Crelga Holdings Pty Ltd v The Commissioner for Railways [1991] QLC 39 (1990-1991) 13 QLCR 311

LAND COURT BRISBANE. 3rd December, 1991. Re: Claim for Compensation - A90-15 Resumption for Railway Purposes - Beenleigh to Robina Railway Line. Crelga Holdings Pty Ltd v. The Commissioner for Railways J U D G M E N T Under the provisions of the Acquisition of Land Act 1967-1986 and the Railways Act 1914-1985 and by proclamation published in the Government Gazette, land described in the schedule below was taken by the Commissioner for Railways as from 9th April, 1988, for Railway purposes for the Beenleigh to Robina Railway Line: County of Ward, Parish of Gilston. Lot 3 on Plan 218165 containing an area of 2977 square metres being part of the land contained in Certificate of Title Volume 5941 Folio 56. Lots 2 & 1 on Plan 218165 containing areas of 1.743 hectares and 1986 square metres respectively and being parts of the land contained in Certificate of Title Volume 5941 Folio 57. Lot 4 on Plan 218165 containing an area of 5327 square metres and being part of the land contained in Certificate of Title Volume 5987 Folio 99. The resumed land with total area of 2.772 hectares is of irregular shape being generally the south-eastern section of an aggregation originally described as Lots 4 and 5 on R.P. 170142 and Lots 6 and 7 on R.P. 168224 ("the parent parcel"), which contained an area of 8.966 hectares. The parent parcel had frontage to Warrener Street in its south-western extremity and Riverview Road in its north-western extremity, and is located north of the Nerang-Broadbeach Road, east of the Pacific Highway about 2 km easterly of the Nerang P.O. The land is located within Albert Shire and the parent parcel at the date of resumption was zoned partly "Special Facilities - Recreation Centre" and partly "Rural B". An easement for drainage purposes [1991] QLC 39 -- 1 of 19 -- 2 encumbers part of the balance of the parent parcel and the resumed land and an easement for electric line purposes encumbers part of the resumed land. Ponded waters from a dam inundate an area in the north-eastern section of both the resumed land and the balance area. Part of the parent parcel was flood free and while the estimates of the area of flood-free land vary, the majority of the land including all of the resumed area was subject to flooding to a depth averaging about 500 mm. The resumed land is intended to accommodate a railway station and ancillary car parking areas. It is surveyed in such a manner as to provide an access point off an internal roadway designed, but not constructed, at the date of resumption with provision for a new road connecting with the southern extremity of that designed internal road at the junction with Warrener Street. A Claim for Compensation dated 30th April, 1988, in the total sum of $995,000 was served on the Commissioner. When the matter came on for hearing leave was sought and granted to amend the claim under the heading of loss of land to $350,000 together with "costs" of $10,000. During the course of the hearing the claim for costs was further reduced to the sum of $465 being for legal fees incurred in the preparation of the Claim. It is mentioned here that the respondent agreed to this amount of $465 which is a compensable item and which will be allowed. The Commissioner for Railways is of the opinion that enhancement in value has occurred to the balance land as a result of the resumption scheme and proposed works, to the degree that the abatement of enhancement results in no compensation being payable. The case before me involves the argument by the claimant that, based on engineering and town planning advice the parent parcel, except for the area encumbered by the electricity easement was, disregarding the resumption scheme, suitable for filling development where land lay below the flood level and then building development for residential purposes to a Residential B or medium density equivalent. On valuation advice the loss suffered to the assessed residential development potential of the resumed land outweighed any benefits flowing -- 2 of 19 -- 3 from the resumption scheme. The respondent, on the other hand, argues that higher order of zonings and development potential was a direct result of the railway line and railway station and that, subsequent to the resumption, the whole of the balance land is capable of filling and building development whereas before resumption Albert Shire Council policy restricted building development to flood free land. Mr M.F. McAnany, a civil engineer, had been engaged by the claimant to investigate the flooding history of the land and its potential for filling development. In his tendered report he estimated that of the total area of the property before resumption, approximately 7.7 hectares was, on the average, 500 mm below flood level. He says that although the land is located close to the Nerang River it is not within the flood flow path, being separated by a levee bank along its northern boundary. Inundation occurs from the effect of backwaters and the property is located in "a pocket at a remote corner of the Nerang River flood plain". It is isolated from the remainder of the flood plain by naturally occurring high land to the east and west, the levee bank to the north and the Nerang-Broadbeach Road embankment to the south. Mr McAnany had investigated the recent history of the rezoning applications, Council decisions and negotiated approvals relevant to the parent parcel, and was well aware that filling of the flood plain was treated as a sensitive matter by the Council. He was also aware that conditions of approval for rezonings of the subject land prior to the resumption had stated that the land below flood level was not to be filled. He was far from convinced however that this apparent restriction was a firm policy of the Council. He pointed to its partial relaxation in the rezonings which had been approved subsequent to the resumption and many other instances in the locality where in the past, filling had been permitted. He felt that the Council's final attitudes had not been consistent with a total restriction on filling development of certain parts of the flood plain. In his opinion, the particular location of the subject property relative to the flood plain, the eventual approval for the filling of parts of the subject property and prior approval for the filling of an overall relatively large area of the local flood plain and the considered negligible effect on the Nerang River flood storage area, combined to indicate that there should have been no valid restriction on filling of the parent parcel including about 1 -- 3 of 19 -- 4 hectare of the resumed land, for residential development. Town planning evidence was given for the claimant by Mr P.G. Bell and for the respondent by Ms S.M. Vigar. Mr D.B.L. Arbon, the town planner with Albert Shire Council was also called by the respondent. On the basis that the potential presence of the railway was to be ignored, Mr Bell was of the opinion that the highest and best use of the parent parcel prior to the resumption was for residential purposes. He saw Residential B density as appropriate and complementary to existing development and approvals as well as the Nerang Development Control Plan which had been in draft form at the time of the resumption, and which now showed "a number of peripheral residential medium density sites which did not rely upon other catalyst land uses (eg.: railway station) for their existence. These other medium density areas are generally free standing and make use of presently undeveloped land which is capable of being developed without flood problems." Mr Bell agreed with Mr McAnany's approach to the flood disability and also referred to the Council having subsequently granted approval for the development "of some 65% of the subject land". He had investigated the town planning history of the site, both prior and subsequent to the resumption. It was his interpretation of town planning approvals relative to the parent parcel, where filling had been stated to be restricted, as inconsistent with the maximum density of development permitted and also inconsistent with the subsequent building approvals. Mr Bell said that, had Residential B density (up to 40 units per hectare) of development not been permitted, then a group housing style of development, where a density of 16 units per hectare could be achieved, was the next best alternative. While the electricity easement area and an area severed from the main body by the easement, together with the land which formed part of an existing dam, would not be capable of building development, these areas would not be excluded from the calculation of maximum site density. -- 4 of 19 -- 5 Ms Vigar was also of the opinion that the best potential use of the parent parcel before resumption would have been for residential purposes. Where she disagreed with Mr Bell however, was with regard to the density of development which might have best met town planning principles. She felt that low density residential would have been the natural extension of existing development. Conventional Residential A development would have allowed a density of 10 units per hectare. She agreed that the total area of the site would be the criterion for calculating the maximum potential development - in this case 89 units. She agreed that in light of other approvals in the locality, small pockets of medium density development within an overall integrated development might have been appropriate and that a density equivalent to Special Residential development of 16 units per hectare overall, was not out of the question but subject to design limitations. She understood from her research that the policy of the Albert Shire Council was not to permit filling of the flood plain to interfere with its storage capacity. Mr Arbon's evidence indicated that while the Council endeavoured to achieve a no-fill or minimal-fill restriction on development in the flood plain, he agreed that there had been significant filling development within the flood plain in this locality over the years, where Council had accepted such development was warranted. He also agreed that even when approvals were given with a condition stating no filling of the flood plain, this restriction was not necessarily strictly adhered to when design or engineering considerations warranted relaxation. He also agreed that the depth of filling required over the subject land would be seen as "minimal". Although subsequent to the resumption a significant part of the land had been approved for filling he felt that this was at least, in part, as a result of the proposed railway and the perceived need for development associated with the railway. Other factors also have assisted in the mitigation of flooding, such as the construction of the second stage of the Hinze Dam and the Broadwater Seaway. Mr Arbon said that since about 1983/1984 the proposed railway had been influencing town planning considerations. He had been the author of a letter written on the 1st July, 1988, addressed to the Valuer-General which set out the zoning history and applications for development of the parent parcel of land. It then included the following: -- 5 of 19 -- 6 " The proposed railway station has been a relevant factor in Council's consideration of the area, and has resulted in higher order zonings that would otherwise have been approved. In particular Residential B would have been unlikely to be approved. (i)Prior to the advent of the railway, the land was partly zoned Private Open Space and Rural B. The Private Open Space area could have been developed for a tourist complex as proposed. The Rural B area would have been unlikely to stay as such because of its proximity to Urban uses. It is possible that the flood free land could have been rezoned to Residential A. Alternatively, the whole of the subject land not subject to flooding could have been rezoned to Residential A. A third possibility could have been for the Private Open Space (Tourist Facility) to be extended to cover the whole area, subject to a minimum 20 metre buffer to the existing residential areas (also for drainage reasons). (ii)It is considered that the highest and best use of these three alternatives would be a tourist facility over the whole of the land. The type of use would be predominantly open space and could not be noisy or a large traffic generator. An example would be an equestrian centre, golfing, tennis, or a recreation theme park, such as the Pony Express Theme Park approved by Council. I advise that the flood level on this area is 5.10 metres. A tourist development could include the floodable land, however Residential A or Residential B development would have to be above the flood level. Limited filling could be approved by Council to facilitate orderly development eg. to straighten out the flood line, however filling should be restricted to an absolute minimum say 2%-3% of the area to be developed. This can only be assessed upon the submission of detailed engineering plans. In the event of Residential B development being approved on the flood free land the Town Plan allows a maximum density of 40 units per hectare. Taking into account the gross area of the land and the flood line on the land (with minor filling) a maximum number of units is considered to be 120 (assume 3.0 ha by 40 per ha = 120). This would be subject to a fresh rezoning application and approval. However as previously stated such an application would have been unlikely to be approved without the advent of the railway station. " In his evidence Mr Arbon agreed that if the railway was to be disregarded then the highest and best use of the land would have been seen to be residential and although he conceded that a group title Special Residential development at a density of 16 units to the hectare may have been achieved, he saw medium density (Residential B) development at 40 units per hectare unlikely to have been achievable. He maintained that any approval for development would have been limited to the flood free land. During the cross-examination of Mr Arbon it was obvious that he quite correctly did not consider himself qualified to comment on engineering matters relative to filling, restricting himself to town planning evidence and policies relevant to fill. He did not indicate any particular technical knowledge relative to the conclusions made by the claimant's engineer Mr -- 6 of 19 -- 7 McAnany. I have concluded that while the Albert Shire would have endeavoured to restrict building development on the subject property to the flood free land or its immediate environs, the engineering evidence indicates that in the special circumstances of location outside of the River flow path, in a remote corner of the flood plain, where filling of the order required on part of the subject property was seen to have negligible effect on the flood storage requirements, where other filling development had been approved and in an area where filling is now permitted, (said to be as a result of the railway), a strong challenge to a filling restriction was capable of being mounted. The town planning evidence has a common thread in that before resumption, residential development should be seen to be the highest and best use of the land. There is also general agreement between the town planners that Special Residential type development with the density of 16 units to the hectare, based on the gross area, should not have been seen as unachievable by reasonable Albert Shire town planning practices and standards. Such density would have equated 144 units on the parent parcel. While a negotiation and appeal process may have been necessary I have concluded that sufficient filling to accommodate such a development was also a reasonable expectation, not in accord with stated Council policies, but certainly consistent with past Council practice. There should be little dispute that higher order zonings and approvals for filling development were readily achievable after resumption and these facts were before me. The resumption quite obviously has been designed to complement a proposed subdivision of the land, which subsequently became Lots 1 to 4 on Plan 223577. Applications for rezoning which had been made prior to, but gazetted subsequent to, the resumption resulted in Lot 2 of 6000 square metres being rezoned to Local Business (with development restricted to a gross floor area of 2000 square metres and further restricted to an initial general store development for a period of two years following gazettal of the rezoning) and Lot 4 of 2.637 hectares to Residential B with a density of 80 units. Subsequent to the resumption, Lot 3 of 1.599 hectares after proposed dedications for public open space, was approved in principle for Residential A/Special Residential development with a density of 31 units. An application to rezone Lot 1 -- 7 of 19 -- 8 to Local Business or Residential A has been refused on the grounds that the Council sees that land "would be more appropriate for a special use allied to the shopping area, eg. a childcare centre or other community use". The proposed subdivision of the balance area involved the construction of a central cul-de-sac road off Warrener Street. Valuation evidence for the claimant was given by Mr R.E. Aston, registered valuer in private practice. He had accepted Mr Bell's opinions as to the density of residential development which might have been achieved had there been no railway. He said that his advice had been that the claimant had purchased the land in the first place for residential development and the railway requirements had delayed development of the land until a complementary plan of development could be formulated. This also involved the internal road which was constructed subsequent to the resumption. Mr Aston, agreeing with the claimant's town planning advices felt that what had subsequently occurred with the properties Lots 3 and 4 (Plan 223577) to the west and north of the proposed internal road, with regard to rezonings or approvals in principle, was no more than the potential for that land, railway or not. He saw the real effect narrowed to the loss of the resumed land and had there been any enhancement, that would be confined to the adjoining area (Lots 1 and 2 Plan 223577) where the Local Business zoning and ancillary use potential had been demonstrated. Mr Aston's valuation approach was to consider:- (a)the value of the resumed land standing alone; (b)the value of the amalgamation of the resumed land with Lots 1 & 2 Plan 223577. (c)the value of Lots 1 & 2 Plan 223577. As far as the resumed land was concerned, Mr Aston again, with the support of Mr McAnany's opinion as to the ability of the land to be filled and Mr Bell's as to the residential development potential, saw it as having "stand alone" value of $350,000. A schematic design showing how 45 units may have been accommodated on the land, constrained by the dam and powerline easement had been prepared by an architect for his assistance. Mr Aston conducted a "hypothetical residential and subdivision" exercise which indicated a "gross realisation" value -- 8 of 19 -- 9 of the resumed land as being $540,000 based on 45 units at $12,000 per unit. He then deducted sale expenses, estimated subdivision and development costs including Council headworks charges and fees, interest and then finally an allowance for profit and risk, resulting in the rounded figure of $350,000. Next, he dealt with the amalgamation of the resumed land and Lots 1 and 2 Plan 223577, the aggregation of which contained 3.672 hectares and which he agreed had no local shopping or ancillary use potential without the railway. Based on an area of 2.68 hectares which had been seen by the engineer and town planner as being suitable for development, and adopting a Residential B density (40 units to the hectare) this amalgamated site would then have had a development potential of 107 units. However the schematic design produced by the architect for this area found accommodation only for 96 units. Adopting this latter density Mr Aston found the amalgamated site would have possessed a developed value of $1,152,000 which reduced to a rounded in globo figure of $700,000. Finally he considered the value of Lots 1 and 2 to have a developed value of $975,000, based on $25 per square metre for Lot 1 (Special Use) and $150 per square metre for Lot 2 (Local Business), if the railway and the railway station had been constructed and operating at the date of resumption. The in globo value was calculated as $643,825. With the railway works not expected to be completed for about 8 years from the date of resumption, Mr Aston deferred the in globo value for 8 years at 10% per annum to find its value at the date of resumption. This came to a rounded $300,000 to which he added a nominal $50,000 to allow a consent use such as an Estate Sales Office and parking until the full development was warranted. In summary if he looked at the resumed land together with Lots 1 and 2 before the resumption, the in globo residential use value was $700,000 but after resumption Lots 1 and 2 had a present value of $350,000 which left the resumed land as having value of $350,000 equating his assessed stand alone value. Having established to his satisfaction that no enhancement was attributable to the resumption he felt that, based on sales evidence, the calculated area of 1.457 hectares able to accommodate residential unit development within the -- 9 of 19 -- 10 resumed land would have value of $21 per square metre and the balance area a nominal $50,000 or alternatively the overall resumed area a value of $12.50 per square metre, which figures supported his valuation of $350,000. The sales evidence supplied by Mr Aston, the details of which are set out in his report, is summarised as follows:- (1)Lot 4 R.P. 223577 (part of the balance area of the subject property), Residential B, sold May 1989 for $960,000 - $12,000 per unit or $36.40 per square metre. (2)Lot 3 R.P. 222810 - Riverview Road - 20.15 ha - Rural C, sold February 1989 for $6,500,000 - Nerang River flood plain single homesite. (3)Lots 5 & 6 R.P. 151574 - Ashmore Road - 5.395 ha - Future Urban, September 1989 for $1,617,000. (4)Lots 4 to 6 R.P. 131219 - Bellara Street - 1.033 ha - Rural A, May 1987 for $260,000. (5)Lot 21 R.P. 221841 - Nerang/Advancetown Road - 21.26 ha - rezoned from Rural B to Special Residential (370 units), sold July 1988 for $2,750,000, resold May 1990 for $3,300,000. (6)Lots 4 to 7 R.P. 222542 - Spencer Road & Pappas Way - 9.39 ha - zoned Multiple Uses, sold December 1989 for $7,360,000. (7)Lot 3 R.P. 222542 - Pappas Way - 2334 m2 - Local Business, sold December 1989 for $480,000 - $205.65 per square metre. Mr Aston was questioned as to market movement in levels of value at about the time of resumption. In his opinion values were depressed in 1987 climbed rapidly through 1988 and peaked and plateaued during 1989 before falling again. He agreed that several of the sales he included were, for various reasons, of little or no assistance except to indicate the overall market levels at various dates. Mr G.W. Knight, registered valuer employed by the Department of Lands had carried out the valuation relied on by the Commissioner. In his tendered report Mr Knight stated: " The lands taken form part of an aggregation of 8.966 hectares which is used for the grazing of horses. The best and highest use for the parent parcel is for development as a residential estate. The resumed lands are low-lying and have a slight fall to the east. Part of the land is developed with an open drain. The resumption causes: (a)A loss of approximately 2.772 hectares of land from the aggregation. (b)Enhancement to the remaining lands, due to a higher land use being permissible as a result of the erection of a railway station on the land taken. " -- 10 of 19 -- 11 Mr Knight assessed compensation as nil. No detail as to how he supported that conclusion was provided in his report. This drew criticism from Counsel for the claimant who, complained that a "non-speaking" valuation was against the spirit involved in the proper exchange of experts' reports prior to hearing. It was established during his evidence, that Mr Knight valued the parent parcel before resumption at $600,000 being a rounded amount resulting from a calculation at $65,000 per hectare. In the after resumption situation he found that the balance area had value of $1,100,000, again a rounded figure after a calculation based on a density of 120 residential units at $8,000 per unit and a local business content of 6000 square metres at $25 per square metre. Mr Knight had accepted the advice supplied by Mr Arbon that had it not been for the proposed railway, the development potential of the land would have been limited to Residential A density, which was interpreted as equivalent to 89 units, and then only on the flood free land except for any practical minor fill which might have been required. He had been guided in his valuation of $65,000 per hectare after the consideration of three sales as follows: (1)10.63 hectares at Chisholm Road Carrara, which sold in August 1987 for $1,150,000, rezoned to Residential A with headworks paid as well as subdivisional design and survey work. His schedule indicated that this sale showed an analysed value of $84,670 per hectare although he agreed that on the information supplied that figure should have been $94,073 per hectare. He saw the sale land as superior to the subject parent parcel in topography and potential yield (115 lots). The sale property had the advantage of the zoning in place with potential for immediate development. (2)11.246 hectares at Riverview Road, Nerang, which sold in January 1987 for $660,000. Mr Knight stated that this property comprised 4 hectares of "flood free" land, was zoned "Retirement Village and Recreation"/"Private Open Space"/"Public Open Space", with development approval for 110 units on the flood free land. He was challenged as to the area of "flood free" land. He agreed that the aggregation in the sale included an island to be transferred to the Council and that the Private Open Space area was in the flood flow path of the Nerang River. He saw the access to this land as being inferior to that of the subject, but the sale land being superior in topography and zoning and with similar location. He agreed that the land adjoined a busy highway and a bridge structure of the River. This property had been resold by the mortgagee-in-possession in 1990 for $1,300,000. (3)A sale of the subject land. Although not included in his formal sales evidence Mr Knight's verbal evidence indicated that he had had regard to the purchase of the subject land by the claimant in early 1986 for $450,000. He did not accept a suggestion that there may have been any forced sale considerations which influenced the sale price at that time. -- 11 of 19 -- 12 It is Mr Knight's evidence that the applied value of $65,000 per hectare to the subject parent parcel took into consideration the zoning position which existed, the flooding disability and the electricity easement. Although there was an apparent error in the analysis of his first sale and some doubt cast on the flood free area of the second sale, Mr Knight was firm in his opinion that his before resumption valuation represented fair market value on a direct comparison basis, if the development potential was limited to low density Residential A. In his after resumption valuation Mr Knight had again been guided by the advice given him by Mr Arbon that higher order zonings and increased density of residential development in line with rezoning approvals negotiated prior to the resumption, were a direct result of the resumption scheme for railway purposes. He had accepted the information given to him that the balance area, as an in globo parcel, had potential for rezoning to permit development of 120 residential units and 6000 square metres of Local Business. He assessed the residential component to have an in globo content equivalent to $8,000 per unit. This was based on the following sales: (a)A 9.41 hectare Residential B Site in Neilsens Road which sold in August 1988 for $1,500,000. The maximum density of development as zoned would have permitted 376 units. This was a steep block providing a difficult development and broken layout, situated between a highway and the proposed railway. Mr Knight saw the sale land as inferior to the subject balance area in situation, access and topography and with a much larger unit yield. (b)A 2.006 hectare Residential B Zoned site in Pappas Way sold in October 1988 for $960,000, capable of development with 80 units. The property adjoins the proposed railway and is subject to the resumption of a small area (160 square metres). The purchaser acquired the rights to compensation. This land had been partially filled. It is considered by Mr Knight to be inferior to the subject land in situation and site quality, but an after date sale on a rising market. (c)A 2.399 hectare Residential B zoned site in Old Coach Road, sold in February 1989 for $1,200,000, approved for 96 units with preliminary plans included. This property is described by Mr Knight as inferior to the subject land in topography, in a remote locality in comparison, but with "superior environmental surroundings". It was also a later sale on a rising market. (d)Part of the subject property being Lot 4 on R.P. 223577 containing 2.637 hectares, zoned Residential B (25th June, 1988) sold in May 1989 for $960,000 approved for 80 units. For the after resumption in globo "local business" component of the balance area Mr Knight used the following sales as a basis: (i)A Local Business zoned site of 2727 square metres in Hardys Road sold in August 1988 for $90,000 or $33 per square metre. Mr Knight said the purchaser considered this a "good" buy and the property had resold twice since, then was developed with shops and a child minding -- 12 of 19 -- 13 centre in 1991. It is located in a developing area although he considered its development was futuristic at the date of sale, reflected in the price. He says that the sale is overall superior to the local business component of the subject. (ii)A Special Business zoned site of 4771 square metres sold in September 1988 for $600,000 in Hinkler Drive a service road to the Pacific Highway. Mr Knight says the sale property is superior in situation and access and although with inferior zoning to the subject land it is superior overall. Mr Knight said that in light of subsequent approvals and Council advices, he would reduce the residential component in the after valuation to about 110 units and instead include the 3000 square metres with indicated potential for special purpose rezoning, such as for a child minding centre associated with the Local Business. Based on sale (i) he would value this 3000 square metres at $30 per square metre ($90,000), reduce the residential component to $880,000 and leave the local business component at $150,000 totalling $1,120,000, but still round the result to the former valuation of $1,100,000. Both valuers have, not unnaturally, based their valuations on the town planning advice given to them. The totality of the town planning evidence before me however indicates that the maximum density of residential development which may have been achieved had the railway not been proposed, was equivalent to a maximum of 16 units per hectare or 144 units on a gross area basis. This is significantly less than the density which formulated the basis of Mr Aston's valuation, and importantly less than the density of the balance area which Mr Aston accepted would remain constant, railway or not. His approach in not dealing with the full parent parcel in the before resumption situation and the full balance area after the resumption is then seen to be defective. There is always the danger of such a result if a piecemeal approach to an assessment of this nature is taken, and his approach assumed that, apart from achievable density, a similar subdivisional design, at least with regard to the internal cul-de-sac road, would have resulted, resumption or not. Mr Aston's approach to the residential component in the before valuation is not therefore accepted. While I do accept Mr Knight's approach in attempting to find the value of the whole parent parcel in the before resumption situation, I find that the advice he received as to development potential was not tempered with the possibility which emerged during the evidence of the expert town planning witnesses, of potential approval for the higher Special -- 13 of 19 -- 14 Residential equivalent density. His first sale then, which relates to a standard low density residential subdivisional development is not necessarily comparable except if viewed on a productive capacity. It is noted that this sale was sometime prior to the relevant date in this matter on what has been described as a rising market. His second sale has, as I see the effect of the riverside location (negated at least in part by the highway and bridge adjacency) overall superior features compared to the subject land, a positive zoning position, but then took place at a date well before the market had escalated to the relevant date. The second sale also needs to be compared on the potential productive capacity of the subject parent parcel which I will adopt. The sale of the subject land itself is, in the circumstances, of even less assistance, being one year earlier than the second sale. The danger in even attempting to gain any comfort from this sale from the respondent's viewpoint, is that it might be arguable that it was more aligned to the "after" resumption position with regard to the effect of the railway than the position "before" resumption. Planning by that time had been delayed - it was found necessary to eventually complement the railway proposal and indeed Mr Arbon's evidence was that the railway had been influencing town planning decisions since prior to the date of that sale. All things considered I find Mr Knight's basis for his before resumption valuation would be too harsh based on the evidence as to potential. There is also the need for adjustment of the sales evidence to the higher level of value which it is agreed existed as at the date of the resumption. The best evidence which I see to be before me, is that of Mr Aston's sale (5) showing $129,350 per hectare. It took place much closer to the relevant date and the land was subsequently rezoned to Special Residential with an approved development density of 17.4 units to the hectare. I would see the physical land contained within that sale and its environment and location generally to be quite superior to the subject parent parcel, but then there is the much larger size of the potential development on the sale land and the effect of the "economy of scale" as referred to by Mr Knight in his evidence. I have decided to adopt a before resumption value based on $105,000 per hectare after -- 14 of 19 -- 15 consideration of the perceived but unproven development potential of up to 144 residential units. This provides a before resumption value before rezoning and with consideration to the physical nature of the site and delays which may have been expected in gaining the maximum development approval of $941,430. In the after resumption situation, the evidence is conclusive that higher order zonings have been readily achievable as a result of the resumption scheme. There is also no doubt in my mind that, had the railway line and railway station been programmed for completion at about the time of the resumption, significant enhancement in value would have flowed to the balance land at that time. However, it is necessary to carefully consider the real position as it affected the market value of the balance lands at the relevant date. Firstly it was known that gazettal of rezoning of part of the balance land was imminent as follows: (1)Proposed Lot 2 on Plan 223577 - 6000 square metres to Local Business with short term development restrictions. (2)Proposed Lot 4 on Plan 223577 - 2.637 hectares to Residential B with an approved development density of 80 residential units. Secondly, while it was not known precisely at the time, it was capable of prediction that: (1)Lot 1 on Plan 223577 of 3000 square metres had potential for rezoning to a Special Use (such as a child minding centre) in association with the Local Business potential of Lot 2. (2)An area of near 2 hectares in the western sector had potential for residential rezoning and with adequate buffering from adjoining low density residential, a Special Residential density of development providing 31 residential units (16 to the hectare). This would be achieved on Lot 3 on Plan 223577 of 1.599 hectares, with Lot 12 on that plan being the surveyed buffer strip. Thirdly, to effect the rezonings and orderly development, the plan of subdivision of which the resumption was obviously designed as an integral part, needed to be put into effect and this included the construction of the internal cul-de-sac road to be known as Bowden Court. Fourthly, the date of completion of the resumption scheme was not known precisely except on the balance of probabilities it was not to occur in the short term. It appears that enquiries made at the relevant date would have indicated uncertain timing but a minimum period of 6 to 7 years. The timing even at this date remains unknown with current estimates -- 15 of 19 -- 16 extended to 9 years from the date of resumption, dependent on Government funding. These comments are based on the evidence given by Mr R.B. Hunter, the Manager of Projects and Contracts Division of the Railway Department. He was called to advise the past and present predictions as to construction dates for the Helensvale - Robina section of the project. The evidence is, that while advantages are seen in having medium density residential development within walking distance of a railway station, immediate adjacency is not generally considered as being ideal. The real estate market in the locality including part of the subject land (Lot 4) indicated that subsequent to the resumption on a rising market, a stand-alone site with approval for development with 80 units possessed value of $12,000 per unit. It is generally conceded that a smaller, less dense stand-alone development such as was possible on Lot 3 would have commanded a higher unit value. There is also a general acceptance that full development of the local business zoned area would not realistically proceed until the advent of the railway facility was at least imminent, although as the residential development takes place on the balance subject land, some limited convenience shopping facility might be economically viable as an initial stage of development. There is some difference of opinion as to the potential for development of the Special Use site (Lot 1) in the short term. Mr Aston's after resumption approach is again of limited assistance as he has chosen not to consider the total balance area. However with regard to the Local Business area of 6000 square metres he sees it as having a value of $150 per square metre had the railway facilities been imminent at the date of resumption. On the same basis he values the Special Use site of 3000 square metres at $25 per square metre. I interpret the sales evidence that has been supplied both by himself and Mr Knight as supporting both of these levels of value. Mr Aston then reduced the market value of Lots 1 and 2 to an in globo condition by using estimated development costs and an allowance for profit and risk, then defers the result for 8 years as an estimate of when the railway facility might be completed, using a deferral rate of 10% per annum. Mr Knight, again correctly deals with the total balance area. He assesses an in globo -- 16 of 19 -- 17 value of $8,000 for each potential residential unit, a present in globo value of $25 per square metre for the Local Business land and $30 per square metre for the Special Use land. He offers sales evidence of stand-alone sites in the various zoning categories as offering support to the levels of value applied. With particular regard to the Local Business and Special Use land he gains comfort from the sale in a relatively remote location where a convenience shopping and child minding development took place some 3 years after the sale which he saw as representing the futuristic potential. He says that the development potential of the subject land is significantly greater although more futuristic. Section 20 (3) of the Acquisition of Land Act of 1967 (as amended) requires that: " In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken. But in no case shall this subsection operate so as to require any payment to be made by the claimant in consideration of such enhancement of value. " Where enhancement is considered to have resulted from the resumption scheme there is the need for special care to be exercised in establishing the factual situation so that a realistic interpretation of the Spencer test of value (Spencer v. The Commonwealth of Australia (1907) 5CLR 418) as resulting from the negotiations between an informed and not over-anxious vendor and purchaser, is made. There should be no doubt that in this case prudent people when deciding the fair price for the balance area would need to consider: (1)That the balance area needed to be developed by road construction and subdivision into the various lots to ensure its marketability as rezoned or as capable of being rezoned. (2)The costs of such development. (3)The date of construction of the works of the resumption scheme (with regard to the Local Business and Special Use lots). Mr Knight says that the levels of value he has adopted represent the in globo state of the balance area and he may well have considered the above matters but his "non-speaking" approach to the reporting of his conclusions and, in this instance, the lack of proof of those conclusions, has been of no assistance in establishing the veracity of his assessment. He is critical of Mr Aston's approach in deferring the value of the Local Business zoned land when, he -- 17 of 19 -- 18 says, there was better evidence available. That "better evidence" was however of stand alone sites already in subdivision. There was in fact, evidence to support the levels of value Mr Aston adopted but it seems logical that those present day values would not have been achieved until the railway project was far more advanced. It seems to me that a prudent purchaser may have perceived even greater risk than did Mr Aston in the project coming to fruition within the period estimated. I see Mr Aston's method of deferring the present value as a reasonable approach and one which is realistically market place related. While there has been judicial criticism of the hypothetical development method of valuation being used as a primary basis when directly comparable sales evidence is available, this is one case where such method was available as at worst, a check against the end result. Mr Aston partially performed the exercise to suit his own approach in endeavouring to establish piece-meal in globo values. Criticism was levelled at the methodology he used, particularly the manner in which he dealt with the profit/risk allowance for individual parcels. Although it is still a hypothetical exercise, it was known at the date of resumption which way the balance area needed to be developed and subdivided. There was good evidence to show the gross realisation which might have been achieved from the subdivision of the balance area, which was eventually to take place. It seems to me that if a development and selling period as short as one year from the resumption date had been assumed, use of residential unit values of say $12,000 for the 80 unit Lot 4 and as high as $15,000 for the 31 unit Lot 3, a present value (after deferral at say 15%) as high as $300,000 for the Local Business Lot 2 and $75,000 for the Special Use Lot 1 were capable of support on the evidence available, with a gross realisation in the order of $1,800,000 appeared achievable. Mr Aston's report indicated that actual costs of subdivision were in the order of $226,874, exclusive of the necessary filling costs, headworks charges, professional fees, all of which were capable of being estimated. The traditional exercise of deducting from the gross realisation, the selling expenses of the individual lots, reasonable allowance for profit and risk of realisation, development costs including interest, holding costs on the land and its acquisition costs, would not, on the limited cogent evidence before me support Mr Knight's after resumption in globo valuation of -- 18 of 19 -- 19 $1,100,000. Indeed, a broad check of the probable result using a profit/risk allowance as low as 20%, would indicate an in globo value significantly less than that contained in Mr Knight's valuation. I find myself in the difficult position of not being able to accept either valuer's conclusions, either in the before or after resumption situation. As indicated earlier, I will find an in globo value of $105,000 per hectare over the total area before resumption, based on a potential for Special Residential density development with necessary filling. In the after resumption valuation, with its potential demanding subdivision to complement the resumption requirements, and the higher order zonings. I will adopt an in globo value of $140,000 per hectare. The result is then as follows: Before resumption: 8.966 hectares @ $105,000 per hectare = $941,430 After resumption: 6.194 hectares @ $140,000 per hectare = $867,160 ---------- Compensation payable $74,270 Adopt in practical figures $74,500 Disturbance: Legal costs as agreed for preparation of Claim $465 ---------- Total Award $74,965 The evidence before me is that with regard to the legal fees an account was rendered dated 2nd September, 1991. No interest is therefore awarded on that item. Interest is awarded on the amount of $74,500 at the rate of 12.5% per annum from and including 9th April, 1988, up to and including the day immediately preceding the date on which the award is paid. Member of the Land Court. -- 19 of 19 --