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- Mio Art Pty Ltd v Brisbane City Council[2010] QLAC 7
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Mio Art Pty Ltd v Brisbane City Council[2010] QLAC 7
Mio Art Pty Ltd v Brisbane City Council[2010] QLAC 7
LAND APPEAL COURT OF QUEENSLAND
CITATION: | Mio Art Pty Ltd v Brisbane City Council; Greener Investments Pty Ltd (In Liquidation) v Brisbane City Council [2010] QLAC 0007 |
PARTIES: | MIO ART PTY LTD ACN 121 010 875 (appellant) BRISBANE CITY COUNCIL (respondent) GREENER INVESTMENTS PTY LTD (IN LIQUIDATION) ACN 110 036 452 (appellant) BRISBANE CITY COUNCIL (respondent) |
FILE NO: | Appeal No 1 of 2010 Appeal No 2 of 2010 LC No 6 of 2008 LC No 1084 of 2008 LC 851 of 2007 |
DIVISION: | Land Appeal Court |
PROCEEDING: | Appeal from the Land Court |
ORIGINATING COURT: | Land Court |
DELIVERED ON: | 19 November 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 27 July 2010; 12 August 2010; 13 August 2010 |
JUDGES: | Peter Lyons J, Mr PA Smith and Mr WA Isdale Judgment of the Court |
ORDER: | Appeal allowed |
CATCHWORDS: | REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – PROCEEDINGS FOR COMPENSATION – QUEENSLAND – APPEAL TO LAND APPEAL COURT – where the appellants appeal against the assessment of compensation for resumed land – whether the Land Court erred in its determination of compensation REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION – ASSESSMENT – MARKET VALUE – COMPARABLE SALES – where the Land Court relied on evidence of a particular contract of sale – where the appellants contend that the use of that contract as evidence of value was wrong, because the contract was rescinded prior to settlement – where the appellants contend that the contract of sale was akin to an option to purchase and should not have been relied on as evidence of value of the resumed land – where the appellants contend that information which is ordinarily available to valuers investigating a sale was not available in relation to the contract of sale – where the appellants contend that the Land Court erred in taking into account a development application prepared by the purchaser in the contract of sale – whether the Land Court committed discretionary, factual, or legal error, in its reliance on the contract of sale REAL PROPERTY – VALUATION OF LAND – METHODS OF VALUATION – GENERALLY – where the appellants contend that the Land Court erred by adopting an incorrect valuation methodology – where the appellants contend that the Land Court erred in its conclusion about an acceptable plot ratio for the development potential of the resumed land – whether the Land Court should have adopted a different valuation methodology – whether the Land Court should have assessed compensation according to the case relating to development potential presented by the appellants – whether the Land Court made an arithmetic error in estimating the gross floor area of potential development on the resumed land REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION – ASSESSMENT – MARKET VALUE – COMPARABLE SALES – where the appellants contend that the Land Court erred in failing to give proper weight to the sale of the appellants’ retained land – whether the Land Court erred in relation to the weight it attributed to the sale of the retained land REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – PROCEEDINGS FOR COMPENSATION – QUEENSLAND – EVIDENCE – where the appellants seek to tender as evidence a document not tendered in the Land Court proceedings – whether the admission of the document as evidence is necessary to avoid grave injustice REAL PROPERTY – COMPULSORY ACQUISITION OF LAND – COMPENSATION – ASSESSMENT – OTHER CONSIDERATIONS – whether the liberal estimate principle should have been applied to alter the assessment of compensation |
COUNSEL: | D Gore QC with D Smith for Mio Art Pty Ltd G Griffin (solicitor) for Greener Investments Pty Ltd M Hinson SC with D O'Brien for the Brisbane City Council |
SOLICITORS: | Delta Law for Mio Art Pty Ltd Griffin Hilditch Lawyers for Greener Investments Pty Ltd DLA Phillips Fox for the Brisbane City Council |
- [1]On 31 August 2007, land located at 85 Montague Road, South Brisbane was resumed by Brisbane City Council for the Hale St Bridge project (the bridge is now known as the Go Between Bridge). A judgment of the Land Court delivered on 24 November 2009 assessed compensation in an amount of $16,600,000. These proceedings are appeals against that assessment.
Background
- [2]The resumed land was, prior to its resumption, owned by Mio Art Pty Ltd as trustee of the Ecomonitors Unit Trust. It was subject to a mortgage to Greener Investments Pty Ltd. It was also subject to mortgages to a number of other entities, to whom it is unnecessary to make further reference in these appeals.
- [3]Mio Art and Greener Investments both appealed against the determination of compensation. After its appeal was instituted, Greener Investments went into liquidation. The appeal was continued by its liquidator.
- [4]Prior to its resumption, the land formed part of a parcel of land owned by Mio Art, comprised of Lot 1 on RP903012, with an area of 745 square metres; and Lot 2 on RP903012, with an area of 8,080 square metres (the land, or the pre-resumption parcel). The pre-resumption parcel therefore had a total area of 8,825 square metres. The resumed land included the whole of Lot 1 and part of Lot 2, and had an area of 5,643 square metres. Mio Art thus retained an area of 3,182 square metres (retained land).
- [5]At the date of the resumption, development of the land was regulated by CityPlan 2000 (CityPlan). Under CityPlan, the area classification for the land was Special Purposes Centre SP13 (Office Park). Development was therefore affected by the Centre Design Code in CityPlan. The land was located in the West End Woolloongabba District; and development of it was thus affected by the West End Woolloongabba District Local Plan (WEWDLP), and the West End Woolloongabba District Local Plan Code (WEWDLP Code).
- [6]Under the WEWDLP, the land was included in the Riverside North Precinct. One performance criterion in the WEWDLP for this precinct included the maintenance of views to Mount Coot-tha and the Taylor Ranges, when viewed from the Riverside Expressway; and the maintenance of views of the CBD from Coronation Drive. The acceptable solution for this performance criterion was that building height not exceed 10 storeys.
- [7]Another performance criterion related to development occurring on major sites in an orderly sequence, and in accordance with a precinct structure plan. The acceptable solution for this performance criterion was the preparation of a structure plan for sites with an area greater than 1500 square metres, which would provide an indication of building bulk, scale and space between the buildings, and public access to the riverside.
- [8]CityPlan did not contain any designation of gross floor area (GFA) for the site.
- [9]There were other documents of potential relevance to the application of CityPlan to the land. In April 2007, the Council published a draft Kurilpa Structure Plan (Kurilpa 1). The relevant provisions of Kurilpa 1 dealt with built form, including building height; movement, including mid-block connections between streets; and publicly accessible open space. For the land, Kurilpa 1 identified a proposed maximum building height of 9 storeys.
- [10]In December 2007, the Council published a second draft of the Kurilpa Structure Plan (Kurilpa 2), which again included provisions relating to building heights. A map which formed part of Kurilpa 2 showed the indicative building height for the land as 12 storeys.
- [11]Both Kurilpa 1 and Kurilpa 2 related building heights to views of Mount Coot-tha and the Taylor Ranges from locations close to the Brisbane Central Business District (CBD).
- [12]There were, however, other documents potentially relevant to an assessment of the development potential of the land. One was a document entitled “Smart Cities: rethinking the city centre” (Smart Cities Report). This was a report prepared by the Smart State Council on the initiative of the Queensland Government, published in May 2007. Its contributors included Council officers. It considered planning for development in relation to the CBD. It noted that the CBD Peninsula was being challenged in its role as the core primary activity generator of the City, by commercial development in Fortitude Valley and South Brisbane. It recorded that the Council was considering permitting building heights of up to 20 levels in these areas.
- [13]An application had been made to develop the land on 17 February 2003. The application required impact assessment. It resulted in an approval dated 7 July 2005 (Capulet approval). At that time, the area classification for the land was the SP12 (Mixed Industry and Business) Area. The Local Plan Code then identified a building height of 12 metres, equating to three or four storeys. The approved development consisted of four buildings, with two of them linked for the uppermost five levels. Three of the buildings were six storeys in height, and the fourth was six storeys in height above a ground storey void. The gross floor area which would result from this development was 17,560 square metres. That equated to a plot ratio (i.e. the ratio between GFA and the area of the site) of 1.99:1, considerably above the .35:1 which the then relevant planning provisions identified as an acceptable solution for development on the site.
- [14]It is convenient at this point to mention an additional document which Mio Art sought leave to introduce into evidence. It is the South Brisbane Riverside Renewal Strategy Executive Summary Final Draft dated July 2009 (2009 Renewal Strategy). The question whether leave should be granted has been reserved. For the sub-precinct nominated in the 2009 Renewal Strategy which included the land, the maximum building height for sites with an area of less than 5000 square metres is 15 storeys; and for sites with a greater area, 30 storeys.
- [15]The retained land was sold in the latter part of 2007, for $8,964,685.68. It was common ground that this reflected the market value of the retained land at the date of resumption, and accordingly, the learned President adopted a sum of $9,000,000 as its value. As will appear, the critical issue was the value of the pre-resumption parcel.
Land Court decision
- [16]The reasons for judgment given in the Land Court reveal an extensive and detailed consideration of factors affecting the development potential of the land prior to the resumption. It was common ground that the development potential of the land should be judged for the purpose of determining its value, by reference to code assessable development.
- [17]The parties had put forward design concepts for the development of the land, on the assumption that the resumption had not occurred. That put forward on behalf of the Council (Council proposal) showed four separate buildings, with a maximum height of 10 storeys, scaling down to six storeys. The resultant GFA was 34,175 square metres, with a plot ratio of 3.87:1.
- [18]The development concept advanced on behalf of Mio Art (Mio Art proposal) showed three buildings, with a total height of 12 storeys. The resultant GFA was 66,579 square metres, with a plot ratio of 7.54:1.
- [19]The development concept advanced on behalf of Greener Investments (Greener proposal) was for a single building, with a GFA of 71,750 square metres, and a plot ratio of 8.13:1.
- [20]The learned President concluded that a prudent purchaser would consider it unlikely that a development with a plot ratio of 7.54:1 would be approved for the land. Her Honour considered that a prudent purchaser would conclude that the Council proposal more closely represented the form of development that might achieve an approval; but that such a purchaser would expect an approval for development which was 10 storeys in height “across the site”. This led her Honour to conclude that, if the Council proposal were modified so that the height was increased to 10 storeys, it would result in an increase of the GFA by 6,000 square metres. Her Honour also considered that the Council proposal was unduly generous in its provision of space between buildings, and therefore unduly conservative in the extent of development achievable. With both adjustments, she found the land had a development potential with a total GFA approximating 44,000 square metres, with a plot ratio of 4.98:1. It was on that basis that the value of the land was determined.
- [21]There was a debate among the valuers who gave evidence in the case as to whether, in arriving at a value for the land, an analysis should be made of sales evidence by reducing it to a rate per square metre of land, or relating it to a rate per square metre of GFA. The approach taken by Mr Johnston, the valuer called on behalf of the Council, was to adopt a rate per square metre of land. Mr Robertson, the valuer called on behalf of Mio Art, adopted a rate per square metre of GFA. Her Honour rejected that approach, on the ground that there was a significant dispute about the development potential of the land, and, that being uncertain, it was inappropriate to arrive at the value of the land by analyses based on rates per square metre of GFA.
- [22]Reference should be made to the more significant sales evidence advanced in the Land Court. The property at 144 Montague Road, South Brisbane was sold on 11 May 2007 for $7,500,000. This site had an area of 3,557 square metres. A resale of this land in December 2007 was excluded from consideration for reasons not challenged on the appeal. This site is much smaller than the Mio Art land.
- [23]Land located at 512 Wickham Street, Fortitude Valley, was sold on 25 May 2007, for $27,000,000. This site had an area of 9708 square metres. After adjustments reflecting the state of land and other matters, Mr Johnston analysed this sale as showing a rate of $2,924 per square metre of land. Others analysed it as showing a rate of $2,781 per square metre.
- [24]Land at 56 Edmonstone Road, Bowen Hills, was sold on 16 July 2007, for $11,500,000. It had an area of 9302 square metres. On Mr Johnston’s analysis, this reflected an unadjusted rate per square meter of $1,236.29 of land; but after his adjustments, the rate was $629 per square metres of land.
- [25]Land located at 150-180 Breakfast Creek Road, Newstead (Newstead Circle), was sold on 24 November 2006 for $40,000,000. This site has an area of 19,863 square metres. It has an extended frontage to Breakfast Creek Road. It was affected by a number of contaminants. The sale reflected a rate of $2,014 per square metre of land.
- [26]Land located at 98 Montague Road, South Brisbane, was the subject of a contract dated 6 November 2007 (Parmalat sale). This land had an area of 16,890 square metres. The learned President found this to be a sale which should be taken into account. Since reliance on this sale is an issue in the appeal, fuller reference will be made to it later in these reasons.
- [27]For Mio Art, reliance was placed on the sale of the retained land in the latter part of 2007.
- [28]Of the other sales referred to in the evidence, it was said that one could not be used; and that others were of “less relevance”. Reference to them does not seem to have had a discernable effect on the determination of compensation. The learned President’s approach to these other sales has not been the subject of criticism in this appeal.
Issues in the appeal
- [29]A number of matters raised on behalf of the appellants relate to the Parmalat sale. Those matters (Parmalat sale errors) may be summarised as follows:
- (a)The use of the Parmalat contract as evidence of value was wrong, because the contract was rescinded, prior to settlement;
- (b)An analysis of the Parmalat contract demonstrated that it was “akin to an option to purchase”, and it was according wrong to rely on it as evidence of value of the pre-existing parcel;
- (c)Information which is ordinarily available to valuers investigating a sale was not available in relation to the Parmalat sale, and that fact, together with some unusual features in the history of the transaction, meant that it was unsafe to place any reliance on the Parmalat sale.
- [30]It was also submitted that the Land Court erred in adopting a valuation methodology based upon analysed rates per square metre of land, rather than rates per square metre of GFA.
- [31]It was also submitted that the Land Court erred in failing to give proper weight to a sale of the retained land, relied upon by Mio Art as its primary sale.
- [32]A submission related to the submissions about the Parmalat sale errors was that the Land Court erred in taking into account a development application prepared by the purchaser in the Parmalat sale, as provided for in the Parmalat contract.
- [33]Other issues in the appeal relate to the determination of the development potential of the pre-existing parcel (development potential errors). A particular focus was the fact that the Land Court did not adopt the 12 storey height proposed by Mio Art. Reliance was placed on the support for Mio Art’s proposed form of development, said to be found in Kurilpa 2. Reliance was also placed on the 2009 Renewal Strategy. It was submitted that the Land Court erred in its conclusion about an acceptable plot ratio, which was affected by its acceptance of evidence based upon the Parmalat development application.
- [34]Before considering these issues, it is convenient to note the submissions of the parties on the nature of an appeal to this Court.
Appeal to the Land Appeal Court
- [35]Jurisdiction to determine matters relating to compensation for the acquisition of land is conferred on the Land Court by s 26 of the Acquisition of Land Act 1967 (Qld) (AL Act). However, that provision recognises that there may be an appeal against the decision of the Land Court to the Land Appeal Court.
- [36]The right to appeal to this Court against a decision of the Land Court is conferred by s 64 of the Land Court Act 2000 (Qld) (LC Act). Unlike an appeal under s 64 of the Valuation of Land Act 1944 (Qld)[1], the nature of an appeal brought under s 64 of the LC Act is not articulated in that Act. However, s 56 of the LC Act provides that an appeal to this Court must be decided on the evidence on the record of the Land Court; though there is a power to admit new evidence. Further, s 55 provides that in exercising its jurisdiction, this Court is not bound by the rules of evidence, and may inform itself “in the way it considers appropriate”; and it must “act according to equity, good conscience and the substantial merits of the case without regard to legal technicalities and forms or the practice of other courts”. Taken together, these provisions rather strongly suggest that an appeal to this Court is at least akin to an appeal by way of rehearing, a view which has been accepted in the Court of Appeal.[2]
- [37]Mio Art contends that it must demonstrate that the order of the Land Court is the result of some legal, factual or discretionary error.[3] For the Council it is submitted that the determination of compensation depends upon the making of a valuation, which is necessarily the exercise of a discretionary judgment, involving some element of choice, and that the decision of the Land Court cannot be overturned simply because this Court would come to a different conclusion; rather error on the part of the Land Court must be demonstrated.[4] The differences between the submissions appear to be differences of emphasis, rather than of underlying principle. It is not proposed to give them further consideration.
Parmalat sale errors
- [38]Since Mio Art submits that the Parmalat contract is “akin to an option to purchase”, it is necessary to say something about it, and some related factual matters.
- [39]The contract was produced to the parties pursuant to a Court order dated 18 November 2008, made subject to an undertaking and other arrangements designed to ensure its confidentiality. Portions of the reasons for judgment of the Land Court which might result in a loss of confidentiality were excluded from the published version of those reasons. In this judgment, it is intended to attempt to maintain that confidentiality.
- [40]The purchase price for which provision was made in the contract was a large sum of money. The contract provided for a deposit of five per cent of the purchase price; the payment of most of the balance on settlement; and the payment of four instalments annually after settlement, each amounting to approximately two per cent of the purchase price.
- [41]The contract was subject to a number of conditions, described as “pre-conditions”. However, it is clear that they were not conditions precedent to the formation of the contract. Reference to one of them is sufficient to illustrate their nature. It provided for the obtaining of a development approval for a particular form of development, on conditions “satisfactory to the Purchaser in its absolute discretion”, by a time which could be determined under the contract.
- [42]The Parmalat contract was varied by a Deed of Variation (First Deed of Variation) dated 30 June 2008. That Deed was not produced to the Land Court.
- [43]On 24 July 2008, by a court order, the assets of Parmalat were transferred to another Parmalat company. On 31 July 2008, the Parmalat contract was further varied by another Deed of Variation (Second Deed of Variation). One effect of the second Deed of Variation was to increase that part of the purchase price payable at settlement, and provide that the unpaid balance be paid a year later. Another was to give the vendor the benefit of reports, development applications and approvals, if the contract were terminated. There were also changes to other times for events identified in the contract.
- [44]There was evidence, accepted by the Land Court, that steps were taken with a view to making a development application, including the holding of a pre-lodgement meeting, and the preparation of a development application. The evidence suggests that no development application was made. It therefore seems appropriate to refer to the development proposal by the purchaser for the purposes of the provisions of the Parmalat contract dealing with the development application as the Parmalat development proposal.
- [45]By 3 December 2008, the parties to these proceedings had become aware that the parties to the Parmalat contract had agreed to rescind it. The rescission was effected by a Deed (Deed of Rescission) dated 19 December 2008.
- [46]The appellants submitted that the Parmalat contract was akin to an option to purchase, because it “tied up the land” for a period of about two years, and contained terms beneficial to the purchaser, enabling the purchaser “in its absolute discretion” to determine whether the conditions were satisfied. Moreover, it (initially) made provision for not insignificant annual payments for four years after the contract date.
- [47]Whatever their effect might otherwise be on the use of this contract as evidence of the value of land, the post-settlement payments do not have the effect of making it “akin to an option to purchase”. They may therefore be disregarded in the context of this submission.
- [48]The conditions to which the Parmalat contract was subject do not alter the fact that the contract was a binding contract. Indeed, they carried with them certain obligations binding on the purchaser. For example, the purchaser was required to make the development application, and pursue it diligently. Even the power of the purchaser to bring the contract to an end in certain circumstances “in its absolute discretion” is likely to have been subject to some constraint.[5]
- [49]For many years there has been some debate whether an option to purchase property should be characterised as a conditional contract, or as an offer which, by contract, is irrevocable.[6] Nevertheless, accepting the characterisation of an option as a conditional contract, the obligations to which reference has been made show that there are significant differences between a contract which merely confers an option to purchase land on stated terms, and a conditional contract like the Parmalat contract.
- [50]The parties made reference to authorities dealing with the question whether an option might provide evidence of the value of land. In Stanfield v Commissioner of Main Roads,[7] the Land Court excluded options to purchase land from the evidence considered in determining the value of the land, likening them to offers. In Barns v Director-General, Department of Transport[8], this Court observed that options to purchase do not have the same evidentiary value as completed sales, and have long been regarded as little better than offers, citing Stanfield. Nevertheless, the parties having agreed that a contract which included options provided evidence of the value of land, the Court accepted the transaction as providing such evidence.
- [51]In Heavey Lex No 64 Pty Ltd v Chief Executive, Department of Transport[9], the Land Court chose not to place “any useful reliance” on a transaction referred to as an “option or contact”. However, it is clear that its reasons for doing so related to the “casual and uninformed approach” particularly of the purchaser, who apparently related the price to land values in Sicily, without recourse to independent professional advice in Australia. On appeal,[10] this Court observed that a conditional contract, not without some similarity to the Parmalat contract, also had similarities to an option to purchase. The Court was not deciding whether such a contract would provide evidence of value. It was concerned with whether an offer to enter into such a contract would provide evidence of value; and in doing so noted that there is a body of authority supporting the proposition that a genuine offer to purchase may be used for this purpose.[11] The Court did not express a view that the character of an option is such that it is not admissible as evidence of the value of land; rather, its reference to a body of authority supporting the proposition that a genuine offer to purchase provides such evidence, would suggest the contrary. Otherwise, no case was cited dealing with the question whether a conditional contract, such as the Parmalat contract, might provide evidence of this kind.
- [52]Whatever may be the state of the law relating to the admissibility of evidence of offers relating to the purchase or sale of land, it has not been established that evidence of a conditional contract such as the Parmalat contract may not, as a matter of law, be relied upon to determine the value of land. There may have been reason to argue that the nature of the condition removed any risk associated with obtaining a development approval, and for that reason the Parmalat contract was of little or no assistance in determining the value of the land (a matter dealt with in the reasons for judgment of the Land Court); but that was not the argument advanced in this Court.
- [53]The appellants contend that the Land Court erred in applying a proposition stated in Freestone v Parramatta City Council[12] that the rescission of a contract is not a reason for the contract not to be used as evidence of market value. It was submitted that the case did not establish a principle of general application, and that it is distinguishable from the present case. However, as is submitted on behalf of the Council, there is other authority for that proposition. In Yates Property Corporation Pty Ltd v Darling Harbour Authority[13], Cripps J said:-
“I do not think that the transaction must be rejected as a matter of law, because the sale was not completed. However, the circumstance that it was not completed is, undoubtedly, a circumstance that must be taken into account.”
- [54]Where parties have entered into a binding contract, which has subsequently been terminated before completion, there is less reason to exclude that contract from consideration as evidence of value, than there is in the case of an unaccepted offer, or an option agreement. There is no reason to think that such a contract must, as a matter of law, be excluded from consideration as evidence of value, by reason of the fact that it was terminated prior to completion.
- [55]It was not submitted that paucity of evidence about the circumstances surrounding the Parmalat contract meant that as a matter of law, it was not admissible for the purpose of determining the value of the land.
- [56]It follows that the appellants have not demonstrated that the learned President erred in law by receiving into evidence, and taking into account, the Parmalat contract for the purpose of determining the value of the land. It remains to consider whether the appellants have demonstrated factual or discretionary error by the Land Court in relation to the Parmalat contract.
- [57]At this point, it is convenient to note the learned President’s consideration of the Parmalat contract. Her Honour noted that this contract was regarded by Mr Johnston as the prime indication of value in the vicinity of the land. She also noted some differences between the land the subject of the Parmalat contract, and the pre-resumption parcel. She characterised the Parmalat contract as a binding contract, though subject to conditions. Her Honour noted that the contract had been terminated, but as has been indicated, did not regard this as a reason to exclude it from consideration. She found the contract to be a contract “negotiated between two commercial entities, each of which, the evidence indicated had obtained independent valuation advice”. She also noted the absence of evidence of the circumstances surrounding the rescission of the contract. Her Honour noted that the contract was formed some months after the present resumption.
- [58]The role which the Parmalat sale played directly in the Land Court’s determination of value is apparent from the learned President’s conclusions relating to the sales evidence. Her Honour considered that the sales of the land at 144 Montague Road, and at 512 Wickham Street, were “very relevant to the valuations”, though she identified some differences between the land at 144 Montague Road and the pre-resumption parcel. In her analysis, her Honour placed greatest reliance on the sale of the property at 512 Wickham Street. The sale of land at 56 Edmonstone Road was considered to be less relevant than both these sales, because of its location. Her Honour considered that the Parmalat contract should be taken into account, though she recognised the site was much larger than the pre-resumption parcel, and that its location was inferior (lacking river frontage). She also considered the Newstead Circle sale to be relevant.
- [59]It should also noted that the learned President’s reasoning appears to commence with a consideration of the rate per square metre of land adopted by Mr Johnston. This might suggest some additional indirect reliance on the Parmalat sale. However, the rate adopted by her Honour did not reflect an arithmetic adjustment of Mr Johnston’s rate, derived from the difference in the plot ratios. The reasons for judgment indicate that Mr Johnston’s rate was seen as too low, and that the rate adopted by the Land Court was derived from the sales discussed in the final part of the reasons.
- [60]It has not been suggested that any of the learned President’s factual findings in relation to the Parmalat contract, insofar as they might be relevant to the determination of the value of the resumed land, are erroneous. On analysis, it would seem that the appellants’ criticisms of the use by the Land Court of this sale relate to discretionary error. Thus reference was made to the confidentiality clause in the Parmalat contract, and the absence of evidence of discussions between the valuers and the parties to the contract, relevant to what weight might be given to it. Reference was also made to the Deeds of Variation, and the absence of evidence of the terms of the First Deed of Variation, and the absence of explanation of the changes made by the Second Deed of Variation. Some of the submissions depended upon the drawing of an analogy between the Parmalat contract, and an offer to sell or purchase land, as has been mentioned. The rescission of this contract was also relied upon.
- [61]The lack of information about the circumstances surrounding the Parmalat contract provides a basis for treating it with caution. For example, it would be difficult to prefer it, as evidence of value of the land, to another sale which the valuers were able to investigate fully, with the result that they were satisfied that it reflected market value. Similarly, the rescission of the contract may possibly provide a basis for treating it with caution. It is conceivable that the circumstances of the rescission might be relevant to the question whether the original contract reflected market value. In the absence of evidence, it would be speculative to reach that conclusion; though again, it suggests the need for some caution in relying on the Parmalat sale. No positive attempt was made to show that the Second Deed of Variation demonstrated that the original contract did not reflect market value. An examination of its terms suggests that the changes reflect not unusual adjustments to a contractual regime which remains in force over a relatively lengthy period. Some of the changes appear to be of benefit to the vendor.
- [62]The submissions of the appellants do not seek to specify the nature of the discretionary error which they assert. The reasons for judgment of the Land Court, although they indicate that the Parmalat sale was treated as relevant, also indicate that it played a limited role in the determination of value. This is apparent from the ranking applied by the learned President to the evidence of value which she considered to be relevant. As has been indicated, greatest reliance was placed on the Wickham Street sale. There is quite a significant difference between the rate per square metre derived from the Parmalat sale, and that adopted for the land. A number of differences between the Parmalat site and the pre-resumption parcel were specifically recognised. None of this suggests discretionary error.
- [63]The appellants have failed to establish that the Land Court committed discretionary, factual, or legal error, in its reliance on the Parmalat contract.
GFA error (valuation methodology)
- [64]Mr Johnston’s assessment of the value of the land was derived by reference to a rate per square metre of land area. Mr Robertson’s valuation relied on a rate per square metre of GFA. The Land Court considered that, because there was uncertainty about the development potential of the land, an approach based on a rate per square metre of land area would provide a more reliable guide to the value of the land.
- [65]The appellants criticise the Land Court’s reasons on two bases. The first is that the reasons ignore the Capulet approval. The second is that, for land which has the potential for commercial development, the return from the developed land is related to GFA, and the return determines the value of the land.
- [66]The reasons for judgment include the following:-
“In my opinion the prudent purchaser would consider that a rate per square metre of GFA should not be used for this valuation. One of the central issues in dispute in these proceedings concerns the development potential of the subject land. That reflects the uncertainty that can attach to the development approval process. Similarly where there is no approval in place for a sale property as at the date of sale, there is uncertainty as to the development potential of the site.”
- [67]The appellants rely on that part of the passage just quoted which refers to there being “no approval in place for a sale property” as demonstrating that the Land Court overlooked the Capulet approval, when deciding to rely on rates per square metre of land area, rather than rates per square metre of GFA. It should be noted that her Honour was not referring to the pre-resumption parcel. Moreover, the development the subject of the Capulet approval had a GFA of 17,560 square metres. A difficulty with the appellants’ submission is that the Land Court did not value the land by reference to the development potential demonstrated by the Capulet approval. The learned President assumed a potential development with a GFA of approximately 44,000 square metres, obviously significantly greater than the development the subject of the Capulet approval. There was no development approval for a development with a GFA of 44,000 square metres on the land. In those circumstances, there was no error on the part of the Land Court in concluding that there was uncertainty about the development potential of the land. The Capulet approval did not demonstrate the contrary. There was no error in relying on the considerations identified by her Honour for a decision to value the land by reference to rates per square metre of land area.
- [68]While it may be accepted that the GFA of a development which is achievable on a parcel of land is an important factor in determining its value, related to returns resulting from the development, its utility will be affected by the level of certainty attaching to an approval of such a development. There was no certainty about the development potential of the land. In those circumstances, there was no error in determining that it was more appropriate to value the land by reference to a rate per square metre of land area, than by reference to GFA.
Sale of retained land
- [69]This land was sold in October 2007 for $9 million. It was common ground that that represented the value of the retained land, after the resumption. However, it was relied upon by Mr Robertson as one of his primary sales for the determination of the value of the pre-resumption parcel. The appellants submit that the Land Court erred “in not placing a real weight” on this sale.
- [70]The learned President appeared to include this in the “remaining sales of the valuers”, which she said were “of less relevance”.
- [71]The sale was analysed as reflecting a rate of $2,830 per m² of land area. The sale no doubt reflected the effect of the resumption, and the anticipated effect of the proposed bridge. The learned President considered that the bridge would both result in some injurious affection, and some enhancement, of the retained land; and that in the absence of market evidence to assist in quantifying the allowances to be made for those factors, there was difficulty in using the sale to establish the value of the land prior to the resumption. Moreover, her Honour considered that the adjustments for these factors suggested by Mr Robertson resulted in a rate per square metre substantially higher than that shown by other sales evidence.
- [72]The Land Court did not err in holding that the value of the retained land would be affected by the proposed bridge, and that some of the effects would be advantageous to its value, and others would have a detrimental effect. It should also be noted that, before the resumption, the land was adversely affected by the railway line to the east, though not to the same degree as the retained land would be affected by the Hale Street Bridge. The Land Court did not err in observing that Mr Robertson’s adjustments were based on professional judgment, without the support of market evidence. Nor was there any error in holding that, with Mr Robertson’s adjustments, the derived rate per square metre was substantially higher than the rates per square metre derived from other sales (whether or not the Parmalat contract is taken into account). The weight, if any, to be given to the sale of the retained land involved the making of a discretionary judgment by the Land Court. It has not been demonstrated that the Land Court erred in making that judgment.
Building height
- [73]The Land Court concluded that a prudent purchaser would expect approval for a development averaging 10 storeys across the land. As has been mentioned, 10 storeys was an acceptable solution identified in the WEWDLP Code, for the purpose of maintaining certain views. The learned President did not accept that a prudent purchaser would consider it likely that a development 12 storeys in height would be approved. In part that was based upon a consideration of the Capulet approval, which her Honour considered to demonstrate the concern of the Council about the height of riverside development. In part, the conclusion was based upon Kurilpa 1, which proposed a maximum building height of 9 storeys for the site. In part, the conclusion was based on other conclusions of the learned President relating to the bulk and scale of development likely to be approved by the Council.
- [74]In her consideration of the planning instruments which might affect development on the site, the learned President took into account Kurilpa 1, which as has been mentioned, was a draft structure plan for the area which had been in circulation for some months prior to the resumption. She had, however, excluded consideration of Kurilpa 2, published some three or four months after the resumption. Her Honour excluded consideration of this document on the basis that evidence of events occurring after the date at which value is to be assessed is generally not relevant, unless the evidence confirms a foresight held by the prudent purchaser at the date of resumption. Her Honour accepted that it was likely that at that date, the prudent purchaser would have been informed that Kurilpa 1 was under review; but there was no evidence available as to the content of the review, and in particular as to whether it was proposed to raise the indicated height for development on land in the vicinity of the parent parcel to 12 storeys.
- [75]The appellants challenge the conclusion of the Land Court on this issue on a number of grounds. The first is that it was unduly restrictive to require evidence that by the relevant date, there was a specific proposal to increase the indicated height of buildings on the land to 12 storeys, under the planning controls. The second is that it was unreasonable to insist that there be evidence available to the prudent purchaser at the date of resumption of the detail of potential or probable changes to a planning instrument, as it is the practice of local governments to maintain confidentiality in relation to such matters. The third is that there was evidence, not referred to by the Land Court in this context, from an experienced town planner that an increase in the indicated height from 10 storeys to 12 storeys “would certainly be well within the realms of reasonable expectations”; and that that was sufficient to ground a relevant foresight. Reference was also made to the 2007 Smart Cities Report and the 2009 Renewal Strategy (the subject of the application for leave to adduce further evidence on appeal).
- [76]This raises for consideration the circumstances in which the Land Court was entitled to take into account events occurring after the resumption, which might affect the value of the land taken. There are two decisions at what is the final appellate level in the Courts of this State, relevant to this question.
- [77]Thorpe v Brisbane City Council[14] dealt with the resumption of a portion of a parcel of land, including part of a wooden shop building. More than two and a half years after the resumption, the Council offered to move the shop building so that it remained wholly within the land retained by the owner. In the Full Court, Gibbs J (as he then was), with whom the other members of the Court agreed, adopted a proposition from Minister for the Army v Parbury Henty & Co[15] that:-
“The amount of compensation, being a matter of assessment, can, like damages, be calculated in the light of any subsequent facts to the extent to which they throw light upon the items of value which can properly be taken into account in the calculation, having regard to the circumstances existing at the date of the acquisition.”[16]
- [78]His Honour then stated that at the date of the resumption, it was reasonable to expect that the Council would offer to make the building available to the land owner, because the purpose of the resumption was to widen a road, and the building would be of no use to the Council.
- [79]CMB No 1 Pty Ltd v Cairns City Council[17] was concerned with compensation for injurious affection consequent upon an amendment to a planning scheme. The legislation provided that the compensation was to be an amount “equal to the difference between the market value of the land affected by the change in the planning scheme immediately after the time of coming into operation of the provision of the planning scheme by virtue of the operation whereof the claim for compensation arose and what would have been the market value of (that land) if the provision had not come into operation.”
- [80]Land which had been previously zoned for a shopping centre was, on the change to the planning scheme, zoned rural. That change was the result of an accident or error on the part of the Council. Within three months, the Council took steps to rectify the error, those steps being completed within approximately five months of the change of the scheme. In the Planning and Environment Court, compensation was assessed on the basis that, immediately after the change, some small risk affected the value of the land. The Court appeared to have accepted the considerations giving rise to the risk which were identified by a valuer called on behalf of the land owner. They included the possibility of conditions being imposed on development, a possible change to planning policies before the error was rectified, and the possibility of some unforeseen circumstances which could delay that process.
- [81]On appeal, the award of compensation was overturned. McPherson JA did not “…consider it possible, in determining compensation for injurious affection, in effect to insulate the assessment of market value from the impact of subsequent events …”[18] His Honour held that, as in Thorpe, “regard may be had to (subsequent events) to show that immediately after the date of the injurious affection, the land had a market value (which equated to its market value immediately before the change in the scheme)”.[19] His Honour also cited the statement of Harman LJ in Curwen v James[20] that “the court should never speculate where it knows”.
- [82]Williams J (as his Honour then was) in addition to adopting the statement from Curwen and the decision in Thorpe, repeated the following statement from Bwllfa and Merthyr Dare Steam Collieries (1891) v Pontypridd Waterworks Company[21]:-
“If the question goes to arbitration, the arbitrator’s duty is to determine the amount of compensation payable. In order to enable him to come to a just and true conclusion it is his duty, I think, to avail himself of all information at hand at the time of making his award which may be laid before him. Why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With the light before him, why should he shut his eyes and grope in the dark?”[22]
- [83]In reaching his conclusion, McPherson JA assimilated the question of assessment of compensation at a particular point in time with “other purposes of the law, such as assessing compensation for reinstatement, or damages in tort.”[23]
- [84]It is difficult to see that the decision in CMB, drawing as it does on Thorpe, and relating a determination of compensation for injurious affection to other assessments of compensation, should not be of great weight in determining the relevance of post-resumption events to the assessment of compensation payable under the AL Act.
- [85]The extent of foresight required has not been discussed in the cases which have been referred to. In CMB, McPherson JA referred to the “possibility that a future rezoning would occur, and the strong likelihood, approaching near certainty, that the Council would ensure that it did”.[24] Williams J spoke of the subsequent facts confirming a foresight, rather than proving a hindsight. In Thorpe, Gibbs J regarded the Council’s offer (made more than two and a half years later) as something “which was reasonable to expect”. The strength of the basis of that expectation may be questioned.
- [86]Curwen was concerned with the prospect of the remarriage of a widow. The trial judge considered there to be a real likelihood of this occurring, and accordingly made a “real diminution” in the award on this account. The widow having remarried by the time the appeal was heard, the award was further diminished. While it might be said that there was a probability of remarriage at the time of trial, the time at which that might occur was then quite uncertain. Nevertheless, the actual time at which the widow was remarried was taken into account in the assessment in the Court of Appeal.
- [87]In the present case, no case has been cited which has stated that any particular level of likelihood is required to establish foresight of an event that occurs subsequent to the date at which compensation is to be assessed.
- [88]The Land Court found that it was likely that a prudent purchaser would have been informed at the date of resumption that Kurilpa 1 was under review. There was no direct evidence of the state of that review at that time. However, the Smart Cities Report had been published in May 2007. Contributors to the report included officers of the Council. It recorded a fact not likely to have escaped the attention of the prudent purchaser of the land, namely, that much of the existing CBD had been built out by residential towers. It also recorded that the Council was considering permitting heights up to 20 levels in the adjoining precincts of Fortitude Valley and South Brisbane. Taken together, these facts made it foreseeable in August 2007 that the building heights in the WEWDLP Code and Kurilpa 1 would be increased. That foresight is confirmed by the obvious development pressures existing in the vicinity of the CBD; and by the fact that planning for South Brisbane was in a state of transition, highlighted by the change in CityPlan subsequent to the Capulet approval. Kurilpa 2 confirms what was a foresight at the date of resumption, namely, that there would be an increase in building heights for the site in relevant planning instruments.
- [89]It follows that the application of Thorpe and CMB to the facts of this case would mean that it was erroneous to exclude Kurilpa 2 from consideration, and to assess the development potential of the site, and ultimately to determine compensation, on the basis that building heights would, on average, not exceed 10 storeys.
- [90]For the Council, it is submitted that the Smart Cities Report does not assist the appellants, because the Land Court found that it was not “directly relevant to ascertaining the highest and best use of the subject land as at the date of resumption”; and that finding was not challenged. While it may be accepted that the Smart Cities Report is a “high level document”, and not itself directly relevant to the planning controls affecting the land at the date of resumption, nevertheless it contained published information relevant to the question whether the heights shown in planning documents for development of the land would increase.
- [91]The Council submits that the development height adopted by the Land Court was the result of a number of considerations, and not simply the acceptable solution for height found in the WEWDLP Code. That submission is correct. However, it is also clear that the learned President considered that the change in the WEWDLP Code after the Capulet approval to increase the height to 10 storeys was a significant change which would affect the reasonable anticipation of the prudent purchaser. Had the further change in the Council’s attitude to building heights which had become apparent in Kurilpa 2 been taken into account, it is difficult to think that the Land Court would have concluded that the prudent purchaser would assume that development on the land would be limited to an average height of 10 storeys.
- [92]It follows that compensation should have been assessed on the basis of the case presented on behalf of Mio Art, namely, that the prudent purchaser would consider that a development with a height of 12 storeys would be accepted by the Council. Given the attention paid to this matter in the reasons of the Land Court, it seems clear that the application of sales evidence would have been affected by any significant change to that Court’s finding about the development potential of the land.
Admission of evidence of 2009 Renewal Strategy
- [93]Whether this document may be admitted into evidence on this appeal under s 56 of the LC Act depends upon whether its admission is necessary to avoid grave injustice. The effect of the document was to propose a maximum building height of 30 storeys for development on the land.
- [94]If the view which has been expressed above, namely, that Mio Art’s contention that development potential of the land should have been assessed by reference to a height of 12 storeys rather than 10 storeys, is correct, then it is difficult to see how grave injustice would result from the exclusion of the 2009 Renewal Strategy. Accordingly, (subject to one consideration referred to later in these reasons) a condition for its admission under s 56 of the LC Act has not been established.
Parmalat contract and development potential
- [95]The appellants submit that the Parmalat contract provides no evidence of the development potential of the land relevant to the assessment of compensation because it was not within the range of information that would be available to the hypothetical prudent purchaser; it was “tainted by the mystery surrounding the contract”; and the proposed development took the Hale Street Bridge project into account.
- [96]The Parmalat contract includes only a very generalised description of a proposed development. It is apparent from the appellants’ submissions that they extend to the development identified in documents other than the contract, and relating to the Parmalat development application.
- [97]It was common ground that the knowledge of the hypothetical prudent purchaser and vendor is limited to knowledge that would ordinarily be available to such parties at the date at which compensation is to be assessed.[25]
- [98]It is convenient to note the role played by the Parmalat development proposal in the Land Court’s determination of compensation. Having determined that the Parmalat contract was relevant to the sale of the land, the learned President concluded that evidence of the Parmalat development proposal was “relevant to the matters in issue”. The plot ratio for the development proposal had been included in a table prepared by Mr Ovenden, a planner called by the Council, to demonstrate the relationship between plot ratios and site areas in South Brisbane, leading to a conclusion, adopted by her Honour, that the intensity of developments approved in the vicinity decreases with the size of the site. Having taken into account a number of planning considerations, the learned President concluded that the prudent purchaser would expect approval of a development on the land with a GFA of approximately 44,000 square metres, reflecting a plot ratio of 4.98:1. Her Honour then found this to be not inconsistent with the Parmalat proposal, leaving the prudent purchaser to conclude that a plot ratio of five (a little greater than that shown by the Parmalat proposal) was achievable. Elsewhere, her Honour said that because the Parmalat site was twice the size of the land, and because the proposal did not lead to a development approval, she did not consider that too much weight could be placed upon it.
- [99]To some extent, the appellant’s submissions are based on their submissions that the Land Court erred in taking the Parmalat contract into account as evidence of the value of the land. Those submissions have been rejected earlier in these reasons.
- [100]The submissions of the appellants do not in terms rely upon the fact that these events occurred some months after the resumption date, a point noted in the written submissions of the Council, and not responded to in the appellants’ submissions in reply.
- [101]The appellants’ submissions do not explain why it was said that the Parmalat development proposal was not within the range of information available to the hypothetical prudent purchaser. The Land Court found that the development proposal had been prepared during 2007, with pre-lodgment documentation lodged in November 2007, which approximates the date of the Parmalat contract. The evidence included press reports contemporaneous with the Parmalat contract describing the proposed development, including a reference to a net lettable area of 60,000 square metres, which does not appear inconsistent with the GFA of 68,060 square metres for the Parmalat proposal, referred to in the Land Court’s reasons for judgment. The submissions of the appellants did not point to any evidence to demonstrate that at the time of the Parmalat contract, a member of the public would not be able to obtain some information about the Parmalat proposal, or that the information referred to in the Land Court’s reasons was materially different to what a member of the public could have found out.
- [102]The appellants’ submission that the Parmalat proposal was “tainted by the mystery surrounding the contract” did not appear to raise any matter not raised in respect of the Parmalat sale. This submission does not lead to a conclusion that the Land Court erred in its reliance of the Parmalat proposal.
- [103]It was common ground that the Parmalat proposal appeared to contemplate the construction of the Hale Street Bridge. However, that fact, by itself, does not demonstrate that the Land Court erred in taking the Parmalat proposal into account. The appellants have not attempted to demonstrate that the Hale Steet Bridge materially affected the development potential of the Parmalat land.
- [104]The appellants have failed to demonstrate the Land Court erred by relying on the Parmalat proposal.
Arithmetic error
- [105]It will be recalled that the Land Court concluded that a prudent purchaser would consider that the Council proposal more closely resembled the type of development that would receive development approval, than the Mio Art proposal or the Greener proposal; but that such a purchaser would expect approval for a development averaging 10 storeys in height across the site; and that some further adjustment was required in relation to space between buildings. That meant that an adjustment was required to the GFA for the Council proposal. The total adjustment was an addition of 10,000 square metres GFA, of which 6,000 square metres related to the increase in height above what appeared in the Council proposal.
- [106]The 6,000 square metres adjustment to the additional height was based on evidence from Mr McNaughton. It will be recalled that the Mio Art proposal was for a development 12 storeys in height, comprising three buildings. Mr McNaughton’s evidence was that the difference in GFA between the Mio Art proposal and the Council proposal, to the extent that it was attributable to the different heights of riverfront buildings, was about 10,000 square metres. The learned President used this as the basis for a calculation, leading her to conclude that an increase from six storeys to 10 storeys would result in an increase of 6,000 square metres GFA.
- [107]For MioArt, it is submitted that, when Mr McNaughton’s evidence is properly understood, the 10,000 square metre differential relates to the difference between a development with a height of six storeys along the riverfront, and a development with a height of 10 storeys in that location. Senior Counsel for MioArt points to a number of matters to demonstrate this
- [108]The first is that the 10,000 square metres differential related to what was described by Mr McNaughton as “Building height adjoining River-park”; but he has another differential of 11,000 square metres, related to “Overall building height”. The Mio Art proposal had a height of 12 storeys across the site; whereas the Council proposal had a height varying between six and 10 storeys. However the two differentials were cumulative. It is therefore by no means clear that the 10,000 square metre differential related to a height of 12 storeys adjacent to the river.
- [109]He next makes reference to specific features of the Council proposal. In that proposal, Building 1 is adjacent to the river. So is building 4. Each has a height of six storeys. From figures provided by Mr O'Brien, the GFA of each of these buildings has been calculated respectively at 4,945 square metres and 7,715 square metres. It is immediately apparent that an increase in height from six to 12 storeys of these two buildings is likely to be substantially more than 10,000 square metres; and indeed to exceed 12,000 square metres. A calculation based on the average floor levels of these two buildings shows that an increase in height from six to 10 storeys would mean an increase in GFA of about 8,440 square metres. It should be noted that a similar result is achieved if the GFA were increased by an amount derived by multiplying the GFA at level 6 of each of these buildings by four.
- [110]The Mio Art proposal provided for three buildings. Building 1 was adjacent to the river, as was part of Building 3. The GFA for the first six storeys of Building 3 is 17,435 square metres. These figures make it unlikely that 10,000 square metres of GFA is attributable to the difference between six storeys and 12 storeys for that part of the development which is adjacent to the river.
- [111]These considerations demonstrate that the decision of the Land Court, in making an adjustment for a development averaging 10 storeys across the site, incorrectly apprehended the effect of Mr McNaughton’s evidence. Given the way in which the evidence was expressed, that is not particularly surprising. However, the error having been identified, it is appropriate to recognise it.
- [112]The appellants further submit that the additional adjustment to GFA, made on the basis that the development proposal advanced on behalf of the Council was unduly conservative in relation to the spaces between buildings, is likely to be too low, because of the error in appreciating the true effect of Mr McNaughton’s evidence.
- [113]In principle the submission would appear to be correct. However its significance may not be great. The resultant GFA determined by the Land Court was 44,000 square metres, the adjustment because of the conservative approach taken in Mr O'Brien’s design reflecting an increase of 10 per cent above what it would otherwise have been. The error in understanding Mr McNaughton’s evidence suggests an addition of approximately 2,500 square metres to the GFA. A further adjustment of 10 per cent would increase the GFA by a further 250 square metres.
- [114]For reasons which will become apparent, it is not necessary to reach a final conclusion about this matter at this point.
Parmalat proposal and GFA
- [115]Mr Overton gave consideration to plot ratio with reference to a number of sites in South Brisbane. He produced a table which was reproduced in the reasons for judgment of the Land Court. Ten sites were referred to in the table. Eight of the sites have an area of less than 2,000 square metres; one had an area of 3,557 square metres (144 Montague Road); and the Parmalat site had an area of 15,813 square metres. For the sites with an area of less than 2,000 squares metres, plot ratios varied between 5.13 and 9.9; for the Parmalat site the plot ratio was 4.39; and for 144 Montague Road, the plot ratio was 4.11. Mr Overton expressed the view that the table demonstrated a pattern for plot ratio, showing that, in general terms, it decreased as allotment size increased. That view was accepted by the learned President. Having come to a conclusion about the GFA of a potential development of the site of 44,000 square metres GFA, she noted the resultant plot ratio would be 4.98:1. Her Honour observed that that was not inconsistent with the development proposal for the Parmalat land. Her Honour considered that, because the site was substantially smaller than the Parmalat site, the Parmalat plot ratio provided support for her conclusion.
- [116]The appellants criticise the reasoning of the Land Court because that reasoning is said to rely on “inadmissible material”, being the Parmalat proposal, evidence of which it was submitted was “entitled to no weight”. The reasons for those submissions appear to be related to the objections to reliance on the Parmalat contract and the Parmalat development proposal, referred to previously.
- [117]As was observed in the course of argument, there are considerable difficulties with the table produced by Mr Overton. It demonstrates (whether or not the Parmalat development proposal is considered) a wide range of plot ratios. While the lowest of those plot ratios relates to a site with an area in excess of 2,000 square metres, there was nevertheless considerable variability in the plot ratios for those with an area less than 2,000 square metres. Moreover, the Parmalat contract gave the vendor some control about some of the development to be carried out on that site. It also identified a particular prospective major tenant. It is by no means clear that the Parmalat development proposal was unaffected by these considerations. For these reasons, it can only be said that the table provided very limited guidance for an appropriate plot ratio for development on the subject site.
- [118]While reliance on Mr Overton’s opinion as to a trend in plot ratios related to site areas may be the subject of criticism, it is necessary to recognise that the learned President’s view about the extent of development achievable on this site was the result of a range of considerations, and in particular the development principles in the WEWDLP and the WEWDLP Code relating to building heights, the provision of riverside parks and access to them, and building bulk, scale and density of development. The reasons record the view of the learned President that “not … too much weight” could be placed on the Parmalat proposal. The appellants submit nevertheless that her Honour did place considerable weight on the proposal. As has been indicated, other significant considerations were clearly taken into account. Both the trend referred to by Mr Overton, and the plot ratio resulting from the Parmalat development, were not of great significance in the analysis. Rather they appear simply to provide a check for the assessed development potential.
- [119]In any event, the criticism is somewhat diluted if the arithmetic error is taken into account, and the development potential of the site is determined by reference to a height of 12 storeys rather than 10. Of itself, this criticism does not seem to warrant any additional variation to the conclusions reached in the Land Court.
- [120]At this point, it is convenient to note a further basis on which the appellants contended that the 2009 Renewal Strategy should be received into evidence. As has been referred to, that document included a table relating to maximum building height and site cover, for lots less than 5000 square metres in area, the maximum building height being 15 storeys, and for sites larger than that, 30 storeys. In each case, site cover is said to be dependent upon site planning outcomes. The appellants submitted that the document demonstrated that Mr Ovenden’s evidence about a trend was erroneous.
- [121]In isolation, the greater building height permitted on sites larger than 5,000 square metres would suggest a greater GFA and plot ratio for such sites. However, it is difficult to attribute much significance to that consideration. There is some uncertainty inherent in the statement that site cover is to be dependent upon site planning outcomes. For this reason, and having regard to the limited role of Mr Ovenden’s evidence about trends in plot ratios, it cannot be said that the admission of evidence of the 2009 Renewal Strategy is necessary to avoid grave injustice.
Liberal estimate principle
- [122]This principle requires that, in determining the compensation to be paid for resumed land, doubts are to be resolved in favour of a more liberal estimate.[26]
- [123]This principle does not mean that a court determining compensation must necessarily favour the evidence advanced on behalf of the claimant. As was observed by Bignold J in Peter Croke Holdings Pty Ltd v Roads & Traffic Authority of NSW[27] the principle is not to be “resorted to by the Court as a substitute for the undertaking of its duty to adjudicate on disputed issues of fact (including of course, conflicting expert opinion)”.
- [124]Although generally favouring the approach of the Council, the learned President made some adjustments to reflect a greater development potential for the land than the Council contended for. The reasons do not suggest that her Honour was left in any doubt which called for the application of the principle, nor that, having regard to the view which she took of the evidence including the relevant planning instruments, her approach was ungenerous. There is no reason to think that the principle should have been applied to alter the assessment of compensation.
Further conduct of appeal
- [125]It will be apparent from these reasons that the appeal should be allowed. If the Court came to that conclusion, the parties asked for the opportunity to make submissions about the further conduct of the matter. It is proposed to give them the opportunity to do so, before disposing of the appeal.
P LYONS
JUSTICE OF THE SUPREME COURT
PA SMITH
PRESIDENT OF THE LAND COURT
WA ISDALE
MEMBER OF THE LAND COURT
Footnotes
[1] See Department of Natural Resources & Mines v Spender [2003] QLAC 86.
[2] See De Tournouer v Chief Executive, Department of Environment and Resource Management [2009] QCA 395 at [20].
[3] Citing Allesch v Maunz (2000) 203 CLR 172 at [23].
[4] Reliance is placed on Commonwealth v Reeve (1949) 78 CLR 410, 423; FCT v St Helens Farm ACT Pty Ltd (1981) 146 CLR 336, 381; Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19]; Norbis v Norbis (1986) 161 CLR 513, 518-519.
[5] See for example Godfrey Constructions Pty Ltd v Kanangra Park Pty Ltd (1972) 128 CLR 529, 540, 552-555; Pierce Bell Sales Pty Ltd v Frazer (1973) 130 CLR 575; and for a recent example, see Schenk v ACN 081 123 140 Pty Ltd [2002] NSWSC 123.
[6] See for example Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57, 75-78; see also David Deane & Associates Pty Ltd v Bonnyview Pty Ltd [2005] QCA 270 at [22]; the alternative views are identified in Traywinds Pty Ltd v Cooper [1989] 1 Qd R 222.
[7] (1968) 35 QCLLR 192, 200-201.
[8] (1997) 16 QLCR 101, at 119-121.
[9] (1999) 20 QLCR 296, 364-365.
[10] At [27]. This view was also taken in MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167, applied in Fick v Groves [2010] QSC 89. A different view was taken by the Court of Appeal in Western Australia in Auxil Pty Ltd v Terranova (2009) 260 ALR 164.
[11] Heavey Lex at [24]. This view was also taken in MMAL Rentals Pty Ltd v Bruning (2004) 63 NSWLR 167, applied in Fick v Groves [2010] QSC 89. A different view was taken by the Court of Appeal in Western Australia in Auxil Pty Ltd v Terranova (2009) 260 ALR 164.
[11]Heavey Lex at [24].
[12] (1974) 34 LGRA 35, 49.
[13] (1990) 70 LGRA 187, 211.
[14] [1966] Qd R 37.
[15] (1945) 70 CLR 459, 514.
[16] See Thorpe at 44-45.
[17] [1999] 1 Qd R 1.
[18] At p. 14.
[19] At P. 14.
[20] [1963] 1 WLR 748, 753.
[21] [1903] AC 426, 431.
[22] See CMB at 20.
[23] See CMB at p. 14.
[24] Page 11.
[25] See Hyam, The Law Affecting Valuation of Land in Australia (4th ed) pp. 502-504, and Jacobs, Law of Compulsory Land Acquisition (2nd ed) p. 299 [18.135]; and cases cited by both authors.
[26] See Commissioner of Succession Duties (SA) v Executor Trustee & Agency Co of SA Ltd (1947) 74 CLR 358, 374; Gregory v FCT (1971) 123 CLR 547, 565; Boland v Yates Property Corp Pty Ltd (1999) 74 ALJR 209, 279-280.
[27] (1998) 101 LGERA 30, 50, cited in Hyam at 316-317.