Alex Gow Pty Limited v Brisbane City Council [2000] QLC 60

LAND COURT, BRISBANE 5 October 2000 Re: Claim for Compensation - Resumption for road purposes - Acquisition of Land Act 1967. (A99-44). Alex Gow Pty Limited v. Brisbane City Council J U D G M E N T (1) Background: This is a claim for compensation for lands resumed under the provisions of the Acquisition of Land Act 1967 (the Act). By Proclamation in the Queensland Government Gazette of 25 July 1987, the Brisbane City Council (the respondent) resumed land of area 609 square metres for road purposes, being Lot 3 on Plan 212543, Parish of North Brisbane (subsequently Registered Plan 212543). At the date of proclamation on 25 July 1987, the registered proprietor of the subject land was Alex Gow Pty Limited (the claimant). The date of 25 July 1987 then becomes the date at which compensation is to be assessed. (2) The Claim: By Notice of Intention to Resume on 5 September 1986, the respondent issued a notice to the claimant seeking written objections to the proposed resumption, and signalling a willingness to negotiate an agreement to acquire the land, or failing agreement, to treat as to the compensation to be paid and all consequential matters. The land was resumed for the purposes of widening Breakfast Creek Road, which was subsequently upgraded from two lanes in each direction to three lanes in each direction, with a constructed median divide. On 1 September 1999, a claim for compensation was lodged with the Land Court as follows: [2000] QLC 60 -- 1 of 31 -- 2  Loss of land = $ 91,350  Loss of improvements (i) re-erection of illuminated sign = $ 1,337 (ii) loss of 50ft sign = $ 1,680 (iii) loss of 4 mature golden cypress pines = $ 3,400 (iv) loss of brick retaining wall = $ 1,595 (v) new brick wall on top of retaining wall = $ 47,409 (vi) landscaping = $ 4,925 (vii) new signs = $ 10,965 (viii) Brisbane City Council fees = $ 398  Severance Loss of profits to 30 June 1988 = $ 26,948 Loss of profits to 30 June 1989 = $ 68,897  Injurious affection (i) valuer's fees (Foster) = $ 990 (ii) valuer's fees (Taylor Byrne) = $ 8,000 (iii) counsel's fees (Callinan,Clifford,Howe)= $ 7,500 (iv) legal fees = $ 21,966 (v) accountant's fees = $ 9,847 (vi) interest = $257,698 TOTAL = $564,905 At a Court callover of 29 November 1999, it was agreed to set a date for hearing for 2 May 2000, with agreement for each party to notify in writing documents which were required for discovery by 15 February 2000, and their inspection by 22 February 2000. Documented reports were to be exchanged by 7 April 2000, and the parties were to confer out of court by 21 April 2000, with a view to resolving any issues. The hearing commenced on 2 May 2000. During the hearing, leave was approved for the claimant to amend the claim as follows:  Loss of land = $210,000  Loss of improvements (i) re erection of illuminated sign = $ 1,335 (ii) loss of 50ft sign = $ 1,680 (iii) loss of 4 mature golden cypress pines = $ 3,300 (iv) loss of brick retaining wall = Withdrawn (v) new brick wall on top of retaining wall = $ 47,409 (vi) landscaping = Withdrawn (vii) re-instatement of 50ft sign = Withdrawn (viii) Brisbane City Council fees = $ 398 (ix) architect's fees = $ 8,660 -- 2 of 31 -- 3  Severance Loss of profits to 30 June 1988 = $ 27,229 Loss of profits to 30 June 1989 = $ 81,640 Loss of profits to 30 June 1990 = $ 67,523 Loss of profits to 30 June 1991 = $ 71,339  Injurious affection (i) valuer's fees (Foster) = $ 990 (ii) valuer's fees (Taylor Byrne) = $ 8,000 (iii) counsel's fees (Callinan,Clifford,Howe)= $ 9,650 (iv) legal fees = $ 22,986 (v) accountant's fees (Coopers & Lybrand, Galloway) = $ 11,722 (vi) acoustic engineer's fees = $ 1,109.70 (vii)interest = $557,494.72 TOTAL = $1,132,465.40 During the hearing both parties agreed on the following:  Erection of illuminated sign = $ 1,335  Loss of 50ft sign = $ 1,680  Architect's fees for front fence = $ 2,600  Engineering fees for front fence = $ 800  Counsel fees (excluding fees associated with prior objection hearing) = $ 6,400  Brisbane City Council fees = $ 398  Legal fees = $ 22,986 The variations to counsel fees claimed involved reduction for advice given in association with an earlier objection to the proposed resumption (Callinan $2,100 and Clifford $1,150). There has been no advance payment by the respondent. Subsequent to the hearing, both parties agreed to address the matters of valuation fees, accountant fees, and the architect's fees associated with alterations and additions, in conjunction with any matter of costs that might arise. The difference between the parties in respect of the valuation fees, relates only to the reasonableness of those fees. (See Stanfield v. Brisbane City Council (1990) 70 LGRA 392, at 417.) Both parties finally agreed on valuation fees to a total of $7,000. The respondent argues that compensation should be assessed at $51,207, plus disturbance items and interest. That figure comprises: -- 3 of 31 -- 4  Cost of brick wall = $ 47,409  Architect's fees = $ 2,600  Engineering fees = $ 800  Council fees = $ 398 Mr K Howe of counsel, instructed by Ellison Moschella & Co, solicitors, appeared for the claimant. Mr M Hinson SC, instructed by Brisbane City Council, appeared for the respondent. (3) The History of the Site: The claimant has been in the business of funeral directors since it acquired a former business in 1910. Prior to that time the original business had been established by an early pioneer, Andrew Petrie, in 1840. The family business has subsequently passed down the family to the current date where Alistair Robert Gow is the Chairman of Directors of the Company. The business had been formerly located in Petrie Bight, Brisbane, since 1871, and was relocated to the current site in November 1963. The decision to relocate was apparently in response to public discussions in December 1951, about the need to relocate funeral parlours outside the city centre as a traffic amelioration measure. The claimant made several applications to the respondent for consent to establish the new funeral parlour at alternative sites in near-city suburbs, all of which were rejected. Finally the claimant located the current site in the late-1950s. While an earlier application to relocate was rejected by the Council, following a personal deputation to the Lord Mayor, Council approved the establishment of the funeral parlour on the current site, subject to certain conditions on traffic movements by funeral corteges, and off-street parking arrangements. That approval was in full recognition of an existing Notice to Realign Breakfast Creek Road, which had issued to the previous owner on 18 March 1957. The intention of that realignment was to resume 296 square metres from the front of the current site. The development of the claimant's facilities proceeded on the basis that no permanent structures could be erected, or the owners do anything, upon the proposed realigned area (296 square metres). The claimant was aware that the area of land would be resumed at a later time. In 1981 the claimant submitted an unsuccessful application to rezone the subject land from its "Residential B" zoning to "Special Uses". The claimant occupied the subject land as a consent use only at that time. That was subsequently amended to a lawful non-conforming use. The purpose of that rezoning was to allow for the -- 4 of 31 -- 5 erection of a residence for a second resident officer. However conditions imposed by the respondent at that time, in the claimant's opinion, made the proposal unreasonable. On 1 March 1983, the Council released its Zoning Guide to the Town Plan of 1978, and on 22 July 1986, the claimant became aware of the respondent's proposal to increase the area of realignment to 609 square metres. The claimant objected that proposal in late August 1986; however the respondent issued a Notice of Intent to Resume 616 square metres on 5 September 1986. The respondent rejected any objections on 1 December 1986. The amended Town Planning Scheme of 1987 at that time retained the "Residential B" zoning for the subject land; however that has since, in September 1987, been rezoned to "Particular Development (Undertaker's Establishment)". On 7 October 1986, the claimant formally objected to the Council, and on 14 October 1986 an objection hearing occurred. The respondent's consulting engineers sought approval for the erection of certain works associated with a proposed retaining wall along the resumed land, which was disallowed by the claimant at that time. The respondent confirmed on 2 March 1987 that the resumption was proceeding. Because of the extended resumption area from the subject land, the claimant in March 1987 engaged architects to seek to redesign the whole parking and cortege area, with a view to relocating those areas to the rear of the funeral chapel building, and away from the traffic noise. However the large cost of those alterations ($772,400) was seen as well beyond any reasonable compensation that might be achieved from the respondent, and the proposal was not proceeded with. On 25 July 1987, the notification of resumption was published in the Queensland Government Gazette, and advice of that action provided to the claimant on 28 July 1987. Works commenced on the widening of Breakfast Creek Road on 24 August 1987, and were completed on 31 May 1988. The retaining wall was completed by 9 November 1987. Following the rezoning of the subject land to "Particular Development (Undertaker's Establishment)", the Council advised conditions for the proposed extensions of the funeral premises on 12 May 1988. Those extensions involved initially the enclosure of the porte-cochere with laminated glass, the erection of airport doors at either end, the airconditioning of the porte-cochere area, and the erection of a brick fence on top of the retaining wall along Breakfast Creek Road frontage. (Completed October 1994). Subsequently a top floor for additional administration office area, and second residence, was completed in 1998. The Council conditions included appropriate landscaping and a 1.8 metre fence along the southern boundary. -- 5 of 31 -- 6 (4) The Nature of the Land: The subject land is located about 3km north of the Central Business District, in the suburb of Newstead. The land fronts Breakfast Creek Road to the east, and is at the corner of Dunlop Street to the north, and one lot removed from Cowlishaw Street to the south. All services and amenities are available, and the site is well located for access to most suburban areas and cemeteries and crematoriums. Breakfast Creek Road and Dunlop Street are both fully bitumen-sealed with concrete kerb and channelling. Access is only from Dunlop Street, with a one-way U-shaped driveway providing access to the funeral parlour and chapel. The subject land had an area of 5881 square metres before resumption, and an area of 5272 square metres after resumption. The land has an eastward slope towards Breakfast Creek Road, and the site has been extensively terraced and developed as a funeral parlour, coffin store/workshop and vehicle maintenance workshop, with associated parking areas. Prior to the resumption the existing parlour and chapel building areas were located to provide parking for funeral corteges and mourners along the eastern side of the main building. That parking was arranged in three lanes, thus allowing for unavoidable traffic movements along the most eastern lane, during funeral services. As a result of the resumption, that parking area has now been restricted, thus inhibiting funeral operations. Part of those restrictions, in the claimant's opinion, relates to inconvenience and restricted parking areas which are often distressing to already emotional people attending funeral services. As a result of those restrictions, it is argued there may be flow-on impacts affecting future funeral business opportunities. There have been no impacts upon the parking areas to the west of the chapel as a direct result of the resumption. (5) The Funeral Industry: Mr Gow gave evidence that the funeral industry has undergone Australia-wide changes over recent years, resulting in a decline in the level of cortege funerals now leaving the place of the funeral service for burial or cremation. It is clear from the evidence, that the funeral industry is one of delicate sensitivity, where mourners often tend to rely upon word-of-mouth references at their times of bereavement. A cortege service can originate from either a church or a funeral director's chapel, and the hearse precedes a procession of vehicles to the place of disposition. -- 6 of 31 -- 7 Clearly such corteges require the careful marshalling of vehicles, with the chief mourners' vehicle immediately behind the hearse. Such was the original planning for the funeral parlour and chapel on the subject land. As a result of a broad community-wide shift in trends in the early 1980s from cortege to chapel-only funerals, the claimant successfully introduced techniques such as closing curtains in the chapel service. A similar trend to church-only funerals has also occurred. Because of the nature of the industry, the key measurement criteria tends to reflect the actual number of funerals, rather than the dollar outcomes. It is argued by Mr Gow that funeral unit costs tend not to be price sensitive, and cost of funerals do not fluctuate dramatically. For those reasons the following analyses will examine changes in the number of funerals as the measurement of industry activity. However Mr Gow concedes that funeral fixed costs are less at the funeral parlour than off-site. He notes his company rates tend to be very competitive. Mr Gow has analysed statistics of funeral notices advertised in the newspapers over the period 1982 to 1997. He provides graphs of those statistics, comparing overall death rates for the Brisbane Statistical Division (BSD), with percentage rates for selected participants in the funeral industry, including the claimant. In seeking to isolate funerals related only to the subject land, Mr Gow deducts any country funerals where activities relate to deaths in another city. It was noted that country funerals tend to be fairly consistent and varied between 56 (1987), 83 (1990), 52 (1994) and 23 (1998). The purpose of the graphs was to seek to identify any industry factors which might have influenced the claimant's market share of funerals, other than any impact from the resumption. I note also the relationship between the claimant's total funerals, the overall deaths in the BSD, and the claimant's expenditure on advertising. While the overall death rate fluctuated slightly, it tended to increase overall from 8,382 (1987) to 9,015 (1994), and 9,882 (1998). I will consider the 1987 figures (representing the date of resumption), the 1994 figures (representing the date at which the claimant first undertook significant extensions in order to seek to recapture market share), and the 1998 figures (the date of the second extensions in order to overcome pressures from growth). Annual Change 1987/1990 1990/1994 1994/1998 Total BSD deaths 9% increase 2.4% fall 6.5% increase Total Alex Gow funerals 1% increase 18% fall 60% increase Cost of advertising 280% increase 378% increase 250% increase -- 7 of 31 -- 8 It was noted that Alex Gow's funerals totalled 773 in 1993, which was the lowest total since 1941. It is argued that most advertising is currently electronic, either by radio or television, and the rise in advertising expenditure has been a fairly recent phenomenon, starting mainly since the large companies entered the market in March 1986. Mr Gow has no in-depth figures on the level of advertising costs of his competitors, although he notes the association of Australia-owned funeral directors also advertise widely. The large companies have acquired the crematoriums, and have taken over several former Australian companies in March 1986 (Credit Union Australia), April 1989 (Industrial Equity), August 1993 (Service Corporation International), and December 1994 (Stewart Enterprises). While there has been a sharp rise in overseas participation since August 1993, what is very noticeable has been the sharp decline in their share of the local market, while the Australian companies have steadily maintained, or increased, their market share. The following percentages reflect that trend: Company 1987 1990 1994 1998 Service Corporation International (American) 38.7% 34.9% 36.9% 27.9% Stewart Enterprise (American) 29.4% 32.9% 29.9% 19.2% KM Smith (Local) 15.1% 14.5% 15.8% 20.9% Alex Gow (Local) 11.7% 11.1% 9.2% 14.9% There were 13 local companies in the Brisbane Statistical Division market at the date of resumption in July 1987. A further new company (White Lady Funerals) commenced operations in 1992. While most of the companies have tended to lose market share since 1994, only KM Smith, White Lady Funerals and Alex Gow have increased their share. The patterns also confirm that the main growth in Alex Gow Funeral numbers since 1994 has occurred in the non-chapel funerals (away from the subject land). The changes are as follows: Alex Gow Funerals Type of Funeral 1987 1994 1998 Total 951 (100%) 789 (100%) 1268 (100%) Total Chapel 94 (10%) 90 (11%) 126 (10%) Non-Chapel 857 (90%) 699 (90%) 1142 (90%) Mr Gow confirms that the decision to enclose the porte-cochere was made in 1993 in response to the decline in their market share, rather than any response to threat from the American companies. He also argues that while only 10% of funerals undertaken by the claimant are chapel funerals, in his opinion, the resulting impact of the resumption should not be restricted only to that share of the business. Because of -- 8 of 31 -- 9 the nature of word of mouth, he argues a less than satisfactory experience at the chapel can have an impact also upon some of the remaining 90% of off-site funerals. In all off-site funerals the body is always brought to the subject land. Families also visit the site to discuss funeral arrangements. Mr Gow argues that in the funeral industry it is the commonly held view that the funeral chapel is the company's greatest asset. It is also Mr Gow's opinion that should the American companies decide to vacate the market, he believes the claimant's market share was likely to be adversely affected. However he was unable to quantify that conclusion. (6) The Method of Valuation: It is noted that the business undertaken upon the subject land involves Alex Gow Pty Limited and Alex Gow Enterprises Pty Ltd. For the purposes of this matter the business operations of those two companies are considered collectively, allowing for any inter-company transactions. (6.1) Loss of Business - In seeking to assess any potential loss of business profits, both parties seek expert technical assistance. Marian Micalizzi, an experienced business expert and chartered accountant provides advice to the claimant; and Keith Bertram Cooper, an experienced business expert and chartered accountant provides advice to the respondent. Both experts rely upon detailed historical funeral industry statistics supplied by the claimant. Mrs Micalizzi seeks to identify the market share realised by the claimant in terms of actual funerals undertaken; and then, noting the margins achieved over a period of years, seeks to identify any loss of profits, or margins foregone. The key criteria analysed are the number of advertised funerals (referred to as "advertised deaths"); and the number of deaths reported in the Brisbane Statistical Division (BSD). The average margin per funeral reflects the average charge less the variable funeral cost to funeral. The period analysed extended from September 1987 to June 1991. The principal assumption accepted is that any fall in market share was only as a consequence of the resumption of part of the land. By comparing actual numbers of funerals with expected market share numbers of funerals, Mrs Micalizzi determines the following margins foregone (equated to profits foregone): Year Losses Losses (Advertised Deaths) (BSD Deaths) 1988 $45,275 $27,229 1989 $86,119 $81,640 -- 9 of 31 -- 10 1990 $67,559 $67,523 1991 $85,235 $71,339 In concluding losses under "advertised deaths", Mrs Micalizzi adopts an average of 11.62% (1984-1987) as the claimant's expected market share of all advertised deaths in the BSD (85.02% of all deaths in the BSD). The projections are made on the presumption that there was no major restructures of the industry; no significant new competitors; the claimant's stability and quality of service had been maintained; and increased marketing efforts had been sustained in order to seek to maintain market share. Because of its long-standing history in the funeral industry in Brisbane, the cost structure of the claimant was accepted as relatively fixed in nature, with little variations. In considering losses based on advertised deaths, Mrs Micalizzi provides an indication of the range of losses, which in her opinion, depicts a low market share (11.25%) and a high market share (11.75%) as follows: Year Range of Losses 1988 $30,229 to $50,467 1989 $67,594 to $92,513 1990 $46,478 to $74,834 1991 $61,498 to $93,428 In concluding losses under BSD deaths, Mrs Micalizzi adopts an average of 10.7% (1984 to 1987), as the claimant's share of BSD deaths, and concludes an indication of the range of losses, depicting low market share (10.5%) and high market share (11.0%) as follows: Year Range of Losses 1988 $17,533 to $41,335 1989 $69,701 to $99,009 1990 $53,936 to $87,287 1991 $56,040 to $93,594 Based upon the above conclusions, Mrs Micalizzi determines (earnings before interest, tax, depreciation and amortization) (EBITDA) as follows: Average of 3 years (1985-1987) = $120,916.41 Average of 2 years (1986-1987) = $126,903.90 Mrs Micalizzi therefore adopts $120,000 (EBITDA). Mrs Micalizzi argues that while gross revenues or profits may have continued to rise over the relevant period, that does not exclude any actual loss of market share of funerals. Mr Cooper agrees in that matter, as it is noted that the actual margin per -- 10 of 31 -- 11 funeral had increased significantly. Mrs Micalizzi also agues that any loss of market share may be attributed not only to the actual duration of the road and resumption works (August 1987 to May 1988), but also to a longer term effect due to the disruption. The matter of profits foregone was addressed in Queensland Railways v. Somerville Funerals Pty Ltd (A91-55), 3 March 1995, unreported. In that matter the Land Appeal Court considered any potential loss of business to the Allambe Garden of Memories Lawn Cemetery and Cremation Complex at Nerang, as a consequence of a resumption by Queensland Railways of an area of 2.9155 hectares for a proposed railway. The Land Appeal Court concluded that a prudent purchaser of Allambe, at the date of resumption, would have been concerned at the potential for permanent injurious affection due to railway noise. It also noted that it is not an illogical consideration to conclude that there was potential for buyer resistance in those circumstances, but argued that any assessment of monetary loss should be related to the reality of the marketplace. In that matter the Land Appeal Court noted the lack of any meaningful evidence of industry or marketplace capitalisation rates. In the Court below the learned Member was presented with an extensive range of evidence, including industry statistics on numbers of funerals, and the nature of the funeral business, much of which parallels similar evidence in the current matter. The learned Member in Somerville noted that Allambe had made a net profit in the year of the resumption (1991); but went on to allow a loss of 2.5% of the gross sales for that year, which equated to $20,000 per annum. He then capitalised that amount at 10% (compared to the long-term Treasury Bond Rate of 8.9%), giving a loss in business in perpetuity for compensation purposes. The Land Appeal Court accepted that there was potential for loss of business during the actual period of construction, and noted that "the extent of that loss would depend on the manner in which effective management dealt with the problem" (page 9). In summarising the loss of on-going revenue the Land Appeal Court concluded, in the circumstances of that matter, that the value of the land in the "after" situation would reflect 85% per hectare of the value of the land in the "before" situation. The Land Appeal Court rejected any claim for airconditioning of the mortuary as it found that there had already been a dust problem, and "any need for airconditioning of that building would not be a direct result of the railway resumption" (page 10). -- 11 of 31 -- 12 I believe the findings of Somerville have application in the current matter; although it can be distinguished in as much as there was market evidence in that matter to support a "before" and "after" assessment of the inglobo value of the land; evidence not available in the current matter. Mrs Micalizzi also cautions against comparing market share on a month to month basis, noting that the statistics of deaths demonstrates some fluctuation over time. It is also noted that seasonal variations occur, particularly for elderly people in times of severe heat or cold, which tends to increase the death rate. There was also the matter of long-term allegiances to particular funeral directors which may impact market share. The total advertised deaths also include people from outside the BSD which needs to be separately identified, as they provide little impact upon the subject land. In considering the average charge and cost per funeral, it was noted that there is a difference in some costs between on-site chapel costs and off-site costs. The on-site chapel services have a smaller margin than the off-site services. That provides scope for the claimant to provide economic funerals where family hardship is an issue. The scope to continue to provide such economic funerals was of concern to the claimant, who speculates that should the Americans depart the scene, competition from the Australian-owned companies could heighten market competition for the claimant. However, that speculation provides little assistance in this matter. While acknowledging that two smaller companies had in fact entered the market during the relevant period, Mrs Micalizzi argues those new companies had only a minor impact upon the market. (Skinner in 1984 and Kenton-Ross in 1986). By 1988 Skinner had captured 1% of market share and Kenton-Ross 0.4%. It was also noted that Simplicity Funerals had increased their market share from 3.6% (1986) to 5% (1988). There was also a fall in market share for Metropolitan Funerals from 21.1% (1986) to 20.2% (1987), rising again to 21.6% (1988). Collectively those fluctuations demonstrate the level of volatility in the market, a not uncommon phenomenon in business. In comparing the funeral industry, both Mrs Micalizzi and Mr Cooper agree that there is nothing unique about funeral parlours from a business perspective. While there is a special level of sensitivity to be demonstrated to the clients, in their fragile state at the time of the funeral, those are not dissimilar to how any business must confront the market place. Mr Cooper argues that competition, the need for a quality product, and the ability to service the client's needs, are all similar to other businesses from a business perspective. -- 12 of 31 -- 13 Mr Cooper analyses Mrs Micalizzi's report, and initially seeks to determine whether the actual roadworks during August 1987 to May 1988 have made a measurable impact upon the market share of the claimant. Mr Cooper notes that the actual construction period was only about 9 months, and he finds no rationale for why a longer period (nearly 4 years) was used to assess market share. In comparing the actual numbers of funerals conducted by the claimant, Mr Cooper concentrates upon funerals conducted upon the subject land. Mr Cooper seeks comparisons with funerals in 1985-86, and notes that in 1987-88 there were actually more funerals held on the subject land during the construction period (September to May), than during the same period in 1985-86. However I note that during the period July and August there had been a fall in the number of funerals in 1987-88, and overall the total number of funerals annually was very similar in both of those years. I believe such a comparison provides little assistance, and merely demonstrates the variable cyclic nature of deaths in the community. Mr Cooper acknowledges that the impact of marketing in the funeral industry is less direct than in other types of industry, where market response can be almost immediate. He agrees that there was likely to be a delay in perceiving a response to advertising of funeral services, and notes the lack of any comparative advertising costs which might provide some wider industry perspective. Mr Cooper notes that the claimant's services away from the chapel were relatively steady between 1985 and 1988; while his chapel-only services on the subject land had greater fluctuations. The number of chapel-only funerals had been steady at about 66 to 78 funerals from 1982 to 1984, rising suddenly to 113 (1985), 107 (1986) and 94 (1987), before falling back to 74 (1988) and 75 (1989). They then subsequently started to rise again to 102 (1991). In seeking some relationship between the level of advertising expenditure over that period and market share, the following trends are noted: Year Advertising cost per funeral 1982-85 $168 to $224 1986 $73 1987 $78 1988-1991 $185 to $316 It is also noted that with the exception of KM Smith, Hartnett Funerals and Simplicity Funerals, all other industry participants suffered a decline in their market share between 1986 and 1987. As Mr Cooper notes, the lag in response to the increased advertising investment in 1985 ($224 per funeral) was likely to have been a -- 13 of 31 -- 14 carry-over effect in 1986 and 1987. The failure to maintain corresponding levels of advertising in 1986 and 1987, may then have contributed to the lesser number of funerals in 1988 and 1989. If those conclusions have substance, then the decline in the number of funerals on the subject land subsequent to the resumption in 1987 may be related more to the normal market forces than as a consequence of the resumption, a conclusion reached by Mr Cooper. Mr Cooper confirms that in assessing any potential losses it is important to consider the profits before fixed expenses are deducted. He defines "fixed expenses" as those which cannot be avoided; although he believes that certain expenses such as advertising, electricity, telephone, postage and cleaning would be partially variable costs, which should have been considered, thus reducing any calculated losses. In his assessment of future maintainable profits, Mr Cooper has assessed the profit and loss outcomes for the two in situ companies, deducting the following combined adjusted figures: Year Net Profit before Net Profit before depreciation, Interest and tax interest and tax 1985 $ 94,596 $ 104,267 1986 $106,809 $ 123,749 1987 $ 71,479 $ 91,747 Average of 3 years $ 90,961 $ 106,588 After adjusting his figures to allow for additional information now available to him in respect of depreciation and management retirement costs, Mr Cooper concludes future maintainable profits as : Average for 3 years = $105,502 Average for 2 years = $108,493 Because of the need to replace equipment over time, Mr Cooper rejects the adding back of depreciation, unless the cost of new capital equipment is included as a reduction of the cash flow. However he concedes that depreciation is often considered to be a reasonable estimate of that amount. Mr Cooper notes that the method of discounted cash flows is an over-arching methodology which encompasses the principle of future maintainable profits. He argues that future maintainable profits can effectively be adopted where future profits are not seen to vary, and where cash flows are seen to be indefinite, or for a long period in the future. As the result of those criteria, any errors in the discount rate adopted have little effect on the overall value of the business. -- 14 of 31 -- 15 Mr Cooper concedes that his assessment is from the business perspective, and not the property side. He believes those two components demonstrate different risk elements to the claimant. Because of the stability of management and location of Alex Gow, Mr Cooper concludes that there has been no detriment to the business of the claimant as the result of the resumption, and therefore he apportions no difference in risk. He makes no conclusion in respect of the property perspective. Mr Cooper also challenges Mrs Micalizzi's conclusion that variations in the market share after the resumption, should be correlated with the resumption. Mr Cooper argues that, certain variations in market share would be a normal part of the business cycle, and not necessarily an anomaly. To support that opinion he notes that analysing the normal distribution of the number of funerals conducted by the claimant in the period 1982 to 1999, indicates an average of 949 funerals per year, with a standard deviation of 135. Mr Cooper is therefore 95% confident that any variation between 814 and 1084 annual funerals could represent normal market fluctuations. The only variations to that conclusion were in 1993 (773) and 1994 (789), where the total advertised funerals for the claimant were at their lowest point since 1941. Mr Cooper concedes that businesses such as the claimant, which have been in business for a long time, tend to become relatively stable. However he notes that several of the family funeral businesses in Brisbane also have that long background characteristic. In concluding his analysis of business risk, Mr Cooper agrees that from a business perspective it would be in line with normal business practice for a person to pay less for a business which has a higher risk element, and correspondingly more for a business with lesser risk. While there is considerable competition in the funeral business, Mr Cooper agrees that the funeral industry really has little risk of any discontinuity, and could therefore reflect a relatively lower risk, and higher price, than other types of industry with less predictable outcomes. However, he believes the business risk factor has not been demonstrated to have changed as a consequence of the resumption. In summarising Mrs Micalizzi's advice on EBITDA, he agrees that she has provided the correct evidence to Mr Walsh. It is Mr Cooper's opinion, however, that Mr Walsh has misinterpreted her EBITDA figures to represent future maintainable profits. Mr Cooper argues that to adopt future maintainable profits Mr Walsh would need to add back the depreciation features. Mr Cooper believes that Mr Walsh's dilemma is that he is seeking to value both the loss in business and any loss in property, with differing levels of risk, as a single exercise. -- 15 of 31 -- 16 (6.2) Loss of Land - Kevin Patrick Walsh, an experienced registered valuer for the claimant, and Michael Joseph Slater, an experienced registered valuer for the respondent, have adopted different approaches to this matter. Both valuers agree that the highest and best use of the site is for a funeral parlour. Mr Walsh seeks to compare the "before" and "after" values on the basis of the capitalisation of net maintainable profits; while Mr Slater uses a piecemeal approach looking at the loss of land, the impact of severance and injurious affection, and business disturbance.  The Evidence of Mr Walsh - In his calculations Mr Walsh has adopted the figure of $120,000 supplied by Mrs Micalizzi as representing a reasonable average estimated net maintainable profit, and capitalised that at 9% in the "before" situation, and 10.5% in the "after" situation. His concluded capitalisation values represent: Before = $ 1,350,000 After = $ 1,140,000 Loss in value = $ 210,000 In addition to that loss in value of the property, Mr Walsh also identifies disturbance costs including loss of net profit during the construction period, re-siting of signage, and appropriate professional fees, plus applicable interest. In his assessment of the appropriate capitalisation rates, Mr Walsh has allowed, in his opinion, for the increase risk to the business as a result of the loss of land and other matters associated with the resumption as outlined by Mr Gow. Mr Walsh also includes in the capitalisation rate for the "before" situation, recognition that the property had been restricted in its opportunity to fully develop the whole site by the earlier Notice to Realign Breakfast Creek Road in 1957. Mr Walsh places some reliance upon reported capitalisation rates in the funeral industry in the BSD. However Mr Walsh concedes that there is a paucity of reliable market evidence about yields, and he notes that valuations and sales of funeral parlours are rare. The only sales evidence he has are the two purchasers by Credit Union Australia of properties, the first at Upper Mt Gravatt for $1 million in March 1986, and a further two properties at Aspley and Fortitude Valley which collectively sold for $1,340,000 also in March 1986. Based upon enquiries of Credit Union Australia, Mr Walsh was advised that those purchasers were made on the basis of 11% of maintainable profits. -- 16 of 31 -- 17 Mr Walsh also notes that subsequent takeovers of smaller family oriented businesses by larger corporations (particularly American corporations) apparently were based upon acceptance yields of 9%. However he concedes that is based only upon general enquiries within the industry, and he has no specific details to support that conclusion. Both Mr Cooper and Mr Slater are critical of the lack of hard evidence to support the referred capitalisation rates, and it is noted that Mr Walsh's information was obtained about 1994, about 8 years after the purchases. However Mr Walsh sees the rates of 9% and 11% as some evidence of the market forces for such sales. In his comparison of those sales with the claimant's property, Mr Walsh sees the latter's superior location and greater passing traffic as reasons why the subject land would demonstrate a lower capitalisation rate than 11% and he adopts 10.5% in the "after" situation. In his assessment of the "before" situation, Mr Walsh makes allowance for the fact that no compensation was due as a result of the Notice to Realign Breakfast Creek Road, although in effect the subject land had been adversely impacted since 1957. Because of the later resumption, Mr Walsh argues that the subject land is now less easily managed for its purpose. He also argues that because of the roadworks, the subject land is now subject to greater intrusion of noise and fumes. As a result of the loss of land and the above disabilities, Mr Walsh argues that the "before" situation would have demonstrated a lesser capitalisation rate, and he adopts 9% in line with the later Stewart Enterprise sale. In his assessment Mr Walsh has sought to combine both the loss of the property and the loss of the business into one "before" and "after" assessment. Mr Walsh argues that such an approach is more properly aligned to the loss in the marketplace. He notes that Mr Cooper's assessment in his opinion, reflects the situation merely from an accounting perspective, although he notes that the discounted cashflow approach has relevance as long as it is well linked to sales in the marketplace. In his comparison with Mr Slater's approach of offsetting the costs of the new brick wall on top of the retaining wall, against losses due to the resumption and roadworks, Mr Walsh argues that makes no allowance for the previous adverse impact of the Notice to Realign Breakfast Creek Road. Mr Walsh confirms that the Notice to Realign carries with it no entitlement to compensation which only becomes activated once the resumption proceeds. Mr Walsh also agrees that the right to any future compensation passes with the land should it be transferred from one owner to another. The Notice to Realign merely precludes the owner, without permission, from building -- 17 of 31 -- 18 any structures upon the land which is subject to realignment. Mr Slater has treated the Notice of Realignment as though it never happened for purposes of compensation. However, while a Notice to Realign brings with it no immediate compensation to the land owner, its effect does not go unnoticed in the marketplace. Any prudent purchaser would be aware of the intentions of the public authority and would weigh any risk of those intentions in the price to which they will pay. It would not be unreasonable to conclude that the "shadow of realignment" would have had some adverse impact upon the market price at the time of transfer of ownership. On that basis the value of the subject land at purchase by the claimant in 1963, may have already reflected some adverse impact. However the claimant is now fully entitled to any perceived loss as a result of the later resumption. In his assessment of the loss due to injurious affection of the claimant's business upon the subject land, Mr Walsh accepts Mr Gow's opinions. Mr Walsh agrees that there continues to be room for parking to the east of the chapel, although in a more constrained area. He also agrees that it is really the perception of increased noise and traffic and potential damage to mourners' vehicles, which is evident. However Mr Walsh argues that in the marketplace it is often perceptions which influence the value that purchasers will pay for the property. For those reasons Mr Walsh sees that the risk of maintaining the average net maintainable profits are higher in the "after" situation, than in the "before" situation. Because of lack of available figures for net maintainable profits, Mr Walsh has maintained the same estimate of $120,000 in both the "before" and "after" situations, and has allowed for the increased risk in the capitalisation rates adopted. In support of his adopted capitalisation rates Mr Walsh agrees that normal business investments take some notice of current long-term ten year bond rates. Those are seen as risk free, and provide a benchmark for investment decisions. Where there is perceived to be a higher level of risk, then capitalisation rates above the ten year bond rate are usually negotiated. However, Mr Walsh argues that because of the nature of the funeral industry, and its pattern of being handed down through generations of families, the appropriate capitalisation rate, in his opinion, is not directly related to the ten year bond rate. It is noted that the effective long-term ten year bond rate in 1987 varied between 11.97% and 14.37%, at an average of 13%. The long-term ten year bond rates at the time of the entry of the American companies in 1993 (Service Corporation International) and 1994 (Stewart Enterprises) were 7.25% and 9% respectively. Mr Walsh also notes that because of the nature of the business, it was at the lower end of risk. -- 18 of 31 -- 19 Mr Walsh agrees that normally higher capitalisation rates would apply, but he has sought to rely upon the evidence of the limited sales of funeral parlours, and their reported capitalisation rates. Mr Cooper is critical of the lack of details of those limited sales, as he notes that a credit union was likely to have some market advantage, as it was in a position to offer special concessions to its members, and thus increase its market share. Mr Walsh concedes that his assessment of 10.5% capitalisation rate in the "after" situation, makes no allowance for the agreed reduction in noise as a consequence of the brick wall on top of the retaining wall. He agrees that if the brick wall is allowed for, then his capitalisation rate would be less than 10.5% and the loss of $210,000 would be reduced by the cost of the brick wall at $56,282. Those costs represent $47,409 for the wall, $4,925 for landscaping, $2,600 architect's fees, $950 for engineering fees, and $398 for Brisbane City Council fees.  The Evidence of Mr Slater - Mr Slater argues that the current matter is similar to the findings of this Court in M, S and A Conias v. Brisbane City Council (A91-7), 21 February 1992, unreported. In that matter the President considered the loss of an area of 142 square metres for road purposes from a parcel of 1,214 square metres in the suburb of Toowong. The owner had constructed a two-storey commercial building upon the land and, as a consequence of the resumption, had to redesign the originally intended building, with the resulting loss of net lettable area of 1.5 square metres on the ground floor, the loss of one car space in the carpark, a location of stairs, and a loss of some landscaping. The claimant had argued that the predominant loss to the owner was one of lesser amenity to the balance of the land. The claimant argued that the losses incurred involved the loss of land; traffic noise and fumes were now closer to the remaining improvements; there was a loss of amenity with only minimal landscaping now possible; a loss of partial redevelopment potential of the building; and additional redesign costs. Those matters have some commonality with the common matter. The President found at page 16: "I am satisfied that a prudent purchaser at that date or the moment before resumption would have had little regard to the question of landscaping but would have assessed his purchase price on the net rental return. ---- I find that the claimants are entitled to recover the actual loss that they have suffered by reason of the resumption. This can be arrived at by taking the capitalised value of the lettable space which has been lost and adding to this amount the expenses incurred by the claimant for the extra costs in the modifications to the building necessitated by the resumption. " -- 19 of 31 -- 20 Mr Slater argues that the loss of the land in the current matter has no apparent impact upon trading of the business upon the site. He concludes that the potential impact of the Notice to Realign upon the eventual siting of the improvements would have been fairly marginal in his opinion, considering the normal net setback requirements of the town plan and the slope of the land. The setback requirements, given the zoning of "Residential B", was likely to have been consistent with standard residential uses (i.e. 6 metres). However Mr Slater concedes that a factor of 5% might be considered as "fairly marginal". In considering the matter of severance of the land by the resumption, Mr Slater concedes that the loss of the land (609 square metres) may result in some inconvenience when services are held in the chapel. He agrees that the outside through lane, which formerly allowed service vehicles and clergy to pass outside parked mourners' vehicles, is now lost. However he argues that would only occur on the small number of occasions when an on-site chapel service is held (10%), and only where there was a high attendance of mourners. For that reason, he sees the loss of land as unlikely to give rise to any discernible loss in value. However he concedes there could be some small increased risk to the business, but argues it is hard to quantify the amount. In seeking any loss of amenity due to the visual impact for increased noise and fumes, Mr Slater sees the erection of the brick wall on top of the retaining wall as overcoming those impacts. He notes that the construction of the brick wall has resulted in a reduction of 4.8dB in noise levels, at the façade of the chapel building, a matter not disputed by the claimant. He also notes that the brick wall has vegetation inserts at various locations. Mr Slater makes no allowance for loss of business, which he notes is addressed by others, and argues that it is the risk to the cash flow which determines the capitalisation rate. In considering the matter of the perception of increased noise and fumes, and their impact upon chapel services, Mr Slater believes those features would have increased anyhow with the increasing growth of traffic along Breakfast Creek Road. It is agreed by both parties that there is no claim for compensation arising solely out of the increase in traffic density along that roadway. Mr Slater believes that the more recent costs of enclosing the laminated glass porte-cochere are a result of general traffic increases, and not specifically related to the actual resumption itself. (See Edwards v. Minister of Transport [1964] 2 QB 134) (1 All ER 483). -- 20 of 31 -- 21 Changes in traffic noise were analysed in an acoustic report by Warren Middleton, an acoustic consultant for the respondent. While Mr Gow was critical of the timing of Mr Middleton's recording of noise levels, his findings were not challenged, and no matters of contention arise from that report. The report basically notes that the erection of the retaining wall, and the brick wall upon the retaining wall, result in the creation of an increased acoustic shadow area near the chapel eastern parking area. As a consequence of that acoustic shadow area, there is now a decrease of 4.8dB in that area, thus screening traffic noise levels at the chapel. Mr Hinson further argues that as the claimant failed to produce any acoustic evidence, then the fees claimed for acoustic engineering fees of $1109.70 ought not to be allowed, and I concur in that matter. Decision: I look first at matters that are in agreement and note the following common grounds:  There was a loss of land of 609 square metres.  There was a reduction in the width of the driveway and parking area.  There is some inconvenience to funeral cortege and chapel arrangements.  There is some impact upon the landscape visual amenity.  There is some "special value" in the subject land to the claimant by virtue of its history and location as a funeral parlour and chapel. (1) Loss of Land - I seek first the potential for any "special value" to the claimant, and note the findings of Pastoral Finance Association Limited v. Minister [1914] AC 1083. In that matter the Privy Council addressed the principle that the value to be established is the value of the land to the dispossessed owner. Lord Moulton said at page 1088: "That which the appellants were entitled to receive was compensation not for the business profits or savings which they expected to make from the use of the land, but for the value of the land to them. No doubt the suitability of the land for the purpose of their special business affected the value of the land to them, and the prospective savings and additional profits which it could be shown would probably attend the use of the land in their business furnished material for estimating what was the real value of the land to them. But that is a very different thing from saying that they were entitled to have the capitalized value of these savings and additional profits added to the market value of the land in estimating their compensation. They were only entitled to have them taken into consideration so far as they might fairly be said to increase the value of the land. Probably the most practical form in which the matter can be put is -- 21 of 31 -- 22 that they were entitled to that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it." An extensive list of precedents in establishing the principle of "special value" was later examined by the New South Wales Court of Appeal in Yates Property Corporation Pty Ltd v. Darling Harbour Authority (1991) 73 LGRA 47. In that matter Kirby P noted at page 52: "However, within the authorities which elaborate the statutory entitlement to compensation applicable in this case, it is clear that compensation for special value is available, at least to the extent that the owner, at the moment of resumption, enjoyed additional economic advantages directly attributable to its ownership or occupation of the land which would not be reflected in the market value: ---- Special value can only arise where, at the time of compulsory acquisition, the owner is actually putting the property to some use for which it is especially well suited. It is a term of art used to describe a characteristic of the expropriated interest which is of economic value to the owner but which would not enhance the market value of the interest and hence would not be included in the 'market value' component as the compensation to which the statute entitles the owner following resumption:" In the circumstances of the current matter I would agree with Mr Hinson that a prudent purchaser was unlikely to pay beyond the market value, to the extent of adding the capitalised savings and additional profits to the market value. It is Mr Hinson's submission that any effect or special value to the claimant could only relate to any impact upon the "business" carried out upon the land, and that would relate mainly to those businesses that are conducted entirely upon the site, and not related to off-site funerals. If I then examine Mr Walsh's estimate of the loss incurred as the result of the resumption, I find that he has sought to entwine both the land and its use as a total enterprise. As such, any conclusions so reached in respect of a loss as a result of the resumption, could entail any special value to the claimant. Under those circumstances it could be accepted that the capitalisation of net maintainable profits is a useful method of determining any loss in the land on an "before" and "after" basis in the circumstances of this matter. It is noted that Mr Walsh has accepted Mrs Micalizzi's estimate of an annual figure of $120,000 (EBIDTA), and use that to reflect net maintainable profits. If I am to accept Mr Cooper's evidence that the risks associated with the loss of the land, and any potential loss of business are different levels of risk, then it may be more appropriate to adopt Mr Cooper's estimate of $105,000 as net maintainable profits. However both accountants agree that a similar net maintainable profit should be -- 22 of 31 -- 23 allowed in both the "before" and "after" situations. Accordingly any variation in the net maintainable profits would only have a relative significance. The matter in dispute in Mr Walsh's approach really is the capitalisation rates that he adopts. I note that care needs to be taken in adopting the capitalisation of profits approach, and that it should not be used where there are sales of comparable lands and improvements in the neighbourhood. (Angelo Efstathis v. Commissioner for Railways (1958-59) 27 CLLR 52). However in the current matter, the paucity of comparable sales lends support to Mr Walsh's approach. In seeking guidance on appropriate capitalisation rates Mr Walsh has turned to the marketplace. I note that evidence in that regard is also limited, but industry verbal advice was that the Credit Union Australia's sales were negotiated on the basis of 11% of maintainable profits in 1986. (In 1987 the long-term ten year bond rate averaged 13%; and in 1986 it averaged 13.75%.) I note also that the later Service Corporation International sale in 1993 was negotiated at 7.25% of maintainable profits; and the Stewart Enterprise sale on the basis of 9%. (The long-term ten year bond rate averaged 7.25% in 1993, and 9% in 1994.) In both of those later sales there is a direct correlation with the long-term ten year bond rate. Such close correlation, in my opinion, would reflect the very secure on-going nature of the funeral industry, a not unexpected conclusion. I note also that the earlier "closed" nature of the funeral industry as a family business that is handed down between generations, has been opened since 1986 to wider competition. Such wider economic forces are more likely to move the market price for funeral enterprises towards a more open market. On that basis I believe that the long-term bond rate may now more closely reflect the appropriate capitalisation rate. That trend commenced in March 1986, and was likely to have become influential at the date of resumption in July 1987. I also note that Mr Cooper speculates that Credit Union Australia may have seen some wider marketing advantage from its constituents, a factor that may have had an influence upon the capitalisation rate. However in the absence of any industry evidence to the contrary, I will accept Mr Walsh's figure of 11% for 1986. Mr Walsh concludes that Alex Gow Funerals was better located, with increased traffic, compared to the Credit Union Australia sales. However in view of the lack of any in-depth analysis of the Credit Union Australia sales, I will accept 11% also as an appropriate capitalisation rate for the subject land in the "after" situation. -- 23 of 31 -- 24 That then leaves the estimate of the appropriate capitalisation rate to apply in the "before" situation. I note Mr Walsh's concern to reflect the lower rate in the "before" situation in order to allow for the increased risks associated with the resumption, and any impact that the prior Notice of Realignment may have had upon the value of the land. However I see no correlation between the later industry capitalisation rate of 9% (1994), and Mr Walsh's concluded rate of 9% in the "before" situation in 1987. On that basis there is no market indicator to support Mr Walsh's lower capitalisation rate, which must stand only upon his professional judgment. However Mr Walsh admits that turnover in ownership in the funeral industry has been largely non-existent, and I agree with Mr Slater that it is not possible to arrive at a meaningful conclusion as to the difference in the critical nature of the capitalisation rate. On the evidence before me I could only accept a similar capitalisation rate of 11% in both the "before" and "after" situations. On that basis the capitalisation rate method fails to provide any indication of the actual loss incurred by the claimant, and I seek other evidence to assist me in this matter. I note that Mr Walsh has made only a cursory reference in his report, that sales of other lands in the immediate locality at July 1987 reflected a rate of $180 to $200 per square metre. However he appears to use those comments only as support for his concluded diminution in value of $210,000 by the capitalisation method. Mr Walsh provides no evidence of the sales of other lands, and that matter was not pursued further. However if I am to accept the loss of land considered in isolation, that would tend to run counter to principles espoused in the "before" and "after" approach in determining compensation. In the "before" and "after" approach, it is the whole of the subject land that is considered in each situation. On an isolation approach one must be careful not to conclude that the land lost in this matter (609 square metres), reflects the highest valued portion of the subject land as being the frontage land to Breakfast Creek Road. In fact in the "after" situation, the remaining subject land continues to have frontage to Breakfast Creek Road. The loss of 609 square metres of land should then be seen in the perspective of the continuing usability of the residue land (5,272 square metres). While the land falls towards Breakfast Creek Road, the major development of the site has occurred well removed from the resumed land. In respect of whether there has been any impact upon access to the subject land, it is agreed that access always was, and continues to be, from Dunlop Street. There was no direct impact upon the buildings upon the site, and the only direct impact is agreed to relate to restrictions on parking and vehicle movements east of the chapel. -- 24 of 31 -- 25 However the resumption has resulted in a loss of frontage to Dunlop Street by some 15.8 metres. The use of a piecemeal approach was accepted in Daly and another v. Manly Municipal Council (1981) 50 LGRA 301. In that matter the respondent resumed an area of 1090 square metres from part of a total area of 3,118 square metres, upon which a residence continued to occupy the residual land retained by the claimant. The "before" and "after" approach was rejected in the circumstances of that matter, and Perrignon J found at page 307: "It seems to me that in the circumstances of the present case the more appropriate method is to rely upon a direct comparison of comparable sales, with appropriate deductions for the costs of bringing the resumed land to a saleable condition and a further deduction to reflect any detriment to the value of the residual land brought about by the use of the direct method of comparison of sales. " Part of the reason for the rejection of the "before" and "after" approach lay in the very profit and risk factors adopted by the parties, a fact relevant in the current matter. However the lack of any meaningful sales evidence in the current matter distinguishes it from the findings of Daly. If I then turn to Mr Slater's approach, I note that he concedes that any impacts by the Notice of Realignment would have been "fairly marginal" upon the value of the land, reflecting perhaps a factor of about 5% in the value in the "before" situation. If I accept Mr Walsh's suggestion from sales evidence of about $180 to $200 per square metre, then an impact of 5% upon the initial 296 square metres affected by the Notice of Realignment could represent about $3,000. That may have been reflected in a lesser value paid by the claimants when he purchased the land in November 1963. If I also adopt a "marginal loss" for the entire 609 square metres lost, I could conclude a figure of $6,090. However that makes no allowance for the loss of frontage to Dunlop Street. While the existing access to Dunlop Street has not changed in the "before" and "after" situations, what the claimant has lost is some potential for him to redesign his entrance arrangements, should he so desire in the future. However counter to such flexibility must be the requirement of the respondent in respect of where any alternative access point might be situated. The current access is already very near to the intersection with Breakfast Creek Road, and traffic arrangements are likely to constrain any alternative location of the access point to Dunlop Street. On balance the loss of frontage to Dunlop Street is not a major loss to the claimant, and I believe $6,090 could reflect any loss of the land in isolation, and -- 25 of 31 -- 26 without the benefit of a "before" and "after" analysis. However in order to allow any benefit of doubt in the claimant's favour, I will allow 10% for any marginal impact in the "after" situation, or say $12,000 for the loss of land. Mr Slater argues that any loss as a consequence of the severance of the land, would merely represent some inconvenience to the operations upon the land, but only during on-site chapel services. He concedes some small increased risk to mourners, but he argues that it is hard to quantify that amount and he makes no special allowance for that risk. In the matter of loss of visual amenity, I accept Mr Slater's conclusion that the erection of the new brick wall upon the retaining wall has diminished the impact of traffic noise; although I believe the impact of fumes from vehicle exhaust would not be so easily overcome. While those fumes would have increased anyway with the growth of traffic along Breakfast Creek Road, it is a fact that the large diesel trucks are now much closer than previously. In my opinion, any loss as a consequence of the closer expulsion of fumes, is best considered more as a factor impacting the business operations, or any loss of profits. I accept Mr Slater's conclusion that the enclosing of the porte-cochere was as a consequence of seeking to reduce overall traffic disturbance along Breakfast Creek Road, and is not directly related to the resumption. However there clearly has been a loss of visual amenity with the loss of the four mature golden cypress pines. It may be argued that the total cost of $3,300 would not now be required, as the trees would not need to be lifted into place in the "after" situation. However the loss to the claimant must reflect what he would have had to pay if he was to replace them as they were before the resumption. It is the amount that he has lost which must be compensated for, and I will allow $3,300 for that purpose. (ii) Loss of Profits - On the basis of the evidence, in my opinion, there has been some element of increased risk to the business operations of the claimant on the subject land. However I believe that is restricted only to the impact of increased risk to mourners as they park to the east of the chapel; plus increase in inconvenience to the claimant during on-site chapel services, impacting normal delivery activities. I see little evidence to support any conclusion that off-site funeral services have been impacted as a direct result of the resumption. There is evidence that, in an attempt to preserve the number of parking spaces for mourners' vehicles, there has been a need to restrict the width of vehicle lanes. While that is no doubt less convenient for elderly people entering or leaving vehicles, the level of risk to them is fairly marginal. While there is also the risk of a "bad experience" for relatives making arrangements at the subject land, for funerals to -- 26 of 31 -- 27 be conducted off-site, that would tend to be a matter of timing of the visit by the relative, a matter within the control of the claimant. On balance I see no particular loss as a consequence of the lesser parking spaces, and only minor for the lesser accessibility of service vehicles. At the heart of the matter is the period during which it may be appropriate to note any impact upon business activities, as a direct consequence of the resumption. I note that the claimant made a conscious decision to delay any claim for compensation until such time as all impacts upon the business of the claimant could be assessed. A key issue is whether there has been any loss of profits by the claimant as a direct result of the resumption. I look then at the business analyses by Mrs Micalizzi and Mr Cooper and note that it is a agreed that the number of funerals undertaken by the claimant has continued to fluctuate between 1987 and 1991, generally consistent with other market indicators. The total number of deaths in the BSD has risen steadily during that period. In analysing the annual number of funerals conducted by the claimant, Mr Cooper concludes with a 95% confidence level that the recorded variations in numbers represent the normal business cycle, with the exception of 1993 and 1994. It was because of the 1993 lowest number of funerals conducted since 1941, that the claimant decided to proceed in 1994 with upgrading of the facilities upon the subject land by enclosing and airconditioning the porte-cochere. It was Mr Gow's evidence that the claimant had refrained from undertaking any prior improvements, other than increasing advertising, with the view of letting the market define the impact of the resumption. However in any competitive business activity, it is generally held that failure to promote a business is tantamount to promoting failure. While the level of advertising has been an increasing burden upon the profits, advertising is only one part of ensuring retention of market share. There is no evidence that the claimant's competitors had not undertaken refurbishment of their facilities, and there could be other reasons why the number of advertised funerals declined as a percentage of total deaths during that period. I believe it is over- simplistic to attribute any variations in total funeral numbers undertaken by the claimant, as entirely due to the resumption process. However I do accept that additional noise and inconvenience was likely to have been experienced by the claimant during the period of actual construction from August 1987 to May 1988. The photographs of slippage in the bitumen parking areas, the need to underpin the retaining wall, the surface water ponding on the parking areas, and presence of major construction equipment, would all have attributed to a loss of amenity, and discomfort for mourners. The fact that that period is also coincident with -- 27 of 31 -- 28 a downturn in funerals undertaken by the claimant, could in part have contributed to some loss of profits in that period. On that basis I will accept the projected loss of profits for 1987-88 of $27,229 as contributed to by the resumption process. I reject the other losses as, in my opinion, there is no conclusive proof of those losses of business being directly the result of the resumption. (iii) Assessment of Compensation - In summarising this matter I find compensation as follows:  Loss of land $ 12,000  Loss of improvements - Re-erection of illuminated sign = $ 1,335 - Loss of 50ft sign = $ 1,680 - Loss of 4 golden cypress pines = $ 3,300 - Cost of brick fence on top of retaining wall = $ 47,409 - Architect's fees for front fence = $ 2,600 - Engineering fees for front fence = $ 800 - Brisbane City Council fees = $ 398 $ 57,522  Injurious affection - Loss of profits 1987-1988 = $ 27,229  Disturbance - Valuer's fees = $ 7,000 - Counsel's fees = $ 6,400 - Legal fees = $ 22,986 Total disturbance = $ 36,386 TOTAL $133,137 In respect of any architect's fees associated with the possible alterations and additions to the buildings, I find those would be more related to the need to expand the business as a result of growth in the industry. I do not allow those architect's fees as directly related to the resumption. Likewise I make no allowance for the acoustic consultant's fees. (iv) Interest - The remaining matter then for consideration is the level of interest that should be added to the above amounts for compensation. In that respect I note that this has been a long and protracted matter, extending virtually for 30 years from the time of the first Notice of Realignment of Breakfast Creek Road, plus a further 12 years from the actual date of resumption. However in terms of any actual interest in this matter, I can -- 28 of 31 -- 29 only consider any time from the date of resumption at 25 July 1987. The appeal was lodged with this Court in September 1999, after being lodged with the respondent in September 1995. Mr Hinson argues that the claimant has been less than diligent in pursuing his claim for compensation, and seeks for the Court to exercise its discretion and to apportion responsibility for costs on a 50%/50% basis. It is noted that the right to receive interest on compensation due, was upheld by the Land Appeal Court was upheld in Small and another v. Brisbane City Council (1968) 35 CLLR 239. In that matter the Land Appeal Court considered the long-held practice in this Court (from 1925) "to award interest on compensation, except where the dispossessed owner has remained in possession or derived some benefit from the resumed land after the date of resumption". The Land Appeal Court went on to say at page 248: "We think it would be most unfair and contrary to equitable principles to deny a dispossessed owner interest on his compensation monies in cases where he has lost possession of his property, its enjoyment and/or productivity. To deny interest is to deny him the earning power of the money into which the law provides his interest in the resumed land is ultimately to be converted." However it is noted that interest so awarded is not an interest in land, and should not therefore be considered as part of an amount of compensation awarded. As such it should not be considered when examining any question of costs. (See Acquisition of Land Act 1967, s.28.) The power for this Court to exercise discretion as to whether interest is to be paid, is found in s.28(1) which states that the Court "may order that interest be paid". In exercising my discretion in the current matter I note that it was the decision of the claimant to delay lodging a claim with the respondent from July 1987 until September 1995. While that approach was adopted for the fair and reasonable purpose of seeking to identify whether any losses had in fact been incurred, the delay until 1995 at least contributed to the protracted nature of the matter. However throughout that extended period it is also noted that the respondent had not made any advance payments towards settling the matter. As a consequence the claimant has been at a financial disadvantage in terms of any loss of interest that might have occurred. In seeking guidance on the impact of the nature of the behaviour of the parties, I note the decision in Moyses and others v. Townsville City Council (1979) 6 QLCR 271. In that matter the Land Appeal Court found at page 274: "Where the Court is considering whether it should award costs to an authority, it would be wrong to have regard merely to the amounts of the claim and of the award and of the value put in evidence by the authority. -- 29 of 31 -- 30 We would think that usually it would be more relevant to enquire whether the conduct of the claimant, including his making of an exorbitant claim, if he has made one, has been such as to force the authority; unreasonably and unnecessarily, into litigation. " While that referred to the matter of costs, in my opinion the principle of unreasonable behaviour is application with regard to awarding interest also. In the current matter I have no evidence that either party has sought to act unreasonably. The difference between the parties has tended to occur as the result of the lack of any market evidence of comparable sales; and the unusual nature of the funeral industry in the locality. The respondent could not be accused of unreasonably delaying or extending the process of resumption and construction. I believe the delay by Mr Gow can be attributed to his very careful and thorough approach to ensure his claims were correct and supportable, in the then changing nature of the funeral industry. Neither of those actions demonstrate, in my opinion, any lack of unreasonableness. However I find that there may have been some contribution by both parties in delaying settlement of the issue since the claim was first lodged with the respondent in September 1995. It would have been open to either party during this period to have sought to bring the matter before this Court at an earlier date. Accordingly I find that interest should be paid on compensation to the claimant from the date of resumption until September 1995; and then for half of the period from September 1995 until the date of the hearing of the claim. I note some guidance in the matter of MR Marshall v. Director-General, Department of Transport (A92-77) 20 February 1998, to be reported, in respect of what might be accepted as guidance as to what might be seen as a reasonable time for interest to apply. In Marshall the learned Member considered a period from 1986 to 1996, during which he found that the claimant had been dilatory in not lodging his claim with this Court until 1993. The Member only awarded interest from the date of the resumption until the date of lodgment with the Court, and also from the date of the hearing until final settlement. In the current matter I see some similarities with Marshall. In respect of the actual amounts of interest due, I note that Mr Cooper confirms the interest rates and the calculations in the amended interest schedule supplied with the outline of submission by the claimant. However each of those calculations applies up to the date of the hearing at 2 May 2000 and makes no allowance for any shared responsibility from 4 September 1995. If I allow for half of the period from 4 -- 30 of 31 -- 31 September 1995 to the date of hearing at 2 May 2000, I find a mid-point at 2 January 1998, and I will allow interest to that date. In accordance with s.28 of the Acquisition of Land Act 1967, this Court may order that interest be paid upon an amount of compensation determined. Accordingly it is ordered that interest be paid as follows: Claim Amount Date of Days Rate Interest Loss to 2.1.98 Land $12,000 25.07.87 3,818 10% $12,552.33 Illuminated sign $ 1,335 22.12.92 1,841 8.5% $ 572.35 50ft sign $ 1,680 25.07.87 3,818 10% $ 1,757.33 Golden cypress pines $ 3,300 25.07.87 3,818 10.0% $ 3,451.89 Brick fence $45,035 13.10.94 1,181 8.5% $12,385.86 Brick fence $ 1,187 09.01.95 1,093 8.25% $ 293.25 Brick fence $ 1,187 18.08.95 872 8.25% $ 233.95 Architect's fees $ 2,600 20.05.94 1,327 8.5% $ 803.47 Engineer's fees $ 800 21.06.94 1,295 8.5% $ 241.26 BCC fees $ 398 13.10.94 1,181 8.5% $ 109.46 Loss of profits $27,229 25.07.87 3,818 10.0% $28,482.28 Counsel's fees - Callinan $ 1,800 06.12.89 2,953 9.0% $ 1,310.65 - Callinan $ 2,100 07.01.94 1,460 8.5% $ 714.00 - Howe $ 1,400 08.12.93 1,490 8.5% $ 485.78 - Howe $ 300 18.03.94 1,390 8.5% $ 97.11 - Howe $ 450 25.07.95 896 8.25% $ 91.13 - Howe $ 350 29.09.95 830 8.25% $ 65.66 Legal fees $ 5,823 10.07.90 2,737 9.25% $ 4,038.97 $ 8,808 27.01.95 1,075 8.25% $ 2,140.16 $ 2,375 28.02.96 678 8.00% $ 352.93 $ 2,545 08.04.97 273 7.25% $ 138.00 TOTAL INTEREST DUE TO 2/5/00 $70,317.82 In summary, compensation under all headings for the resumption of the land, is awarded in the sum of One hundred and thirty-three thousand, one hundred and thirty-seven dollars ($133,137). It is further ordered that interest to an amount of $70,317.82 due prior to the date of the hearing on 2 May 2000 be paid. In addition to the above also to pay any interest at the rate of 6.75% per annum from the date of the hearing on 2 May 2000 up to and including the date upon which the final payment of compensation is made. (NG Divett) Member of the Land Court -- 31 of 31 --