Bratton Pty Ltd v South-East Queensland Water Board [1993] QLC 38 (1994-1995) 15 QLCR 15

LAND COURT BRISBANE 14TH DECEMBER, 1993. Re: Determination of Compensation Resumption for the purpose of the Glendower Dam (A93-33) Acquisition of Land Act 1967 Bratton Pty Ltd v. South East Queensland Water Board J U D G M E N T The Glendower Dam will be sited on the Albert River, north-easterly of Beaudesert. In September, 1991, interested parties were informed at a public meeting that construction of the works was planned to commence in about the year 2010, the completion date estimated to be about 2015. At the meeting, representatives of the South East Queensland Water Board (SEQWB) advised that compulsory acquisition was not intended to take place until about the time of the commencement of construction. The option was available, however, for owners of affected property to seek earlier resumption, by agreement. This was the procedure followed in this matter. By agreement, certain land was taken, by proclamation published in the Government Gazette, on and from 14th August, 1992, from property known as "Dagworth", owned by Bratton Pty Ltd. The land taken is described as follows: Lot 1 on Plan 850212, containing an area of 191.9605 hectares, being part of the land contained in Certificate of Title, Volume 3969, Folio 173; and Lot 3 on Plan 850212, containing an area of 22.612 hectares, being part of the land contained in Certificate of Title, Volume 5533, Folio 124. Both County of Ward, Parish of Tabragalba [1993] QLC 38 -- 1 of 53 -- 2 Before the resumption, "Dagworth" comprised an aggregation of seven separately surveyed parcels making up a total area of approximately 880 hectares, on the eastern side and with frontage to, the Albert River, at its nearest point about 7 radial kilometres south-easterly of Beaudesert, with access off Tabragalba House Road. The land consisted of alluvial river flats rising through undulating topography to steeper ridges in the eastern end. The western section above the main river flats was highly improved with a quality, well-maintained dwelling, farm buildings, yards, intensive fencing and water facilities. The land necessary for dam storage and adjacent buffer did not include the site of the main structural improvements. "Dagworth" had been purchased in 1986 by a family company of which Mr R.J. and Mrs C.N. Ruddle were the officers and major shareholders. Since that time a business involving the quarantining and preparation of livestock for export had been established. The land dedicated for this purpose had been classified by the Australian Quarantine and Inspection Service (AQIS) as a permanent pre-export quarantine (PEQ) facility and is registered as such. Registration is renewed on an annual basis, subject to the requirements of AQIS being met. "Dagworth" is claimed to have been the only property in Queensland with such registration. SEQWB considered that the intensive holding of livestock and the overall quarantine operation to be a use with potential to breach the water quality control standards which will be imposed on completion of the dam construction. For this reason it was agreed that the resumption area should be extended from the normal full supply plus buffer requirement level, to include the structural improvements and certain infrastructure directly associated with the PEQ use. Indeed, one option available to Bratton Pty Ltd (Bratton) was for SEQWB to acquire the whole of the property. The existing access to Tabragalba House Road will be eventually inundated by the ponded waters of the dam. The total resumption option was considered but rejected by Bratton. Alternative access to the balance land could be provided. The land, with total area of 214.57 hectares, as contained in the -- 2 of 53 -- 3 proclamation and including the structural improvements of "Dagworth" was resumed by agreement, leaving a balance area of 665.24 hectares. To the time of the Land Court hearing, which commenced on 27th September, 1993 (continuing for a total six sitting days together with an inspection), the claimant had remained in occupation with continued use of the property including the PEQ facility. The claim for compensation, dated 19th August, 1992, served on SEQWB was, under the combined headings of Land, Improvements, Severance and Injurious Affection, in the amount of $5,000,000. At the outset, leave was sought and granted for the claim to be amended to the amount of $4,137,953 which was the assessment of the claimant's valuer, Mr K.C. Herron, FVLE, (Val and Econ) calculated as follows: Value of "Dagworth" prior to the Taking $4,643,977 Value of "Dagworth" after the Taking $1,863,120 Loss in Value to "Dagworth" $2,780,857 Special Value/Severance $1,259,764 Disturbance $ 97,332 Total $4,137,953 SEQWB had made an advance payment of $1,920,000 on 26th August, 1992, 12 days subsequent to the proclamation being published. The valuation which was placed in evidence before the Court was the assessment of Mr K.P. Walsh, AVLE (Val) as follows: Market Value before Resumption $3,338,000 Market Value after Resumption $1,330,000 Quantum of Compensation $2,008,000 (Plus disturbance and cost of formation of road access) On the basis of providing a particular road access to the boundary of the balance area, there was agreement between the parties as to an estimated cost of $184,381. Some of the items of disturbance as claimed, e.g., legal and valuation fees -- 3 of 53 -- 4 totalling $20,562 were proved and not disputed by the respondent. The individual items of disturbance within the claim will be dealt with later. While a relatively minor point, it should also be mentioned here that Mr Walsh had assumed that the respondent would be responsible for the construction of a stock-proof fence on the boundary between the resumed land and the balance of "Dagworth", while the cost of erecting such a fence formed part of Mr Herron's assessment under the heading of severance. THE CLAIMANT'S CASE: It was the claimant's case that the property held special value to the owner, in that it possessed a combination of features which made it ideally suited to the significant quarantine business which had already been established. These features included: (a)sufficient suitable land to allow expansion as expected demand for such a facility increased; (b)suitable zoning in a local authority area where more stringent town planning control might be expected with the efflux of time; (c)the overall size which was difficult to replace in such an ideal location; (d)an ideal mix of land types from virgin or near virgin alluvial and colluvial soils of particularly high fertility, to good quality undulating grazing lands rising to steeper ridges providing a buffer from competing land uses; (e)an existing irrigation licence with potential for the granting of additional licences including the provision for water harvesting. The special value to the owner was expressed in the claim as being represented by matters associated with relocation of the PEQ facility and the fodder production segments of the existing business, then the redesign of the balance area of "Dagworth" and replacement of improvements necessary for the assembly and pre-quarantine agistment of livestock. With the intention of mitigating loss by not allowing the destruction of the -- 4 of 53 -- 5 existing business, and particularly the PEQ, the claimant had acquired two separate properties - one at "Laravale", the development of which, as a replacement PEQ facility, was well advanced by the time of the hearing - the second "Tooloom Creek" to replace the lost fodder growing lands and part of the associated grazing operation on "Dagworth". The balance lands of "Dagworth" are intended to be used for the remaining original grazing operation, including the agistment of livestock while herds were put together by the exporters prior to quarantine. This involved the "turning around" of the original working layout, necessitated by the position of new external access and the associated internal access, to a new building and stockyard site. The assessment of Mr Herron details the various items of claim. The supporting witnesses for the claimant were Mr R.J. Ruddle, managing director of Bratton; Mr G.L. Vann, town planner; Mr R.K. Trivett, a director of a livestock exporting company and major client of Bratton; Mr R.E. Harrison, a soil scientist; Mr E.E. Powell, an agricultural consultant; Mr P.G. Breene, a civil engineer. Mr Ruddle: After a dairying background, Mr Ruddle, with his wife, purchased a dairy farm near Beaudesert in 1972, then another in the same district in 1976. The second farm was used in conjunction with the first for the running of dry stock, production of fodder and the quarantining and preparation of livestock for export. Apart from the dairy, a tourist and education centre had been established on the original dairy farm together with a mobile animal nursery. After sale of these properties, "Dagworth" was purchased in 1986. Mr and Mrs Ruddle had recognised a business opportunity with growth potential in the quarantining and preparation of livestock for export. They set about developing "Dagworth" as an integrated operation comprising the PEQ facility together with farming and grazing activities. While they saw potential and have used the property for a variety of purposes, not only of a primary production nature, but including tourism-related activities, their energies had been concentrated on -- 5 of 53 -- 6 establishment of the PEQ facility. Apart from the redesign and upgrading of improvements which were in existence, including the dwelling and yards, significant capital expenditure had gone into specialised fencing, water and power reticulation and access construction, as infrastructure additional to normal grazing and farming requirements. There had been the need for duplication of some improvements due to the specific requirements of the quarantine operation, which included segregation from the other activities. The agricultural component provided by the fertile and largely virgin river flats and adjacent arable slopes was seen as an important arm of the overall business. Crop assistance enhanced the nature and capacity of the grazing operation. Importantly, the fodder production supplied the specific requirements of the intensive stock holding prior to export. An opportunity also existed for the pre-packaging of feed requirements of the livestock during export transit. A licence for the irrigation of 12 hectares of the agricultural land had been sought from Water Resources and granted. Potential was seen to exist for water harvesting from the Albert River in times of high flow and storage for further irrigation in an existing lagoon or alternatively in storages to be constructed. Mr Ruddle provided details of the significant income growth from the PEQ facility in the two years prior to the resumption, from stock movements of cattle, horses, goats and even camels, to countries including Thailand, Mexico, Indonesia, Oman and Korea. Having established that the PEQ business would either be lost or need to be relocated as a result of the impending resumption for the dam, the decision was made to relocate early rather than later. Mr Ruddle saw an increasing trend towards environmental controls over land use for such a facility, and was convinced that "we needed to relocate our pre-export facilities immediately". Mr Ruddle had been aware that SEQWB had been willing in principle, to enter into a lease-back of the resumed land until it was required for the project. Through its solicitor, the claimant had indicated interest in a satisfactory lease. Mr Ruddle knew -- 6 of 53 -- 7 of the standard terms contained in lease offers by SEQWB for nearby resumed properties. He considered some of those standard terms to be commercially unacceptable. No negotiation of specific terms had been instigated by either party. Occupation had been continued free of rental except that he said some Council rates had been paid for at least part of the period. The balance area of "Dagworth" was considered unsuitable for relocation of the PEQ infrastructure, due to topography and drainage impediments. A contract was signed on 28th May, 1992, for the purchase of the "Laravale" property of 98.77 hectares, the contract being subject to conditions specific to the proposed relocation of the PEQ facility. "Laravale" is about 12 kilometres southerly of Beaudesert on the Mt Lindesay Highway. The purchase, at a contract price of $300,000, was completed on 1st September, 1992. The "Laravale" property did not have arable quality soils. Indeed, Mr Ruddle's written statement contained the following paragraph (j): "While the new site at `Laravale' is the best we could find within the constraints with which we had to operate, it is larger than needed and this necessitates more double fencing, larger individual paddocks and laneways and the lack of trees meant the main yards had to be covered for shade." On 24th November, 1992, a contract was signed to purchase property of about 2,717 hectares being "Tooloom Creek" in New South Wales to the south of Woodenbong and about 120 kilometres from "Laravale". The purpose of the purchase of this property was "primarily in order to re-establish the cultivation of fodder crops for the PEQ business, replacing the resumed arable land". Apart from its arable potential, however, "Tooloom Creek" was regarded as a replacement cattle grazing property, the capacity of the balance area of "Dagworth" having been "dramatically reduced due to the loss of the river flats and the crop assistance to the grazing arm". The purchase price of "Tooloom Creek" was $1,135,000 and this purchase price included a vehicle and some plant. -- 7 of 53 -- 8 Mr Ruddle described in detail the difficulties he envisaged as a consequence of the resumption. He provided the break-up of the amounts which had been expended and those still required to be spent in re-establishment of the PEQ facility and dwelling at "Laravale", totalling $935,960.76. This was calculated as the cost of duplicating only that which had already existed at "Dagworth" and did not represent the total cost, being exclusive of Mr Ruddle's time and various plant and machinery required at the new premises. The PEQ facilities at both "Dagworth" and "Laravale" are capable of holding up to 6,000 head of cattle. It is Mr Ruddle's evidence that the new facility will not produce income greater than that from the resumed facility, although some aspects of the yard design should be more efficient, having been based on the experience gained at "Dagworth". The extra expenses to be incurred at "Dagworth" were itemised to total $609,127 and at "Tooloom Creek" $15,735. Apart from labour, Mr Ruddle estimated that the additional annual costs involved in running the three fragmented properties would total $8,432.61. (Mr Herron reviewed these figures for valuation purposes to $5,200 per annum). Mr Ruddle estimated that the additional future labour costs, involving an extra manager, travelling time for up to four people between properties and additional surveillance and maintenance, to be a "very conservative" $30,000 per annum. (Mr Herron adopted this figure in his valuation). Mr Herron dealt in detail with the matters associated with relocation and fragmentation of the business operation in his valuation. Mr Vann: The resumed land was zoned "Rural" in the relevant Beaudesert Shire Town Planning Scheme, and the strategic plan includes the site within the "Rural Area" and "Arable Resource Area". Because the quarantine containment of livestock is temporary, for less than (30) days, the use of the PEQ falls into the "animal -- 8 of 53 -- 9 husbandry" definition (and not "lot feeding") and is currently a use not requiring consent in the "Rural" zone. Mr Vann made reference to certain draft form recommendations contained within the SEQ 2001 Project (established by the State Government to assist in the management of growth in South-East Queensland). He holds the opinion that future town planning strategies may be expected to reduce the extent of land designated as suitable for rural residential development, as well as conserving good quality agricultural land for continued use. These strategies will tend to buffer rural use lands from urban encroachment. Nevertheless, he sees land suitable for PEQ use, and still within the required distance of port or airport facilities continuing to diminish over time due to population growth. While a PEQ use is currently permitted through its inclusion in the Beaudesert Shire Town Planning Scheme definition of "animal husbandry", Mr Vann sees the likelihood of this town planning framework and the definition of such use, being dealt with differently in this shire in the future. He points out that the definitions of "lot feeding" in current town planning schemes of other local authorities in South-East Queensland, does not exclude, as the Beaudesert scheme does, the intensive holding of livestock for less than 30 days. In these other shires then, the PEQ use would, in his opinion, fall within the "lot feeding" definition, when environmental protection issues become of significance. He pointed out that while the Beaudesert Shire Council had confirmed that PEQ use was as of right on the "Laravale" "Rural" zoned property where the relocation had taken place, it nevertheless had stipulated conditions which it requested be addressed. These included "conduct of the use in such a way that: •land degradation does not occur; •effluent and waste water are contained within the site; and •no significant odour which would cause unreasonable impact on nearby residents is generated. -- 9 of 53 -- 10 The Council letter also raised an issue of improving access to the site, by dedication of land to improve the intersection alignment at the site access." Mr Vann sees it as "reasonable to assume that more town planning controls will be placed over uses of this nature in South-East Queensland in the future as population growth continues and environmental protection measures become more sophisticated". However, "Due to the relatively secluded location of the subject site, (`Dagworth')" current land uses in the area, and likely future land use patterns under emerging town planning directions, continuation of this use of the site into the long term would have been a realistic expectation had the Dam proposal not arisen." From a town planning viewpoint, he concluded that as relocation of the PEQ was necessary, such location "is prudent under the relative certainty of the current town planning framework of the Shire rather than to leave relocation subject to the uncertainties of future town planning frameworks, which may well make establishment of this use subject to additional approval requirements." He went on to say, "The alternative site at `Laravale' is considered suitable for the pre-export quarantine centre use in the context of current and evolving town planning framework for the shire." Mr Trivett: Mr Trivett is a director of Australian Rural Exports Pty Ltd (trading as "Austrex"), the major client of the claimant's PEQ business. Austrex commenced operations in 1975 and Mr Trivett says that since that time it has played an increasingly important role in arranging for the delivery of Australian primary products, predominantly livestock, to overseas clients, having exported 15-30,000 head of cattle per year. He said that export of Australian cattle to the Asia-Pacific region had increased from 80,000 head in 1989 to 165,000 head in the 1993 financial year. He estimated that cattle numbers exported could increase to 200,000 head in the next 12 months. Significant categories of other livestock - mainly sheep, horses and goats - are also exported. -- 10 of 53 -- 11 Mr Trivett provided the details of livestock numbers which Austrex had guaranteed through the "Dagworth" facility since 1990. In his opinion, both "Dagworth" and "Laravale" have ideal location for a PEQ facility relative to rail and port facilities. He confirmed the attributes of "Dagworth" including size, pre-quarantine grazing agistment capability, availability of fodder during quarantine, all-weather access and water supply. In his opinion, the "Dagworth" facilities are excellent and the property particularly well managed. He felt that "anyone interested in acquiring a property for use as a pre-embarkation quarantine centre would pay a premium to acquire `Dagworth'." Mr Trivett's evidence extended to the differing requirements of "approval" and "registration" of premises for the preparation of livestock for export. A "registered PEQ premises" is a site with permanently fixed yards and equipment for the purpose of the preparation of livestock while "approved" premises are usually those which are inspected and deemed to be suitable for use for individual export consignments only. This latter approval lapses following the completion of export preparation for that particular consignment and the premises must be re-assessed for approval for use for subsequent consignments. He said that registration/approval takes into account all aspects of the property location as well as the equipment. This includes the disease situation of the surrounding area/region as well as the health status of the property itself. Yards, fencing and other equipment are assessed as to their suitability to fulfil importing country isolation requirements and AQIS animal welfare requirements for the preparation of animals for export. Mr Trivett explained the planning advantages provided to an exporter by the availability of a "registered" facility as "Dagworth" was, as opposed to the alternative temporary type "approved" facility. Mr Harrison: Mr Harrison is an agricultural scientist of wide experience and was engaged in this matter to report in the role of a soil scientist. He had inspected the "Dagworth" -- 11 of 53 -- 12 property and other Albert River frontage properties in company with a Mr G.M. Hawley, who had recently retired from the Department of Primary Industries. A report under joint authorship was tendered, dealing with "an assessment of the soils on `Dagworth'". Mr Harrison has lived all his life on a property in the district and has family ties with the early ownership of "Dagworth". Mr Hawley's experience in the Beaudesert district commenced in 1978. From aerial photography, a plan of the various paddocks within the resumed area of "Dagworth" was produced. A number of soil profiles were taken and some soil analyses obtained. The soil types on the resumed land were classified (with the assistance of planimeter measurement from aerial photography) as follows: 135.018 hectares of prime agricultural land - alluvial and colluvial soils, where soil profiles indicated organic matter still present at a significant level. 33.336 hectares of lower slopes - being areas suitable for occasional cultivation or for continuous "zero tillage". Although major soil nutrients are still very favourable in part of this land, that part was not included in the "prime agricultural land" classification due to the result of the soil analysis obtained and knowledge of the underlying geology. 27.49 hectares of upper slopes - being grazing land suitable for occasional "zero tillage", but being soils of generally lower fertility. 10.75 hectares of "other areas" being house, yards and quarantine area where "fertility has been built up through the recycling of nutrients, making these smaller paddocks ideal for the introduction of winter crops by zero tillage". 12.33 hectares of "special purpose areas which provide shade and very significant dry weather grazing and so must be considered in the same category as the Prime Agricultural Land above". It will be noted that the total area classified is 218.924 hectares while the resumed area is, by survey, 214.5775 hectares. No doubt the calculation of areas from aerial photography has caused the relatively minor distortion in area. The area of prime agricultural land is one item of difference between the parties. Mr Harrison's evidence as to the inspection and criteria used in adopting the -- 12 of 53 -- 13 area of prime land is convincing and appears unbiased, particularly when areas of existing cultivation considered to be near as fertile have been excluded from the prime agricultural land. For the purposes of later assessment, I will adopt a rounded area of 135 hectares being alluvial and colluvial soil types adjacent and leading into the river, as the prime agricultural or potential agricultural land, and an area of 33 hectares of undulating to sloping land suited to cultivation, but of secondary classification. In valuation terms, I cannot accept his contention that the 12.33 hectares of "special purpose areas" being lands unsuitable for arable use should be included with the prime agricultural classification. Mr Harrison made the strong point that the virgin or near virgin qualities of the "Dagworth" agricultural land set it apart in terms of quality, at least in the eyes of a soil scientist, in a locality where the river flats have been generally intensively farmed for generations. He accepted that these other agricultural lands along the river systems were still of good quality but with the continual farming use lacked the organic content and moisture retentive qualities of the "Dagworth" lands. In Mr Harrison's opinion, with informed farming techniques, proper management, recognition of the detrimental effects of historical farming practices, an opportunity had existed for the "Dagworth" lands to retain their productive superiority. Dated aerial photography showing an area of old cultivation did not alter Mr Harrison's view that the fertility of all the "Dagworth" flats, including any relatively small areas of old cultivation, was equivalent to virgin agricultural land. In his opinion, the 12 hectares of agricultural land capable of being irrigated under the licence granted by Water Resources, should not be given a separate classification, as the licence, as he understood it, was not restricted to a specific 12 hectares but was ambulatory in the sense that any part of the agricultural land, up to an area of 12 hectares, was capable of irrigation during one or more cropping seasons per annum. He saw the potential for water harvesting and storage of irrigation water -- 13 of 53 -- 14 in the existing lagoon or in artificial storages which could be constructed, as giving most of the agricultural land potential for irrigation, particularly if rotation of cropping was practised. Mr Harrison's investigations of soil quality had been extended on request to other properties which have been subject to resumption for the dam. Particular attention had been paid to "Wyambyn", a nearby property where compensation had recently been determined by myself, subsequent to a Land Court hearing. The question of the value of the "Wyambyn" prime irrigable lands had figured prominently in the evidence provided in that hearing, when the claimant's valuer had also been Mr Herron. A number of soil profiles had been taken by Messrs. Harrison and Hawley on that part of the "Wyambyn" arable land adjacent to the river and were found to be inferior in fertility to those on "Dagworth". The investigation on another area of irrigable cultivation had been limited, and although Mr Harrison's initial opinion as to the quality of that soil was not high, his evidence proved to be somewhat flexible after he became aware that that particular section of land was also "near virgin". Mr Harrison's evidence left no doubt that the "Dagworth" agricultural land's fertility and productive potential had not declined, at the relevant date, in comparison with other well used arable lands along the Albert River. The effect of this superiority expressed in terms of market value, however, was not within the area of Mr Harrison's expertise, and was necessarily left as a matter to be dealt with by the valuers. Mr Powell: Mr Powell had inspected the "Dagworth" and "Laravale" properties and had prepared a report in which he had assessed the cost of replacing the yard facilities at both properties. He is well experienced in the design and construction of such facilities. In his opinion, the "Dagworth" facility was well constructed and maintained in a condition "moving towards as new" and a credit to the owner. He had assessed the replacement cost of the cattle yards and dip at "Dagworth" with some "artificial -- 14 of 53 -- 15 shade" but excluding "tree value" for natural shade, as follows: Timber - (round) $108,716 or Timber - (Sawn) $105,923 or Steel $108,241 The horse yards (including the stable structure) were estimated to have replacement cost of $87,730 in round timber or $87,580 in steel. He estimated the new dip and yard facilities replacement cost as constructed at "Laravale" as $139,851 (including the steel framed roof cover) for the cattle yards and $16,025 for the horse yards (including shelters, but excluding stables). He had not considered the cost of horse-orientated facilities yet to be constructed. While the "Laravale" cattle yards are smaller in enclosed area than "Dagworth", Mr Powell considered them to be an adequate replacement for cattle drafting, testing, separation, animal welfare and all-weather requirements for pre-export handling. His report states: "The `Laravale' cattle complex lacks the holding capacity for larger mobs but provides excellent relay working facilities. The number of pens, restraint and drafting facilities are not excessive and have similar capabilities to the `Dagworth' complex. The `Laravale' panel construction is preferred to the `Dagworth' timber or steel constructions for intensively handling cattle in smaller size yards." Mr Breene: Mr. Breene is a consulting civil engineer with long experience in the design, cost estimate and construction of roads. His first task in this matter was to provide an estimate of the cost to construct the existing internal (private) road from the northern boundary of "Dagworth" servicing the home and main structural improvements as well as the access through the PEQ area. As at the date of resumption, Mr Breene estimated the construction cost of that internal road infrastructure, 1,600 metres in length, to be $105,150. Next, Mr Breene estimated, with detailed calculations, the cost to construct a -- 15 of 53 -- 16 presently unformed section of a surveyed road known as Armstrong Road. This route was nominated by SEQWB as the access option to the northern boundary balance area of "Dagworth" which should be costed for the purposes of assessing compensation in this matter. On the basis of construction to a standard which Mr Breene considered would be acceptable to Beaudesert Shire, although on a one-in-10 year rather than a one-in-50 year flood frequency basis, that cost estimate was $184,381. Finally, Mr Breene designed an internal road from the Armstrong Road proposed extension on the northern boundary, to a site which had been selected by Mr Ruddle for location of a replacement cottage and yard facility. With the difficult topography for road construction and the need to provide an all-weather road for usage by heavy vehicles, the cost estimate was $216,435. This estimate was on the basis of similar load capacity as the public road, but to a lesser design standard. While he had not been asked to investigate what the cost may have been to provide access from Armstrong Road to the existing "Dagworth" homestead area, Mr Breene offered the opinion that because of the topography and length of road involved, the cost could well be as high as $600,000. As it happened, there was no argument between the parties as to the estimated cost of the external Armstrong Road extension. Considerable difference of opinion existed as to the selected route and design standard suggested by Mr Breene for the internal road. Mr Herron's assessment of compensation: As stated earlier, Mr Herron assessed the value of "Dagworth" before resumption, in the amount of $4,643,977. Guided to some degree by Mr Harrison's investigations and classification of the agricultural lands, Mr Herron's land component was valued as follows; "135 hectares prime cultivated land as cleared, fenced and watered at $9,650 per hectare $1,302,750 33 hectares of good quality cultivation -- 16 of 53 -- 17 land as cleared, fenced and watered at $6,500 per hectare $ 214,500 712 hectares of fair to good quality grazing forest as cleared, fenced and watered at $3,500 per hectare $2,492,000 880 hectares at $4,556 per hectare, ex structures as registered and used for pre-embarkation quarantine premises $4,009,250" Mr Herron's valuation of the improvements was $ 634,727 giving a total valuation before resumption of $4,643,977 During the course of the hearing, the parties advised the Court that agreement had been reached in the adoption of a figure for the "added value of the structures" midway between the assessment of Mr Herron ($634,727) and that of Mr Walsh ($667,000). More will be said of that agreement and the valuation of structural improvements later. Mr Herron's "after resumption" valuation of $1,863,120 was assessed as follows: 665.4 hectares fair to good quality forest at $3,500 per hectare $2,328,900 Less 20 per cent diminution in value due to loss of access to cultivation, better quality grazing and fattening potential, loss of permanent river frontage, additional distance to town, poorer access, loss of versatility and suitability for existing business $ 465,780 665.4 hectares at $2,800 per hectare $1,863,120 The loss in value to "Dagworth" as assessed by Mr Herron, being the difference in the before and after valuations, was $2,780,857. Mr Herron took the view that the effect of the resumption could have been to destroy the claimant's PEQ business unless that business was transferred to another property. He accepted that the action taken by the claimant, in retaining the balance -- 17 of 53 -- 18 area, then acquiring the "Laravale" and "Tooloom Creek" properties to replace the lost segments of "Dagworth", was a responsible course. He comments: "Unfortunately, the business will be scattered in three separate locations which will cause continual on-going additional costs and managerial and security problems." His valuation approach is based on what he perceives as a recognition that "Dagworth" had special value to the owner. Endeavouring to place the owner in "as good as a position as it enjoyed prior to the resumption", Mr Herron saw the need to relocate the existing infrastructure, then assess the additional costs involved in running the overall business. In terms of the relocation considerations, Mr Herron commented - "There is always concern that a dispossessed owner may gain unfairly if compensated with a new facility to replace an older one. However, a rural resumption is different." Mr Herron quotes from "Land Valuation and Compensation in Australia", by R.O. Rost and H.G. Collins, where at p.497 (3rd Edition) is found: "When the whole of an urban property is taken, other premises of similar utility and value are usually available for purchase. In respect of a rural property the position may be quite different if the part taken includes the homestead and perhaps the farm buildings. Only in exceptional cases would it be possible to purchase buildings of equal utility and value adjacent to the residual area which could adequately serve that area. If the buildings taken are no longer equal to new the owner would not be sufficiently compensated by the payment to him of their depreciated value only." (Emphasis is added). The emphasis is added because it is noted that the authors' opinion was provided where the discussion related to a rural residual area after a partial resumption and the need for reinstatement of improvements. Mr Herron's approach in this matter, extends his interpretation of the reinstatement principle not only to the residual area but to replacement property as well. Mr Herron's full assessment of the individual items of claim are set out as follows: Dagworth Residual Area - Cottage 100 sq.m. @ $600 $ 60,000 -- 18 of 53 -- 19 Appurtenances (fence, tank, pump, rotary clothes hoist ect) $ 3,000 $ 63,000 Deduct Value of Existing Cottage $ 27,020 $ 35,980 Provision of Lock Up Garage/Workshop 72 sq.m. @ $150 including power $ 10,800 Stock Yards and Dip suitable for quarantine agistment and permanent stock (Quote T. Thomson suit 135 head) $ 34,000 Internal 1.2 km access road and grid (P. Breene) $216,435 External Access Road (P. Breene) $184,381 Telephone Connection ($1,048), Radio Base and Aerial (quotations) $ 2,308 Power Connection (SEQEB estimate) $ 36,000 Electrical - 3 phase to cottage and shed site - quote $ 8,241 Site Levelling to Cottage and Yards estimate 25 hours @ $60 $ 1,500 New Bore $ 6,400 Electric Pump and Fittings $ 2,879 5.2 kilometres Pipeline to elevated tanks, cottage and yards and existing pipeline $ 7,800 Three 22,500 litre concrete tanks $ 6,000 Pump at tanks $ 535 Provide four troughs at the yards $ 1,800 Remove two troughs and install at new location $ 360 Remove 2.4 kilometres of fence $ 600 Erect new 2.4 kilometres of boundary and provide new internal fencing 2.7 kilometres, 4 barb 2 droppers - $3 m $ 15,300 $571,319 Add Costs at "Tooloom Creek" Radio Base $ 1,260 -- 19 of 53 -- 20 Office Equipment (desk, chair, two filing cabinets, facsimile) $ 2,405 Front End Loader for tractor for loading hay, unloading seed and fertiliser etc $12,070 $ 15,735 Add Additional Costs for extra insurance, vehicle registration, petrol, diesel and oils, telephone rent, additional maintenance, re-charging two additional dips, in running three separate properties - allow $5,200 per annum; at 7% average interest, investment required $74,286 Add Additional Future Labour costs - extra manager, travelling time for up to four people between properties, additional surveillance and maintenance - allow half x one manager @ $30,000 per annum and 7% average interest - investment required $214,286 Add Labour Costs to date - extra staff to work "Dagworth" while R Ruddle supervising "Laravale" construction $ 11,790 Add Truck and Stock Crate for cartage between properties (International Acco 23JOE and 7 metre platform body) quotation $106,500 $993,916 Laravale Export Centre Expenditure to relocate pre-export quarantine from "Dagworth" Expenditure Incurred - Power $ 23,276 Staff Amenities $ 54,094 Telephone Installation $ 2,824 Ponding Banks 80 hours @ $60 per hour dry hire $ 4,800 Site Preparation $ 23,002 Fuel and Oil $ 5,452 Maverick 4WD for transport between properties $ 28,512 Fencing $ 39,709 Water Facilities $ 46,620 Charging Dip $ 927 $229,216 Expenditure Yet To Be Incurred - Machinery Shed/Workshop 78 sq.m. @ $150 $ 11,700 Hay Shed 207 sq.m. @ $90 $ 18,630 -- 20 of 53 -- 21 Ponding to complete $ 1,500 Signs $ 500 Fire Extinguisher (Council requirement) $ 335 Radio Base $ 1,690 Contribution to Council for road widening estimate $ 4,000 New Homestead and Appurtenances $254,400 Water Facilities $ 4,546 $297,301 Add cost of existing main yards new $114,266 Horse yards and stables new $ 84,872 $199,138 $725,655 Deduct Amount Claimed in Before Valuation - Homestead, main yards, horse yards and stable $360,831 Deduct Value of Hay Shed and Machinery/Workshop Shed claimed in Before Valuation $ 21,732 Deduct Fencing and Water Facilities in Before Valuation $ 77,244 $459,807 $265,848 Mr Herron noted that he understood that the actual expenditure by the owner at "Laravale" to the date of his writing of the report included: Water Facilities $ 46,620 Fencing $ 39,709 Stables and Day Yards $ 45,166 Ponding $ 4,800 Yards and Dip $137,041 Timber for Loading Ramp $ 150 Portable Yards $ 4,600 Telephone $ 2,824 Wages for Construction $ 18,788 Fuel and Oil $ 5,452 Freight and Cartage on Materials $ 988 Sign $ 95 And Have Yet To Spend - Horse Stables and Yards $ 13,976 Sheep and Goat Yards $ 9,018 Additional Water $ 4,546 Main Yards $ 6,032 Ponding to Complete $ 1,500 Roadwork to Complete $ 900 Signs $ 500 Radio Base and Aerials $ 1,690 -- 21 of 53 -- 22 $344,395 These costs exclude extra plant and equipment including a truck, tractor, slasher, compressor, generator, fire fighting equipment and hand tools necessary due to the three locations. Mr Herron's assessment of disturbance items is as follows: Removal Costs to two locations - allow $ 5,800 Notification to clients and drivers, traders/shops; telephone and fax stationery - allow $ 300 Cost of Council approval $ 85 Valuation Fees on claim $ 17,562 Legal Fees on claim $ 3,000 Stamp Duty and Legal Fees "Laravale" $ 12,906 Stamp Duty and Legal Fees "Tooloom Creek" $ 54,199 Additional Accountants Fees - quotation $ 3,000 Additional Electricity Authority Deposits - estimate $ 480 $ 97,332 A summary of Mr Herron's total assessment is as follows; Value Before the Taking $4,643,977 Less Value of the Remaining Land $1,863,120 $2,780,857 Add Severance to Balance Land $571,319 Additional Costs "Tooloom Creek" $ 15,735 Additional running costs three properties $ 74,286 Additional labour costs three properties $214,286 Labour costs to date $ 11,790 Truck and stock crate required $106,500 "Laravale" expenditure net $265,848 $1,259,764 Disturbance $ 97,332 $4,137,953 Mr Loughnan: -- 22 of 53 -- 23 Mr W.L. Loughnan, the claimant's solicitor, was called to give evidence regarding inquiries he had made of Water Resources relative to irrigation licences for the use of water from both the Logan and Albert Rivers. He had been informed that in addition to a one-off capital charge of $200 per megalitre attaching to licences now issued to utilise water from the Logan River, there was an annual fee of $12.30 per megalitre, 75 per cent of which was payable irrespective of the use of the water. In comparison, no charge applied to the licensed use of water from the Albert River. He had been advised that the subject licence on "Dagworth" for the irrigation of 12 hectares, applied to the whole of Lot 29 (containing the majority of the river frontage lands of "Dagworth"). While the licence limited irrigation to an area of any 12 hectares , the limitation applied only in any one crop growing season, and there could be two or three crop-growing seasons per annum. THE RESPONDENT'S CASE: Four witnesses were called for the respondent - Mr C.J. Schomburgk, town planner; Mr G.P. Steel, registered valuer and Property Services Manager with SEQWB; Mr K.P. Walsh, valuer in private practice and Mr D.C. Lewis, civil engineer. Mr Schomburgk: Mr Schomburgk held the opinion that while PEQ usage involved the intensive holding of animals, but for limited non-continuous periods, it could reasonably be argued to fall within a "animal husbandry" definition of use - a description which was common for local authority town planning schemes throughout Queensland. He did not feel that the PEQ use fell within the intensive animal husbandry meaning of "lot feeding" as defined in most of the South-East Queensland local authority town planning schemes to which Mr Vann had referred. He held the opinion that in most cases, the PEQ use would be as of right under a suitable "Rural" zone in those shires. He did agree, however, that Beaudesert Shire was different from other shires in using the criteria of time for the holding of stock, rather than intensity of numbers, to allow -- 23 of 53 -- 24 the use to fall, without doubt, into the "animal husbandry" definition. He agreed also that the intensity in terms of numbers of stock held for short periods, would, during those peak periods, equate the definition of "lot feeding" in those other shires. Nevertheless, he was not aware of any local authority which prohibited the use of land in a suitable "Rural" zone for "lot feeding". Mr Schomburgk said that the consequences of PEQ use falling within the definition of "lot feeding" were that establishment of such use would in the first place, require a town planning application, followed by advertisement and consideration by the relevant Council which would have the power to impose conditions seen to be relevant. Typical "lot feeding" use considerations relate to water quality control and effect of odours. Mr Steel: Mr Steel gave evidence as to discussions which had been held with Mr and Mrs Ruddle prior to the resumption. He confirmed that the land required by SEQWB did not initially include the dwelling and associated structural improvements, but, at the request of the claimant, the resumption boundary was extended to include those improvements. Mr Steel indicated that he would have himself recommended such an extension if those improvements were intended to be used for the continuation of the PEQ operation. Had the intended use been for grazing, without the PEQ, then he could see no reason why the improvements should not have been retained by the owner. Had this been the case, SEQWB would have undertaken to provide easement access over the existing road within the resumption area until inundation occurred, after which alternative access would have been constructed. Through Mr Steel was tendered a letter from the Secretary/Manager of SEQWB to the Crown Solicitor dated 27th September, 1993 (the date on which the hearing commenced), which contained the following: "I wish to advise that the Board at its meeting held on 24th September 1993 resolved: Consequent upon the acquisition of Lots 1 and 3 on Plan 850212 Parish of Tabragalba from Bratton Pty Ltd for the Glendower Dam project, the Board is prepared to enter into an agreement, as part of the terms of -- 24 of 53 -- 25 settlement of compensation with the dispossessed owner, to provide legal access to its balance land by the following means: •a registered easement over the Board's property, Lots 1 and 3, to provide access to the balance land, Lots 2 and 4 on Plan 850212, from the existing Tabragalba House Road, until such time as alternate access is provided by the Board, with such access within the easement being maintained by the grantee at its own cost. •the Board gives an undertaking to the Beaudesert Shire Council to construct an alternate access for dedication as a Shire Road, to the balance land owned by Bratton Pty Ltd prior to inundation of the existing Tabragalba House Road in a location and to a standard and condition mutually agreed between Council and the Board, at the relevant time. As part of an agreement (on the terms of settlement), the Board agrees to bear all costs associated with the provision of such easement and the relocation, construction and dedication of the alternate road access." The claimant had been previously advised that a number of alternative access routes to the balance area were capable of being constructed. For the purpose of assessment of compensation it had been considered necessary to identify a specific option, which had become the extension of Armstrong Road. Mr Lewis: Mr Lewis, the engineer, had been requested to examine the report provided to the Court by Mr Breene, relative to various road construction costs. In his opinion the cost estimate for the extension of Armstrong Road to the "Dagworth" northern boundary ($184,381) was reasonable. He felt that the route and design of the internal private access road was capable of modification to significantly lessen the cost estimated by Mr Breene. On his inspection he had noticed what he considered to be a reasonable alternative building site closer to the northern boundary. His evidence in this regard was not convincing. Mr Walsh's assessment of compensation: -- 25 of 53 -- 26 The primary witness for the respondent was Mr Walsh, the valuer. As indicated earlier, he valued "Dagworth" before resumption in the amount of $3,338,000 including structural improvements of $667,000. The land value component of Mr Walsh's valuation was assessed as follows: "As cleared, fenced and watered - Prime arable river flats available for irrigation - 12 hectares @ $8,000/ha $ 96,000 Balance arable cultivation land 90 hectares @ $7,000/ha $ 630,000 Balance mixed grazing lands 777.86 hectares @ $2,500/ha $1,945,000 $2,671,000" After the resumption, Mr Walsh valued the cleared, fenced and watered grazing balance area at $2,000 per hectare, totalling $1,330,000 in rounded figures. This assessment was made on the basis that formed road access was provided. (It also assumed that the resumption boundary would be fenced). The difference between the before and after resumption valuations became the assessment of compensation in the amount of $2,008,000 "plus disturbance costs and the cost of formation of road access". Mr Walsh held the opinion that his assessment provided full compensation to the owner. He had informed himself as to the requirements of AQIS relative to the registration of the PEQ facility. He considered that in order to retain that registration the premises to which it attached would need to be well maintained and managed. As I understood his evidence, due to the high standard of maintenance necessary to maintain the AQIS registration, he valued the PEQ infrastructure (including the dwelling) on the basis that its added value was equivalent to new, or near new, replacement cost. He made it clear that had he approached the valuation -- 26 of 53 -- 27 of those improvements on the basis of "Dagworth" being a grazing and farming property, with no PEQ registration, his valuation result would have been significantly lower. Mr Walsh had calculated the areas of cultivation from a farm plan with which he had been provided and which was placed in evidence. A comparison of that plan with Mr. Harrison's plan produced from the on-ground inspection and aerial photography, indicates that Mr Walsh did not identify some land of the arable quality described by Mr Harrison. In fairness to Mr Walsh, it is clear that his inspection revealed parts of the arable area as being planted to improved pasture and he treated those lands as part of the overall grazing section of the property. I have indicated earlier that I will adopt Mr Harrison's evidence as to the extent of arable or potential arable land on "Dagworth". Valuation Differences between Mr Herron and Mr Walsh: The principal areas of difference in the approaches to the valuation of "Dagworth" are as follows: Before Resumption: Mr Herron Mr Walsh Arable Land - Area of Prime Land 135 hectares 12 hectares irrigated 90 hectares not irrigated Valuation of Prime $9,650 per ha 12 ha @ $8,000 Land 90 ha @ $7,000 Additional arable land 33 hectares - Valuation of additional arable $6,500 per ha - Grazing Land 712 hectares 777.86 hectares Valuation of grazing land $3,500 per ha $2,500 per ha -- 27 of 53 -- 28 After Resumption: Mr Herron Mr Walsh Grazing Land $2,800 per ha $2,000 per ha Both valuers have provided sales evidence in support of their valuation. With "Dagworth" being the only registered PEQ facility in Queensland there could be no sales evidence of property used for a similar integrated business. The claimant company itself provided evidence relating to a site capable of being developed for the relocation of the facility ("Laravale"). Both valuers included that purchase in their basic sales evidence. Of the other sales used, two were common to both valuations. Mr Herron had been the valuer for the claimant in the "Wyambyn" matter and had presented a body of sales evidence for that hearing. He referred to that overall sales schedule in a broad sense, then selected from it the sales and settlements which he saw as most relevant to the valuation of "Dagworth". He also relied on the determination of values in the "Wyambyn" judgment. Mr Walsh made reference to the "Wyambyn" judgment as a matter which he took into account. His basic sales evidence included seven transactions additional to the common evidence. The full details of the sales evidence on which the valuers relied is contained within their respective reports. That information is now summarised as follows: Parties Area Date Analysis Valuer Comments Arthy/Bratton Pty.Ltd. "Laravale" site - (Herron/Walsh sale) 98.77 ha 5/92 $3,037 per ha PEQ relocation. grazing Previous grazing use, small gravel quarry - undulating to hilly shallow soil forest. Barry/Klatte Herron - Undulating to steep (Herron/Walsh sale) 123.03 ha 11/90 $3,374 per forest with small creek ha grazing flats, 1.5 hectares cultivation - inferior access - nothing to compare with western end -- 28 of 53 -- 29 of "Dagworth". Walsh - Undulating to steep 20 ha cultivation grazing plus pockets @ $5,000 per of cultivation - mainly 103.03 ha grazing grazing land comparison - @ $3049 per ha smaller area, more proximate location, slightly aged sale date. Ruiter/Hohl Herron- (Herron/Walsh sale) 163.97 ha 9/91 16 ha part irrigated 24 hectares cultivation in @ $6,000 ha. six areas, 16 hectares part 8 ha dry cultivation irrigated (bore 1,800 gph @ $4,500 per ha creek pumps out) - gently 140 ha grazing undulating forest becoming @ $2,079 per ha hilly then steeply sloping towards range forming eastern boundary - comparable with but inferior to "Dagworth's" (after resumption) grazing due to location access quality. Walsh - Majority selectively cleared, 25 ha cultivation mix of cultivation adjoining @ $6,000 per ha creek, undulating and easy 138.97 mixed grazing slopes to steep ridges of @ $2,058 per ha Range, irrigation licence off creek 6 hectares. Broad comparison for grazing land and cultivation land - smaller land area, more remote, some main lines to irrigation area, lesser quality cultivation land. "Wyambyn" Land Court judgment - Herron - Remote (Vadoog Pty Ltd- 30 ha prime irrigable subdivisional potential, SEQWB) arable $8,750 per somewhat similar country (Herron basis) 170.48 ha 7/92 ha but "older" cultivation 138.55 ha grazing and with lower fertility. dry farming with partial subdivisional potential @ $5,000 per ha Ludwig/SEQWB Settlement - Herron - Country ranges (Herron basis) 266.6 ha 8/92 Glendower Dam from prime cultivation Herron analysis - to forest ridges. 52 ha prime cultivation Somewhat similar but @ $9,000 per ha scattered prime land, but 119.6 ha easy forest with lower fertility. @ $5,000 per ha Somewhat similar forest -- 29 of 53 -- 30 95 ha forest ridges and potential. @ $3,042 per ha Hester/SEQWB Settlement - Glendower Herron - Albert River (Herron basis) 119.58 ha 2/92 Dam River flats adjacent Herron analysis - gently sloping forest. 40 ha prime cultivation Similar prime land, but @ $9,688 per ha "old" cultivation and 79.58 ha forest flats less fertile with and bottom slopes tighter soils. Suffers @ $6,000 per ha more from flooding and has more wet areas. Larsen Nominees Walsh - Walsh - Aggregation of Pty Ltd/Drynan $2,190 per ha five parcels of mainly (Walsh sale) 471.57 ha 8/91 scrub grazing land with some steep slopes - large area aggregation, more remote location, better quality grazing. Richardson and Walsh - Walsh - Majority cleared Ors/Vause 20 ha cultivation undulating to steep ridge (Walsh sale) 105.6 ha 2/93 @ $4,000 per ha grazing land plus 85.6 ha grazing cultivation areas on creek. @ $2,102 per ha Comparisons with grazing land and limited cultivation area. Smaller land areas slightly more remote, unirrigated cultivation - after 8/92 date. Deerain/Sexton Walsh - Walsh - Irrigated (Walsh sale) 50.44 ha 9/90 16 ha irrigated cultivation adjoining cultivation Albert River mixed with @ $7,500 per ha easy sloping grazing/ 34.44 ha easy slopes contoured pasture land - and pasture land comparison for @ $4,645 per ha cultivation land - smaller area, more remote, sale to adjoining owner, slightly aged sale date - water restrictions on Albert River - no irrigation mainline. Lahrs/Hester Walsh - Walsh - Mix of black soil (Walsh sale) 140.6 ha 12/91 80 ha cultivation cultivation adjoining land @ $7,000 per ha Logan River with balance 60.6 ha grazing/ easy slopes and pasture pasture @ $4,661 land/grazing - 370 ML per ha irrigation licence - comparison for riverfront cultivation land and to a lesser extent the grazing land - smaller land area, -- 30 of 53 -- 31 mortgagee sale, well tested at auctions, main lines to irrigated areas, reliable regulated Logan River water supply, higher incidence of flooding. Hinze/Christoffel Walsh - Walsh - Mix of Logan River (Walsh sale) 91.96 ha 3/93 55 ha cultivation front cultivation land and @ $8,500 per ha balance easy slopes, gullies 36.96 ha grazing etc. Irrigation licence balance @ $4,532 120 ML - comparison for per ha riverfront cultivation land, lesser extent grazing land - smaller land area, more proximate location, main lines to irrigation areas, reliable regulated Logan River water supply, higher incidence of flooding, sale after 8/92. Haseler/Ferris Walsh - Walsh - Mix of Logan River (Walsh sale) 40.469 ha 6/93 25 ha cultivation front cultivation land, @ $8,500 per ha balance grazing, very easy 15.469 ha balance slopes, irrigation licence grazing A $4,686 16 ML - mainly comparison per ha for riverfront cultivation land - smaller area, more proximate location, main lines to irrigation areas, reliable regulated Logan River water supply, higher incidence of flooding, sale after 8/92. Cameron/McDermott Walsh - Walsh - Mix of Logan River (Walsh sale) 40.469 ha 5/93 30 ha cultivation cultivation land, balance land @ $8,600 very easy slopes grazing. per ha Irrigation licence 180 ML 10.469 ha balance - comparison with riverfront grazing @ $4,680 cultivation land, lesser per ha extent grazing - smaller land area, main lines to irrigation areas, reliable regulated Logan River water supply, higher incidence of flooding, sale after 8/92. Mr Herron is of the opinion, supported by that of Mr Harrison, that the "Dagworth" prime arable land is more valuable than those Albert River flats which have been farmed for many years. He makes specific comparison with the "prime arable" "Wyambyn" flats - the valuation of which was determined by the Land Court on -- 31 of 53 -- 32 the basis of $8,750 per hectare. By comparison, he values the "prime arable" "Dagworth" land (135 hectares) at $9,650 per hectare. He makes no differentiation in value for the area capable of irrigation under the licence. He sees the relatively larger area of arable land as an advantage to the overall mix of country on "Dagworth" and its suitability for the integrated use. He values the "good quality" arable classification (33 hectares) at $6,500 per hectare. The balance "fair to good" quality grazing land (712 hectares) is valued at $3,500 per hectare. Again, he sees the grazing area factor as advantageous to the integrated use. It is Mr Herron's opinion that a large holding in a location such as "Dagworth" commands a premium value, for an integrated use requiring the total area. Mr Walsh takes an opposing view. He says that once the size of a holding exceeds the area common to a locality, it is generally accepted that value on a unit of area basis will decrease. In his overall considerations as to matters such as size, quality of land, availability of irrigation water and irrigation infrastructure (main lines), he valued what he saw as the irrigable prime cultivation (12 hectares) on "Dagworth" at $8,000 per hectare, the balance arable land (90 hectares) at $7,000 per hectare and the balance mixed grazing (777.86 hectares) at $2,500 per hectare. Included in his grazing classification (and logically improving its quality) would be (by deduction) 33 hectares classified by Mr Harrison and Mr Herron as prime arable land as well as 33 hectares of good quality arable land. These areas are included in what Mr Walsh described as "improved pasture" land. It also follows, by deduction, that the grazing land would include some of the broken river frontage lands in both valuers' assessment. Dealing firstly with the prime arable land, it should first be mentioned that the Court found a value of $8,750 per hectare for the "Wyambyn" "prime irrigable arable" land (the emphasis is added). The evidence then before the Court included settlements referred to by Mr Herron in this matter (Ludwig and Hester) and the sales Deerain/Sexton, Lahrs/Hester, Hinze/Christoffel and Ruiter/Hohl - all of which -- 32 of 53 -- 33 evidence was considered and discussed at some length in that judgment. It is noted that here, Mr Walsh found an area of 16 hectares of irrigable land, which he analysed to show $7,500 per hectare on the Deerain/Sexton sale property. The valuers in the "Wyambyn" hearing, one of whom was Mr Herron, found 12 hectares and 12.61 hectares respectively with analysed values of $9,000 (Mr Hamilton for SEQWB) and $8,000 (Mr Herron for the claimant) respectively. Mr Herron does not resile from his earlier analysis as to the prime irrigable land on that sale property or his previous comments that the circumstances of the private sale to an adjoining and acceptable neighbour, without testing the open market, resulted, in his opinion, in a lower than open market land value. The further sales evidence introduced here by Mr Walsh, relative to prime irrigable land on the regulated Logan River, with its guaranteed water availability, (Haseler/Ferris and Cameron/McDermott) is seen to support the level of value indicated by the Hinze/Christoffel sale which figured prominently in the "Wyambyn" determination, being a sale introduced in that matter by Mr Herron. Mr Walsh has supplied, with his Logan River sales evidence, the water allocation available under the various licences. The Lahrs/Hester sale has annual allocation equivalent to 4.625 ML per irrigable hectare; Hinze/Christoffel 2.18 ML per hectare; Haseler/Ferris 0.64 ML per hectare and Cameron/McDermott 6 ML per hectare. The sales showed, on Mr Walsh's analyses, values of $7,000, $8,500, $8,500 and $8,600 per hectare respectively. Mr Herron suggests that this evidence indicates that the availability of regulated irrigation water of varying volume, has no demonstrable effect on market value. When it is Mr Loughnan's evidence as to the information obtained from Water Resources that there is now a once only capital charge of $200 per ML for the granting of licences on the Logan River, it would seem somewhat illogical that volume of water available through a licence would not be a factor influencing value. It is observed that the volume available, without further application and capital cost on the Haseler/Ferris property is very low. It is possible then that factors other than prime irrigable land may have influenced the sale price of that property. The volume -- 33 of 53 -- 34 of allocated irrigation water on the Hinze/Christoffel sale is also low in comparison with the other irrigated farms. The value of the relatively larger area of irrigable land on the Lahrs/Hester sale might be interpreted to reflect the size factor referred to by Mr Walsh, although it is the opinion of Mr Herron that this is a "low" sale. Mr Walsh agreed that there were circumstances other than the sale being by the mortgagee which might have affected the saleability of that property at the date of sale. In the end result, however, there is no fresh evidence before this Court which leads me to conclude that the value attributed to the "Wyambyn" prime irrigable land is not supported. That land, whilst not having a guaranteed supply from the river, was said to have an abundant underground supply and an irrigation bore connected to the main line infrastructure. The licence from the river allowed irrigation of 30 hectares at any one time. Mr Walsh's approach in valuing the "Dagworth" area of arable land with considered irrigation potential at a lower level of value than that which was irrigable under licence, was subjected to criticism. It was argued for the claimant that not only was the area available under the licence for "Dagworth" ambulatory in the sense that any part of the total available area (albeit limited to 12 hectares in any one crop growing season) was available for irrigation but, as well, potential existed for increasing the available area by application to Water Resources. In light of other similar licence applications in the close proximity, there was also seen to be potential for licensed water harvesting during peak flow periods, for on-site storage and irrigation - which was the practice on other Albert River irrigation farms. I am not convinced that the area of land capable of irrigation at any one time or the volume of water available without further payment of capital charges as exists on the Logan River, would be disregarded in a well-informed marketplace. For example, it would be difficult to accept that a new waterworks licence on the Logan River, allowing say 4 ML per hectare, and costing $800 per hectare in capital charges (4 ML x $200) would not add value at least equal to that cost. If this theoretical -- 34 of 53 -- 35 approach was taken in an analysis of the various sales quoted previously, the land, with main-line infrastructure but with the irrigation potential only, would show values as follows - Lahrs/Hester (80 hectares) $6,057 per hectare ($7,000 -(4.625 ML x $200)); Hinze/Christoffel (55 hectares) $8,064 per hectare ($8,500 - (2.18 ML x $200)); Haseler/Ferris (25 hectares) $8,372 per hectare (($8,500 - (0.64 ML x $200)) and Cameron/McDermott (30 hectares) $7,400 per hectare ($8,600 - (6 ML x $200)). Unless Mr Walsh's argument for discounting the level of value relative to increasing size is correct, the Logan River sales, on the above analysis, with the exception of Lahrs/Hester, support a higher valuation for the "Dagworth" arable land than he has applied. The Lahrs/Hester sale has, on his own admission, circumstances surrounding it (apart from being a mortgagee sale - drought conditions and poor presentation) which limits the weight which can be placed on the evidence it provides. There is no evidence of larger size influencing lower value with the balance of the Logan River sales. Indeed the comparison between the Cameron/McDermott and Hinze/Christoffel sales could be argued in reverse. There is nevertheless, logic in Mr Walsh's experience-orientated opinion, particularly when the large area of arable land available on "Dagworth" is considered, that some market discounting for size might have been expected in comparison with the sales evidence. If the use of "Dagworth" was limited to a commercial farming/grazing operation, I would be influenced by his opinion, but that is not the case here. The farming lands of "Dagworth" are important to the high intensity fodder requirements of the integrated PEQ operation. I can accept that no discounting of the value of the arable lands should be envisaged when the more intense existing use of "Dagworth" is considered. The question still remains as to the correct value of the arable lands. On the basis of potential for irrigation, lack of irrigation infrastructure but superior soil fertility, I will adopt a value of $8,250 per hectare - a value which I see as sitting comfortably with the analysis conducted on the Logan River sales evidence, hypothetically stripped of the waterworks licences. I agree with Mr Walsh that a premium should be -- 35 of 53 -- 36 recognised for the existence of the licence. He has allowed $1,000 per hectare as that premium. There is no evidence to support such an amount for an Albert River licence, and it might well be generous. Allowing a value of $9,250 for the nominal 12 hectares without main-line infrastructure, but with superior soil fertility, is seen to sit comfortably with the value determined in the "Wyambyn" matter of $8,750 per hectare for the prime irrigable land including main-line infrastructure. With regard to the value of the secondary but "good quality" arable land, it seems to me that $5,500 per hectare would accord with the relative worth, in comparison with the prime land, as indicated by Mr Herron's assessment (about two-thirds the value). Some support for a valuation in this amount is provided by the secondary sales evidence. There is agreement between the valuers as to the lack of strictly comparable evidence as a basis for valuation of the grazing component. Mr Herron takes the view that it is more valuable, associated with the overall business, than the level of value shown by his sales of significantly smaller holdings. It is suggested that, to replace such a large area, in a locality such as that of "Dagworth", aggregation of smaller properties would be necessary at a cost equivalent at least to the values of the smaller holdings. I do not agree with that suggestion. The value to be found is not that of the more available smaller areas, but of an unusually large area, as the grazing arm of the integrated business. I am unable to accept, in the first place, that the value to be found could be, as Mr Herron has found, higher than that which the claimant itself paid for "Laravale", to replace the primary PEQ use. "Laravale" is a property of much smaller area and even if the soil types are hard to gravelly, in comparison much of the eastern end of "Dagworth" is at best, only fair quality grazing. No comparison can reasonably be made with the $5,000 per hectare applied to the balance area of the "grazing and dry farming" land component on "Wyambyn", because of the accepted argument that partial subdivisional potential influenced the value of that land. Mr Walsh's introduction of the Larsen Nominees Pty Ltd/Drynan sale was -- 36 of 53 -- 37 criticised due to the significantly inferior location of that land in comparison. Location aside, it is seen as a better guide to the value of the grazing component. It is of a relatively large property yet the area is still significantly smaller than the grazing component of "Dagworth". It comprises country capable of heavier carrying capacity than does the "Dagworth" grazing land. The sale showed a land value (cleared, fenced and watered) of $2,190 per hectare. Mr Walsh valued his classified balance area of "Dagworth" at $2,500 per hectare. As already mentioned, included in Mr Walsh's balance area are those prime and good quality arable areas totalling 66 hectares, which significantly lift the quality of the pure grazing lands as valued by Mr Herron. For example, if the values which I am adopting for the arable land (33 hectares at $8,250 and 33 hectares at $5,500) within Mr Walsh's grazing land classification were deducted from his valuation, it would be seen that the valuation of the 712 hectares would become $1,491,250 ($1,945,000 - $453,750) or a little under $2,100 per hectare. Again, I am prepared to accept the argument that the overall market value of "Dagworth" would be influenced above pure grazing and farming values in recognition of the integrated highest and best use which existed. I have decided to adopt a grazing component value for the 712 hectares of $2,500 per hectare on a cleared, particularly well fenced, and watered basis. Adopted Values Before Resumption: The value of the "Dagworth" land on a cleared, fenced and watered basis, before the resumption will be adopted as follows: 12 hectares prime irrigable arable land at $9,250 per ha $ 111,000 123 hectares prime arable land with irrigable potential at $8,250 per ha $1,014,750 33 hectares good quality arable land at $5,500 per ha $ 181,500 712 hectares fair to good quality grazing at $2,500 per ha $1,780,000 -- 37 of 53 -- 38 Total Land Value $3,087,250 Value of Improvements: Mr Herron valued the improvements in the amount of $634,727, while Mr Walsh valued them at $667,000. The parties indicated that they had reached agreement to "split the difference". Now, while that would seem like a reasonable valuation result, it is necessary to consider the valuation considerations of both valuers. Mr Walsh had taken the view that any enhancement in the grazing and farming value resulting from the PEQ registration attached to the improvements, as registration was largely dependent on the standard of associated infrastructure. He says that, had the PEQ registration not been in place, then he would have found the added value of the improvements (including the dwelling, as I understand his evidence) for grazing and farming use to have been significantly less. Apart from the age of the structures, no doubt the question of over-capitalisation would have required consideration. Mr Walsh had not identified, for the benefit of the Court, the degree of enhancement in added value which he felt resulted from the PEQ registration. It seems that Mr Walsh valued the PEQ infrastructure on the basis of its added value being equivalent or near equivalent to replacement cost. He said that he considered the dwelling to form part of the PEQ facility. The individual improvements as valued by Mr Herron and Mr Walsh are not able to be matched precisely but the valuations are set out as follows: Mr Herron Mr Walsh Homestead and Appurtenances $198,485 Dwelling-house and Appurtenances $206,200 Cottage and Appurtenances $ 27,020 Cottage $ 39,600 Pre-Export Quarantine Facilities "The Flat" $ 33,000 Quarters/Workshop/ Workers Toilet and Poison Amenities $ 40,592 Storage Shed $ 800 Hay Shed $ 12,420 Hay Shed $ 30,900 -- 38 of 53 -- 39 Stables $ 44,360 Stables $ 29,600 Shelter Sheds and Horse Yards Shelter Sheds $ 9,600 Yards $ 21,167 "Mares and Foals" Machinery Shed $ 17,000 Main Yards $103,004 Working Yards Complex $110,600 Roadways, culverts $105,150 Shelter Shed in Yards $ 13,100 Entry Grid $ 2,970 Shed at Scales Facility $ 6,000 Water Facilities $ 58,353 Water Improvements $ 42,000 Facility Fencing $ 21,106 Miscellaneous infrastructure, electricity, roads, trees $109,600 $409,222 Fencing $ 19,000 $634,727 $667,000 Returning to Mr Powell's evidence, his estimated replacement value of the "Dagworth" yards complex was as follows: Cattle Facility - Round Timber $108,716 Sawn Timber $105,923 Steel $108,141 His costing breakdown included a work shed ($3,700) and shelter/storage sheds ($12,800) and test centre ($11,764). Horse Facilities - Round Timber (Bottom Yards) $29,716 Round Timber (Top Yards) $58,014 $ 87,730 Steel (Bottom Yards) $30,019 (Top Yards) $57,561 $ 87,580 His costing breakdown included shelters ($4,000) and shed ($4,000) in the bottom yards and stable ($49,000) in the top yards. It seems to me that Mr Herron has valued the facility yards together with the -- 39 of 53 -- 40 stables at $168,531 (with an estimated replacement cost of $199,138 which amount appears in his replacement value at the "Laravale" complex) while Mr Walsh has valued the same facilities at $186,700. Mr Powell's estimated replacement cost in steel, as an example, totalled $195,721 including the stables and various structures. Mr Herron has provided, again under the "Laravale" considerations, an estimated replacement cost of the dwelling as being $254,400. The estimated cost of the cottage which he envisaged being replaced on the balance of "Dagworth" was $63,000. It is clear that Mr Herron's added value of structures was intended to be on a depreciated replacement cost basis. It is equally clear that Mr Walsh had intended to value the structures, at least the specific PEQ infrastructure, as he said he did, with added value near equivalent to his opinion of new replacement cost. Due to the differing valuation approaches, I believe it would be unfair to "split the difference". I will therefore adopt Mr Walsh's valuation of the improvements, which appears to be supported as being an added value near equivalent to replacement cost, at least with regard to the PEQ infrastructure. Total Valuation Before Resumption: I have adopted a land value which is intended to reflect, on the evidence of value accepted, the market value of the land with highest and best use including the PEQ registration of $3,087,250 The valuation adopted for the improvements including the added value associated with PEQ registration is $ 667,000 The total before resumption valuation with PEQ registration is adopted as $3,754,250 Valuation After Resumption: With the PEQ infrastructure and structural improvements on the resumed land, the owner is left with a large balance area, the highest and best use of which is limited to commercial grazing with insignificant improved pasture or cropping potential. The -- 40 of 53 -- 41 grazing capacity, in comparison with the before resumption situation, is lightened due to the lack of crop assistance, and severance from the riverfront lands. No formal vehicular access is available. The adjoining resumed lands will be partially inundated in about 20 years from the date of resumption. In the meantime, access could be negotiated by way of access easement over the resumed land to the Tabragalba House Road. When this access is eventually denied by inundation, the resuming authority has offered, if settlement of compensation could be effected, to provide constructed alternative access to an as yet unknown point. Alternatively, it is known that the cost to the owner to provide access off Armstrong Road to the north-eastern section of the property (where topographical features limit the availability of all-weather internal access construction), was $184,381 at the date of resumption. The balance land will eventually adjoin the dam lake buffer. Long-term potential exists for leasing of grazing rights over the buffer to the water frontage, allowing the use of stock water as well. Potential existed for leasing of the actual resumed land, subject to standard SEQWB or, alternatively, negotiated lease terms, until the land is actually required for the purpose of the resumption. The value of the balance area is required to be determined, with acceptable access arrangements but no lease-back in place. That does not exclude consideration of the potentialities which exist. Putting aside initially the question of the owner's demonstrated intentions, it seems to me that if the balance land was to be offered for sale in the open market, the future access uncertainty, relative to the point of access, might influence prudent buyers when the preferred building site is a consideration. However, with good access available to the western end until future guaranteed access is determined, a prudent vendor would not logically reduce the asking price by $185,000 or, alternatively, outlay that amount, as the cost to extend Armstrong Road to the northern boundary. It may well offer a purchaser a bargaining point, but I see the initial easement proposition as both a practical and totally acceptable option, for a -- 41 of 53 -- 42 non-specific commercial grazing use. In the open marketplace, I would expect prudent parties to consider the size and non-fattening quality of the balance grazing lands, and the uncertain location of future access, as negative factors, but the potential for initial lease-back and long-term grazing rights and stock water, together with future lake adjacency, as positive features. A potential purchaser might see the availability of the original "Dagworth" homestead, yards and farm buildings, for lease (and even possible later purchase) as a distinct advantage, at least until the point of future access becomes known. Both valuers reduced their before resumption grazing component valuations by 20 per cent in assessing the value of the balance area. It is not quite as it first seems. Mr Walsh's before resumption valuation included the arable land as previously mentioned. If that land was removed from the valuation, his "ex improved pasture" grazing valuation would realistically be significantly lower than $2,500 per hectare. In fact then, when his "after" valuation is of "native pasture" grazing land at $2,000 per hectare, 20 per cent reduction in value includes, significantly, the reduction in quality from the pre-resumption "mixed" grazing classification. Mr Herron's "after" valuation of $2,800 per hectare is based on a specific 20 per cent reduction, from the pre-resumption valuation of similar quality land. One of his considerations was that access will be of lesser quality than before, being restricted to Armstrong Road. I do not accept that as being the real or practical situation - at least not in the medium term. He gave verbal evidence that his "after" valuation still included a premium for use of the land as part of the now fragmented business. I do not find that evidence, as to premium, convincing. He suggested an "after" grazing value of $2,500 per hectare, exclusive of the premium. Based on the valuation evidence before me as to the relative worth of the "Dagworth" grazing land, before and after resumption, I will adopt a reduction of 15 per cent, reflecting a valuation of $2,125 per hectare. Support for such a valuation is seen to be gained from the sale Larsen Nominees Pty Ltd/Drynan, of superior grazing -- 42 of 53 -- 43 land in an inferior location. I will round the "after" valuation to $1,413,000 to provide for the minor removal of fencing which could be necessitated by the position of the resumption boundary. The adopted "after" valuation is seen to recognise: (1)the large area with use in the open marketplace limited to grazing. (2)loss of the riverfront lands for grazing assistance, but potential for medium-term lease-back of the resumed land and buildings, as well as potential for acquiring grazing rights in the long term, to the ponded level. (3)medium-term access as existed before the resumption but with an uncertain long-term access point. (4)the fencing of the resumption boundary to be the responsibility of the constructing authority, when and if required. Special Value to Owner/Relocation/Disturbance: The value of the land resumed is ordinarily its market value, although it is well-established principle that the value to be found in matters of compulsory acquisition is the value to the dispossessed owner - see Pastoral Finance Association Ltd v. Minister [1914] AC 1083, in which matter the Privy Council found such value to be, at p.1088, "that which a prudent man in their position would have been willing to give for the land sooner than fail to obtain it." Any element additional to market value falls to be considered as special value to the owner. As I see the position with "Dagworth", its use was special in the sense that no other property in Queensland had similar registration for the PEQ segment of the operation. Nevertheless, that use is not so special as to defy comparison with other rural operations involving the combination of farming/grazing and in some cases intensive animal husbandry. The associated improvements are readily identifiable with livestock and grazing undertakings. The value of "Dagworth" at the date of resumption, as it has been found, recognises its integrated use potential as being greater than if the registration, allowing the PEQ, did not exist, or was not for any -- 43 of 53 -- 44 reason, able to be obtained. There seems to be no suggestion, at least from Mr Herron, that the market value of "Dagworth" contains any element of value other than those addressed under the headings of land and improvements. No doubt, some personal goodwill attaches to the expertise of Mr and Mrs Ruddle in the PEQ business, but "Dagworth" is seen to have been, before resumption, a property readily saleable in the open marketplace for continuation of that integrated business. With the eventual need for the PEQ operation to be relocated, as a result of the purpose of the resumption, the costs of relocation which are a direct, natural and reasonable consequence of the resumption then, as I see it, fall under the umbrella of special value to the owner. Had the claimant accepted the total resumption option, the question of full compensation would have been much clearer. Reinstatement, apart from costs of relocation, would not have been seen to be an issue of significance. The value of the PEQ improvements as they specifically relate to "Dagworth", will be determined on a basis reflecting "new or near new" condition. If Mr Walsh's valuation of the residential structures was on the "new or near new" basis, as he says, then such an approach would be considered to be generous in the circumstances. If Mr Herron's replacement cost estimate for the residential structures was correct, then Mr Walsh's valuation of these structures would be seen to be on a depreciated basis, but I find no reason to alter the result. Mr Herron of course took a different approach and purposely valued, where he saw it as correct to do so, improvements as having added value equivalent to a depreciated replacement cost but reflecting the good condition in which they were maintained. His special value to the owner then was assessed on the basis of the need to replace improvements at the new locations. For assessment of "special value" he accepts without question the sites selected by the owner for relocation of parts of the business. -- 44 of 53 -- 45 This is where the issue becomes clouded. The owner saw the need sooner rather than later to mitigate against the potential loss of the PEQ business. It is claimed, and evidence was put before the Court, that no comparable "Dagworth" replacement property was listed with agents or known to be available for purchase in the general locality. The written enquiry of local agents contained the following guidelines for a replacement property: "Area - min 800 ha (200 ha alluvial flats, the remainder undulating grazing country) At least 3 k river frontage Carrying capacity - min 500 breeders Min 850 mm rainfall area All weather access Location - within approximately one hour from Brisbane and the coast, with close proximity to a railhead." The limitations contained within the written request were recognised: "The above guidelines may appear stringent, however we must be able to continue our pre-conditioning export facility, which requires all-weather access, proximity to a railhead, Brisbane port and airport." There is no evidence to suggest that the search for property was particularly intense or extended to other localities in South-East Queensland. There was no short to medium term relocation pressure brought to bear by the constructing authority. Indeed, its requirement for possession was known to be many years distant. The owner had the knowledge that the financial constraints of acquiring replacement property would be alleviated by early resumption by agreement. It was known that lease-back arrangements were available. The circumstances were such that, apart from perceived potential for town planning considerations to become more restrictive - a consideration which no doubt reflected directly on the market value of the established "Dagworth" - the owner was in control of the resumption procedure in the interim period, at least until the year 2005. I find it difficult to accept that a person, knowing the requirements for PEQ -- 45 of 53 -- 46 registration, desirous of establishing such an operation within reasonable proximity of Brisbane, (as the primary port of embarkation for Southern Queensland), and supported by cropping and grazing activities, would be unable to acquire a single suitable property. To duplicate all of the features of "Dagworth" may well have been difficult, if not impossible, particularly in the Beaudesert locality. However, I am unable to accept that there is no property available, or likely to become available, capable of meeting the broad integrated use potential of "Dagworth". Disadvantages, or for that matter, advantages, could well have become a question of market value. It is recognised that Mr and Mrs Ruddle wished to remain in the Beaudesert area. However, except for the fact that the Beaudesert district meets location and town planning criteria, commercial considerations should not have limited integrated relocation to that particular locality. While there might well be compelling personal reasons for an owner to limit the range of relocation, sentiment is not an element capable of compensable consideration. As Fletcher Moulton LJ said in Lucas and Chesterfield Gas and Water Board [1909] 1 K.B. 16 - "The owner receives for the lands he gives up their equivalent, i.e. that which they were worth to him in money". In Duncan v. The Minister for Education (1968-69) 17 L.G.R.A. 323 Barber J said at p.328, when considering the question of value to the owner - "A well-known test is to determine what the owner would pay, rather than not retain the property. For this purpose the owner must be regarded as a prudent and reasonable man acting in a business-like manner. One cannot charge the acquiring authority with a value which the owner puts on the land on some sentimental or irrational basis." Here, the claimant put into effect the fragmentation of uses, which is now complained of as one of the elements necessitating compensation payment. The acquisition of the "Laravale" property, patently unsuitable for use other than that of the PEQ facility in isolation, was the initial replacement property purchase. This precluded opportunity for, as an example, the crop production and/or the pre-quarantine agistment grazing to be integrated with the PEQ operation. -- 46 of 53 -- 47 Subsequent to the contract being signed on "Laravale" came the request for early resumption. Rejection of the option for SEQWB to acquire the whole "Dagworth" property and the decision to use the balance area for some of the grazing activities, may have denied the opportunity for acquisition of a suitably located farming/grazing replacement property. The acquisition of "Tooloom Creek" created the final and distant fragmentation of that which previously existed. There is no suggestion that the claimant is not directed by other than astute, business orientated persons. It is unlikely then that the fragmentation exercise was not fully considered in light of previous experiences. The evidence supports the conclusion that the fragmentation exercise and the relocation activity has been, in fact, a carefully planned operation. Any benefits or business advantages flowing from fragmentation which might be particular to the family company, are not obvious or, if they do exist, are not disclosed. The disadvantages are particularly well exposed. Principles of "reinstatement" in acquisition matters have recently been discussed by Wilcox J in the Federal Court of Australia in Salvatore and Antonino Banno v. Commonwealth of Australia (Judgment 626/93) not yet reported. His Honour was dealing with a claim based on reinstatement under the Lands Acquisition Act 1989 (Cwlth) where principles of assessment of compensation differ from the relevant legislation here. Nevertheless, he referred to the judgment in Commissioner of Highways v. Shipp Bros Pty Ltd (1978) 19 S.A.S.R. 215 which involved a reinstatement claim but where no alternative location had been found. Many of the observations by Wells J in the Shipp Bros judgment (supra) have relevance here although it is suggested by Mr Herron that the "Dagworth" exercise has been one of relocation rather than "reinstatement". In the Banno judgment at p.22, 23 and 24, the following comments of Wilcox J are found: "His Honour pointed out at 219-220 that, in compensation cases, the court is concerned to consider the value of the land from the viewpoint of the claimant; this value may be greater than market value. He went on at 220-221: -- 47 of 53 -- 48 `4.Where the taking of the land, for one reason or another, has the effect of destroying the business, the compensation will, speaking generally, and subject to qualifications arising from special circumstances, amount to the value, assessed at the date when it is apparent that re-establishment of substantially the same business is impracticable, of the land and business as a going concern, less, of course, a reasonable allowance for moveable plant and equipment that is retained. 5.A business may be held to have been destroyed in various ways and in many different sets of circumstances. It may be destroyed because it has been so closely integrated with the particular land ... that no other comparable site is to be found. It may be destroyed because it has been exclusively or heavily dependent upon and characterised by a local reputation and connection; to set up the same kind of business elsewhere would be, therefore, to establish a completely new venture. 6.But the reputation and connection of a business may not be concentrated within narrow local limits and the business may not, or not to any great degree, be bound to the subject land. The strength and extent of that reputation and connection, and the freedom of the business from physical and administrative fetters binding it to the subject land, may be such that the business cannot fairly be held to have been destroyed by the acquisition. The answer to the question "Destroyed or not destroyed?" will necessarily depend on a wide range of circumstances as to which it would be undesirable - probably even harmful - to purport to lay down any hard and fast rules. 7.The role played by re-establishment in the process of computing compensation is not left at large, and must be regulated because, within comparatively liberal limits, it is expected that a claimant will, like the plaintiff in a claim for damages at common law, take proper steps to mitigate his loss. Causation is, as always, the ultimate test - on the one hand, for example, the circumstances may be such that it would be wholly unreasonable for the claimant to do other than promptly to lay out moneys in order to effect a simple and inexpensive transfer to an immediately available and obviously appropriate alternative site. On the other hand, a proposal to relocate (or each such proposal, if more than one be under examination) may lie uncomfortably close to the limits of acceptability, and may present itself (or themselves) as by no means the only course (or courses) reasonably open to the claimant. In such circumstances, proof of causation may lie nicely in balance, and the Court may find it difficult to choose between holding the business to have been, in truth, destroyed, and assessing compensation upon the basis of costs of -- 48 of 53 -- 49 re-establishment that are closely scrutinised and sometimes discounted.' Wells J observed at 221 that - `if the costs of available relocation plainly and substantially would exceed the value of the business as a going concern (after making due allowance for retained moveable assets) it would not be the reasonable and natural consequence of expropriation to incur such costs, and hence compensation could not justifiably be assessed by reference to them ... Even if the claimant has no alternative to obtaining new fixed assets that are more expensive and commodious than those he has lost, the Court may well make some allowance against the claimant in recognition of that enhancement.'" Relocation of the overall "Dagworth" business is accepted as a bona fide response to the resumption as it occurred. Nevertheless, the fragmentation of the business as has occurred is not accepted as a direct, reasonable or natural consequence of the resumption. As an example, in the circumstances as I see them, the cost of reinstatement of the pre-quarantine assembly and agistment arm of the business, by "turning the balance of `Dagworth' around" with provision of fixed external access from the north-east, which in turn fixes the internal access necessary to service selected sites for a cottage and yards, is not warranted, on an economic basis. While it might well have been a one-step resumption procedure in the first place, it seems to me that disposal of the balance of "Dagworth" as it stood immediately subsequent to the resumption, is one option which deserved consideration. It is proposed to outlay near $600,000, and for that outlay, an added value of probably no more than one-third of the expenditure would result. The claimant is of course at liberty to do what it thinks best, but in any economic sense unwarranted expenditure should not be the responsibility of the respondent. The purpose of the acquisition of "Tooloom Creek" is said to be primarily for replacement of the farming arm. There is insufficient evidence before the Court to dispel the perception that potential for more than that, together with minor grazing activity replacement, is involved. No doubt, as Mr Herron -- 49 of 53 -- 50 calculates, additional costs will result from the introduced management and administration expenses caused by the fragmentation and distance between the various properties. These are the areas where consideration of advantages as well as disadvantages would no doubt have prevailed in the claimant's decision-making process. Conclusions: I do not propose to make any award for the capitalised additional costs as claimed. Similarly, I do not propose to make any award for the additional plant-machinery-vehicles and equipment which are seen by the claimant to be necessary acquisitions. In any event, the outlays proposed under these latter headings will provide, at the time of purchase, equivalent asset value to the claimant. Having taken the view that the specific relocation process adopted was not a direct, reasonable or natural consequence of the resumption, it is necessary then to consider, on a notional basis, that which might have been seen as reasonable. Integrated re-establishment, whilst said to be difficult to achieve, is deserving of notional consideration in light of the capital which might have been available to achieve this result. To this end, I would envisage as having been necessary, the sale of the balance area. The notional costs of sale are excluded from consideration for the reason that they need not have been incurred in the first place. The funds available to replace the total property are then as assessed in the before resumption valuation. Any special value relating to the potential of "Dagworth" for its integrated use is included in that valuation. No disruption to business or loss of profits can be contemplated as occupation of the property was able to be continued free of rent, at least during a reasonable period for relocation. While it is in these circumstances a notional amount, I would see special value to the owner of "Dagworth" including an amount equivalent to the acquisition costs of acquiring a hypothetical replacement property of similar value. -- 50 of 53 -- 51 I will allow amounts as seen to be reasonable for the various items of business relocation, albeit to one notional address. In addition, I will allow the amount of additional labour actually incurred at "Dagworth" during the relocation operation which took place at "Laravale", or may have notionally taken place elsewhere. Legal and valuation fees incurred in preparation of the claim, as proved, will be allowed. Assessment of Compensation: Value of "Dagworth" before resumption Land with highest and best integrated use for registered PEQ facility, farming and grazing, as cleared, fenced and watered, other than PEQ infrastructure - 12 hectares prime irrigable arable land at $9,250 per hectare $ 111,000 123 hectares prime arable land with irrigable potential at $8,250 per hectare $1,014,750 33 hectares good quality arable land at $5,500 per hectare $ 181,500 712 hectares fair to good quality grazing at $2,500 per hectare $1,780,000 $3,087,250 Value of Improvements - added value with PEQ registration $ 667,000 Total Value Before Resumption $3,754,250 Less Value after Resumption Assume easement access to Tabragalba House Road, with external access to be provided by constructing authority as part of resumption works, resumption boundary fencing responsibility of constructing authority - -- 51 of 53 -- 52 665.24 hectares at $2,125 per ha treated, fenced and watered with minor removal of existing fencing, adopt $1,413,000 Loss of land and improvements $2,341,250 Special Value to Owner: Cost of notional acquisition of property to replace the whole of "Dagworth" Stamp Duty and Legal Fees, say $167,500 Estimated removal costs (total "Dagworth") allow $ 7,500 Additional Wages during relocation activities - allow $ 12,000 Change of address notifications $ 300 $ 187,300 Costs associated with lodgment of claim: Valuation fee $ 17,562 Legal Fees $ 3,000 $ 20,562 $2,549,112 In practical figures adopt $2,550,000 Interest: An advance of $1,920,000 was paid on 26th August, 1992. The claimant had remained in possession of the resumed land to the date of hearing at no cost except for the payment of an unidentified amount of rates. Apart from the allowed claim for additional wages, the continued occupation has set aside potential loss due to disruption to the business during relocation. This is of benefit to the constructing authority. The claimant has enjoyed the privilege of rent-free occupation of the total resumed area. With the early payment of the compensation advance, by far the greater benefit of the arrangement as to occupation has been enjoyed by the claimant. -- 52 of 53 -- 53 No order is made for the payment of interest on the outstanding compensation. External Access and Fencing: It should be clearly understood that the basis of this determination of compensation is that if it is requested to do so, the respondent will provide at no cost to the claimant formal easement access to the balance area of "Dagworth" from the northern boundary of the resumed land adjacent to Tabragalba House Road. The responsibility for providing formal access to the balance area of "Dagworth", prior to the inundation of Tabragalba House Road, is that of the constructing authority and such access will be to a standard acceptable to the Beaudesert Shire Council. The access arrangements are to be generally in accordance with the South-East Queensland Water Board resolution of 24th September, 1993. If it is requested to do so, the boundary between the balance of "Dagworth" and the resumed land will be fenced with a suitable stock-proof structure at the expense of the constructing authority. MEMBER OF THE LAND COURT -- 53 of 53 --