Cidneo Pty Ltd v Department of Transport and Main Roads (No 3) [2017] QLC 45

LAND COURT OF QUEENSLAND CITATION: Cidneo Pty Ltd v Department of Transport and Main Roads (No 3) [2017] QLC 45 PARTIES: Cidneo Pty Ltd ACN 105 454 064 (applicant) v Chief Executive, Department of Transport and Main Roads (respondent) FILE NO/s: AQL325-10 DIVISION: General Division PROCEEDING: Determination of compensation under the Acquisition of Land Act 1967 DELIVERED ON: 24 August 2017 DELIVERED AT: Brisbane HEARD ON: 22, 23, 24 February 2016 Submissions closed 4 March 2017 HEARD AT: Brisbane MEMBER: WL Cochrane ORDER/S: Compensation is payable by the respondent to the applicant for the taking on 22 February 2008 of an area of 8.385 hectares being Lot 1 on SP 218520 being part of the land contained in title reference 50553649, County of Stanley, Parish of Oxley in the sum of Six Million Three Hundred and Seventy-Seven Thousand Eight Hundred Dollars ($6,377,800). CATCHWORDS: REAL PROPERTY – compulsory acquisition of land – compensation – proceedings for compensation – resumption of land – valuation methodology – contribution for traffic infrastructure – before and after method – remitted hearing. Acquisition of Land Act 1967, s 20 -- 1 of 42 -- 2 Boland v Yates Property Corporation Pty Ltd [1999] 74 ALJR 209 Brisbane City Council v Mio Art Pty Ltd & Anor [2011] QCA 234 Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2011] QLC 18 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2013] QLC 47 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2014] QLAC 3 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Ltd [1947] 74 CLR 358 Gregory v FCT [1971] 123 CLR 547 Heavey Lex No 64 Pty Ltd & S Paino v Chief Executive, Department of Transport [1999] QLC 133 Heavey Lex No 64 Pty Ltd & S Paino v Chief Executive, Department of Transport (2001) 22 QLCR 177 Leichhardt Council v Roads and Traffic Authority (NSW) (No 2) [2008] NSWLEC 1 APPEARANCES: MD Hinson QC (instructed by Anderssen Lawyers) for the applicant DR Gore QC , with J Brien of Counsel (instructed by Clayton Utz Lawyers) for the respondent Assessment [1] This is a matter which has been remitted back from the Court of Appeal via the Land Appeal Court for determination in accordance with grounds which were successfully appealed against in the original decision. [2] On 26 July 2013, I delivered a judgment ordering that the compensation payable by the respondent to the applicant for a resumption which occurred on 22 February 2008 was $6,900,000.1 1 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2013] QLC 47. -- 2 of 42 -- 3 Land Appeal Court proceedings [3] Subsequently, Cidneo appealed to the Land Appeal Court in respect of three grounds of appeal. [4] The Department of Transport and Main Roads (“DTMR”) cross appealed. [5] In the event, the Land Appeal Court allowed the appeal by Cidneo in respect of three grounds. [6] The first ground of appeal as set out in the Land Appeal Court reasons is articulated as follows: “The first ground of appeal was that the learned Member erred in determining, for the purpose of the cash flow analysis, that the appropriate figure to adopt for a contribution for road works (other than on Boundary Road) was $3,000,000. In relation to that ground it was submitted for Cidneo that the learned Member erred in law by disregarding relevant evidence...”2 [7] The Land Appeal Court upheld the first ground of appeal. [8] In the Land Appeal Court judgment the Court said: “For DTMR it was submitted that the valuation which the learned Member adopted of the land retained by Cidneo was correct, because the road works contributions payable to DTMR were likely to be the same in the before and after cases. A number of its other submissions seem to have been directed to supporting this proposition. The point of the submission appears to have been that, on that basis, since neither party suggested a significant contribution for external road works in the before case, the learned Member was right to reach the conclusion he reached for the after case. That does not address the question whether the learned Member considered relevant evidence, and gave adequate explanations for his reasons, nor does it address the question whether he erred in the conclusion he reached about the value of the retained land. Cidneo’s submissions may cast doubt on the correctness of the assumptions about contributions, and on the value of the land, in the before resumption case; but these matters were not in issue in the appeal.” 3 [9] The Land Appeal Court further commented: “Ground 2 of the Notice of Appeal alleged that the Land Court erred in not accepting and acting on evidence called in Cidneo’s case that, in assessing the value of its retained land after resumption, an additional period of six months should have been allowed for the time assumed to be taken to develop and sell lots resulting from the subdivision of the land. The written submissions for Cidneo supported this ground. The submissions identified the six month period as being an extra six months in part occasioned by the need for a further traffic analysis, but also by the need to 2 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2014] QLAC 3 at [25]. 3 Ibid at [66]. -- 3 of 42 -- 4 redesign the estate in relation to the construction of Boundary Road, and the hydraulics associated with Bullockhead Creek. It was orally submitted that the evidence in support of this longer period was uncontradicted, but not referred to in the reasons of the learned Member. It was submitted that the reasons identified the issue, but did not resolve it. Alternatively, if the issue was taken to be implicitly resolved by the adoption of Mr Brett’s valuation, then the Land Court erred in failing to give reasons for doing so.”4 [10] The second ground of appeal was also upheld by the Land Appeal Court: “There was a real issue between the parties on this question. It was raised by the differences in the cash flow analyses, and was the subject of submissions on behalf of Cidneo in the Land Court. The matters raised by Mr Viney and Mr Cumming in support of the longer period are not obviously without substance, so that a failure to discuss them might be explained on that basis. The reasons for judgment provide no basis for thinking that the learned Member considered this issue, and decided to accept the approach taken by Mr Brett on the basis of such a consideration. So far as is apparent from the reasons, the opposite is true. The submission made on behalf of DTMR that the matter is covered by the assumption, apparently derived from Spencer, that the parties are aware of all relevant facts, is novel. No authority was cited in support of it. It is difficult to see how the assumption would account for the existence of a traffic study, no doubt to be presented in support of a development application. The submission should not be accepted.”5 [11] The third ground of appeal was expressed as follows: “Ground 3 of the Notice of Appeal alleged that the Land Court erred in adopting Mr Brett’s period of 62 months for the development and sale of the land in the post-resumption case. Mr Hamilton’s cash flow analysis assumed a period of 76 months. The submissions for Cidneo made clear that, of the 14 months’ difference, six months was accounted for by the period the subject of Ground 2. In relation to the balance (8 months), it was submitted that the Land Court erred in particular in accepting Mr Brett’s evidence as to his rate of sale for lots produced in Stage 3, being two sales per month. It was submitted that the Land Court Member erred in failing to take into account evidence from Mr Whitelaw and Mr Hamilton criticising this rate of sale; as well as Mr Brett’s own acknowledgement that in February 2008 it could be expected that credit (and, if it be different, finance) was tightening. It was also submitted that Mr Brett in his cash flow analysis assumed an overlap in the construction of stages of the development (thus reducing the time required for the project); which he acknowledged might not be the approach of the prudent purchaser’ but the learned Member failed to deal with this evidence.”6 [12] The Land Appeal Court allowed the third ground of appeal: “Ground 4 of the Notice of Appeal alleged that the Land Court erred in accepting Mr Brett’s evidence that in February 2008 a low internal rate of return was acceptable for his cash flow analysis. The submissions for 4 Ibid at [29]. 5 Ibid at [74] to [75]. 6 Ibid at [30]. -- 4 of 42 -- 5 Cidneo in relation to this ground of appeal criticised Mr Brett’s approach of deriving an internal rate of return from a cash flow analysis, rather than adopting such a rate as an input for the analysis. It was submitted that his explanation that in February 2008 the market was speculative, was inconsistent with the agreed highest and best use of the land for development for industry and warehouse purposes; as this use did not include land banking. It was submitted that these matters were not dealt with in the reasons for judgment.” [13] From the Land Appeal Court determination, DTMR appealed to the Court of Appeal against the Land Appeal Court’s confirmation that the Land Court could not take into account the transport infrastructure contribution actually required when assessing the just amount of compensation. That actual figure was $1,087,110 not the $3,000,000 which was initially relied upon in the Land Court. As the Court of Appeal observed: “In DTMR’s cross appeal it contended that the Land Court erred in law in concluding that it could not take into account the transport infrastructure contribution actually required when assessing the just amount of compensation. DTMR contended that, using the known cost of $1,087,110 instead of the estimated cost of $3,000,000, compensation should have been less than the amount determined in the Land Court. Upon that footing, and assuming that an assessment using a combination of the before and after method and cash flow analyses was appropriate, DTMR contended that the amount of compensation should be reduced to $6,377,800 in accordance with Mr Brett’s Further Supplementary Report. DTMR also contended in its cross appeal that the Land Court erred in failing to prefer a method of assessment which separately assessed each head of Cidneo’s loss under s 20 of ALA. DTMR argued that the before and after method would not produce a fair assessment of compensation and that (any) injurious affection or severance damage should have been separately assessed with reference to the actual amount of the transport infrastructure contribution. Under that ground of the cross appeal DTMR contended that the compensation should be reduced to $6,100,000 in accordance with the “check valuation” in Mr Brett’s “Further Supplementary Report” which separately valued the resumed land at $4,533,954 and “injurious affect” at $1,530,405. In relation to that issue the Land Appeal Court held that if Cidneo’s appeal was allowed the submission that the use of the before and after method would result in an unfair assessment of compensation was somewhat speculative. Furthermore, because the contribution was relevant to the value of the land at the resumption date its amount was not to be determined by reference to knowledge of subsequent events except where they demonstrated the existence of facts known to the parties at the resumption date; it followed that the assessment of compensation would not unfair despite subsequent events turning out to be different from those known, or taken to be likely, at the date of the resumption.”7 7 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2015] QCA 96 at [18], [20] and [21]. -- 5 of 42 -- 6 [14] DTMR expressed its grounds of appeal in the following terms: “1. The Land Appeal Court erred in law in deciding: (a) That, for the purposes of s 20(1) of the Acquisition of Land Act 1967 (reprint no 5A) (“ALA”), in considering the damage (if any) caused to the retained land of the Respondent, the Land Court was not entitled to take into account events subsequent to the resumption on 22 February 2008, in particular, the cost of external roadworks agreed between the Applicant and the Respondent on 6 December 2011 (“the external roadworks costs”); (b) That neither the external roadworks costs nor any estimated transport infrastructure contributions were relevant to, or came within, severance damage or injurious affection damage, for the purposes of s 20(1) of the ALA; (c) That, where the before and after approach is used to determine compensation, in the assessment of the value of the retained land in the after case, either s 20 of the ALA or the decision in Brisbane City Council v Mio Art Pty Ltd [2011] QCA 234; [2012] 2 Qd R 1 (“Mio Art”) requires that the quantum of any costs must be fixed at the date of resumption, without taking into account any known subsequent increase or decrease in such costs;”8 Court of Appeal proceedings [15] The Court of Appeal considered only the first ground of appeal.9 [16] In the course of his decision, Fraser JA (with whom the other members of Court agreed) said: “DTMR also argued that the Land Appeal Court should have allowed DTMR’s cross appeal and assessed compensation in accordance with Mr Brett’s Further Supplementary Report. The argument was based upon the circumstance that the compensation of $6,900,000 determined in the Land Court (taking into account the estimate of $3,000,000 for the transport infrastructure contribution) exceeded the assessment of $6,377,800 in Mr Brett’s Further Supplementary Report (which took into account the transport infrastructure contribution of $1,087,110 actually required). In response, Cidneo pointed to Mr Hamilton’s opinion that if the transport infrastructure contribution actually required should be taken into account, so too should DTMR’s demand in 2010 for a contribution of $13.7 million and the time and cost required to achieve the reduction in the transport infrastructure contribution be taken into account in the cash flows. As I have mentioned, upon that basis Mr Hamilton’s evidence implied an assessment of compensation of $27,350,000 (based on a pre-construction phase of 33 months) or $22,250,000 (based on a pre-construction phase of 25 months). The exercise conducted by Mr Hamilton appears to involve contestable valuation judgments and assumptions, including an assumption that Cidneo’s holding costs (which apparently account for most of the amounts mentioned by Mr Hamilton) would not have been incurred but for the delay in reaching agreement upon the amount of the contribution. Neither the Land Court nor the Land Appeal Court has addressed those issues or made 8 Ibid at [25]. 9 Ibid at [29]. -- 6 of 42 -- 7 any determination with reference to the calculations in Mr Brett’s Further Supplementary Report. If it becomes necessary to do so, the Land Court, as the specialist tribunal established to resolve issues of that kind, should determine them. For that reason, I would hold that the Land Appeal Court was correct in not determining compensation in an amount claimed in the cross appeal. Instead, the matter should have been remitted to the Land Court for the determination of compensation.” The current proceedings [17] Accordingly, the matter was remitted to this Court for determination in accordance with the Land Appeal Court’s determination relating to grounds of appeal 2 and 3 and the Court of Appeal’s determination in respect of the first ground of appeal brought by the Department in that Court. [18] At the remitted hearing, the parties tendered an agreed bundle of documents including valuation reports prepared by Mr Hamilton and by Mr Brett, traffic engineering reports prepared by Mr Viney and Mr Beard, and affidavits of Peter McGregor and Majella Pollard. [19] The valuation reports of Mr Hamilton included two reports which post-dated the decision of the Land Appeal Court namely: an addendum report to Mr Hamilton’s compensation report of 4 November 2015,10 and a second addendum report to Mr Hamilton’s compensation report dated 3 February 2016.11 [20] Similarly, the valuation reports of Mr Brett included an addendum report by him, dated 3 December 2015.12 [21] Clearly, the documents in the agreed bundle were agreed subject to the entitlement to object to the content of the document or the use proposed to be made of it. [22] At the beginning of the remitted hearing Mr Gore QC, Counsel for the respondent, dealt with the reports of Mr Hamilton referred to correspondence sent to the applicant’s solicitors prior to the hearing. That correspondence said, inter alia; “1.1 The respondent objects to the following aspects in both the body of the report and the after resumption scenario cash-flows on the ground that the changes are outside the scope of the remitter from the Land Appeal Court or the Court of Appeal: 10 Ex R5. 11 Ex R6. 12 Ex R10. -- 7 of 42 -- 8 (a) the introduction of an 8 month delay between stages 2 and 3, with construction commencing at months 29, 35 or 41; (b) the use of an infrastructure charge of $3,000,000; (c) an increase in the pre-construction phase from 12 months to 18 months. 1.2 The Respondent objects to Mr Hamilton’s challenge in Section 2 of the report to Mr Brett’s piecemeal approach as being unreliable and not even a worthwhile check method on the ground that Mr Hamilton did not express any disagreement with Mr Brett’s evidence about those matters in the original hearing in 2011 and 2012, and so this belated challenge is outside the scope of the remitter from the Land Appeal Court or the Court of Appeal.” 13 [23] In supporting his objection, Mr Gore referred to the Land Appeal Court decision wherein it is said: “It follows that the reasons for judgment indicate that the learned Member recognised the need to determine which rate of sales should be preferred; he expressed a preference for that adopted by Mr Brett; and he gave brief reasons for doing so. It cannot be said that he failed to determine the issue. Although brief, his reasons provide some explanation for his conclusion on this question…”14 [24] Mr Gore also referred to paragraphs 77, 78, 83 and 84 of the Land Appeal Court reasons to point out that the eight-month difference between Mr Brett and Mr Hamilton was an issue in my decision; secondly, that the rate of sales of lots in stage three was a relevant issue; and thirdly, that the construction program for stage three was a relevant issue. All of those matters were raised in ground three of the appeal to the Land Appeal Court, and he further submitted that, given the Land Appeal Court’s decision in respect of those grounds, there is no scope for any further evidence or indeed for any further submissions.15 [25] With respect to the second objection (paragraph 1.2) which relates to the use of an infrastructure charge of $3,000,000, Mr Gore referred to Mr Brett’s further supplementary report.16 Mr Brett here gave consideration to the actual transport infrastructure charges of $1,087,110,000, and to which I declined to give weight on the basis that it reflected figures not available to the parties or known by them as at the date of resumption. Mr Brett had utilised those figures in his check method to confirm an earlier analysis carried out by him, and Mr Hamilton did not challenge that part of the check method at the original hearing, which matter was referred to in 13 Ex R27. 14 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2014] QLAC 3 at [82]. 15 T 1-7, line 35. 16 Ex R9. -- 8 of 42 -- 9 the two appellate Courts above, and which Mr Gore submits to Mr Hamilton is now not entitled to do. [26] Mr Gore’s basic point was that to do so would offend the basic rule about fresh evidence; if there was evidence available at the time that they could have put in, but did not. [27] In support of his submissions, Mr Gore refers to the decision in Clarke v Japan Machines (Australia) Pty Ltd,17 and in particular the observations of Thomas J (as his Honour then was), where his Honour considered that special grounds were needed before evidence which had otherwise been available at an earlier time that should be received. [28] His Honour stated: “The classic statement of what amounts to “special grounds” for reception of further evidence upon an appeal was approved recently by Lord Bridge in Langdale v Danby [1982] 3 All E.R. 129 at 137-138. Three conditions must be fulfilled. “First it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial: second, the evidence must be such that, if given, it would probably have an important influence on the result of the case, although it need not be decisive: third, the evidence must be such as is presumably to be believed, or in other words, it must be apparently credible, though it need not be incontrovertible.”” 18 [29] He also referred to the decision of the New South Wales Land and Environment Court in Leichhardt Council v Roads and Traffic Authority of New South Wales,19 which considered an application for leave to adduce further evidence on the remitter of a matter from the Court of Appeal. [30] In the course of the decision, Lloyd J said as follows: “The appeal rules relating to fresh evidence, whilst not determinative, provide a useful guide as to the manner in which the discretion should be exercised: Smith v New South Wales Bar Association [1992] 176 CLR 256 at 266-267, Carriage v Stockland Development Pty Ltd (No 5) [2004] NSWLEC 674. Those principles have been correctly identified by the council and noted in par [9](b) above.” [31] The paragraph 9(b) referred to the submissions of the appellant local government and stated as follows: 17 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404. 18 Ibid at [408]. 19 Leichhardt Council v Roads and Traffic Authority (NSW) (No 2) [2008] NSWLEC 1. -- 9 of 42 -- 10 “Three conditions must be met before fresh evidence can be admitted on appeal: (i) it must be shown that the evidence could not have been obtained with reasonable diligence for use at the trial; (ii) the evidence must be such that there must be a high degree of probability that there could be a different verdict; and (iii) the evidence must be credible: Atkins v National Australia Bank (1994) 34 NSWLR 155 at 160 per Clarke JA (Shelter JA agreeing).”20 [32] As to the second ground of objections (paragraphs 1.1 to 1.2), Mr Gore conceded that it overstated the actual position because reference to the transcript demonstrates that Mr Hamilton did disagree with Mr Brett’s check method.21 [33] In attempting to clarify his position, Mr Gore said the following to the Court: “I just wanted to add, for your Honour’s assistance and my learned friends assistance … some more specificity in relation to paragraph 1.2 of exhibit R27. Having acknowledged it’s too wide, I would like to be more specific, and if your Honour would go to Mr Hamilton’s 2016 report … and if your Honour goes to page 9 ... he is responding to parts of Mr Brett’s 2015 report. And if your Honour just reads the first sentence of paragraph 2.2 … so in that first sentence he is clearly dealing with the figure of $4.3 million that Mr Brett has referred to in all of his 2011 and 2012 reports and now repeats in his 2015 reports and it’s that evidence of Mr Hamilton which is fresh evidence that offends the fresh evidence rules. And that’s a clear example, we respectfully submit, not for your Honour to rule on now, but for ruling on at the end of the case in light of your Honour’s information of what we intended to object to.”22 [34] Mr Gore also referred to paragraphs 2.7, 8, 9 and 16.23 [35] Lest it be thought that Mr Hinson for the applicant agreed, on the face of Mr Gore’s submissions, Mr Hinson said as follows: “And the respondent submits that the scope of the remitter includes the approaches taken by Mr Brett and Mr Hamilton of their supplementary reports. And both parties seek to expand upon the issues raised in those reports, and, on the face of it that should be permitted. Now, part of that exercise involves Mr Brett now saying, and this appears from paragraph 34 on the following page, subparagraph (a). This now involves Mr Brett saying I now prefer the piecemeal method rather than the before and after method. So that now is being put forward by Mr Brett as the primary evaluation approach, not the before and after method, at the original hearing where the piecemeal was described as a check. And what the department is, in effect, saying is that now that Mr Brett wants to put forward the piecemeal mode of assessment as the primary assessment, not the check method, my side is not permitted to respond to that in the way that Mr Hamilton responds in his February 2016 report. In other words, while there is a change of Mr Brett’s preference in the 20 Ibid at [9]. 21 T 1-13, line 8. 22 T 1-15, line 20 to T 1-16, line 23. 23 T 1-16, lines 10 to 22. -- 10 of 42 -- 11 appropriate method from before and after cash flow to piecemeal method my side is not to be permitted to challenge that, and is only permitted to challenge it on the basis that we did in the primary hearing where it wasn’t the preferred method, but was simply said to be a check method. Now, your Honour might well understand a challenge to a check method evaluation in a primary hearing might not be as complete and comprehensive as a challenge to what was now said to be the preferred method of assessment. It was very much a side issue in the first hearing, because as there were – as your Honour will recall, there were joint reports saying the before and after cash flow analysis is the best way to bring out the differences. And Mr Brett simply put this up as a check method. And if your Honour has the transcript could I trouble your Honour to go back to the transcript to day six where at page 6-72 --- … This is Mr Brett’s examination-in-chief [indistinct] this isn’t meant to be something that’s precise. It’s meant to be something that assists the court in getting a feeling of a general level. So the first hearing – this was described by Mr Brett as a check method. Your Honour might recall I cross-examined Mr Brett about it, and he agreed that many of the figures that he used in the check method were themselves taken out of the cash flow. And I’ve put to him the proposition that if you use different outputs from the different cash flow, Mr Hamilton’s, for example, you’d get a different result. And he agreed. This was obviously correct. So this was very much something which was not meant to be precise. Meant to be something that assists the court in getting a feeling of a general level, and was very much a check method as a check to the before and after. Now, the department’s case is quite different. This is the preferred method. This is the one that they urge upon you. And they want to argue the before and after shouldn’t be --- the preferred method.”24 [36] The appeals above did not include any challenge to any of the reports or the methodology adopted by any of the expert witnesses (including, in particular, those of the valuers, Mr Hamilton and Mr Brett) in their various reports. [37] The appeal points which resulted in this remitter all related to the view I had taken (or in some cases failed to take) of some expert evidence. [38] The main failure, as articulated by the Court of Appeal, was my disinclination to permit use of the actual traffic infrastructure contribution of $1,087,110. Permitting that figure to be utilised resulted in the fresh reports of Mr Brett and Mr Hamilton’s response to the Court of Appeal remitter (which effectively disposed of the Land Appeal Court’s decision in respect of appeal ground one). The traffic engineering evidence 24 T 1-17, line 11 to T 1-18, line 21. -- 11 of 42 -- 12 [39] Mr Viney, who gave evidence at the original hearing, was called by the respondent. [40] The Court had before it Mr Viney’s report of 4 November 2015. [41] Mr Viney is a highly experienced traffic engineer well known to this Court, and has been involved with the subject land since the mid to late 1990s. [42] In his report he says: “the resolution of the TIC for this development has been the most difficult and longest running dispute of its kind that I have been involved in.” 25 [43] He was critical of the respondent’s position saying: “The respondent’s position seemed, from my perspective, driven more by an apparent desire to obtain a large contribution from a party that it thought it might be able to collect from rather than by a sensible and principled traffic engineering basis.”26 [44] It is beyond dispute, and the matter frankly acknowledged by most of the witnesses, that at all times up to the point at which a traffic infrastructure contribution of just in excess of $1,000,000 (actually $1,087,110) was agreed, there was a high degree of antagonism and antipathy between the applicant and DTMR. [45] It is clear to me from the evidence that that antagonism and antipathy unnecessarily extended the period of time taken to reach agreement about the appropriate contribution for traffic infrastructure. [46] It is clear on the evidence that there was a degree of suspicion by each side about the motives and bona fides of the other. [47] In his affidavit placed before the Court, Mr Viney gives a detailed outline of all of the various steps that were taken regarding traffic engineering planning in respect of the subject site, including steps that were taken to finally resolve the total amount of the Transport Infrastructure Contribution (“TIC”). [48] The evidence-in-chief and cross-examination of both Mr Viney and Mr Beard (to whose evidence I will come shortly) focused on all of the various steps that were taken by the various traffic consultants engaged with the project to try and get agreement as to the appropriate TIC. 25 Ex R11, page 2, para 5. 26 Ex R11, para 8. -- 12 of 42 -- 13 [49] A careful reading of all of the evidence and the material contained within the reports leads me to the conclusion that fault lay on both sides. [50] As the respondent sets out in its supplementary submissions: “Cidneo contends that the Land Court ought to take into consideration the actual time taken by Metroplex between the lodging of its development application for the western component of its proposed development in November 2009 and the date of the agreement with DTMR about the TIC on 6 December 2011 in the after resumption cash flows.” 27 [51] Unsurprisingly, the respondent objects to Metroplex being able to rely upon the totality of the time and costs expended to achieve a reduction in the TIC. [52] The evidence of Mr Viney, notwithstanding Mr Gore’s proposition put to him that he had a fixation in relation to this subject development that DTMR had been trying to “rip Cidneo off” provides, to me, some useful insights into the various fractures or impediments to the ultimate decision of agreement being reached. [53] The achievement of agreement with respect to the TIC had direct relevance to the question of timing of works and staging of the ultimate development. [54] For the respondent, the submissions contend that at least two of the factors which impacted upon the timing of the development related to traffic matters. [55] Those two factors were: “(a) the standard of traffic material that supported the application and was provided to DTMR during the assessment and negotiations between Metroplex and DTMR (“the standard of material factor”); and (b) any unnecessary delays and the actual time taken between the lodging of the development application and agreement with DTMR (“the unnecessary delays factor”).”28 [56] The applicant, for its part, points to the following matters: 1. Timing of communications from DTMR, including the need to respond to an information request issued on 31 March 2010;29 2. The information request on 31 March 2010;30 3. The slow response by DTMR in providing a concurrence agency response in September 2010;31 4. Demands by DTMR expressed in a briefing note in September 201032 indicating or suggesting an inclination to seek contributions from the 27 Ex R39, para 20. 28 Ex R39, paras 27(a) and (b). 29 Ex R12, pages 23 to 25. 30 Ibid. 31 Ex R14, page 469. -- 13 of 42 -- 14 developer for their proportion of traffic on the planned upgrade to the progress road and Ipswich Motorway exchange; 5. An appeal to the Planning and Environment Court by the applicant’s associated company against the conditions of approval including the DTMR concurrence agency condition.33 [57] All of those apparent delays and disruptions were, in my view, at least in part caused by the belligerence that existed between the parties and were not indicative of a timeframe that would be contemplated by the traditional hypothetical purchaser and vendor. [58] My view as to the blame for the time taken being visited on both parties being somewhat out of the ordinary is confirmed by a reading of the report prepared in December 2015 by Mr Beard. [59] In the same way as Mr Viney was critical of the respondent’s conduct in the negotiations for the transport infrastructure contribution, so is Mr Beard extremely critical of the conduct of the applicant, and, in particular, critical of the quality of the traffic engineering data and the analysis provided by the applicant to DTMR. [60] In his report, Mr Beard observed as follows: “This report does identify some significant impacts of generated traffic on the State-controlled road network. However, directly contrary to the Traffic Impact Information Request, it provides no recommendations on works which might be considered necessary to ameliorate the impacts of the generated traffic. Instead, on page 7 it simply states “as the land is designated for industry uses and road safety is not compromised, the application should be approved.” That is, in terms of the four basic steps expected to be included in a traffic impact assessment report (see paragraph 21), this report dealt with the first step, partially dealt with the second step, but made no attempt to provide information in respect of the third and fourth steps. Despite the very clear guidance provided by the DTMR letter of 31st March 2010, this traffic report submitted by the applicant was essentially still arguing that the impacts of their traffic generations were not their responsibility. Information relating to the third and fourth steps (necessary road network upgrading) was not submitted until early December 2010, six months after this report of May 2010. In my opinion, the identification of the impacts of the proposed development and the identification of works which would ameliorate those impacts was never particularly complex. All of the information required for a traffic impact assessment dealing with all relevant impacts was 32 Ex R17, pages 309 to 311. 33 Ex R14, para 171. -- 14 of 42 -- 15 available from mid-2010. From that time, there were no traffic engineering issues which necessitated significant delays in the approval process.” 34 [61] In my view, there is no proper basis for regarding the period of time taken between the applicant and the respondent to reach agreement on traffic infrastructure contribution matters as indicative of what the prospective purchaser and prospective vendor may have done in a Spencer-type situation. [62] I am more comforted by the evidence of Mr Viney about the likely time that might be taken to reach agreement. [63] In his submissions, Mr Hinson says: “now, there is a good deal of criticism in the respondent’s submissions directed towards Metroflex saying “well, look, you sat on your hands. If you’re acting reasonably, you could have done this.” It takes two people to make an agreement and all I’m simply trying to identify is that on the Department’s side there was an attitude, to, which was not necessarily receptive to a meeting of the minds. Now a resolution did occur. It occurred on the eve of the commencement of the appeal for the western application.”35 The valuation evidence [64] Consequent upon each of the appeals above, each of the parties to this matter engaged their respective valuers to prepare supplementary reports. [65] For the applicant, Mr Hamilton produced a report dated 4 November 201536 and a second addendum report dated 3 February 2016.37 [66] For the respondent, Mr Brett produced a supplementary valuation report dated 23 November 2011, and what it described as an addendum report dated 3 December 2015 following the Land Appeal Court decision.38 [67] A starting point from the outset was that the valuers agreed, on the basis of what they described as comparable en-globo sales, that the value of the land in the before case was $60,877,800, which was based on a value of $60 per square metre of land area.39 34 Ex R12, page 6, paras 30 to 33. 35 T 4-37, line 19. 36 Ex R5. 37 Ex R6. 38 Ex R10. 39 Ex 29, page 55; Ex 30, pages 16, 18 and 23; Ex 71, page 5 and T 3-46, lines 32 to 33. -- 15 of 42 -- 16 [68] That valuation was not the subject of any of the appeals above. [69] For this appeal, Mr Brett has revisited the cash flow figures in the before case contained in his December 2015 report. [70] I cannot glean from the decisions of either the Land Appeal Court or the Court of Appeal any basis upon which he is entitled to do this in respect of the before case. [71] The applicant in their submissions say as follows:40 “The before value was an input to the before cash flow to derive an IRR which was then used as an input to the after cash flow to derive the after value. Mr Brett’s before cash flow in Ex 61 produced an IRR after interest of 8.65% which was then input to his after cash flow. Mr Brett revisits the before cash flow in his December 2015 report. That is outside the scope of either remitter order. Ground 3 of the appeal to the Land Appeal Court was solely concerned with the construction staging period in the after case not the before case. The appeal to the Court of Appeal related to the TIC in the after case, not the before case. The before case was and remains hypothetical. No development application was made for the before case highest and best use. The TIC was not agreed by reference to the facts of the before case. The Land Court has determined that the before TIC would be $3 million and there is no reason to change that figure. There is no basis to revisit the before cash flow by substituting $1.087 million for $3 million as the TIC. As Mr Brett acknowledged in his March 2012 report, the before TIC would not be less than the after TIC and would likely be higher. That is the effect of Mr Beard’s evidence also.”41 [72] The remitter clearly permits the contemplation of the actual figure of the TIC, but nowhere can I read into the reasons of either Court above a warrant for changing the methodology that was used by either party. [73] In his written submissions at the conclusion of the remitted hearing, Mr Gore characterised the positon as follows: “The basic issue remains – what is the impact of the decision of the Court of Appeal on the assessment of compensation of $6,900,000 by this Court. The specific sub-issues also remain as: The Stage three issue The Time and Cost issues The Ground 2 issue The Piecemeal issue The Proper assessment of compensation.”42 40 Ex 38, paras 10 to 12. 41 See T 3-13 line 25; T 3-25 line 41 to T 3-26 line 15 and Ex R12, para 37. See also Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2013] QLC 47 at [215]. 42 Ex 39, para 3. -- 16 of 42 -- 17 [74] With respect to those issues, a number of matters emerged from the opening submissions filed by the parties on the remitter. The applicant identified its primary case in the following terms: “Cidneo’s primary case (Mr Hamilton’s Cash Flow 1) is that Mr Brett’s cash flow should be adjusted in four respects: “the TIC is reduced from $3,000,000 to $1.087 million; the preconstruction phase is increased from 12 months to 24 months; the cost of negotiating the TIC agreement is substituted for the cost of a traffic network analysis; construction of stage 3 commences at month 41 instead of eight months earlier.” 43 [75] The reduction in TIC to $1.087 million is not contentious as between the parties, and accordingly it becomes unnecessary to consider Mr Hamilton’s Cash Flows 3 and 5 in his 2016 report44 in that regard. [76] Similarly, with respect to Mr Hamilton’s 2016 report, the applicant informs the Court that “with a view to minimising the area of dispute and the issues to be determined Cidneo will not pursue the sales rate issue. Mr Hamilton’s February 2016 Cash Flows adopt a sales rate of two sales per calendar month for Stage 3.”45 [77] As Mr Hinson informed the Court during his opening: “To the rate of sales, and as I said, that’s now disappeared because in the cash flows that Mr Hamilton has done, he said, look, let’s not have that argument, I’ll just adopt Mr Brett’s rate of sales. I’ll try and keep them simple. So that’s fallen by the wayside.”46 [78] In that regard, the Land Appeal Court in respect of ground 3 then before it said: “These conclusions provide a sufficient basis on which to uphold the appeal on Ground 3. It should, however, be said that there must be a real doubt about the validity of Mr Brett’s approach to the rate of sales. As has been mentioned, he proceeded on the basis that the speculative market of 2007 would continue, notwithstanding the increases in interest rates up to February 2008, and the increased difficulty in obtaining finance. Particularly against that background, there is a very real question whether the hypothetical prudent vendor and purchaser would assume the continuation of a speculative market for a further period approaching four years. If Mr Brett’s rate of sales were not adopted, this could well have implications for the assumed construction program. With slower sales, a developer might be more inclined to delay construction for Stage 3 to reduce its risks and its interest of liabilities.”47 43 Ex R24, page 3, para 14. 44 Ex R6. 45 Ex R24, page 4, para 26. 46 T 1-20 lines 22 to 26. 47 Cidneo Pty Ltd v Chief Executive, Department of Transport and Main Roads [2014] QLAC 3 at [88]. -- 17 of 42 -- 18 [79] That apparent concession does arguably relieve me of the duty to give adequate reasons as to why I accepted Mr Brett’s approach to the rate of sales since it is now not contentious. [80] In his opening submissions, Mr Hinson also told the Court: “can I just mention, in that regard, to-Ground 2 of the Appeal to the Land Appeal Court – your Honour may have seen, from the written submissions, concerned this extra six months in the after case for traffic analysis. That’s now disappeared and been subsumed in the issue canvassed in Mr Hamilton’s supplementary March 2012 report about whether one needs to take into account if one can have regard to a subsequent event, that being the agreement about the amount of transport infrastructure contribution in the after case – whether one can also have regard to the time and cost taken in achieving that outcome in making the assessment of compensation, and as I indicated earlier, paragraph 32 of the respondent’s submissions on the remitted hearing, exhibit R26, appears to accept that the scope of the remitter includes the approaches taken by Mr Brett and Mr Hamilton in their supplementary reports.”48 [81] In his most recent report, Mr Brett explains why, in essence, he has changed courses and now wants just to rely upon a piecemeal approach dependent on cash flow analysis.49 [82] He says: “Providing the before and after returns are consistent it is appropriate to determine the compensable loss (apart from disturbance matters) by the piecemeal addition of the per hectare value of the resumed land plus the per hectare impacts on the retained land of the components identified in paragraphs 2.6.1, 2.6.2 and 2.6.3 above. This is the basis of my assessment on pages 25 and 26 of my valuation report dated 17 November 2011. From the Court of Appeal decision it is clear that post-resumption events impacting on the value of the retained land may be brought to account. On this occasion post resumption changes have occurred, at least in respect of identification of the TIC cost. In these circumstances the summation of the value of the resumed land and of the value of injurious affects on the retained land is my preferred method.”50 [83] The reference in paragraph 2.12 to Mr Brett’s valuation report dated 17 November 2011 (actually 15 November 2011) reveals that he did not in fact rely upon this piecemeal approach as his basic valuation exercise. 51 Rather, it was contained in the report as a “check valuation” and disposed of in one and a half pages. 48 T 1-20, lines 25 to 37. 49 Ex R10, page 5, paras 2.12 to 2.13. 50 Ex R10, page 5, para 2.12. 51 Ex R7. -- 18 of 42 -- 19 [84] I can see nothing in the Court of Appeal decision which entitles Mr Brett to do other than to incorporate the actual TIC figures into his report and not to create a whole new methodology for expressing his views. [85] When questioned by Mr Hinson as to why he now contends that it is preferable to do a piecemeal assessment rather than a before and after cash flow analysis, Mr Brett responded as follows: “I don’t mind the cash flow. It’s a reverse of what I’ve spoken of in the past. The cash flow’s there certainly to quantify those holding charges. The cash flow’s there to see what comes of the cash flow and if it differs from the piecemeal, you need to reconcile the two and see which you prefer to go with. But on this occasion, what triggers it really is the Court of Appeal’s decision as a – something of a reminder to be somewhat more flexible in these matters, not being wedded to the before and after approach for the last 40 years and then treat something else as some kind of check method. I revisit this one and there’s a good deal of clarity that can be obtained from the piecemeal method in respect of the quantification of the value of the resumed land and the quantification of the injurious effects or, if there was, enhancement on the retained land.” 52 [86] His previous apparent disdain for that approach is apparent from a subsequent answer given by him where he said: “The use of the subsequent information made me realise that you can’t close your mind to the piecemeal method. Here’s an occasion where, if events have happened after the acquisition, you need to then revisit the exercise to substitute those costs to bring those to account and that got me thinking in respect of the means by which you could reasonably quantify the components of the piecemeal method. Sot it was a reminder rather than some dramatic event.” [87] Notwithstanding his strident support for the piecemeal assessment as the preferred approach, Mr Brett acknowledged in cross-examination that he could not recall a case where he had used a piecemeal assessment as his preferred method of assessment of compensation.53 [88] Prior to that concession by Mr Brett, he had confirmed to Mr Hinson that, in respect of the before and after cash flow methodology, which involves putting material into the cash flow, amongst the things to go into that cash flow were: 1. The development yield; 2. Construction costs; and 3. Construction periods. 52 T 3-41, lines 23 to 34. 53 T 3-44, line 37. -- 19 of 42 -- 20 All of which matters were subject of agreement between him and Mr Hamilton.54 [89] Mr Brett agreed with the proposition put to him by Mr Hinson in cross-examination that by comparison with a lot of other cases there are far fewer uncertainties involved in doing a cash flow analysis in this case, but he added that “those outstanding uncertainties can have a big impact on the conclusion reached.”55 [90] One of those uncertainties had been taken out of the equation because in Mr Hamilton’s February 2016 report,56 he had adopted the sales rates contended for by Mr Brett.57 [91] There remained differences between Mr Brett and Mr Hamilton about when stage three construction should start, and whether the appropriate period was a 12 month period or a 24 month period. [92] The following passage of cross-examination, to my mind, subsequently summarises the position exclusive of Mr Brett’s inclination to use a piecemeal approach: “And on the approach that you and Mr Hamilton took in this case you said that a before and after cash flow analysis was the appropriate way to go because – and the appropriate way to deal with that was to put yourself in the position of the hypothetical prudent purchase as at the date of resumption, February 2008 --- Correct. All right. And on that basis you and Mr Hamilton received different advice from traffic engineers about what an input into the cashflow, a transport infrastructure contribution, would be? --- Yes, yes. Yes? --- Sorry. And now each of you are putting in a different figure, 1.087 million ---? --- Yes. --- at least in the after case. That’s common to both of you? --- Correct. And Mr Hamilton doesn’t revisit the before case and I’ll come to that shortly? --- Yes. But you use the same figure in the before case? --- I do.”58 [93] Following that, Mr Brett conceded the fact that he put in a different input figure for the transport infrastructure contribution based upon a subsequent event, as opposed 54 T 3-42, lines 20 to 38. 55 T 3-43, lines 15-16. 56 Ex R6. 57 T 3-43 line 21. 58 T 3-45, lines 26 to 44. -- 20 of 42 -- 21 to a figure based upon foresight at the time of resumption, did not mean that the before and after cash flow analysis method ceased to be an appropriate method.59 [94] Mr Brett conceded that those propositions did not drive the decision about whether to use the piecemeal or the cash flow approach. [95] Invited to explain why he chose a piecemeal approach rather than a before and after cash flow analysis for the current remitted hearing Mr Brett told us as follows: “Well, it’s what I touched on before, the reminder from the Court of Appeal’s decision that there are the occasions where it’s appropriate to look at the piecemeal because a subsequent event might affect the value, but that was only a trigger to – as a reminder that you do not need to look at both the piecemeal and the cash flow, so I look at the piecemeal and the cash flow, and then re-looking at the piecemeal approach it seems to me there is considerable transparency and considerable ability to quantify each of the relevant components and leave somewhat unclear and unexplained what drives all of the issues in the uncertainty of the cash flow.” [96] Mr Brett conceded that there was nothing in the Court of Appeal decision which gave him comfort to revert to using the piecemeal approach. [97] He also confirmed that he remained comfortable with the before figure for value of $60 million (or more correctly, $60,877,800). [98] By way of clarification, Mr Brett told Mr Hinson that he had worked on a $60 million figure but that if they were doing a current valuation exercise then they were looking at a before figure of $60,877,800 then everything would come up by $877,800.60 [99] Having regard to what transpired in the Land Appeal Court and in the Court of Appeal I can find no basis for Mr Brett to now change his primary approach to a piecemeal approach, and accordingly do not propose to rely upon that particular part of his evidence in respect of the before case. [100] I do, however, have the view that his approach is responsive to the observations of Dalton J in the Court of Appeal. [101] Her Honour said: “A decision needs to be made as to the matters raised by Mr Hamilton in his March 2012 report. Quite apart from that, the matters decided by the 59 T 3-45, line 46 to T 3-46 line 3. 60 T 3-48, line 21. -- 21 of 42 -- 22 Land Appeal Court as to appeal ground 2 and appeal ground 3 are not resolved by an agreement as to the amount of TIC. They need to be determined by the Land Court. As well, it seems to me that the valuers will need to revisit their evidence, and that the parties will need to spend some time ensuring that the evidence which is presented to the Land Court is coherent and in a framework consistent with s 20 of the Act.”61 [102] I am satisfied that both Mr Hamilton and Mr Brett have attempted to do that in respect of the after case. [103] The before case was not the subject of any appeal point, and I do not propose to revisit it. Nothing in the Land Appeal Court decision nor in the Court of Appeal decision suggests I should do so. [104] Mr Hinson’s final submissions on behalf of the applicant set out how that before case was calculated and it is unnecessary to recite everything that he says here.62 [105] Mr Brett’s report of December 2015 seems to anticipate the objections taken against him. 63 He says: “My approach and valuation are unchanged from the Alternative (b) check valuation on page 5 of my March 2012 Further Supplementary Report. These proceed on the basis of a 12 month approval period and a $100,000 traffic network study both before and after the resumption. It excludes Mr Hamilton’s 8 month delay in the release of stage 3. The approach separately quantifies the value of the resumed land and that of the various injurious affects calculated as: Injurious affect $1,530,405 Value of resumed land $4,533,954 Total $6,064.359 Rounded to $6,100,000” 64 [106] Mr Brett’s December 2015 report was prepared after the Court of Appeal made its decision. It addressed the incorporation of the traffic infrastructure charge of $1,087,110. [107] Mr Brett’s December 2015 report moves away from the approach he adopted earlier. He explains his use of the piecemeal approach this way: “2.5 Before and after cash flow exercises are necessary on this occasion because the direct comparison approach is not sufficiently sensitive to quantify the resumptions impacts on the retained land. The size and nature of this property, with its potential for industrial subdivision, means comparison with prices 61 Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96 at [87]. 62 Ex R38, page 2, paras 8-12. 63 Ex R10. 64 Ibid, page 8, para 5.1. -- 22 of 42 -- 23 paid elsewhere cannot account for all variables relevant to each site’s development characteristics and costs. Adverse impacts on the retained land are best brought to account by accommodating each within the post resumption cash flow. 2.6 For this property the resumption’s affects on the retained land, best expressed as a rate per hectare of developable land, are: 2.6.1 lower net realisations from allotment sales 2.6.2 high development costs, including holding costs (council rates and government land tax), over the life of the project, and 2.6.3 lower interest costs over the life of the project.” 65 [108] True it is to say, however, that he did use a piecemeal cash flow approach by way of a check valuation.66 [109] In his supplementary report of 23 November 2011,67 he amended that report to reflect the calculation of goods and services tax and both the before and after cash flows and to accommodate a 40-metre tree retention and rehabilitation buffer.68 [110] In his yet further supplementary report,69 he then incorporated the figure of $1,087,110 and produced calculations in the before and after utilising the $1,087,110 figure. [111] In that report of 14 March 2012, he calculated the loss in value as $6,377,800.70 [112] To some extent, Mr Brett’s approach in March 2012 was prophetic of the decision of the Court of Appeal. [113] In the March 2012 report, Mr Brett adopted two different approaches with respect to the before situation. [114] The first alternative was to contemplate a pre-resumption contribution of $2 million and a post resumption contribution of $1,087,110.71 65 Ibid, page 4, paras 2.5. to 2.6.3. 66 Ex R7, page 19. 67 Ex R8. 68 Ibid, page 2. 69 Ex R9. 70 Ibid, page 5. 71 Ibid, page 3. -- 23 of 42 -- 24 [115] The second alternative embraced by him was to contemplate the contribution of $1,087,110 in both the pre- and post-resumption situations. [116] The utilisation of the $2 million contribution was premised upon estimated figures for a pre-resumption contribution to both the Progress Road intersection and the Centenary Highway intersection. [117] The first alternative presented by Mr Brett resulted in the loss being quantified as $5,400,000 based upon the check valuation approach, and $5,877,800 based upon the cash flow approach. [118] Pursuant to the second alternative approach, that resulted in quantification of the loss based upon the check valuation in his report of $6,100,000 and a loss of $6,377,800 if reliance is placed upon the cash flow approach.72 [119] In his report of 3 December 201573 Mr Brett prepared four cash flows each of which adopted a 24-month approval period both pre- and post-resumption but which excluded the eight-month stage 3 delay. (That being the delay contended for by Mr Hamilton). Those four alternative cash flows produce the following values in each case:74 A table summarising these values follows. The cash flows are contained in Attachments One to Four of this report. BRETT MARCH 2012 REPORT (Based on 12 month approval period and $100,000 traffic network analysis) Land Value IRR Before Resumption $60,877,800 9.12% After Resumption $54,500,000 9.03% Difference $ 6,377,800 Piecemeal assessment $ 6,064,359 CASHFLOW 1 (Based on the $60,000,000 pre-resumption value, 24 month approval period and $100,000 traffic network analysis) Land Value 72 Ibid, page 5. 73 Ex R10. 74 Ibid, page 7. -- 24 of 42 -- 25 IRR Before Resumption $60,000,000 5.97% After Resumption $53,000,000 5.98% Difference $ 7,000,000 Piecemeal assessment $ 5,071,766 CASH FLOW 2 (Based on the $60,000,000 pre-resumption value, 24 month approval period and $241,236 litigation cost) Land Value IRR Before Resumption $60,000,000 5.92% After Resumption $53,000,000 5.93% Difference $ 7,000,000 Piecemeal assessment $ 5,074,345 CASH FLOW 3 (Based on a pre-resumption return of about 9.04%, 24 month approval period and $100,000 traffic network analysis) Land Value IRR Before Resumption $52,350,000 9.06% After Resumption $46,500,000 9.05% Difference $ 5,850,000 CASH FLOW 4 (Based on a pre-resumption return of about 9.04%, 24 month approval period and $241,236 litigation cost) Land Value IRR Before Resumption $52,275,000 9.04% After Resumption $46,425,000 9.04% Difference $ 5,850,000 The traffic engineering evidence [120] In his closing submissions Mr Gore said: “and it’s really, at bottom, your Honour’s acceptance of the Department’s case that in terms of traffic impacts there was no material difference -- 25 of 42 -- 26 between the before and after case. There was significant impacts in the before case there was significant impacts in the after case, and your Honour accepted that in the result, the amount of time taken in the before-case to obtain the relevant preconstruction approvals would be the same as in the after case, and that, in effect, in both cases there would be a need for a traffic study, which was the thrust of Mr Beard’s evidence.” 75 [121] For the remitted hearing, Mr Hamilton prepared a report dated 3 February 2016.76 [122] In explaining the genesis of his report he wrote: “… I have been instructed to prepare post resumption cash flows adopting adjustments to Mr Brett’s after resumption cash flow contained in his supplementary report dated 23 November 2011. The purpose of this report is to: (1) Provide an after resumption cash flow that takes into account a correction to Peter McGregor’s evidence as to the cost of the litigation required to resolve the TIC; (2) Provide the Court of post resumption cash flows that take into account possible alternative findings which it might make if my assessment is not preferred or is preferred only in part; (3) Provide a reply to Mr Brett’s addendum report dated 3 December 2015.” [123] In his report, Mr Hamilton presents three alternative cash flows (cash flow 3, 4 and 5) which adopt a traffic infrastructure charge of $3,000,000.77 [124] In light of the Court of Appeal findings with respect to the TIC charge, I do not propose to consider those cash flows where Mr Hamilton has ignored the apparent preference of the Court of Appeal for the $1,087,110 TIC, and sought comfort in the $3,000,000 figure opined by him. [125] Both cash flows 1 and 2 adopted an internal rate of return of 8.68 percent and applied a cost to litigate the TIC of $214,497 as per Mr McGregor’s 4 February 2016 affidavit.78 [126] As to that $214,497 figure, in her cross-examination of Mr McGregor, about the figures advanced by him in his affidavits Ms Brien was able to elicit from Mr McGregor numerous concessions that the figures which she had used were, to express it colloquially, “a little rubbery.” 75 T 4-9, lines 1 to 10. 76 Ex R6. 77 Ex R6, pages 4 to 7. 78 Ex R16. -- 26 of 42 -- 27 [127] There were really two important aspects of her cross-examination which lead me to the view that the figure of $241,236 contended for as the actual cost incurred by Cidneo in achieving resolution of the TIC issue are unreliable. [128] The first of those is the amount claimed by Mr McGregor in his role as a consultant and town planner, as opposed to his assertion in his evidence that he stood in the shoes of the developer because Mr Pradella had lived overseas for some years.79 [129] The claim by Mr McGregor was a figure of just over $80,000. It was the biggest single figure in the calculation. [130] In their submissions to the Court, the respondent asserted as follows: “The hypothetical exercise necessitated by the resumption does not assume that the hypothetical prudent purchaser is an overseas resident. Rather, it assumes that the hypothetical prudent purchaser is a “johnny-on-the-spot” – who would not factor into his costs in the cash analysis some costs referable to a consultant engaged by an overseas purchaser. All of Mr McGregor’s claimed amount of $80,000 fails on this ground alone.”80 [131] In aid of that proposition, the respondent refers to a line of authority in Queensland to the effect that costs attributable to the time spent by an owner in preparing a compensation claim are not recoverable.81 [132] The second ground upon which the respondent challenges the figures contended for in Mr McGregor’s affidavit is his inability to justify some of the amounts, and the frequent response that he either “did not know, had no idea, had made a complete guess, did not understand what had happened here, and I don’t maintain it” were unconvincing.82 [133] The respondent also points to the applicant’s final submissions. The applicant submitted the schedule of deductions which had been conceded by Mr McGregor in cross-examination totalled $36,600.83.83 79 T 1-90, lines 22 to 36. 80 Ex R39, page 22, para 77. 81 Ex R39, page 2,2 para 78. See Heavey Lex No 64 Pty Ltd v Chief Executive, Department of Transport [1999] QLC 133 at [451] to [453]; Heavey Lex No 64 Pty Ltd v Chief Executive, Department of Transport (2001) 22 QLCR 177 at [184]. 82 T 1-44 to T 1-64. 83 Ex R38. -- 27 of 42 -- 28 [134] It is unnecessary to identify those items acknowledged by the applicant individually, but most of them relate to work that was unrelated to the subject claim or constituted doubling up. [135] That concession by the respondent would reduce the amount claimed from $214,497 to $177,400. [136] As to the claim by Mr McGregor for a figure of just over $80,000 for his consultancy work, I am of the view that there is merit in the respondent’s submissions. Mr McGregor’s evidence was to the effect that he effectively became the alter ego of the developer, Mr Pradella, who lived overseas. There was, to my recollection, no evidence at all of any involvement by Mr Pradella as the principal, and while Mr McGregor was paid for his efforts, a lot of what he was doing was clearly work that Mr Pradella would otherwise have done himself and for which, in my view, he is not entitled to claim. [137] If one was to take a strict view of the documentary evidence advanced to support the $214,000 claim, much of it would fall by the wayside because of the lack of specificity for detail in the documentation. Clearly, some figure has to be allowed for the negotiation efforts which achieve the reduction in the TIC. [138] The respondent also points to the absence of any documentary support for the figures contended for by Mr McGregor,84 and Mr McGregor’s concession in response to a question from me that even if the Department had not sought any contribution, many of the invoices would relate to work that would have inevitably have to have been done in any event.85 [139] To some extent, concerns about the precision of Mr McGregor’s evidence are mitigated by the evidence given by Mr Hamilton as to what the effect would be on his modelling exercise if the TIC was, for example, reduced from $214,000 to say $100,000.86 [140] When asked to assume that reduction from $214,000 to $100,000 Mr Hamilton said: “Because the cost is up at the beginning of the cash flow, it will have an impact, but because the project takes over many many years it’s not the 84 T 1-68, lines 36 to 40. 85 T 1-81, lines 12 to 18. 86 T 2-45, lines 1 to 10 -- 28 of 42 -- 29 case where you deduct $100,000 or $200,000 from the actual land value. So if you reduce that TIC contribution from $214,000 to $100,000, all other matters remain the same, the value would increase, but not to the same extent as the $100,000.”87 [141] While Mr Hamilton was unable to give an accurate answer off the top of his head, he did inform the Court that the increase in the value would be less than the $114,000 difference between the two figures. 88 Doing the best I can with the evidence that was before me, and putting aside some serious doubts about the lack of substantiation of some of the claims, I think it would be fair to allow a figure of $100,000 for those negotiations in lieu of the $214,000 claim. [142] I observe that a $100,000 reduction in a value of $67 million dollars represents less than one percent (by my calculation, 0.149 percent). [143] In his most recent report Mr Hamilton assessed: “I consider that Mr Brett’s cash flow four – after resumption most closely reflects the actual after resumption scenario. His after resumption valuation is $46,425,000. Mr Brett’s after resumption valuation of $46,425,000 is relatively similar to my after resumption valuation of $45,750,000 based on a delay of 24 months. The difference in value would reflect what I consider an error in Mr Brett’s valuation in that he commenced construction of Stage 3 well before it would have been prudent to do so.” 89 [144] Based on the agreed pre-resumption valuation of $60 million and Mr Brett’s cash flow 4 after resumption valuation of $46,425,000, the compensation payable would be $13,575,000. [145] That cash flow 4 calculation of Mr Brett’s, it should be noted, includes an infrastructure charges item of $1,087,000, and a cost of litigation to reduce the DTMR contribution of $241,236.90 [146] Mr Hamilton attributes the difference in Mr Brett’s valuation to what he described as an error insofar as Mr Hamilton contends that Mr Brett commenced construction of stage three before it would have been prudent to do so, and that constitutes the overlapping construction period which is a point of difference between Mr Hamilton and Mr Brett. 87 T 2-45, lines 4 to 9. 88 T 2-45. 89 Ex R6, page 13. 90 Ex R10, attachment 4, page 43. -- 29 of 42 -- 30 [147] In his February 2016 report Mr Hamilton explains his approach this way: “In my 4 November 2015 Addendum report I adopted Mr Brett’s post- resumption cash flow with a number of amendments. These amendments were included in the cash flow in order to take into consideration comments within the judgement of the Court of Appeal. These included:  Delay of 8 months for commencement of construction of Stage 3 after completion of Stage 2 – See the Land Appeal Court Judgement at [83].  Pre-construction approval period of 24 months.  Provision of $241,236 for the cost of litigation to reduce DTMR contributions.  Removal of the traffic network analysis cost of $100,000. In order for my post-resumption cash flow, which was based on Mr Brett’s post resumption cash flow to reflect the same level of return that Mr Brett had selected, it was necessary for my cash flow to deliver an IRR of approximately 8.68%.”91 [148] Mr Hamilton agrees that the $60 million value should remain as the pre-resumption land value, but disagrees that that figure of $60 million should be the primary determinant of the value of the land resumed.92 [149] Mr Hamilton states: “what is required in my opinion to fairly assess compensation in this case is to assess the value of the property before resumption and the value of the land after resumption. The difference between the two figures reflects not only the land taken but severance, injurious affection and enhancement. The exercise undertaken by Mr Brett does not satisfy this approach.” [150] In making that observation, it might be inferred that he was influenced by the observations of Dalton J in the Court of Appeal decision where her Honour observed: “… the matters decided by the Land Appeal Court as to appeal ground 2 and appeal ground 3 are not resolved by an agreement as to the amount of TIC. They need to be determined by the Land Court. As well, it seems to me that the valuers will need to revisit their evidence, and that the parties will need to spend some time ensuring that the evidence which is presented to the Land Court is coherent and in a framework consistent with s 20 of the Act.”93 [151] Accepting as Mr Hinson said, by Mr Hamilton adopting Mr Brett’s rates of sales, ground of appeal 2 has evaporated but there still remains to be considered ground of 91 Ex R6, page 8, paras 1.4 to 1.5. 92 Ex R6, page 9, para 2.3 93 Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96 at [87]. -- 30 of 42 -- 31 appeal 3, which dealt with the eight month delay for the commencement of construction of stage 3 after completion of stage 2. [152] In my original decision I accepted the view taken by Mr Brett. [153] The Land Appeal Court loosely pointed out that it appeared I had not properly contemplated the evidence given by Mr Whitelaw, a chartered accountant specialising in property development finance. [154] Mr Whitelaw’s evidence based upon the Gantt chart prepared by him was to the effect that the early commencement of stage 3 assumed by Mr Brett was uncommercial and not the action of a prudent developer. [155] In his affidavit tendered before the Land Appeal Court, Mr Hamilton expressed the following: “Mr Brett and Mr Hamilton differ in their ‘before’ and ‘after’ construction timeframes by a total of 21 months. Mr Brett opines the construction timeframe in the ‘after’ will be completed 10 months earlier than the ‘before’ development (47 months in the ‘before’ including gaps between stages and 37 in the ‘after’). Mr Hamilton opines the construction timeframe in the ‘after’ will be completed 5 months later than the ‘before’ development (43 months in the ‘before’ including gaps between stages and 48 months in the ‘after’). Mr Hamilton also takes the view that the commencement of construction will be delayed by 6 months as a result of the severance and injurious affection in the after case. Apart from the six month delay, the main differences between Mr Brett and Mr Hamilton are – Mr Brett starts Stage 4 one month later than Mr Hamilton in the ‘before’ 1 month Mr Brett starts Stage 1 three months later than Mr Hamilton in the ‘before’ 3 months Mr Brett starts Stage 3 five months earlier than Mr Hamilton in the ‘after’ 5 months Mr Brett starts Stage 4 six months earlier than Mr Hamilton in the ‘after’ 6 months At Mr Hamilton’s request, I have prepared Gant charts illustrating the staging of each valuer which are located at pages 1 and 2 of the bundle. A prudent developer who relies on bank funding to undertake development would, in my experience, usually only commence the next stage of a construction once they had achieved sufficient pre-sales of the prior stage and settlements of most lots in the stage prior to that. -- 31 of 42 -- 32 Page 5 of the bundle is entitled ‘Lots Sold and Settled before commencement of next stage’ and shows that in the cash flow models prepared by Mr Brett and Mr Hamilton there is one significant item which does not meet these principles (highlighted) blue, namely Mr Brett’s model whereby he suggests Stage 3 in the ‘after’ would commence so early that there would probably be no pre-sales and certainly no settlements of Stage 1. In my opinion that is ‘unbankable’, uncommercial and not the action of a prudent developer. By the term ‘unbankable’ I mean that such a position would not be acceptable, in my opinion, to a financier lending to fund the construction of any given stage on generally accepted practices. Based in my experience in property finance, I would concur with Mr Hamilton’s view that construction of stage 3 in the ‘after’ case would commence 5 months later than Mr Brett’s timing. With any four stage land development, I would normally expect there to be three peaks in stock on hand as construction of new stock is undertaken. On occasions, I have seen developments with four peaks – this arises when the second stage is not commenced prior to any settlements from the first stage. In this case, both valuers have proceeded on the basis (in both the ‘before’ and ‘after’ case) that commencement of the second stage will proceed prior to any settlements in the first stage.”94 [156] The “bundle” to which Mr Hamilton referred in that affidavit was a bundle of documents attached to that affidavit and included a series of graphs comparing the consequences of the staging contended for by each of the valuers. [157] Those graphs show the peaks and the availability of land stock created by the land developer coming on to the market. The graphs show that in the before case, each of Mr Brett and Mr Hamilton had three peaks of stock of land. [158] In the after case, Mr Hamilton’s proposed staging had three peaks whereas Mr Brett had only two. [159] Mr Hamilton relied upon that as demonstrating, in his opinion, “that Mr Brett’s model brings on stock of land too early and is not the action of a prudent developer.” [160] Mr Whitelaw said, clearly having regard to cash flows being achieved form earlier stages of development, said that Mr Brett’s “two peak” scenario was disadvantageous for a number of reasons:95 94 Ex R36. 95 Ex R36, page 5, para 25. -- 32 of 42 -- 33 “(a) It would be difficult to attract finance to construct stage 3 while no settlements have occurred in stages 1 and 2. (b) If finance was obtained, the effect of this construction timetable is that stock on hand levels are significantly higher than the level held by a prudent developer and therefore interest costs would also be significantly higher. (c) Developers, in my experience, do not want to have an oversupply of stock, particularly in a period of rising interest rates. (d) By bringing on stage 3 without experiencing the results of stages 1 and 2 the developer loses the flexibility to alter lot sizes or otherwise adapt the design to meet the market or changes in market conditions.” [161] In her decision in the Court of Appeal, Justice Dalton drew attention to the decision in Mio Art:96 “The decision of this Court in Mio Art recognised that s 20 of the Act deals with two separate elements of compensation: the value of the land taken, and damage caused by severance, injurious affection and disturbance. The decision recognised that the Act requires that the value of the land taken be assessed as at the date of the acquisition. Further, that damage caused by the other three matters will often be quantified by reference to post- acquisition events – [51], [75]. Where the entirety of a land-owner’s lot is resumed, the only relevant enquiry for the Court is the value of the land taken. However if part of a land-owner’s lot is resumed, the Court may in addition need to enquire as to: damage caused by severance, injurious affection, disturbance and enhancement. In cases of the latter type, a short-hand method of assessing compensation known as the ‘before and after method’ has been used regularly. It is described by Spigelman CJ in Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority of New South Wales: “… That method involves subtracting the market value of the residue land (i.e. the part of the property that was not acquired and remains the property of the Appellant) from the market value of the entire property prior to acquisition.”” 97 [162] As was made clear in the cross-examination of Mr Whitelaw by Mr Gore, Mr Whitelaw was by no means an entirely aloof witness. He is Director of Brescia Investments, a registered shareholder in Cidneo. [163] He is also a Director of Metroplex Management Pty Ltd, a company associated with Mr Pradella and Cidneo.98 [164] Mr Whitelaw conceded that at the time of the stage 4 construction the “cash flow would be in the black and the developer would be, in a sense, self-financing”.99 96 Brisbane City Council v Mio Art Pty Ltd [2011] QCA 234. 97 Chief Executive, Department of Transport and Main Roads v Cidneo Pty Ltd [2015] QCA 96 at [56] and [57]. 98 Initial Land Court hearing transcript, T 7-64, lines 20 to 45. -- 33 of 42 -- 34 Those concessions by Mr Whitelaw effectively, to my satisfaction, dispose of any reservations about the start of construction of stage 3 because on all of the evidence available by the time stage 3 was developed, the project had sold. The project would be cash flow positive, and reservations about financing would be substantially diminished. [165] He said “he wouldn’t have the constraints placed on him by his financier.” The differences between the valuers were canvassed at some length in the first instance before me. [166] Each of the valuers find some support in the others’ calculations. [167] Mr Hamilton says in his 2016 report: “I consider that Mr Brett’s cash flow 4 – after resumption most closely reflects the actual resumption scenario. His after resumption valuation is $46,425,000. Mr Brett’s after resumption valuation of $46,425,000 is relatively similar to my after resumption valuation of $45,750,000 based on a delay of 24 months. The difference in value would reflect what I consider an error in Mr Brett’s valuation in that he commenced construction of Stage 3 well before it would have been prudent to do so. Based on the agreed pre-resumption valuation of $60,000,000 and Mr Brett’s Cash Flow 4 after-resumption valuation of $46,425,000 the compensation payable would be $13,575,000.”100 [168] Mr Brett, in a similar way in his December 2015 report observes, speaking of Mr Hamilton’s November 2015 addendum report: “Mr Hamilton’s 4 November 2015 Addendum Report contains a post- resumption cash flow which adopts my post-resumption cash flow including a return of 9.04% as per Attachment 2 of my Further Supplementary Report dated 14 March 2012 but changed by the following: 1.4.1 Stage 3 construction is delayed for 8 months after the completion of stage 2 whereas I do not include a delay. 1.4.2 Development approval period is extended by 12 months to 24 months. 1.4.3 Provision of a $241,236 cost of litigation to reduce DTMR contribution. 1.4.4 Exclusion of a traffic network analysis cost of $100,000.”101 99 Initial Land Court hearing transcript, T 7-66, line 20. 100 Ex R4, page 13. 101 Ex R10, page 3, para 1.4. -- 34 of 42 -- 35 [169] In their closing submissions, Counsel for the respondent highlighted the manner in which the applicant’s case with respect to litigation cost had been something of a moving feast. [170] Those submissions conceded that “of itself, the dispute about the amount is not significant.” [171] Because of my scepticism as to the accuracy of the $241,236 litigation cost, I am not prepared to contemplate those modelling outcomes which relied upon that figure. [172] I am firmly of the view that the figure of $100,000 contemplated by DTMR is an adequate allowance for that. [173] As Mr Gore points out, the dispute about the amount is not significant. [174] Mr Hamilton’s revised cash flow, which assumed the departmental figure of $100,000, resulted in an increase in the after case land value of only $100,000, up to $45,850,000.102 [175] Mr Brett’s cash flows 1 and 2 demonstrate something similar.103 [176] While the issue of the cost of achieving transport condition may result in relatively minor differences amounting to less than say, one percent of the total value, the issue of the time taken to achieve agreement is a different matter. [177] In the present case, for the reasons I have already articulated, there was fault on both sides which resulted in achievement of agreement taking much longer than it should have. It is unnecessary to attempt to apportion blame but a number of factors led to delays including: (a) Changes in the western development application prompted by the Brisbane City Council and unrelated to resumption issues104and delays in responding to information request from concurrence agencies and Brisbane City Council.105 (b) Difficulties in communication between the department and experts engaged by the applicant. 102 Ex R35. 103 Ex R10, page 7 104 Ex R14, paras 83, 84, and 91(b). 105 Ex R12, para 24 and Ex R14, para 112. -- 35 of 42 -- 36 (c) Delays in the Brisbane City Council issuing its decision notice.106 (d) Delays occasioned by the appeal to the Planning and Environment Court including the involvement of unrelated submitters.107 (e) Delays between March and September clarifying cost sharing arrangements.108 (f) The various requirements in the Brisbane City Council in connection with the planning application requiring expert input into other matters including hydraulics, storm water drainage and quality management and ecological matters. [178] In all of the circumstances I am satisfied that the contention by the respondent for a period of 12 months ought be preferred over the contention of the applicant for a period of 24 (or 25 months). [179] Accordingly, that leads to a position where the most acceptable recourse or approaches from Mr Brett are his March 2012 report. I come to the view that so far as Mr Brett’s work is concerned the preferable approach is that contained in his March 2012 report which contemplated a 12 month approval period and $100,000 for a traffic network analysis.109 [180] That report generated an internal rate of return of 9.12 percent in the before situation and 9.03 percent in the after. [181] Mr Hamilton on the other hand, in his report of February 2016, remains vetted to the figure of $241,236 for the cost of litigation to reduce the DTMR contributions. He says in a quote, which is already referred to above,110 that he sought to achieve the valuation exercise that would reflect not only the land taken but severance, injurious affection and enhancement and asserts that Mr Brett does not satisfy an approach. [182] In his report, Mr Hamilton produces two cash flows which adopt the parameters contained within Mr Brett’s after resumption cash flow in his 23 November 2011 report.111 [183] The parameters which he adopts in both cash flow cases are: (a) Development yield 106 Ex R14, paras 166 to 171. 107 Ex R14, para 171. 108 Ex R17, para 9. 109 Ex R9. 110 Ex R6, page 9. 111 Ex R8. -- 36 of 42 -- 37 (b) Gross realisation (c) Rate of sale (d) Construction Costs (e) Selling Costs (f) Treatment of GST (g) Internal Rate of Return (IRR) of 8.68 percent. [184] In addition, his cash flow 2 adopts Mr Brett’s commencement date for construction of Stage 3. [185] In his case flow 1 he makes a number of adjustments to Mr Brett’s cash flow modelling. [186] Those adjustments are:112  Infrastructure charges reduced from $3,000,000 to $1,087,000.  Pre-construction phase increased from 12 months to 24 months.  Replaced the Traffic Network Analysis cost of $100,000 with the cost to litigate the TIC of $214,497 (as per Mr McGregor’s 4 February 2016 affidavit).  Construction of Stage 3 to commence at month 41 whereas Mr Brett’s cash flow has Stage 3 construction commencing eight months earlier (as per Cidneo’s appeal ground 3 referred to in the Land Appeal Court’s Judgment at [84] to [88]). [187] In the cash flow 2 he makes the following adjustments to Mr Brett’s cash flow:113  Infrastructure charges reduced from $3,000,000 to $1,087,000.  Pre-construction phase increased from 12 months to 24 months.  Replaced the Traffic Network Analysis cost of $100,000 with the cost to litigate the TIC of $214,497. [188] His cash flow 1 produces an after resumption land value of $45,750,000, so that on that basis compensation would be $14,250,000.114 [189] His cash flow 2 produces an after resumption land value of $47,250,000 which generates a compensation figure of $12,750,000. [190] The respondent in its submissions identifies two relevant differences between Mr Hamilton’s 2015 report and his 2016 report.115 112 Ex R6, page 4. 113 Ex R6, page 5. 114 Ex R6, page 4. 115 Ex R39, paras 6 and 7. -- 37 of 42 -- 38 [191] As can be seen, Mr Hamilton utilised the cash flow from Mr Brett’s 2011 report (which generated an internal rate of return of 8.68 percent) as the base cash flow, which change is embraced by the respondent. [192] The second difference identified relates to Mr Hamilton’s support for the litigation cost of $214,497 focusing on cash flow 1. [193] The respondent’s submissions contend, I think correctly, that within Mr Hamilton’s cash flow 1 in his 2016 report there are two significant errors. [194] The respondent in its written submissions submits as follows: “The first mistake relates to the adjustment described as “pre-construction phase increased from 12 months to 24 months.” It was common ground between the 2 valuers in the original hearing that it was possible to start construction in the last month of the pre-construction phase; for both valuers that was month 12 in the before case; in the after case, it remained month 12 for Mr Brett, but Mr Hamilton used month 18, to allow for the extra 6 months to allow for the obtaining of a traffic report; applying the same logic to the new period of 24 months, construction should commence in month 24, not month 25.”116 [195] Those contentions are borne out by a review of the transcript on the remitted hearing.117 [196] In cross-examination, Mr Gore put to Mr Hamilton that applying that same logic that he had applied in his before and after cases in 2011 he would have started his cash flow 1, true civil costs in month 24 not month 25 and Mr Hamilton agreed with that proposition.118 [197] Because the respondent goes on to contend that it is outside the remitter for Cidneo to contend for any other approach then that conceded on that occasion by Mr Hamilton, because the logic was an area of common ground between the valuers at the original hearing and so beyond the reach of any complaint of the Land Appeal Court. [198] I think that is correct. [199] Shortly after that dialog, Mr Hamilton conceded that the impact on value of simple interest for one month was of the order of $310,000 with the consequence that the 116 Ex R39, page 5, para 9. 117 T 2-56 to T 2-57. 118 T 2-56, lines 25 to 27. -- 38 of 42 -- 39 after value was reduced, thereby providing an opportunity to increase the compensation contended for. [200] The second mistake relates to Mr Hamilton’s adjustment to commit construction of Stage 3 to commence at month 41 compared to Mr Brett’s construction commencing eight months earlier. [201] The respondent says in respect of that adjustment “while it is true that the LIC did refer to a difference of eight months between the two valuers in this discussion of Ground 3, Mr Hamilton has taken that reference out of context in his decision to delay the start of construction of Stage 3 for eight months after the time assumed by Mr Brett.” [202] The respondent contends that the eight months referred to by the Land Appeal Court was in the context of its identification of the overall difference in the valuers total development and sales periods in the after case where Mr Brett’s period was 62 months, whereas Mr Hamilton’s period was for 76 months, a difference of 14 months. [203] Six months of that 14 months is accounted for by the period the subject of ground 2 which by the amended approach of Mr Hamilton as referred to by Mr Hinson in his opening has now evaporated. [204] The balance of eight months was referred to by the Land Appeal Court in its discussion of ground 3 and, says the respondent: “it was never identified as a period that separated the start of construction of Stage 3 in the valuers different cash flows. Mr Whitelaw had identified that as a period of five months and reference to the relevant cash flows confirms that that was the correct period.” [205] Reference to the transcript for the remitted hearing in his affidavit, Mr Whitelaw, in seeking to describe the main differences between himself and Mr Brett, said “Mr Brett starts Stage 3 five months earlier than Mr Hamilton in the ‘after’”. 119 [206] The respondent contends that the consequence of that is that in cash flow 1, Mr Hamilton has started construction of Stage 3 some three months later than he should have which lengthens the total period and so has the effect of reducing the after case 119 Ex R36, para 18. -- 39 of 42 -- 40 land value. This is because net realisations are occurring later, and interest is being incurred for a longer period of time.120 [207] In cross-examination by Mr Gore, Mr Hamilton said as follows: “Mr Brett’s preconstruction phase is 12 months, but with the true civil works commencing in month 12. We’ve established that? --- Mmm. Right? So if it is valid to adjust that 12 months by adding on an extra 12 months, that takes you to month 24. We discussed that before lunch, correct? --- Yes, I’m following you. And if you add on the five months’ difference, which was – we can see was between you and Mr Brett for the commencement of stage 3, whatever you use as the indicator of commencement, you get a total of 17 months to add on to Mr Brett’s 12 months, so if he started phase – stage 3 in 2011 – let’s go back to ---? --- At month 20, yes. At 20, to use the trigger that you’ve used here. Then the adjustment would be to month 37. Just let me think about that? --- Yes. You’ve got to add on 17, so it’ll be to month 37. Yes. Correct? --- Yes. Whereas you have added on four months. You’ve taken it to month 41? --- Yes. And that is a mistake? --- I’d have to think through why I adjusted it. It’s inconsistent. I’ll give you – I concede that.” [208] Later, Mr Gore put to Mr Hamilton “now, the difference you and I have established that, in truth emerged from that factor is five months, not eight months: correct?” to which Mr Hamilton responded, “yes and then subsequently accepted that his use of month 41 as the start of construction was incorrect.”121 [209] The consequence of all of those mistakes and concessions is that Mr Hamilton’s cash flow analysis contained in his 2016 report122 is incorrect and that makes it very difficult to act upon the conclusions of that report. Conclusion [210] For the reasons set out above, I remain of the view that the approach and reports of Mr Brett are to be preferred to the approach and reports of Mr Hamilton, and have attempted to set out above the reasons why I believe that is so. 120 T 2-65, lines 19 to 40. 121 T 2-68, lines 1 to 5. 122 Ex R10. -- 40 of 42 -- 41 [211] As I estimated above, I have come to the view that by relying on a 12-month approval period and a $100,000 traffic network analysis as opposed to the $241,236 litigation cost, Mr Brett’s report of March 2012123 provides the appropriate basis upon which to assess the compensation which is due to the applicant. Save that it is premised upon a before resumption valuation of $60,877,800, which is some $877,800 higher than the before resumption value that was agreed between the valuers on the basis of the before valuation of $60 million dollars. The after value calculated by Mr Brett was $54,500,000.124 [212] Accepting and relying upon that valuation exercise of course involved the adoption of the figure of a pre-resumption contribution of $1,087,100. That figure is of course applied in the pre- and post-resumption scenarios and the figures within that report are not significantly inconsistent with any of the cash flow analyses done. [213] I propose to utilise the more accurately calculated before land value of $60,877,800 for the purpose of trying to properly quantify the pre-resumption value. [214] That was a figure contended for by the respondent and, in his evidence-in-chief in the Land Court previously, Mr Hamilton acknowledged that he had, on the basis of a direct comparison, valued the land at $60 a square metre, which on a precise calculation produced a figure of $6,377,800, but had rounded it down.125 [215] To do so is consistent with the liberal estimate principle, well established, that in a resumption case doubts are resolved in favour of a more liberal estimate.126 [216] Accordingly I order that compensation is payable by the respondent to the applicant for the taking on 22 February 2008 of an area of 8.385 hectares being Lot 1 on SP 218520 being part of the land contained in title reference 50553649, County of Stanley, Parish of Oxley in the sum of $6,377,800. Orders: 123 Ex R9. 124 Ibid, page 5. 125 Initial Land Court hearing transcript, T 5-5. 126 Commissioner of Succession Duties (SA) v Executor Trustee and Agency Company of South Australia Ltd [1947] 74 CLR 358 at [373]-[374]; Gregory v FCT [1971] 123 CLR 547; and Boland v Yates Property Corporation Pty Ltd [1999] 74 ALJR 209 at [279]. -- 41 of 42 -- 42 Compensation is payable by the respondent to the applicant for the taking on 22 February 2008 of an area of 8.385 hectares being Lot 1 on SP 218520 being part of the land contained in title reference 50553649, County of Stanley, Parish of Oxley in the sum of Six Million Three Hundred and Seventy-Seven Thousand Eight Hundred Dollars ($6,377,800). WL COCHRANE MEMBER OF THE LAND COURT -- 42 of 42 --