Director-General, Department of Transport v The McKellar Development Corporation Pty Ltd [1997] QLAC 127

LAND APPEAL COURT TOWNSVILLE Re: Appeal against determination of compensation and award of costs by the Land Court - (A93-76) Director-General, Department of Transport v. The McKellar Development Corporation Pty Ltd J U D G M E N T Delivered this Twenty-sixth day of August 1997 This appeal is against the determination by the Land Court of compensation in the sum of $473,100 for the resumption on 6 November 1992 of a parcel of 9478 m² of land described as Lot 92 on Plan 855865, Parish of Smithfield, for road purposes. The resumption of the land is from a parent parcel containing an area of 5.406 ha situated at the junction of the Captain Cook Highway and McGregor Road, Smithfield, in the northern beaches area of Cairns, and being located about 17 km north of the Cairns Central Business District. There is also an appeal against the Land Court decision that the then respondent constructing authority pay the claimant's (McKellar) costs of and incidental to the hearing and determination of the claim for compensation. This costs appeal will be dealt with at the end of this judgment. The facts insofar as they relate to these matters are adequately encompassed within the written judgments of the learned Member of the Land Court which are now under appeal. Insofar as it is relevant, and for the purpose of giving meaning to this decision, a brief history of events leading up to the hearing in the Land Court is: Consequent upon resumption, the Director-General, Department of Transport, referred to the Land Court for hearing and determination a claim for compensation by the McKellar Development Corporation Pty Ltd in the sum of $806,300. This claim was amended during the hearing in the Land Court to $703,200 made up as to $696,900 for the loss of land and injurious affection and $6,300 for valuation and legal fees involved in the compilation of the claim. The then respondent, the Director-General, Department of Transport, assessed compensation for the resumption of the land in the sum of $230,000. The amended claim for compensation was based on a valuation made by practising registered valuer, Mr G Coonan, while the Director-General's assessment of compensation was also based on a valuation of the land made by practising registered valuer, Mr TJ Gould. The judgment compensation quantum under appeal ($473,100) is made up as follows: Compensation for Loss of Land [1997] QLAC 127 -- 1 of 7 -- 2 Value before Resumption - 5.406 ha @ $375,000 per ha ($37.50 m²) $2,027,250 Less: Value after resumption - 4.458 ha @ $350,000 per ha ($35 m²) $1,560,300 Compensation - Loss of Land and Injurious Affection $466,950 Round to $467,000 Disturbance Legal Fees $1,600 Valuation Fees $4,500 $6,100 Total Compensation $473,100 In addition, the Land Court made an award of interest as set out in the judgment. This interest award is not the subject of challenge before us. The principal ground of appeal is rather narrow in compass and is the only ground pressed before this Court. It reads: "The learned Member, having accepted that 'need' existed for 3.0627 ha of 'local shopping' owned land and that the need for buffering would not have precluded the rezoning of any of the subject land to "local shopping", the Member erred in applying the development as constructed as the highest and best use of the site after resumption." To bring this ground into perspective, we should indicate that at the date of the resumption, the whole of the parent parcel (then described as Lot 196 on Registered Plan 748699, Parish of Smithfield) was zoned "Rural C" under the provisions of the Mulgrave Shire Town Planning Scheme. Prior to resumption, in June 1992, McKellar made application to the Mulgrave Shire Council to have the balance area after the then proposed resumption (the Notice of Intention to Resume having issued on 26 May 1992) to be excluded from the "Rural C" zone and to be partly included in the "Local Shopping" zone and partly within the "Special Facilities (Multiple Dwellings)" zone. This application was subsequently withdrawn by McKellar and a fresh application was submitted in August 1992 which excluded an area which was designed as a proposed internal road, reducing the total area sought to be included within the "Local Shopping" zone to 2.3167 ha. This area comprised one parcel of 1.721 ha in the immediate corner of the then proposed new alignment of the Captain Cook Highway and McGregor Road, and two severed parcels, one of 2,957 m² at the northern extremity of the proposed new alignment of the Captain Cook Highway, and one of 3,000 m² at the southern extremity of McGregor Road. The -- 2 of 7 -- 3 area sought to be included within the "Special Facilities (Multiple Dwellings)" zone contained an area of 1.182 ha and this is located on the eastern side of the proposed internal road between the 2,957 m² and the 3,000 m² parcels sought to be included in the "Local Shopping" zone. The above two parcels and the land proposed to be included within the "Special Facilities (Multiple Dwellings)" zone all fronted a 40 metre wide drainage reserve which abuts the parent parcel along the whole of its eastern boundary, and which separates the parent parcel from "Residential A" zoned and developed land further to the east (the McKellar Estate). This August 1992 rezoning application was approved by the Mulgrave Shire Council on 30 November 1992 and formally approved pursuant to an order of the Planning and Environment Court on 12 July 1993. Rezoning of this retention area after resumption was gazetted on 19 November 1993. The internal road was subsequently constructed and the "Campus Shopping Village" was constructed between that road and the major intersection of the Captain Cook Highway and McGregor Road. The valuation by Mr Coonan which was placed in evidence during the proceedings in the Land Court was based on a "before and after" method of valuation. Mr Coonan contended (and as was found by the Land Court) that the value of the parent parcel before resumption was higher per unit area ($50 per m²) than after the resumption ($45 per m²) based on the zoning as subsequently gazetted for the retention area. He reasoned that the resumed area would logically have been included within the "Local Shopping" zone had it not been resumed. The then respondent Director-General's case before the Land Court, through Mr Gould, was that the resumed land should be valued (at the rate of $24 per m²) as land which, if the resumption had not occurred, had the potential highest and best use of medium density residential, alike such part of the retention area land included within the "Special Facilities (Multiple Dwellings)" zone. Mr Gould's primary reason for this approach to his valuation was that in the actual zoning application, McKellar only sought to rezone 2.3 ha of land of the area of 3.5 ha which was then available for rezoning to "Local Shopping". Before us, the appellant Director-General does not take issue with a finding of the Land Court accepting as a basis for compensation assessment that the McKellar before resumption rezoning design represented the highest and best use of the parent parcel of land, and a proposal which could have been seen, at the date of resumption, to have the likelihood of receiving rezoning approval. But as we understand the case in this appeal, the issue pressed before us is that post-resumption, the claim by McKellar that the company could not have obtained a rezoning of any greater area of "Local Shopping" land in the after resumption situation because a buffer of "Special Facilities (Multiple Dwellings)" zoned land was needed on the north-eastern boundary of the retention area, buffering the "Residential A" development land formerly referred -- 3 of 7 -- 4 to in this decision from commercially developed McKellar land, is not sustainable in view of a finding contained within the text of the judgment under appeal which reads: "Had proven need existed, the town planning opinion of Mr Challoner (who was called in evidence by the then respondent/Director-General) - that there might not have been any planning reason why the whole of the parent parcel could not have been developed for commercial purposes - could be accepted. While it seems obvious that the Mulgrave Shire Council would have resisted total rezoning to 'Local Shopping', I am not convinced that a successful challenge to a refusal on the grounds of the effect on residential amenity would not have been seen to be possible. It seems that suitable buffering could have been provided with particular assistance from the location and width of the adjacent drainage reserve." This Court is accordingly urged by the Director-General to find that the learned Member of the Land Court erred in finding that the highest and best use of the retention area post- resumption was as subsequently zoned and developed as a mix of "Local Shopping" and "Special Facilities (Multiple Dwellings)" land. It was also urged that the learned Member erred in not having found that a similar area of "Local Shopping" zoned land should be adopted for compensation assessment purposes to that proposed in the pre-resumption scenario, and that such area (3.0627 ha) was available for inclusion and valuation within the "Local Shopping" zone post-resumption. It is noted, as previously discussed, that the Director-General's primary claim in the case before the Land Court was that the highest and best use of the parent parcel pre-resumption included only 2.3167 ha of "Local Shopping" zoned land. Therefore, he says that the land resumed had a highest and best use for multiple dwelling purposes, and that the rezoning achieved after resumption represented the highest and best use of the land after resumption. It is, of course, also to be observed that both valuers called in the Court below endorse the latter segment of the primary claim. A secondary claim before the Land Court endorsed by the valuation made by Mr Gould is that, even if in the pre-resumption situation, rezoning to "Local Shopping" could have been obtained for the claimed larger area of 3.0627 ha, then such an area could have similarly been rezoned in the post-resumption situation, as no buffer of "Special Facilities (Multiple Dwellings)" land was required due to the presence of the 40 metre wide Council owned drainage reserve. It is submitted before us by the appellant/Director-General that the learned Member erred because his finding with respect to there being no need for a buffer is inconsistent with his finding with respect to the highest and best use of the land post-resumption. We are urged further to find that the learned Member's acceptance that the after-resumption rezoning design -- 4 of 7 -- 5 was an appropriate form of development ignores the basic premise of that acceptance, namely the appellant's claim that no larger area than that shown in the after resumption plan could have been rezoned to "Local Shopping". We are further asked to find that had the Member of the Land Court correctly applied his finding in respect to there being no need for a buffer, then he must have found that 3.0627 ha of land could have been rezoned "Local Shopping" in the after- resumption situation, instead of the 2.3167 ha applied for by McKellar. For these reasons, the appellant/Director-General maintains before us his contention that compensation should be assessed at $230,000, plus the agreed amount of $6,100 for legal and valuation fees. On the evidence before the Land Court, this Court is not convinced that the highest and best use of the retention area is a use which envisages the use of more "Local Shopping" zoned land than that actually approved consequent upon the rezoning application made by McKellar. To make such a finding would be contrary to the evidence of both valuers called in the case, contrary to the views of the constructing authority in the Land Court, and also contrary to the actual development which took place consequent upon rezoning after resumption. It is to be noted that the development was effected by an experienced developer. Such a finding would also involve placing no weight upon the town planning evidence of locally experienced planner, Mr Peter Robinson, who was called in evidence by the claimant in the Court below. Mr Robinson was of the view that had the owner (McKellar) sought to relocate the "Local Shopping" zone boundary to the east to recover the 9,478 m² of potential "Local Shopping" zoned land lost in the resumption, it would have meant that the zone boundary would lie almost coincident with the drainage reserve boundary. Mr Robinson said that Council may not in fact have permitted the zone boundary in this location, and that if the "Local Shopping" zone boundary was shifted east, Council would likely have imposed some substantial conditions with regard to buffering, which would have meant that at least part of this land would not be able to be used for "Local Shopping" purposes, being otherwise used for buffer. Mr Robinson also offered the opinion that any multiple unit development on the "Special Facilities (Multiple Dwellings)" zoned area would make an ideal buffer between the "Local Shopping" zone and the residential subdivision to the east, allowing utilisation of the whole of the land. In summary, Mr Robinson said that it is possible to hypothesise about the extension of the commercial development (shopping) to the east, however, in town planning terms it has particular difficulties bearing in mind the Council's attitude to other commercial developments at the relevant time. He considered it unlikely that Council would have approved the "Local Shopping" zone boundary to be coincident with the drainage reserve boundary. -- 5 of 7 -- 6 We regard Mr Robinson's evidence on the point as being quite persuasive given his long period (1980 to 1994) of experience as a town planner with the Mulgrave Shire Council. We also think it somewhat improbable that an experienced developer would have under developed the land to the extent and in the manner implicit in the appellant's argument Further, we are not satisfied that we should find that the learned Member erred in making his finding as to the highest and best use of the land post-resumption in view of his remark that "it seems that suitable buffering could have been provided with particular assistance from the location and width of the adjacent drainage reserve". The appellant argued that this remark can be construed in such a way as to have been a finding that no buffer additional to the drainage reserve would have been necessary in the event of rezoning a significant part (3.0627 ha) of the retention area for "Local Shopping". To so construe his remark would be to place no emphasis or significance on the words "with particular assistance" in the passage quoted from his judgment. To put it another way, we cannot construe the quoted passage to be a finding that the area of Council drain alone would be sufficient to satisfy town planning requirements for the provision of a buffer between the development contended for by the appellant for the retention area (with its increased "Local Shopping" area) and the residential estate to the east. Given the terms in which it is expressed and the context in which it appears, we do not think it is appropriate to isolate the reference to buffering on which so much reliance is placed, and use it to negate the finding that the after resumption development represents the highest and best use of the land. This finding was justified by the evidence. Nor do we think that the member was obliged to put aside the appellant's/valuer's evidence on this subject because he did not accept his evidence on the question of need. This appeal is by way of rehearing pursuant to the provisions of s.44(13)(a) of the Land Act 1962. Our consideration of the evidence leads us to conclude, for reasons already set out, that the finding that the post-resumption development represented the highest and best use of the land should not be disturbed. Consequent upon these findings, we cannot uphold the appeal in this case. It is dismissed, and the determination of compensation made by the Land Court in the sum of Four Hundred and Seventy-three Thousand One Hundred Dollars ($473,100) is confirmed. Re Appeal Against Costs Award The grounds of appeal read: 1. The Land Court erred in law and in fact and acted against the evidence and the weight of evidence in making an order for costs against the respondent authority. -- 6 of 7 -- 7 2. The Land Court erred in law and in fact in not holding that there should be no order as to costs. 3. The Land Court erred in law and in fact in not holding that there should an apportionment of any costs order against the respondent constructing authority." It is conceded on behalf of the appellant/Director-General, Department of Transport that if this Court upholds the decision of the Member of the Land Court in respect of his award of compensation, then it was clearly within the Member's discretion to award costs to the claimant in the Court below. The Land Court judgment as to the award of compensation has been upheld by this Court, and as a consequence the appeal against the award of costs in the Land Court now before us must fail. It is dismissed and in accordance with the provisions of s.44(16) of the Land Act 1962, the Land Court decision that the Director-General, Department of Transport pays McKellar's costs in the Land Court is confirmed. Costs in the Land Appeal Court Section 44(16) of the Land Act 1962 provides that the Land Appeal Court may make any such order as it thinks fit as to the costs of and incidental to an appeal that the Court has jurisdiction to hear and determine. Accordingly, we order that the appellant/Director-General, Department of Transport, pay the respondent McKellar's costs of and incidental to this appeal. Such costs shall be ascertained and fixed by the Taxing Officer of the Supreme Court at Brisbane, according to the scale of costs prescribed by law for the time being in respect of proceedings in the Supreme Court and the Taxing Officer is authorised and required to ascertain and fix such costs, in accordance with this order. K.A. CULLINANE J JUDGE OF THE SUPREME COURT JJ TRICKETT PRESIDENT OF THE LAND COURT CH CARTER MEMBER OF THE LAND COURT -- 7 of 7 --