr Brazier has carried out similar exercises in the "before" and "after" subdivisional design by Mr Rowlands for Part Lot 100 on RP 812592 ("The Palms"). He says Mr Rowlands' "before" resumption design is defective and that it has one lot with an area less than 600 square metres, 4 lots fail the template test, 1 lot is less than 600 square metres external to the powerline easement, (the Council By-Laws are that lots are to have an area of not less than 600 square metres external to a powerline easement) and there is again inadequate provision for drainage. Mr Brazier also suggests that Mr Rowlands' plan does not show Stage 10 lots of "The Palms" Estate. After design revision, Mr Brazier suggests the Rowlands' after resumption plan would yield 156 lots compared with Mr Brazier's 159 lots. As for Mr Rowlands' plan for balance Lot 21
100 on RP 812592 after resumption, Mr Brazier says five lots are less than 600 square metres, nine lots fail the template test, eight lots are less than 600 square metres external to the powerline easement, and again there is an adequate provision for drainage. Mr Brazier suggests that this plan again does not show Stage 10 of "The Palms" Estate. After revision, Mr Brazier has adjusted Mr Rowlands' lot yield to 106 lots, the same number as designed by him. But all this criticism of Mr Rowlands' design plan is relatively insignificant, for Mr Rowlands himself later in the hearing offered his own revision of his original design plans and this largely reconciled and embraced Mr Brazier's criticisms. Engineering evidence was called by the claimant from Mr Hamilton whose company (Cardno and Davies) has, since October 1992, been involved in providing engineering advice to Parkside in connection with its development of "The Palms". At that time, Stages 1 to 3 had been designed and developed by another firm (McIntyre and Associates). Stage 4 had been designed by McIntyre, and Cardno and Davies were retained to design Stage 5. Mr Hamilton was responsible for and has prepared engineering drawings in conjunction with Brazier and Motti for the balance of "The Palms" Estate and for the hypothetical development of "Riverside North". He investigated the engineering infrastructure which was required including internal and external open out-door drainage works requirements of the Council of the City of Thuringowa current at the date of resumption. Mr Hamilton says the design plans prepared by Mr Brazier, as used by Mr Eales, take into consideration such engineering infrastructure. Mr Hamilton has examined an engineering report prepared by Mr Jensen who is an associate of Cardno and Davies. This report was tendered in evidence (Exhibit 9), but Mr Jensen was not called as, in the end result, there was little dispute as to engineering costs (development costs) between the engineers based on Mr Brazier's and Mr Rowlands' respective plans of subdivision. Cardno and Davies development costs were eventually rationalised by agreement with the respondent's engineer (Mr Johnstone) to be $13,958 per lot before resumption, and $14,703 per lot after resumption. This is for both parent parcels and both retention areas. It is to be noted that these costs compare with the costs used by Mr Eales of $13,705 per lot before resumption for "Riverside North" and of $14,092 per lot before resumption for "The Palms", and of $13,662 per lot after resumption for "Riverside North" and of $15,180 per lot after resumption for "The Palms", or, on a combined basis, almost the same costs per lot as rationalised by Mr Johnstone. Mr Clarke was called in evidence by the claimant since his role was to contact the Department of Transport in an attempt to obtain from it information on estimated traffic volumes on the future by-pass road and on the on/off ramps at the main intersection with Upper Ross River Road. This information was passed on to the noise consultant called by the claimant, Mr Brown. Mr Clarke has obtained traffic volumes based on an engineering judgment rather than on a detailed independent analysis, with critical assumptions for his engineering judgment being outlined in his report (Exhibit 37). Mr Clarke's findings, as I interpret them, suggest that by the year 2003, 37,700 vehicles 22
per day would be using the By-Pass road from the main intersection with Upper Ross River Road to the east. This will increase to 45,000 vehicles per day for this section of the By-Pass in the year 2011. From the intersection to the west (through the subject parent parcels) the calculated traffic volume is 26,000 vehicles per day in 2003, increasing to 33,000 in the year 2011. Mr Clarke says that it is anticipated that 11,000 vehicles per day will use the on/off ramps at the main intersection in 2003, increasing to 23,000 vehicles per day in 2011. He estimates the volume of traffic which will use Upper Ross River Road to be 27,000 vehicles per day in 2003, and 28,000 vehicles per day in 2011. Mr Clarke estimates that the volume of commercial vehicles would be 5% of the total number. Mr Clarke is of the opinion that there would be, due to actual and projected vehicular traffic in Upper Ross River Road, a need for traffic signalisation on road access from the overall subject subdivisional development to that road. In the post-resumption situation, Mr Clarke also believes that access from the "Riverside North" subdivision to Upper Ross River Road would require signalisation although obviously the traffic volume using that intersection would be lower. He believes also that traffic signalisation is required at the intersection of Gregory Street and Upper Ross River Road to the north of the By-Pass road, since his traffic flow analysis shows that, with certain traffic flow assumptions he has made (percentage turning left and percentage turning right out of Gregory Street), the intersection does not operate satisfactorily. Mr Brown used the figures supplied by Mr Clarke as a basis for his report on road traffic noise assessment caused by the proposed new By-Pass road. Mr Brown told us that the bounds for assessing the degree of noise impact have been set relative to the 63dBA limit as contained within the Department of Main Roads interim guidelines, and the 55dBA limit for standard construction dwellings. As a result of his assessment, Mr Brown says that some 135 allotments in the post-resumption subdivision proposed in Mr Brazier's plan may be subject to road traffic noise levels exceeding the 55dBA noise level limit. He anticipates that some or all of these allotments would need to be discounted in value when placed on the market to offset the effect of traffic noise intrusion. But this remark is one which really falls outside the area of Mr Brown's expertise - it is in the province of the valuer. Further, Mr Brown comments that it is likely that any residential construction on these affected lots would need to be airconditioned if compliance with Australian Standard 3671 has to be achieved. Mr Brown describes the new road scheme as involving construction in two stages, initially as a two-lane road with a three-lane bridge over the Ross River with a connection road to Angus Smith Drive together with a two ramp interchange with Upper Ross River Road. The ultimate development is also described by Mr Brown as consisting of a four-lane road to connect the new bridge to Harveys Range development road. Mr Brown told us that, as is commonly experienced, road traffic noise levels attenuate with distance of separation from the road. He says that consequently, if a noise barrier is erected along the road to ensure that the 63dBA level is met at all residential allotments abutting 23
the road reserve, road traffic noise levels will steadily attenuate with distances from the residences. Nonetheless, he confirms that on either side of the road reserve, in the event of subdivisional development, there is likely to be a band of residences which are subject to road traffic noise levels equal to or greater than 55dBA. Mr Brown has conducted a series of noise level calculations to establish where the 55dBA noise level contour would be expected to be on the retention areas after the completion of the By-Pass. He tendered to the Court a plot of the likely location of the contour (Figure 2 in Exhibit 39). It is based on this Noise Level Contour Plan that Mr Brown has calculated the number of likely noise affected lots previously mentioned (135). It is to be observed, also as aforementioned, that Mr Eales discounted the value of 107 lots adjacent to or in near proximity to the road resumption line. Mr Williams, who is currently the manager of Tropical Homes Pty Ltd, was called in evidence by the claimant to support its contention that allotments backing onto a highway should be discounted in value. Mr Williams referred to his experience when earlier managing another construction company - Spinnaker Homes - of having attempted unsuccessfully to interest purchasers in blocks backing onto busy Thuringowa Road in an estate called "Reana Developments". But I should briefly say that Mr Williams' evidence really does not further the evidence about valuation reduction for noise pollution - both parties in this case recognise that land adjacent to busy roads is affected in value terms by noise pollution, and it is really only a question of degree. Mr Keenan's evidence was mainly directed to the substantiation of a significant segment of the disturbance claim, specifically in respect of the claim for lost profit by Parkside because of the resumption on its purchase of 17 lots of land from outside its land stocks to continue with Tropical Homes' house construction operations. I will discuss this aspect of his evidence later. But Mr Keenan did comment by way of support for Mr Eales' allowance in his hypothetical valuation exercises upon what he sees as being an appropriate allowance for profit and risk. Mr Keenan says that he understands that profit and risk allowances in valuation exercises are intended to represent a reward for effort involved in the reimbursement of management costs, return on capital invested, and an allowance in the return achieved for the risk involved in the subdivision project. Now Mr Keenan has carried out a mathematical exercise adopting a profit and risk factor of 25%, showing various rates of return based on four different scenarios. Again I do not feel the need to discuss this material in this decision. But after discussing the scenarios, Mr Keenan expressed the view that a prudent investor in subdivisional land would ordinarily seek a return after effort, reward and management costs of in the order of 25%, subject to specific knowledge and risk. Mr Keenan believes the only risk Parkside would have been subject to in the proposed subdivisional exercises was that during the selling period the demand for allotments could decrease. The final witness called by the claimant was Mr Tapiolas, whose evidence was also largely directed to supporting many of the items in the disturbance claim. But Mr Tapiolas 24
outlined the history of land development by Parkside and its relationship with the associated building company Tropical Homes Pty Ltd. He says it was the overall company strategy to develop its lands, erect houses upon them and then sell the property as a house and land package. It was not Parkside's policy, as it was with other developers, to simply develop land for sale to the market generally. At the time of the resumption, Mr Tapiolas regarded the company landholdings in the subject (Condon) area to have been premium lands for residential development. This was particularly so because of the proximity to the development of "The Willows" area and the desirability of having land situated close to shopping facilities. Mr Tapiolas outlined for us the history of his company's involvement with the development of Lot 100 - "The Palms" Estate. Lands forming Stage 1 were released for sale in 1991. By August 1992, the development of "The Palms" was well under way. Stages 1 to 4 had been approved covering 82 lots. Stage 4 covered 30 lots. By then all Stage 1 lots had been sold. In Stage 2, three only had not been settled, and in Stage 3, 13 remained not settled, but of those 7 were under contract. On 20 August 1992, Parkside lodged with Thuringowa City Council an application for approval to develop Stages 6, 7, 8 and 9 of "The Palms". In relation to Stage 4, Council approval had been granted. A NORQEB subdivisional agreement was entered into on 14 August 1992, and construction and development works were scheduled to commence on 1 September 1992. Stage 5 with 25 lots was approved by Council on 25 June 1992. On 24 July 1992, Brazier and Motti had instructed McIntyre & Associates to prepare the appropriate engineering plans. Mr Tapiolas told us that it was always Parkside's strategy to deal with "Riverside North" development in a manner differently to other lands forming part of "The Palms" Estate. "Riverside North" was always considered by the company to be a more up-market parcel of land than "The Palms" and quite suitable for a different type of development. Mr Tapiolas is confident that had his company proceeded with the development of "Riverside North", then the sale prices achievable for lots would have been only marginally below those in the upmarket "The Willows" residential subdivision, and would have been not less than $45,000 per lot. Mr Tapiolas is of the opinion that an independent land developer could have expected to achieve an annual sale rate in "Riverside North" of 40 lots per annum, and if "Riverside North" was not developed, the sales by an independent developer in "The Palms" Estate at date of resumption could have been at figures of between 105 and 100 per annum. But even if "Riverside North" was developed at the same time, Mr Tapiolas is confident that 85 sales per annum would have been reasonably achievable by an independent developer in "The Palms". Mr Tapiolas explained that, as a result of the works proposed by the Department of Transport on the lands resumed from his company, there will be detrimental effects suffered by part of the retained lands. He referred to Mr Brazier's after resumption subdivisional plan and says that about 94 lots will suffer disabilities as a result of the presence of the future roadway and the interchange. Mr Tapiolas calculates that 54 lots will actually back onto the roadway and that another 40 will suffer from some residual disability as a result of the presence of the 25
roadway and the interchange when coupled with the presently-existing overhead powerline which runs through the southern severance. Notwithstanding the Deed of Undertaking placed in evidence about the noise amelioration barrier, it is Mr Tapiolas's experience that sales of developed blocks affected by the roadway will show a significant diminution in prices from those achieved for blocks not so affected. Mr Tapiolas has had experience of this from dealings in which Tropical Homes Pty Ltd was involved in the construction of houses in estates developed by other developers - namely Greenwood Estate and Annandale Estate. In Greenwood Estate, a large number of lots backed onto Thuringowa Drive which he says is a busy thoroughfare. The developer found these lands very difficult to sell, notwithstanding that a masonry screen fence had been erected along the road boundary. Mr Tapiolas said these lots were eventually sold by the developer allowing a cash rebate of up to $8,000 per lot. This was in June 1995, when the normal pricing of the blocks was approximately $49,000. It is Mr Tapiolas' opinion that the sale prices of Parkside lots backing onto the By-Pass road will be diminished by up to 15% from the sale prices of lots not so affected. He says that even lots up to 100 metres from the By Pass will be affected but to a lesser extent. But Mr Tapiolas believes that a reduction of 10% in the price for these more distant lots would result in their sale within a reasonable selling period. Mr Tapiolas also believes that the total discount which would need to be given for affected lots between the powerline and the By Pass Road would not be less than 25%. During the course of his evidence, Mr Tapiolas was asked by Senior Counsel for the respondent about the state of the residential land market in the area at the time of resumption. He expressed the view that developers would normally experience a drop-off in enquiry and sales prior to a drop-off appearing as a statistic in sales records. But Mr Tapiolas does not believe that a drop-off in sales was evident in the first quarter of 1994, or not as evident as it is today looking back at the statistics. He says the market did not come off the boil until the end of 1994, and sales activity was still happening and quite strongly at that time.
The Respondent Department of Transport's Valuation - Mr Duncan As aforementioned Mr Duncan relies upon in-globo sales evidence as a basis for both his before and after valuations using the direct comparison method, although he says the available in-globo sales are limited. Details of the sales evidence upon which he relies are: Sale No 1 - Ocean Drive Estate, Bushland Beach - 16.97 hectares - zoning "Residential A" - Sold in December 1992 for $570,000 or $33,589 per hectare.
Mr Duncan describes this land as beach frontage residential in-globo land situated to the north of Townsville. The land was sold by a mortgagee in possession, and is severed by a depression with major civil works required at sale date to develop the beachfront section. These works include a culvert crossing and filling with an estimated cost of $270,000 (bridge $70,000 - filling $200,000). Mr Duncan calculates the sale price per hectare inclusive of the 26
bridge and filling costs to be $49,499 per hectare, and regards the Ocean Drive Estate land to be inferior to the subject land. Sale No 2 - Burnda Street Estate - 17.27 hectares - "Residential A" zoned - adjoins the Kirwan Primary School in Burnda Street, Kirwan - purchased by Townacre Developments in August 1992 for $680,000 - or $39,375 per hectare.
Mr Duncan describes this land as requiring significant external works at date of sale for stormwater drainage, and he says that this problem was subsequently addressed in conjunction with other in-globo land parcels in the lower Kirwan area. Mr Duncan believes that at the time of sale, the perceived cost of external works was in the order of $250,000 to $400,000. At worst scenario external works cost ($400,000), Mr Duncan calculates that the sale reflects a "with cost" value of $62,536 per hectare, and on a best scenario external work costs ($250,000), it reflects a "with cost" value of $53,851 per hectare. Mr Duncan describes this sale land as being a smaller and prime parcel for residential subdivision in comparison with the Parkside land, and he rates it as being superior to Parkside on a developable basis. There are no internal drainage requirements. Mr Duncan says the Burnda Street land has a headworks advantage over the subject land for residential subdivision. Subsequent residential development achieved lot sales of 86 lots per annum at prices between $42,000 and $46,000. Sale No 3 - "The Willows Estate", Kirwan - a "Residential A" zoned parcel with an area of 105.6 hectares - Sold to Defence Housing Authority on 20 May 1994, for $5,570,000 - or $52,746 per hectare.
Mr Duncan points out that this in-globo parcel was severed with what is known as the Kern drain, which is a constructed drain requiring batter adjustments to accommodate the full residential lot yield. The drain area is approximately 3.9 hectares. Mr Duncan says that "The Willows Estate" land has an extended frontage to "The Willows" Golf Club development along its western side boundary. Approximately 40 potential lots abut the 18 hole golf course. Mr Duncan told us that the land is currently being developed in a joint venture arrangement with the Delfin Group and is known as "Willows Gardens". At sale date, two undeveloped stages had been approved by Council providing a yield of 79 lots which completed the development to the eastern side of the Kern drain. Mr Duncan says that "The Willows" land requires selective filling, with some 300,000 cubic metres of fill being stockpiled on site at the time of sale, with further fill available from batter variations and road construction. Mr Duncan told us that the main impediment to the development of "Willows Gardens" was the Sandstone Drive bridge requirement which had a cost estimate of $350,000 at sale date, and an actual construction cost of about $600,000 for what he describes as an "overspecified" structure reflective of the superior standard of the development in "Willows Gardens". At sale date external drainage works of $500,000 were also projected while filling costs of lands abutting the Willows Golf Course were estimated at $300,000. Further allowance of $50,000 27
has been made by Mr Duncan in analysing "The Willows" sale for the Martello Drive/Evergreen Drive crossing. After making an allowances for the bridge costs ($400,000), filling ($300,000), drainage works ($500,000), and for what parkland advantages the land had ($79,000), Mr Duncan calculates that the sale reflects an in-globo land value of $63,362 per hectare. Mr Duncan sees "Willows Gardens" to be a superior parcel in comparison with the Parkside lands in terms of location, features and development history, with achieved average lot prices at time of sale in the order of $45,000 per lot. Sale No 4 - Carlyle Gardens Estate - comprising 29.45 hectares of "Residential B" zoned in-globo land - situated on Smiths Road, Bowhunter Road, and Beck Road, Condon - Sold in August 1996 for $1,100,000 - or $37,351 per hectare. Carlyle Gardens Estate is located opposite the Beck Road frontage of "The Palms" estate.
Mr Duncan told us that this land was sold conditional upon the purchaser obtaining a rezoning to "Special Facilities - Retirement Village", and that Council imposed development conditions which included road upgrades, drain construction, levy bank construction and contributions to the western collector road system with a combined estimated cost of $450,000. Further, external infrastructure and Beck Road access costs are estimated for a 1995 residential subdivision to be $250,000. Mr Duncan then adjusts the reflected in-globo sale price of the Carlyle Gardens parcel with upgraded access, infrastructure and drainage costs to $45,840 per hectare. Mr Duncan offers the view that residential lot market conditions were inferior at the time of this after-date sale than at resumption date, but there is no in-globo sales evidence which shows a decrease in in-globo values in comparison with historical levels. Mr Duncan sees Carlyle Gardens Estate land to be comparable to the south-western section of the Parkside land, and points out that it also has a headworks advantage over the Parkside land for residential subdivision purposes. Mr Duncan believes the Carlyle Gardens sale is of some use in valuing the Parkside retention areas abutting the By-Pass corridor, as it abuts Beck Road for a considerable distance on the east and Beck Road in the overall road systems in the area, is projected to be a busy collector road or secondary road type system. The hypothetical development valuation exercise carried out by Mr Duncan as a check against his valuation using the direct comparison method resulted in a before resumption valuation of $3,165,000, and an after resumption valuation of $2,780,000, both values being well below his before and after valuations using the direct comparison method. Mr Duncan's resultant assessment of compensation using this method of valuation is $385,000 (Exhibit 18A), and since this is below his compensation assessment on a direct comparison basis, then Mr Duncan has rejected it. It is to be noted that Mr Duncan based his hypothetical subdivisional valuations upon the subdivisional plans prepared by Mr Rowlands which produced a before resumption residential yield of 646 lots and an after residential yield of 557 lots. As earlier mentioned, the subdivisional plans were revised by Mr Rowland after certain criticisms of them was made by Mr Brazier. The revised lot yields show a loss in lot numbers due to the 28
resumption of 88 lots as compared with Mr Rowland's original lot yield loss of 89 lots. Mr Duncan has used in his hypothetical development valuation exercises a profit and risk factor of 30%, and an interest allowance rate of 8%. Mr Duncan is of the view that, given that the projected timing of the completion of the first stage of the construction of the interchange on Upper Ross River Road is 2002 to 2003, and that the ultimate scheme is to be constructed by 2015 to 2020, then at the projected selling rate adopted by him for the Parkside subdivision, it would be completed prior to the commencement of a lot of the construction work. His layout plans (the original Rowlands' plan) show that 65 of the proposed lots would be injuriously affected as a result of the acquisition and road construction, but stresses that the construction of the interchange and bridge over the Ross River will provide the subject locality with direct access to major sources of employment and education in the James Cook University and the Lavarack Army Barracks, and accordingly will benefit the area. Mr Duncan told us that it was apparent at the commencement of the year 1994 that the buoyancy in the vacant residential land market over the preceding two years was waning with market demand beginning to lag behind production. He suggests that recorded sales data show the dramatic decrease in sales activity through mid-1994 to late-1994. Mr Duncan, after studying the achieved selling rate in the Kingsmead Residential Development within a two year period commencing June 1993, concludes that the selling rate of 85 lots per annum used in his hypothetical valuation exercises is indicated as an upper rate limit. In valuing the Parkside land after resumption, Mr Duncan has adopted a higher in-globo value per hectare for the northern severance (Riverside North) than in his before resumption valuation of it. This, he says, is simply a reflection of its lower development costs post-resumption due to the cost saving benefit brought about by engineering advice that the signalisation of the proposed intersection between the northern severance and Upper Ross River Road at a cost of $150,000 to $200,000, required in the before resumption scenario, is not required in the post resumption scenario. In addition, the cost of $50,000 for the extra access point to Upper Ross River Road which was also required pre-resumption, is not required post-resumption. This effectively gives, in Mr Duncan's opinion, a cost saving of $200,000 in the pre-resumption in-globo land value in comparison with the post-resumption in-globo land value for the Parkside land north of the resumption line. Mr Duncan has, since being involved in the Parkside compensation assessment, closely monitored the sales history of lots in the suburb of Annandale abutting University Road with its in-place noise amelioration fencing. Initially his investigations revealed that there had been very little variation at all in prices achieved as between traffic noise-affected lots and lots unaffected by the noise. He visited the Annandale Estate and spoke to Kathy Rossini who was the sales manager, seeking her opinion as to the reduction in sale prices of lots adjoining University Road, and was advised that the developer had to discount University Road frontage lots little, if any, before late 1994, but as time has gone on a number of corridor lots showed a 29
discount in price in excess of that which would normally have been attributed to the changes - the elevation of University Road surface. Mr Duncan has also analysed "The Willows" sale to calculate the profit and risk factor. He has assumed the same subdivisional layout as did Mr Eales, and has looked at the subdivision in a traditional style with parkland provided. Mr Duncan's analysis reflects a profit and risk factor of 28.4% (Exhibit 34), as opposed to Mr Eales analysis which reflects a profit and risk factor of 22.65%. Mr Duncan produced in evidence a hypothetical subdivisional valuation of the Parkside land before resumption using Mr Eales' figures save for the substitution of a profit and risk factor of 30% (Mr Eales' 25%), and a longer selling period based on 85 lot sales per annum in lieu of Mr Eales annual lot sales of 108 per annum. The deduced in-globo land value based on this calculation is $3,119,500 - well below the value derived by Mr Eales in his hypothetical subdivision valuation ($3,979,500) and also below the valuation placed on the in-globo land by Mr Duncan of $3,655,000 (exclusive of the 16 developed lots). This exercise does not help me in my task of compensation assessment, but was no doubt undertaken by Mr Duncan to serve as an illustration of the widely divergent resultant land value using this method of valuation with the variation in input factors.
Evidence of Other Witnesses Called by the Respondent Mr Honeycombe was called by the respondent Department of Transport mainly to assist the Court with his views as to the state of the residential land market at or about the resumption date and the effect on lot values, as he sees it, adjacency to busy roads has. He is a director of various companies associated with the Honeycombe Family Group of companies and is a real estate agent, an auctioneer, a licensed homebuilder and a licensed motor dealer. Mr Honeycombe considers "The Palms" Estate to be one of the better "up-river" estates in the Thuringowa area. However, he says that the commencement of "Willows Gardens" residential subdivision by Delfin would have had a substantial impact on the success of "The Palms" development. Mr Honeycombe says that "Willows Gardens" first release of lots was not until May 1995, but the sale of the in-globo land to the current developer was market knowledge early in 1994. He believes that the potential competition to be provided by a development competitor of Delfin's stature would be a consideration for all "up-river" in-globo landholders when considering the prospect of the future rate of lot sales and gross lot yields. Mr Honeycombe relies upon his experience and involvement in the residential Estates of Kingsmead and Rosewood when he expresses a view that a likely rate of lot sales in "The Palms" would have been in the order of four lots per month early in 1994 - or 48 lots per annum. Mr Honeycombe is also of the opinion that the construction of a road for the purpose of a major by-pass would be likely to have a negative (deleterious) impact on the lots which are directly adjoining the road corridor. But on balance, considering the improved access to the Parkside land when the road construction is completed, then Mr Honeycombe is confident that 30
the future road system will provide as much benefit in form of an increase in the value of many of the lots proposed within the estate as it would create a reduction in the value of lots adjoining the corridor. Mr Honeycombe told us that other estates in Townsville where there exists a proportion of lots which back onto major thoroughfares tend to require a price differential of 5% to 10% for corridor lots depending on the volume of traffic which is expected and the amount of screening undertaken by the developer. Mr Honeycombe told us that the real estate market in 1990 and 1991, experienced a very strong trend towards house and land sale packages rather than vacant land sales, particularly in the first homebuyer market. He says there was a strong increase in the sales of vacant lots towards the end of 1992, through 1993 and in the early part of 1994. Between 1993 and 1994, developers experienced very good sale times, but the consistency of demand could not be maintained, and in 1994 there was a tapering off of sales activity in house sales, particularly towards mid-1994 and preceding that, a tapering off in vacant land sales. Mr Honeycombe says this market drop off continued from mid-1994 right through to the month before this hearing. Mr Rowlands told us that, contrary to the Brazier plans, his plans show no allocation of parkland as such. Really he kept the exercise simple, and came to his decision about parkland without the knowledge that Council would not require parkland, and being aware of Council policies, and also of the amount of parkland which is just south of the subject area, and also of the existence of Pioneer Park to the north-east. But it seems to me not to be an issue that Mr Rowlands did not allow for parkland as such as his plans are consistent in this regard, both before and after resumption. He assumed that there would have been a monetary parkland contribution to be paid to Council by the developer. It was during the course of the hearing of this matter that Mr Rowlands prepared a series of new plans of subdivision in response to the criticisms of the original Rowlands' plans by Mr Brazier. These new plans provided for access for the drainage surcharge to the main drain on the northern end and buffer areas, and adjusted in a couple of instances where there were grievances about the size and shape of lots and that they would not meet his building template test - a 20 metre circle. Mr Rowlands has also moved the heads of culs-de-sac slightly to overcome some suggested deficiencies. Mr Rowlands thinks his revised plans would satisfy all relevant Council subdivisional by-laws and other engineering and design requirements of Council. Mr Dance provided the Court with an opinion on the implications of the road corridor upon a proposed subdivision. Apart from the obvious loss of land for subdivision, Mr Dance says there is an impact on amenity caused by the new road on land which lies in the vicinity of the proposed road, which more particularly adversely affects allotments which would have their rear boundaries abutting the road corridor. But Mr Dance does not believe the utilisation of the land is affected. Commenting upon Mr Brazier's subdivisional plans showing significant areas of parkland, Mr Dance said that at the relevant time it was a policy of Council to accept parkland 31
in the form of either land, or a monetary contribution in lieu. Mr Dance commented that earlier actual subdivision by Parkside Development Pty Ltd had not included any smaller park areas, but rather a larger single park area. Mr Dance believes the Rowlands' subdivisional plan showing no parkland would have conformed to the City of Thuringowa subdivision policy. Mr Kamst was called by the respondent to provide his view as to the likely impact which road traffic noise would have on Parkside's lands post the resumption and post the carrying out of the By-Pass roadworks. Mr Kamst confirmed the Department of Transport's schedule for the By-Pass road as being a two-lane road from Douglas to Condon (to be completed by the year 2002), a two-lane road between Upper Ross River Road and Harveys Range Development Road (to be completed by the year 2014), and the four-laning of the By-Pass (to be completed by the year 2020). Mr Kamst says that in addition it is proposed that Beck Road will be extended to the north to Harveys Range Development Road and to the south to Allambie Lane, and as a result would form an additional north-south thoroughfare to Upper Ross River Road. Mr Kamst assumes the construction of Beck Road would occur between 2002 and 2014. The stated aim in Mr Kamst's tendered report is to quantify the noise impact on the retention areas due to road traffic on existing roads, as well as on the proposed By-Pass, and to compare this with noise levels received at residences in University Road at Annandale. He has monitored noise levels on 8th and 9th April 1997 at a location some 77 metres from the nearest edge of Upper Ross River Road in the backyard of a residence located at 883 Upper Ross River
Road. At this location, the L10 (18hour) noise level was calculated to be 53.2dBA without a reflecting surface, which level he says is equivalent to an L10(18hour) level of 55.7dBA with a reflecting facade. L10 means a noise level which was exceeded 10% of the time, and (18 hour) means it was an 18 hour test period. Mr Kamst provided us with the road traffic criteria as contained within the Department of Main Roads' "Interim Guidelines and Technical Notes for Road Traffic Noise Amelioration", which for new access controls reads: "When the L10(18 hour)...noise level (measured or predicted) at the reception point, within or during the five year period following construction is:
(a)63dB(A) or greater, and has increased to 3dB(A) above the ambient level prior to construction, ameliorative measures will be considered as part of the initial planning and construction, or
(b)below 63dB(A), ameliorative measures will be considered when the noise level increases by at least 10dB(A) above the ambient level prior to construction, resulting in a level 60 dB(A)..."
Mr Kamst has investigated a number of road traffic scenarios. They include for 32
existing conditions, conditions as at the date of resumption, Section 1 of By-Pass 2002, Upper Ross River Road Traffic in 2002, Sections 1 and 3 of the By-Pass in 2014, ultimate conditions of Upper Ross River Road and Beck Road - 2014/2020, Section 7 of the By-Pass in 2020, and University Road - 1994 to 2020. He sets out in his statement traffic volumes used in each of the scenarios in the various years. Noise modelling results are also diagrammatically set out in the tendered report. (Exhibit 23). As a result of the computerised study, Mr Kamst concludes that with appropriate noise amelioration measures comprising noise barriers, the L10(18 hour) noise levels on the subject land due to traffic on the proposed By-Pass under "ultimate" traffic flow conditions would be
63dBA or less. For "ultimate" traffic flow conditions along University Road, the L10(18 hour) noise levels at adjacent residences would exceed 63dBA. Mr Henwood has been the Director of Planning Services for the City of Thuringowa since 1984. He was called by the respondent to outline the future roll Beck Road would have in the road system in the area. Mr Henwood informed the Court that the concept of an extension of Beck Road from Harveys Range Road southwards to Kelso to provide a major arterial route to service the Upper Ross River urban corridor was first proposed in 1978. In 1989, a plan of the Townsville By-Pass Road was issued by the then Main Roads Department and this indicated that Beck Road would traverse under the By-Pass Road at grade. The Beck Road/By-Pass Intersection was then proposed to be the only point of access and egress to the By-Pass in that locality, but Mr Henwood points out that in 1992/3, this point of access and egress to the By-Pass was relocated to the Upper Ross River Road intersection, and Beck Road will now fly over the By-Pass with no direct access or egress to that road. Mr Henwood outlined the history of the subdivision applications made by Parkside concerning "The Palms" subdivision since 1990 as was extracted from the City of Thuringowa records. It is: (a) Stage 4 - (1) approved by Council in April 1990; (2) engineering drawings approved for 30 residential lots in September 1992; (3)plan of survey consented to in May 1993;
(b) Stages 5 - 10
(1)applications lodged with City on 24 August 1992; (2)referred to Main Roads Department for comment; (3)all applications withdrawn on 27 July 1993.
(c)New Stage 9
(1)application lodged with City on 24 September 1992; (2)referred to Main Roads Department which advised it had no requirements regarding this stage; 33
(3)approved by Council in October 1992; (4)plan of survey consented to in August 1993.
As commented upon earlier, Mr Johnstone was called by the respondent largely in support of his firm's engineering report which was used by Mr Duncan in his hypothetical subdivision valuation report. As also earlier mentioned, the engineering costs have largely been reconciled between the parties so I do not find it necessary to encompass Mr Johnstone's evidence in this decision. Mr Horman, who is a professional traffic engineer providing services to the respondent (now Department of Main Roads), was called by it in evidence. Mr Horman confirmed that prior to 1992, the proposal for a ring-road was for a full diamond interchange at Beck Road with an overpass at Upper Ross River Road, but in late 1992, the district developed the "Parclo" (Partial Cloverleaf) Interchange Format since it provided superior traffic service to the area serviced by Upper Ross River Road, and the primary reason for it was that the "Parclo" interchanges with the major arterial road serving the Upper Ross River area - namely Upper Ross River Road. Mr Horman told us that, based on the Rowlands' survey plan before resumption scheme, access to any proposed development for the Parkside land from Upper Ross River Road would be at three points - one of which is the developed Gouldian Avenue which is situated to the south of the subject land and to the south from its frontage to Upper Ross River Road. Mr Horman believes that in the before resumption situation, one of the two designed access points to Upper Ross River Road would need to be provided with a signalised median opening. This is because of the high volume of traffic using Upper Ross River Road. After resumption, Mr Rowlands' design plan has only one access point to Upper Ross River Road for the Parkside land to the north of the road corridor. There are proposed to be two signalised intersections from the interchange ramps to Upper Ross River Road. Mr Horman is of the opinion that, post resumption, there is no need for a signalised intersection on Upper Ross River Road to handle incoming and outgoing traffic from the 165 lots in the proposed Parkside northern severance subdivision. Nor is there a need for a median opening, and the development Department of Main Roads would prefer that they were not provided. Mr Horman considers that the only access needed to a future residential estate in the northern severance after resumption would be a "left in left out" access point. Traffic exiting the estate could be "left out" and provision would need to be made for a U-turn at Gregory Street to the north. Southbound traffic on Upper Ross River Road could progress to one of the two interchange ramp signalised intersections, make a U-turn and proceed "left out" to the estate through the one intersection in Upper Ross River Road. So in the before resumption situation, Mr Horman says that Main Roads Department would require the developer to construct a median opening in Upper Ross River Road, associated turning lanes, and to install signals at one of the connections to Upper Ross River 34
Road, probably the northern one, at a cost of between $150,000 and $200,000 - say $200,000. The developer would also be required to pay for the construction of a "left in left out" intersection where the second access road from the estate connects with Upper Ross River Road at a cost of, say, $40,000 for kerb and channel works, lighting and drainage. But Mr Henwood says that in the after resumption situation, there would only be a requirement to construct the one "left in left out" intersection. He says that in the after resumption situation, the Main Roads Department would require the developer to pay for the construction of a short right turn slot at Gregory Street at a cost of about $15,000. Mr Henwood does not agree with Mr Clarke's assessment of the problem with traffic at the corner of Gregory Street and Upper Ross River Road. When he first saw Mr Clarke's figures, he said he knew they could not be correct and while on Mr Clarke's figures the intersection could not work without signalisation, he knows it and "it works fine" without signals. Mr Henwood produced in evidence his SIDRA analysis of the intersection in support of his comments on Mr Clarke's report. Mr Brameld provided the Court with traffic engineering data for the proposed by-pass road on behalf of the respondent. He referred to the road systems and to the subdivisional layout plans prepared by the surveyors for this case, and says from the viewpoint of traffic engineering on the major road network, the impact of all the various development concepts for the before resumption situation are similar, while those for all concepts for the after resumption situation are also similar. Mr Brameld says that initially the By-Pass road is proposed to cross the Ross River and link Upper Ross River Road near the subject site with University Drive. As a result, he feels the subject site will become more accessible for traffic and that there will be positive benefits to the Parkside land to partially compensate for the impact of loss of land. Mr Brameld notes that in general, immediate access to the By-Pass road improves accessibility, shortens travel distances and reduces travel times to all areas throughout the city. He informed the Court that the purpose of his tendered report was to review the traffic engineering impacts associated with this improved accessibility, including the reduction in travel times and travel distances between the subject site and the University, the Lavarack Barracks, the reduction in travel times to Nathan Plaza and significant reductions in travel times to the Bruce Highway to the south of Townsville. Mr Brameld says that due to the forecast growth on the western outskirts of Townsville, Ore Arup & Partners were commissioned by the Department of Transport to undertake two studies, making traffic projections for various land use scenarios and various road network upgrading to the year 2001. The Ore Arup reports produced specific data on the subject By-Pass road in the location of the subject site and in the vicinity of the University. However, Mr Brameld says that at the time of undertaking the study, the traffic data was becoming old and the base traffic model was not specifically derived for the links being studied. But the second of the Ore Arup studies provides more accurate information on likely traffic patterns on the 35
north-west of Townsville rather than the vicinity of the subject land, but it is the best available forecasting data. Existing traffic flows in and around the subject site have been sourced by Mr Brameld from the 1995 Ore Arup report and on traffic counts carried out by the Main Roads Department. They are: •Upper Ross River Road between subject site and Harveys Range Road - 25,500 vehicles per day •Ross River Road (midway between Thuringowa Drive and Nathan Street) -26,300 vehicles per day. •University Road/Nathan Street over the Ross River - 32,300 vehicles per day •University Road towards Annandale Estate - 15,282 vehicles per day.
Mr Brameld says that traffic growth along the western and southern corridor has been very high, particularly near the Bohle River and Harveys Range Road where 11% per annum sustained growth occurred, but during the last two to three years, growth rates have been very low in contrast with those in the early 1990s - with 0% per annum growth on some roads within the study area. Mr Brameld told us that the traffic flow on Upper Ross River Road north of the subject By-Pass is currently about 25,000 vehicles per day but is expected to reduce after the construction of the By-Pass road after which it would then continue to grow in keeping with the future residential development to the south of Harveys Range Road. With these traffic forecast flows, full access from a residential estate on the Parkside lands before resumption to Upper Ross River Road would, in Mr Brameld's opinion, not be possible without signalisation. He suggests this is so because it would not be possible during peak periods to undertake right-hand turns across Upper Ross River Road from an access road without signalisation. Mr Brameld said that since there would be signalised intersections at the proposed ramp terminals of the intersection with Upper Ross River Road, then it would not be possible to provide an additional signalised intersection on the northern severance access point in the after resumption situation. Therefore Mr Brameld suggests that access from Upper Ross River Road after resumption would embrace the widening of the median in Upper Ross River Road for U-turn pockets, or perhaps an alternative would be for traffic from the proposed residential estate in the northern severance moving to the north to use Gregory Street to exit the estate, with signalisation of Gregory Street intersection possible when traffic movements required it. Mr Brameld agrees with other expert witnesses called by the respondent that the construction of the proposed Ross River bridge and associated ringroad to University Road will have significant benefits to the land to the west of Ross River Road by way of accessibility, travel times and travel distances. These benefits will be available by the year 2002/3. Like Mr Henwood, Mr Brameld also offered criticism of Mr Clarke's findings about the need to signalise the Gregory Street/Upper Ross River Road intersection, in the before resumption situation. 36
Reasons for and Determination of Compensation - Land, Severance and Injurious Affection. Now although as can be observed the evidence in this case was voluminous, really, insofar as compensation for the loss of land, severance and injurious affection consequent upon the resumption is concerned, the relevant issue is relatively simple. It is to resolve whether compensation assessment should be made on the basis of a before and after resumption valuation based on direct comparison with in-globo sales evidence (Mr Duncan), or if it should be based upon a before and after valuation made by the process of hypothetical subdivision, checked by reference to in-globo sales evidence for the before valuation (Mr Eales). Factors of major influence when considering valuations on the basis of hypothetical subdivision are clearly the gross realisations, the appropriate profit and risk allowance, the hypothetical subdivisional plan yields, the development costs, the interest rate, and the development and selling period for the hypothetical residential estate. In this case, there is no significant difference between the valuers in the gross realisations (lot values) except that Mr Eales has discounted the resumed road corridor lots and more of the near corridor lots in his after resumption valuation exercise to a greater extent than did Mr Duncan. Mr Eales has placed a gross realisation in his before resumption valuation exercise of $41,039 per lot average and in his after resumption exercise, a lot value average of $39,887. I calculate Mr Duncan's lot average values to be $42,086 per lot before resumption and $41,597 per lot after resumption. Apart from the discounted lot values, there is no acceptable basis for adopting one valuer's gross realisations per lot to the exclusion of the other's - in valuation terms they are virtually as one in this aspect of their valuations by the process of hypothetical subdivision. The difference between the engineers called in evidence as to development costs has been virtually reconciled. The interest rates adopted by the valuers in their hypothetical valuation exercises are identical (Mr Eales 7.95% per annum, Mr Duncan 8% per annum). The hypothetical subdivision plans prepared by the surveyors called in evidence (as adjusted by Mr Rowlands in minor detail) each would, on the evidence, appear to satisfy and comply with the requirements of the Council of the City of Thuringowa Subdivision By-Laws. But unfortunately, here the similarities end. Mr Eales uses a profit and risk factor allowance of 25%, Mr Duncan 30%. Now, this difference is relatively small, and in my experience over time, so insignificant as to prove elusive to conclusively and meaningfully identify by reference to evidence. But the effect of adopting one of the profit and risk factors to the exclusion of the other alone has a staggering effect on end land value in a hypothetical subdivision of the magnitudes postulated by the valuers in this case. Mr Eales' valuation exercise is based on a total subdivision lot yield of 551 lots before resumption, and on a total yield of 455 lots after resumption (surveyor Brazier's plans). Mr Duncan has based his valuation by the process of hypothetical subdivision on a before resumption yield of 646 lots and an after resumption yield of 557 lots (surveyor 37
Rowlands plan). Now by any standard the size of the proposed subdivision is large and the valuers' gross realisations are huge. As a result, Mr Eales' total allowance for profit and risk in quantum before resumption is $4,336,568, and after resumption is $3,493,511. Mr Duncan's total allowance for profit and risk in quantum before resumption is $6,018,698, and after resumption is $5,137,021. But I do not intend to endeavour to reconcile the profit and risk allowances by interposing, as it were, the profit and risk factors used by the valuers in their respective valuations. To do so would be really only "fiddling with the figures" and, in any event, would be likely to produce a result which would be open to criticism as being manufactured or contrived. But I must say that I am somewhat surprised that Mr Eales would describe his allowance for profit and risk as being almost all profit as the risk, he says, is minimal. I can understand the reason for him expressing this opinion; for example, the proven track record of Parkside as a land developer, the successful development history of "The Palms", the relatively buoyant state of residential sales at resumption date (as he saw it), but in a proposed subdivision of such magnitude I find it somewhat surprising that the risk would have been negligible, especially as the projected selling period adopted by the valuers was to be lengthy and changed market conditions during the lot selling cycle is a factor with a direct bearing on an allowance for risk - as Mr Keenan was prepared to recognise when he said that a downturn in the selling rate would be the most likely factor affecting an allowance for risk. Of course we all know now what did happen to the market conditions since the date of resumption, and on the evidence it took a severe and extended downturn which commenced at or about or not long after the date of resumption. While I do not say that this downturn should necessarily be a factor of influence on the valuations to be made for compensation assessment in this matter, as we are concerned with the better market conditions as at date of resumption, it does serve as an example of what can happen in the marketplace and is, in my opinion, a factor which has a considerable bearing on what is an appropriate allowance to be made for profit and risk in these types of valuation exercises. Although in the end result a precise finding as to what is the appropriate allowance for profit and risk is not essential for the purpose of this compensation decision, I comment that if I had to make such a finding, then I would adopt the profit and risk factor used by Mr Duncan of 30%, this notwithstanding the efforts of Mr Keenan with his complicated mathematical exercise and its support for a factor of 25%. The remaining factor which has a bearing on the ultimate valuations made by the process of hypothetical subdivision is the quantum of interest allowances made on land and acquisition costs over the development and selling period. Mr Eales' allowance in his before resumption valuation totals $865,064 (based on half the development and selling period of 6.3 years for "Riverside North" and of 4.6 years for "The Palms"). His after resumption allowance is $481,553 (based on half the development and selling period of 4.75 years for "Riverside North" and of 4 years for "The Palms"). Mr Duncan's allowance for interest on land and acquisition costs before resumption totals $1,001,389 (based on half a development and selling 38
period of 7.6 years before resumption and on half a development and selling period of 6.6 years after resumption). So it can be observed that the forecast lot selling period is a factor of significant influence upon the respective valuations by the process of hypothetical subdivision. Mr Eales postulates the selling rate at 108 lot sales per annum (30 lots from "Riverside North" and 78 lots from "The Palms"). Mr Duncan bases his estimate of selling period on sales of 85 lots per annum overall. I appreciate the foundation for Mr Eales' reasoning. He says that "Riverside North" could and would have been aimed at a different market (a higher standard building covenant market), then "The Palms" - first home buyer market) and that the two separate estates could have been marketed simultaneously. Mr Duncan bases his estimate on a stand-alone one estate development but I do feel that Mr Eales' selling rates are somewhat high. In so commenting, I am mindful of the competition his proposed estates would have from "Willows Gardens". I am not influenced in making this comment by the evidence of Mr Honeycombe whose evidence about selling rates is at odds with other (much higher) opinions expressed by other witnesses in the case. But, once again I do not find it necessary to resolve the conflict as to likely selling periods. So, in the end, there is much conflict in the evidence as to the major factors of influence in the hypothetical subdivision valuations. I again comment that I am not prepared to attempt to reconcile the hypothetical subdivision valuations placed in evidence - they simply stand or fall without adjustment. I set them all aside as not being a sufficiently reliable basis for the assessment of compensation. I do so for the same reasons which drew the attention and the comments of Wells J. and Gobbo J. as outlined earlier in this decision (page 6). I have come to this conclusion notwithstanding that the evidence is that the in-globo sales evidence is not ideal, and that it is particularly difficult to use in-globo sales evidence for the after resumption valuation (to include an allowance for severance and injurious affection) for the reasons outlined by Mr Eales. But difficult as it may be, I find for the use of the direct comparison with in-globo sales evidence method for the after resumption valuation of the Parkside land. This of course calls for a close examination of Mr Duncan's after resumption valuation. I am generally satisfied that Mr Duncan's after resumption valuation fits in general terms with the in-globo sales evidence relied upon by him, especially with the sale of Carlyle Gardens Estate. I say in general terms because there is always some likelihood that a valuer's opinion as to in-globo land value in comparison with sales evidence will not be precisely accepted by this Court. I am convinced that the proposed subdivisional development of the northern severance ("Riverside North") after resumption would not entail the provision of the proposed signalised access to Upper Ross River Road at a cost of $150,000 to $200,000. This was required pre resumption. The relevant engineering evidence has convinced me of this. And there is cost associated with the provision of a U-turn lane in Upper Ross River Road at Gregory Street 39
($15,000). On the development costing credit side, an additional access point to Upper Ross River Road (at a cost of $50,000) is not required in the after resumption situation compared with the before resumption situation. But I think that, in comparison with the before resumption valuation of the "Residential A" zoned Parkside land, the northern severance suffers quite seriously in not having signalised access to Upper Ross River Road post resumption, particularly for traffic travelling south along Upper Ross River Road from the north (the suburb of Thuringowa Central). It is here many of the amenities in the area are located (shopping centres, schools, sporting facilities and the like). Such traffic would need, post resumption, and post the carrying out of the roadworks, to bypass the "Riverside North" estate to a signalised ramp at the interchange in Upper Ross River Road, make a U-turn, travel north along Upper Ross River Road and make a left turn into the estate. This I feel this would impact considerably on the value of "Riverside North" land post resumption. I might say here I adopt Mr Duncan's valuation of the mushroom lot. As for the "Residential A" land to the south of the road corridor, I see its value as being more adversely affected by severance than Mr Duncan has in comparison with its pre resumption value, mainly because of its lack of access post resumption directly to Upper Ross River Road through a designed internal roadworks system to the proposed signalised access point. There is little doubt that suitable traffic noise amelioration barriers will be constructed on or near the boundary lines of the resumption, and that these barriers will be constructed so as to meet the Traffic Noise Amelioration Criteria adopted by the Department of Main Roads. But the evidence as to the likely traffic noise which will emanate from the By-Pass road upon its completion convinces me that more allowance should be made in Mr Duncan's after resumption valuation for the traffic noise problem. The difficulty is, as Mr Eales suggests, just how does one quantify it. I accept that more allotments in any proposed subdivisional development than the number allowed for by Mr Duncan (60) would have been affected by noise pollution from the By-Pass road, and that the value of the affected lots would be diminished to a greater degree than the allowance made by him in his gross realisations in his after resumption hypothetical subdivision valuation exercise. I suppose I should comment that on the evidence as a whole, if I had the need to make a finding as to the depreciation in the value of corridor and near-corridor lots post resumption, I would be much closer to Mr Eales' discounts than to those made by Mr Duncan. I am led to this comment on the evidence of Mr Eales on lot depreciation on University Drive at Annandale due to the lot adjacency to that road. Doing the best I can, I have decided to make a further allowance in the form of compensation assessment for anticipated traffic noise problems from the By-Pass road by increasing the area of the corridor affected land from 6.2 hectares by 5 hectares to extend the noise allowance factor further from the proposed By-Pass road (2.5 hectares to the north and 2.5 hectares to the south, since the frontage to the resumed area for each of the By-Pass severances appears to be about equal). I have also decided to further reduce the value of the corridor land 40
to $40,000 for the northern corridor land and to $35,000 per hectare for the southern corridor land to make a further allowance for the depreciation in value due to traffic noise influence. In the end, then, the value of the retention area of Parkside land is determined as follows: Northern Severance ("Riverside North"). 11.62 ha "Residential A" in-globo land net of stock @ $50,000/ha $ 581,000 5.6 ha corridor "Residential A" in-globo land @ $40,000/ha $ 224,000 $ 805,000
Mushroom Lot
0.8501 ha $ 15,000
Southern Severance ("The Palms")
8.35 ha "Residential A" in-globo land @ $45,000/ha $ 375,750 5.6 ha corridor "Residential A" in-globo land @ $35,000/ha $ 196,000 31.25 ha "Residential B" in-globo land @ $45,000/ha $1,406,250 9.96 ha "Residential B" land at $10,000/ha - say $ 100,000 $2,078,000
Total Value of In-globo Land After Resumption $2,898,000 Add - Inline value of 16 developed lots (1.95ha) $ 560,000
Total Valuation After Resumption $3,458,000
Accordingly, compensation for loss of land, severance and injurious affection is determined as follows: Value before resumption $4,215,000 Less value after resumption $3,458,000
Compensation $ 757,000
CLAIM FOR DISTURBANCE I now consider the claim for disturbance (as amended during the proceedings) in the sum of $213,829.69. Details are: (a) Engineer's fees (i) McIntyre & Associates Pty Ltd $ 17,985.90 (Re-design of Stage 4 and the drain including documentation and approvals 41
(ii) McIntyre & Associates Pty Ltd $ 3,911.33 (Engineering design & drafting - Stage 5) (iii) Ariotti, Hamilton & Bruce (Design, Plan preparation, documentation - Stage 5) $ 18,150.00 (iv)Ariotti, Hamilton & Bruce $ 4,606.46 (Redesign master plan "The Palms & "Riverside North" - New stages and services)
(b) Council Application fees thrown away $ 6,500.00 (Stages 5 to 8 totally lost)
(c) Schomburgk and Long Pty Ltd $ 1,500.00 (Town Planning Fees - Re-design considerations as a result of Department of Transport involvement)
(d)Brazier & Motti Pty Ltd - Survey Fees
(i) Survey fees - Stage 5 $ 8,210.00 (ii) Survey fees - Stages 6 to 10 inclusive $ 2,590.00
(e)Preparation and lodgement of Claim
(i) Valuation Fees - Collins & Eales Preparation of Claim $ 8,500.00 (ii)Legal Fees - Ruddy Tomlins & Baxter $ 2,500.00 Preparation of Claim (iii)Before proposed development plan - survey fee $ 1,989.00
(f) Loss of Employee's Time $ 9,600.00
SUB-TOTAL: $ 86,042.69
(g) Loss of Developer's Profit $127,797.00
TOTAL: $213,839.69
I propose to deal with the disturbance claim in the same order as set out in the claim document. (a)Engineer's fees Mr Tapiolas told us that in about mid-August 1992, he learned that the Department of Transport may have intended to alter its requirements in relation to the Townsville By-Pass route running through the Parkside lands. He attended a meeting with the Thuringowa City Council representatives, including the Mayor, on 20 August 1990. Mr Tapiolas says the purpose of this meeting was to discuss what finality there might have been in relation to the development of Transport's plans and how this would impact upon his company's development of "The Palms" given the approvals which were in place and the works which had been undertaken. Subsequently, Mr Tapiolas obtained from the Department of Transport a copy of its proposed amended requirements for the By-Pass route, and he says this plan confirmed the 42
serious impact the proposal would have on the Parkside lands. Mr Tapiolas says that on 26 September 1992, an advertisement appeared in the local paper notifying the public of the Department's amended proposals and advising that a public display of such amended plans was proposed and inviting comment from the public in relation to those proposals. On behalf of his company, Mr Tapiolas wrote a letter to the Department of Transport setting out the prejudicial effect the proposal would have on the development of the Parkside lands and requesting that it not be proceeded with. On 21 October 1992, the Department of Transport wrote advising that it had now taken a final decision in the matter and that it intended to proceed with its amended proposals, that is, in accordance with the plan provided to him by the Department in August 1992. Mr Tapiolas informed the Court that he received a letter from Council in late November 1992 saying that it had agreed to the changed location of the interchange. He says that the changes impacted upon Stages 5, 6, 7, 8, 9 and 10 of "The Palms" estate so that the work already done would have to be redone. The road systems and subdivisional layout had to be redesigned. Council application fees for Stages 5, 6, 7 and 8 in the sum of $6,500 were totally thrown away because of the resumption. Mr Tapiolas said that as a result of the change of plans for the interchange, the drainage arrangements for "The Palms" estate had to be altered. Originally it was proposed to drain the estate to the east but it now had to be drained to the west. Mr Tapiolas told us that the engineering firm McIntyre & Associates prepared a Master Engineering Services Plan for the whole of "The Palms" estate before the commencement of Stage 1. It was the fees of McIntyre & Associates Pty Ltd involved in the redesign of Stage 4 and the drain including documentation and approvals which are claimed to have been thrown away (reference items (a)(i)), and McIntyre & Associates' fees for engineering, design and drafting for Stage 5 were also thrown away. The evidence is that McIntyre & Associates advised Parkside that, pending the design and construction of proposed interchange, if they continued to act for Parkside there would have been a conflict of interest between McIntyre and Parkside. This was because McIntyre was involved in providing engineering advice to the Department of Transport in connection with the construction of the interchange. As a result, McIntyre & Associates withdrew their engineering services to Parkside. It was at this time in 1992 that Mr Hamilton became the engineering adviser to Parkside. Again as is previously generally outlined, Mr Hamilton told us that at that time, Stages 1, 2 and 3 were designed again as previously outlined and developed and Stage 4 had been designed. But when Mr Hamilton came to Stage 5, the design had to be changed because of the requirements of the Department of Transport. Also, Mr Hamilton told us that Stage 4 (designed by McIntyre) had to be redesigned also because of the requirement of the Department of Transport. He also says Stages 6, 7 and 8 were never proceeded with, again because of the requirements of the Department. As at 24 March 1994, Mr Hamilton was aware that Stages 5, 9, 10 and 11 had been designed by his company. Mr Hamilton himself was responsible for the 43
design of the engineering works in those stages. It is contended by the respondent Chief Executive in respect of the disturbance claim Items (a)(i),(ii),(iii) and (iv) that the only item (a)(iii) - the fees of Ariotti, Hamilton & Bruce for the design, plan preparation and documentation for Stage 5 of "The Palms" is compensable - and that in the sum of $17,373. It is submitted that a fee of $777 which was for preliminary discussions by Mr Hamilton to get oriented with the project and look at the area to prepare a master plan was not compensable, but the reason for McIntyre & Associates withdrawing from the development project appears to have been the carrying out of part of the resumption roadwork (the interchange). Notwithstanding the suggestion by the respondent that the design changes made by Parkside were of a voluntary nature to better suit the subdivision, I am satisfied that
claim items (a)(i), (ii), (iii) and (iv) are compensable, and in the sums claimed. Re: (b)Council application fees - thrown away Mr Tapiolas told us that as a result of the resumption the Council application fee for subdivisional approval was thrown away, and in particular the fees for Stages 5 to 8 of "The Palms" estate were totally lost. I accept that this also is a compensable item and I award compensation as claimed. Re: (c) Town Planning fees - Schomburgk and Long Pty Ltd This claim is not pressed by the claimant. No compensation is awarded under this head of claim for disturbance. Re: (d) Survey fees (i)Survey fees - Stage 5. The fees of $8,210 are agreed by the respondent as being compensable, and also in quantum. (ii) Survey fees - Stages 6 to 10 inclusive. Mr Tapiolas says that as a result of the changed requirements of the Department of Transport of the By-Pass route, significant interruption was caused to the planned Parkside development of "The Palms". Stages 5 and 6 designs had to be changed, and the works done in relation to those stages were rendered worthless as outlays paid were thrown away. He says that similarly with Stages 7, 8, and 9 the changes so impacted on road location and design that the work done on these stages was also rendered useless and the costs incurred were lost. It is submitted by the respondent that these fees are not compensable since Mr Tapiolas had knowledge of the proposed By-Pass Road in August-September 1992, at which time only Stage 5 had been approved and that Stages 9 and 10 were not affected by the resumption. Be that as it may, the survey fees were Parkside's responsibility, and Mr Tapiolas' evidence satisfies me that they were thrown away due to the resumption. 44
In evidence is a copy of the Memorandum of Fees issued by Brazier & Motti Pty Ltd for the survey fees for Stages 6 - 10 of "The Palms" estate (Exhibit 41). It is dated 23 July 1993, and issued in the sum of $2,590. I find this item compensable and award compensation for these lost fees in full.
Re: Items (e)(i) and (ii) - Valuation and legal fees involved in the preparation and lodgment of the claim for compensation.
These fees are agreed by the Department of Transport both as to being compensable and in quantum. Re: Item (e)(iii) - Before proposed development plan - survey fee This claim is for survey fees involved in the preparation by Brazier and Motti Pty Ltd of the subdivisional design plans used in the preparation of Mr Eales' valuation, and accordingly in the claim for compensation. It is submitted by the respondent that these fees are not compensable as they bear little resemblance to "what is actually being developed on the ground". But the plan was not prepared for what was happening on the ground - it was for the purpose of lodging a claim for compensation. It is compensable, and I award the claimed sum of $1,989.00 for this item. Re: Item (f) - Loss of employee's time Mr Tapiolas, who is the employee for whom the claim is made, told us that his company suffered a loss in the amount of wages paid to him in respect of his time given to the planning of the relevant abandoned stages of the development, and the redundant applications for all necessary approvals, and his liaison with and meeting Council and consultants. Mr Tapiolas says he has checked his diary files and records and has made the best estimate he can of time involved with those developments and his estimate is that it would have been 160 hours. He rates the total cost to the company for his time and the use of vehicles at $9,600.00 - a rate of $60 per hour. This rate is not an issue, but the respondent submits that as a general rule, the loss of an owner's time is not compensable, and in this case as the onus lies very much on the claimant to prove to an adequate degree the facts necessary to establish both liability and quantum - vide Pejama v. Commissioner of Main Roads 12 QLCR 278 at p. 291, and Shann v. Commissioner of Water Resources 11 QLCR 194 at p.224/225 - it is submitted by the respondent that no compensation should be awarded under this head of claim. I disallow this item on the claim for disturbance. The standard of proof has not been satisfied. Mr Tapiolas was unable to produce any diary items in support of the lost time claimed as he said he did not realise this would have been necessary. The onus is upon Parkside to prove the quantum of the claim and this has not been discharged. No award of compensation is made for this item of the claim.
45
Re: Item (g) - Loss of developer's profit This is a contentious issue. It is based on the premise that the claimant Parkside lost its margin of developer's profit on the purchase of 17 lots of vacant land in subdivisional estates owned by others so that its subsidiary company - Tropical Homes Pty Ltd - could continue with its housebuilding program during the period of subdivisional disruption at "The Palms" caused by the resumption. Mr Tapiolas told us that but for the resumption, Parkside would have had the ability to produce the 17 allotments from its own land which it had earmarked for development at the time of resumption. We are indebted to Mr Keenan for his calculation of the claimed loss of profit in the sum of $127,797.00. It is submitted by the respondent that this component of the claim is not compensable since it is too remote from the resumption and associated works to be seen as such. But in the event that the Court finds that it is compensable, then compensation, it is submitted by the respondent, should be limited to the loss of the developer's profit on the purchase of 5 lots in the sum of $39,500, since 12 of the purchases were made in the Rosewood Estate and in Bayswater Village where the company did not have a presence, and Mr Tapiolas did not argue in evidence that the purchases in Rosewood Estate and Bayswater Village were not for the purpose of obtaining a presence. But there is no evidence that the reason for the purchase of the lots was for Tropical Homes to build display homes on them, so the submission by the respondent about presence loses most of its force. But that is not what is troubling me about this aspect of the disturbance claim. Mr Tapiolas told us that the 17 lots were purchased, not by Parkside, but by Tropical Homes Pty Ltd. Now it is clear that Tropical Homes cannot claim for disturbance because it was not the owner of the resumed land. Nor was the claim made by Tropical Homes. It is contended by Parkside that it lost the developer's profit it would have made if it was free to continue and develop the 17 lots on "The Palms". But Parkside still has land it could use to develop the lots. At best the only loss of Parkside's developer's profit is a loss which really has to be deferred until the end of the development of "The Palms" and "Riverside North" estates, since only then will Parkside not have the land to produce the 17 lots. We have no evidence as to when it is likely that the subdivisional development of "The Palms" and "Riverside North" will be completed, but I should say that on the projected lot yields in both surveyors' subdivisional plans, and the evidence about development and selling periods, and the recent market slump, it may well be a long way off. In this event, the amount claimed would need to be so significantly discounted by the use of appropriate interest tables to a very much reduced figure, perhaps even close to nominal. In the end, I have come to the conclusion that there is no assessable loss of the developer's profit, and no award of compensation is made for this item in the claim.
Accordingly, my determination of compensation for disturbance is: 46
(a) Engineers' Fees.
(i)McIntyre & Associates Pty Ltd $ 17,985.90 (Re-design of Stage 4 and the drain including documentation and approvals)
(ii) McIntyre & Associates Pty Ltd $ 3,911.33 (Engineering design & drafting - Stage 5)
(iii) Ariotti, Hamilton & Bruce $ 18,150.00 Design, Plan preparation, documentation - Stage 5)
(iv) Ariotti, Hamilton & Bruce $ 4,606.46 $ 44,563.69 (Re-design master plan "The Palms" and "Riverside North" - New stages and services).
(b) Council application fees thrown away (Stages 5 to 8 totally lost) $ 6,500.00
(c) Schomburgk & Long Pty Ltd Nil (Town Planning Fees - Re-design considerations as a result of Department of Transport involvement)
(d) Brazier & Motti Pty Ltd Survey Fees
(i) Survey fees - Stage 5 $ 8,210.00
(ii)Survey fees - Stages 6 to 10 incl. $ 2,590.00 $ 10,800.00
(e) Preparation and lodgement of claim
(i) Valuation Fees - Collins & Eales $ 8,500.00
(ii) Legal Fees - Ruddy Tomlins & Baxter $ 2,500.00
(iii) Before proposed development plan - survey fee $ 1,989.00 $ 12,989.00 47
(f) Loss of employee's time Nil
(g) Loss of developer's profit Nil
TOTAL AWARD OF COMPENSATION FOR DISTURBANCE $ 74,852.69
I would normally round this figure off in my determination of compensation, but to do so would have implications for the pending award of interest. A summary of my determination of compensation for the resumption is therefore: (a) Compensation for loss of land and injurious affection $ 757,000.00 (b) Compensation for disturbance $ 74,852.69 TOTAL AWARD OF COMPENSATION $ 831,852.69
Section 28 of the Acquisition of Land Act 1967 provides that the Land Court may order that interest be paid upon the amount of compensation determined by it, and further that such interest shall be of such rate percentum per annum as the Court deems reasonable. It provides further that interest shall not be payable in respect of any amount of compensation advanced under the provisions of Section 23 of the Act. The Court is advised that an advance against compensation in the sum of $505,000 was paid by the respondent Director-General to the claimant on 23 June 1994. I order that, in addition to compensation payable, the respondent Director-General, Department of Transport, pays to the claimant Parkside Development Pty Ltd interest at the rate of 8.5 percent per annum on the following sums and for the following periods:
On the sum of $757,000 for the period commencing on 25 March 1994 (the date of resumption) and ending on 23 June 1994 (the date of the payment of the advance); and
On the sum of $252,000 for the period commencing 24 June 1994 and ending on the day immediately preceding the date upon which final payment of compensation is made; and On the compensation award for disturbance items commencing upon the dates the respective award items were paid by Parkside Development Pty Ltd (if they were paid) and ending upon the day immediately preceding the date upon which final payment of compensation for disturbance is made.
(CH Carter) Member of the Land Court