Desbois v Chief Executive, Department of Transport and Main Roads [2021] QLC 43

LAND COURT OF QUEENSLAND CITATION: Desbois v Chief Executive, Department of Transport and Main Roads [2021] QLC 43 PARTIES: Clive John Desbois (applicant) v Chief Executive, Department of Transport and Main Roads (respondent) FILE NO: AQL696-19 PROCEEDING: Determination of compensation under the Acquisition of Land Act 1967 DELIVERED ON: 16 December 2021 DELIVERED AT: Brisbane HEARD ON: 6, 8, 9, 10 September 2021; 16 November 2021 HEARD AT: Mackay – 6 September Brisbane – 8, 9, 10 September; 16 November PRESIDENT: FY Kingham ORDER: 1. Compensation is payable by the Respondent to the Applicant for the taking on 12 August 2016 of an area of 1.934ha of the total area of 59.556ha, being part of Lot 1 on RP 736046 and Lot 5 on RP 728844, in the sum of nine hundred and forty-eight thousand, nine hundred and sixty-one dollars ($948,961.00). CATCHWORDS: REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION – ASSESSMENT – where the Department of Transport and Main Roads resumed rural land for road improvements – where the applicant applied to the Court to determine his compensation entitlement under the Acquisition of Land Act 1967 – where the applicant claimed compensation should be assessed on the basis that 2.25 ha of his land could have been used for a service station/truck stop – where DTMR denied the potential could be realised because it would not be approved under the planning scheme -- 1 of 31 -- 2 or the developer would be required to widen a railway bridge to provide safe access from the site, at a cost that would destroy any value in the potential use – where the Court held there were realistic prospects of obtaining planning approval and a less onerous traffic safety condition than DTMR asserted – where the valuers did not agree on the rate/ha for valuing the land - where the Court adopted the rate/ha proposed by DTMR’s valuer and discounted that value to account for the risks of achieving the land’s potential Acquisition of Land Act 1967 s 20 Sustainable Planning Act 2009 s 326 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575, cited Commissioner of Succession Duties (SA) v Executor Trustee & Agency Co of SA Ltd (1947) 74 CLR 358, cited De Ieso v Commissioner of Highways (1981) 27 SASR 248, cited Eumundi Group Hotels Pty Ltd v Valuer-General [2021] QLAC 2, cited Macarthur Central Shopping Centre Pty Ltd as TTE v Valuer-General (No. 2) [2016] QLC 80, cited McBaron v Roads Traffic Authority of NSW (1995) 87 LGERA 238, cited Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177, cited Small v Brisbane City Council (1968) 35 CLLR 239, cited Spencer v The Commonwealth (1907) 5 CLR 418, cited Sydney Water Corp v Caruso (2009) 170 LGERA 298, cited Taylor v Port Macquarie Hastings Council [2010] NSWLEC 113, cited Turner v Minister for Public Instruction (1956) 95 CLR 245, cited Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259, cited APPEARANCES: EJ Morzone QC, with DC Whitehouse (instructed by Kelly Legal) for the applicant RJ Anderson QC (instructed by Clayton Utz) for the respondent [1] Mr Desbois owns rural land adjoining the Bruce Highway west of Mackay. In 2016, the Department of Transport and Main Roads resumed 1.934ha of the total area of 59.556ha for road improvements associated with the Mackay Ring Road Project. Mr Desbois applied to the Court to decide his compensation entitlement under the Acquisition of Land Act 1967. -- 2 of 31 -- 3 [2] Section 20 of the ALA prescribes how compensation is assessed. The Court must have regard to the value of land on the date it was taken; damage caused by severance or injurious affection; and costs attributable to disturbance. Mr Desbois has not claimed any amount for damage caused by severance or injurious affection. The parties have agreed on disturbance costs of $84,000. The matter in issue is the value of the land taken. [3] Mr Desbois claims it is $1,702,000.1 DTMR says it is only $67,000. The difference arises out of the parties’ conflicting positions on the highest and best use (HBU) of a 2.25ha area of the land before it was resumed. Mr Desbois says it was a service station/truck stop, with a land value of $750,000/ha. DTMR says it was grazing and valued it at $22,100/ha. [4] The parties agree compensation should be assessed using the “before and after” valuation method, deducting, from the pre-resumption value of the entire parcel of land, the value of the balance land post-resumption. They also agree on the HBU and the value of all but the disputed 2.25ha before the land was resumed. [5] Mr Desbois’ pre-resumption HBU for the 2.25ha is a potential not the current use of that area when resumed. That is not unusual. There are well established principles that guide courts in assessing compensation with reference to the land’s potential. [6] DTMR argued planning and traffic safety issues would have prevented Mr Desbois from securing approval to use the land for a service station/truck stop. Both parties led evidence about the advice a hypothetical developer would receive about those risks. [7] Assuming the Court accepts Mr Desbois’ case on the pre-resumption HBU for the 2.25ha, the parties agree there is one comparable sale, with an analysed rate of $400,000/ha, but they apply the sale differently in valuing the disputed area. [8] The legal and factual issues are addressed by the following questions: • What are the legal principles for assessing compensation when a claimant asserts a HBU that is not the current use of the land? 1 Amended Annexure A. -- 3 of 31 -- 4 • Was a service station/truck stop a realistic potential use for the disputed area? • If so, how should compensation be assessed having regard to any risks of realising the potential use? What are the legal principles for assessing compensation when a claimant asserts a HBU that is not the current use of the land? [9] The Court’s function in assessing compensation is to find a figure which represents adequate compensation to the landowner for the loss of their land.2 The value of land is determined by applying the Spencer test3 – the price that would be agreed by willing, but not anxious, hypothetical buyer and seller. The value of land includes its “future advantages and potentialities.”4 [10] If there is a dispute about whether the asserted highest and best use for valuing the land would be approved or on what conditions, the Court’s function is clear. The Court is not required to decide, as a fact, whether the planning authority would approve the use or the conditions of approval. The Court must decide how a hypothetical prospective developer would have viewed the potential to use the land for that purpose in settling on the sale price.5 [11] The hypothetical buyer and seller are assumed to be cognisant of all circumstances which affect the land’s value, including the advice of experts on relevant factors.6 The parties have led competing expert evidence on issues of planning, traffic safety and value. [12] Compensation should be ‘resolved in favour of a more liberal estimate.’7 Where practicable, discretion should be exercised in favour of the claimant to achieve a 2 Turner v Minister for Public Instruction (1956) 95 CLR 245 at 264. 3 Spencer v The Commonwealth (1907) 5 CLR 418. 4 Turner v Minister for Public Instruction (1956) 95 CLR 245 at 264.Ibid at 57. 5 Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177 at [12] citing De Ieso v Commissioner of Highways (1981) 27 SASR 248; (1981) 47 LGRA 412, 417. 6 Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259 at 276- 277; De Ieso v Commissioner of Highways (1981) 27 SASR 248 at 253. 7 Commissioner of Succession Duties (SA) v Executor Trustee & Agency Co of SA Ltd (1947) 74 CLR 358. -- 4 of 31 -- 5 just result.8 That does not detract from the Court’s obligation to engage with and evaluate the evidence of competing witnesses.9 Was a service station/truck stop a realistic potential use for the disputed area? [13] DTMR contested a service station/truck stop was a realistic potential use of the disputed area when the land was resumed. It raised issues of planning and traffic safety, but otherwise led evidence that the land would be attractive to a potential developer. [14] Mr Desbois said that, before the land was resumed, he was approached by two persons interested in developing a service station. That evidence was uncontested.10 The service station experts called by both parties assessed the land against eight criteria and agreed it achieved an 8 out of 8 network assessment score, making it attractive to a large first tier oil company or developer.11 [15] After they provided their joint report, Mr Desbois modified his concept plan for the service station/truck stop to reduce the number of truck parks from 8 to 4; to reduce the canopy requirement for truck refuelling; to remove a motel component; and to use that area for a motor vehicle repair workshop and associated hardstand. [16] During oral evidence, the service station experts said this modification did not affect their opinions.12 Mr Lunney, engaged by Mr Desbois, said the different uses can replace those originally envisaged based upon customer needs now or into the future.13 The expert called by DTMR, Mr Coudrey, said what was important was that the revised proposal continued to provide diesel fuel to trucks, albeit on a smaller scale given the reduction in the number of truck parking spaces.14 [17] The experts discussed the change in scale in the number of truck stands, the differences between a residential and a highway site, and the evolution in the industry of what Mr Lunney called a travel stop. Neither said they would change 8 McBaron v Roads Traffic Authority of NSW (1995) 87 LGERA 238 at 244–245. 9 Sydney Water Corp v Caruso (2009) 170 LGERA 298 Allsop P, Sackville AJA. 10 Ex DES.004, Statement of Mr Clive John Desbois dated 26 August 2021. 11 Ex DES.020, Joint Expert Report of Service Station Experts Mr Peter Lunney and Mr Bruce Coudrey dated 15 August 2021, pp 3, 5. 12 T 1–96, line 38 to 1–97, line 47. 13 T 1–97, lines 25 to 27. 14 T 1–97, line 35 to T 1–98, line 10. -- 5 of 31 -- 6 their rating from the one they agreed upon in their report because of the concept plan modifications.15 [18] They were asked how a developer would view the requirement to buy almost 60ha to develop a service station on 2.25ha. Ultimately, that comes down to feasibility of the development, including the purchase price for the land. [19] Mr Lunney said this: “Well, we’d have to look at that – the whole scenario as to what the 2.2 was worth, the development cost of the site, external road works. So long-term returns and the excitement to be on that location, to cover a network fit. It’s not a – it’s not an excessive amount of money. When you’re putting in a shop fit-out of a million dollars, it’s not a big number.”16 [20] Mr Coudrey said this: “I think it would be resolved in – not by just a snap of the fingers decision, yes, we’ll do it. They would have to undergo due diligence and have an extra strategy on the balance of the land. I believe, in my experience, that the – I think the tier 1 guys would probably be too conservative to buy it and just land bank it or sit on it, generally speaking, and the tier 2 guys, I think, would probably look at it and go, unless we can do something with it or petition it off and sell it and get our money back, they’d be out, especially if there were other options. If there was no other option and they really wanted to sell it, they’d have to try and make it work. But the point is, I suppose, that they would need, you know, three to six months of time to consider that. They couldn’t just be able to go, yeah, we’ll buy it. They’d need time to weigh it up.17 [21] An option would be to hive off the balance and sell it, but ultimately it came down to price and feasibility.18 However, they were not asked to assess the feasibility of the proposal. Rather they looked at the features that a developer or an oil company would consider before they would undertake a feasibility analysis of a site.19 [22] Senior counsel for DTMR submitted that, in a scenario when the Court must assume an unconditional contract, this evidence about the need to assess feasibility in light of the area of land to be purchased is contrary to Mr Desbois’ case. I do not accept that submission. DTMR did not run a case on feasibility, except as it related to the traffic safety issues. 15 T 1–98, line 1 to T 1–99, line 2; T 1–100, line 17 to T 1–107, line 14. 16 T 1–125, lines 40 to 44. 17 T 1–126, lines 1 to 26. 18 T 1–127, lines 1 to 32. 19 T 1–99, line 4 to T 1–100, line 7. -- 6 of 31 -- 7 [23] The service station experts were asked to assess the attractiveness of the site for the proposed use and agreed it would have been very attractive to a developer or oil company. Subject to evidence about the planning and traffic safety issues raised by DTMR, the service station experts evidence establishes the land’s potential for that use. Planning Requirements [24] The parties do not agree about the advice that town planning experts would give a prospective purchaser/vendor regarding the prospect of approval of the proposed development. [25] Mr Schomburgk, the planner called by Mr Desbois, said the ultimate prospects of such an application were good because of the following features: “i) the site is located on the left-hand side, for south-bound Highway traffic; ii) the site could utilise the existing access off the Bruce Highway, albeit with some upgrading required to this access; iii) the site is mostly cleared of significant vegetation, and development could be located outside of that area of the site traversed by the waterway – Jane Creek; iv) the site, or that part of the site where a service centre could be located; is not affected by the overlay provisions of the Planning Scheme (or these overlays could have, in my opinion, been sufficiently addressed as part of any development application); v) the land area was adequate for the possible uses (listed above); vi) a service station or service centre development on the site could have been designed and located to: a. provide an attractive built form within a landscape setting consistent with the Overall Outcomes of the Service Station Code and providing provide “a high standard of safety and appearance” when seen from the Highway (as per the Service Station Code – Overall Outcome 9.111(2)(a)); b. include adequate buffer areas (given the size of the overall site) as required by Overall Outcome 9.111(2)(b) of the Service Station Code; -- 7 of 31 -- 8 c. provide safe and convenient vehicular access consistent with Overall Outcome 9.111(2)(c)) of the Service Station Code; vii) a service station development could have been designed to meet the design parameters set out in the Service Station Code as Specific Outcomes; viii) the site is of a sufficient size and area to self-sufficient with respect to water supply and effluent disposal, noting that the option also existed for the site to be connected to the full range of services if this was preferable; ix) a service station is a “consistent” use in the Rural Zone, noting that it required impact assessment. The combination of a service station with other supporting uses (ie service industry (vehicle repair), fast food store, catering shop and shop) would have also required Impact Assessment, noting that the highest level of assessment is applicable to a ‘combined’ development proposal; x) the repealed SPRP provisions of the Regional Plan specifically contemplated both a service station and a motel in the Regional Landscape and Rural Production area, subject to impact assessment; and xi) the suggested uses are, with the possible exception of the motel, are “non-sensitive” uses. A highway motel is a common occurrence and measures such as double glazing, air-conditioning, acoustic fencing, etc are common means of resolving potential noise nuisance to motel guests.”20 [26] Some of those factors are no longer relevant, given the modification to the concept plan to remove the motel component. [27] Mr Gaskell, for DTMR, said the use would have conflicted with the planning scheme in the following ways, and Mr Desbois had not demonstrated there was a need for the proposed use: a. Overall outcome 5(a) of the Goosepond Creek Precinct – regarding where commercial activity occurs; b. Overall outcome 8.48 of the Good Quality Agricultural Land Overlay Code - about conserving and protecting such land from encroachment by incompatible uses; 20 Ex DES.014, Joint Expert Report of Town Planners Mr Chris Schomburgk and Mr John Gaskell, [7.1.7]. -- 8 of 31 -- 9 c. Overall outcome 2(d) for rural land in the Mackay Frame Locality – to the effect that “non-rural activities do not occur”; d. The Assessment Criteria for the Landscape Character Overlay Code. [28] A brief overview of the function and structure of the Mackay Planning Scheme sets the scene for the specific issues raised by the planners. [29] The purpose of the scheme is to manage development by identifying assessable and self-assessable development and the outcomes the plan seeks to achieve as the context for assessing development.21 The scheme includes a Strategic Framework which reflects the desired environmental outcomes and the approach taken by the scheme to achieve them.22 Relevantly, the scheme’s approach to commercial centres involves a network of centres, including the Mt Pleasant Sub-Regional Centre which is proximate to the land. 23 [30] Further, it explains the approach to “Rural Agriculture” and “Rural Areas,” which assists in weighing the planners’ divergent views on whether the proposed use is acceptable development in a rural area.24 [31] The scheme has several structural elements which identify desired outcomes, how development will be assessed and what criteria will be used to do so. The key elements for the purpose of this case are localities, zones, precincts and overlay codes. [32] Localities are geographic areas with a particular character or characteristics that require certain development outcomes.25 Localities are divided into zones. Each locality has a table which identifies the level of assessment and the assessment criteria for types of development in each of the zones. [33] Localities may also be divided into precincts to provide more detailed development outcomes and assessment criteria to parts of a locality and zone. Finally, the scheme contains codes, including overlay codes, which provide 21 Ex DES.016, [1.1]. 22 Ex DES.016, [1.3]. 23 Ex DES.016, [1.4(2)(d)]. 24 Ex DES.016, [1.4(2)(j)–(k)]. 25 Ex DES.016, [1.5], [1.6(b)]. -- 9 of 31 -- 10 additional assessment criteria for development within areas subject to particular issues, features or constraints. [34] This land is within the Mackay Frame Locality in the Rural zone. That locality includes the Goosepond Creek Precinct, in which the land is situated. A number of overlay codes apply, including the Good Quality Agricultural Land (GQAL) Overlay Code and the Landscape Character Overlay Code. [35] The planners agree the proposed use would have been an “impact assessable consistent use,” although they differ about the significance of it being “consistent” for the prospects of approval. Further, Mr Gaskell identified specific conflicts between the proposed use and the scheme. Both planners also raised the question of need for the proposed use, although Mr Desbois submits that, as a matter of law it is not necessary to establish need. [36] It makes sense to work through the differences between the planners by moving through the structural elements of the scheme which apply to the land and proposed use. The Strategic Framework and Desired Environmental Outcomes [37] One of the desired environmental outcomes for the scheme is:26 “(xi) Rural land: (A) is protected from incompatible land uses; (B) is maintained in agricultural use, where possible, in order to ensure the viability of the sugar industry in the City; and (C) provides opportunities for use for a wide range of economic activities including extractive industries, forestry, grazing, intensive animal husbandry and water supply development.” [38] The planners disagreed on whether the service station was an incompatible land use for rural land. Mr Gaskell said the land was best described in the Strategic Framework as “Rural Area’.”27 The description of the strategy and outcomes for this element opens with these words: “Rural land is developed and used for a wide range of economic activities…” [39] That language is broad enough to encompass a service station/truck stop. Whether it is an incompatible land use as that term is used in the high level desired 26 Ex DES.016, pp 3–3 to 3–4. 27 T 1–74, lines 5 to 22; T 1–72, lines 16 to 35. -- 10 of 31 -- 11 environmental outcome requires consideration of more specific provisions within the scheme. The Mackay Frame Locality [40] In the JER, Mr Gaskell identified some overall outcomes for the Mackay Frame Locality that he thought would be offended by the proposed use. Most of these fell away during oral evidence, largely because the modified proposal removed the motel component. [41] Mr Gaskell accepted overall outcome 2(b), which refers to out of sequence urban residential growth, is not relevant because the proposed use no longer contains any residential aspect.28 He also said overall outcome 2(k), which protects rural land “from the constraining effect of encroaching urban and rural residential development,” is not relevant for the same reason. He deferred to the traffic engineers on overall outcomes with a traffic safety or road network focus.29 In the end it seemed there were two where he maintained there was some conflict. [42] Overall outcome 2(a) provides that:30 “urban development occurs on land in an urban zone in preference to land included in a non-urban zone” [43] He described this as “a direction,”31 but by its own terms it is a preference, not a prohibition. [44] Overall outcome 2(m) seeks to prevent non-rural activities from adversely affecting the operation of rural uses.32 Although he said his concern about this one was ameliorated by the removal of the motel, he said it was “pretty clear” that rural land is there for rural purposes.33 [45] Assuming for the purpose of argument that the service station is a non-rural activity, I accept Mr Schomburgk’s evidence that the proposed development does 28 T 1–54 line 31. 29 T 1–57, line 34 to T 1–58, line 2. 30 Ex DES.016, p 5–22. 31 T 1–54, line 23. 32 Ex DES.016, p 5–23. 33 T 1–57, lines 1 to 2. -- 11 of 31 -- 12 not affect the existing rural use (which is very low intensity grazing) and if it might affect a future rural use, that could be managed by appropriate conditions.34 The rural zone in the Mackay Frame Locality [46] The land is within the rural zone in the Mackay Frame Locality. Relevantly, the overall outcomes for this zone in this locality include: “2(a) Rural activities undertaken on land in the Rural zone continue unconstrained by encroachment of incompatible land uses. … (d) Non-rural activities do not occur.” [47] Mr Gaskell relied on 2(d), because of his characterisation of the proposed use as commercial. Mr Schomburgk said applying Mr Gaskell’s interpretation would prevent any commercial activity within the rural zone. [48] Further, he considered the proposed use is not incompatible with rural activities. That view gains some support from the Assessment Table for this locality.35 The table lists specific uses and identifies whether they are inconsistent for any zone. A service station is not identified as an inconsistent use for the rural zone.36 If not identified as inconsistent, the use is a “consistent use” in that zone.37 [49] The consequence of it being inconsistent or consistent is not immediately obvious. The scheme does not define those terms. The use is still impact assessable in this zone. [50] Mr Desbois submitted the table is a clear statement that a service station is not inherently inconsistent with the objectives or intentions for the rural zone in this locality. [51] That accords with the evidence of both planners. [52] Mr Schomburgk said, “it must be a conscious decision of the planning authority that those uses may be acceptable.”38 Mr Gaskell agreed it indicated this kind of use could “consistently go in the rural zone.”39 34 T 1–57, line 15. 35 Ex DES.016, Table 5–1. 36 Ex DES.016, Table 5–1. 37 Ex DES.016, [5.6]. 38 T 1–31, line 47 to T 1–32, line 1. 39 T 1–31, lines 8 to 14. -- 12 of 31 -- 13 [53] I accept Mr Schomburgk’s opinion that the overall outcomes for the zone should be read with that indication in mind. Further, I accept his evidence that a service station is not an incompatible land use or a non-rural use in this zone, merely because it is commercial in nature. The Goosepond Creek Precinct [54] Moving to the next level of specificity in the scheme, Mr Gaskell identified a conflict between the proposed use and overall outcome 5(a) of the Goosepond Creek Precinct. It provides: “commercial activity occurs within the boundaries of the commercial zone and accords with the network of centres.”40 [55] The land is not in the commercial zone. Again, what was important to Mr Gaskell was the commercial nature of the activity. He stressed that it was more than a service station and involved a range of different commercial uses. [56] Mr Schomburgk said the focus of the overall outcome was on commercial centres, local, neighbourhood and major regional. Mr Gaskell agreed the proposed use does not equate to a commercial centre or in any way impact on the network of centres.41 He also said the overall outcomes that related to the Mt Pleasant subregional centre did not “specifically” apply, but the general planning principle did. He would advise a prudent purchaser that the activities for the proposed use “need to be established in commercial centres.”42 [57] Although Mr Schomburgk agreed the activity is commercial, he did not agree either that they were best supported in a commercial or industrial zone, or that the scheme actively discouraged them in the rural zone. [58] I prefer Mr Schomburgk’s opinion on that point. To prohibit all commercial activity outside the commercial zone is contrary to the Assessment Table for this Locality and the rural zone. In the absence of a clear statement to that effect, this overall outcome for the Precinct should be read in the context of those higher order indications. 40 Ex DES.016, 41 T 1–39, line 30; T 1–50 line 18; T 1–51 lines 32 to 34. 42 T 1–53, lines 46 to 47. -- 13 of 31 -- 14 The Good Quality Agricultural Land (GQAL) Overlay Code [59] Turning to the overlay codes, the land is largely included in the GQAL Overlay Code, which has these overall outcomes: “(2) The overall outcomes sought for the Good Quality Agricultural Land Overlay Code are to ensure: (a) good quality agricultural land is conserved for continued agricultural use; … (b) Agricultural uses are protected from encroachment by incompatible uses.”43 [60] Mr Gaskell said the overlay codes may limit or prevent development in certain instances.44 In oral evidence, he said “this issue probably goes down the list a little bit.”45 The land is not sugar cane land. It has never been used for intensive agricultural purposes. Mr Gaskell said this caused him to moderate his view.46 [61] DTMR placed little emphasis on this asserted conflict in its closing submissions. I accept Mr Desbois’ submission that the specific outcome that might be engaged is P3. It provides that “development…does not result in land taken out of agricultural use.”47 Mr Gaskell agreed that, given the land is currently used only to agist 2 horses, the proposed use would not have that result.48 The Landscape Character Overlay Code [62] The Landscape Character Overlay Code makes this reference to the Glenella area, which includes the land, in the code’s overall outcomes: “Areas or features contributing to the landscape of each Locality are not affected by the potential impacts of inappropriate development including… (iii) the visual intrusion of highway-related development upon the rural landscape between Farleigh and Glenella.”49 [63] The code seeks to protect rural views and amenity and identifies Landscape Character areas and image corridors. The code land is not in a Landscape Character area. The code is called up because the land is adjacent to an image corridor, the Bruce Highway. [64] Again, Mr Gaskell modified his view on this code in oral evidence: 43 Ex DES.016, [8.48(2)]. 44 Ex DES.014, [4.8.3]. 45 T 1–68, lines 28 to 29. 46 T 1–44, lines 24 to 32. 47 Ex DES.016, [8.50]. 48 T 1–70, line 43. 49 Ex DES.016, [8.55(2)(b)]. -- 14 of 31 -- 15 “I really don’t think this would be… the one that says you’re refused or approved.”50 [65] That is consistent with Mr Desbois’ submission that the code outcomes could be achieved by building design and landscape treatments, a matter that would be dealt with by relevant conditions. Need for the proposed use [66] DTMR relied on Mr Schomburgk’s evidence that a developer would have to demonstrate need for the use to be approved.51 It also relied on this statement from the first JER: “6.1.5 The town planning experts agree that impact assessment applications have higher risks for a proponent, as they need to pass these decision rules tests. Relevant to the subject land and the land uses in question are matters which would be relevant to a prudent purchaser: i) the question of need – “need” is a test relevant to consideration of impact assessment applications, particularly where those applications are not anticipated by the planning scheme. In this case, a need would be required to be demonstrated for any uses not envisaged by the planning scheme;” [67] To the extent that the planners might have expressed a legal conclusion, I have disregarded it. Neither party asserted that was a correct statement of the law. [68] Senior counsel for Mr Desbois said the question of need did not arise as a legal requirement in this case. Senior counsel for DTMR said that demonstrated need was only required in two situations. [69] First, if that was required by an assessment criterion. In that respect, DTMR referred to P3 of the GQAL Overlay Code which requires “overriding community need for the development” if it “would result in land taken out of agricultural use”. As already observed, Mr Gaskell agreed the proposed development would not have had that result. [70] Second, if the development conflicts with a relevant instrument, it must not be approved unless “there are sufficient grounds to justify the decision, despite the 50 T 1–45, lines 29 to 30. 51 T 1–43, lines 1 to 28. -- 15 of 31 -- 16 conflict.”52 Grounds means matters of public interest.53 Need would fall within that definition. [71] I have already expressed my reasons for not accepting Mr Gaskell’s views on the asserted conflicts. [72] If I was conducting a planning appeal, I would find that, as a matter of law, the circumstances in which need must be established have not arisen. [73] However, in assessing compensation, the Court must consider what advice the hypothetical developer would receive about the prospects of approval, and how that would affect their assessment of the value of the land. [74] The evidence before the Court is that both planners would advise a developer that need is a relevant consideration for an impact assessable application. And as senior counsel for Mr Desbois identified in his written closing submissions, evidence of need is often used as a positive ground of approval. I accept the hypothetical developer would be advised that the prospects of approval would, at the very least, be enhanced by evidence of need. [75] Mr Desbois pointed to some limited evidence on the topic. Mr Desbois was approached by 2 persons about developing the service station.54 That may be accepted as indirect evidence of need – without a need there would be no interest - but it is extremely weak. [76] The service station experts’ evidence about the attractiveness of the site is not a needs assessment except, perhaps, in one respect. One of the criteria considered by the service station experts was “network fit”. I could find no definition of that term in their JER, but Mr Lunney’s notation for network fit might infer an unmet demand, but, again, this is weak: “Limited competition;- Puma Conningsby 7klms away then no suitable current highway sites through Mackay on old highway).”55 52 Sustainable Planning Act 2009 s 326. 53 Ibid sch 3. 54 Ex DES.004. 55 Ex DES.020, p 3. -- 16 of 31 -- 17 [77] Finally, Mr Desbois relied on the post-resumption approval of a service station at Farleigh as evidence of need. That was approved on 31 May 2021 and is too remote from the date of acquisition to establish a need when the land was resumed. [78] If all the hypothetical developer had about need was the evidence before the Court, they would be uncertain about the prospects of approval without further investigation. Prospects of approval [79] The planners agreed there was a high probability the application would be refused by the Council.56 DTMR argued this was inconsistent with Mr Schomburgk’s view about the prospects on appeal. However, there is an important difference between the planners about why the Council would reject the application, which bears on what a Council could be expected to do, acting lawfully and reasonably. [80] In oral evidence, Mr Schomburgk was referred to his statement in the second JER that the prospects of refusal by either Council or DTMR are high.57 He explained that DTMR would direct refusal because of its intention “to resume the land and for the road to go through.” 58 Further, he assumed Council was aware of DTMR’s plans and “whether or not it was directed to would also be likely to refuse an application based on those issues.” [81] The value of land before resumption must be assessed without reference to the scheme of resumption. Putting aside knowledge of the intention to resume for road works, Mr Schomburgk’s view was that traffic safety requirements depended on the advice of traffic engineers and the length of an acceleration lane was a matter of conditions, not a ground for refusal.59 Mr Gaskell agreed with that.60 His opinion there would be a high prospect of refusal was based on town planning grounds alone.61 56 T 1–84, lines 20 to 32; T 1–85, lines 29 to 41; T 1–86, lines 38 to 45. 57 Ex DES.015, Supplementary Joint Expert Report of Town Planners Mr Chris Schomburgk and Mr John Gaskell at [2.2.1]. 58 T 1–84 line 20 to T 1–85 line 27. 59 T 1–85 line 16. 60 T 1–85 lines 38 to 41. 61 T 1–85 lines 43 to 49. -- 17 of 31 -- 18 [82] For reasons already given, I prefer Mr Schomburgk’s evidence that the Council would not refuse the application on planning grounds. Compensation should be assessed on the assumption that the hypothetical developer would be advised that, subject to the traffic safety issue, there were good prospects of obtaining planning approval for a service station/truck stop. Traffic Safety Conditions [83] Traffic safety would have been an issue for the access intersection for a service station/truck stop on the disputed area. The planners agreed this was a matter of conditions, not a ground for refusal. The parties did not agree about the advice a prospective developer would be given about the conditions to deal with this issue. [84] The traffic engineers called by the parties agreed an access intersection “could be designed and operate in a manner that does not create a safety hazard for users of a state-controlled road or result in a worsening of operating conditions on a state- controlled road.”62 [85] Mr Camilleri, engaged by Mr Desbois, and Mr Johnston, engaged by DTMR, agreed the Austroads Guide to Road Design would be used in setting design requirements. [86] The Guide is not prescriptive and does not have regulatory force. It “provides valuable guidance to designers in the production of safe, economical and efficient road designs.”63 It adopts a “safe system approach” to road safety that recognises human fallibility. In a safe system “roads should be designed to reduce the incidence and severity of crashes when they inevitably occur.”64 [87] Drawing on the Guide, the engineers prepared their JER on the basis that an acceleration lane was an appropriate way to apply the Guide to the hypothetical development. The length of the lane was an important point of difference between them. 62 Ex DES.007, Joint Expert Report of Traffic Engineers Mr Andrew Johnston and Mr Brian Camilleri dated 1 May 2020 at [10.1]. 63 Ex DES.009, Austroads Guide to Road Design Part 4A at 1.1. 64 Ex DES.009, 1.3. -- 18 of 31 -- 19 [88] Mr Johnston said the lane would need to be 435m long, with the consequence that the road bridge over the railway would have to be widened at an agreed cost of $1,575,000.65 Mr Camilleri said no more than 315m would be required. [89] Counsel for Mr Desbois submitted the Court could not find, as a certainty, that an acceleration lane would have been required, let alone of the length that Mr Johnston said was necessary. [90] The evidence raises these questions: • Would the hypothetical developer be advised that an acceleration lane is required? • If so, what length would be required? Would the hypothetical developer be advised that an acceleration lane is required? [91] Acceleration lanes are not the only intersection treatments provided for by the Guide.66 It identifies acceleration lanes as a possibility in certain circumstances: 5.2.2 Acceleration Lanes Acceleration lanes may be provided at major intersections depending on traffic analysis. However, they are usually provided only where: • insufficient gaps exist for vehicles to enter a traffic stream • turning volumes are high (e.g. 300 to 500 vph) • the observation angle falls below the requirements of the minimum gap sight distance model (for example, inside of horizontal curves) [92] The engineers did not appear to agree whether the circumstances that warranted an acceleration lane existed here. Mr Camilleri thought there would be sufficient gaps for vehicles to enter the highway and that the turning volumes were not high.67 Mr Johnston did not agree.68 There was limited data about those matters and no formal traffic analysis. [93] Senior counsel for Mr Desbois invited me to draw an inference about through traffic from the treatment of some intersections in the vicinity of the land. 65 Ex DES.005, Joint Expert Report of Civil Engineers Mr Maurice McAnany and Mr Pat Flanagan dated 11 November 2020 at [26]. 66 Ex DES.009, [4.1]–[4.14]. 67 T 2–25, lines 3 to 39; T 2–26, lines 7 to 29. 68 T 2–65, lines 11 to 43; T 2–28, lines 6 to 24. -- 19 of 31 -- 20 [94] The one on which Mr Desbois placed most reliance is the intersection of Glendaragh Road with the Bruce Highway, approximately 900m to the west. Glendaragh Road is a designated haulage road for 2 quarries and carries heavy vehicles.69 It was upgraded in 2010 “to improve road safety performance.”70 That upgrade did not include an acceleration lane for vehicles entering the highway. [95] The traffic data reveals similar traffic movements for this stretch of the highway in 2010 and 2016.71 DTMR did not suggest the Guide that then applied differed in any material respect. Nor did it suggest that DTMR applies a different standard depending on whether it is a public or private development. In fact, Mr Johnston said it would apply consistently.72 [96] The only point of distinction suggested by DTMR is that the hypothetical development would be creating a new problem, which would result in greater attention being given to the Guide. That submission only serves to support Mr Desbois’ argument that there is discretion in how the Guide is applied. [97] That impression is reinforced by another proximate intersection, between the Bruce Highway and Bald Hill Road. It also has no acceleration lane.73 There is evidence that DTMR has plans to upgrade this intersection further over time, but a staged approach implies there is no pressing safety concern due to the traffic volumes on this part of the highway. [98] DTMR’s approach to these two intersections is consistent with the discretionary wording of the Guide and the evidence from the engineers that an acceleration lane is not the only option. [99] A hypothetical developer could be expected to seek advice about alternatives, given the conflict between the experts about the length of the lane and the expense involved. But neither investigated an alternative solution in any detail. The Court cannot speculate about different conditions in the absence of evidence. The 69 Ex DES.096 to DES.099, p 9–43. 70 Ex DES.111, p 64; T 2–43, lines 29 to 46. 71 Ex DES.007, Table 1 at [4.5]. 72 T 2–24, lines 1 to 35. 73 Ex DES.123; T 2–47, lines 28 to 37. -- 20 of 31 -- 21 engineers agreed use of this design feature satisfies me a hypothetical developer would be advised that this would be a probable condition of approval.74 The length of an acceleration lane [100] The primary contest between the parties was whether it needed to be 315m or 435m. [101] The engineers agreed the relevant section of the Guide is Part 5.4.75 It includes Table 5.4 showing the length of an acceleration lane on level grade by reference to the design speed for both the entry curve (that is from the site into the acceleration lane) and the road being entered (the Bruce Highway). [102] The speed limit for this part of the Bruce Highway is 100 km/hr. In applying the table, assumptions are made about the design speed for the entry curve and the road. Both assumed 20km for the entry curve because vehicles would accelerate within the site before entering the acceleration lane. The experts differed on the safe design speed for the road. [103] In the first JER Mr Johnston said a lane of 315m was adequate. In the second he said it needed to be 435 m long. Mr Johnston initially used 90 km/hr as the design speed for the road because he was mistaken about the location of a speed zone change from 100km/hr to 80km/hr. He had assumed drivers approaching the site 74 Ex DES.008, [4.19] ; T 2-28, lines 20 to 24; T 2–38 line 35, to T 2–39, line 4; T 4–41 lines 22 to 28. 75 T 2–15, line 38, to T 2–17, line 20. -- 21 of 31 -- 22 would see the 80 km/hr sign and be slowing in anticipation of the reduced speed limit.76 When he realised the sign was further away, he used a design speed of 100km/hr. Strictly applied, the Table indicates an acceleration lane of 435 m. [104] Mr Camilleri appeared to accept a design speed of 100 km/hr was the starting point for the design speed for the road. He relied on section 5.4.2 which provides this discretion: While it is desirable in most cases that the accelerating vehicle reaches the mean free speed of the adjacent through lane (about numerically equal to the posted speed limit) before merging, in some situations where the site is constrained and the volume in the through lane is low it may be acceptable to design for a speed decrement of 20 km/h within the merge area (i.e. a merging vehicle travelling at 80 km/h enters a traffic stream of vehicles travelling at 100 km/h). [105] Mr Camilleri considered both circumstances were met – the site was constrained and the volume in the through lane is low – making it acceptable to design for the merging vehicle to be travelling at 80 km/hr when it exited the lane. [106] For a vehicle to accelerate from 20km/hr to 80 km/hr, Table 5.4 specifies 220m.77 If it is assumed the vehicle enters the acceleration lane from a stationary start, the length would need to be 315m. Mr Camilleri did not think that length was necessary but, in the second JER, accepted 315 m might be reasonably imposed.78 [107] Senior counsel for DTMR and, indeed, Mr Johnston, referred to this as a “relaxation” of the “requirements” of the Guide, requiring Mr Desbois to establish the circumstances referred to in 5.4.2. [108] That slavishly applies Table 5.4 and puts a gloss on the Guide that is not warranted given its discretionary language. As already observed, 5.2.2 provides when an acceleration lane may be required. Section 5.4.2 refers to what is desirable and identifies when a different design might be acceptable. [109] The engineers agree the site is constrained by the bridge and the cost of widening it to provide an acceleration lane.79 They did not agree whether the traffic volume was low. 76 T 2–46, line 3 to T–47, line 26. 77 Ex DES.009, [5.4]. 78 T 2–15, line 34. 79 T 2–22 to T 2–24; T 2–23, line 39 to 45. -- 22 of 31 -- 23 [110] The Guide does not define the term. At 5.2.2 it provides that 300 to 500 vph is an example of high volume for a turning lane. The engineers agreed this provides limited assistance because it relates to a very different intersection treatment. [111] Also of limited assistance is the Puma service station at Conningsby, which has a shorter than desirable acceleration lane.80 It is about 6.6km west of the subject and was constructed somewhere between 1986 and 1988.81 The Court should be cautious in relying on that to draw an inference about what might have been required in 2016. [112] Of more assistance is evidence about the traffic volumes near or adjacent to the subject. [113] Mr Camilleri considered the traffic volumes were low at the relevant time, having regard to the operating capacity of the road. During the peak hour there are about 500 vph, less than a third of the operating capacity of the highway. At other times of the day there are in the order of 300 vph.82 [114] Mr Johnston disagreed. He looked not only at the raw volume, but at the trend. Recourse to an upward trend tends to support the view that, as at 2016, the volume could well be considered low. Further, while Mr Johnston said the growth rates suggested an upward trend,83 Mr Camilleri did not agree and DTMR placed little reliance on this evidence. [115] However, DTMR’s upgrade of the intersection of Glendaragh Road and the Bruce Highway in 2010 indicates the through traffic volumes at that site, in 2010, were accepted to be low, because it has no acceleration lane and a deceleration lane that is shorter than the Table indicates.84 [116] That intersection is only 900 m to the west of the site and the traffic volumes adjacent to the subject were near identical.85 Volumes at Glendaragh Road were approximately 9500 a day in 2010 and 9000 a day in 2016.86 80 Ex DES.007, p 36 at [4.3.2]. 81 Ex DES.008, [4.25]. 82 T 2–25, lines 20 to 22; T 2–54, lines 39 to 40. 83 Ex DES.008, [5.5]–[5.6]; T 2–28, lines 9 to 24. 84 Ex DES.007, p 36 at [4.3.2]; T 2–43, line 9, to T 2–44, line 27. 85 Ex DES.007, [4.5]. 86 T 2–44, line 29, to T 2–45, line 1. -- 23 of 31 -- 24 [117] I prefer Mr Camilleri’s view that both circumstances referred to in 5.4.2 did exist in 2016. The site was constrained by the bridge and the cost of widening it and the volume of the through traffic was low. [118] In any case, if I am wrong in that finding, I accept Mr Camilleri’s opinion that there was sufficient discretion in the Guide to accept an acceleration lane of less than 435m. Using Table 5.4 as the reference point, Mr Camilleri’s acceptance of an acceleration lane of 315m, assumes a speed decrement of 10km/hr (not 20 km/hr), from the speed limit of 100 km/hr to 90 km/hr. [119] Mr Johnston said there was no discretion in applying Table 5.4 unless the “pre- conditions” are met.87 That is contrary to Mr Johnston’s approach in the first JER. He considered it acceptable then to make an assumption about driver behaviour to set the design speed for the road, because of the location of a speed sign. In accepting 315 m was reasonable, Mr Camilleri did the same thing because of other road conditions. He noted the numerous intersections along that stretch of the highway, which he thought would make drivers more alert to entering traffic.88 [120] On a development application, DTMR could only require a relevant and reasonable condition. What is reasonable requires a site-specific consideration of the safety risk posed by the development and what would be appropriate to ameliorate that risk. [121] The Guide is ambiguous and lacks definition for terms that DTMR purports to treat as “pre-conditions” to the “relaxation” of a “requirement.” I have already observed that approach to the Guide is at odds with its purpose and elevates it to a regulatory instrument. The Guide uses discretionary language and invites the exercise of professional judgment. The specific discretion provided by s 5.4.2 does not limit the discretion that otherwise applies in using the Guide. [122] Considering all the evidence given by the engineers, I find that a hypothetical developer would be advised they would have reasonable prospects of a traffic safety condition that required an acceleration lane of 315 m. 87 T 2–28, lines 36 to 45. 88 T 2–28, lines 26 to 32. -- 24 of 31 -- 25 [123] In summary, I find a service station/truck stop was a realistic potential use for the disputed area. The site would be very attractive to a developer, and the hypothetical developer would be advised it had good prospects of obtaining planning approval and reasonable prospects of a traffic safety condition that required an acceleration lane no longer than 315 m. If a service station/truck stop was a realistic potential use for the disputed area, how should compensation be assessed? [124] The valuers agree compensation for loss of land value should be assessed using the before and after method. They also agree on several aspects of that exercise. The after value is $1,273,00, assuming grazing is the HBU.89 The before value of all but 2.25 ha is $1,289,385 on the same HBU. They agree there is only one comparable sale that should be used for assessing a HBU of service station/truck stop and that its analysed rate is $400,000/ha. [125] They do not agree whether all or any of the 2.25ha should be valued on a HBU of service station/truck stop. Mr Williams says that use should be considered for no more than 1.8ha. Further, Mr Williams says the applicable rate/ha is $400,000, the analysed rate of the agreed comparable sale. [126] Mr Eales says the rate/ha should be $750,000/ha, which he adjusted from the comparable sale to account for differences between the sale and the subject. To account for the risk of being required to widen the bridge, he discounted his $750,000 by 30% to $525,000. Mr Williams did not agree with that method. He said the risk of widening the rail bridge destroyed the potential, because it is disproportionate to the value of the land for that use. [127] The issues raised by the valuers’ opinions are: • What area should be considered for the HBU of service station/truck stop? • What rate/ha should be applied? 89 DTMR initially contested Mr Desbois’ claim the roadworks had destroyed any potential for a service station/truck stop on the balance land. However, in closing submissions, senior counsel for DTMR relied on the agreed post-resumption valuation which assumes grazing is the HBU. As that was DTMR’s last word on the topic, there is no need to address the post-resumption HBU. -- 25 of 31 -- 26 • How should the potential to use the land for that HBU be assessed given the risks in realising its potential? What area should be considered? [128] This is a small point. The area assessed for the potential HBU should be 2.25 ha. [129] Mr Williams used an area of 1.8 ha, not 2.25ha, because the modified concept plan removed the motel which occupied 0.45ha.90 The evidence does not support Mr Williams’ approach. [130] Mr Schomburgk gave evidence about the mix of uses that could be applied to the site under the modified concept plan. The service station experts accepted the mix of facilities and activities identified in the modified concept plan would be attractive to a developer.91 [131] When asked whether 2ha would be the minimum needed for a highway site, Mr Lunney said “That would be comfortable. Yes.”92 Mr Coudrey was not asked to comment. Neither expert was asked whether the area was excessive given the removal of the motel proposal. What rate/ha should be applied? [132] The agreed comparable sale is of land bought for a service station at Gracemere. [133] The subject and the sale properties are similar in size,93 road gradient,94 and sewerage and water costs.95 The subject has a superior location on the Bruce Highway, although the proximity of cattle saleyards to the sale is an advantage that is reflected in the higher number of trucks passing the sale.96 Although the subject has direct access from the Bruce Highway, the sale has other features that provide easier access for trucks. Mr Eales considered the subject better overall.97 [134] The valuers agreed the analysed rate for the sale is $400,000/ha. 90 Ex DES.021, Joint Expert Report of Valuers Mr Geoff Eales and Mr Gregory Williams, [5.5.18]. 91 T 1–96, line 38 to 1–97 line 47. 92 T 1–101, line 35. 93 T 2–94, line 40; T 2–95, line 4. 94 T 2–101, line 40; T 2–103, line 4. 95 T 2–106, line 45; T 2–107, line 10. 96 T 2–95, line 6 to T 2–97, line 30. 97 T 2–98, line 42 to T 2–99, line 9. -- 26 of 31 -- 27 [135] Mr Williams made no adjustment in applying the analysed rate for the sale of $400,000/ha to the subject land. Mr Eales relied on the difference between the passing traffic statistics for the 2 properties in 2016, to increase the rate by 86% to $750,000/ha. Senior counsel for DTMR described this method as “a single metric applied in a linear way”98 which should be rejected. [136] Mr Eales said: “It is an agreed position with the service station/service centre experts that traffic volumes is a major factor in the successful development of a service station business. This is unsurprising, more traffic means more potential profit.”99 [137] The service station experts did say that traffic volumes are important, but not necessarily the most important factor. They identified other factors such as the quality of the facility, whether it includes a fast-food outlet; its visibility, ease of manoeuvrability, and potentiality due to the size of the site; and the quality of the traffic, in the sense that low truck volumes may still return high fuel sales.100 [138] Mr Eales said he applied the higher rate/ha to the subject land primarily for traffic volume, he also increased the rate to account for the subject’s other advantages of better demographics and lower competition.101 [139] As DTMR submitted, Mr Eales’ method does not look at any trends in traffic volumes and does not distinguish between trucks and cars, an important factor given the service station experts’ evidence about the relationship between truck numbers and fuel sales. Mr Eales was open that this was a rough guide that he used to deal with a number of differences between the properties, in the absence of anything more rigorous. I understand the difficulty of the exercise, but I am not persuaded this method provides a reliable indication of value. [140] However, Mr Williams’ approach fails to account for the superior locational attributes of the subject. It is close to the Glenella urban area, as well as more intense agricultural land and large rural residential land.102 The service station experts identified 3 benefits of proximity. The ability to attract more customers, 98 T 3–34, lines 44 to 45. 99 Ex DES.121, Further Supplementary Joint Expert Report of Valuers Mr Geoff Eales and Mr Gregory Williams, [2.4]. 100 T 1–122, line 20 to T 1–124, line 8. 101 Ex DES.121, [5.3]. 102 T 2–95, lines 10 to 20; T 2–95 line 30. -- 27 of 31 -- 28 including commuter and fast-food sales; the reduced costs in fuel transport; and the ability to source staff nearby. This suggests a rate of $400,000 is too low. How to assess value of the potential given the planning and traffic safety risks [141] The Gracemere sale and the subject land had certain risks in common, such as planning approval; and the costs associated with access and egress and provision of services to the land.103 Although there was some difference between the parties about whether the planning risk was greater for the subject land than the sale, little turns on this given the finding I have made about the planning advice. Mr Williams said the sale rate assumed good prospects of planning approval, although the exact conditions were not known. Putting aside the issue of the bridge, I have made the same finding in relation to the subject. For that reason, there is no need to reduce the award for loss in land value on that account. [142] The risks that are not common to the two properties are, for the sale, loss of area that can be developed and the cost of flood mitigation works, and for the subject, the risk of having to widen the bridge.104 [143] While there has been substantial evidence about the risk for the subject site, the same cannot be said for the sale. The valuers agree the risk profile for the Gracemere sale has been accounted for in the sale price. Mr Williams said normal risks for an asset class or market segment “are accounted for at a high level in comparison to the sales evidence.”105 I take that to mean he considered the usual planning, construction, and economic risks were accounted for in the analysed sale. Mr Eales said those risks were accounted for in applying the sales evidence.106 [144] Further, the valuers accepted the sale price reflected the risk of potentially losing up to 1/3rd of the site due to flooding, and the risk of unknown costs associated with flood mitigation works.107 Mr Eales said: “The sale of Gracemere is heavily discounted due to perceived risks which have no quantum as to costs, or, professional advice 103 Ex DES.121, [5.4], [6.3]. 104 Ex DES.121, [2.7]–[2.8]. 105 Ex DES.121, [6.5]. 106 Ex DES.121, [5.2]. 107 Ex DES.121, [5.4], [7.2]. -- 28 of 31 -- 29 on which the parties to the contract can even reasonably guestimate.”108 [145] The question, then, is how to account for the risk on the subject, of being required to provide an acceleration lane of 435m with the associated costs of widening the bridge. [146] Compensation is “assessed in a theoretical, albeit artificial, fashion by assuming that the land has been sold on the date of its acquisition.”109 The use of a hypothetical sale assumes an unconditional contract “where any uncertainty that might arise about the postulated use for the land ought…to be reflected in the purchase price.”110 [147] Mr Williams described the requirement to widen the bridge as a critical risk which impacts the HBU:111 “Based on this information and that the cost of bridge widening may effectively result in purchase price of 5 times greater than originally anticipated, a buyer would obviously conclude that this risk is too high and that the highest and best use reverts to grazing/rural lifestyle land value only.”112 [148] That is inconsistent with my finding that a hypothetical developer would be advised they had reasonable prospects of obtaining an approval that did not require them to widen the bridge. That probability is not reflected in Mr Williams’ opinion. [149] I find myself in the same position as Biscoe J who said: “The value of a potential depends on how good was the chance at the acquisition date of the potential being realised. The chance may be virtually certain at one end of the spectrum or a mere speculative hope at the other end. In the case when the task of assessing compensation comes down to the evaluation of a chance, it will rarely be possible to demonstrate that any particular figure is correct. I certainly can’t do so in this case. I can only consider all the relevant factors and make a judgment about them; a “best guess” perhaps.”113 108 Ex DES.121, [5.9]. 109 Lenz Nominees Pty Ltd v The Commissioner of Main Roads [2012] WASC 6 at [66]; Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 647–649. 110 Crouch v Minister for Works (1976) 13 SASR 553 at 560. 111 Ex DES.121, [6.9] 112 Ex DES.121, [3.7]. 113 Taylor v Port Macquarie Hastings Council [2010] NSWLEC 113 at [8]. -- 29 of 31 -- 30 [150] Mr Eales applied a % discount to his starting rate. In the absence of any other basis for accounting for the risk, applying a % discount is a reasonable approach to adopt to reflect the probabilities, as well as the doubts and misgivings.114 This Court has taken the same approach to deal with the uncertainty arising from a heritage listing.115 [151] The chance of the potential being realised is neither certain nor speculative, and, after considering the expert evidence, where there is doubt, that should be resolved in favour of the dispossessed owner.116 [152] If approval with no requirement to widen the bridge was a near certainty, I would consider $400,000/ha to be too low. That rate is heavily discounted for the sale’s un-costed flood mitigation risks and does not reflect the superior locational attributes of the subject. As I have no information that would allow me to adjust that rate, Mr Desbois will have the benefit of the doubt in a lower discount for the risk of having to widen the bridge. [153] Mr Eales applied a 30% discount from his starting rate of $750,000/ha. I have rejected that rate/ha. After hearing the evidence from the traffic engineers, in particular the possibility of an alternative to an acceleration lane, Mr Eales said he thought that discount was too high. I have found that a hypothetical developer would be advised they had good prospects of securing planning approval and reasonable prospects of achieving a traffic condition that did not require them to widen the bridge. In those circumstances, and given my view that $400,000/ha is too low, I will apply a 15% discount, resulting in a value of $765,000 for the 2.25ha ($400,000 x 85% x 2.25 ha). I consider that adequately compensates Mr Desbois for the loss of his land. Compensation award [154] The before value of the land is $2,054,385 ($765,000 plus agreed grazing value of $1,289,385). The agreed after value of the land is $1,273,000. The difference is a loss in land value of $781,385. 114 Crouch v Minister for Works (1976) 13 SASR 553 at 560–561. 115 Macarthur Central Shopping Centre Pty Ltd as TTE v Valuer-General (No. 2) [2016] QLC 80. 116 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at [100], [111], [356]; Commissioner of Succession Duties (SA) v Executor Trustee & Agency Co of SA Ltd (1947) 74 CLR 358 at 373–374. -- 30 of 31 -- 31 [155] The Court has the power to award interest. DTMR did not argue there was a proper reason to withhold it.117 Interest on that sum of $83,576.08 is awarded, calculated at the rate of 2% per annum118 from 12 August 2016, the date of resumption, to 16 December 2021, the date of judgment. [156] The total award is: Loss in land value $781,385 Interest on that loss $83,576.08 Disturbance $84,000 Total compensation $948,961.08 say $948,961 [157] I will hear from the parties as to costs. Order Compensation is payable by the Respondent to the Applicant for the taking on 12 August 2016 of an area of 1.934ha of the total area of 59.556ha, being part of Lot 1 on RP 736046 and Lot 5 on RP 728844, in the sum of nine hundred and forty-eight thousand, nine hundred and sixty-one dollars ($948,961.00). 117 Small v Brisbane City Council (1968) 35 CLLR 239 at 246. 118 The interest rate average published by the Registrar of the Land Court for 2015-21. -- 31 of 31 --