Astway Pty Ltd v Council of the Shire of Albert [1996] QLC 128 (1996-1997) 16 QLCR 558

LAND COURT BRISBANE 20 SEPTEMBER 1996 Re: A95-09 Determination of Compensation - Resumption for Rubbish Depot Purposes - Acquisition of Land Act 1967 Astway Pty Ltd (Claimant) v. The Council of the Shire of Albert (Respondent Constructing Authority) J U D G M E N T The Council of the Shire of Albert resumed by proclamation published in the Government Gazette on 16 December 1994, land owned by the claimant, situated at Old Coach Road and Nerang-Southport Road, Nerang. The land is described as Lot 241 on Registered Plan No. 844822, Parish of Nerang, containing an area of 16.75 ha, being the whole of the land in Certificate of Title, Volume 8500, Folio 248. The land adjoins the eastern alignment of the Gold Coast railway reserve. It comprises the balance area after an earlier but fairly recent resumption for railway purposes. At the date of the hearing, the railway was under construction. Access is being provided from Old Coach Road under the railway to the south-western corner of the site. A relatively short frontage remains to the Nerang-Southport Road, also in the south-western extremity. The land is bounded to the east by a water reservoir site. Although irregular in shape the land has an average depth of about 585 metres north to south and a maximum width of about 300 metres east to west. The land has been extensively quarried which activity has created an excavated land form, benched at various levels with the quarried rock face adjacent to the north-eastern and eastern boundaries. At the date of resumption the parties agree that an in situ volume of approximately 120,000 m3 of hard rock material remained within the site. Also accommodated on the site were various stockpiles of sand and soil material. A gully watercourse (Quarry Creek) drains as an ephemeral stream from the north-western quarter generally south to south-easterly, westerly of the centre of the site except in the southern section where it traverses the south-eastern extremity. [1996] QLC 128 -- 1 of 27 -- 2 An easement for future electricity transmission purposes traverses the site from west to east northerly of its centre with a branch easement surveyed back through the centre in a south-westerly direction to an easterly extension of the railway reserve. A second easement for access purposes is surveyed from near the eastern extremity of the Nerang-Southport Road frontage in a direction north of west to that railway reserve extension. The land at the date of resumption was zoned “Future Urban” in an area of the Shire identified as “Industrial” in the then existing strategic plan as well as a draft strategic plan. The differences between the claimant and the respondent lie in the assessment of the highest and best use of the land at the date of resumption. It is the opinion of the claimant that the potential of the site for development as a “dry-inert” commercial landfill represented the highest and best use. With leave, and subject to agreement being reached with the respondent relevant to continued occupation of the land, (as eventually occurred) the claim for compensation was amended during the hearing. The final claim before the Court is set out as follows: 1. Valuation of land resumed (a) Market value of land $2,495,000 (b) Special value to the owner: (i) $587,000 (ii) $651,000 $1,238,000 $3,733,000 2. Disturbance (a) Relocation Costs $76,000 (b) Loss of Stockpile $122,000 $3,931,000 During the course of the hearing agreement was reached between the parties as to professional fees expended in compilation of the claim for compensation and that will be dealt with later. The valuation put in evidence by the constructing authority was in the amount of $1,450,000. That valuation represented market value of the in globo land with potential for industrial subdivisional development. Witnesses called by the claimant were: Mr R.B. Bycroft, a Director of the claimant company. His evidence related to the history of the use of the land, the business activities of the Bycroft Group -- 2 of 27 -- 3 of Companies with which Astway Pty Ltd was associated, and certain aspects of the claim for compensation. Mr G.A. Penridge, the Financial Manger of the related companies. His evidence related to analysis of financial material relating to, in particular, expenditure on waste disposal. Messrs E.H. Briese and D.A. Houghton, who provided a joint geotechnical feasibility assessment of the potential of the site for land fill development. Mr R. V. Holland, whose evidence was related to town planning issues. Mr A.R. Brown, who had conducted an environmental noise assessment relative to the proposal for a landfill development. Mr A.R. Midwood, who dealt with population statistics and anticipated demand trends for landfill in the Gold Coast region. Mr D.C. Clements, who provided financial projections for development of the site as a landfill. Mr J.A. Judd, who operates a business, once owned by the Bycroft Group, involved in waste disposal. Mr N.C. Calabro, an accountant who provided an assessment of the hypothetical going concern value of the potential landfill development. Mr. K.P. Walsh, the registered valuer on whose valuation the claim for compensation was based. Witnesses called by the respondent constructing authority were: Mr D.W. Perkins, who dealt with the town planning issues. Mr D.R. Davis, an engineer who had provided estimates of development costs. Mr R.H. Amaral, an engineer involved in waste disposal planning. Mr T.J. Lacey, a registered valuer who had been responsible for the respondent’s valuation. At the outset it may be said that there was no disagreement between the parties that the subject land had potential for development as a private landfill. Modern waste disposal planning has become orientated towards segregation of material. Receival fee structure at public rubbish depots is designed to direct non-putrescible solid, dry/inert waste to specific locations. Dry/inert waste is usually generated from the construction and demolition industry but, to ensure a disposal site did not develop into an “uncontrolled” landfill, it was Mr -- 3 of 27 -- 4 Amaral’s evidence that it would be necessary, for reasons associated with potential contamination, for a strict protocol to be developed whereby the following materials be specifically excluded:  all conventional household waste (includes putrescibles)  all conventional Council “clean-up” collections (includes excess green waste, fine timber, cans etc., etc.)  all green waste (biodegrades)  tyres (produces toxins and oil when burnt)  cars, motors etc. (includes greases, oils, etc.)  white goods (includes oils, CFC’s, etc.)  liquids (partly filled tins, containers)  asbestos (needs special treatment, cover)  batteries  dry chemicals/hazardous wastes. Town Planning Issues The town planning evidence was consistent to the degree that both Mr Holland and Mr Perkins had concluded, that from their perspective, appropriate uses of the site included development as a private landfill or as an industrial subdivision. There was some difference in opinion as to the potential for the quarrying of the remaining rock reserves. The quarry operation had commenced prior to gazettal of the first planning scheme for Albert Shire in 1973. The quarry had become registered as a lawful non-conforming use, after application in 1984. It seems that for the lawful use of a crushing and screening plant in association with the quarry activity successful application for consent use of the site for a “temporary quarry” was first made in 1989. The life of a temporary quarry was restricted to two years under the planning scheme. A second successful application was made in 1991 but a third application in 1993 was refused. The grounds of refusal were that the application was contrary to the definition of “temporary quarry” in the planning scheme and that the appropriate form of application should have been a rezoning application to include the land in the “Extractive Industry” Zone. An appeal had been lodged in the Planning and Environment Court against that refusal but had not been heard by the date of the resumption. Mr Holland held the opinion that the refusal had resulted from a previous Planning and Environment Court judgment relative to the definition of “temporary quarry” in the Albert shire planning scheme. He was confident that a suitable rezoning to allow the relatively small volume of remaining rock material could have been expected. -- 4 of 27 -- 5 Mr Perkins had no such confidence, for technical reasons. He did agree however that the remaining rock was a valuable resource and being in small quantity, the short term required to quarry the material would be a relevant consideration. Both town planners agreed that the actual use of the site for stockpiling and sale of various sand and soil material was unlawful within the “Future Urban” Zone. There was no disagreement that such use, together with quarrying of rock on a temporary basis were compatible with the potential use of the site as a landfill. As early as 1991, the claimant company had, inter alia, requested the respondent to advise if it had any objection to a proposal “in recognition of the dwindling rubbish disposal site capacity in the city” to utilise the “existing quarry infrastructure and our crushing capacity to recycle concrete from building demolition sites in Albert Shire and adjoining Gold Coast City”. The respondent had replied to that written request by referring to an on-site meeting and advising that it had no objection to the operation as demonstrated. While it cannot be said with certainty I have formed the opinion on the overall town planning evidence, that the subject site had the potential to be included within the “Special Facilities” Zone, for a particular development which would have incorporated the further preparation of the site for landfill by quarrying activities and the contemporaneous development for that primary use as a commercial landfill in conjunction with the stockpiling of soil, sand and associated materials for recycling and processing for sale. The further quarrying of the rock material or the stockpiling of material would not be seen to be compatible with the proposal for industrial subdivision. Market Value for Development as an Industrial Subdivision Mr Lacey’s was the only evidence presented as to the value of the land for industrial development. Suffice to say that, based on his comprehensive research into sales evidence, consideration of the gross realisation which would result from the sale of the land in subdivision, and the various costs involved and appropriate allowance for profit and risk of realisation, Mr Lacey valued the land in globo with subdivisional potential in the amount of $1,450,000, exclusive of disturbance items. It is also relevant that the valuation included the existing stockpiles of materials which, in the development cost exercise, were to be utilised in connection with the siteworks requirements. Market Value for Development as a Private Dry/Inert Landfill -- 5 of 27 -- 6 Because of the lack of local evidence of sales of sites for development as private landfills, there had been a generally common valuation approach adopted. This involved estimation of the following criteria:  the void space within the site available to be filled  the demand for such space  available market share  the appropriate charge for waste material receival  the costs of operation of a landfill  gross and net income  the appropriate “capitalisation/discount” rate to be adopted in assessment of the value of the commercial operation as a going concern  the costs of establishing the commercial operation  holding costs during development of the landfill The valuation exercises brought about widely varying opinions of site value for that purpose, ranging from an initial $600,000 from Mr Lacey up to the various related amounts in the claim. There was virtually no common ground initially in the evidence relative to the valuation criteria, although eventually the charge for receival of the waste material at about the resumption date, as suggested by the claimant, seemed to be accepted by the respondent. Adjustments made by Mr Lacey to this and other criteria, resulted in calculations which, in his opinion, had the highest and best use of the land remaining as a potential industrial subdivisional development. It is necessary to consider carefully the evidence relative to the various items of valuation criteria. Void Space The development proposed by Messrs Briese/Houghton for the claimant, recognised the availability of further quarrying potential. It was Mr Houghton’s estimate that an in situ rock resource of 755,000 m³ remained. Of that volume “about 120,000 m³ may be suitable as hardrock aggregate, with the remaining 635,000 m³ being weathered material and argillite which could be used as cover or sold for filling”. It was their proposal to provide a floor at RL 13, as an extension of the development which existed and in their opinion above water table level. The watercourse was to remain generally in its natural location, within a reserved area 15 metres wide. The fill was to rise above that watercourse reserve in a benched batter with a relatively flat upper surface on either side of the creek, the finished level not to be above the natural adjacent ridge line. As I understood the proposal, an area in the south-west corner was excluded from filling to accommodate the main entry and administrative area including the weighbridge and to provide stockpiling facilities. The first estimate of void space was in the order of 1,750,00 m³ with waste capacity of about 1,630,000 m³ after -- 6 of 27 -- 7 provision for the placement of cover material. During the hearing the void space was recalculated to meet the restrictions on filling within the electricity easement. On the original concept, this reduced the usable void space to about 1,300,000 m³. It was envisaged that the final landform would be of suitable contour for some residual use. Mr Amaral’s proposal was to create five mounded areas eventually occupying the whole of the site, except for the watercourse area. He envisaged residual use limited to public open space. The proposal was generally more conservative in that first, the watercourse reserve varied in width from 30 metres to 40 metres (including adjacent access tracks). Second, 10 metre wide perimeter access and drainage berms were allowed where the claimant’s proposal allowed a strip 5 metres wide for that use. Mr Amaral did not accept that the quarry floor should be developed to RL 13 and his proposal did not envisage further quarrying although he had recognised the availability of the rock resource. His proposal resulted in a void space for receival of covered waste of 992,000 m³. If Mr Amaral’s more conservative design relative to the watercourse and site perimeter was applied to the Briese/Houghton concept (adjusted for the easement) then a usable void space of about 1,100,000 m³ would have resulted, still excluding the south-west corner area. There was no dispute that because of the nature of the existing topography and the various site constraints, the final void space could be plus or minus 20% of the estimates. Although significant volumes are involved in the differences, any deficiency in void space has minor significance in terms of the deferred present value basis of assessment adopted by the valuers, when the estimated ultimate life of the development and the earnings discount factor enter into the calculations. It is observed that Mr Walsh’s valuation effectively adopted a usable void of 1,200,000 m³. While I accept that the gully location might have required a more cautious approach in relation to future access requirements than was adopted in the claimant’s proposal, it seems to me that Mr Amaral’s estimate is overly conservative particularly in that the further quarrying potential was not incorporated within his proposal. For the purpose of the exercise, I will adopt a usable void space after further quarrying and exclusion of an unfilled area in the south-west corner, of 1,200,000 m³. Waste Disposal Demand At the date of resumption, there were in existence in the locality, two private solid waste landfills. These were referred to in the evidence as “City Link” situated at Spall Street, off the Gaven Way, at Carrara and “M & M” at Rudman Parade, off Reedy Creek Road, West -- 7 of 27 -- 8 Burleigh. Both were utilising void space provided by continuing quarrying operations. Both are to the south of the subject land. There were then six Council operated tips with varying remaining life spans. As a general comment the evidence indicates that the disposal of solid waste of the type with which this matter is concerned, is actively discouraged at the Council tips. While there also remains some demand for fill at low-lying sites, it was Mr Bycroft’s evidence that this demand has reduced significantly over the years due to the more stringent soil testing requirements for the development of filled sites. It seems that both Mr Walsh and Mr Amaral had accepted that the waste disposal activities at City Link and M & M represented the extent of the commercial market available in the Gold Coast locality. There is some potential for further solid waste to be directed from the more expensive Council tips but, as Mr Amaral pointed out, there are also times when suitable cover material is sought by those tips free of receival charge. Development of the subject site would have resulted in three commercial operations sharing the existing demand. However, the separate investigations resulted in significantly different interpretation of the private waste disposal requirements of the locality. Mr Walsh’s inquiries at City Link had provided him with actual figures for the second half of 1995 when an average of what he interpreted as 3,186 m³ of waste per month had been received. He had been informed that the intake during the period reflected recessionary market conditions and that “a couple of years ago” it would have been about double that volume. He recognised the need to obtain more precise figures over a longer period but the best he could establish from the accountancy section of that business was that the “range” over the last three years had been between 2,500 and 6,000 m³ per month. He had adopted the average in that range - ie 4,250 m³ per month as representing the maintainable intake at that facility. Mr Walsh accepted the criticism which was directed at him for adopting an average in a range but his response was that he did the best that he could based on his interpretation of the information provided to him. His inquiry at M & M revealed, in the absence of actual figures, an opinion that the intake in the second half of 1995 “should be around 2,000 m³ to 2,500 m³” per month, although it varied. Again he was informed that the particular period had been considered recessionary and the intake would have been double “a couple of years ago”. He was unable to take his inquiries to any higher level and decided to adopt a maintainable intake of 2,500 m³ per month at that facility. On his estimates the total maintainable intake at both facilities amounted to 6,750 m³ per month or 81,000 m³ per annum. His investigations revealed that within the industry some -- 8 of 27 -- 9 operators spoke of intake in terms of weight and some in terms of volume. After various discussions he satisfied himself that as a rule of thumb 1 tonne of waste material such as was accepted at the dry/inert landfills was generally regarded as equivalent to 1 m³. Mr Amaral did not accept that ratio from his own considerable experience in the industry and also from his own discussions with various operators. In his opinion, because the range of material capable of being accepted at these facilities did not include such items as cardboard cartons but was limited to solid waste and predominantly demolition material, the ratio was more likely to be 1.8 tonnes per m³. On this particular point, Mr Clements’ many years’ experience in the waste industry had influenced him to adopt for the purposes of the exercise he had conducted the ratio of 1 tonne to 1 m³. He was able to inform the Court however that the somewhat precise weight to volume records of the Brisbane City Council which he had been able to check after compilation of his report, indicated a ratio of between 1.1 and 1.2 tonnes per m³ for that Council’s solid waste intake. While it is observed that the private landfills had similar charges for either a tonne or a cubic metre, for the purpose of estimating demand on a volume basis, I will adopt the Brisbane City Council experience, of 1.15 tonne/m³, overall. Mr Amaral’s first investigation at City Link indicated to him that the intake there averaged 3,500 tonnes per month, which on his weight to volume conversion resulted in a rounded estimate of 2,000 m³. Evidence given by Mr Walsh caused him to go back to City Link during the hearing. He was then informed that in the five months preceding the hearing the intake on “actual truck measurements” had been 3,200 m³ per month. Mr Amaral enjoyed a working relationship with M & M and confirmed there his earlier advice that while intake did fluctuate, it had averaged 2,000 m³ per month over the last three years. Based on his first inquiry at City Link he had adopted a total intake at both facilities of 4,000 m³ per month and 48,000 m³ per annum. Subsequent to his later inquiry he upgraded his monthly assessment to 3,000 m² at City Link and 5,000 m³ per month at both facilities, totalling 60,000 m³ per annum. In his opinion, had the subject land been developed as a landfill it would have shared equally in the waste disposal demand for the locality. On that basis he had estimated that the site had the potential to receive 20,000 m³ of waste per annum. The Briese/Houghton report, in assessment of demand for “hardfill landfills” had included reference to the “Draft Waste Management Strategy for Queensland - Discussion Paper” (Queensland Department of Environment and Heritage, May 1994) according to which “the -- 9 of 27 -- 10 Industry Commission’s 1990 Report on Recycling estimated that the amount of demolition waste generated in Brisbane in 1989 was 190 kg per person per year”. Mr Briese assumed that such level of waste generation would also apply to the Gold Coast. Mr Amaral had similar figures produced by several consultants. When the Environmental Impact Study had been carried out for the Albert Shire on the Molendinar Landfill proposal, 190 kg per person per year had been adopted for the solid waste generation but not for the whole of the Gold Coast statistical district. Instead the catchment for the Molendinar proposal had been estimated as being a population of 189,000 persons. His verbal evidence-in-chief included the following: “So if I use, round that off even, and use a 200,000 figure and multiply it out, I come to about 38,000 tonnes using the Douglas & Partners” (Briese/Houghton) “figure and if I upgrade that, because that was 1989 and this is now seven years later, and someone said that could be 45 or 50,000 tonnes I would say that wasn’t far off the mark. It’s a far lesser figure when you revert it back to cubic metres of course than what I’m getting now looking at M & M and City Link. But it would appear to be about appropriate, anywhere from 40 to 60,000 m³ a year total.” Mr Clements had been of the opinion that as the Brisbane figures were over the whole of its population it was reasonable to assess the solid waste demand for the whole Gold Coast City Council (now including Albert Shire) population which he had rounded to 300,000 persons. However, Mr Clements had established that the hardfill waste generation in Brisbane had been 565 kg per capita in the 1994/95 year based on a population of 1,000,000 persons. Had the Gold Coast City Council population of 300,000 generated the equivalent capita hardfill waste, that would have been the equivalent of 169,500 tonnes in 1994/95. At 90% of the Brisbane figures then 80% and 70%, the calculations became 152,550 tonnes, 135,600 tonnes and 118,650 tonnes respectively. It is observed that at 70% of the Brisbane generation, and a conversion factor of 1.15 tonne/m3 overall, the Gold Coast figure would be about 103,000 m³. Mr Walsh estimated the Gold Coast private hardfill demand as 81,000 m³ on a maintainable basis. That figure is far in excess of the best estimate of the 1994/95 year when allowing say 3,250 m³ at City Link and 2,000 m³ at M & M there was private commercial disposal of only 63,000 m³. Even in a recessionary period those figures cannot be ignored. They indicate that at least in 1994/95, the waste generation in the Gold Coast/Albert Shire statistical area was far less than 70% of the generation in Brisbane, or alternatively large volumes were being deposited at one-off filling sites or the Council facilities at the much higher receival rates. Even accepting that the recessionary forces were at work in the Gold Coast area in the -- 10 of 27 -- 11 1994/95 period in terms of hardfill waste generation, I am unable to accept that there is substantive evidence to support Mr Walsh’s estimate on a maintainable basis. Mr Bycroft’s evidence was that the quantity of waste disposal work over the last five years had not changed “a lot”. It was the cost of waste disposal which had risen significantly. For the purpose of the exercise, and providing benefit of doubt, which must exist on the state of the evidence, in favour of the claimant, I will adopt a maintainable commercial hardfill demand estimate of 70,000 m³ per annum for the catchment area which had been served by City Link and M & M at the resumption date. Market Share Mr Amaral’s opinion was that, of the private hardfill demand, the subject site could be expected to attract an equal share, ie one-third. His first estimate had been 16,000 m³ per annum and it was on this estimate which Mr Lacey had carried out his initial valuation. For the reasons explained, Mr Amaral’s estimate had been upgraded to 20,000 m3 per annum. Mr Walsh had been in possession of the hardfill disposal activities of both Bycroft Earthmoving Pty Ltd (one of the Bycroft Group) and Mainflag Pty Ltd trading as Bycroft Backhoe & Bobcat Hire (the company now operated by Mr Judd but no longer associated with the Bycroft Group). In 1993/94 Bycroft Earthmoving had paid fees to Council Tips, City Link and M & M involving solid waste disposal amounting to the equivalent of 15,025 tonnes/m³. This volume on the actual tonnage figures supplied would have reduced to about 14,107 m³ on the conversion rate which I have adopted. Then in 1994/95, the figures were 14,311 tonnes/m³ which I have converted to 14,264 m³ on the tonnages provided. It is accepted by Mr Walsh that had the subject site been developed as a landfill and had it remained in the ownership of the claimant company, all of this waste material would have been directed to it. It is observed that in 1994/95, about 22% went to M & M and about 75% to City Link, the balance to Council landfills. The Mainflag business in the 1994/95 period had disposed of hardfill waste comprising 13,931 tonnes and 9,910 m³ to all sources. On the conversion adopted that would amount to about 22,000 m3. Mr Judd gave evidence that because of the geographic area in which his business was concentrated, he had estimated that 70% of his disposal requirements would have been directed to the subject site had it been in operation. On Mr Walsh’s figures (tonnes equating m³ ) Bycroft Earthmoving and the Mainflag business accounted for a potential source to the subject site of 32,000 m³ per annum. The balance of the Gold Coast generation was, on his figures, 49,000 m3 (81,000 m³ minus 32,000 m³). He -- 11 of 27 -- 12 felt that the subject site’s share of the balance would be one-third, rounded to 16,000 m³. He adopted the potential intake at the subject site then as being the 48,000 m³ or 4,000 m³ per month. Mr Clements’ report contained reference to a review of the market carried out by Mr Walsh “and others” which indicated that the local market would generate hardfill waste of 3,000-5,000 m³ per month that would be attracted to this site. After consideration of the 32,000 m³ per annum potential from Bycroft and Mainflag, Mr Clements had adopted Mr Walsh’s 4,000 m³ estimate as the “starting” volume, for the financial model which he had developed. He had taken comfort from the waste generation figures in Brisbane when accepting that starting volume. For the purpose of this valuation exercise, it seems to me that the potential Bycroft and Mainflag demand should not be ignored. Mr Amaral had not been aware of these suggested disposal figures until reports had been exchanged. Even so, he felt that little weight could be placed on, in particular, the Mainflag figures when the realism of the commercial market was considered. I disagree because, as I understood the evidence of Mr Judd, his estimate had been based on geographical considerations and related haulage costs rather than any business bias towards the claimant. Also because of geographical considerations, I am not convinced that Mr Walsh was entitled to be so confident that the balance of the market would be equally shared. It seems to me that M & M would continue to have an advantage in terms of haulage distances for the more southerly waste generation but a disadvantage in terms of the more northern generation, including the older Southport/Surfers Paradise area. Of the best information available, it seems that in 1994/95, M & M’s share of the private market was about 38% and City Link’s 62%. If the more generous maintainable estimate of 70,000 m³ was adopted, the relative shares would be say 26,500 m³ to M & M and 43,500 m³ to City Link (the best estimates of actual figures having been increased by about 10% to arrive at 70,000 m³). On the conversions adopted it seems to me that the combined Bycroft Earthmoving and Mainflag disposals would have been about 29,500 m³ in 1994/95 or similarly increased by 10% to find a maintainable basis, say 32,500 m³ out of the 70,000 m³ total. This would leave 37,500 m³ to be shared amongst the hypothetical three operators. Accepting that M & M would suffer some loss of market share and reducing its intake to say 20,000 m³ per annum, 17,500 m³ would remain to be shared between City Link and the subject site. If that remainder was shared equally, City Link’s share would fall to 8,750 m³ per annum or only 20% of its previous share of the total market. The subject site would, with that remainder share improve to 41,250 m³ per annum. It would -- 12 of 27 -- 13 be seen as highly likely that City Link in particular would respond to such significant loss by the use of aggressive trading practices to counter the competition created by development of the subject site.. For the purpose of the exercise, after consideration of the actual trading figures of two operators within the industry, and the northernmost location, I will adopt a market share on a maintainable basis of 3,250 m³ per month or 39,000 m³ per annum. Waste Receival Charge Mr Amaral’s initial inquiry indicated that “in 1994 ” the gate charge at City Link and M & M was $15 per tonne or m³. Mr Lacey’s calculations had been based on that advice. The fact is that at about the time of the resumption both those operators had increased their charges to $20 per tonne or m³. The Council landfill nearby to the subject site was and had been charging $45 per tonne and directing, by signage, hardfill waste to City Link. I will adopt a waste receival charge of $20 per m³, at the relevant date. Costs of Operation Relying primarily on the advice of Mr Amaral, Mr Lacey, in his initial valuation, adopted an annual operating cost of $104,600, for the receival of 16,000 m³ of fill. On a gate fee of $15 per m³ the operating cost allowance was about 43.6% of gross revenue but on $20 per m³ gate fee that allowance would have reduced to 32.6%. The cost structure would logically decrease if fixed costs were then spread over a greater intake volume. Mr Amaral’s advice had been that operating costs would be about $5 per m³ plus the costs of water control and sampling. Mr Clements’ financial analysis had been comprehensive and detailed. He had prepared a financial model reflecting the requirements of a public company. Included in his costings were allowances for depreciation (including depreciation on land) and interest costs. Mr Calabro, in his business valuation approach, adopted Mr Clements’ basic estimates, except that he deducted the allowance for depreciation on land and the interest costs. On an estimated receival of 48,000 m³ per annum at commencement, Mr Calabro calculated net earnings to be $547,000, operating costs being 43% of gross revenue. However on the 10-year projections adopted the operating costs fell to 28.3% of gross revenue. Mr Walsh also adjusted Mr Clements’ figures as had Mr Calabro, but only in the commencement year “setting aside projections of increases in income and costs”. It seems to me reasonable that Mr Clements’ public company approach be adjusted for market value assessment as adopted by Messrs Calabro and Walsh. I will adopt Mr Walsh’s -- 13 of 27 -- 14 commencement year approach, when costs of operation were estimated to be about 43% of gross income. Although Mr Walsh’s revenue/cost ratio is based on the higher intake than I have adopted in this exercise, it does make allowance, for example, for depreciation on items other than land and might be seen to be quite pessimistic when the long-term projections are considered. Gross and Net Income I have adopted a gross income on the basis of maintainable waste receival of 39,000 m³ per annum at $20 per m³ or $780,000 per annum. Expenses at the rate of 43% of gross income leave a net estimated income of $444,600 per annum. Going Concern Discount Rate The methodology adopted by the valuers was to discount to present value, the estimated net income stream over the life of the development. The discount factor is obviously one of the critical factors in the equation. Relying on Mr Amaral’s estimates, Mr Lacey had adopted a discount factor of 15% in his initial assessment. Although he had not conducted the demand investigation, the discount factor he said was intended to reflect the “conservative” estimate of demand which would have allowed a growth factor. I did not gain the impression that Mr Amaral intended his initial estimate to be conservative. However, when Mr Amaral adjusted his demand estimate (his initial estimate being wrong), Mr Lacey saw the need to increase the discount factor. His reasoning for doing that was not convincing when he was relying on Mr Amaral’s estimates. When it emerged that highest and best use as a landfill was not as remote as he had first considered, through challenges to Mr Amaral’s evidence, it seemed to me that Mr Lacey turned his mind more seriously to market considerations. He then suggested that some comparison could be seen to exist between a commercial landfill operation and that of a quarry operation. Although with the converse physical result, the analogy makes some sense. From a valuation perspective the income estimates are based on demand as are life expectancy considerations. It was necessary for Mr Lacey to rely on his professional experience rather than providing specific market evidence, in providing his opinion that the market discount factor for quarrying operations would be in the range of 25%. As I interpreted his evidence, Mr Lacey had been prepared to adopt a discount factor of 15% on what he seemed to accept as a conservative demand estimate or a minimum of 25% if the demand estimate, on the best information available, was seen to be optimistic. -- 14 of 27 -- 15 Mr Calabro had adopted a discount factor of 30% in his going concern assessment, but it needs to be recognised that his discount factor had taken into consideration not only the risk associated with achievement of the initial income estimate but also the future projections of the overall operation. Having found that there was no reliable evidence of sales of potential landfill sites in Queensland, Mr Walsh went as far as Melbourne to gain some valuation assistance from sales evidence. He well recognised the difficulties in comparison between the two locations but at the very least the available Melbourne sales evidence indicated to him a level of value which was industry related. Two sales had taken place in that city. One was of no assistance because of the limited void space available. The second sale took place in 1991. It was of a site with 2,700,000 m³ of void space and sold for the analysed equivalent of $2.72 per m³ of that void space. Mr Walsh’s investigation revealed that the estimated net income at the time of sale showed “a present value over 13 years at 17.25% exclusive of establishment costs”. No information was provided as to the estimated establishment costs or the discount factor which would have been indicated on a going concern basis. Nevertheless, Mr Walsh in his valuation adopted a discount factor of 17.25% for the hypothetical established going concern basis of valuation for the subject site. He pointed out that on the resultant value of the site, before establishment, on his estimate of net income, over a life of at least 25 years, the discount factor equated 23.5%. This 23.5% was then the “like with like” comparison with the discount factor of 17.25% shown by the sale. In Mr Walsh’s opinion increasing the factor from 17.25% in Melbourne to 23.5% at the Gold Coast, reflected a reasonable interpretation of the differing market and risk considerations. During the hearing, Mr Lacey had made contact with a Melbourne based associate. He had been informed that another valuer had analysed that same sale to show a discount factor of 20%. If strict reliance was to be placed on the evidence provided by that sale, then in the circumstances, Mr Walsh’s firsthand analysis would be preferred. Nevertheless the weight which might be placed on the evidence is, in my opinion, most limited, when the Melbourne demand was clearly much greater and the life of the landfill more finite. In considering a hypothetical sale of the subject land the particular claimant, as the vendor, had knowledge of the potential demand. Some of the risk factors associated with demand are logically reduced significantly when one related business creates about 20% of the total demand which has been estimated. The claimant, as a hypothetical vendor, also had specific information as to the likely demand of others operating within the industry. It is unlikely -- 15 of 27 -- 16 then that in negotiations to sell the subject site the claimant, or any other prudent vendor, would have been influenced by demand estimates which ignored that particular information. If the claimant company was to be seen in the role of a hypothetical purchaser, while specific knowledge of a particular source of demand would unlikely lead to a purchase price in excess of market value, it would be expected to at least crystallise the price which it would be prepared to pay rather than fail to obtain the site. In discussing the concept of market value, Isaacs J said in Spencer v. The Commonwealth [1907] 5 CLR 418 at p.441: “To arrive at the value of land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognisant of all circumstances which might affect its value, either advantageously or prejudicially, ...” Under that test both the hypothetical vendor and purchaser are assumed to be in a similar position when it comes to circumstances which might affect the value of the land. The question of any special value to the owner will be addressed later. The discount factor to be adopted in the preferred valuation methodology, will reflect the market perception of the risk involved in maintaining the estimated income stream. The evidence indicates that if the income stream was clearly conservative a discount factor as low as 15% might be appropriate. Conversely where income stream estimate involves projections incapable of proof but arguable on the available evidence, a discount factor as high as 30% might also be appropriate. In the subject matter, on the criteria which is adopted, no certainty exists. However, the gross income is based on actual receival rate. The receival potential is based on a market share which has, as its base and major component, the actual trading history of a related company and prospective client and the geographical disposal history of another prospective client. The cost of operation can be accepted with confidence, as the maximum likely. On any view, in the range of discount factors available for consideration, neither the lowest nor the highest would be appropriate. The income stream estimate adopted is seen to have had some median elements of risk reasonably reduced, and I have decided to adopt a discount factor of 20%, as a result. Establishment Costs Mr Clements had consulted with Mr Bycroft as to site specific matters. A detailed estimate of establishment cost including the necessary plant and machinery was contained within his -- 16 of 27 -- 17 financial projection assessment. Generally, Mr Clements’ estimate was accepted by Mr Walsh, although he had deducted an allowance of $43,000 for provision of a weighbridge and site office, on the basis that these improvements already existed at the date of resumption (the evidence is however that the weighbridge had been subsequently sold and it appears that the claimant did not own the site office). Mr Clements’ estimate was in the amount of $602,200. There was criticism of an allowance of only $23,000 within that amount for internal access including the crossing of the watercourse. Mr Clements had sighted a quote for part of the work and had accepted Mr Bycroft’s proposal that on-site concrete pipes could be used in the construction of a watercourse crossing. Mr Davis had provided the respondent with engineering estimates for the alternative development proposals. He had understood that access to the landfill proposal would have been gained off the Nerang-Southport Road and had allowed an intersection cost of $40,000, sealed internal road access at a cost of $100,000 and the watercourse crossing at a cost of $75,000. In his opinion, while access off Old Coach Road would eliminate the particular intersection costs allowed, there would then be involved another intersection cost, an additional 80 metres of road construction, rock cutting and drainage at a cost additional to the alternative route of $69,400. The internal road construction was intended to have a service life of 20 years requiring minimal maintenance. A properly designed permanent culvert for the watercourse crossing was seen as essential. As I understood the evidence of Mr Davis, (and no doubt this would have had some effect on the alternative subdivisional proposal which gained access off Old Coach Road) he had not been aware that Queensland Rail, as a consequence of an earlier resumption, was responsible for the provision of access under a railway bridge to the south-west boundary of the site. Further, the claimant had already constructed certain external roadworks in connection with an earlier rezoning proposal. Mr Davis agreed that if that had been the case a concession could be expected relative to external roadworks. Although I have not been convinced that need existed for the standard of internal roadwork envisaged by Mr Davis, for the landfill, it seems that approval for rezoning and development of the site would reasonably have involved the provision of a more substantial culvert than had been envisaged by Mr Bycroft. It is not possible to make direct comparisons between the estimates of establishment costs made by Mr Amaral and others and those of Mr Clements. More substantial drainage would increase the cost estimate of Mr Clements, but it is observed that a siteworks contingency -- 17 of 27 -- 18 allowance was made. His allowance for the cost of obtaining approvals was significantly higher than suggested by witnesses for the respondent. On the overall evidence of Mr Clements, an establishment cost in the order of $600,000 would seem a reasonable estimate and I will adopt that rounded amount. Holding Costs Mr Walsh’s approach to this aspect of the valuation considerations was to deduct an “allowance of three months’ earnings to provide for a lead-up period prior to full operation”. It seems to me that the holding costs would include the loss of interest on siteworks during part of the actual development period, interest on the land value for the rezoning and development period, together with rates and taxes. In the absence of any specific information as to these individual holding costs I will adopt Mr Walsh’s broad methodology of allowing three months’ loss of gross earnings. I am confident that actual holding costs would not be greater than this allowance. Market Value of Site as a Potential Landfill Using the criteria which has now been discussed in detail I will adopt the following basis of assessment of market value: Void Space - 1,200,000 m³ Demand - 39,000 m³ per annum Life of Land Fill - 30 years Gross Maintainable Income - $780,000 per annum Net Maintainable income - $444,600 (57% of gross) Discount Factor to Present Value - 20% Establishment Costs - $600,000 Holding Costs - $195,000 (3 months gross income) Valuation as Going Concern: Present value of $444,600 per annum for 30 years @ 20% = $444,600 x 4.97894 $2,213,635 Less Establishment Costs including plant and machinery $600,000 $1,613,635 Less Holding Costs $195,000 Land Value as a potential landfill $1,418,635 In practical figures adopt $1,420,000 The foregoing exercise appears to indicate that as raw land there would be virtually no difference in value for development either as a landfill or for an industrial subdivision. However, that is not the case. -- 18 of 27 -- 19 As an industrial development, either the remaining rock reserve would be lost or that development would need to be held over incurring associated holding costs until the quarry operations were to cease. As a landfill, the quarry operations would continue as a complementary use. Another matter arises which is seen to be critical to the claim as it was calculated. I have adopted a void space based on the further quarrying operations but excluding an area of about 2 ha in the south-west corner. It was the loss of this area for which the claimant, on Mr Walsh’s valuation advice, sought a special value component initially of $726,000. This represented the present value of what Mr Walsh saw as the cost of renting an equivalent parcel for a period of 25 years (Mr Walsh’s expectation of the life of the landfill). I will deal with these matters as follows: Rock Reserve Mr Houghton identified an in situ hard rock reserve of 120,000 m³. Mr Walsh calculated that after quarrying, that reserve would equate 240,000 tonnes. Mr Walsh envisaged extraction of that rock by “a third party quarrier, paying a royalty back to the property owner”. A royalty rate of $1 per tonne was adopted with sale of the reserve to be effected over a two-year period. It is seen as relevant, in terms of the earlier discussion regarding an appropriate discount factor for the landfill, that Mr Walsh adopted a “discount factor” of 15% for this short-term operation with what was, it seems, far less risk relative to demand than might have been expected with the landfill proposal. Mr Walsh’s calculation was rounded to $195,000 which amount I will adopt. Associated Stockpiling On Mr Walsh’s adoption of a 2 ha area being utilised for this operation, the balance of the site including the watercourse area would comprise 14.75 ha. As a raw land site with potential for landfill development, the adopted valuation is $1,420,000 or about $96,000 per ha. Mr Lacey’s in globo valuation of the total site for industrial subdivision was $1,450,000 or about $86,500 per ha. He had adopted values averaging about $85 per m² for fully developed and serviced industrial sites, apportioning a value of $35 per m² to “hardstand” land. It seems to me that a realistic approach to the value of this 2 ha of land to any owner would be to establish its worth as part of the land taken. It would not have been a developed 2 ha of industrial land as such. Its value as part of an overall particular development within -- 19 of 27 -- 20 the “Special Facilities” Zone might have been expected to be apportioned at a higher figure than the overall pro-rata value of the potential landfill, but significantly less than for example hardstand areas within a smaller fully developed industrial lot. I will adopt a value of $12.50 per m² or $125,000 per ha for this 2 ha component of the total site, being an amount of $250,000. Total Market Value of Land The market value of the land is determined as follows: Potential landfill component $1,420,000 Potential site for stockpiling and sale of sand and soil $250,000 Rock Reserve $195,000 $1,865,000 Special Value to Owner Special value was described by Kirby P in Yates Property Corporation Pty Ltd v. Darling Harbour Authority (1991) 73 LGRA 47 at pp.52, 53 as follows: “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 Arkaba Holdings Ltd v. Commissioner of Highways (1969) 19 LGRA 398, Bray CJ said of special value at p.404: “It is, of course, well established that it is the value to the owner which must be paid, even if that value exceeds the market value (Pastoral Finance Association Ltd v. The Minister [1914] A.C. 1083; Minister for Public Works v. Thistlethwayte [1954] A.C. 475). The additional element is commonly called ‘special value to the owner’, eg Thistlethwayte’s case (at p.491). But this special value must, in my view, arise from some attribute of the land, some use made or to be made of it or advantage derived or to be derived from it, which is peculiar to the claimant and would not exist in the case of the abstract hypothetical purchaser. Would a prudent man in the position of the claimant have been willing to give more for this land than the market value rather than fail to obtain it or regain it if he had been momentarily deprived of it?” The claimant has identified here two aspects of the use and potential use of the land where it is submitted that the land possessed special value to the owner. (1)Sand and Soil Business -- 20 of 27 -- 21 The first limb of the claim for special value to the owner related to the conduct of the sand and soil business. Mr Walsh’s report contained the following passage in relation to this aspect: “It is considered that in the hands of Astway Pty Ltd, the subject property value included a premium, reflective of the additional special value to Astway Pty Ltd to conduct the sand and soil business, over and above the market value of the property as a hardfill and quarry site.” Mr Walsh equated that special value as being the present value of the cost of leasing “a suitable land area (approx 2 ha) over the life of the landfill adopted at 25 years.” He estimated, based on rental evidence, that the cost of rental of “the type of land and location required” would be $4 per m² or $80,000 per annum. Because the agreement had been reached with regard to continued occupation of the site, Mr Walsh had agreed that it would be reasonable to reduce his calculation accordingly. This resulted in the amended claim being $587,000, based on a rental period reduced by the extended period of occupation. I have accepted that the claimant was able to provide within the land taken an area of about 2 ha from which, with overall rezoning approval, a “sand and soil business” might lawfully have been conducted. I am unable to accept that this component of the land taken possessed any attribute peculiar to its use by the claimant which would enhance, above market value, its value to the owner. If it had been necessary to consider rental value, such value would have been seen to be related to the capital value of the land taken, or its equivalent. Other than factors capable of further consideration under the “disturbance” heading of claim, no award is made for special value to the owner under this segment of the claim. (2)Land Fill Potential Mr Clements’ financial model was based on acceptance of Mr Walsh’s estimated demand of 48,000 m³ per annum in the commencement year of the proposed development, projected then to increase through “best practice” management strategies and population increases, by 15% in the second year. Over the total of the first 10 years’ operation of the landfill a compound growth averaging 10% per annum was adopted. Total waste volume to be accepted in that 10-year period was projected to be 756,000 tonnes (with a density of 1 tonne per m³). It was Mr Clements’ evidence that on the basis of “normal commercial returns required by major public companies operating in the waste industry” the indicated -- 21 of 27 -- 22 purchase price of the site was $1,808,000. Such a purchase price would exclude any value being attached to the residual void space after the initial 10 years of operation. While I have found Mr Clements’ analysis of establishment and operating costs to be most helpful in this matter, I have been unable to accept Mr Walsh’s estimate of demand. It follows that I am unable to accept Mr Clements’ financial analysis based on demand of 48,000 m³ in the first year of operation. It is unnecessary to consider the veracity of the growth projections on which his analysis further relied. Mr Calabro’s main objective was to put aside what a public company might be prepared to pay for the site. He set out to analyse, on Mr Clements’ financial model, adjusted where Mr Calabro saw it as necessary, the value of the development in the hands of the owner, on the following bases: (1)with a waste volume capacity limited to 756,000 m³ in a 10-year period - $2,471,944 based on a going concern value of $2,977,144; (2)with a void capacity of 1,600,000 m³ (Mr Houghton’s original estimate) - $2,950,727 based on a going concern value of $3,455,927. As Mr Calabro acknowledged, his estimates of value to the owner stood or fell on acceptance of Mr Clements’ commencement year demand estimate and subsequent projections. Then Mr Calabro’s second calculation further relied on there being a void space equivalent to 1,600,000 m³ when that volume estimate has been significantly reduced. It follows that I am unable to place any reliance on Mr Calabro’s calculations. Mr Walsh’s valuation of the land as a potential landfill was $2,300,000 calculated on a maintainable demand of 48,000 m³ per annum, maintainable net income of $546,500 for 25 years, a discount factor of 17.25%, establishment costs of $559,200 and holding costs. It was Mr Walsh’s opinion then that such amount represented market value exclusive of any special value to the owner. Mr Walsh was prepared to accept that Mr Calabro’s second calculation of $2,950,727 represented the value of the land to the claimant. He simply adopted the difference between his and Mr Calabro’s assessment as representing that aspect of special value to the owner. Even had Mr Calabro’s financial analysis basis been adopted, I fail to see how Mr Calabro’s discounted earnings calculations could represent anything more than another opinion of market value, albeit from an accountancy approach and then not supported by specific market evidence. -- 22 of 27 -- 23 I have accepted that the claimant’s association with a company involved in and with particular knowledge of the waste industry allows it to influence a more conservative estimate of the risk involved in assessment of demand for the subject site. It is, as I see it, that aspect which would cause the claimant to consider the value of the site in an optimistic light. If the claimant wished to negotiate a sale of the land for landfill development, it would hardly be likely that such information would not be disclosed to a prospective purchaser. The adopted basis of valuation has been to make an assessment of demand and related income potential and to discount the income stream over the life of the development. If the criteria adopted are realistic having been influenced by evidence produced by the claimant, then it should follow that market value has been established. If it was to be argued that any advantage was possessed by the claimant, in its ownership of the site for potential landfill development, it could in my opinion, relate only to the demand which has been demonstrated to exist from a company associated with the claimant. That demand has already been fed into the valuation exercise, both in terms of the income stream and the discount factor.. It is my opinion that on the basis of valuation adopted there can exist no enhancement in the resultant valuation, in the hands of the claimant. Disturbance (a) Relocation Costs The claim for relocation costs related to the sand and soil business and, as amended, was calculated on the basis of Mr Walsh’s assessment as follows: Construction - Bund Wall and Fuel Tank Base $1,400 Provision of - An Office Lunch Room and Toilet $9,000 - Concrete Paving, Walkways, Car Park etc $4,000 - 565 metres Security Fencing ($12,000) and Lighting $14,500 - Ongoing Security Patrol $14,000 - Signage $1,000 Relocation of Equipment - 2 Loaders, 3 Power Screens, Fuel Tank $1,375 - Dismantle, relocate and assemble Trommel $29,250 - Council Application Fees $1,000 Alteration to Yellow Pages advertising $200 Advise clients of alteration to premises’ location $100 -- 23 of 27 -- 24 $75,825 Rounded to $76,000 As I understood the evidence, the items of “Construction” and under “Provision of” were intended to effect reinstatement at a replacement site. On the evidence I am not prepared to accept that the “office lunchroom and toilet” were owned by the claimant. Mr Walsh’s evidence referred to the acquisition by an associated company of an alternative, albeit unsuitable and consequently temporary site, for the continuation of the business. There existed on the subject land a mobile home which does not form part of the claim, but which provided accommodation for a work person who in return performed an after-hours security role. Mr Lacey was asked to comment on the claim from a valuation point of view. Putting aside the question of ownership, he felt the claim for the structures and the concrete paving etc, based on that which existed, was excessive and that the need for security patrol was common to any site. He had no argument with the claim for security fencing. It seems to me that the “concrete paving, walkways” etc, on the evidence would have added minimal value to the land taken. It is the respondent’s submission that as the use of the site for a sand and soil business was unlawful, the constructing authority should not be expected to pay any compensation for disturbance under the heading of relocation. As addressed under the town planning issues, I have accepted that successful application for suitable rezoning of the land would have been a reasonable expectation. The evidence indicates that even though technically unlawful, the sand and soil business had operated for a relatively long period within the knowledge of the respondent Council. If for any reason the use had been ordered to cease, I am satisfied that closure would have been of a temporary nature for a period sufficient for the town planning issues to be resolved. In the absence of close examination of the basis of Mr Walsh’s assessment of individual items under this heading, I will allow an amount of $14,500 for security fencing and lighting, $3,500 as the value of siteworks and rounded relocation expenses, including client advices and advertising, of $31,000. It would seem to be unrealistic to claim for “Council application and fees” when, although necessary, such application had not been made for use of the existing site. I agree with Mr Lacey’s opinion that some form of security patrol -- 24 of 27 -- 25 might be seen as a normal requirement of such a business, and that the claim under that heading is too remote to be compensable. The total award for the claim as formulated under the heading of “Relocation” amounts to $49,000. Although relocation of most equipment has been deferred, the question of interest payment will be considered later. (b) Loss on Sales of Topsoil The agreement reached between the parties relative to continued occupation of the site resulted in identification of loss being restricted to the effect on the value of the stockpile of “soil” for resale. Again, the respondent argued that the unlawful activity was not deserving of an award of compensation. Just as the respondent recognised the practicality of allowing an extension of the use which was, in the ownership of the claimant, an unlawful activity, I reiterate that any ordered cessation of that activity would have related to technicalities which, in my opinion were capable of correction on reasonable grounds. The history of soil sales had been established by Mr Walsh as amounting to 12,000 m³ per annum at a sale price of $13 per m³. That activity had continued subsequent to the resumption until October 1995. At that date a stockpile of near 70,000 m³ remained, with a sales period on past trading history of 5.8 years required to dispose of the stockpile. The decision was then taken to reduce the sale price to $8 per m³ in an effort to dispose of the stockpile more speedily. Sales increased significantly. Based on the actual trading results it was estimated that the stockpile would reduce at the rate of 3,200 per month (38,400 m³ per annum) lasting 1.8 years. This would enable the remaining material to be sold within the period for which continued occupation of the site was arranged. Adopting a discount factor of 15% Mr Walsh found that the present value of the stockpile before the reduction in price, on sales of 12,000 m³ per annum @ $13 per m³ over 5.8 years was $577,634. After the price reduction, the then present value was found as being 38,400 m³ per annum @ $8 per m³ for 1.8 years or $455,520. The loss in value was $122,000. Mr Lacey felt that if compensation was to be allowed, the after price reduction calculation was appropriate, based on a discount factor of 15%. However he suggested that there was greater risk associated with the longer selling period involved in disposing of the stockpile before the price reduction situation, and suggested that a discount factor of 20% for that calculation should be adopted. -- 25 of 27 -- 26 I have not been convinced that the risk as it previously existed, was greater than that at the reduced sale price, with increased volume of sales necessary. I will adopt Mr Walsh’s calculation of $122,000. Professional Fees Agreement had been reached as to the amount of $16,975 for professional fees outlaid in the compilation of the claim for compensation. Of that amount, $1,000 had been paid by the claimant in March 1995. Summary of Determination Compensation is determined as follows: Market Value as zoned - Land - Potential landfill component $1,420,000 - Potential component for soil and sand business $250,000 $1,670,000 - Quarry Reserves 195,000 $1,865,000 Disturbance Sand and Soil Business - Relocation costs $49,000 - Loss on sales of soil $122,000 $171,000 Professional Fees - as agreed $16,975 Total Compensation $2,052,975 Interest An advance payment of $1,000,000 was made on 19 May 1995. The submission of the respondent was that as the claimant had been permitted to remain in possession of the land it was inappropriate for interest to be paid on the compensation awarded for loss of land. Apart from the reduced claim for loss on sales of soil, the claimant submitted that the continued occupation of the land had eliminated claims for compensation for other stockpiles of valuable material which will now be capable of disposal (without price reduction) before the occupation agreement expires. Had there been no continued occupation of the site the claimant submitted that the respondent would have been faced with additional significant claims for compensation. Section 28 of the Acquisition of Land Act (1967) provides the Court with the discretion to order that interest be paid “upon the amount of compensation determined by it” with the exception being in respect of any amount of compensation advanced. -- 26 of 27 -- 27 Ordinarily, continued occupation of the land free of rental would be accepted as a consideration in lieu of the payment of interest. The occupation arrangement in this matter had commercial implications for both parties but in practical terms, related only to the sand and soil limb of the business conducted on part of the land. Based on the finding, neither party is seen to have been disadvantaged with respect to the use and continued occupation of that part of the land. In the circumstances I see it as appropriate to order that interest be awarded but only on that part of the determination which excludes any aspect of the sand and soil business, as well as the advance. It is ordered that interest at the rate of 8.75% per annum be paid on the amount of $1,615,000 for the period commencing on and from 16 December 1994 ending on and including 18 May 1995 then on the amount of $616,000 (including the professional fees of $1,000 paid by the claimant near to that date) on and from 19 May 1995 ending on and including the day immediately preceding the date on which the final compensation payment is made. RE WENCK MEMBER OF THE LAND COURT -- 27 of 27 --