Conias v Brisbane City Council [1992] QLC 6

LAND COURT BRISBANE 21st February, 1992 Re: Claim for Compensation - A91-7. M., S. and A. Conias v. Brisbane City Council J U D G M E N T This is a claim for compensation consequent upon the resumption by the Brisbane City Council pursuant to the provisions of the Acquisition of Land Act 1967-1988 for Road purposes, the land described as Lot 1 on Plan No 806343, being a plan intended for registration in the office of the Registrar of Titles, Brisbane, containing an area of 142 square metres and being part of the land contained in Certificates of Title, volume 5220, folios 195, 196, 197, 198, 199 and 200, and volume 4645, folios 209, 210 and 211. Notice of resumption was published in the Government Gazette of 17th November, 1990, and this is the date at which the value of the land taken is to be determined for the purpose of assessing such compensation. The parent parcel is situated on the northern corner of the intersection of Milton Road and Morley Street, Toowong, in an area dominated by residential land use with, until recent times, several old-style retail outlets spread inbound along Milton Road. In the report of valuer, Mr P.L. Hillas, for the respondent Council, records that since 1985 re-development in this area has occurred in the form of the Rialto Centre which is a two-storey retail office development, the Cat and Fiddle local shopping centre, the redevelopment of the subject land and a further retail/office development under construction on the eastern corner of Milton Road and Croydon Street. Prior to resumption, the parent parcel was regular in shape, consisting of three lots with a total frontage to Milton Road of 30.171 metres and to Morley Street, a frontage of 40.234 metres. It is included in the business zone under the Town Plan which affords it a plot [1992] QLC 6 -- 1 of 17 -- 2 ratio of 1:1. The evidence before me shows that in 1988, the owners instructed D.D.B. Architects to prepare plans of a proposed business office building upon the land. Negotiations took place with the respondent Council for approval to construct a two-level commercial building. Under the provision of the Town Plan, 53 carparking spaces were required for the use of offices and a restaurant, being 24 for the offices and 29 for the restaurant. Approval was obtained with a reduced number of spaces to 25 on the grounds that the restaurant would only require the carparks after 5p.m. Notice of intention of resumption issued on 21st February, 1990, and some re-design of the building was necessary which resulted in a loss of net lettable area of 1.5 square metres on the ground floor and loss of 1 car space in the carpark level and a relocation of stairs. It was necessary also for a redesign to provide a retaining wall at carpark level adjacent to landscaping area because the width of landscaping had been reduced and grading could no longer occur as first designed. The building owners were issued with a certificate of completion of the building on 5th October, 1990, and the actual resumption occurred on 8th November, 1990. A claim lodged in the Court on 5th December, 1990, was in the sum of $105,750 as a blanket claim for land, severance, injurious affection and improvements. At the commencement of the hearing, Counsel for the claimant amended the claim as follows: Land and injurious affection $62,585 Disturbance - Additional building costs $ 6,595 Architect's fees $ 580 Valuation fees $ 4,425 Legal fees (agreed) $ 1,315 $12,915 TOTAL CLAIM $75,500 Evidence was given by Mr Steve Elisseos of Elisseos and Co., registered builders, which firm undertook the construction of the building under -- 2 of 17 -- 3 consideration. He says that as a result of the proposed resumption some additional costs were involved in providing a new staircase to the fire passage, new steps at the retaining wall, a block garden wall on Milton Road and a door and window, to a total of $9,425. From the original quote, amounts for the original staircase and other incidentals totalling $2,830 were deleted leaving unnecessary but the total additional cost at $6,595. He explained in his evidence what work was involved and whether the charges were high or low. I do not propose to detail such evidence but find, in the absence of any evidence to the contrary, that the additional cost is a direct result of the resumption and the costs will be allowed. Mr P.J. Daly, the architect responsible for the building, gave evidence that as a result of the resumption it was necessary to make adjustments to the building and 1.5 square metres of floor space was lost as a result of the alteration of the location of the stairs and 1-car bay in the basement was also lost. He says that the current town plan permits a plot ratio of Building GFA to site area of 1:1, therefore permitting a total GFA of 1213 square metres before the resumption. After the loss of 142 square metres of site area, it equates to a loss of 142 square metres of GFA or a loss of approximately 130 square metres net lettable area. He bases this on a building efficiency of 92%. In his written statement he explains the loss as he sees it for 4.5 metres depth of landscaping in the overall presentation of the building. He then speaks of the relocation of the stairs resulting in a loss of net lettable area of 1.5 square metres on the ground floor and a loss of one car space, with the additional building costs. In cross examination Mr Daly agrees that the town plan would require a 6 metre setback as a general rule. He agrees that this development now effectively has a plot ratio in excess of 1:1 as it did lose the GFA associated with the 142 metre resumption. He would not concede that developers seek where possible to have buildings erected as close to the roadway as possible for exposure. He agrees that the original plans for this building were close to the permitted 6-metre setback prior to the -- 3 of 17 -- 4 resumption. Nor would he concede that developers of commercial properties which have a retail component invariably try to get as close as they can to the frontage and use as little landscaping as possible which is likely to block exposure. Mr Spero Conias, one of the claimants, gave evidence to the effect that he has been a real estate agent since the early 1970s and currently has 10 real estate offices, predominantly in the inner City area, specialising in commercial and residential sales. The subject site was the original site of his first office in 1972 and he has developed properties in Logan Road, Underwood; 90 Latrobe Terrace, Paddington; the adjoining lot to the subject in Morley Street, now known as the Cat and Fiddle and another development which also adjoins the subject, built in 1984. He says that the subject building was purposely designed to face Morley Street and not Milton Road because Morley Street, as a quieter street, has better access. He speaks of the landscaping of the Cat and Fiddle development and the emphasis that he places on landscaping in his developments. He says his experience in real estate indicates the first thing a purchaser looks to is to find an aesthetically appealing building and then he looks at the capitalisation rate of return. He speaks of the efforts in endeavouring to landscape the subject land and the problems with lack of sunlight and pollution. He was asked questions on how he would value two allotments where all things were equal except that one was 142 square metres smaller. He says that it was obvious that the smaller allotment would be cheaper. He was asked the same question where there was a successfully tenanted building erected upon the land. He believes that again a purchaser would select the larger because if the existing building was burnt or when the building depreciated to the point where redevelopment was necessary, there was extra land to work with. In cross-examination he agrees that he successfully negotiated a relaxation of the car park requirements with the respondent Council on advancing an argument that the proposed restaurant would be operating at hours different to some of the other tenancies. He was shown photographs of the subject building and would -- 4 of 17 -- 5 not agree that the present state of the landscaping was no more than a token. Evidence in support of the claim for loss of land and injurious affection of $62,585 is made on the valuation of Mr J.R. Porter, who gave evidence that he has substantial experience in valuing all types of commercial properties from suburban commercial to major central business district commercials, major retail shopping centres and to smaller shopping centres. He describes the nature of the improvements and his basis of assessment in his written valuation in the following words: "As at the date of resumption, a new two-level commercial building had recently been constructed on site. The property comprises a two level building of reinforced concrete slab construction with concrete columns, concrete block infills and external rendering. The property features full length aluminium framed glazing to the Milton Road and Morley Street frontages on ground and first floor levels. Ground floor tenancies are accessed via aluminium framed double doors. First floor tenancies have the benefit of a feature balcony to the front of the building facing Morley Street. All tenancy areas have suspended ceilings with flush fluorescent strip lighting diffusers. Tenancies are fully air conditioned, each with its own fully controllable air conditioning plant. First floor areas are accessed via a carpeted staircase. Ground and first floor foyers are finished with reconstituted granite floor tiles. Male and female toilet amenities are provided on each level. Under cover car parking was originally intended to provide 23 spaces however owing to the relocated fire stairs only 22 were provided and accessed via a ramp from Morley Street. A further 3 visitors car parking bays are provided at ground level to the front of the building. Pedestrian access to the undercover car park is via an external staircase adjacent to the main entrance or alternatively, via the internal firestairs at the rear of the building. A concrete block retaining wall has been constructed on the car park level at both street frontages. Some minimal landscaping has been provided to both street frontages. The width of the area of land resumed ranges from 4.4 metres at one end to 10.4 metres at the other end. This strip was intended to be used for landscaping which would have provided a much better buffer to Milton Road whilst also improving the amenity of the existing development. -- 5 of 17 -- 6 Approximate lettable areas are as follows: Suite 1 (Ground) - 222.6 square metres Suite 2 (Ground) - 110.6 square metres Suite 3 (Ground) - 113.2 square metres Suite 4 - 232.6 square metres Suite 5 - 276.0 square metres TOTAL: 955.0 square metres Basis of Assessment In determining the value of the loss due to the resumption, we have relied on the 'before and after' method of valuation. In addition, we have added other professional costs and redesign expenses incurred by the owners and assessed by their builders. As the plot ratio of the existing building relates to the site area before resumption, the land that was resumed could not be developed on and is land that would be used for improving the amenity of the property. The predominant loss to the owners is therefore one of amenity to the balance of the property. As a direct consequence of the resumption, the owners have been unable to undertake any significant beautification works to soften the exterior of the building and the car park and to provide a natural buffer to Milton Road. In addition to the loss of land the effects of the reduced land area include: .Milton Road is now approximately 4.4 metres closer to the building thus increasing traffic noise and visual pollution; .loss of amenity to the property with only minimal landscaping now possible; .loss of partial redevelopment potential of the site at the expiration of the economic life of the subject building. .additional building and redesign costs which include relocation of fire stairs, provision of retaining wall and loss of one car parking bay. In quantifying the diminution in value to the property, we have based our assessment on what a potential purchaser would pay for the property if it were offered for sale on the open market before the resumption and after the resumption. Before the resumption, the property would have an extra 142 square metres of landscaped areas providing a greater amenity to the building whilst after the resumption, the property does not enjoy this extra land or landscaping, proximity to Milton Road, amenity or retain all its future redevelopment rights. -- 6 of 17 -- 7 If a situation arose where the 'before property' and the 'after property' were placed on the market at the same price, it is our considered opinion that the 'before property' would sell first. A potential purchaser would give consideration to the fact that the 'before property' has additional land area, enjoys better amenity and is less effected by Milton Road and hence, would consider it a better buy than the 'after property' at the same purchase price. However, if the purchase price on the 'after property' was discounted to the extent that the purchaser considered the discount to offset advantages of the 'before property' and was influenced to purchase at this price, the amount of the reduction to persuade the purchaser to buy the 'after property' is considered to be the diminution in value occasioned by the resumption. It is our opinion that an informed purchaser would quantify this discount between the 'before' and 'after' properties by expecting a higher return (capitalisation rate) on the 'after property' which would show a slightly less capital value/price reduction to offset the previously mentioned disadvantages. We estimate this variance in the expected capitalisation rate to be one quarter of one percent. Our valuation of the property before the resumption has therefore been undertaken on the capitalisation of net income approach at ten percent (10%) and our valuation of the property after the resumption has been undertaken at ten and one quarter percent (10.25%). In addition, to the loss of land and injurious affection mentioned above the dispossessed owners incurred expenses in the redesign of the original plans of the building to cater for the resumption. These added costs include a retaining wall along the Milton Road boundary and the redesign and construction of the firestairs resulting in increased building costs and a loss of net lettable area of 1.5 square metres and one car parking bay. These additional costs have also been considered in our following calculations. Before Resumption After Resumption Net Annual Income Fully Let Net Annual Income Fully Let Ground level: 447.9M2 Ground level: 446.4m2 (446.4m2 + 1.5m2) @ $350/m2 AVERAGE = $156.240 @ $350/m2 AVERAGE = $ 156,765 First floor: 508.6m2 First level: 508.6m2 @ $155/m2 AVERAGE = $ 78,833@ $155/m2 AVERAGE = $ 78,833 TOTALS - 956.5m2 $ 235,598 TOTALS - 955m2 = $ 235.073 -- 7 of 17 -- 8 CAPITALISED IN PERPETUITY CAPITALISED IN PERPETUITY @ 10% $2,355,980 @ 10.25% $2,293,395 DIFFERENCE $62,585 " Mr Porter uses the plural "we" in his written report. He explains that this is a legal requirement as he works for a firm but that the valuation and the opinion expressed are his own. In his evidence in chief, he says that presently he understands that one of the tenants leases three of the twenty-four available car parks at an annual rental of $60 per month. The others are not leased. He believes that as the area grows there will be more demand for secure under-cover parking and it could arise that all of the car parks would command a rental and the loss of a car park as a result of the resumption could influence a prospective purchaser. He says that while the plot ratio of the existing development is unimpaired by the resumption, should the building be destroyed, it would not have the same plot ratio and this would also be the position at the end of the economic life of the building. Mr Porter says that he is in agreement with the valuer for the respondent on the appropriate capitalisation rate for the building in the before resumption situation but in the after resumption position, he has estimated what a potential purchaser would discount the property for because of the disabilities as he sees them. He believes that such a purchaser would increase his expected return by one-quarter of one percent purely to offset the disadvantages attaching to the property in the after situation. In cross-examination he was asked of his methodology and agrees that it is based on the proposition that the predominant loss to the owners is one of amenity to the balance of the property and the loss of land. There are four results which have occurred and these are set out as separate items in the third paragraph of the basis of assessment already set forth and he agrees that this is his methodology. -- 8 of 17 -- 9 He says that he had prepared another valuation prior in time to this valuation where he adopted a valuation on the basis of loss of land on a square metre basis together with a disturbance component. He says that this was done in about April, 1990, when a building was still under construction but this valuation differed by about 50 percent to his final valuation. On the effects of the resumption, he agrees that while Milton Road is now approximately 4.4 metres closer to the building, this area is taken up by a loading bay and through traffic is no closer to the building. With the visual pollution he is referring to the view from the building. There is now the loading bay which obstructs the views from the building with trucks or buses stopping. Mr Porter says the tenancy on that portion of the floor is a retail showroom and operators of such enterprises seek as much exposure as possible and would not look for landscaping which might obstruct the exposure. On the question of the loss of a car park, Mr Porter says he has heard the evidence of Mr Conias in these proceedings. He agrees that he is an experienced developer and that Mr Conias negotiated a reduction in car parking which on his assessment would be throwing away a potential income source. He agrees that 29 car parks were negotiated away but still feels the loss of one car park on basement level is relevant. It was put to him that given the vintage of the building, it was inappropriate to take into account any potential diminution in redevelopment at some speculative time in the future when it is not known what the planning scheme would require at that time. Mr Porter agrees it is difficult to quantify as it is so distant but still believes it is an item which should be taken into consideration. Valuation evidence was given by Mr Hillas for the respondent and he tenders a written report showing the approach that he has taken to the exercise. He says that the development was issued with a certificate of completion on 5th October, 1990, and he approaches his valuation on the basis that it is a new building in -- 9 of 17 -- 10 excellent condition. The tenancies with exposure to Milton Road have been the first to be let, Curtain Wonderland having taken the prime ground level retail accommodation containing an area of 222.6 square metres at a rental of $350 per square metre from October 1990 on a 5+5 year lease. The remaining two ground level tenancies have since been let to Solomons Carpets and Lanven Real Estate. He is not aware of the rentals for these two tenants but believes they would not command the same rate as Curtain Wonderland due to the reduction in exposure afforded to them. The rental of $350 per square metre for Curtain Wonderland is considered to represent the upper level of the market and he accepts this in his valuation as reflecting the market level for the tenancy. Mr Hillas says on the upper level the area originally set aside for a restaurant containing an area of 232 square metres is now tenanted by the Morley Street Clinic, comprising a dentist, dental technician and a physiotherapist and is let for a net rental of $165 per square metre. The remaining tenancy on the upper floor has been let to MIU Furniture Design but he has no details of the rental. He deals with the effects of the resumption as he sees them in the following words - "The resumption has taken a strip of land from the entire Milton Road frontage of the property to a depth of 4.4 metres at the eastern corner, parallel to the road frontage and culminating in a 6 metre by 3 chord corner truncation at the Morley Street intersection. In all, 142 square metres of land was resumed, leaving a balance area of 1071 square metres. At the date of resumption, the site was improved with a two storey commercial development, constructed after the owner had been made aware of the pending resumption. The gross floor area of this building is 1154 square metres which represents a plot ratio of 0.95:1 to the pre-resumption area of the site and a ratio of 1.08:1 to the post resumption area of the site. The floor area approved for the development was not reduced when the resumption was initiated, however, the resumption necessitated a redesigned fire stair, which now exits to the carpark instead of to the Milton Road frontage as originally designed. This reduced the nett lettable area of the Curtain Wonderland tenancy by 1.5 square metres and the number of carparks on the lower level by 1 to 22. The other physical effect resulting from the resumption is the reduction in the width of the landscaped strip at the Milton Road frontage by the width of the resumption -- 10 of 17 -- 11 i.e. 4.4 metres. This, in turn, has resulted in a minor alteration to the lower level where a "nib wall" 100 mm in height has been replaced by a concrete block wall, ranging in height from 600 mm (3 courses) to 800 mm (4 courses), in order to support the reduced landscaped strip. Conversely, this has resulted in reduced expenditure in landscaping and the maintenance thereof, and increased exposure for the development to Milton Road. While this redesign has resulted in a reduced lettable area and an increased construction cost, it is considered that the aesthetic appeal of the building has been improved. The Milton Road frontage which receives the vast majority of the exposure afforded to the development, now boasts a fully exposed retail area rather than a fire escape to the premier frontage of the property. Obviously, this is an unquantifiable benefit attributable to the resumption, and as such, is not included as enhancement in the assessment of compensation. The design of the building is otherwise, unaltered. Site access is also unaffected by the resumption. In summary, the loss in value attributable to the resumption is limited to the value of the loss of lettable area and the increase in building costs and associated design fees. The following Table sets out the effects of the resumption, both quantifiable and unquantifiable: Quantifiable Unquantifiable -Loss of lettable area. - Improved design of building. -Increase in building costs -Fully exposed retail frontage to Milton Road. -Associated design fees. - Loss of future redevelopment potential. -Reduced expenditure for landscaping. " He gives in his written valuation an explanation of his valuation approach. He says that what has occurred is the excision of a strip of unimproved land comprising the required setback from Milton Road frontage from a fully developed property. He has approached it on the before and after method of valuation and has calculated this by applying the market rental of $350 per square metre to the amount -- 11 of 17 -- 12 of lettable area lost due to the resumption and capitalising this amount by an appropriate rate. In the result in the before resumption situation he arrives at the same figure as Mr Porter of $5,250. In dealing with the reduction in landscaped area, he does not see this as a major issue compared to quality of accommodation, exposure, convenience of access, availability of car parking and rental paid for comparable accommodation as the factors which determine the rental. As to the one car parking space which has been lost, he does not consider this has any affect on the achievable rentals within the development, as the car parking requirements set down in the Town Plan do not take into account any on-street parking. In this case parking is available on both sides of Morley Street although no parking is permitted on either the Milton Road or Morley Street frontage immediately adjacent to the development. He says that while three car parks have been leased to the lessees of the Morley Street Clinic, there are 19 car parks on the basement level available for use. Should the owner decide that as many car parks as possible would be let, the result would be less parking space being available for patrons. All of the tenants rely on patrons physically visiting their premises. Mr Hillas sees no change in the post resumption capitalisation rate which he does not consider to be dependant upon the amount of landscaping afforded to the development. He believes the factors are position, strength of tenancies, quality of accommodation, condition and age of development and convenience of access are the determining factors and none of these have been affected by the resumption. He says it is proper to add the additional costs associated with the redesign of the fire stairways and the inclusion of the block work retaining wall in place of the nib wall with associated professional costs. In the result he arrives at a valuation of $8,746, made up of loss of floor area - $5,250; increased building costs $2,916; additional architectural fees $580. Mr Hillas says that the gross floor area of the building is 1,154 square metres which represents a plot ratio of about 1:1 to the pre-resumption area of the site -- 12 of 17 -- 13 and a plot ratio of 1.08:1 in the post-resumption area of the site. The floor area approved for the development was not reduced by the resumption but did necessitate a re-design of a fire stairway which reduced the net lettable area of the Curtain Wonderland tenancy by 1.5 square metres and reduced the number of car parks by one. In commenting on Mr Porter's valuation, he does not agree that traffic noise will increase to any extent as the area resumed is a loading bay and is not used by through traffic. He says that in his opinion a tenant like Curtain Wonderland would not be concerned with the lack of a 6-metre landscape buffer as such a business relies on exposure to passing traffic. He agrees that the landscaping now existing is less than the landscaping that could have been placed if the resumption had not occurred. He does not believe that for this type of building it makes any difference to the value of the land and has no bearing on the income producing capacity of the building. He rejects the proposition that the loss of partial redevelopment of the site at the expiration of its economic life of the building is relevant. He agrees that at the present time existing development conditions might require a smaller building but it is too remote to speculate what changes might occur in town planning in this area in the distant future. He does not agree with Mr Porter's approach of adopting a capitalisation rate of 10.25% in the after resumption situation. The income producing ability of the property has not changed with the loss only of 1.5 square metres of lettable space. Mr Hillas was cross-examined at some length on the effects of the actual loss of the area of land and whether he has at one time looked at a valuation on the basis of the rate per square metre of the vacant land and a great deal of time was devoted to questions relating to a valuation on this basis. I do not propose to traverse that evidence as no reliance has been placed on the method by the claimants. As so often happens in matters such as these, there will be varying -- 13 of 17 -- 14 opinions of expert witnesses but in this case I am fortunate to have evidence from the person responsible for the construction of the building under discussion. I have no hesitation on the evidence in accepting that Mr Conias is a man of pre-eminence in the real estate world with a sound knowledge of the potential of a commercial property. He is a developer of a number of buildings including the nearby Cat and Fiddle and another development adjoining the subject land. He is well qualified to assess the potential of this land. He planned this building in 1988 and it conformed to the plot ratio based on the prior to resumption land area. In his negotiations obtaining consent to the building, he saw fit to seek a relaxation of the provisions of the Town Plan, obtained approval to reduce car parking space from 53 to 25. He does not in evidence claim that the loss of one more car park has had an effect on the return from the building. While he expresses his opinion that the building suffers because of the lack of landscaping consequent upon the resumption, he does not in his evidence say that there has been a loss in rentals received as a consequence of the resumption. The facts in this matter are that as at the date of resumption the building had been erected upon this land. The notice of intention to resume was 21st February, 1990, and certainly by that date or at some earlier date, the claimants were aware of the impending resumption as the original plans were modified and at some additional expense the building was constructed by July 1990. Thus by the date of resumption on 17th November, 1990, there was available for sale a commercial building in a pristine state. I am satisfied that a prudent purchaser at that date or the moment before resumption would have had little regard to the question of landscaping but would have assessed his purchase price on the net rental return. I reject the proposal that he would have regard to what might befall him if at some time in the future redevelopment was necessary. The reasonable expectation is that the building will have a long life and it is improbable that any person selling a development such as this would accept a price based on imponderables as to the likely prospects of disaster within a foreseeable time. -- 14 of 17 -- 15 I find that the claimants are entitled to recover the actual loss that they have suffered by reason of the resumption. This can be arrived at by taking the capitalised value of the lettable space which has been lost and adding to this amount the expenses incurred by the claimant for the extra costs in the modifications to the building necessitated by the resumption. There is no evidence before me to suggest that I should adopt other than the figure of $350 per square metre which has been adopted by both valuers. The area lost is 1.5 square metres and I adopt the capitalisation rate of 10% having rejected the arguments advanced on the rate of 10.25% suggested by Mr Porter. In the result I determine the loss to the owner under this head at $5,250. The next claim for determination is the additional cost to adjust the building following the resumption. The claim made is in the sum of $6,595 and as already stated, I accept this figure. The parties are agreed that the owner is entitled to the claim of $580 for additional fees for architect services and the sum of $1,315 in respect of legal fees up to the date of lodgment of the claim in the Court. This leaves the claim for valuation fees in the sum of $4,425 and this is in dispute. In his written report Mr Porter says - "In addition, the dispossessed owners have incurred valuation fees ... $4,425". A copy of the account detailing such fees indicating the period when such fees were incurred was not tendered nor has evidence been given of the date of payment of such fees. In his evidence in chief, Mr Porter says that the fee has been arrived at under the recommended scale of fees and charges provided by the Australian Institute of Valuers and Land Administrators Incorporated and he has relied on the scale under item 12(c) - "Partial Acquisition - In the case of partial acquisition of freehold property and the valuer is required to assess the value of the portion and injurious affection or betterment of the remainder, fees could be based on the value of the whole of the property prior -- 15 of 17 -- 16 to acquisition. It is recognised that there may be cases of partial acquisition where assessment of fee on the above basis may be inappropriate and the fee then should be either paid on time spent as in item 9 above with a maximum fee of $750 or by other prior arrangements. " Mr Porter says that he has based his fee solely on the value of the property before the resumption. In cross-examination it was put to him that in striking a fee on the basis of the whole of the value of the property of about $2.3 million when the dispossessed owner is losing 142 square metres, is unreasonable but he did not agree with this suggestion. Mr Porter stated that the fees have been incurred in the period since negotiations began in May 1990. It is the practice of this Court to allow, as an item of disturbance, legal and valuation fees properly incurred up to the date of lodgment of the claim in the Court. I have considered this question at length in Merrivale Motel Investments Pty Ltd v. Brisbane EXPO (1984-85) 10 Q.L.C.R. 175 when I dealt with legal fees at page 202. While this matter was the subject of an appeal to the Land Appeal Court and the Full Court of Queensland, no criticism attached to my findings on the appropriate approach to the allowance of claims for items of disturbance by way of legal fees. Here the quantum and the method of assessing valuation fees has been attacked and I must reach a conclusion on an appropriate fee. Relevant matters which must be taken into account are set out in the judgment in the Merrivale case and I quote from that judgment extracts which I consider are pertinent. At page 205, I said - "The judgment in the Howard case was referred to with approval by the (then) Learned President of this Court in Szirtes v. Pine Rivers Shire Council (1969) 36 C.L.L.R. 103. In that matter the President allowed a certain amount but at page 105 said:- 'However, a claimant who seeks to obtain costs incurred preparatory to lodging a claim must prove not only that the costs have been incurred for the purpose of formulating and lodging his claim but also that they were necessary and reasonable in the circumstances of his case. ' " As I have stated in the Merrivale judgment, the owner is entitled to recover costs -- 16 of 17 -- 17 incurred by way of legal and valuation fees from the date of receiving the notice of intention to resume the land up to the date of lodgment of the claim in the Court. Any costs incurred after that date, perhaps in conferences endeavouring to reach settlement or other courses of action, are not compensable as an item of disturbance. In this case the valuer has assessed his fee on the value of the land and improvements. I have no evidence to suggest that this was arrived at other than on a calculation following the capitalising of rent. The partial acquisition has caused little in the way of destruction of the existing building and the amount claimed by way of compensation is but a mere fraction of the overall value. I am of opinion that the more appropriate approach would be to have adopted the recommendation in the second paragraph of 12(c) by charging for the time spent in completing the valuation assessed at $140 per hour as recommended in item 9. Doing the best I can with the sparse evidence available, I will make an allowance of $1,750. In the result, I determine the compensation payable by the respondent to the claimant under all heads of claim in the sum of Fifteen thousand, four hundred and ninety dollars ($15,490). I am advised that no advance has been made against any award of compensation and, in the circumstances, I order the respondent to pay to the claimant interest at the rate of 11.5 per cent (11.5%) per annum - (a)on the award of $5,250 commencing on 17th November, 1990, and; (b)on the amounts allowed as items of disturbance from the date of payment of the accounts up to and including the day immediately preceding the date on which payment is made. (D.J. Barry) President of the Land Court -- 17 of 17 --