Findings
49Notwithstanding the very general and diversified sample reviewed in the Australian Beef report, Mr Jelbart concludes that an appropriate yield for the subject property, devoted to its highest and best use and managed, it must be assumed by a competent manager, would be 3%. In the absence of more reliable, directly comparable information and doing the best I can with the very limited evidence, I accept Mr Jelbart's conclusion that 3% is a reasonable yield under the circumstances. The calculated yield as shown in the Appendix is 5.75% indicating that the additional yield of 2.75% can be accepted as a reflection of Mr Parfett's skill and experience. On a proportionate basis, for the acquired land, this is $2640 per annum being 2.75% of $96,012. A beef fattening enterprise is a business and the requires active management with decisions, involving risks, having to be made on a regular basis, perhaps weekly, in an environment where profitability is governed to a very large extent by factors outside of Mr Parfett's control.
50Mr Jelbart considered that the appropriate capitalisation rate to obtain the capital value of lost income of $2640 per annum and therefore compensation payable to Mr Parfett, would be 7%. He noted the payback period for an investment capitalised at 7% was approximately 14 years. He made reference to "high-risk or intensive agriculture" and "an intensive agricultural operation being a broiler farm or piggery" where he proffered that a rate of return would be between 10 and 12% (transcript P 182).
51To assess special value it is necessary to address the question: What would the dispossessed owner, as a potential purchaser, be prepared to pay for the acquired land rather than not obtain it? Peter Croke Holdings Pty Ltd and Anors v Roads and Traffic Authority of NSW [1998] 101 LGERA at [38]. I am prepared to accept Mr Jelbart's opinion, as the first step in addressing the question, that a yield of 7% is appropriate as a starting point. However, I consider that notwithstanding Mr Parfett's experience in conducting the beef fattening enterprise on part of the property since 2003 and on the whole of the property since 2006, it would be reasonable for him to allow for income risk arising from issues beyond his control to which I have already referred. I consider that such an allowance would be 25% which when added to the yield of 7% becomes 8.75% which I adopt.
52The final part of the question that needs to be addressed is whether the projected income of $2640 per annum would be quantified by Mr Parfett , as a potential purchaser, by capitalising same at 8.75% or undertaking a present value calculation also using 8.75% over a shorter period; I consider that 20 years would be appropriate.
53Capitalisation produces a sum of $30,171 while the present value calculation produces $24,535.
54Mr Tomasetti drew my attention to decisions in Mir Bros Unit Constructions Pty Ltd v RTA [2006] NSWCA 314 and Beckers (supra) where claims for special value failed. However the facts in both of these cases were entirely different and, for that reason, were of no assistance. I also distinguish the facts in Peter Croke (supra) where a claim for special value was allowed.
55I have decided to adopt the sum of $30,171 as the special value to Mr Parfett of the acquired land. In doing so I have had regard to s 54(1) of the Just Terms Act. In addition, I have followed the orbiter dictum of Dixon J in Commissioner of Succession Duties (South Australia) and Executor Trustee and Agency Company of South Australia Limited and others [1947] 74 CLR 358 at 373:
I should like, however, to add for myself that there is some difference of purpose in valuing property from revenue cases and in compensation cases. In the second the purpose is to ensure that the person to be compensated is given a full money equivalent of his loss while in the first it is to ascertain what money value is plainly contained in the asset so as to afford a proper measure of liability to tax. While the difference cannot change the test of value, is not without effect upon a court's attitude in the application of the test. In the case of compensation doubts are resolved in favour of a more liberal estimate, in a revenue case, of a more conservative estimate.
56If I had been satisfied that the claim made for business disturbance for loss of profits under s 59(f) should have been dealt with under that section I would have awarded compensation in the same sum of $30,171.