THE legacy of Kingstream Steel continues to linger with the Supreme Court of Western Australia finding that Landcorp had significantly undervalued land that was to be compulsorily acquired for the ill-fated project north of Geraldton.
THE legacy of Kingstream Steel continues to linger with the Supreme Court of Western Australia finding that Landcorp had significantly undervalued land that was to be compulsorily acquired for the ill-fated project north of Geraldton.
Justice Christopher Pullin found that Landcorp should pay $3.2 million to the owner of 1,226 hectares of land intended for the Oakajee industrial estate earmarked to support the Kingstream Steel processing project and a new port.
The payout is well above the almost $1.5 million figure placed on the property by Landcorp during its defence of the case brought by Flotilla Nominees Pty Ltd, a corporate entity representing the interests of a consortium of partners from former Perth law firm Lavan & Walsh.
The case stems back to the 1997 resumption of coastal farmland for a 1,000-hectare industrial estate and about 2,000 hectares of buffer zone.
Flotilla has already received about $1.9 million in advance compensation based on an earlier offer and was also awarded a solatium of 10 per cent by the court last week.
However, the court finding fell short of the $4.8 million valuation it claimed.
Phillips Fox chairman of partners Dan Mossenson, whose family trust holds a stake in Flotilla, told WA Business News that the WA Government had originally offered $2.8 million but had later revised this offer down to $1.5 million.
Mr Mossenson said the decision had ramifications for the resumption process of land in the Oakajee area where at least one other landholder is disputing a compensation offer.
“It certainly settles the point as to whether, in compulsory acquisition compensation, you can take account of other transactions the resuming authority has made with other landholders in the area,” he said.
In his judgement Justice Pullin found that the land authority had failed to take into account the sale price of a nearby property sold by the Kruize family under the same resumption process.
He said there was no reason why prices obtained during the resumption process could not be taken into account if the transaction was done at arm’s length.
“I have found that there is no reason why the Kruize sale, negotiated as it was between the defendant and the Kruizes with the assistance of valuers, should not be safely regarded as by far the most appropriate comparable sale,” Justice Pullin said.
The judgement also dismissed the argument of Flotilla’s valuer that the land, prior to the 1997 resumption announcement, was subdivisible and that lots would be sold at a rate of 40 a year, agreeing instead with the defence that only 13 lots per year would be saleable under a subdivision.
A Landcorp spokesman said the authority was taking advice on an appeal but no decision had been made.
