Council of the City of Townsville v MVO Investments Pty Ltd [1992] QLAC 53 (1992) 14 QLCR 191

, . ' IN THE LAND APPEAL COURT OF QUEENSLAND TOWNSVILLE Re: Claim for Compensation Acquisition of Land Act 1967 A91-75 Between And Council of the City of Townsville Appellant MVO Investments Pty Ltd Respondent Judgment of Mr Justice Lee, Mr Barry, President and Mr Wenck, Member. Delivered this thirtieth day of September, 1992 This is an appeal from the decision of the Land Court, delivered on 8th May, 1992, whereby it was determined that compensation, consequent upon the taking of land described as Lot 24 on Registered Plan 800800, parish of Coonambelah, was payable in the sum of $185,387 together with interest thereon. The matter comes before us by way of rehearing. The land subject of the resumption contains an area of 1.041 hectares and was taken on 30th March, 1991 for Park purposes. The background to the resumption and both prior and subsequent agreements between the parties are set out in the judgment of the learned Member below. Before the matter proceeded to the Land Court, negotiations between the Registered Proprietor (the respondent in this matter) and the Council had occurred as a result of the desire of the respondent to effect a residential subdivisional development of land situated at Bergin Road through to Ross River, in the Townsville suburb of Cranbrook. [1992] QLAC 53 -- 1 of 29 -- 2 In a formal agreement dated 5th April, 1990 between the appellant and respondent, reference is made to Survey Plans 800799 and 800800. Plan 800799 is the plan of the residential subdivision for which the respondent had sought approval. This development of twenty-two lots subsequently proceeded and is referred to as the "after" resumption plan. Plan 800800 contains the balance area of the respondent's holding, comprising an area of land averaging . about 87 metres in width between the proposed residential subdivision and the Ross River including a strip averaging about 27 metres between the "high bank" and the river. This total balance area was surveyed to provide Lot 23 of 3589 m 2 and Lot 24 of originally 1.051 hectares. Lot 23 was a strip about 40 metres wide adjacent to the north- eastern boundary from the rear of the designed subdivision in Plan 800799 to the river. Lot 24 comprises the balance of the rear section to the river. The area of Lot 23 equated "the park contribution" for the planned subdivision, while the agreement refers to a condition of the Preliminary Approval which provided that "The Council requires a further area of 8400 m 2 for parkland .. .. ... . This land will be purchased by the Council at a price to be agreed." The agreement proposed that Lot 23 be surrendered to the Crown and provides for Lot 24 to be taken by the Council with compensation to be agreed or referred to the Land Court for determination. It appears that the respondent had owned part of the parent parcel prior to the coming into force of the 1982 Town Plan for the City of Townsville. The balance area of the holding was acquired by the respondent subsequently. Reference was made in the · Court below, and before us, to the judgment of the Land Appeal Court in the matter Toffolutti and Pitt v. The Council of the City of Townsville (1984/85) 10 QLCR 81. This judgment dealt with, inter alia, zoning -- 2 of 29 -- 3 considerations relevant to a parcel of resumed land which also had a frontage to the Ross River at Bergin Road, Cranbrook. We assume that certain complexities arose from the respondent's rights to compensation relevant to zoning considerations, the dates of acquisition of the property and the date of the gazettal of the relevant Town Plan. It became clear that the agreed basis of assessment of compensation encompassed consideration not only of the resumed land, but at least part of Lot 23, which was to be surrendered by the respondent to the Crown. In reality, the agreed basis assumes a "before" resumption subdivisional potentiality extending to a depth of about 157.5 metres from Bergin Road on the south-western boundary and about 170 metres on the north-eastern boundary, leaving a strip of parkland about 30 metres wide to the top of the high bank of the river. The "after" resumption development extends to a depth of 132. 77 metres from Bergin Road on the south-western boundary and 139.5 metres on the north-eastern boundary. This effectively widened the strip of parkland to the high bank of the river to between 55 metres and 60 metres. In the "before" resumption design, thirty-one lots would have been produced, six of which were surveyed with frontage to the riverside park. These six lots would have been of irregular fan-type shape widening from relatively narrow cul-de-sac street frontages. Two public pathways were designed adjacent to four of these lots from the streets to the parkland. The "after" resumption development of twenty-two lots included eight lots with riverside park frontages of varying width. Six of these lots are of irregular shape to the twin cul- de-sac design. One surveyed pathway adjoining two of the lots, provides public access to the park. As the parties have satisfied themselves that adoption of the "before" resumption design including land external to the actaal resumed land will result in a -- 3 of 29 -- 4 fair basis for assessment of compensation, neither the Land Court nor this Court is asked to further consider the veracity of that approach. The "after" resumption design potential is clear - being the actual subdivision and development which subsequently took place. The parties have been able to agree on the in globo value of the remaining land. They have agreed on the value of the "Open Space" zoned land as well as the value to be ascribed to all but the six riverside park frontage lots in the "before" resumption design. The argument before the Court below and this Court is contained to the value of those six hypothetical lots and the resultant effect on the "before" resumption in globo value. Before the Land Court, evidence as to that value was adduced for the claimant company through Mr J R Wake, registered valuer. Supporting evidence as to the marketability of the land within suggested sale price ranges was given by real estate agents Mr R W Ferry and Mr V J Edwards. The one witness for the Council was Mr S Osborne, registered valuer. Mr Wake valued three of the relevant lots in the amount of $105,000, two at $100,000 and the sixth at $95,000. His valuation relied on an opinion that in the "before" resumption design, the riverside park lots were significantly more valuable than those actually developed. His reasoning was that with a narrower parkland strip the frontage lots would have enjoyed the potential for improved views of the waters of Ross River as well as identifying more intimately with the river frontage. In his opinion, quite apart from the effect on the premium in value attaching to the potential for water aspect, the value of residential land declined as the "intimacy" factor reduced with the widening of the parkland strip. His evidence was that owners of lots fronting a narrower parkland strip were more likely to privately landscape and develop the recreational potential of the parkland for private use, -- 4 of 29 -- 5 with the constriction of space discouraging public intrusion. Conversely, as the parkland widened, there was, in his opinion, greater attraction for public usage and the "playing field" type perception discouraged adjoining owners from private beautification activities. He had decided that evidence of sales of riverside parkland lots in the Annandale Estate in the suburb of Murray was of assistance in the valuation of the subject lots. He recognised that the Annandale development provided a more desirable residential address and the water views available from the riverside lots were more attractive and extensive. He concluded that the value of the riverside park lots in the "before" design of the subject would lie between the level achieved for the actual parkland frontage lots (ranging up to $79,500) and parkland frontage Annandale lots (ranging up to $144,000). Mr Ferry's evidence in the Land Court was directed to broad comparisons between the subject hypothetical lots and the riverside Annandale lots as well as other real estate with water aspect influence. His experience in the pricing of lots for marketing purposes led him to a considered opinion that selling prices in the range of $110,000 would have been achievable for the subject lots at the relevant date. He was of the opinion that the "before" riverside lots would have been significantly superior to those in the actual development primarily due to the improved water view. He held the opinion that the shape of the "before" lots also had an enhancing influence on value. Mr Edwards felt that the greater privacy which purchasers would perceive as resulting from the narrower strip of parkland, together with the available water views would reflect a higher level of value for the hypothetical riverside park lots than those created by the actual development. He suggested that if the actual lots had been moved forward by 25 to 30 metres, then they would have been saleable in -- 5 of 29 -- 6 the range of $97,500. In his evidence before the Land Court, Mr Osborne indicated that he saw little difference in value being caused by the riverside park frontage lots being moved 25 to 30 metres further from the river. His inspection of the land indicated to him that no water views existed either in the "before" or "after" situations. He had stood on the roof of a vehicle at one vantage point adjacent to the "before" frontage alignment and had been unable to see the water. He agreed that there could be seen to be some advantages from a perceived increase in privacy by closer proximity to the 'river, but then he also saw potential for greater interference to privacy if a narrower area of open space was to be shared with the recreational pursuits of the general public. He had formed the opinion that the best evidence of value for the hypothetical frontage lots was provided by the sales of the actual lots. He then adopted the highest level of value achieved in the sale of any of the frontage lots and applied that level of value, adjusted in terms of his assessment of relative worth, to the hypothetical "before" frontage lots. His assessment resulted in two lots being valued at $79,500 and the remaining four, all of which had adjacency to the public pathways, at $79,000. He had given consideration to the sales evidence of the Annandale lands but concluded that such evidence did not provide any useful assistance because of Annandale's superiority. The learned Member below was persuaded by the weight of evidence given by the various witnesses for the claimant that an improved water view would have been obtained from the upper level of any two storey residence constructed on the riverside land in the "before" resumption plan. We agree with that conclusion and indeed further evidence before us, and to which reference will be made later, confirms that to be the situation. -- 6 of 29 -- 7 Further valuation evidence was led before us by both parties. Mr A J Matson, registered valuer, was called by the appellant Council and Mr R L Brett, registered valuer by the respondent. Further evidence was also given by Mr Wake and Mr Ferry. Mr Matson was in no doubt that the best evidence available to establish the value of the six riverside lots in the "before" plan was that provided by the sales of the riverside lots in the "after" plan. For similar reasons as had Mr Osborne, he found it difficult to ignore the fact that any heightened "intimacy" between the residential land, the park and the river created by a narrower esplanade did not bring with it the increased potential for the deleterious t)eightened effect of shared public use. He referred to the potential of such public land to be developed and used for "bikeways, fun runs and walking trails." He agreed that this was no different from the potential of the riverside land at Annandale to be used for similar purposes. He accepted that some potential purchasers of the riverside land, and particularly the more elderly, might well prefer a narrower esplanade which would lend itself to less exertion in private development and maintenance, but then young families, in his opinion, would find the wider open space facility more practical and desirable. In an endeavour to consider the real position with the "before" and "after" views, Mr Matson had utilised a "cherry-picker" type vehicle to establish vantage points for what he considered to be equivalent potential first floor locations. On a vacant riverside lot (and from which he suggested the best river aspect was available) he selected a position on the rear alignment of existing dwellings. He found that by standing at the equivalent upper floor height level, a sliver of water view was obtainable. He produced photographs taken at that position. He then -- 7 of 29 -- ' . 8 had the vehicle moved forward towards the river approximately 30 metres which he envisaged would have equated the comparable rear alignment of any dwelling which might have been constructed on one of the "before" lots. From the same height above ground, further photographs were taken. A wider expanse of river water was revealed, providing in Mr Matson's opinion a more attractive water view. During this exercise, Mr Matson had observed that a "levee" bank and vegetation along the river denied any water view from some of the "after" lots. He noted that, regardless of this lack •of view no identifiable difference in value was disclosed in the actual sale prices. This piece of evidence obviously influenced Mr Matson's opinion as to the relative worth of the restricted water view. He states "Significantly the 'After' sales make no distinction between allotments with water views or those without ..... . Further, the views in either case are only really available from first floor level." He notes that of the three houses built on the actual subdivision two are double storey, and one low set while construction on riverside allotments downstream (of the subject development) favours low set design. His conclusion is "that the difference between a sliver or a strip water view say from 2.8 metres a.g.l. '(above ground level)' is less important to purchasers than other aspects such as house design, open space, fewer neighbours etc." More will be said of the obstructed view caused by the "levee bank" and Mr Matson's conclusions relative to views, later. As the Annandale sales evidence had been relied upon by the claimant's valuer and subsequently by the learned Member below, Mr Matson gave consideration to that evidence. He noted that there were three sales of park esplanade lots prior to the relevant date at prices of $143,000, $144,000 and $145,000. At about the same time, an allotment without direct esplanade frontage -- 8 of 29 -- 9 on the opposite side of the road, (on the evidence still with unobstructed water views) sold for $128,000 (There were later sales of non-esplanade lots at lesser prices but Mr Matson put this down to economic rather than physical influences.) Mr Matson saw the evidence of the non-esplanade lot sale in comparison with those of the esplanade lots, as demonstrating the effect of additional distance from the river and road frontage as opposed to esplanade frontage. He states "this is a more serious impediment than in the subject 'Before' and 'After' situation. The difference in values is, say $143,500/$128,000 - 12.1%. In my opinion, on this evidence, the subject difference should not be more than 6%". In the end result Mr Matson states "all my comparisons suggest to me that the 'After' sales in the subject subdivision should not be increased more than say 6%" He proceeded to value four of the lots , at $83,000 and two at $83,500, the slightly higher valuations on two lots with the wider park frontage. Mr Brett valued four of the six lots at $100,000 and two adjacent to the original side boundaries, at $105,000. The difficulty that Mr Brett saw in the use of the riverside park sales in the subject development, in isolation, was the need to assess the premium in value which should be applied to the "before" lots with the superior water views. His investigation of the sales evidence at Annandale showed significant premiums in value applied to those lots with river views over and above the value of inside cul-de-sac street lots with no views. The sales of riverside park lots then showed a further premium over the value of those lots with river views but separated from the riverside park by a street (as had been Mr Matson's evidence.) Mr Brett felt that for an objective assessment of the premium in value for view to be made, the Annandale evidence was of particular assistance. He provided the evidence of sales which had occurred (over the period from 1989 to 1992) of -- 9 of 29 -- 10 riverside park frontage lots; road frontage lots opposite the riverside park with water view (1990/91) and those without or with minor water views (1991/92); and of lots in an adjoining good quality cul-de-sac street with no water views or park frontage (1990/92). He agreed with Mr Matson's evidence that levels of value had fluctuated over the period and any comparisons needed to be made with the time factor in mind. He found convincing evidence to suggest that the riverside park lots at Annandale fetched around twice the level of value achieved by the inside cul- de-sac lots with no views. He also drew the comparison of an inside cul-de-sac lot at Annandale with no view or park frontage selling on 22nd March, 1991 for $67,000 while a site on to which it backed, with no park frontage but good water view sold on 2nd July, 1991 for $115,000. Mr Brett agreed that Annandale Estate comprised better quality residential development than did the locality of the subject land. He also agreed that the sloping topography to the river at Annandale provided significantly superior water views than were possible from the subject land where the level esplanade to a high bank, then a sharp drop to the water, restricted the total water view, particularly as distance from the high bank increased. Indeed, on his inspection of the subject land, he had been able to see some river water from one point on the "before" park alignment, but had difficulty seeing any water from the first floor level of a dwelling on one of the actual riverside park lots which he had been permitted to access. He agreed with Mr Matson that from an approximate first floor level, water views would be even further restricted on some of the actual lots by the grassed earth embankment which Mr Matson had described as a "levee bank". He had however, made specific enquiry regarding this embankment and had been informed that it had been created by unauthorised dumping of fill material subsequent to the -- 10 of 29 -- 11 relevant date in this matter,_ He had been informed that, after complaints, this dumping activity had ceased. Mr Brett also shared the expressed opinion of Mr Wake, Mr Ferry and Mr Edwards that another effect of the widening of the park esplanade was to cause the loss of the "intimacy" factor. He had inspected some properties in the immediate locality of the subject land which identified more closely with the river, due he said, to similar proximity to the river as would have been the case in the "before" situation of the subject land. He found that owners of these adjacent riverside properties had developed and maintained the parkland to create a private recreational river amenity, yet without preventing public access. In his opinion, any opportunity to similarly develop the parkland adjacent to the subsequent development of the subject land had been lost. He stated "There is now a broad expanse of flat ground to which public access is far more obvious and potentially more frequent. The sense of proximity to the river enjoyed and expected by others is now lost to these sites. Loss of water views compounds the situation." It is noted that the reason given by Mr Brett for the premium of $5,000 applied to the two hypothetical "end" lots in his valuation, was that even though their design provided narrower frontages to the riverside park at the rear, they also enjoyed side adjacency to open space parkland or undeveloped land. Mr Wake's evidence before us included reference to the further assistance which the Annandale estate sales evidence provided in the valuation exercise if it was extended to include the inside cul-de-sac. He agreed with Mr Brett's contention that the riverside park lots at Annandale sold in a price range about double that of the better quality inside lots with no park frontage or water views. He had also selected sales to show the premium payable for what he considered to -- 11 of 29 -- .. 12 be water view alone. He interpreted this evidence to indicate that, at Annandale, land with water view commanded value in the range of 50% greater than land with no water view, but otherwise comparable. In his opinion this evidence further supported his valuation of the "before" frontage lots, to which he had applied premiums of value in the range of 25% to 30% (for all enhancing factors) over the prices achieved for the frontage lots in the actual development. Mr Fe rry's further evidence related to the support of his opinion given before the Land Court as to the relative worth of the "before" lots, and to their superior shape, offering privacy to the street and inside park aspect. The valuers, Mr Wake, and Mr Brett, also held the opinion that the shape of the "before" riverside lots was more desirable than in the actual development, in terms of flexibility of building design relative to the park aspect. Both Mr Matson and Mr Osborne had felt that there was no particular advantage in the shape of the "before" lots, the question of regular or irregular shape being more a matter of the personal choice of purchasers. Further photographic evidence was tendered through Mr Ferry. He had taken photographs from an estimated first floor height at a point about 1 metre inside the actual park alignment of one developed lot then about 3 metres inside the park alignment in the before design as established by a surveyor. This latter position provided a significantly superior water view to that indicated in Mr Matson's photographic evidence. Summa ry of Evidence This matter rests solely on the assessed market value of the six hypothetical frontage lots. While general support is provided to the claimant's case in the Land -- 12 of 29 -- 13 Court and the respondent's here , by the evidence of the two real estate agents, their broad opinions are unsupported by evidence capable of analytic considerations. We will devote our comments to the professional valuation evidence. In the first instance we would agree with the principle expressed by both Mr Osborne and Mr Matson that if there was sales evidence of directly comparable land then it could not be stronger than by coming from the subject land itself. Had the valuation exercise been so simple then it would no doubt, have been resolved by the parties themselves. The differences of opinion are created primarily by the perceived effects of widening a riverside park esplanade by 25 to 30 metres. The factors which need to be considered are identified and discussed as follows: Effect on Water View Ground level. It is common ground that there is no water view available from ground level of the riverside park frontage lots in the actual development. There is conflicting evidence as to the availability of water view from ground level at the before resumption park frontage alignment. It appears that clearing of the vegetation which once existed in the area of the high bank of the river at the time of resumption has created what we would _accept as a water view at some points, but so restricted as to be of no significance other than to influence the two-storied design of any proposed dwelling. -- 13 of 29 -- First floor level 14 We accept, based on the tendered photographic evidence that there is a very restricted water view available at normal first floor level on the riverside park lots in the actual development. We also accept that some view would have been available at that level to all lots at the relevant date. The · loss of view caused by the later dumping of fill indicates the fragility of permanent water view. The photographic evidence confirms that the •water view increases in extent with proximity to the river. We accept that the improvement is sufficiently significant to influence value in the "before" situation. The extent of view would depend on the positioning of the rear alignment of a dwelling but we would envisage the position of photography selected by Mr Matson as being more related to practicality. Effect of Water View Relative to Value It is clear that Mr Osborne's valuation was based on the assumption that no water views were available in either the "before" or the "afte r" situation. We find that the potential for water views from a two-storey dwelling should no t be disregarded. Mr Matson accepts that the potential water views improve with proximity to the river but we are not convinced that he has found any identifiable enhancement in value for that specific factor. His evidence indicates that he has been influenced -- 14 of 29 -- 15 by the perception that equivalent levels of value were indicated by the sales of lots within the actual development, with, what he believed to be, varying view potential. It seems to us that he concluded that, if that was the case, a view restricted to first floor level and even then to a strip of water would have no significant effect on value. Mr Brett and Mr Wake, before us, both recognise from an analysis of the Annandale Estate sales evidence that a significant premium in value attaches to those lands in that estate where views of the waters of the river, albeit unrestricted, are available. Mr Brett, in particular, realising that there was need to provide evidentiary support to any otherwise subjective opinion as to premium in value for water view, extended the overall sales research to identify relativity of value between lands with and without those views . Mr Wake's further evidence included such approach. We agree with their conclusions that once a differential or relativity of values in one locality is established by reference to sales evidence, that evidence may be used as a guide in interpretation of the likely forces on the market value of land with features capable of comparison. It seems however, that both Mr Brett and Mr Wake interpret part of the Annandale evidence to suggest that where a premium in value is indicated for land with aspect over a street and parkland to water, the premium relates to water view alone. We find the most relevant analysis which has been made by both Mr Brett and Mr Wake, as being that riverside park adjacent lots with unrestricted park aspect and river views at Annandale fetch in the range of twice the price as do the inside lots with no park adjacency, no aspect, and no water views. The question which might then be asked is whether a similar relationship should exist between the "before" inside cul-de-sac lots and the "before" park -- 15 of 29 -- 16 adjacent lots with park aspect and water view at the subject location. It is suggested by Mr Brett and Mr Wake, all things considered, including the intimacy factor and shape, that such a value relationship is a reasonable conclusion. This verifies to them, the result of their assessments. Mr Brett points out that "the values agreed for the better internal lots in the 'before' exercise are in the range of $48,000 to $55,000." This is so, although it is noted that while one lot is valued at $55,000 the next highest lot value is $51,000. It is also noted that the inside lots in the subject location would have had convenient access by way of the two surveyed pathways to the riverside park, while at Annandale the inside lots are severed from the park facility by an external road. If a reasonable differential was to be established between the subject inside lots and the riverside park lots, based on water view alone, then it seems to us such relativity should be closer than at Annandale where all witnesses agree the water views are significantly superior. For the general range of values as found by .Mr Wake or alternatively by Mr Brett to be adopted, the other factors which they say affect value would need to account for the Annandale relativity being adopted. Effect of "Intimacy" Factor Relative to Value. The evidence for the respondent is that the narrower strip of parkland to the high bank in the "before" design created a more exclusive and more valuable identification with the river. The evidence indicates that owners of land adjoining the narrower sections of the Ross River park tend to develop and maintain this land -- 16 of 29 -- 17 as if it were their own. It is suggested that this deters general intrusion by the public and promotes the exclusivity perception. It is further suggested that as the width of the park increases the broader space discourages private development, encourages greater public use, with the private identification with the adjoining land diminishing. It is suggested that the adjoining lands then become less desirable and less valuable. The opposing view is, that as the parkland is public land in the first place, it would be imprudent for purchasers to pay a premium for any perceived intimacy factor. If the narrower strips of parkland were publicly developed or utilised, the potential for which exists, then .it is . argued that the effect on adjoining land of such public use and intrusion would be more intense. It is argued that varying width of adjacent parkland will attract different categories of purchasers with an equalising effect on values in the market place. Reference is made in this matter to the wider area of parkland taking on a "playing field" type appearance. While the subject land, in its undeveloped state, is not heavily vegetated, we are not persuaded that the doubling of a relatively narrow strip should realistically be seen in the same context as the creation of a "playing field". There is evidence already of garden areas and tree planting extending into the park and of the park's use for private recreational purposes. There is no evidence to support the various subjective views as to diminishing adjoining values as the proximity factor decreases, particularly in the context of proximity decreasing by 25-30 metres. Mr Matson reads the evidence provided by the sale of the land across the road from the river and park at Annandale to include effect, not only of decreasing proximity, but also the severance from such amenity by the road. -- 17 of 29 -- 18 We are not persuaded by Mr Brett's assertion that opportunity for private development, as has occurred in other nearby locations, is lost, or even severely impaired. In terms of the "intimacy" factor which Mr Brett sees as having been lost in the after situation, we find it curious that he then found a premium in the value of the "end" lots resulting from the improved privacy afforded by lack of neighbours but gained from exposure to wider open space or potential open space. We have referred previously to the "before" resumption design where greater encouragement was provided for, if not the general public, at least local residents to access the designed parkland by way of two public pathways. Mr Osborne was the only valuer to allow some amount (albeit nominal) for deleterious effect on the lots adjacent to such pathways. In light of the overall evidence as to the advantages of privacy, some allowance for pathway adjacency would have been expected. The actual sales evidence does not however, show any demonstrable difference in value for the two lots so affected in the "after" design. In the end result we are not persuaded that the "intimacy" factor, in the circumstances of this matter, is a matter of identifiable significance in terms of value. Effect of Shape Relative to Value. It is of interest that in the Toffolutti matter (supra), with a resumption date in 1982, and in which it is noted Mr Brett gave valuation evidence for the Council, the Land Appeal Court commented on the valuation approach there (at pp 90,91): "Mr Maddern 's proposition is that these allotments, being nearer to the river, command a premium in value. In so contending, we think that he overlooks that the maximum distance involved is of the order of 20 metres, the sizes of the allotments which are slightly smaller than his lesser valued allotments similarly situated in the "after" plan, and the irregular shape and the somewhat poor design of the allotments which have limited frontages to the cul-de-sac, angled side boundaries and disproportionately large rear areas so as to make full use of the extra land area -- 18 of 29 -- 19 available for subdivision. .. .... . We think that Mr Maddern's pncmg is inflated and we favour Mr Brett's reasonings which take into account not only the above factors but also appear to be in more reasonable relationship with actual sales in the locality and with the agreed values which have been placed on the other allotments in the subdivision." No doubt with the effluxion of time, the demands of the public will alter with resultant changing value trends in the desirability of shape and privacy factors. Nevertheless, what does not change is that valuation opinion needs to be supported 1 by evidence. We have before us the sales of the land in the actual development where there is no demonstrable difference in value between the more regularly shaped lots and those which widen to the rear. Again we are not persuaded that the shape of the lots to be valued is a factor further enhancing the primary effect of the cul-de-sac street design. Conclusion While we find that the evidence of most assistance in deciding this matter has come from Mr Brett and Mr Wake, we are concerned that their interpretation of that evidence pays insufficient regard to the inferior nature and degree of water view which would have been available to the subject lands in comparison with that at Annandale. The emphasis which they place on the perceived "intimacy" factor and to a lesser degree the effect of shape, is unsupported by factual evidence. We find that, after considering the questions of closer proximity to the river, the improved water view and the levels of value achieved not only for the "after" riverside park frontage lots, but the agreed "before" values for the inside lots, that the effect of doubling those latter values would be too generous when the overall Annandale evidence is considered. We are confide'nt that the "differential" shouldI be less than has been applied by either Mr Wake or Mr Brett. We have decided -- 19 of 29 -- .. 20 that individual lot values in the range of $92,500 at the subject location would not be unreasonable nor would the finding of such level of value offend the practice of resolving doubt in favour of a more liberal estimate (Commissioner of Succession Duties (SA) v. Executer Trustee and Agency Co of SA Ltd (1947) 74 CLR 358 at p. 374) We find the total value of the six hypothetical lots in the "before" exercise to be $555,000. Bearing in mind the agreed items as identified, the "before" valuation will become, with the necessary adjustments: Gross realisation - 31 lots - Less selling costs Vendors legals on sales Commission Advertising $ 9,300 ' $57,100 $ 3, 100· Less developers profit and risk at 40% • Less development costs Less Holding Costs Interest on development costs Interest on land for 9 mths @ 16.5% Rates and Land Tax Value of Land "before" Adopt Less value of land "after" $38,222 ' $75,011 $10,000 " Add loss of value of "Open Space" zoned land $1,726,000 $ 69,500 $1,656,500 $ 463,820 $1,192,680 $ 463,285 ' $ 729,385 $ 123,233 $ 606,152 $ 606,150 $ 455 ,000 ' $ 151,150 $ 5.ooo· -- 20 of 29 -- .. 21 $ 156,150 Add valuation and legal fees $ 4,687. $ 160,837 ===== (amounts marked • have been agreed between the parties) The amount of compensation under all heads of claim in this matter was determined by the Land Court in the sum of $185,387. This sum included an agreed sum of $4,687 for legal and valuation fees incurred by the owner in the preparation of the claim up to the date of lodgment of the claim in the Court. The Court ordered the respondent to pay the claimant interest at the rate of 10.25 per cent per annum on the total sum of $185,387 from the date of the notice of resumption (30th March, 1991) up to and including the day immediately preceding the date on which payment of compensation was made. During the course of th is hearing, the attention of Counsel was directed to a decision of the Land Court in Claim for Compensation - A Varitimos v. Queensland Electricity Commission (1990-91) 13 Q. L.C.R. 1. In that case, Counsel for the respondent submitted that interest on items of disturbance should not be calculated from the date of resumption but should only accrue from the date on which payment was actually made. The Court held that interest should flow from the date of payment. We have considered the submissions made by Counsel in this case. Section 28 of the Acquisition of Land Act 1967 provides - (1) Subject to subsection (2) of this section ; in respect of the period or any part of the period commenced on and including the date on and from which any land is taken and ending on and including the day immediately preceding the date on which payment of compensation is made the Land Court or, upon appeal, the Land Appeal Court may order that interest be paid upon the amount of compensation determined by it. -- 21 of 29 -- 22 Such interest shall be at such rate per centum per annum as the Land Court or, upon appeal, the Land Appeal Court, deeming reasonable, fixes by the order. Interest so ordered to be paid shall be payable as if it were part of the compensation in question and shall be added to the amount thereof and be payable by the constructing authority accordingly. (2) Interest shall not be payable in respect of any amount of compensation advanced under section twenty-three of this Act. " There are many judgments of the Land Appeal Court and the Land Court over the years which have considered claims for items of disturbance on resumption of land. The question of claims , for valuation and legal fees was discussed at length in Merivale Motel Investments Pt y Ltd v. Brisbane Ex position and Southbank Redevelopment Authority (1984-85) 10 Q.L.C.R. 175 (L.C.) at p. 202 and again on appeal from that judgment by the Land Appeal Court at p. 268 of the same volume where, at p. 287, the Land Appeal Court confirmed that judgment in respect of the award for legal and valuation fees and the relevant period over which such fees could properly be claimed. The matter of the scale of charges was considered by the Full Court in Re: Queensland Forest Limited (in li quidation) (1966) Qd.R. 180, where it was held that a scale of charges compiled and recommended by a reputable professional body should, by virtue of the very fact that it is so compiled and so recommended, be regarded as reasonable. In this case, the parties have agreed on the appropriate amount which should be paid by the respondent for legal and valuation fees. The record is silent as to when or if those fees have been paid. The question before this Court is whether it is correct for interest to be paid on that award if monies have not been expended by the claimant. "Interest" is "the return or compensation for the use or retention by one person of a sum of money belonging to or owed to another"- Halsbury's Laws of -- 22 of 29 -- 23 England, Fourth Edition, Volume 32, para 106 and again, "interest" is "Money paid for the use of money lent (the principal) or for forbearance of a debt, according to a fixed ratio (rate per cent.)" The Shorter Oxford English Dictionary. The Full Court considered the question of payment of interest in an action for damages for personal injuries under the provisions of section 72(1) of the Common Law Practice Act 1867 in Callinan v. Borovina and All Risks Insurance Company Limited (1977) Qd.R. 366. The Court held that, in principle, interest should run from the date on which the items of special damage were paid. Section 28 of the Acquisition of Land Act 1967 (supra) gives a discretion to the Land Court on the award of interest. In Callinan's case at p. 369, Douglas J. said: The principles governing the exercise of a discretion to award interest .are set out in the judgment of the Court of Appeal delivered by Denning, MR. in Jefford v. Gee (1970) 2 Q.B. 130 at page 144 (also reported (1970) 1 All E.R. 1202). After tracing the matter historically, he adopted what was said in Harbutt's 'Plasticene'Ltd v. Wayne Tank and Pump Co. Ltd (1970) 1 Q.B. 447 at page 468: 'the basis of an award of interest is that the defendant has kept the plaintiff out of his money; and the defendant has had the use of it himself. So he ought to compensate the plaintiff accordingly.' The relevant section in New South Wales is section 94 of the Supreme Court Act 1970. In terms it is very similar to the relevant Queensland statute, and to the English statute of 1934, already referred to. • In Jefford v. Gee (supra) Lord Denning, in dealing with medical expenses said: In principle interest should run from the date on which they are paid." And in dealing with damage to scooter and clothing In principle interest should run from the date when the account is paid for repairs or replacement. " " Under the Acquisition of Land Act, it is in the discretion of the Member of the Court determining compensation whether to make an award of interest or not. By way of example in cases where a dispossessed owner remains in possession of the resumed lands, rent and rate free, the Court has not awarded interest while this state of affairs continued. In Inglewood Pulp and Paper Company Limited v. New Brunswick Electric Power Commission (1928) AC. 492, Lord Warrington of Clyffe at -- 23 of 29 -- 24 p. 499 said - the right to receive interest takes the place of the right to retain possession." but, in general terms, when a person loses land by resumption his right to the land becomes a right to compensation. If he has lost possession and compensation has not been paid, he is deprived of the opportunity of investing his money. He has been kept out of his money and the respondent has had the use of it so he ought to compensate the dispossessed owner by paying interest. In dealing with items of disturbance we adopt the principle applied in the cases above that interest should run from the date on which the accounts for items compensable as items of disturbance were paid. To find otherwise would be to reward the dispossessed owner for failing to pay such accounts. That burden should not be carried by the resuming authority. Notwithstanding the difference in wording between Section 28 (1) of the Acquisition of Land Act 1967 and Section 72 (1) of the Common Law Practice Act 1867, Section 28 (1) empowers the Court to award interest on the amount of compensation or on any component as determined by it. Cf Section 19 of the Act. In the result, in this case, we will provide in our judgment for interest to be paid upon the agreed sum of Four thousand, six hundred and eighty-seven dollars ($4,687) from the date when payment of such fees was made. The learned Member, in dealing with the question of costs, stated that as the compensation determined was the amount claimed by the claimant, any costs awarded could only be made to the claimant. The judgment was handed down in Brisbane while the solicitors for both parties practice in Townsville. He granted liberty to the solicitors for the claimant to make written application for costs together with submissions why an order for costs should be made and liberty to -- 24 of 29 -- 25 the solicitors for the respondent to reply to such submissions. The submissions were received by the Registrar but before the Member determined the matter, an appeal to the Land Appeal Court was lodged by the solicitors for the respondent. The parties were advised that in the circumstances the application for costs would be considered by the Land Appeal Court when the appeal came on for hearing. We have considered the written submissions and the submissions made by Counsel for both parties before us . The facts in the matter are that the claimant company was wholly successful in the Land Court and we find that cdsts should follow the event. In the proceedings in this Court, the appellant has been successful in that on the new evidence which has been given, the award of compensation has been reduced but it still remains closer to the amount first claimed by the dispossessed owner. We are of opinion in all the circumstances to hold that each of the parties should bear their own costs of the appeal and we make no order for costs of proceedings in the Land Appeal Court. Accordingly, the appeal is allowed, the determination of the Land Court is set aside and compensation payable by the respondent to the claimant under all heads of claim is determined in the sum of One hundred and sixty thousand, eight hundred and thirty-seven dollars ($160,837) . Interest at the rate of 10.25 per cent per annum shall be paid - (a) on the sum of $156,150 from 30th March, 1991; and (b) on the sum of $4,687 from the date of payment. up to and including the day immediately preceding the date on which payment of compensation is made. It is further ordered in the exercise of the Court's discretionary powers that -- 25 of 29 -- 26 the resuming authority pay the claimant's costs of and incidental to this action in respect of the proceedings in the Land Court. The amount of such costs shall be ascertained and fixed by the Taxing Officer of the Supreme Court at Townsville according to the scale of costs prescribed by law for the time being in respect of proceedings in the Supreme Court and in accordance with the provisions of Section 44(16) of the Land Act 1962. 0/'J.C. Lee) J. Judge of the Supreme Court (D.J. Barry) President of the Land Court (R.E. Wenck) Member of the Land Court -- 26 of 29 -- IN THE LAND APPEAL COURT OF QUEENSLAND TOWNSVILLE A91-75 Between Council of the City of Townsville and MVO Investments Pty Ltd Appellant Respondent ORDER AMENDING MATHEMATICAL ERROR IN JUDGMENT On 30th September, 1992, judgment determining compensation payable to the respondent was published. It has been brought to the attention of the Court that at p.20 of the judgment, the correct calculation under the item "developers profit and risk" should be $473,286 and not $463,820 as stated. Correction of this amount has a flow-on effect to other calculations on p.20 and the amount of compensation on p. 21, as well as the reference to the determination and interest payment on p. 25. To correct the errors, it is ordered that the judgment dated 30th September, 1992 be amended as follows:- (1) On p.p. 20 and 21 the full calculation to read: Gross realisation - 31 lots - Less selling costs Vendors legals on sales Commission Advertising Less developers profit and risk at 40% · Less development costs $ 9,300· $57,100 S 3,100· $1,726,000 $ 69.500 $1,656,500 $ 473.286 $1,183,214 $ 463,285' -- 27 of 29 -- Less Holding Costs Interest on development costs Interest on land for 9 mths@ 16.5% Rates and Land Tax Value of Land "before" Less value of land "after" 2 Add loss of value of "Open Space" zoned land Add valuation and legal fees $38,222· $73,970 $ 1 □ . ooo· (amounts marked • have been agreed between the parties) (2) The paragraph appearing on p.25 which reads: $ 719,929 $ 122,192 $ 597,737 $ 455,000 ' $ 142,737 $ s.ooo · $ 147,737 $ 4,687 ' $ 152,424 === = == ''Accordingly, the appeal is allowed, the determination of the Land Court is set aside and compensation payable by the respondent to the claimant under all heads of claim is determined in the sum of One hundred and sixty thousand, eight hundred and thirty-seven dollars ($160,837). Interest at the rate of 10.25 per cent per annum shall be paid - (a) on the sum of $156, 150 from 30th March, 1991 ; and (b) on the sum of $4,687 from the date of payment. up to and including the day immediately preceding the date on which payment of compensation is made." be amended by deleting the words as set out and substituting for them the following: ''Accordingly, the appeal is allowed, the determination of the Land Court is set aside and compensation payable to the claimant under all heads of claim is determined in the sum of One hundred and fifty-two thousand, four hundred and twenty-four dollars ($152,424). Interest at the rate of 10 .25 per cent per annum shall be paid - -- 28 of 29 -- 3 (a) on the sum of $147,737 from 30th March, 1991; and (b) on the sum of $4,687 from the date of payment. up to and including the day immediately preceding the date on which payment of compensation is made.• Dated this Nineteenth day of October, 1992 (WC Lee} J . Judge of the Supreme Court. (DJ Barry} President of the Land Court. (RE Wenck} Member of the Land Court. -- 29 of 29 --