Davidson v Brisbane City Council [1998] QLC 38

LAND COURT BRISBANE 20 March 1998 Re: Determination of Compensation - Resumption for Environmental purposes - A97-38. Sue Elizabeth Davidson v. Brisbane City Council J U D G M E N T Pursuant to the issue of a Notice of Resumption in the Queensland Government Gazette No 122 bearing date 23 August 1996, Sue Elizabeth Davidson has filed through her solicitors a claim for compensation with the Court on 8 July 1997. The claim is in the sum of $364,258.80 and is made up as follows: Land (after profit and risk is deducted) $ 318,250.00 Injurious Affection $ 30,000.00 $ 348,250.00 Less enhancement in value NIL Consequential loss Rates paid in respect of Aspley home from Aug 92 to Feb 95 $3,552.60 Extra rates paid in respect of Burbank property being vacant land rather than residential "A" land $2,047.18 Land tax paid because not place of residence $5,175.10 Cost of previous valuations on whole of property $1,050.00 Legal fees between 1992 and 1995 $4,103.20 Sundry expenses (petrol, parking for metres, phone, fax, postage $ 80.00 $ 16,008.80 Amount of Claim $ 364,258.80 The resumed land is situated at 100 Jenyns Court, Burbank, is described as Lot 2 on Plan No 890166, Parish of Tingalpa, and has an area of 13.58 hectares. At date of resumption it was part of a larger parcel of land described as Lot 4 on RP 209817, Parish of Tingalpa, with an area of 25.37 hectares. The resumed land is an irregularly-shaped "Non-Urban" zoned parcel with a frontage to land already owned by the Brisbane City Council and known as Brisbane Koala Bushlands (formerly Brisbane Koala Park). The claimant's dwelling house is on the retention area. The claimant, through practising registered valuer, Phillip Roy Peterson, assesses compensation for the loss of land, including that for injurious affection, in the sum of $330,000. The respondent Brisbane City Council, through practising registered valuer, John Richard Wood, assesses compensation in the sum of $223,000. Mr Peterson describes the nature of the land as being one which slopes gently to the road frontage. He says it is dominated by a ridge running along the western boundary with a high [1998] QLC 38 -- 1 of 9 -- 2 point to the east. There is a depression running through the centre of the land, and its eastern boundary fronts an esplanade along Buhot Creek. Mr Peterson describes the development surrounding the resumed land as being similar to that of the parent parcel - used for rural residential purposes. Mr Peterson told us that the main effects of the resumption are: 1. Prior to resumption the parent parcel of land had the potential to be subdivided into two allotments, one with access to a creek. 2. After resumption the highest and best use is a single homesite. 3. The resumption proposed public access to the resumed land. This will injuriously affect the value of the balance land. Mr Peterson has assessed compensation as follows: Injurious affection to Retention Area including house (value $700,000) $ 35,000 Loss of sale proceeds - Lot 2 calculated as: Gross sale proceeds $375,000 Less costs of sale Commission $10,000 Advertising $ 2,000 Legals $ 500 $12,500 $362,500 Less Profit and Risk - say 20% $ 60,400 $302,100 Less development costs $ 5,450 $296,650 Plus injurious affection - Lot 1 above $ 35,000 $331,650 Say $330,000 With respect to his assessment for injurious affection, Mr Peterson told us that he understands the resumed property will be provided with walking tracks for public use as well as being used for barbecues and he anticipates that the use of it by the public will upset the quiet enjoyment by the claimant of the retained homesite. Before resumption, while the land was privately owned, some measure of control could be exercised on its use. Mr Peterson says that the resumed land is substantially timbered, whereas the retention area is mainly cleared and pastured land. His assessment of compensation for injurious affection is at the rate of 5 percent of his valuation of the retention area including the value of the dwelling house ($700,000). Mr Peterson considered using a 10 percent diminution factor for injurious affection, but on balance thought a 5 percent factor would be more reflective of the loss in value. Mr Peterson has the opinion that there are two markets for rural homesites - one for cleared land and one for bushland privacy, and he cannot see a difference in the market value of them for this distinction. In so far as the subdivision of the parent parcel into two rural residential sites is -- 2 of 9 -- 3 concerned, Mr Peterson says he would subdivide the "sell-off" site largely along the resumption line with a comparatively long and narrow access to Jenyns Court. He says the best housesite on the sale block is on an elevated ridge. Mr Peterson acknowledges that it would be necessary to construct internal road access to his subdivided site but has not made any allowance for this as he says most developers would not consider road construction. He says it is better to leave this to the potential buyer as he/she has the choice of homesite locations. The claimant, Mrs Davidson, was called in evidence, and told us that she elected to build her home on land which had been cleared rather than on the higher resumed land because she did not want to disturb the land further by clearing more trees with its disruption to wildlife. She says there was never anyone around her secluded homesite. Mrs Davidson told us that her house and backyard can easily be seen from the resumed land and since the resumption, she feels less secure because a lot of people are going to know where the house is and who is living there. From proposed walking tracks, people can see inside her living areas so she is now fitting curtains to the bedroom windows which were not necessary previously. Mrs Davidson says one of the benefits she enjoyed from her property is the abundance of wildlife from which she gets great enjoyment, and she fears that with the proposed walking tracks on the resumed land, the wildlife (particularly the wallabies) will go away and their numbers might decline. She is also concerned about the increased risk of fires in the area when the resumed land is opened up to the public. Mrs Davidson understands that Council intends opening up a barbecue area and will open the resumed land to school excursions. She says that there were no tracks through the resumed land prior to its resumption by Council, but she observed a bulldozer making tracks through it since. Mrs Davidson's attention was directed to the component part of the claim for compensation under the heading "Consequential Loss". She says that originally the Council issued a notice of intention to resume in respect of her whole property in March 1992. Negotiations followed with regard to the appropriate compensation, and ultimately Council issued a further notice of intention to resume the subject land only on 20 November 1995. This was followed by the gazettal of the resumption. Mrs Davidson told us that she purchased a home in Aspley in 1990, when the whole of her land was under threat of resumption by the Department of Transport, for $215,000. This was before the original notice of intention to resume issued. When she realised that only half of her property was to be resumed, she sold the Aspley home in February 1995, for $280,000, and built her present home on the non-resumed half of her land at a cost of $325,000. Mrs Davidson claims that as a result of the resumption she has incurred the losses set out in the claim for compensation for consequential loss. The respondent Brisbane City Council called in evidence Graham Dare Phegan, who is its Principal Environmental Officer, Ecological Planning. Mr Phegan produced a copy of a memorandum dated 20 February 1998, which tracks the history of the resumption of the land. In the document, Mr Phegan tells us that the Brisbane Koala Bushland comprises a mosaic of Brisbane City Council owned/controlled bushland with an area of about 800 hectares. These protected bushlands are linked by areas of privately owned land and land owned by other levels of government. The resumed land is part of a larger bushland unit in the south-east of the City of Brisbane which had a high-quality koala habitat. Since the resumption, the resumed land and contiguous lands have been placed in the conservation zone, and any activity would be required to comply with the restricted uses under that zone. Mr Phegan expresses the view that it is likely that recreational facilities and activities in the Brisbane Koala Bushlands will be focussed on existing infrastructure at Chandler and in -- 3 of 9 -- 4 the Open Space zone at J.C. Trotter Park, and that use of the resumed land will be very low key and consistent with open space recreation. Mr Phegan says it is possible there will be walkways through the resumed land and fire access control tracks, but they will probably be along Buhot Creek. Mr Phegan has been told by staff in the Reserve Management area that Council has created some fire control access on the resumed land in accordance with its obligations under the Fire and Rescue Authority Act. The existing tracks have been largely enhanced with some extra vegetation minimally removed. Mr Wood does not see that there is a valid claim for injurious affection as he feels there is no negative impact on the retention area due to possible use of the resumed land by the public. He says that the Davidson land was always located next to parkland, and this position remains the same. In any case, Mr Wood says that he has never seen evidence of any depreciation in land value due to being adjacent to a reserve. Like Mr Peterson, Mr Wood approaches his valuation taking into account the potential for subdivision of the parent parcel into two rural residential homesites before resumption. Details of his valuation are: Gross realisation (the "sell-off" lot) - $ 300,000 Less Costs of sale Commission $7,950 Advertising $2,000 Legal expenses including issue of Title etc. $1,500 $ 11,450 $ 288,550 Less allowance for profit and risk 15% $ 37,635 $ 250,915 Less application and professional fees etc $5,000 Electricity $2,500 $ 7,500 $ 243,415 Less interest for approval sale and settlement period of 6 months @ 10% $ 11,590 $ 231,825 Less acquisition Costs 4% $ 8,917 $ 222,908 Add -- 4 of 9 -- 5 Value of the retained allotment as a homesite $ 300,000 Value "before" $ 522,908 For practical purposes adopt $ 523,000 "After" Valuation Lot 1 on RP 890166 $ 300,000 Diminution in value $ 223,000 I have inserted the words "(the sell-off lot)". Mr Wood provided us with his hypothetical subdivisional plan into two rural sites. Unlike Mr Peterson, Mr Wood has taken his subdivisional line roughly in an east-west direction with access provision to be by laneway up the western side of the retention area. He sees this as being an appropriate subdivision as it allows for the existing home and the homesite on the subdivided lot to be located on the western ridge with an easterly aspect over cleared sections of the property. Mr Wood also says that the subject land is situated in an area offering a quiet and private setting. He has not made a valuation of the dwelling house and landscaping or of a dam which is on the retention area as he considers their value to be the same in both the "before" and "after" assessments of value. Both Mr Peterson and Mr Wood have relied for their respective valuations on a number of sales. It is to be noted that Mr Wood has tabulated in his sale schedule a list of 22 sales, and of these Mr Peterson schedules 7. There was a lot of evidence about the virtues, disabilities, etc., of the many sale blocks, but in the end I feel more influenced by the following sales in this determination: 329 Prout Road, Burbank - Lot 12 on RP 819279, Parish of Tingalpa - 12.15ha - Lui and Uim to Wanless on 30.4.97 for $410,000 - zoning "Non Urban" This is a quality site with a well elevated homesite, which is accessed with a scoured earth road. The homesite has been cut to provide a level building platform. There is potential for extensive views northerly to the city, to the north-east over the bay to the bay islands, and to the east and south-east over Tingalpa reservoir and bushland. But there is dispute between the valuers as to whether the potential views can be exposed by the destruction of timber on the side of the elevated knoll, with the tree tops obscuring the available views at the moment. The sale land is subject to Vegetation Protection Orders. There is a powerline easement and power line which encumbers part of the lower-lying land. It is to be noted that this is an "after" date resumption sale but Mr Wood accepts that there is no differentiation between 1996 and 1997 market values. 146 Alperton Road, Burbank - Lot 3 on RP222250, Parish of Tingalpa - 13.87ha Keleher to Brisbane City Council on 6.8.96 for $400,000 - zoning "Non Urban". This is a moderately sloping semi-elevated rural homesite which has been selectively cleared. It is accessed by a formed gravel driveway. Mr Peterson told us that the vendor in this sale thought the property was worth $425,000 and in the sale price apportionment, he says that -- 5 of 9 -- 6 the purchaser, Brisbane City Council, made a substantial over-allowance for the value of improvements. He sees a fair apportionment of the sale, after making an appropriate allowance for the value of a shed, clearing and grassing and power connection, etc., in the sum of $30,000, with the land value apportioned at $370,000. Mr Wood has been advised that compensation was apportioned by the Brisbane City Council as follows: Land $ 325,000 Improvements (Dam, shed/tank, electricity, fencing, clearing/grassing) $ 54,000 Stamp duty, plans for a dwelling, restacking and removal of containers on site, valuation fees and legal fees $ 18,275 $ 397,275 Adopt $400,000 Now while that may have been the Council's view on the apportionment of compensation, it is to be noted that there has been no mention of what could be described as compensation disturbance items of the like of those included above in any of the other schedule sales to the Brisbane City Council - of which there are 12 in all. Notwithstanding that Mr Wood considers the Council apportionment to be conservative, I feel that this sale should, on analysis, reflect a land value of about $360,000. Mr Peterson sees the Keleher site to be comparable with the subject land, but Mr Woods sees it as being considerably superior. I have given thought to the totality of the rather voluminous evidence in respect of the sales and to the views expressed by the valuers about the comparability of them, much of which was contrary in nature. I am satisfied on the weight of probability there has been diminution in the value of the retention area and of its dwelling house due to the resumption. What has to be considered in cases of this nature is the "value of the resumed land to the dispossessed owner", and Mrs Davidson left the Court in no doubt that it had a special value to her due to its timbered nature and the presence of the wildlife. Now it well may be that Council will not construct walking tracks on the resumed land, but fire control tracks could surely be used by bushwalkers, and the evidence satisfies me that the dispossessed owner has lost a degree of control over the quiet and peaceful use of her home and the retention area. As Counsel for the respondent suggests, in the end the resolution of the conflict on the issue of injurious affection is left to my good sense. The only evidence I have as to the quantum of compensation to be awarded for injurious affection is that provided by Mr Peterson, and certainly his assessment of $35,000 seems rather nominal when weighed against his valuation of the retention area property ($700,000). I award compensation of $35,000 for injurious affection. It is not possible to make a meaningful reconciliation of the compensation assessment valuations since the valuers have used different hypothetical subdivisions in their "before" valuation exercises, with the resulting potential rural homesites having differing features. I find that each of the valuer's assessments should be adjusted but on my appreciation of the evidence, Mr Wood's valuations of the "sell-off site" and of the retention area is closer to fair market value than is Mr Peterson's. There is no evidence upon which I could conclude whether the appropriate profit and risk factor should be 20% or 15% but little depends on this. Before proceeding further, I must say that the Court has had the benefit of viewing numerous photographs and contour maps put in evidence by the parties - including those of the -- 6 of 9 -- 7 subject land and many of the sale lands. This has been of assistance to me and in my appreciation of the evidence. I find that compensation for loss of land is reflected by the following exercise: Value of land before resumption Value of retained homesite $ 325,000 Add Value of potential "sell-off" homesite (after the allowances made by the valuers for selling costs, profit and risk, interest, etc.) $ 250,000 $ 575,000 Less Value of retention area homesite $ 325,000 Compensation for loss of land $ 250,000 I now consider the claim for consequential loss. Re: Legal fees involved in the preparation and lodgment of the claim for compensation - These are agreed in the sum of $1,000. Re: Valuation fees involved in the preparation of the claim for compensation - These are agreed in the sum of $250. Re: Sundry expenses - These are agreed in the sum of $80. Re: Rates paid in respect of Aspley home from August 92 to February 95 - $3,552.60. This claim understandably is not pressed by the claimant. Re: Extra rates paid in respect of Burbank property being vacant land rather than Residential A land - $2,047.18. This claim also is not pressed by the claimant. Re: Land Tax paid because not place of residence - $5,175.10. Again this claim is not pressed by the claimant. Re: Costs of previous valuations on whole of property - $1,050. -- 7 of 9 -- 8 This claim is not pressed by the claimant other than in the agreed sum of $250 as set out above. (Council has made a commitment to compensate the claimant but this is not part of this compensation award). Re: Legal fees between 1992 and 1995 - $4,103.20. Again these fees are not pressed other than the agreed sum of $1,000 as set out above. (Council has made a commitment to compensate the claimant for additional legal fees but this is not part of this compensation award). My award of compensation for consequential loss is accordingly: Legal fees $ 1,000 Valuation fees $ 250 Sundry $ 80 Total award of compensation for consequential loss $ 1,330 As a result then, my total award of compensation is: Loss in value of land due to resumption $ 250,000 Compensation for injurious affection $ 35,000 $ 285,000 Compensation for consequential loss $ 1,330 TOTAL AWARD OF COMPENSATION $ 286,330 Section 28 of the Acquisition of Land Act 1967 provides that the Land Court may order that interest be paid upon the amount of compensation determined by it, that such interest shall be at such rate percentum per annum as the Land Court deems reasonable, and further that interest shall not be payable in respect of any amount of compensation advanced under Section 23 of the Act. The Court is advised that no compensation has been advanced to the claimant. Accordingly, I ORDER that the respondent Brisbane City Council pay to the claimant, SUE ELIZABETH DAVIDSON, interest at the rate of 7.75 percentum per annum on the following sums and for the following periods: On the sum of $285,000 for period commencing 23 August 1996 (the date of resumption) and ending upon the day immediately preceding the date upon which compensation is paid; and On the compensation awarded for Consequential Loss as follows: On the valuation and legal fees for the period commencing when the fees were paid by the claimant (if they were paid) and ending on the day immediately preceding the date upon which compensation for these fees is paid; and On the sundry expenses for the period commencing on 23 August 1996 (the date of resumption) and ending on the day immediately preceding the date upon which compensation for sundry expenses is paid. -- 8 of 9 -- 9 (CH Carter) Member of the Land Court -- 9 of 9 --