Buckler & Anor v Department of Natural Resources and Water [2011] QLC 7

1 LAND COURT OF QUEENSLAND CITATION: Buckler & Anor v Department of Natural Resources and Water [2011] QLC 7 PARTIES: Patricia Dawn Buckler and Patrick Buckler (appellants) v. Chief Executive, Department of Natural Resources and Water (respondent) FILES NO: AV2007/0858 and AV2008/0988 DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual valuations of land under the Valuation of Land Act 1944 DELIVERED ON: 4 March 2011 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mr PA Smith ORDER: 1. The appeals are allowed. 2. The unimproved value of the subject land as at 1 October 2006 is fixed in the sum of Thirty One Million Three Hundred Thousand Dollars ($31,300,000). 3. The unimproved value of the subject land as at 1 October 2007 is fixed in the sum of Twenty-six Million Nine Hundred Thousand Dollars ($26,900,000). CATCHWORDS: VALUATION - use of sales - which sales comparable - remote area sales - inter-government sales - option agreements VALUATION - methodology - site value for developable area - deductions - costs of fill and holding charges TOWN PLANNING - preliminary development approval - risk - infrastructure charges - Priority Infrastructure Plan (PIP) - planning policies (golf courses) - Koala Conservation Plan -- 1 of 71 -- 2 PRACTICE AND PROCEDURE - grounds of appeal - restrictions imposed by such EVIDENCE - expert opinion evidence - reasoning process - basis - need for objective facts EVIDENCE - events after relevant date - permissible to use such to confirm a foresight Valuation of Land Act 1944 Integrated Planning Act 1997 APPEARANCES: Mr B Cronin for the appellants Mr S Fynes-Clinton for the respondent SOLICITORS: DLA Phillips Fox Lawyers for the appellants Legal Counsel, Legal Services, Department of Natural Resources and Water for the respondent -- 2 of 71 -- 3 Table of Contents Paragraph Page Background............................................................................................ 1 ........................... 4 The Hearing ........................................................................................... 8 ........................... 6 Relevant Legislative Provisions ........................................................... 12 ......................... 6 Presumption of Correctness of Valuation ........................................... 15 ......................... 7 Threshold Matter - Grounds of Appeal .............................................. 18 ......................... 8 Planning Law Issues.............................................................................. 29 ......................... 10 Respondent’s attack on Mr Ransom’s Planning Evidence ............... 34 ......................... 13 What was approved by the preliminary approval of May 2007 ....... 40 ......................... 17 Preliminary Approval - a red herring ................................................. 45 ......................... 19 The Gold Coast City Council’s golf course policy ............................. 49 ......................... 20 Priority infrastructure plan district park ........................................... 65 ......................... 26 Infrastructure charges .......................................................................... 74 ......................... 30 Koala conservation plan ....................................................................... 81 ......................... 33 Bridge to Nowhere ................................................................................ 86 ......................... 34 Evidence of events post valuation date - hindsight, or confirmation of a foresight ............................................................ 92 ......................... 34 Valuation evidence - general observations.......................................... 98 ......................... 38 Valuation Evidence - Mr Parsons ........................................................ 107 ....................... 40 Valuation Evidence - Mr Bale .............................................................. 113 ....................... 44 The Devine option ................................................................................. 120 ....................... 54 Analysis of Sales .................................................................................... 123 ....................... 55 Napper Road .................................................................................. 123 ....................... 55 Santa Maria Court ........................................................................ 129 ....................... 57 ‘The Parc’ Inland Road, Tugun ................................................... 135 ....................... 58 Leada Developments Site .............................................................. 141 ....................... 60 Genesis ........................................................................................... 144 ....................... 60 Waterford Sale............................................................................... 147 ....................... 61 Conclusion - site value of developable area of Lot 18 as at 1 October 2006 ............................................................................ 150 ....................... 61 Conclusion - site value of developable area of Lot 43 as at 1 October 2006 ............................................................................ 153 ....................... 62 Analysis of Mr Bale’s 1 October 2007 sales ........................................ 157 ....................... 63 Nerang Broadbeach Road - Sale 1/07 .......................................... 159 ....................... 63 Tallagandra Road and Teys Road, Holmeview - Sale 2/07 ......... 164 ....................... 64 Strawberry Fields - Sale 3/07 ........................................................ 167 ....................... 64 Martha’s Vineyard - Sale 4/07 ...................................................... 170 ....................... 64 The Esplanade Coomera - Sale 5/07 ............................................ 174 ....................... 65 Cunningham Drive, South Coomera - Sale 6/07 ......................... 177 ....................... 65 Conclusions regarding 2007 Valuation ............................................... 179 ....................... 66 Assessment of Value as at 1 October 2006 .......................................... 183 ....................... 67 Assessment of Value as at 1 October 2007 .......................................... 184 ....................... 67 Summary ................................................................................................ 194 ....................... 69 Orders .................................................................................................... ............................. 69 Postscript................................................................................................ ............................. 71 -- 3 of 71 -- 4 Background [1] This is an appeal by Patricia Dawn Buckler and Patrick Buckler (“the appellants”) against valuations by the Chief Executive, Department of Natural Resources and Waters (“the respondent”) pursuant to the Valuation of Land Act 1944 (the VLA),1 which valued the appellants’ property situated at Gold Coast Highway, Helensvale in the sum of $39,000,000 as at 1 October 20062 and $44,000,000 as at 1 October 2007.3 The appellants contend in their notices of appeal for valuations of $13,250,0004 and $5,000,0005 respectively. At the hearing of these matters, the appellants led evidence for valuation in each year of $18,300,0006 or, in the alternative, of $15,800,000.7 [2] The subject site consists of two contiguous parcels described as Lot 43 on SP180511, which has an area of 19.097 ha, and Lot 18 on RP868223, which has an area of 64.905 ha, making a total area of 84.002 ha. The land is situated at Helensvale in the City of Gold Coast, situated more or less directly opposite the Helensvale Town Centre, but separated from it by the Brisbane Gold Coast railway line. Helensvale railway station adjoins the land. [3] Lot 43, the northern parcel, is currently used as a golf driving range. It has no substantial improvements, other than earthworks to create a filled future development site which were carried out in about 1994, pursuant to a development approval from the Albert Shire Council.8 [4] The easements below relate to Lot 43:  Easement in Gross No. 701894185 burdening the land to Council of the City of Gold Coast over Easement B on RP902270 (sewerage purposes)  Easement No. 708130890 burdening the land to Lot 12 on RP880356, Lot 42 on SP151645 and Lot 4 on SP117549 over Easements B and C on SP171927 (access purposes)  Part/Surrender No. 709027346 over Easement B on SP171927 (road direction)  Easement No. 708130897 burdening the land to Lot 42 on SP151645, Lot 12 on RP880356, Lot 4 on SP117549 over Easement C on SP171927 (access purposes)  Easement No. 708130921 benefiting the land over Easements D, E and F on SP171927 (access purposes)  Easement No. 708901132 burdening the land to Lot 18 on RP868223 over Easement C on SP171927 (access purposes) 1 It should be noted that the VLA has now been repealed and replaced by the Land Valuation Act 2010. However, the provisions of the VLA continue for the purposes of this appeal. 2 Exh.1A. 3 Exh.1B. 4 Exh.1B. 5 Exh.2. 6 Exh.7. 7 Exh.24. 8 Albert Shire Council town planning consent 560/30/1348, issued in July 1982, reproduced in Exh. 6, volume 1, Attachment F. -- 4 of 71 -- 5  Easement No. 709776157 burdening the land to Lots 4-8 on SP182836 over Easements D and E on SP180537 (drainage purposes) [5] Lot 18, to the south, is the site of Gold Coast Country Club, comprising an 18-hole golf course, clubhouse and associated minor buildings. It has no other substantial improvements, again with the exception of relatively significant earthworks carried out to construct the golf course in or about 1988 pursuant to a development approval issued by the Albert Shire Council.9 [6] The following easements are noted on the title for Lot 18:  Easement in Gross No. 701894185 burdening the land to Council of the City of Gold Coast over Easement A on RP902270 (sewerage purposes)  Easement No. 708130921 benefiting the land over Easements D, E and F on SP171927 (access purposes)  Easement No. 708901132 benefiting the land over Easement C on SP171927 (access purposes)  The land has direct vehicle access to the Gold Coast Highway via Country Club Drive, and there is also a road bridge over the railway, just south of the station, providing a direct road connection from Country Club Drive to Helensvale Town Centre and beyond. Further south, a second bridge has been constructed across the railway to connect the subject land (Lot 18) to the southern part of the broader Helensvale commercial centre. The bridge does not enter the subject land, and no road connections presently exist at the bridge ends. It was referred to through the hearing as “the bridge to nowhere”. [7] Although there are substantial issues in dispute between the parties relating to town planning issues, the town planning experts’ joint report10 sets out in paragraph 1 the extent to which the town planners reached agreement on basic statutory information. Relevantly, the town planners agree that: (a) at the relevant dates Lot 43 was within Precinct 2 of the Helensvale Town Centre LAP;11 (b) Lot 18, the Southern Precinct, was within the South Helensvale Structure Plan of the Emerging communities Domain, of which 20.8 ha was designated as Urban Residential and the balance as Open Space comprising 44.1 hectares;12 9 Albert Shire Council town planning consent 560/30/2214, issued in November 1988, reproduced in Exh.6, Volume 1, Attachment F. 10 Exh.8. 11 Exh.8, para 1(k). 12 Exh 8, para 1(m). -- 5 of 71 -- 6 (c) Both parcels are within the Urban Footprint of the SEQ regional Plan;13 (d) On 7 May 2007 the Gold Coast City Council granted a preliminary approval over the site which is subject to appeal to the Planning and Environment Court;14 (e) Any future subdivision of the land for residential purposes under the current planning scheme would have to be undertaken via a separate impact assessable development application;15 (f) The preliminary approval has development parameters of 620 dwelling units at a density of 13 units per hectare on Lot 18, and 550 dwelling units at a density of 43.8 on Lot 43.16 The Hearing [8] The hearing lasted for eight days, including one day spent on an inspection, but not including time spent on an application relating to additional evidence, and issues relating to substantial amendments to the VLA. In total, there were some 500 pages of transcript; 48 exhibits; 124 pages of submissions supplemented by oral submissions; as well as an “agreed position” with respect to the VLA Amendment Act of 2010.17 [9] The appellants were represented by Mr B Cronin of Counsel, instructed by DLA Phillips Fox, Lawyers. At the hearing, the appellants called oral evidence from John Arthur Williams, a civil engineer; David Ransom, a town planner; and Lloyd Sydney Parsons, a valuer. [10] The respondent was represented by Mr S Fynes-Clinton of Counsel, instructed by Legal Services, Department of Natural Resources and Water. The respondent called evidence at the hearing from John Nigel Burn Venn, a town planner; Mr Patrick Buckler, one of the appellants called under subpoena; and Derek Rodney Bale, a valuer. [11] I have fully considered all of the evidence placed before me. In the reasons that follow I refer to the salient points but not all the evidence that I have relied upon in reaching my decision. Relevant legislative provisions [12] Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land. Relevantly, s.31(1) of the VLA says as follows: “3.(1) For the purposes of this Act — ‘unimproved value’ of land means — (a) in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and (b) in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as t which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.” 13 Exh.8, para 1(n). 14 Exh.8, para 1(c) and (d). 15 Exh.8, para 1(e). 16 Exh.8, para 1(s). 17 See Agreed Position filed 10 June 2010. -- 6 of 71 -- 7 [13] I note that the subject land in this matter is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land. [14] As the then President said in Fairfax v Department of Natural Resources and Mines:18 “The principles for determination of the ‘market value’ of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. I that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a raise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441). It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that: ‘Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales’.” I respectfully agree with these observations. Presumption of correctness of valuation [15] I now turn to s.33 of the VLA, which states as follows: “33 Status of valuation Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.” [16] This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation at page 56: “In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of act, the presumption created by 2. 13(7) is rebutted.” It should be noted that s.33 of the VLA is in essentially the same terms as what was then s. 13(7) of the Act. [17] Although it is necessary for the Court to be mindful of the “equity and good conscience” guidelines enshrined in s.7 of the Land Court Act 2000, this Court is not an investigative tribunal. As the Land Appeal Court relevantly said in Qualischefski & Ors v The Valuer- General,19 “… However, upon appeal a statutory onus of proof is case upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer-General incorrect. Neither this Court nor the Land Court in the 18 [2005] QLC 0011 at paras [11] and [12]. 19 (1979) 6 QLCR 167 at 172. -- 7 of 71 -- 8 subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case . …”20 Threshold matter – grounds of appeal [18] As regards the appellants’ appeal against the respondent’s 1 October 2006 valuation, the appellants’ grounds of appeal are stated in the following terms:21 “The valuation is wrong in, and contrary to, law The valuation is excessive The valuation does not take into account the sales of comparable properties The valuation does not take into account the value or extent of improvements to the subject property The valuation is out of relativity with the unimproved capital value of comparable properties” [19] For the 2007 objection, the appellants’ grounds of appeal contained identical grounds of appeal to those contained in the earlier appeal, but also included the following additional ground of appeal: 22 “The valuation does not take into account the limited potential of the property for development owing to its use as a golf course” [20] The respondent asserts that the manner in which the appellants have chosen to word their grounds of appeal have different consequences for the two appeals. Specifically, the respondent asserts that the grounds of appeal with respect to the 2006 valuation are much narrower than those which apply for the 2007 valuation. Mr Fynes-Clinton, for the respondent, had this to say in his reply submissions:23 “2. The Respondent submits, as an overarching submission, that none of the town planning issues about which Mr Ransom gave evidence, are reasonably able to be asserted to relate, either expressly or by necessary implication, to any of the stated grounds of appeal in AV2007/0858. As the Appellants are strictly bound by those grounds of appeal, all of this evidence should be rejected as irrelevant to the stated grounds, regardless of its merits otherwise. 3. A similar submission is made in AV 2008/0988, except that it is accepted that the additional ground of appeal concerning existing use of the land is a golf course is a sufficient basis upon which to introduce the evidence about the “golf course policy” (only).” [21] Mr Cronin for the appellants asserts that the grounds of appeal are sufficiently wide to allow the Court to consider all of the evidence raised during the appeal. In Mr Cronin’s view, although the “golf course ground was not used in the 2006 appeal, the common ground asserting that the valuation does not take into account the sale of comparable properties: “necessarily implies that the comparable properties did not have the limited potential owing to the subject land’s use as a golf course. The grounds of appeal are not restricted and no sensible or reasonable argument can be advanced that the grounds of appeal limit any of the arguments raised by the appellants.”24 20 See also Two v The Valuer-General (1978) 5 QLCR 378 at 381 (LAC). 21 Exh.1. 22 Exh.2. 23 Respondent’s reply submissions p.2. 24 Appellants’ reply submissions p.2 para 2. -- 8 of 71 -- 9 [22] At the time of filing the appeals, s.56 of the VLA relevantly provided as follows: 56 How to start an appeal (1) An appeal shall be instituted by filing in the Land Court registry a notice of appeal. (2) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated, and the burden of proving any and every such ground shall be upon the owner. [23] It is common ground between the parties that the appellant is unable to rely on grounds of appeal outside of those listed in each appeal in light of s.56 as then enacted. The operation of s.56 of the VLA, then numbered as s.21(3) of the VLA, was considered by the Land Appeal Court in the case of Franklin v Valuer-General.25 The Court made the following observations:26 “The provisions of the Valuation of Land Act as to the appeal procedure are restrictive in their operation, more especially to an appellant who has made his appeal on narrow and particular grounds rather than on a broad general ground such as ‘the valuation is excessive and contrary to law’. The language used by the Legislature is mandatory and binding not only on the parties but also on this Court and the Land Court.” [24] One of the quirky features of appeals under the VLA has been that those appellants who go to the detail of explaining exactly what their nature of objection is often make their grounds of appeal so restrictive that they are unable to lead evidence as to matters of significant concern to them regarding the valuation complained about simply because such evidence does not properly fall under the heads of one of their specific grounds of appeal. On the other hand, those experienced in filing grounds of appeal in the Land Court often file grounds of appeal worded in the most general way possible and thus tend to capture each and every possible aspect of appeal that could be raised in evidence at the hearing of the appeal. I call this situation “quirky” as those appellants who attempt to specify their grounds of appeal in a meaningful way are often caught short at a hearing, whilst those who file grounds of appeal which, in real terms, reveal nothing to either the respondent or to the Court of what the actual grounds of appeal are, have free rein to admit whatever evidence they choose on appeal. [25] In essence, the respondent in the case at hand is attempting to rely upon the use of a restrictive ground of appeal by the appellant in 2007 to make the stated grounds of appeal in 2006 even more restrictive. Whilst at first glance there may appear to be some logic to the respondent’s argument, in my view it cannot stand close scrutiny. So much was all but conceded by Mr Fynes-Clinton during oral argument when he said:27 “It’s accepted that the court’s general approach is that once a broad issue such as the matter of comparable sales is raised then all of the matters which input into a proper consideration of comparable sales are at least inferentially raised”. 25 (1978) 5 QLCR 181. 26 At page 184. 27 Transcript p.464. -- 9 of 71 -- 10 [26] In my view, the question is not so much whether the 2006 grounds of appeal are limited by their failure to include the specific ground of objection relating to the golf course policy as contained in the 2007 grounds of appeal, but rather whether, if the specific ground had not been included in the 2007 appeal, all of the evidence adduced by the appellant could have been sustained by the general grounds of appeal set out in both notices of appeal. In my view, the answer must be a resounding yes. [27] In my view, whilst the appellants are limited to the grounds of appeal as set out in their notices of appeal, the broad nature of those notices of appeal is sufficient to encompass all of the evidence presented by the appellants at the appeal hearing of both valuation appeals. [28] One final important point should be made before I leave this topic. As Mr Fynes-Clinton said in his oral submissions:28 “So Sir the only point that the respondent wishes to persist with in a forceful way in that regard in fact links in with the first subject matter of my oral address, so if I can proceed with that” The point that Mr Fynes-Clinton was making was that, in the respondent’s view, the appellants failed to bring any evidence before the Court, in either the tendered reports or oral evidence of witnesses, relating to issues of the golf course policy; the PIP park and the risk of third party appeals, with respect to the 2006 valuation. This of course is fundamentally a different argument than whether or not evidence falls within a stated ground of appeal. At this point, I make no findings regarding the nature of the evidence adduced by the appellants with respect to either the 2006 appeal or the 2007 appeal. Any such comments will be made, insofar as they are necessary, under various headings that follow relating to both the evidence given, specific issues raised, and the grounds of appeal. Planning law issues [29] A significant aspect of the evidence and submissions with respect to these appeals relates to planning law issues. In an intriguing twist, these same issues, at least in an interrelated form, are currently the subject of an appeal by the appellants against a decision of the Gold Coast City Council relating to the approval granted by the Council on 7 May 2007 with respect to the land in question in these appeals. As regards the Court’s role with respect to the planning issues generally, Mr Fynes-Clinton for the respondent had this to say in his submissions:29 “Given the way in which the Appellants have presented their case, the Court is required, before it turns to consider and determine the ultimate valuation issues, to determine a number of discrete issues of planning law, all relating to the proper construction of the Integrated Planning Act 1997 (‘IPA’). Ultimately, these issues all relate to determination of the highest and best use of the subject land, particularly the southern parcel (Lot 18). In the ordinary course, first instance resolution of construction issues under that Act is the province of the Planning and Environment Court. However, neither that Court, nor the Court of Appeal on appeal from that Court, have 28 See Transcript p.464. 29 At para 21. -- 10 of 71 -- 11 previously been called upon to squarely consider a number of the particular IPA issues raised by this appeal. These submissions therefore deal with each of those issues in what is intended to be to be a logical sequence, before turning to deal with the ultimate valuation issues.” [30] Mr Fynes-Clinton expanded upon his view as to the role of this Court in the determination of the valuation appeals at hand during his oral submissions.30 Mr Fynes-Clinton firstly referred the Court to the judgment of Callinan J in Boland v Yates Property Corp Pty Ltd.31 Specifically, Mr Fynes-Clinton referred to paragraphs [272] to [274] of Boland where His Honour had this to say: “[272] An intending prudent developer of a project such as the respondent here had in mind would inevitably require investigations, studies, plans and information of the kind to which I have referred and which would necessarily involve the services of professionals such as town planners, engineers and others, not only perhaps to obtain, or enhance the chances of obtaining, planning approval but also to place itself in a position to satisfy financiers if it has to borrow to complete the development, and prospective tenants or licensees that a tenancy or a licence in it would be an obligation worth incurring. [273] … If what the respondent did [had] not been done, then it would be unlikely that any purchaser would pay a price which included a component for the by now demonstrable, realisable, potential of the property for its highest and best use as a market. And a purchaser would have been in as good a position to take advantage of the site in its cleared state as the respondent. None of this is in disparagement of the respondent’s efforts. But their site-specific nature meant that Yates would have no interest in withholding their fruits from a purchaser and every reason to provide them to ‘talk up’ the price of the land. [274] Any vendor who failed to capitalise on this work by not extolling to a purchaser its consequential, demonstrable, realisable potential would be highly imprudent. And any reasonable purchaser would expect, and know that the price would reflect this potential. It is not a case of the purchaser’s buying, as it were, the plans and the work done in respect of proving up the potential as one of the examples given by the Full Court would suggest. It is merely that, to use the language of Griffith CJ in Spencer’s case, each party to the transaction should be regarded as being fully conversant, or as Isaacs J said, perfectly acquainted with the subject, that is to say the subject land with all of its potential. It follows that the more work, the more proving up that is done by the vendor before the sale, the more any uncertainty as to the realisation of the potential will be reduced, and the higher the price will be. [my emphasis]” [31] Mr Fynes-Clinton then on to submit as follows:32 “As Mr Justice Callinan points out it’s in the vendor’s interests, and we are talking about an objective vendor not a vendor with some particular subjective view of the world that would have it act in a way which is not objectively rational, the objectively rational vendor will make available and will authorise and the objectively rational purchaser will take up the opportunity to identify and investigate all matters relevant to the planning potential of the subject land. So in this case as at 2006 the evidence is that the hypothetical prudent purchaser would make its inquiries of the council and would have relevant material supplied to it by the vendor because that’s in the vendor’s interests, it would know the situation, it would know that Mr Ransom has told the court that there was an application that’s been in since 2002, that it’s been through a number of processes and delays and what one might call hurdles, or at least potential hurdles, and it’s now got to the point as at 1 October 2006 where the process is complete from the applicants’ point, where it’s before the council for decision and whereas Mr Ransom says a favourable decision is to be expected. The Court is invited to consider where in the evidence there is anything to suggest that that informed purchaser would have the slightest concern about these asserted development risks. I don’t want to be repetitive sir and the point is developed. The question is asked, somewhat rhetorically, the answer is that as at October 2006 on the evidence the application was in, it was expected to be approved and the asserted risk issues on the evidence were matters of simply no concern at all, matters which, as the court will recall, had not been raised by the council at any 30 See Transcript p.466-7. 31 [1999] 74 ALJR 209. 32 At Transcript p.466-7. -- 11 of 71 -- 12 stage of the approval process as barriers to approval and were not raised between 1 October 2006 and the approval date of May 2007 as barriers to approval. The evidentiary point that’s being focused on therefore is this, the risk issues simply weren’t risk issues in 2006 and that’s not a matter of this side asserting that from the Bar table, that’s the position on the appellants’ evidentiary case. Therefore, logically, the only use which the appellants could seek to make of these risk issues, assuming they were made out on the evidence, is to mount a case before the court that because of the way the preliminary approval was issued and because of the way in which the future development approval processes could then call in consideration such as the golf course etc. that matters had taken a significant turn for the worse by 2007 as compared to the sunny picture in 2006 which Mr Ransom confirmed. That is in my submission the only use which the appellants could make of all this evidence in the way the appellants have constructed their case that 2007 is a different picture and a different ball park because of all these risk issues that simply weren’t on the horizon in 2006.” [32] Both Mr Fynes-Clinton and Mr Cronin also referred me to the Planning and Environment Court decision of Serenity Lakes Noosa Pty Ltd v Noosa Shire Council.33 In that case, Judge Wilson SC provided helpful observations as to the principles to be generally adopted when construing conditions in a planning approval. His Honour adopted submissions of Mr Trotter as follows:34 “(a) where a planning approval is ambiguous, it should be construed in a manner which places the least burden on the land owner; (b) if a condition is imposed which restricts an approval, it should be expressed fairly; (c) in construing an approval, the search is not for what the Council may have intended or what, if it had been interrogated about various possibilities, it would have said it intended; each approval must speak according to its written terms, construed in context but having regard to its enduring function; (d) it has long been recognised that use rights are determined from the approval itself, which may include other material by express or necessary implication; (e) the nature and extent of any approved development must be determined by construing the document of approval, including any plan or other document which it incorporated, aided only by that evidence admissible in relation to construction which establishes or helps to establish the true meaning of the document as the act of the relevant authority, not the result of a bilateral transaction between the applicant and the Council; (f) in construing an approval a Court is not dealing with an Act of Parliament and an overly technical approach is not called for. The words should not be scrutinised in the same way as words used by the parliamentary drafts-persons; (g) extrinsic evidence, in the forms of expert evidence, may be admissible to explain technical terms. This may extend to explaining the nature of the site so that the impact and meaning of a condition can be understood; and (h) extrinsic evidence is also admissible to understand the physical state of the land at the time of the approval. This may include identification of things like existing vegetation and specific features referred to by the conditions.” (footnotes omitted) [33] The above reference is of assistance because, as set out in paragraph [7] of this decision, one aspect where there was agreement between the evidence of the town planners was that on 7 May 2007 the Gold Coast City Council granted a preliminary approval over the land the subject of these appeals. The Council’s letter of 8 May 2007 together with the preliminary approval are set out in full in Exhibit 6 at pages 315 to 331. I will refer to various aspects of the preliminary approval in the pages that follow. 33 [2007] QPEC 005. 34 At [6]. -- 12 of 71 -- 13 Respondent’s attack on Mr Ransom’s planning evidence [34] Mr Fynes-Clinton for the respondent urges the Court to treat Mr Ransom’s evidence with respect to the preliminary approval as worthless. In his submissions, Mr Fynes-Clinton had this to say:35 “39. There seems little point in being overly diplomatic about this issue. Any suggestion that a preliminary approval is not legally binding to vest development rights (to the extent stated in the approval), or that the rights so vested can be taken away by the local government as part of a subsequent development permit process for the development, is fundamentally misconceived to the point of being farcical. Yet it is exactly such a proposition which lies at the heart of the whole of Mr Ransom’s evidence about the asserted “worthlessness” of the preliminary approval. It is, with respect, Mr Ransom’s evidence on this issue which is of no worth.” Not surprisingly, Mr Cronin for the appellants has quite a different view of Mr Ransom’s evidence. I will carefully analyse the evidence, so far as it is relevant, with respect to various aspects of the planning evidence later in this decision. However, one overarching submission made by Mr Fynes-Clinton regarding the Court’s receipt and handling of Mr Ransom’s evidence needs to be carefully considered at this point. At paragraphs 12 and 13 of his submissions, Mr Fynes-Clinton made the following observations: “12. Ordinarily, it would be a trite and unnecessary observation to state that the Court must decide the appeals based upon the evidence presented and findings on disputed ultimate facts made, on the balance of probabilities, based upon the evidence presented. That observation is made in this case because of what is submitted to be a range of extraordinary assertions throughout the Appellants’ case by which they seek to have the Court adopt a view of the facts, based upon assertions of opinion by expert witnesses, which is quite divorced from what the objective evidence reveals to have actually occurred in the real world. 13. In this regard, it is important not to lose sight of the basic evidentiary principle that the opinions of expert witnesses are, in themselves, worth little or nothing. What is of value to the Court is the reasoning process applied by the expert witness allowing one to go from objective primary facts to an opinion about an ultimate fact in dispute. That process has no value unless the expert has correctly identified the objective primary facts, and logically and coherently reasoned from those facts to the opinion expressed. This is not just a matter of admissibility where the ordinary ‘rules’ might be relaxed having regard to s 7 of the Land Court Act 2000. Purported expert opinions which do not comply with the principles for admissibility of expert evidence are opinions without a proper evidentiary foundation, and are therefore probative of nothing. There can be no warrant in this Court for permitting any material departure from the rules of expert evidence seminally stated by Heydon JA (as he then was) in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, at 743-744. To do so would be to act upon purported evidence which has no legal relevance to matters in issue and no probative value, in relation to those matters. [35] For his part, Mr Cronin refers to the respondent’s attack on Mr Ransom and, indeed, on Mr Parsons, as “inappropriate, inaccurate and misplaced”.36 Mr Cronin also referred me to numerous aspects of Mr Ransom’s evidence which he submitted should be accepted by the Court as relevant expert evidence with respect to various issues. 35 At para 39. 36 Appellant’s reply submissions para 38. -- 13 of 71 -- 14 [36] Mr Fynes-Clinton in the passages referred to above referred to statements of Heydon JA in Makita. Due to the force of Mr Fynes-Clinton’s submissions, it is appropriate to consider what Heydon JA had to say in detail:37 “In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of ‘specialised knowledge’; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be ‘wholly or substantially based on the witness’s expert knowledge’; so far as the opinion is based on facts ‘observed’ by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on ‘assumed’ or ‘accepted’ facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study or experience’, and on which the opinion is ‘wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ’s characterisation of the evidence in HG v The Queen (at 428 [41]), on ‘a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise’.” [37] Certainly, there are aspects of Mr Ransom’s evidence which, taken on their own, may lead one to have concerns as to the value of his expert evidence applying the formula set out by Heydon JA in Makita. For instance, when referring to the Gold Coast City Council, Mr Ransom had this to say during cross-examination:38 “Without getting sidetracked, it is a fundamental premise of your report and evidence to this Court that the developers must assume that the council would break the law?-- I wouldn’t term it so harshly as ‘break the law’. What I would say is that I am aware of numerous instances where council have basically done whatever they pleased irrespective of what the legal situation was. I have numerous instances of that occurring that I am aware of. The Gold Coast City Council is a very poor corporate citizen that disregards the law?-- Again, I wouldn’t term it that harshly but I don’t, sort of, have a high regard for the level of rigour that they apply to things all the time. It is quite inconsistent is what I would say. That is a risk for a prospective purchaser and that is something I would certainly inform them of, were I asked to give them due diligence advice in considering the purchase of a site. Can I then ask you to make a further assumption that Gold Coast City Council as a public authority does in fact comply with the law. I am asking you to make that assumption?--I can make that assumption for this exercise but ----- You don’t agree with it?--Well, it is inconsistent. Sometimes they do, sometimes they don’t. The council is a political organisation and often decisions get made for political reasons and the law is not exactly adhered to. I appreciate that you are disclaiming any of the more harsher extreme terms that I use, but you really are telling the Court that the Gold Coast City Council is or can be a rogue council, aren’t you?- -In certain circumstances I guess I am, yes.” 37 Makita, at para [85]. 38 Transcript p.85. -- 14 of 71 -- 15 Like comments were confirmed by Mr Ransom during re-examination by Mr Cronin:39 “In terms of making decisions of the council, the expression ‘rogue’, what do you really understand that expression to mean, in terms of the way in which it was expressed to you earlier?-- Look, you can’t generalise about the council. It is like any big organisation. There are people within it who make correct and lawful decisions and there are many instances where there is no political interference in the application process. By the same token there are many other instances where you do encounter an attitude of council taking the view that they are right irrespective of what the law says and if you don’t like it then you are welcome to pursue an appeal, if you have sufficient resources to fund that particular process. That does happen.” [38] Mr Ransom’s evidence as regards the Gold Coast City Council being a “rogue” council is inextricably linked to his expert opinion that there are risks associated with the preliminary approval given by the council in May 2007 which any developer interested in purchasing the subject land would be properly advised of during any due diligence. In his primary submissions, Mr Cronin set out details of other evidence relating to uncertainty associated with the site, including evidence by Mr Venn, the town planner called by the respondent. I adopt Mr Cronin’s reasons set out in paragraph 62 of his submissions, which are relevantly as follows: (a) Mr Ransom spoke about the uncertainty of the position with respect to infrastructure charges and that some people had walked away from purchasing a site when told about the infrastructure charges;40 (b) Mr Ransom spoke about the uncertainty attaching to the risk of submitter applications as a result of the impact assessment nature of the further approvals following the preliminary approval;41 (c) The area of uncertainty with respect to the version of the planning scheme against which any future development application will be assessed was said by Mr Ransom to be an area of uncertainty;42 (d) Mr Ransom spoke about the uncertainty of dealing with the local authority which might use a Court as a mechanism to deliver bad news to the community;43 (e) Mr Parsons referred to the risk and uncertainty in relation to district parks and golf courses with respect to the land;44 (f) Mr Parsons said there was a lot of uncertainty about the PIP charges and that there was also uncertainty in the marketplace about them;45 39 Transcript p.120. 40 Transcript p.34, L5-15. 41 Transcript p.119, L6. 42 Transcript p.119, L33-36. 43 Transcript p.120, L7-15. 44 Transcript p.164, L5. 45 Transcript p.216, L45 to Transcript p.217, L2. -- 15 of 71 -- 16 (g) Mr Parsons was asked about uncertainty associated with applications to fill flood prone land. After some objection Mr Parsons said that there were difficulties attaching with obtaining such approvals;46 (h) Mr Venn, when asked whether the golf course policy represented a degree of uncertainty about the development, although not agreeing that there was uncertainty, he did agree that the policy specifically identified Lot 18;47 (i) When asked about the difficulty of how a local authority imposes its desire to obtain land under the priority infrastructure plan, Mr Venn agreed there was some uncertainty about that;48 (j) When asked about a number of actors it was put to Mr Venn that any person acquiring the land would expect a high level of uncertainty in obtaining full development rights. Mr Venn said that high level was too strong a phrase but rather agreed that there was a level of uncertainty but at the lower end, not at the upper end;49 (k) When asked about the Council’s desire for a district park and about there being no discussions about it prior to its inclusion in the plan, Mr Venn agreed that there was uncertainty about that and that there would be an element of uncertainty for a purchaser;50 (l) Mr Parsons said that there was a risk of obtaining access to the bridge near the golf course to enable residential development.51 [39] As regards the evidence of both Mr Venn and Mr Ransom, it is my view that both gave credible evidence to the Court as to their respective expert opinions relating to the planning issues in dispute in this matter. They were both subject to rigorous cross-examination, which they both withstood well. On all substantive matters, their views as expressed in their reports were adhered to throughout cross-examination. Both Mr Ransom and Mr Venn referred extensively to the factual evidence contained within numerous documents and assisted the Court with their expert opinion as to the contents of those documents from a planning perspective. Both Mr Ransom and Mr Venn gave, in my view, their honest expert opinion as to the various matters upon which their expert advice was sought. They both fully comprehend and take seriously, in my view, their obligations as experts to the Court. Both have considerable experience in the town planning field. Of course, in some respects their expert opinions differ. That is often the case when experts give evidence to any Court. Where their 46 Transcript p.251, L40-45 and Transcript p.252, L38. 47 Transcript p.293, L13 and L30-35. 48 Transcript p.300, L10-15 and Transcript p.311, L40. 49 Transcript p.317, L18-30. 50 Transcript p.318, L45 to Transcript p.319, L1-21. 51 Transcript p.160, L13. -- 16 of 71 -- 17 evidence differs, and to the extent that such differences are relevant to the ultimate outcome of the appeals at hand, I set out below under various headings my preference for the evidence of one expert over the other. What was approved by the preliminary approval of May 2007? [40] Much has been said by both parties to these appeals as to the nature of what was actually approved by the Gold Coast City Council in May 2007. Much of the evidence of Mr Venn and Mr Ransom, and indeed the submissions, focused on the question as to whether or not the approval was made by the Council pursuant to s.3.1.5 of the Integrated Planning Act 1997 (“IPA”) or s.3.1.6 of IPA. To begin with, it is appropriate to set out the provisions of sections 3.1.5 and 3.1.6 which as at the relevant date in May 2007 provided as follows: 3.1.5 Approvals under this Act (1) A preliminary approval approves development (but does not authorise assessable development to occur)— (a) to the extent stated in the approval; and (b) subject to the conditions in the approval. (2) However, there is no requirement to get a preliminary approval for development.38 (3) A development permit authorises assessable development to occur— (a) to the extent stated in the permit; and (b) subject to— (i) the conditions in the permit; and (ii) any preliminary approval relating to the development the permit authorises, including any conditions in the preliminary approval. ______________________________________ 38. Preliminary approvals assist in the staging of approvals. 3.1.6 Preliminary approval may override a local planning instrument (1) This section applies if— (a) an applicant applies for a preliminary approval; and (b) part of the application states the way in which the applicant seeks the approval to vary the effect of any local planning instrument for the land. (2) Subsection (3) applies to the extent the application is for— (a) development that is a material change of use; and (b) the part mentioned in subsection (1)(b). (3) If the preliminary approval approves the material change of use, the preliminary approval may, in addition to the things an approval may do under part 5, do either or both of the following for development relating to the material change of use— (a) state that the development is— (i) assessable development (requiring code or impact assessment); or (ii) self-assessable development; or (iii) exempt development; (b) identify any codes for the development. (4) Subsection (5) applies to the extent the application is for— (a) development other than a material change of use; and (b) the part mentioned in subsection (1)(b). (5) If the preliminary approval approves the development, the preliminary approval may, in addition to the things an approval may do under part 5, do either or both of the following for the development— (a) state that the development is— (i) assessable development (requiring code or impact assessment); or (ii) self-assessable development; or (iii) exempt development; (b) identify codes for the development. (6) To the extent the preliminary approval, by doing either or both of the things mentioned in subsection (3) or (5), is different to the local planning instrument, the approval prevails. -- 17 of 71 -- 18 (7) However, subsection (3) or (5) no longer applies to development mentioned in subsection (3)(a) or (5)(a) when the first of the following happens— (a) the development approved by the preliminary approval and authorised by a later development permit is completed; (b) any time limit for completing the development ends. (8) To the extent the preliminary approval is inconsistent with schedule 8 or 9, the preliminary approval is of no effect. [41] A number of basic observations should be made regarding approvals pursuant to 3.1.5 and 3.1.6 of IPA. To begin with, it is clear that approvals under 3.1.5 and 3.1.6 are both classified as “preliminary approvals”. Insofar as it is relevant to the case at hand, there is one fundamental difference between a 3.1.5 approval and a 3.1.6 approval. Preliminary approvals made pursuant to 3.1.6 have the advantage that, with respect to subsequent development permits required to give final affect to the development, such permits are code assessable rather than impact assessable where relevant, the assessment level may also be self assessable if it is consistent with the preliminary approval. Additionally, a 3.1.6 preliminary approval may identify development specific codes for the particular development which will displace any otherwise applicable codes in the planning scheme to the extent of any inconsistency. This situation is to be contrasted with an approval pursuant to 3.1.5 which necessitates that future development permits be impact assessable. [42] I am in no doubt that the appellants in making their application in 2002 were seeking code assessable approvals pursuant to 3.1.6 of IPA. It is equally clear what was approved by the Council on 7 May 2007; that is, Council’s approval is as it is stated to be pursuant to s.3.1.5 of IPA. Although there were some suggestions put to witnesses that perhaps the approval of the Council contained a simple typographical error and meant to refer to 3.1.6 of IPA, I reject any such suggestions. Firstly, there is no evidence before the Court to support such contentions. Additionally, the evidence that is before the Court, including internal papers produced by Council in the lead up to the decision, clearly show that at one point an approval pursuant to 3.1.6 of IPA was proposed, but that prior to the final decision being made by Council there was a change of view in Council such that the approval was made pursuant to s.3.1.5. [43] One final observation in this regard should be made. It is suggested that, by their nature, some of the conditions set out in the approval are properly made pursuant to s.3.1.6 of IPA and not 3.1.5. In my view, relying upon the fundamental principles as enunciated by Judge Wilson in Serenity, this issue is easily resolved. As His Honour said, where a planning approval is ambiguous, it should be construed in a manner which places the least burden on the landowner.52 Accordingly, it is my view that insofar as any aspects of the preliminary approval relate to code assessable provisions pursuant to 3.1.6, those conditions, despite the preliminary 52 See Serenity at [6] and para 32. -- 18 of 71 -- 19 approval being classified as a 3.1.5 approval, are capable of being construed in favour of the appellants as code assessable. I note however that the bulk of the approval falls within 3.1.5 even with this concession in favour of the appellants necessitating that almost all future permits would be impact assessable. [44] I should also make the observation that the above comments relate in simple terms to what was approved by the Council in May 2007 from a valuation perspective in assessing unimproved value under the VLA. The nature and extent of any risk that may be considered by any hypothetical prudent purchaser consequent to that approval is considered under a separate heading. Preliminary approval – a red herring? [45] In his reply submissions, Mr Fynes-Clinton submits, at paragraph 12, that the highly prominent issue in the case for the appellants regarding the preliminary approval is a complete irrelevance. The respondent urges the Court not to allow the prominence which the appellants seek to give to the issue to be allowed to obscure that irrelevance. Specifically, Mr Fynes- Clinton states that “a bright scarlet herring is of no more forensic assistance to the Court than an ordinary red one”. [46] Clearly, for the reasons enunciated earlier in this decision, it is the task of this Court to determine the appropriate valuations of the subject land pursuant to the VLA as at 1 October 2006 and 1 October 2007. I have already discussed in detail the relevant tests to be applied in this regard, including the time-proven test from Spencers case. In my view, it is not necessary that I reach any final concluded views as to the various planning issues relied upon extensively by the appellants. That however, is not the point of the evidence adduced by the appellants. What the appellants have sought to do by their evidence is to demonstrate their view of planning issues that related to the land as at 1 October 2006 and 1 October 2007 and, in light of those planning issues, interpolate what a hypothetical prudent purchaser would take into account when considering the price that would be paid for the subject land. Seen in this way, the evidence led by the appellants is neither a scarlet nor red herring, or any other colour herring for that matter. It is simply a factor which a hypothetical purchaser would be considered to take into account as at the relevant valuation dates; nothing more and nothing less. The impact of such considerations on the actual unimproved value of the subject land will be a matter for close consideration of the valuation evidence read in light of the town planning evidence. [47] The respondent contends that the appellants have not in fact linked any of the town planning evidence to their valuation evidence, thus reinforcing the respondent’s “scarlet herring” view. However, in my view it is necessary, in order to properly understand the appellants’ case, to -- 19 of 71 -- 20 appreciate the town planning evidence and then to consider how that evidence has been used, or adopted, if at all, by the valuers in their evidence. [48] I now turn to an examination of various town planning issues. The Gold Coast City Council’s ‘golf course policy’ [49] There has been a significant amount of evidence with respect to the so called ‘golf course policy’ of the Council. For clarity, I should point out that, in referring to the golf course policy throughout this decision, I am mindful of the submissions made by Mr Fynes-Clinton that the proper title for the golf course policy is “options study”.53 The evidence and the submissions overwhelmingly refer to “golf course policy” and, in using that terminology, I am simply being reflective of the evidence and the submissions and the use of such phrase does not translate to any finding by myself that the “golf course policy” is indeed a formal policy of the Gold Coast City Council. I use the term as a convenient descriptor; nothing more. [50] An indication of the amount of evidence and documentary material provided to the Court with respect to this issue is to be found by an analysis of exhibit 6. Volume 2 of exhibit 6 contains 283 pages of material relating to documents that Mr Ransom has provided to the Court in support of his views regarding the golf course policy. Thankfully, Mr Ransom provided a summary of that material at pages 1 – 3 of volume 2 of exhibit 6. To summarise the summary, Mr Ransom’s material shows that the Gold Coast City Council, either in meetings of the full Council or in committee meetings, considered the interaction of continued use of land as golf courses and potential redevelopment of those golf courses at numerous meetings commencing 19 September 2003. That first Council meeting included a resolution passed by Council “to ensure appropriate measures are in place to restrict their redevelopment under the planning scheme. A report to be prepared and presented detailing the environmental and economic significance of roles played by private golf courses”.54 Subsequent Council or committee meetings regarding the golf course policy occurred on 25 February 2004, 18 May 2004, 28 May 2004, 7 September 2004, 17 September 2004, 19 October 2004, 1 November 2004, 18 October 2005, 31 October 2005, 29 August 2006, 11 September 2006, 29 May 2007, 8 June 2007, 12 June 2007, 22 June 2007, 26 August 2008 and 1 September 2008. [51] During cross-examination by Mr Fynes-Clinton, a very useful summary of Mr Ransom’s evidence regarding the golf course policy emerged as follows:55 “So the thesis that you put to the Court then comes down to this, doesn’t it? In 2002 the land had a certain development potential that was unaffected by the golf course policy. As the policy was slowly developed from embryonic idea to full-scale council resolutions and the drafting of scheme amendments, the policy became more and more concerning in terms of its impact on development potential; correct?--Yes. 53 See respondent’s submissions para 41, 44 and 45. 54 Exh.6, volume 2 p.1. 55 Transcript p.109. -- 20 of 71 -- 21 And logically, though you are not a valuer, the policy had a greater and greater potential negative adverse -- that is duplication -- negative impact on market value?--Yes. But then we get to 2010 and, if I am right about the law, the market value is suddenly fully preserved again because the land owner either gets development, disregarding the policy completely or gets compensation?--well, again, I would have to go back to the second relevant date being 1 October 2007 and advise a prospective purchaser about what I knew at that particular point in time. That might not be an option available to them but by no means would that be a simple or guaranteed outcome. They would have to go into the purchase of the site in the full knowledge that they would probably end up in court with council on perhaps that issue or a variety of issues. That again is -- developers are generally risk averse, particularly in development booms. They want sites they can move onto and develop quickly. They don’t want to sit around and wait for three years for some potential dispute to be taken to court and potentially a negative outcome to come out of that process. Understood. But in terms of your analysis my proposition is correct, that if you accept my analysis at the 2010 staring point, which you don’t need to own because that is my analysis, but if you accept that analysis the developers are much worse off as the policy is being developed and coming to fruition then they are once it is actually in place?--Yes, I would agree with you, if that compensation option is indeed available to them.” [52] There is additionally consistent evidence provided by both Mr Ransom and Mr Venn that the preliminary approval for the subject land of May 2007 made no reference to the golf course policy, but that a development approval with respect to the Parkwood golf course was rejected by Council on 13 August 2007, the grounds for rejection including that the proposed development was inconsistent with the Council’s golf course policy. More intriguingly, on 27 August 2007 another development application was rejected involving a golf course, this time the Arundel golf course. Although the same planning officer was involved in both the Parkwood and Arundel assessments, no reference was made to the golf course policy with respect to the Arundel golf course.56 [53] During cross-examination by Mr Cronin, Mr Venn had this to say with respect to his opinion as to the golf course policy:57 “That policy represents a degree of uncertainty that any development -- developer, an owner of a land would have to deal with when seeking to develop his land at Helensvale, doesn’t it?--One has to look at the sites and the applications for their merits. In this case, I think there is something like 30 golf courses that are identified in the policy. These two are -- exist on land that is, I think, subject to some sort of development or rezoning deed. They also exist on land that is included in the private open space domain, and they’re remote from -- not remote, they are some distance from social and retail infrastructure. In the case of Mr Buckler’s land, it is not on land that’s zoned -- that’s in the private open space domain, it is in domains that encourage residential development. Not only by the assessment table, but by specific statements, one of which is the importance of this area close to the Helensvale town centre. So the two contexts are entirely different. I suggest to you that the attitude of the council, with respect to the subject site is in conflict. In the golf course -- in the golf course report that they have, which has been referred to and adopted by the council, they specifically refer to this site, don’t they, the subject site?--They identify the site. I don’t know that they specifically distinguish it from other sites. 56 Details of the Council decisions and related material with respect to the Parkwood and Arundel golf courses are contained throughout the material and in particular in exh.6, and were also referred to at various places throughout the oral evidence of the town planners. See for instance transcript p.291-293. 57 Transcript p.293. -- 21 of 71 -- 22 Well, they refer to lot 18. They refer to lot 18 and they refer to it as the Gold Coast Country Club, don’t they?--I said they----- That’s a specific reference to it?--No, I agree that they identify it as one of the golf courses.” [54] In the respondent’s primary submissions, Mr Fynes-Clinton raises fundamental issues regarding the relevance of the existence of the golf course on the subject land, let alone the golf course policy, to a consideration of the determination of the unimproved value of the land.58 Mr Fynes-Clinton submits that, as it is accepted that the existing golf course buildings, earthworks and other structures are improvements,59 for the purposes of the VLA in determining the unimproved value of the subject land, those improvements are to be notionally removed, resulting in the subject land being valued as an unfilled and unimproved flood plan adjacent to Coombabah Creek. Mr Fynes-Clinton then goes on to state that, as at the date of either valuation there was notionally no golf course, there was accordingly nothing on which the golf course policy could operate. [55] In support of his submissions, Mr Fynes-Clinton refers to the cases of Surfers Paradise Resort Hotel Pty Limited v Department of Natural Resources and Water,60 Bollow Chambers Ltd v Valuer-General,61 Valuer-General v Queensland Club,62 and Randwick Municipal Council v The Valuer-General.63 To quote Mr Fynes-Clinton64 “those cases establish that the exercise of notional removal of improvements in order to value the land in an unimproved state does not permit or require the court to disregard legally binding land use controls in the form of statutory constraints affecting the land which give rise to restrictions upon its use actually in operation at the valuation date”. Mr Fynes-Clinton goes on to make the distinction between the operation of legally binding constraints and the golf course policy which he describes as “a non statutory proposal to possibly amend the planning scheme at some future time”.65 [56] Mr Fynes-Clinton goes on in his submissions to refer to the operation of s.1.4.4 of IPA. Section 1.4.4 provides as follows: 1.4.4 New planning instruments can not affect existing development approvals (1) This section applies if— (a) development approval exists for premises; and (b) after the approval is given, a new planning instrument or an amendment of a planning instrument commences. (2) To the extent the approval has not lapsed, neither the planning instrument nor the amendment can stop or further regulate the development, or otherwise affect the approval. 58 See respondent’s submissions para 41 and following. 59 See transcript p.168, evidence of Mr Parsons. 60 [2007] QLAC 0127. 61 (1993) 14 QLCR 422 at 430. 62 (1991) 13 QLCR 207. 63 (1965) LGRA 387 at p.395. 64 At para 43 of respondent’s submissions. 65 Submissions para 43. -- 22 of 71 -- 23 [57] Mr Fynes-Clinton submits that66 “even if the ‘golf course policy’ had taken legal effect as an amendment of the planning scheme on 1 October 2007, those particular planning scheme provisions would have been legally incapable of diminishing the development rights granted by the preliminary approval”. [58] In his reply submissions67 Mr Cronin for the appellants counters Mr Fynes-Clinton’s submissions in the following way: “11. In paragraphs 41 to 43 of its submissions, the Chief Executive seeks to hide behind the artificiality contained in section 3(1)(b) and (2A) of the VOLA. However, it is extraordinary that the Chief Executive would then say that the policy could not apply to the land because the Act assumes there are no improvements for the purposes of the valuation. That submission overlooks that section 3(2C) of the VOLA does not require the assumption that the improvements have never been made. The land is to be valued having regard to all town planning constraints affecting the land. It also overlooks section 3(4) which assumes that the land may be used or may be continued to be used for any purpose for which it was being used as at the date on which the valuation arises. There is simply no requirement, and indeed it is wrong in principle, when assuming that the improvements did not exist under section 3(1)(b) of VOLA, to take that assumption any further than to arrive at the value of the land having regard to all its constraints and benefits without regard to improvements. 12. It is asserted that the artificial construction was mandated by the legislation. The cited authority of Surfers Paradise Resort Hotel Pty Ltd v Department of Natural Resources and Water12 was about whether section 3(1)(a) or (b) applied to the valuation of the land the subject of that appeal. The issue before the Court was whether the improvements added value to the land in question at the time under consideration in order to determine which limb of section 3(1) of VOLA applied. The case is significant in resolving the need to identify the highest and best use only when the valuation step takes place and not as part of the process of considering whether the land was improved or not. There is nothing in that case which mandates the artificial construction about whether the improvements ‘did not exist’ or not. 13. The submissions by the Chief Executive also refer to the decision of Valuer-General v Queensland Club13 which was itself referred to in the decision of Ballow Chambers Ltd v Valuer-General.14 Those cases are relevant only in the sense that they deal with improved land where the improvement was protected (by the Heritage Act in the case of Ballow Chambers, and by the heritage provisions in the Brisbane City Town Plan in the case of Queensland Club) by various statutory provisions or statutory instruments. The owner of the land was effectively prevented from developing the land to any other use other than that to which it was presently utilized because of the heritage value of the improvements. Those cases assist the Appellant although they are not directly on point because they recognize that town planning or similar use restrictions applying to a site are relevant in determining unimproved value. In the case of the subject appeal, the Council sought to apply its golf course protection policy in respect of the Parkwood Golf Course in August 2007 and it is contended by the Appellant that the Council, having specifically referred to Gold Coast Country Club in its policy, may seek to restrict any development approval on the land because of that draft policy. The only question is the weight to be attached to the policy.” __________________________ 12. [2007] QLAC 0127. 13. [1991] 13 QLCR 207. 14. [1992-1993] 14 QLCR 422. [59] I agree with the approach adopted by Mr Cronin. Taking account of the provisions of the VLA as a whole, whilst it is incumbent upon the Court to determine the unimproved value of the subject land on the assumption that the improvements do not exist, the VLA also makes it clear that the Court is not blind to the current use of the land as at the valuation date. Neither, 66 See submissions of respondent para 54. 67 Paras 11-13. -- 23 of 71 -- 24 in my view, can it properly be said that any impediments that may be considered to flow in the mind of a prudent purchaser as a consequence of that existing use of the land are also relevant in determining the unimproved value of that land pursuant to the VLA. [60] It is appropriate to touch upon one further element of the planning evidence relating to the golf course policy and related issues. During cross-examination, Mr Venn stated that he was “quite astounded”68 that the preliminary approval of May 2007 stated that all future development applications as set out in the table of development are impact assessable. Indeed, such is Mr Venn’s level of concern with this aspect of the preliminary approval that he considers this aspect “might have been a mistake”.69 Mr Cronin then questioned Mr Venn as to potential consequences which may flow as a result of the specified future development applications being impact assessable. Mr Venn’s evidence relevantly is as follows:70 “But, I mean, any member of the golf course, of which I think the evidence was is over 1,000, any member of the golf course could object to a development application for any of those uses and have appeal rights with respect to it?--But they didn’t before. The could, couldn’t they? I mean, you are avoiding the question. They could, couldn’t they?--They could, just as they couldn’t before. And clearly anyone owning the land as at the two relevant dates 1/10/06 and 1/10/07 would have the knowledge that any member of the golf course could frustrate these development plans, maybe only in time but certainly frustrate them through this process?--Not nearly to the degree that they could have frustrated this. This is an application that covered the whole of the land. Any future applications are going to involve different elements of it. So there is opportunity to pursue a number of different applications simultaneously to avoid some situation like that. Whereas at this time there was the opportunity to object to it and hold the whole thing up. And any person wanting to lodge a submission in respect of this application could force this developer, this land owner to go to Court, to have a significant Court case to deal with a whole range of issues, including whether it should remain as a golf course, or what its impact might be on the environmental area immediately to the east. All of that could occur as a result of this preliminary approval, couldn’t it?--No, because this plan here shows the development standards and layout and general concept. I think you are pulling a very wide bow here. The future applications are to do with detail, not the broad land use concept. Mr Venn, my question was any person, any member of the golf course, any member of the public could have a right to lodge a submission and to appeal with respect to any future development application for users set out on page 318. That is undeniably correct, isn’t it?--Correct. As I said, just as they could have before. You really want to downplay the fact that the preliminary approval refers to impact assessable applications. You want to downplay that, don’t you?--Look, certainly it would have been an advantage to have the first piece of paper a 316, and all those code assessable or even self assessable would have been even more magical but it didn’t, so I agree with you that it was a little bit unfortunate but that approval can be put in place instantly, instantly by withdrawing the appeal, or by agreeing with the council that they are going to change under the negotiation.” [61] Mr Cronin closes his reply submissions with respect to the golf course policy issue by making the following submission:71 68 Transcript p.302. 69 Transcript p.302. 70 Transcript p.303-304. 71 At para 15. -- 24 of 71 -- 25 “15. While it is correct to say, as set out in paragraph 50 of the Respondent’s submissions, that no reference is made in the planning report to the Council about the golf course policy, nevertheless some section in the Council was sufficiently influential to be able to have the recommendation changed for the assessment of future development applications from code assessable to impact assessable. That extraordinary fact alone suggests that this site was the subject of some special and/or political interest within the Council from which uncertainty may only be inferred.” [62] In my view, Mr Cronin’s submissions set out in the proceeding paragraph have some force, and are certainly supported by various aspects of the evidence relating to the strange nature of the preliminary approval together with the unusual circumstances of the golf course policy being referred to with respect to the Parkwood golf course development application but not the Arundel golf course application which was rejected some two weeks later. This is relevant as the respondent throughout his submissions seeks to cast doubt on the reliability of Mr Ransom as a witness. As Mr Fynes-Clinton put it as paragraph 51 of his submissions: “51. The process which led to that approval in May 2007 was well advanced on 1 October 2006, and the approval itself was in place as at 1 October 2007. If Mr Ransom is correct to any extent or degree, one must necessarily ask ‘Why is there no mention of the golf course policy in any Council decision or document concerning the subject land?’ The question is rhetorical. The answer is clear.” The clear answer that Mr Fynes-Clinton is referring to is obviously that, in his view, the Council made no reference to the golf course policy in its preliminary approval of May 2007 because that policy simply formed no part of its consideration and was not considered at all relevant. [63] In my view, the answer to Mr Fynes-Clinton’s rhetorical question is not as clear cut as he would have the Court believe. Both Mr Ransom and Mr Venn gave evidence as to the strange nature of certain decisions of the Gold Coast City Council, both in their treatment of the development application for the subject land in 2002, as well as the inconsistent refusals of the Parkwood golf course development application as compared to the Arundel golf course development application. I have already set out relevant examples of the evidence in this regard and I will not repeat it. Certainly though, from the clear evidence of each valuer, aspects of Council decisions such as the preliminary approval of May 2007 may involve what they refer to as ‘political considerations’. Indeed, as regards the development of the approval with respect to the May 2007 preliminary approval, there was a significant change in the view of Council officers who originally proposed a 3.1.6 code assessable development approval yet, for reasons which do not appear in any of the material subpoenaed from the Gold Coast City Council, the approval ultimately was made pursuant to 3.1.5 of IPA as already discussed. [64] The rhetorical question could be asked, “what caused Council to change its mind regarding the May approval?”. The evidence presented to the Court in this case clearly demonstrates that factors outside of the usual development approval process may have been at play within the -- 25 of 71 -- 26 Gold Coast City Council which resulted in the decision being made in the way that it was. Whilst there is clearly no firm evidence in this regard and therefore not an aspect to which the Court can put any weight whatsoever as to what actually occurred in Council, there is ample evidence to bring significant doubt to the answer to Mr Fynes-Clinton’s rhetorical question that he would have the Court find. So much is known and is relevant: the Council by its approval did change, in a substantive way, from what was put up for approval by Council officers. Further, as a consequence of that change, a potential purchaser of the property as at 1 October 2007 in particular would be cognisant of the fact that Council had for some reason determined the preliminary approval pursuant to 3.1.5, and accordingly that hypothetical prudent purchaser would have justifiable concerns that an underlying reason may have been because of a desire expressed at least by some within Council to protect this particular land under the golf course policy, resulting in the hypothetical prudent purchaser as at 1 October 2007 being required to make an assessment of the risk posed to future development on the subject land by, amongst other things, the golf course policy. The extent to which that risk impacts the unimproved value of the land, if at all, will be assessed when I consider the valuation evidence in this matter. Priority infrastructure plan district park [65] As with the golf course policy referred to previously, a significant amount of evidence was given as regards the potential impact of a district park which is proposed by the Gold Coast City Council’s priority infrastructure plan (“PIP”) on Lot 18 of the subject land. The PIP came into affect on 8 January 2007.72 The following comments from the town planning experts joint report73 are relevant: “(p) Under both the previous infrastructure Policies and the PIP, the Southern Precinct of the subject site (Lot 18 on RP868223) is identified as ‘Guanaba-Currumbin Valley ‘SLA’, ‘District Park’ Infrastructure Type, ‘Arundel Sports Park’. Both documents indicate that a ten hectare District Park is to be established on Lot 18… (q) … The PIP clarifies that this District Park will have an area of 10 hectares. The PIP (Table 1-32) indicates that 90% of a District Sports Park must have a Q50 flood immunity, while 10% of a District Sports Park must have a Q100 flood immunity. DR says that the area in which the District Park is designated on the PIP mapping is predominantly flood prone while JV suggests that this assessment needs to be qualified with reference to a flood frequency contour.” [66] Further in their joint report, the town planners make the following relevant observations regarding the district park: “2.4 PIP-District Park (i) JV comment - … The area represented on the PIP plans closely represents an of area 10 hectares and from which it may be determined that approximately 18% of the District Park designation is above the Q100 flood frequency contour. 72 See Exh.8 para 1(O). 73 Exh.8 p.3. -- 26 of 71 -- 27 JV has sighted an Hydrology Report by GHD dated October 2002 which reports on the impacts of filling proposed in association with the ‘Helensvale Residential Development’ on the left bank of the Coombabah Creek. Noted are the following findings from that report: (a) The Report is based on the extent of filling proposed by the MasterPlan which indicates a ‘residential area’ of 47.89 hectares derived from the subtraction of the buffer area from the total area of the Southern Precinct; (b) The Q50 and Q100 are quite similar with little differential between contours; (c) The impact of the proposed left bank development on peak discharges and flow velocities are negligible; (d) The impact of the additional filling of the off-stream storage areas associated with the development area extension will be negligible. It appears to be feasible, both physically and economically, to fill the land identified in the GHD report to provide an area for a District Park (and this area will be more fully illustrated in the ‘Further Statement’ individual report to be prepared by JV subsequent to this Joint Report). This location results in a shift of the PIP indicated location onto higher land at the expense of some ‘developable’ land above the Q100 flood frequency contour. This modified developable land is discussed further in section 2.5 below. (ii) DR comment - … The facility described in the PIP is not a golf course for the following reasons:  10 Hectares is an insufficient land area for even the smallest of golf courses.  The reference to either ‘round or square’ is a reference to round or square playing fields to accommodate recreational activities such as Cricket, Australian Rules Football, Soccer, Rugby League, Rugby Union, Touch Football or Hockey. Golf courses are not required to be, and never are, either round or square in shape. … The reference to a District Sports Park in the PIP is a reference to a collection of mainstream playing field for group ball sports and golf would not be an activity falling into this category. It is apparent that no ‘ground truthing’ has been undertaken by Council in the selection of the designated site, and that if the South Precinct was to be utilised for this purpose, land with a 90% Q50 flood immunity and 10% Q100 flood immunity would have to occupied. The only land likely to meet this requirement on the South Precinct, is the northernmost peninsula of flood free land on the Southern Precinct. With respect to JV’s observation in point 2.4(i) above, in relation to the GHD report dated October 2002, reference is made to Condition 15 of the Section 3.1.5 Preliminary Approval issued over the site which makes reference to a different GHD Report (reference 41/12721/74301 dated 4 August 2004). It is noted that Condition 16 of the Approval requires no increase in flood levels external to the site, while Condition 17 of the Approval requires the submission of detailed design of the detention measures. DR makes the following observations in relation to the GHD 2004 flood report and the comments from JV in point 2.4(i): …  The GHD report referred to in Condition 15 of the Approval, is subject to compliance with the requirements of Conditions 16 and 17 of the Approval. Uncertainty exists as to whether the filling activities identified in the GHD report can actually be undertaken, as Condition 16 requires the written consent of property owners affected by any increase in flood levels external to the site.  Council, through consideration of future Impact Assessable applications, is not precluded from considering and applying the current flood standards to the proposed development, in this case being the Flood Affected Areas Code under the 2003 Gold Coast Planning Scheme. In my experience, Council’s assessment of flooding issues has become more rigid over time, and generally includes more onerous requirements than were applicable to development applications lodged and assessed under the 1995 Albert Shire Planning Scheme. There is no guarantee that the level of filling identified in the GHD report could actually be achieved on the site.” -- 27 of 71 -- 28 [67] It is also noteworthy that the preliminary approval for the subject land of May 2007 contains the following paragraph in the ‘general advice’ part of the preliminary approval notification:74 “The applicant is advised that the area indicated as open space on Lot 43 SP180511 (the finger) and the area also indicated as open space on Lot 18 RP868223 (the most northern part of the site) on Plan of Development No. 2279 CP 07, Issue J, dated March 2007 is identified by Council’s Parks and Recreation Services Branch for Recreation Facilities in accordance with Council’s Priority Infrastructure Planning. You are also advised that the open space area identified above for Lot 43 SP180511 is to be identified for passive use. You are requested to contact Mr Paul Brookfield on telephone number 55816437 for further instructions prior to lodging any future application seeking approval for a Development Permit.” [68] In Mr Fynes-Clinton’s view, the issues relating to the district park are no more than “a third deposit in the herring basket”.75 Mr Fynes-Clinton points out that both valuers noted that should the council acquire land from Lot 18 for the purposes of a district park, then the owner of the land would be appropriately compensated.76 [69] While referring to the general advice part of the preliminary approval relating to the district park, Mr Fynes-Clinton had this to say in his oral submissions:77 “That statement means what it says, refers to an approved plan and, has just been demonstrated by going to the council’s location plans for the parks as distinct from the invented locations by Mr Ransom and others what the council has said in that advice statement is completely consistent with what the council has said on its PIP park map on p.60. This notion either that substantial part of Lot 43 has to be given up to local park because the council wouldn’t accept the finger or that development would be wiped out on Lot 18 because a district park needs to go on the high land are all very interesting but they completely defy the plain and unequivocal words of what the council itself has said and done.” [70] The appellants’ case with respect to the district park is underlined by the assertion that the PIP requires the payment by a developer of substantial infrastructure charges.78 Mr Cronin further points out that the giving of land can form part of an infrastructure charge. Importantly, Mr Cronin pointed out the following in his primary submissions:79 “45. The ability for the Council to obtain the land under the priority infrastructure plan arises from section 5.1.12(2) of the IPA. It is in the following terms: ‘5.1.12 Agreements about, and alternatives to, paying infrastructure Charges … (2) For development infrastructure that is land, the local government may give the applicant a notice, in addition to, or instead of, the notice given under section 5.1.8, requiring the person to— (a) give to the local government, in fee simple, part of the land the subject of the development application; or (b) give to the local government, in fee simple, part of the land the subject of the development application and an infrastructure charge.’ 46. That section permits the Council to require that land be given for development infrastructure. That term is defined in schedule 10 of IPA to include land or works, or both land and works including public parks and public recreation facilities. 74 See exh.6 volume 1 p.325. 75 Respondent’s reply submissions para 27. 76 Respondent’s reply submissions para 23. 77 Transcript p.477. 78 Appellants’ reply submissions para 16. 79 At paras 45 - 49. -- 28 of 71 -- 29 47. Mr Venn did not have any knowledge about the process.50 However Mr Ransom knew about it. He thought that the quickest and easiest way for the Council was to impose a condition requiring that the park be provided to them51 and that it be the subject to a negotiated valuation process52 or that it would be more likely to be set off against other infrastructure charges.53 He said that it is likely that the Council will try and offset the value of the park against other charges on a formula basis in that it had a lot to do with the topography of the park.54 48. Mr Parsons included the district park from the developable area on the basis that there would be some compensation applied for it.55 The district park was ignored by Mr Bale. The only expert evidence on how the district park might be dealt with is provided by Mr Ransom, who says that it is likely to be the subject of a condition in the development approval and that there would be some sort of level of offsetting against infrastructure charges. Clearly there would not be any certainty about the payment of full compensation to the owner of the land. 49. At its very best, the district park presents a major level of uncertainty and a major encumbrance upon the development potential of the land.” _____________________ 50. T300, L 15 51. T50, L 22 52. T50, L 30 53. T50, L 33 54. T40, L 43-50 and T51, L 1-5 55. Exhibit 7, p.9 [71] In his valuation report,80 Mr Venn gives his opinion that while the positioning of the district park “may have a negative affect on the residential dwelling unit yield, the location identified is sustainable from both physical and planning scheme perspectives - if it substantiated as legitimately required by the planning process”.81 Mr Venn further notes that the land component required for the district park “represents a loss of yield approximating 200 dwelling units”.82 [72] Looking at all of the evidence and submissions relating to the district park, including that evidence referred to above, in my view it is clear that the Council has identified land in the north east corner of Lot 18 as the location for a district park, and further that, pursuant to the PIP, it is open to the Council to require the handing over of that land as part of an infrastructure charge for future development of the subject land. If the land was required to be handed over as part of an infrastructure charge, it is my view, based on the evidence such as it is before me, that the district park land would include land above the Q100 level which would otherwise be used for residential development. I do not doubt Mr Venn’s evidence that this would represent a loss of yield approximating 200 dwelling units. It is of course feasible that other areas of land on Lot 18 currently physically below the Q100 level may be filled so as to allow development to occur up to the full component as set out in the preliminary approval even if the land as indicated is required for a district park. However, should such additional fill be required on the site, then there are flow-on affects that all have to be taken into account relating to flood impact and mitigation. On the evidence before me, I have no way of knowing 80 Exh.13. 81 Exh.13 para 4.9.2. 82 Exh.13 para 5.1.1(xx). -- 29 of 71 -- 30 whether or not flood mitigation issues would negatively impact on the likelihood of the landholder obtaining permission to relevantly fill the subject land. In this regard, however, I note the opinion of the civil engineer, Mr Williams, that the filling application lodged with Council constitutes a technically acceptable solution which would permit filling of the subject land.83 [73] In my view, the question as to the likely impact of the district park on the amount that a prudent purchaser would be prepared to pay for the subject land as at the valuation dates again comes down to a question of risk. Particularly with respect to this issue, the assessment of that risk presents somewhat of a conundrum wrapped in a paradox. It is certainly true that were the land acquired by Council under the statutory acquisition provisions of the Acquisition of Land Act, appropriate compensation would be payable to the landholder. Ordinarily, one would expect the question of risk to simply be whether or not such an acquisition is likely to occur. The paradox comes to light, however, due to the operation of the PIP insofar as it relates to infrastructure charges. On the evidence, there is some element of risk that a prudent purchaser would be aware of, insofar as the valuation date of 1 October 2007 is concerned, with respect to land that may be required by Council for a district park as an infrastructure charge component of any future development. The quantification of that risk into a dollar impact on the appropriate valuations of the subject land under the VLA, if indeed there be any at all, will be dealt with as part of my examination of the valuation evidence and conclusions. Infrastructure charges [74] The appellants’ contentions with respect to infrastructure charges are conveniently set out in summary form in the appellants’ primary submissions as follows:84 “50. In every respect the infrastructure charges which have been calculated at pages 220 to 223 of exhibit 6, are a major disincentive for the development of the site on Lot 18. They are: (a) as at 1 October 2006 $20,543,337.20 (b) as at 1 October 2007 $19,399,911.45. 51. On Lot 43 they are: (a) as at 1 October 2006 $22,626,878.92 (b) as at 1 October 2007 $36,546,470.44. 52. By way of contrast, the sales evidence of Mr Parsons gives the following information with respect to PIP charges: Sale 4 $13.00 per m² Sale 5 $18.00 per m² Sale 6 $18.00 per m² 56 53. Mr Ransom gave evidence about infrastructure charges being introduced by the Gold Coast City Council as the first Council in Queensland to do so.57 He gave evidence about the non viability of projects and the concessions being made by the Council.58 He referred to the infrastructure charges with respect to the Zupps car yard site which the Court saw on inspection on the other 83 See transcript p.19. 84 At paras 50 - 54. -- 30 of 71 -- 31 side of the railway station on the Gold Coast Highway at Helensvale. The charges in that instance were in excess of $2,000,000.00.59 He also referred to a shopping centre at Nerang which was rendered economically unviable because of the infrastructure charges.60 The extent of the issue of infrastructure charges on the Gold Coast is reflected in the number of appeals which Mr Ransom said were 35 current at the moment.61 54. Mr Venn agreed that infrastructure charges on the Gold Coast were high and were the subject of constantly continuous comment by the development industry.62 He agreed that the infrastructure charges were a source of concern for developers.63 He agreed that infrastructure charges were applied on a planned demand basis.64 __________________________ 56. See Exhibit 7, p. 10 - 11 57. T98, L 40 58. T99, L 10 - 35 59. T100, L 3 and T31, L 25 - 45 60. T31, L 46 to T32, L 15 61. T32, L 24 62 T304, L 40 - 45 63 T309, L 13 64 T309, L 28 and T310, L 20 where he acknowledged evidence which he gave in the case of Clift v Gold Coast City Council (2006) QPELR 280 at 290” [75] Consistent with the highly differing views as to the evidence and the law throughout this case, the respondent’s position is summarised as to infrastructure charges in Mr Fynes-Clinton’s response submissions:85 “28. The primary submissions of the Appellants make no attempt to address the real issue, articulated in the primary submissions of the Respondent, that:- (a) the evidence demonstrates that a hypothetical purchaser on 1 October 2006, properly informed, would have been aware that it would be paying infrastructure charges under the PIP regime when its development actually took place in 2007 or later; (b) the valuation evidence demonstrates that there is simply nothing at all in the market sales evidence to support a conclusion that relevant property values suddenly stalled or dropped in January (or October) 2007 as a result of the introduction of the PIP regime; (c) therefore, on the evidence, there is nothing to support a proposition that the introduction of the PIP regime in January 2007 affected market values in any way between 1 October 2006 and 1 October 2007. 29. It is considered necessary to repeat the trite observation which opened the Respondent’s primary submissions: this case must be decided on the evidence, not on speculation or the mere dogmatic assertion of a purported expert witness where that assertion is unsupported by any primary facts or any discernible process of reasoning from primary facts to the opinion expressed. [76] The impact of infrastructure charges on valuations under the VLA have been the subject of two decisions of the Land Court, they being GPT RE Limited (as responsible entity) & Anor v Department of Natural Resources and Water86 and Thiess Services Pty Ltd v Department of Natural Resources and Mines.87 In both GPT and Thiess, it was submitted on behalf of the respondent that the value of infrastructure credits pertaining to a parcel of land should be 85 At paras 28 and 29. 86 [2009] QLC 0078. 87 [2010] QLC 0030. -- 31 of 71 -- 32 added to the unimproved value of that land pursuant to the VLA. In GPT, Member Jones had this to say with respect to infrastructure credits:88 “[92] That the right to the credits has not crystallised as at the date of valuation and, in that sense has not ‘happened’, is not to the point. The issue is whether, at the date of valuation, the potential or opportunity to derive a benefit from the credits adds value to the land. It is the increase in value that has to have ‘happened’ at the relevant date not the actual event that gives rise to the right to secure the benefit of the credits. … [116] On the evidence before me I have reached the conclusion that the infrastructure credits are not an improvement nor are they an integral part of or inseparable from the existing improvements on the land. In the event that the existing improvements were demolished the credits do not disappear. They remain to be taken advantage of by the person who next develops the land. As the respondent puts it their existence is not dependant upon the existence of the improvements on the land. In this context I respectfully adopt the words of Davies JA and Thomas J as an apt description of the infrastructure credits and conclude that they should be regarded as a feature of the land to be taken into account when assessing its unimproved value. [117] Under the artificial valuation exercise prescribed under s.3(1)(b) of the Act the notional prudent purchaser acquiring the land as at the date of valuation would, while acquiring it absent any improvements thereon or appertaining thereto, would nonetheless be acquiring it with the benefits (if any) of any infrastructure credits attaching to the land. This approach appears to be consistent with that adopted by the Land Court in cases such as Galli Development (Qld) Pty Ltd v Department of Natural Resources and Water95 and Riverside Drive Estate Pty Ltd v Valuer General96 where the Court included the added value previously paid headwork charges gave to the land. [118] Whether or not infrastructure credits do add value and, if so, to what extent is a question of fact. __________________________ 95. (1997) 17 QLCR 205. See also Schokman v DNR (1998) 19 QLCR 386. 96. (1988-89) 12 QLCR 165” [77] In Thiess, after adopting the reasoning of Member Jones in GPT, I made the following comments:89 “Quite specifically, infrastructure credits are a question of fact. As a question of fact, the value, if any, to be applied to infrastructure credits will necessarily differ from case to case, depending upon the factual circumstances before the Court. For instance, in GPT, on the facts of that case, Mr Jones discounted the quantum of the infrastructure credits to 95 percent of their known value.” [78] I find it somewhat perplexing that the respondent should argue in cases such as GPT and Thiess that infrastructure credits should be added to the unimproved value of land calculated pursuant to the VLA, yet in this case essentially argue that the burden that infrastructure charges place on the development potential of land should not be taken into account for the purposes of valuations under the VLA. [79] In my view, just as the Court has found it appropriate to include infrastructure credits in the unimproved value of land assessed under the VLA, so to must the issue of infrastructure 88 At paras [92] and [116] - [118]. 89 At paras [94] - [95]. -- 32 of 71 -- 33 charges be taken into account when assessing appropriate unimproved values under the VLA. Such assessment however must be a question of fact on a case by case basis. [80] I accept the evidence of Mr Ransom that, on a case by case basis, depending upon the potential infrastructure charges that may flow with development approvals for any specific site, that such charges have a potential to have a direct impact on what a prudent purchaser would be willing to pay for a block of land. The nature and extent of that impact as a question of fact must be considered on a case by case basis and in conjunction with a consideration of the relevant valuation evidence. Koala conservation plan [81] At pages 34 to 36 of Volume 1 of Exhibit 6, Mr Ransom attempts to show that there is a risk to development of the subject land, particularly as at 1 October 2007, in light of the Nature Conservation (Koala) Conservation Plan 2006 and Management Program 2006-2016. Mr Ransom notes that Lot 18 is designated within both the Koala Conservation Area and the Urban Koala Area, while Lot 43 is situated within the Urban Koala Area designation.90 [82] Mr Ransom concludes his analysis of the potential impact of the Koala Conservation Plan by stating that “it may be that ultimately the relevant criteria within the Koala Plan impacts upon the extent of the developable area and dwelling yield that has been calculated for Lot 18 and Lot 43”.91 [83] During cross-examination, Mr Ransom readily acknowledged Lot 43 is almost completely cleared and is devoid of trees and that Lot 18 is significantly cleared but for trees associated with the golf course and that no koalas have been seen on either lot in living memory.92 [84] Mr Ransom also made reference to the South East Queensland Regional Plan which came into effect in December 2008 and their koala regulatory provisions contained therein requiring a vegetation agreement with the Department of Infrastructure and Planning. He went on to note that the plan is very site specific and land targeted document and that there is no doubt that the South East Queensland Regional Plan relates to the subject land insofar as the koala regulatory provisions are concerned.93 Of course, the South East Regional Plan is well after the second valuation date of 1 October 2007. [85] Given the facts of this matter as to the circumstances as they existed with regard to koalas relevant to the subject land as at 1 October 2006 and 1 October 2007, it is my view that issues relating to the koala protection plan would not have had any discernible impact on the price that a prudent purchaser would have paid for the land as those dates, and therefore the koala 90 See Exh.6 volume 1 p.34 para 148. 91 Exh.6 volume 1 p.36 para 156. 92 Transcript p.74-75. 93 See transcript p.75-76. -- 33 of 71 -- 34 protection policy has no impact on the unimproved value of the subject land as at 1 October 2006 or 1 October 2007. Bridge to Nowhere [86] The “Bridge to Nowhere” as it has been called throughout the evidence is a bridge that was constructed many years ago, funded by the Department of Railways and Mr Buckler, to allow access from Lot 18 across the rail and road corridor to the west of Lot 18. The Bridge to Nowhere is located at or about the mid point of the western boundary of Lot 18 but it does not intrude onto Lot 18 in any way. [87] The bridge is clearly visible on exhibit 12. [88] The Bridge to Nowhere also features on the plans pertaining to the preliminary approval of May 2007.94 [89] The respondent contends that development of the subject land would be possible, from the point of view of the hypothetical prudent purchaser, by way of existing road access from the Gold Coast Highway via Country Club Drive and the Helensvale town centre via Country Club Drive.95 [90] During oral submissions, Mr Cronin had tis to say regarding the Bridge to Nowhere:96 “In terms of the Bridge to Nowhere, the evidence before you isn’t comprehensive. There isn’t before you a traffic assessment. The council had before them plans indicating that bridge clearly shown on the plans which were exhibited to the preliminary approval and you’ll see that the preliminary approval requires that there be a traffic assessment and no doubt that traffic assessment will be dependent upon - well, let me just take you to it. It’s condition 9 and it’s at . 319 of Mr Ransom’s report, Exhibit 6, and it says, ‘For all future development applications, the subject site seeking a development permit, the applicant must undertake a traffic impact assessment and submit a traffic impact report to identify the potential impacts and one of the requirements is the position and nature of vehicular access to the site, the need for any changes to the existing roads’ infrastructure, expect a demand, etc.’ So there will be an assessment to be made on it. There is an existing bridge which sticks out on all of the plans and, of course, council aren’t expected to be blind. If council see that there’s a need for that bridge, then that appropriately will be conditioned. If the development has the sort of potential that the respondent asserts, then one would expect that it’s likely that the bridge would be required, but we can’t take it any further than that.” [91] I will leave further analysis of the Bridge to Nowhere to my assessment of the valuation evidence in this matter. Evidence of events post valuation date - hindsight, or confirmation of a foresight? [92] An important aspect for determination in these appeals relates to evidence of events that have occurred subsequent to the relevant valuation dates. There are a number of relevant examples. For instance, evidence as to the actual terms of the preliminary approval obtained in May 2007 and its relationship to the 1 October 2006 valuation; further decisions by the Gold Coast City Council relating to the golf course policy; the impact of the South East Queensland 94 See exh.6 volume 1 p.332 and 333. 95 Respondent’s reply submissions para 42. 96 Transcript p.485. -- 34 of 71 -- 35 Regional Plan; Mr Ransom’s advice to Devine of 24 February 2008;97 the Gold Coast City Council’s without prejudice offer of 24 August 2008 to settle the appeal relating to the preliminary approval of May 2007;98 and plans for the protection of koalas. [93] The Land Appeal Court of Queensland has recently considered the law regarding the receipt of evidence subsequent to an event which confirms a foresight in the case of Mio Art Pty Ltd v Brisbane City Council and Greener Investments Pty Ltd (In Liquidation) v Brisbane City Council.99 In Mio Art, the Land Appeal Court, constituted by Peter Lyons J, myself and Mr Isdale, went to some length in considering a number of relevant authorities. It is appropriate to refer to that examination from Mio Art in detail:100 “[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 Council14 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 & Co15 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 Council17 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. 97 See exh.20. 98 See exh.13 appendix C pages 46 - 48. 99 [2010] QLAC 0007. 100 At paras [76] - [88]. -- 35 of 71 -- 36 [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 James20 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 Company21:- ‘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. -- 36 of 71 -- 37 _______________________ 14 [2966] 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.” [94] I can see no reason why the reasoning as set out in Mio Art should not be applied to cases involving the determination of unimproved value as at a specified date under the VLA. Of course, it is paramount to bear in mind that the evidence which is apt to be adduced is that relating to a foresight as at a particular date, and not the application of unforeseen subsequent events by hindsight to a particular date. The application of this principal becomes self evident when the evidence is considered relating to the preliminary approval of May 2007. It is clear on the evidence that, as at 1 October 2006, it was the expectation of all relevantly informed persons that the application lodged by the appellants in 2002 with respect to the subject land would be approved pursuant to 3.1.6 of IPA. As I have already pointed out, the approval of May 2007 was made under 3.1.5 of IPA, and not 3.1.6. However, the fact that the approval ultimately was granted under 3.1.5 and not 3.1.6 cannot have any bearing on the valuation as at 1 October 2006. It was the foresight of all concerned as at 1 October 2006 that the approval would be made under 3.1.6. That foresight was not confirmed by subsequent events; it was, indeed, found to be in error. The fact that the preliminary approval in May 2007 was a 3.1.5 approval could only be applied to the 1 October 2006 valuation by way of hindsight. That is not permissible, as to do would clearly be applying hindsight rather than foresight. [95] The position regarding the relationship of the May 2007 preliminary approval to the 1 October 2006 valuation is different though to the issue of the advice provided by Mr Ransom to a purchaser in February 2008. Mr Ransom gives evidence as to considerations that a potential purchaser, properly advised, would have taken into account as at 1 October 2007. The fact that he was engaged to provide just such an advice in February 2008 is clearly a confirmation of a foresight. Repeating the comments set out above from the case of Bwllfa, “why should he listen to conjecture on a matter which has become an accomplished fact? Why should he guess when he can calculate? With a light before him why should he shut his eyes and grope in the dark”. I would add: why should the Court only take note of the hypothetical evidence of Mr Ransom and Mr Venn as to what town planning issues would be taken into account by a hypothetical prudent purchaser as at 1 October 2007 when the Court can avail itself of an actual advice to a prudent purchaser by Mr Ransom relating to this very same land in February -- 37 of 71 -- 38 2008? In my view, to not take into account Mr Ransom’s advice of February 2008 would be nonsensical. [96] In like manner, the Council’s without prejudice offer of 25 August 2008 relating to the preliminary approval can also be taken into account. As regards that offer, it does not of course resolve the appeal as the offer has not been accepted. It is however good evidence of one way in which the appeal may be resolved, showing in black and white terms what the Gold Coast City Council is prepared to do to settle the matter. This detracts somewhat from the level of uncertainty as at 1 October 2007, although such only goes to prove, rather than speculate, as to the manner in which the Gold Coast City Council would be prepared to resolve the matter. Substantively, of course, the issue remains subject to an unresolved appeal and the legal outcome remains unknown.101 [97] Other issues relating to the evidence as being either the confirmation of a foresight or an attempt to impose evidence in hindsight onto the respective valuation dates will be addressed, as is necessary, when I deal with the specific valuation evidence in this matter. Valuation evidence - general observations [98] As previously indicated, the Court had the benefit of valuation evidence from two expert valuers; Mr Parsons for the appellants and Mr Bale for the respondent. [99] In the respondent’s submissions, Mr Parsons evidence is described as inconsistent and error ridden.102 They are not the only uncomplimentary remarks made regarding Mr Parsons’ evidence by the respondent. Mr Fynes-Clinton in his submissions went on to say that “Mr Parsons’ attempt to value Lot 18 based upon the larger developable area adopted by Mr Bale (exhibit 24) was, for the want of a better term, schizophrenic”.103 [100] In the appellants’ reply submissions, Mr Cronin says of Mr Bale that “his errors abound”.104 Mr Cronin describes the reference to Mr Parsons as being schizophrenic as “both insulting and unfair”.105 [101] In Mr Cronin’s words, “the almost personal attack in the submissions both on Mr Parsons and on Mr Ransom, is inappropriate, inaccurate and misplaced”.106 [102] It is unfortunate that Counsel have both seen fit to refer to the valuers who assisted the Court with their expert opinion in such a manner. I am particularly concerned regarding the reference to Mr Parsons’ evidence as schizophrenic. In my view, what Mr Parsons was attempting to do in providing the Court with an alternate valuation approach was his way of 101 It must of course be noted that whilst the appeal remains on foot, the Preliminary Approval is not operational. 102 Submissions para 117. 103 Respondent’s submissions para 125. 104 Appellants’ reply submissions para 38. 105 Appellants’ reply submissions para 42. 106 Appellants’ reply submissions para 38. -- 38 of 71 -- 39 seeking, as a professional expert understanding his duties to the Court, to assist the Court to the greatest extent possible. Rather than being chastised for this conduct, he is to be commended. Leaving aside the schizophrenic comment, the attack by both Counsel on the respective experts as providing evidence supposedly full of errors could tend one to the belief that the expert evidence provided by the expert valuers to the Court in this case was haphazard, shoddy, ill-informed and not in keeping with the usual standard of expert evidence before the Court. Perhaps that is overstating Counsel’s respective attacks, but it is the take that I put on evidence said to be ‘error ridden, misstated, inappropriate, inaccurate, and misplaced’. [103] I had the benefit of observing both Mr Parsons and Mr Bale closely when they gave their evidence over a number of days. They were both subject to significant cross-examination. Both witnesses impressed me. [104] Mr Parsons presented as a highly qualified valuer with many many years of experience. He gave his evidence in a highly professional manner. He was willing to accept errors when they were pointed out to him. However, he was also firm in his views as to his opinion relating to the value of both the subject land and appraisal of sale properties. He gave his evidence throughout in a strong, confident but not arrogant style. [105] In like manner, Mr Bale also presented well before the Court. Though he has less experience than Mr Parsons, he nonetheless has practiced for over ten years and has clearly built up a sound knowledge base of the factors impacting upon the value of land such as the subject land in the Gold Coast region. Mr Bale also accepted errors when they were pointed out to him. He was also firm in maintaining his expert opinion. [106] In short, I consider the attacks on both expert valuers harsh and unfair. Of course, it is the task of this Court to arrive at the appropriate unimproved values for the subject land as at 1 October 2006 and 1 October 2007, and in order to do this, it is necessary for the Court to prefer some valuation evidence over other valuation evidence. This I will do in the paragraphs that follow. However, it should not be seen as detracting from my overriding comments that, in general terms, I was impressed by the professional approach adopted by both valuers in providing their valuation evidence to the Court. -- 39 of 71 -- 40 Valuation evidence - Mr Parsons [107] In Mr Parsons’ report,107 he gives the following summary of his sales evidence:108 “Low Lying/Open Space Land Sales The following sales are purchases by the Gold Coast City Council as part of the ‘Green Heart Vision’. The land will be developed as parkland being part of the ‘premier central park’. Address Sale Sale Land Area Land Area Rate Date Price (ha) ($/ha) 1. Ghilgai Road, Merrimac 16/10/06 $4,650,384 67.62 $68,772 RPD: L2 SP190865 Comments: The property comprises low lying land which is subject to flooding. The south-eastern boundary is formed by Mudgeeraba Creek. The south-western boundary adjoins the Brisbane-Gold Coast railway line. Most of the land is cleared and grassed. The property is included in the Guragunbah LAP with conceptual land uses of ‘Residential Low/Medium Density’, ‘Tourism - Built Environment’, ‘Tourism - Open Use’, ‘Active/Passive Recreation’, ‘Wetlands’, ‘New Roads and Road Improvement’ and ‘Pedestrian and Bike Improvement’. Part of the land is designated as ‘Core Floodway’, ‘Flood Fringe’ and the majority is ‘Peripheral Floodway’ on the LAP Floodways Map. 2. 83 Macadie Way, Merrimac 19/12/05 $4,450,000 68.42 $65,039 RPD: L14 RP179055 Comments: The property comprises mostly low lying land which is subject to flooding. The south- eastern boundary is formed by Mudgeeraba Creek and a number of small water bodies extend from the creek and are situated in the south-eastern section of the property. The property includes an elevated ridge which has been categorised as visually significant and not able to be developed in the Council planning instruments. The property also includes an elevated section of land in the south-west corner, adjoining the existing Fig Tree Heights residential estate. The land is in the Guragunbah LAP with Conceptual Land Uses of ‘Residential Low/Medium Density’, ‘Tourism - Built Environment’, ‘Tourism - Open Use’, ‘Active/Passive Recreation’, ‘Passive Recreation’, ‘Conservation Area’, Wetlands’, ‘Pedestrian and Bike Improvement’ and ‘New Roads and Road Improvement’. Parts of the land are designated as ‘Core floodway’, ‘Flood Fringe’ and the majority is ‘Peripheral Floodway’ on the LAP Floodways Map. 3. Boowaggan Road, Merrimac 19/03/2008 $2,400,000 40.5856 $59,128 RPD: L6 SP214289 Comments: The irregular shaped parcel previously formed part of the Avica Wedding and Resort property. The land has frontage to Mudgeeraba Creek. Most of the property comprises low lying flood prone land which is located within the Merrimac/Carrara floodplain. The property has two elevated areas which are subject to restrictive covenant registered by the Council which restricts any form of development. The Guragunbah LAP conceptual land uses are ‘Active/Passive Recreation’, ‘Passive Recreation’, ‘Open Space Corridor’, ‘Conservation Area’ and Wetlands’. A significant part of the land is categorised on the LAP Floodways Map as being Core Floodway, with the balance of the land identified as Peripheral Floodway’. Residential Development Site Sales Address Sale Sale Land Area Land Area Rate Date Price (ha) ($/ha) 4. 6 Santa Maria Court, 27/02/05 $5,300,000 5.148 Unfilled $1,030,000 Burleigh Waters Filled $1,750,000 RPD: L1 SP163203 Comments: Irregular shaped, vacant, mostly cleared site located on the eastern side of Bermuda Street within the ‘Bermuda Precinct’ of the Varsity Lakes Approved Master Plan. The land is low lying and required approximately 2 metres of fill, associated drainage and retaining. The estimated cost at the time of sale was $3,700,000 (approximately $72/m² of site area). The site has a wide frontage to Bermuda Street (A major arterial road) with access from Santa Maria Court via a traffic light controlled intersection. The land is whin the ‘Emerging Communities’ domain with a dominant land 107 Exh.7. 108 Exh.7 p.10-11. -- 40 of 71 -- 41 use of residential under the approved master plan of Varsity Lakes. The maximum building height is two storeys and a maximum density of 25 dwelling units per net ha. Subsequent approval (14 August 2006) was obtained by the purchaser for 110 dwelling units. The DA was prior to PIP charges. Council charges (sewer and water only) were $670,642.50 which reflects $13 per square metre. As part of a master plan, there was no further requirement for park dedication from the site. 5. Seachange Village, 299 Napper Rd 27/01/06 $27,800,000 20.51 $1,360,000 Arundel RPD: Lot 90 RP897115 Comments: Comprises a regular shaped residential englobo parcel located opposite the Arundel shopping centre. The site has a wide frontage to Napper Road and has existing residential development on three sides. The land has been cleared and gently falls from a low ridge (western section) to an intersecting drain with the balance area (eastern section) being mostly level filled land. The land is within the detached dwelling domain with the purchaser investigating use of the site for a range of housing options and associated community facilities. Sold with no Development Approval in place, however, the site had no impediments as evidenced by the short approval period. An application was lodged on 09/08/2006 and an approval was obtained on 17/09/2007. The final approval included 395 attached dwellings, medium density detached dwellings and Indoor Recreation (Residence Club). Total infrastructure charges have been estimated at $3,670,000 which reflects approximately $18 per square metre of site area. Address Sale Sale Land Area Land Area Rate Date Price (ha) ($/ha) 6. ‘The Parc’, Inland Drive, Tugun 06/12/06 $16,975,000 6.726 $2,520,000 RPD: L4 SP191059 Comments: Vacant residential development site being slightly irregular in shape and adjoining the John Flynn Private Hospital. The land is generally level at road height having been filled and compacted. The site adjoins the Tugan By-pass to the south-west and a lake (stormwater reserve) to the south-east. Land Use Classification: Residential Choice domain with a height control of 2 stories and a density classification of RD3 (one dwelling per 250 square metres). There was a current development approval (19/01/2006) for 213 units (one dwelling per 315 square metres), however purchaser has modified approval to 187 units (one dwelling per 350 square metres). Purchased through an extensive marketing campaign (Expression of Interest closing 2 November 2006.) There was strong interest due to limited large sites located on the southern end of Coast and within reasonably close proximity to the beach. The existing approval had substantial value to the purchasers with all earthworks/drainage issues and residential density resolved. Furthermore, there was certainty and substantial savings in costs relating to Council charges. Sewer and water headworks were payable, however, due to the existing approval (pre January 2007), there is no PIP charges. The purchaser advised this was a substantial positive consideration. Council charges within the approval equated to approximately $18/m² of gross site area. 5.3 Relativity with Other Golf Course Sites A summary of a recent Land Court decision in relation to the unimproved land value for the Tee Trees golf course site and two improved golf course sales are set out below: Land Rate Address RPD Area (ha) ULV ($/ha) Comments Tee Tree Golf Course Site L901 SP172778 61.61 01/10/06 - Recent Land Court Tee Trees Blv, $1,527,000 $24,800 decision QLC0187. Arundel 01/10/07 - Adjoins subject to $2,600,000 $42,200 east. DNRW appear to have increased the 2007 value back to the applied level prior to the Land Court decision for 2006 value. This is contrary to other golf course/open space -- 41 of 71 -- 42 land which has seen a nil increase. Parkwood Golf L2 RP894197 56.49 01/10/06 - Sold as an operating Course $2,600,000 $46,026 golf course for $5m 76 Napper Road, 01/10/07 - on 2/4/07. Real estate Parkwood $2,600,000 $46,026 component was $4.5m. Analysis of sale would not support applied ULV as the improvement have a value well in excess of sale price. Lakelands Golf L134 SP176212 72.02 01/10/06 - Sold as a going Course $3,100,000 $40,779 concern golf course Gooding Drive, 01/10/07 - for $12m on Merrimac $3,100,000 $40,779 23/11/06. One of the best resort style course in Australia with good quality club house and plant & equipment. Analysis of sale would not support applied ULV as the improvements have a value in excess of sale price.” [108] For the purposes of valuing the subject land under the VLA, Mr Parsons then breaks the subject land down into two components, being Lot 18 and Lot 43. He then does an assessment of the unimproved valuation calculations as at 1 October 2006 and 1 October 2007. For Lot 18 for 1 October 2006, Mr Parsons’ calculations are summarised as follows:109 Component Land Area (ha) Rate ($/ha) Value Golf course above Q100 21.25 $50,000 $1,062,500 Golf course + buffer below Q100 33.445 $25,000 $836,125 Developable area 10.21 $1,000,000 $10,210,000 Total 64.905 $186,560 $12,108,625 Adopt $12,000,000 [109] As regards Mr Parsons’ Lot 43 calculations for 1 October 2006, his details are as follows:110 Component Land Area (ha) Rate ($/ha) Value • Residential developable land filled, services available, however with no Council headworks or PIP charges paid 9.380 $1,250,000 $11,725,000 • Buffer/flood prone open space land 9.307 $25,000 $232,675 • Easement C .4095 - Nil Total 19.097 $626,155 $11,957,675 Less development costs: Civil works as per Cozens Regan Williams $4,375,250 109 Exh.7 p.12. 110 Exh.7 p.13. -- 42 of 71 -- 43 Prove Interest on civil works (5.5% for 12 months) $240,639 Interest on land (5.5% for 24 months) $697,835 Holding costs (land tax & Council rates) allow $300,000 $5,613,724 $6,343,951 Adopt $6,300,000 [110] Mr Parsons then goes on to determine his unimproved value of the subject land pursuant to the VLA as at 1 October 2006 as a sum equivalent to the addition of his components for Lot 18 and Lot 43, being $12,000,000 and $6,300,000 respectively, resulting in Mr Parsons determining an unimproved value for the subject land as at 1 October 2006 as $18,300,000.111 [111] As regards the valuation of the subject land for 1 October 2007, it is Mr Parsons’ view that any increase that may have occurred to the subject land subsequent to 1 October 2006 was offset by an increase in infrastructure charges in 2007 of $13,921,592 and an increase of 14.7% in development costs.112 Mr Parsons accordingly concludes that the appropriate value for the subject land as at 1 October 2007 is $18,300,000. [112] Mr Parsons has also provided the Court with evidence relating to his alternate valuation ‘adopting DNRW approach’.113 Mr Parsons’ alternate approach is summarised as follows:114 Lot 18 Developable area 31.45ha @ $700,000/ha $22,015,000 Open Space/Buffer 33.455ha @ $25,000/ha $836,375 $22,851,375 Less Developable Works - as per Cozens Regan Williams Prove $7,014,000 - Int on development works (5.5% for 12 months) $385,770 - Int on land (5.5% for 24 months) $1,471,780 - holding costs (allow 2.5% pa) $600,000 $9,471,550 $13,379,825 Adopt $13,400,000 Note: The unimproved land value for the developable land area is $400,000 per hectare. Lot 43 Developable area 9.97ha @ $1,250,000/ha $12,462,500 Open Space/Buffer 9.127ha @ $25,000/ha $228,175 $12,690,675 Less Developable Works - as per Cozens Regan Williams Prove $4,375,250 - Int on development works (5.5% for 12 months) $240,639 - Int on land (5.5% for 24 months) $765,519 - holding costs (allow 2.5% pa) $350,000 $5,731,408 $6,959,267 Adopt $7,000,000 Note: The unimproved land value for the developable area is $679,220 per hectare. Total Value $20,400,000 111 See exh.7 p.14 and 15. 112 Exh.7 p.14. 113 See exh.24. This is the approach which resulted in Mr Fynes-Clinton’s “schizophrenic” remark. 114 Exh.24. -- 43 of 71 -- 44 Less 15% bulk $3,060,000 $17,340,000 Less 10% additional holdings costs $1,576,363 $15,763,637 Adopt $15,800,000 Valuation evidence - Mr Bale [113] Mr Bale provided the Court with extensive reports for the valuations of 1 October 2006115 and 1 October 2007.116 It is to be noted that, with respect to both valuation reports, they were subject to numerous amendments.117 For the purposes of this decision, I have incorporated the amendments into the primary exhibits. Accordingly, reference to exhibit 14 necessarily includes all those amendments to exhibit 14 as set out in exhibits 14A - 14E and likewise exhibit 15 necessarily sets out all those amendments in exhibits 15A - 15E, except on those occasions where I specifically refer to amendments. [114] Mr Bale’s sales evidence for the 1 October 2006 valuation can be conveniently summarised as follows:118 “Sale 1: 299 Napper Road, Parkwood Real Property Description Lot 90 on RP897115 Sale Price $27,800,000 Sale Date 27 January 2006 Gross Site Area 20.51ha Park / Open Space 2.330ha Net Site Area 18.18ha Value Attributed $58,250 Park / Open Space Analysed Sales $27,741,750 Price (Ex park / $1,525,949/ha open space) Site Improvements Approximated at Required Post $3,027,499 Sale Analysed Site $30,769,249 Value Analysed Site $1,692,478/ha Value / Net Site Area Analysed Site Development Value / Potential $77,897 / Unit Density 21.73 dwellings/ha Unit Dwellings/ha of NSA Comparison I consider the sale property superior to the southern precinct of the subject site in respect of location, size, and situation as to reduced noise and visual amenity impacts from the existing rail line and potentially the proposed IRTC, however I consider this to be somewhat offset in respect of its proximity and ease of access provided to Helensvale rail station, Helensvale Westfield Shopping Town and developing Helensvale Town Centre Precinct. Overall I consider the sale superior to the ‘southern precinct’ of the subject property on a pro rata site rate per hectare of net developable site area, and on a rate per dwelling unit. 115 Exh.14. 116 Exh.15. 117 See exhs.14A, 14B, 14C, 14D, 14E, 15A, 15B, 15C, 15D and 15E. 118 Exh.14 p.22 - 33. -- 44 of 71 -- 45 Sale 2 Cunningham Drive & Dixon Drive, Pimpama (Leda Developments) Real Property Description Lots 31& 33 on RP163789, Lots 34, 37, 38, 39, 40, 41, 42, on RP168217, Lot 6 on RP158726, Lots 12, 13, & 43 on RP184234, and Lots 44 & 45 on RP817755. Sale Price $32,000,000 Sale Date 27/1/2006 Gross Site Area 53.992ha Park / Open Space 9.9044ha Net Site Area 44.0876ha Value Attributed $247,610 Park / Open Space Analysed Sales $31,752,390 Price (Ex park / open space) $720,211/ha Site Improvements Considerable Required Post though not Sale estimated. $440,000 Analysed Site $32,192,390 Value Analysed Site Value / Net Site $730,191/ha Area Analysed Site Development Density Value / Dwelling $45,405 / Unit Dwellings/ha of NSA 16.1 dwellings / ha Unit Comparison I consider the sale inferior to the southern portion of subject property in respect of location and decreased development potential (pro rata of net sight area). I consider the sale slightly superior to the subject in respect of reduced noise and visual amenity impacts from the existing rail line and potentially the proposed IRTC, however I consider that this is more than offset by the subject sites proximity and ease of access provided to Helensvale rail station, Helensvale Westfield Shopping Town and developing Helensvale Town Centre Precinct, together with the superior general amenity of proposed residential development overlooking extensive areas of open space down to extensive creek frontages. I consider the topography of the site as sold vastly inferior to the current condition of the subject site, the sale requiring considerable site works that would have been anticipated in the proposed residential development of the same. Without the ability to readily contemplate or interview the purchaser as to the same, it is somewhat difficult to objectively compare like with like. However I consider it fair to say that such a site could conceivably be seen to set a bottom for the ‘southern precinct’ of the subject site on an pro rata unimproved rate per hectare of net developable site area, and on a rate / unit. Sale 3 Gardiner, Jarvis, Logan River, and Dairy Creek Road, Waterford. (Woodlands by Delvin) Real Property Description Lots 3, 4, 5, 6, 7, 8, 12, 13, & 22 on RP96004; Lot 10 on RP96262; Lots 4,5,6,7,8 & 9 on RP136027; Lots 32, 33, & 34 on SP174611; Lots 1, & 2 on RP151346; Lot 1 on RP161290; Lots 19, 20, 21, 23 & 101 on SP174609; Lots 26, 27, & 30 on SP174610; Lots 24, 25, 28, 29, 31, & 102 on SP174622. Sale Price $54,945,612 (Ex GXT) Sale Date 2nd - 22nd March 2005 Gross Site Area 139.6024ha Park / Open Space 32.302ha Net Site Area 107.30ha Value Attributed $807,550 -- 45 of 71 -- 46 Park / Open Space Analysed Sales $54,138,062 Price (Ex park / $504,549/ha open space) Site Improvements Considerable though Required Post not estimated. Clearing Sale $1,070,000 Analysed Site $55,208,062 Value Analysed Value / Net Site Area $514,520/ha Analysed Site Development Density Value / Potential $42,797 / Unit Dwellings/ha of NSA 12 dwellings / ha Unit Comparison I note that this sale is considerably removed from the relevant date of this valuation (namely 18 months prior to) within a rising residential property market. I consider the sale inferior to the southern precinct of the subject property in respect of location, and development potential (pro rata). I consider the sale slightly superior to the subject in respect of reduced noise and visual amenity impacts from the existing rail line and potentially the proposed IRTC, however I consider that this is offset in part by the subject sites proximity and ease of access provided to Helensvale rail station, Helensvale Westfield Shopping Town and developing Helensvale Town Centre Precinct. The sale is considered somewhat similar to the subject in general amenity of proposed residential development, as whilst the sale proffers a relatively lower density of residential development (pro rata) with some 30 hectares of parkland within close proximity of Loan River, the subject offers a relatively higher density of development (pro rata) though overlooking extensive areas of open space down to extensive creek frontages. Overall I consider the sale inferior to the southern portion of subject property in respect of location, development density (pro rata), and date in light of an increasing residential market, though I do consider the sale reflective of a master planned residential estate of an overall scale, similar to that of the subject. Overall I consider the sale inferior to the ‘southern precinct’ of the subject property on an unimproved pro rata rate per hectare of net developable site area. Sale 4: Amity Road and Pamphlet Lane, Coomera (Genesis) Real Property Description 23 separate lots amalgamated between 13/5/2003 and 27/10/2005. Sale Price $38,533,290 (Ex GST) Sale Date 13 May 2003 - 27 October 2005 Gross Site Area 81.029ha Park / Open Space 15.0ha Net Site Area 66.029ha Value Attributed $375,000 Park / Open Space Analysed Sales $38,158,290 Price (Ex park / $577,902/ha open space) Site Considerable but Improvements not estimated Required Post Sale Analysed Site Value $38,158,290 Analysed Net Site Value / $502,177/ha NSA -- 46 of 71 -- 47 Analysed Site Development Density Value / $45,799 / Unit Dwellings/ha of NSA 10.965 dwellings / ha Potential Unit Comparison I note that this sale is considerably removed from the relevant date of this valuation (namely between 1 and 3 ½ years prior to) within a rising Gold Coast residential property market. I consider the sale inferior to be inferior to the southern precinct of the subject property in respect of location, development potential (pro rata), and date in light of an increasing residential market. I consider the sale slightly superior to the subject in respect of reduced noise and visual amenity impacts from the proposed IRTC, however I consider that this is more than offset by the subject sites proximity and ease of access provided to Helensvale rail station, Helensvale Westfield Shopping town and developing Helensvale Town Centre Precinct. The sale is considered slightly inferior to the subject in general amenity of proposed residential development, as whilst the sale proffers a relatively lower density of residential development (pro rata) with some 15 hectares of parkland, the subject offers a relatively higher density of development (pro rata) though overlooking extensive areas of open space down to extensive creek frontages. Overall I consider the sale inferior to the southern portion of subject property in respect of location, development density (pro rata), and date in light of an increasing residential market, though I do consider the sale reflective of a master planned residential estate of an overall scale, not too dissimilar to that proposed for the southern portion of the subject. Overall I consider the sale inferior to the ‘southern precinct’ of the subject property on an unimproved pro rata rate per hectare of net developable site area, and on a rate per dwelling unit. Sale 5: 2 Inland Drive, Tugun (‘The Parc” - by Sunlands) Real Property Description Lot 4 on SP191059 Sale Price $16,965,000 Sale Date 6/12/2006 Gross Site Area 6.726ha Park / Open Space 0.769ha Net Site Area 5.957ha Value Attributed $19,225 Park / Open Space Analysed Sales $16,945,775 Price (Ex park / open space) $2,844,683/ha Site Improvements Considered only Required Post nominal. Sale Analysed Site $16,945,775 Value Net Site Area 5.9570ha Analysed Site Value / Net Site $2,844,683/ha Area Analysed Site Development Density Value / Potential $90,619 / Unit 31.40 dwellings / Unit Dwellings/ha of NSA ha Comparison I consider the sales location within close proximity of the beach and Private Gold Coast Hospital, superior to the subject, however this is somewhat offset by the sales inferior situation in respect to noise, visual, and general amenity impacts. The sale is considered only slightly inferior as to proximity and ease of access provided to public transport infrastructure, and associated retail / commercial facilities, as it is considered within the immediate proximity of the Hospital. -- 47 of 71 -- 48 The sale is considered inferior in residential densities achievable under the Town Plan. Overall I consider the sale superior to the ‘central precinct’ of the subject property on a pro rata site rate per hectare of net developable site area. Overall I consider the sale property superior on a pro rata rate per dwelling unit, given considerably higher densities of development, and increased development costs. Sale 6: 6 Santa Maria Court, Burleigh Waters (Villa World Ltd) Real Property Description Lot 1 on SP163203 Sale Price $5,300,000 Sale Date 27/2/2005 Gross Site Area 5.148ha Park / Open Space 1.398ha Net Site Area 3.750ha Value Attributed $34,950 Park / Open Space Analysed Sales $5,265,050 Price (Ex park / open space) $1,404,013/ha Site Improvements Approximated at Required Post $3,942,000 Sale Analysed Site Value $9,207,050 Net Site Area 3.750ha Analysed Site Value / Net Site Area $2,455,213/ha Analysed Site Value / Development Density Potential Unit $83,700 / Unit Dwellings/ha of NSA 29.33 dwellings / Ha Comparison I note that this sale is considerably removed from the relevant date of this valuation (namely 18 months prior to) within a rising Gold Coast residential property market. I consider the sales location superior to the subject in respect of its proximity to coast line beaches and established southern Gold Coast suburbs. In respect of situation to noise, visual, and general amenity I consider the sale similar to the subject. Further, I consider the sales’ proximity and ease of access to Bond University and the developing Varsity Lakes Commercial / Mixed Use Precinct, similar to the subjects’ proximity and ease of access to Helensvale Rail Station and associated retail / commercial / mixed use Helensvale town Centre Precinct. The sale is inferior as to residential densities achievable under the Town Plan. Overall I consider the sale property superior to the central precinct of the subject property, however given significant market movement between February 2005 and October 2006 (as evidenced by the level of value achieved for Sale 5, considered an inferior sale) I consider the ‘sale price’ of the property only slightly superior to the ‘central precinct’ of the subject property on a pro rata site rate per hectare of net developable site area. Overall I consider the sale property superior on a pro rata rate per dwelling unit, given considerably higher densities of development, and increased development costs.” [115] Like the approach of Mr Parsons, Mr Bale has also valued the subject land by looking at the respective component values of Lot 18 and Lot 43 and then combining them to reach an overall figure. Mr Bale’s calculations are as follows: -- 48 of 71 -- 49 “Valuation Approach Methodologies The primary approach of valuation has been the Direct Comparison on a Rate per Hectare (Improved Net Site Area), and as required Direct Comparison on a Rate per Hectare (Unimproved Net Area) Subject Site (Site Value less costs) Lot 43 9.97 hectares @ $2,000,000 / hectare $19,940,000 Lot 18 31.45 hectares @ $1,250,000 / hectare $39,312,500 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $60,317,057 Less costs of estimated bulk earthworks (including holding charges) $10,299,921 Sub Total $50,017,136 Less 15% bulk $ 7,502,570 $42,514,566 Less 10% additional holding costs to obtain approval $ 3,864,961 Unimproved Valuation as at 1/10/2006 $38,649,605 Unimproved State (Check) Lot 43 9.97 hectares @ $1,600,000 / hectare $15,952,000 Lot 18 31.45 hectares @ $1,050,000 / hectare $33,022,500 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $50,039,057 Less 15% bulk $ 7,505,859 $42,533,199 Less 10% additional holding costs to obtain approval $ 3,866,654 Unimproved Valuation as at 1/10/2006 $38,666,544 I have directly compared the sales evidence to the subject property as at the date of valuation.” Mr Bale also adopted the following secondary valuation approach: “The secondary approach which supports the primary approach has been the Direct Comparison on a Rate per Dwelling Unit (Improved Site), and, as required Direct Comparison on a Rate per Hectare (Unimproved Net Area) Subject Site Lot 43 550 dwelling units @ $37,500/unit $20,625,000 Lot 18 620 dwelling units @ $65,000/unit $40,300,000 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $61,989,557 Less costs of estimated bulk earthworks $10,299,921 (including holding charges as per Annexure 7) Sub Total $51,689,636 Less 15% bulk $ 7,753,445 $43,936,191 Less 10% additional holding costs to obtain approval $ 3,994,199 Unimproved Valuation as at 1/10/2006 $39,941,991” [116] In Mr Bale’s opinion, the appropriate unimproved valuation for the subject land as at 1 October 2006 is $39,000,000.119 119 See exh.14 p.3 and p.37. -- 49 of 71 -- 50 [117] As regards the valuation of the subject land as at 1 October 2007, Mr Bale relied upon the following sales:120 Sale 1: 114-250 Nerang Broadbeach Road, Nerang Real Property Description Lot 4 on Survey Plan 180847 Sale Price $25,500,000 Sale Date 05/04/2007 Gross Site Area 40.4561ha Park / Open Space 26.7ha Net Site Area 13.76ha Value Attributed $667,500 Park / Open Space Analysed Sales $24,832,500 Price (Ex park / $1,802,591/ha open space)/NSA Analysed Site Value $35,807,884 Analysed Site Value / Net Site Area $2,559,295/ha Analysed Site Value / Development Potential Unit $118,178 / Unit Density 22 dwellings / ha Dwellings/ha of NSA Comparison I consider the sale property superior to the southern precinct of the subject property in respect of location and situation on the Nerang River. I consider the sale property similar to the southern precinct of the subject site in respect of development potential (pro rata on a net developable area), situation in respect of noise and visual amenity impacts from the existing rail line and potentially to a greater detriment, Nerang-Broadbeach Road and the proposed IRTC, however the sale property is considered inferior to the subject in respect of the subject sites proximity and ease of access provided to Helensvale Westfield Shopping Town and developing Helensvale Town Centre. The sale is considered inferior to the ‘southern precinct’ of the subject property in respect of site access. Overall I consider the sale superior to the ‘southern precinct’ of the subject property on a pro rata site rate per hectare of net developable site area, and on a rate per dwelling unit. Overall I consider the sale superior to the ‘southern precinct’ of the subject property on an unimproved pro rata rate per hectare of net developable site area, and on a rate per dwelling unit. Sale 2: Tallagandra Road & Teys Road, Holmview Real Property Description: L1-2 RP197324, L15-16 RP106788, Pt 900 SP202036 (3.9143 ha) Sale Price $20,618,400 (no GST payable) Adopted $20,000,000 (allowing For 3 developed residential lots) Sale Date 09/08/2007 Gross Site Area 20.7523 ha (20,9158 ha but 3 lots already developed with an area of 1,635m²). Park / Open Space 7.8ha Net Site Area 12.9523ha Value Attributed $195,000 Park / Open Space Analysed Sales $19,805,000 Price (Ex park / $1,529,072/ha open space) / NSA Site Improvements Not determined Required Post Sale Unimproved Sale Development Density Value / Dwelling Unit $93,420 / Unit Dwellings/ha of NSA 16.4 dwellings / ha 120 Exh.15 p.26-37. -- 50 of 71 -- 51 Comparison I consider the sale inferior to the southern precinct of the subject property in respect of location, and development potential (pro rata on a net developable area). I consider the sale superior to the subject in respect of noise and visual amenity impacts from the existing rail line and potentially the proposed IRTC, however I consider that this is somewhat offset by the subject sites proximity and ease of access provided to Helensvale rail station, Helensvale Westfield Shopping Town and developing Helensvale town Centre Precinct, together with the superior general amenity of proposed residential development overlooking extensive areas of open space down to extensive creek frontages. I consider the topography of the site as sold somewhat inferior to the current condition of the subject site, however the sale is considered to have been reflective of the need for considerably lower levels of site works, than the subject site from an unimproved state. Overall I consider the sale slightly superior to the subject on a pro rata rate unimproved per hectare of net site area and per dwelling unit. Sale 3 Yawalpa Road, Pimpama (Strawberry Fields) Real Property Description Lot 901 on Survey Plan 178046 Sale Price $16,000,000 (Ex. GST) Sale Date 30/08/2007 Gross Site Area 17.193ha Park/Open Space 3.083ha Net Site Area 14.11ha Value $77,075 Attributed Park / Open Space Analysed $15,922,925 Sale Price $1,128,485/ha (Ex park / open space)/NSA Site Not determined. Improvements Required Post Sale Unimproved Development Density Sale Value / $53,794 / Unit 20.98 dwellings/ha Dwelling Unit Dwellings/ha of NSA Comparison I consider the sale inferior to subject property in respect of location, though similar to the southern precinct of the subject site in respect of development potential. Whilst I consider the sale slightly superior to the subject in respect of noise and visual amenity impacts from the existing rail line and potentially the proposed IRTC, I consider that this is somewhat offset by the subject sites proximity and ease of access provided to Helensvale rail station, Helensvale Westfield Shopping Town and developing Helensvale Town Centre Precinct, together with the superior general amenity of proposed residential development overlooking extensive areas of open space down to extensive creek frontages. I consider the topography of the site as sold vastly inferior to the current condition of the subject site, the sale requiring considerable site works that would have been anticipated in the proposed residential development of the same. Without the ability to readily contemplate or interview the purchaser as to the same, it is somewhat difficult to objectively compare like with like on a site improved basis. However I consider it reasonable that such a site could conceivably be seen to set a bottom for the subject site on an unimproved basis. -- 51 of 71 -- 52 Overall I consider the sale inferior to the ‘southern precinct’ of the subject property on a pro rata site rate per hectare of net developable site area, and on a rate per dwelling unit, given similar densities of development. Sale 4: Piggabeen Road, Currumbin Waters (Martha’s Vineyard formerly Hideaway @ Currumbin) Real Property Description 1-2RP168012, 3RP82364 & 1-2 & 247 RP854934 Sale Price $75,000,000 (Ex. GST) Staged payment over 5 years Present Value $66,459,291 Sale Date 29/12/2007 Gross Site Area 153.345Ha Park/Open Space 125.645Ha Net Site Area 27.7 Ha Value Attributed $3,141,125 Park / Open Space Analysed Sales $63,318,166 Price (Ex park / $2,285,854/ha open space)/NSA Site Improvements Substantial Required Post compensatory fill, Sale lake, tidal control Measures and bridge To gain access. Analysed Site $170,976,291 Value Analysed Net Site Value / NSA $6,172,429/ha Analysed Site Development Density Value / Potential Unit $322,597 / Unit Dwellings/Ha of NSA 19.14 dwellings / Ha Comparison I consider the sale superior to the subject property in respect of location, though similar to the southern precinct of the subject site in respect of development potential (pro rata). I consider the sale superior to the subject in respect of noise and visual amenity impacts from the existing rail line and potentially the proposed IRTC. I consider the topography of the site as sold vastly inferior to the current condition of the subject site, the sale requiring considerable site works that were anticipated in the proposed residential development of the same. With the ability to readily interview the purchaser as to the same, it is significant to consider the intended end value of the product being developed as it were. However I consider it fair to say that such a site would conceivably be seen to set a top for the subject site on an unimproved basis Overall I consider the sale superior to the ‘southern precinct’ of the subject property on a pro rata site rate per hectare of net developable site area, and on a rate per dwelling unit. Sale 5: The Esplanade, Coomera Real Property Description Lot 300 on Survey Plan 202039 Sale Price $9,250,000 (Ex. GST) Sale Date 13/08/2007 Gross Site Area 4.918Ha Park / Open Space 1.5Ha Net Site Area 3.418Ha Value Attributed $37,500 Park / Open Space -- 52 of 71 -- 53 Analysed Sales $9,212,500 Price (Ex park / $2,695,290/ha open space)/NSA Site Improvements Substantial Required Post compensatory fill Sale and lake. Analysed Site $10,012,500 Value Analysed Site Value / Net Site $2,929,345/ha Area Analysed Site Development Density Value / Potential $54,122 / Unit 54.13 dwellings / Unit Dwellings/ha of NSA ha Comparison The sale is considered inferior in location to the central precinct of the subject property, though this is more than offset by the subject sites inferior situation in respect to noise, visual, and general amenity impacts. Overall I consider the sale superior to the ‘central precinct’ of the subject property on a pro rata site rate and unimproved site per hectare of net developable site area, and on a rate per dwelling unit. Sale 6: Cunningham Drive South, Coomera Real Property Description Lot 900 on Survey Plan 207822 Sale Price $15,236,595 $13,851,450 (EX GST) Sale Date 07/09/2007 Gross Site Area 13.52Ha Park / Open Space 6.52Ha Net Site Area 7Ha Value Attributed $163,000 Park / Open Space Analysed Sales $13,688,450 Price (Ex park / $1,955,493/Ha open space)/NSA Site Improvements Not determined Required Post Sale Analysed Site N/A Value Comparison I consider the sales location inferior to the central precinct of the subject site, though similar in situation alongside the rail line in respect to noise, visual, and general amenity impacts and also as to sites proximity of the Coomera rail station and proposed Coomera Town Centre. I consider the sale to be comparable to the central precinct of the subject property on an unimproved pro rata rate per hectare. [118] Adopting the same approach he took to the 1 October 2006 valuation, Mr Bale then proceeded to consider Lots 18 and 43 separately in order to arrive at a cumulative amount for the subject land, but also taking into account other factors as set out in his report. Mr Bale’s calculations are as follows:121 Subject Site (Site Value less costs) Lot 43 9.97 hectares @ $2,000,000 / hectare $19,940,000 121 See exh.15B p.1-2. -- 53 of 71 -- 54 Lot 18 31.45 hectares @ $1,425,000 / hectare $44,816,250 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $65,820,807 Less costs of estimated bulk earthworks (including holding charges as per annexure) $11,026,852 Sub Total $54,793,955 Less 15% bulk $ 8,219,093 Sub Total $46,574,861 Less 5% additional (holding) costs to obtain further approval $ 2,217,851 Unimproved Valuation as at 1/10/2007 $44,357,011 Unimproved State (Check) Lot 43 9.97 hectares @ $1,575,000 / hectare $15,702,750 Lot 18 31.45 hectares @ $1,225,000 / hectare $38,526,250 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $55,293,557 Less 15% bulk $ 8,294,033 Sub Total $46,999,524 Less 5% additional (holding) costs to obtain further approvals $ 2,238,073 Unimproved Valuation as at 1/10/2007 $44,761,451 I have directly compared the sales evidence to the subject property as at the date of valuation.” As he did for 2006, Mr Bale also provided a secondary valuation approach. “The secondary approach which supports the primary approach has been the Direct Comparison on a Rate per Dwelling Unit (Improved Site), and, as required Direct Comparison on a Rate per Hectare (Unimproved Net Area) Subject Site Lot 43 550 dwelling units @ $37,500/unit $20,625,000 Lot 18 620 dwelling units @ $72,500/unit $44,950,000 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $66,639,557 Less costs of estimated bulk earthworks $11,026.853 (including holding charges as per Annexure 7) Sub Total $55,612,705 Less 15% bulk $ 8,341,905 Sub Total $47,270,799 Less 5% additional (holding) costs to obtain further approvals $ 2,250,990 Unimproved Valuation as at 1/10/2007 $45,019,808 [119] Using the above methodologies, Mr Bale arrived at an unimproved value for the subject land as at 1 October 2007 of $44,000,000.122 The Devine option [120] Although there was an amount of evidence presented by the respondent relating to the Devine option,123 as Mr Fynes-Clinton points out in his primary submissions, it “is not relied upon as a central or important part of the respondent’s case. However, it is relevant to the extent of giving the Court some additional comfort that Mr Bale’s analysis is conservatively correct 122 See exh.15 p.3 and exh.15B p.4. 123 See exh.35. -- 54 of 71 -- 55 …”.124 As Mr Cronin points out, the approach by the Court “has been to give only slight weight to such an offer”.125 Mr Cronin relies upon Hustlers Pty Ltd v Valuer-General126 in support of his contention. [121] Both parties contend that the appropriate law is as set out by Wilcox J in Goold v The Commonwealth.127 I respectfully agree. [122] In my view, whilst the Court can be apprised of the Devine option, it is to be given very little weight or utility in determining the unimproved value of the land. Further, I should add that I accept the evidence of Mr Buckler, who was called by the respondent. Specifically regarding the option, Mr Buckler had this to say,128 when referring to an approach made by representatives of Devine: “that they would pay this sort of money, and it was mad sort of money, in my view, at the time, and just signed up under the conditions. But it was done before they had done any work, before they knew any of the problems, and I honestly didn’t think it would go - it would proceed. In fact it didn’t proceed;” Analysis of sales Napper Road [123] It is common ground between the parties that the Napper Road sale, which is Mr Parsons’ sale no. 5 and Mr Bale’s sale no. 1 for 2006, is the most comparable sale for Lot 18. Mr Cronin for the appellants relies heavily upon this sale.129 Mr Cronin explained Mr Parsons’ reliance on the Napper Road sale for the following reasons:  It was in very close proximity;130  It would have had a similar type of density to Lot 18;131  It is a gently sloping block that did not need clearing and did not need fill;132  It did not have an approval but its pathway to obtaining an approval was more readily available than the subject;133  It had fairly good topography, with roads, services and everything available to it to enable it to be compared to Lot 18;134  Napper Road is a four lane and channelled roadway to which it had access.135 It did not have the problems of flood prone access as occurs with Lot 18. 124 Respondent’s submissions para 158. 125 Appellants’ submissions para 96. 126 (1967) 14 LGRA 269 at 277. 127 (1993) 79 LGRA 407 at 415-417. 128 Page 329. 129 Submissions para 81. 130 Transcript page 127 line 14. 131 Transcript page 127 line 15. 132 Transcript page 129 line 25-30. 133 Transcript page 129 line 28. 134 Transcript page 129 line 30-35. 135 Transcript 129 line 30-35. -- 55 of 71 -- 56  An application was made on the sale on 9 August 2006 and the decision was reached on 17 September 2007, roughly 12 months after the application was made, suggesting a straight forward approval process;136  Lower infrastructure charges.137 [124] Mr Fynes-Clinton is critical of some aspects of Mr Parsons’ evidence regarding the comparisons between Napper Road and Lot 18. One of Mr Fynes-Clinton’s criticisms relates to a “like for like” type comparison. As Mr Fynes-Clinton rightly points out, Lot 18 in its natural state was predominantly low lying flood prone land requiring significant fill. Mr Bale therefore considered the best way of approaching a proper comparison between the Napper Road sale and Lot 18 was to consider both on a site improved basis. I agree with Mr Bale’s approach. However, I have some difficulty with the figures that Mr Bale has used to arrive at his like for like comparison. [125] Mr Fynes-Clinton also takes issue with Mr Parsons for believing that the pathway to obtaining Council approval for Napper Road was more readily available than for the subject. I do not support Mr Fynes-Clinton in this regard. As the evidence clearly shows, Napper Road obtained its approval for its over 50s development in a little over 12 months, whilst the preliminary approval for the subject land took five years to obtain, and that approval as the evidence clearly shows, is subject to some uncertainty as to its operation. In making this assessment, I am careful to consider the matter as it was known or foreseen as at 1 October 2006 and not with the benefit of hindsight. I accept Mr Parsons’ evidence that a prudent purchaser of the Napper Road property as at 1 October 2006 would have, if properly advised, formed the view that the development approval for an over 50s development would be straightforward and rather quickly approved by Council. This foresight is of course confirmed by the quick approval actually given to the Napper Road development by Council. Likewise, as at 1 October 2006, a prudent purchaser of the subject land would have been aware that a development application had been awaiting approval for some four years. Whilst it is my view, consistent with the evidence particularly of Mr Parsons, that the prudent purchaser as at 1 October 2006 would have anticipated obtaining an approval by Council for the subject land pursuant to 3.1.6 of IPA, nevertheless Mr Parsons in my view is correct when he states that the approvals process for Napper Road were much more straightforward than for the subject. [126] As regards Mr Fynes-Clinton’s comments regarding comparisons of access between Napper Road and the subject, in my view both the subject and Napper Road enjoy good access. Additionally, the access to the subject is enhanced if the “Bridge to Nowhere” is utilised, but 136 Transcript 130 line 25-35. 137 Transcript 214 line 15-40. -- 56 of 71 -- 57 as the evidence shows, utilisation of that bridge brings with it many additional risk factors. Taking these risks into account, any benefit which flows to the subject land is neutralised. [127] Turning to Mr Fynes-Clinton’s complaint regarding the infrastructure charges for Napper Road,138 I consider that Mr Parsons has overstated the impact of infrastructure charges insofar as the 1 October 2006 valuation is concerned. However, in light of the Council’s introduction of the new PIP regime in January 2007, I agree that the imposition of the new PIP regime was certainly a factor to which a prudent purchaser would have regard as at 1 October 2007. [128] I note that Mr Bale has provided the Court with three analysed site values for Napper Road; $35,357,524;139 $30,769,249140 and $30,604,726. The differences principally flow from the value of site improvements required post sale. I note that in what appears to be Mr Bales’ most comprehensive analysis of the Napper Road sale,141 that Mr Bale allows the sum of $1,400,000 for bulk earthworks and clearing. I accept Mr Parsons’ evidence that this sum incorporates earthworks to create a building platform as part of the building works for Napper Road and, as such, does not bring the Napper Road property up to a like for like comparison with Lot 18, but in fact takes Napper Road to a superior position. Doing the best I can on the evidence before me, I have decided to reduce Mr Bale’s sum of $1,400,000 for bulk earthworks and clearing by $1,000,000, resulting in a site value for Napper Road of $29,604,726. Applying this sum to the net site area of 18.18 ha, I arrive at an analysed site value / net site area of $1,628,423 per hectare for Napper Road. Santa Maria Court [129] Both valuers rely upon the Santa Maria Court sale as relevant to the value of Lot 43 of the subject. Save for the issue of the way in which park land should be dealt with, there is little between the parties regarding the analysis of Santa Maria Court. [130] To begin with, it must be noted that this is a sale from 27 February 2005, in what is accepted as being a rapidly rising market at the time. As it is over 1½ years prior to the 1 October 2006 valuation date, it is clearly an old sale. [131] In round terms, Mr Parsons refers to the sale price of $5,300,000, to which he adds the sum of $3,700,000 for site works. This makes a total of $9,000,000.142 The analysed site value which Mr Bale arrives at is $9,207,050.143 Mr Bale arrives at an analysed site value of $2,455,213 per hectare. On the other hand, Mr Parsons arrives at a site value of $1,750,000.144 138 See reply submissions of the respondent para 54E. 139 See exh.14. 140 See exh.14B. 141 Exh.41. 142 See exh.7 p.10 sale 4. 143 See exh.14 p.32. 144 See exh.7 p.10 sale 4. -- 57 of 71 -- 58 [132] The key area of difference between Mr Bale and Mr Parsons relates to whether or not an area required for parkland should be included in the site value. As Mr Cronin points out in the appellants’ submissions, Mr Parsons does not take off the park “because he takes the view that the park is part of the 10% allocation required as part of a development and he only deducts public open space deduction which would not otherwise be acceptable for park because of the standards required for public park. In this respect his analysis should be accepted because it is orthodox, it is consistent and it accepts the reality that there is a 10% deduction for park complying with requirements in every development”.145 Mr Bale of course contends that it is necessary to exclude the park area so as to properly engage in a true comparison between the subject and the Santa Maria Court sale. [133] For the purposes of this particular valuation case, and in light of the manner in which the evidence has been presented and the particular features of the subject land, I have decided to determine the proper valuation for the subject land by following an approach consistent with that adopted by Mr Bale and as set out by Mr Parsons in exhibit 24. Consistent with this approach, it would be necessary, in my view, to exclude the park from the developable area of the Santa Maria Court sale. However, in so doing, it is then necessary to take into account that the sale property is significantly smaller than the subject. This has the effect of the exclusion of the park area having an impact which is much more significant than it really should be. [134] Due to the early time of this sale and the park issues discussed above, in my view this sale is useful as a guide only in determining the unimproved value of the subject as at 1 October 2006. ‘The Parc’ Inland Road, Tugun [135] The Parc sale is Mr Parsons’ sale number 6 and Mr Bale’s sale 5/06. [136] During his evidence, it was clear that Mr Parsons was very familiar with this sale. A synopsis of Mr Parsons’ evidence regarding this sale was provided to the Court by Mr Cronin.146 Relevantly, Mr Parsons’ evidence can be summarised as follows:  He was very familiar with it as he had been involved with it because of a resumption for the extension of the Tugun bypass;147  He applies this sale for the Lot 43 medium density;148  There are very few comparable medium density sites and it was necessary to go farther away from the subject in order to find such a site although it was within the Gold Coast City;149 145 Appellants’ submissions para 86. 146 See appellants’ submissions para 90. 147 Transcript page 136 line 5-10. 148 Transcript page 136 line 15. 149 Transcript page 136 line 15-20. -- 58 of 71 -- 59  It was filled and serviced at the time of sale and had approval at the time of sale;150  It had approval ready to start immediate development;151  At the time of sale there were very few other competing residential product at the southern end of the coast, and it was relatively close to the beach;152  It had certainty;153  There was substantial savings in costs and Council charges as there were no PIP charges although there were infrastructure charges;154  There were Council charges at $18.00 per m².155  The difference between the PIP charges on the subject and on the site were very significant.156 [137] In his reply submissions, Mr Fynes-Clinton takes issue with the reference to the PIP charges impact on the subject compared to the sale. For the reasons I have already addressed relating to the Napper Road sale, I agree with Mr Fynes-Clinton. There was some, albeit a small, amount of uncertainty as to the development approval process as at 1 October 2006, but it was anticipated that the subject would obtain development approval pursuant to 3.1.6 of IPA and that the infrastructure charges at that time would be similar to those applying to other developments. It was not until January 2007 that the PIP regime came into force and I am not satisfied, on the evidence before me, that there was the required amount of foresight as at 1 October 2006 to enable the prudent purchaser to be aware of the likely impact of the Council’s January 2007 PIP regime. Accordingly, the substantial impact of the PIP regime on the subject is only relevant for the 1 October 2007 valuation. [138] As was the case with Santa Maria Court, the analysis of The Parc sale is similar between the two valuers, save for the treatment of an area of 0.769 ha for park/open space. Mr Parsons arrives at a site area rate per hectare of $2,520,000 whilst Mr Bale arrives at $2,844,683 per hectare. Again, in light of the method of valuation as set out in exhibit 24, I am prepared to accept Mr Bale’s site analysis per hectare. [139] Mr Bale reaches the conclusion157 that The Parc site is overall superior to the ‘central precinct’ of the subject property on a pro rata site rate per hectare of net developable site area, and also superior on a pro rata rate per dwelling unit, given considerably higher densities of development and increased development costs. 150 Transcript page 136 line 20. 151 Transcript page 136 line 22. 152 Transcript 136 line 25. 153 Transcript 136 line 41. 154 Transcript 136 line 42-45. 155 Transcript 137 line 3. 156 Transcript 137 line 10 and line 40-44. 157 See exh.14 p.31. -- 59 of 71 -- 60 [140] Mr Parsons considers The Parc sale significantly superior to the subject. Although it is true that The Parc site is located close to the Gold Coast airport and therefore has noise issues, it is also situated close to Tugun beach and various league and community clubs. It is also located within close proximity to the private Gold Coast hospital. On balance, I prefer the evidence of Mr Parsons to that of Mr Bale regarding the attributes of The Parc as compared to the subject, save for Mr Parsons’ comments regarding PIP charges. In my view The Parc sale is significantly superior to the subject. Leada Developments sale [141] The Leada developments sale is Mr Bale’s sale no. 2/06. [142] During his evidence-in-chief,158 Mr Parsons was quite critical of the analysis made by Mr Bale of the Leada sale. In exhibit 14 in its original form, Mr Bale arrived at an analysed site value of $31,564,325 for the Leada sale which he equated to a site value of $1,206,361 per hectare. However, following the criticisms by Mr Parsons, Mr Bale amended his analysis of sale 2 substantially. The primary change that Mr Bale made between exhibit 14 and exhibit 14C was that he decreased the park/open space area from 27.827 ha down to 9.9044 ha, resulting in a change to the net site area from 26.1649 ha to 44.0876 ha. This multiplies out to an analysed site value, as set out by Mr Bale in his exhibit 14C, of $730,191 per hectare. Of course, it is commendable that Mr Bale has assisted the Court by properly amending his report in circumstances where he considered it appropriate to do so. My concern though is that the change between exhibit 14, page 24 and exhibit 14C, page 24 is very considerable, being almost $500,000 per hectare, but that this very significant change has not had any impact whatsoever on Mr Bale’s final analysis of an appropriate value for site purposes of Lot 43 of the subject. [143] If, taking into account appropriate relativities, Mr Bale properly relied upon the analysed site value of $1,206,361 as set out in exhibit 14 as supporting a rate per hectare for developable area of $2,000,000 for Lot 43, then it must surely follow that Mr Bale’s substantially reduced analysed site value as set out in exhibit 14C should have an impact on the site value per hectare for Lot 43. Genesis [144] The Genesis sale is Mr Bale’s sale 4/06. Mr Parsons does not rely upon this sale. In his assessment, Mr Bale arrives at an analysed net site value for the Genesis sale of $502,177 per hectare. Mr Bale considers the Genesis site to be quite inferior to the subject.159 Mr Bale states that he considers “the topography of the sale as sold vastly inferior to the current condition of 158 See transcript p.131-2. 159 See exh.14 p.29. -- 60 of 71 -- 61 the subject site ripe for development”.160 Mr Bale acknowledges that the sale is an early sale in a rising Gold Coast property market. [145] Mr Parsons disagrees with the assessment of Genesis as vastly inferior to the subject. Mr Parsons considered Genesis to be some of the best land in Coomera, and thought the land to be particularly attractive due to a watercourse/gully making a nice feature through it.161 Mr Parsons considered the topography of Genesis to be similar to the existing topography of Lot 18. He was taken to task in this aspect by Mr Fynes-Clinton who quite correctly points out that it is the Court’s responsibility under the VLA to value the subject land in its unimproved state. However, in light of the respondent’s method of valuation of the subject land by allocating values to open space land and other values to developable site land on the subject, Mr Parsons confusion is somewhat understandable. I took Mr Parsons’ description to be accurate in a literal sense, not descriptive in a hypothetical VLA unimproved value sense. [146] In my view, the consistent evidence of both Mr Bale and Mr Parsons is that Genesis is inferior to the subject, but I am more inclined to the evidence of Mr Parsons as to the inferiority of Genesis than the evidence of Mr Bale as to the ‘vast inferiority’ of Genesis in some respects. Again, in my view the Genesis sale does not support the respondent’s assessment of $2,000,000 per hectare for developable site land on Lot 43. Waterford sale [147] The Waterford sale is Mr Bale’s sale 3/06. Mr Bale has relied upon this sale due to its gross site area of 139.6024 ha of which 32.302 ha is park/open space leaving a net site area of 107.30 ha. Mr Bale arrives at an analysed value/net site area of $514,520 per hectare. Overall, Mr Bale considers the Waterford sale inferior to the subject.162 [148] Mr Parsons does not rely upon the Waterford sale. He notes that the sale property is well removed from the subject and in a different local authority area.163 As Mr Cronin pointed out,164 the respondent did not ask that the Waterford sale be inspected at the time of the Court inspection of the sales. [149] I tend to agree with the views of the appellant that not much can be made of the Waterford sale. In fairness, I should point out that the respondent did not place a heavy reliance upon this sale in his submissions. Conclusion - site value of developable area of Lot 18 as at 1 October 2006 [150] As indicated, both parties principally rely on the Napper Road sale for arriving at an appropriate value for Lot 18. I agree. 160 Exh.14 p.29, final paragraph. 161 See transcript p.135. 162 See exh.14 p.27. 163 See transcript p.133. 164 Submissions of the appellant, para 88. -- 61 of 71 -- 62 [151] The analysed site value/net site area for Napper Road is $1,628,423 per hectare in accordance with my reasoning as set out in my analysis of the Napper Road sale above. [152] There is essentially no difference between Mr Bale and Mr Parsons as to the percentage reduction which should be applied to Napper Road to bring it back to a proper comparison with Lot 18. Accepting Mr Bale’s rate of 72%, this results in a per hectare value for Lot 18 for its developable area of $1,172,464 per hectare. I round this amount to $1,175,000. Conclusion - site value of developable area of Lot 43 as at 1 October 2006 [153] The respondent relies upon a site value for the developable area of Lot 43 of $2,000,000 per hectare.165 For the reasons set out above, it is my view that that allocation is too high. However, it is also my view that the appellants’ assessment, done on the same basis as the respondent as set out in exhibit 24, in arriving at a sum per hectare of $1,250,000 is too low. In my view, as at 1 October 2006, the subject land was clearly of considerable value. As at 1 October 2006, the concerns which come to the fore in 1 October 2007 regarding the Council’s January 2007 PIP charges have not materialised. [154] As Mr Fynes-Clinton succinctly put it in his submissions166 “there is no mathematical formula for this type of comparison”. I trust I am not taking Mr Fynes-Clinton out of context by adopting his comments generally with respect to the comparative analysis required to be made every day in the difficult task of valuing land. Valuation evidence is certainly not an exact science, which is why the Court relies heavily upon the expert opinion of qualified valuers like Mr Parsons and Mr Bale. [155] Doing the best that I can with the evidence, and having formed the view that, whilst the sales do not support Mr Bale’s site value for Lot 43, the evidence as a whole, including the sales specifically referred to above, support Mr Bale’s site value more than Mr Parsons’ site value as at 1 October 2006. In my view, Mr Parsons has placed too great a reliance upon the events of 2007, particularly with respect to the nature of the preliminary approval of May 2007 and the imposition of the new PIP regime in January 2007. As to the specifics of both the PIP regime of January 2007 and the preliminary approval of May 2007, the knowledge that Mr Parsons has attempted to impart onto the appropriate valuation for 1 October 2006 is, in my view, the application of hindsight and not the proper application of a foresight. [156] I adopt the figure of $1,800,000 per hectare as the site value of the developable area of Lot 43 as at 1 October 2006. 165 See exh.14D p.35. 166 At para 132. -- 62 of 71 -- 63 Analysis of Mr Bale’s 1 October 2007 sales [157] As previously indicated, Mr Bale relies upon six sales for his 1 October 2007 valuation. Mr Parsons says that any increase in value which occurred with respect to land like the subject land was offset by the imposition of the Gold Coast’s PIP regime in January 2007, as a result of which Mr Parsons contends that there was no overall increase in value for the subject land from 1 October 2006 to 1 October 2007. [158] I now turn to examine the sales evidence provided to the Court by Mr Bale for 1 October 2007. Nerang Broadbeach Road - Sale 1/07 [159] I have already set out earlier in this decision a summary of Mr Bale’s contentions regarding this sale. [160] An important feature of this sale related to the history of not only the lots contained within the sale but also of what is referred to as “resumed land”. It is apparent from the evidence that the sale land originally was part of a larger lot from which the Department of Main Roads compulsorily acquired a part of the land. It is also clear from the evidence that the owner of the land at the time of the resumption converted their right to compensation pursuant to the Acquisition of Land Act into other rights that directly impact on the sale land. These rights are clearly set out in exhibit 31 at paragraph 4. It is of fundamental importance that the rights obtained by the original owner went with the sale land to the benefit of any subsequent owners of the sale land. I have refrained from going into detail regarding the contents of exhibit 31 as it is subject to a confidentiality order. Importantly, exhibit 31 was available to all parties before the Court. [161] When questioned by Mr Parsons regarding the impact of the agreement that flows from the resumption of land, Mr Bale had this to say:167 “And clearly what the vendor did was to enter into an agreement with the State of Queensland or Department of Main Roads in which they abandoned their rights to compensation in order to get rights to use the resumed land?--That is correct. That’s my understanding. And therefore there was a value -- the owner of the land obviously placed a value on the resumed land that was equal to the rights to be able to use it?--That is correct. And in order to analyse the sale it’s necessary to know what value was placed on the resumed land by the owner at the time they entered into that agreement with the Department of Main Roads, wouldn’t it?--No, I don’t believe it is. Once again, it comes down to the intention of the purchaser. The purchaser has attributed a value to be able to use that land in respect of what they have paid for, which is a development site capable of development.” [162] Commenting upon both the above evidence by Mr Bale and to submissions by Mr Fynes- Clinton, Mr Cronin has this to say in his supply submissions:168 167 Transcript p.431. 168 Reply submissions para 37(d). -- 63 of 71 -- 64 “It is rather remarkable that there is the suggestion that the Appellant has sought to obfuscate this sale by turning something simple into something complex. It is really quite simple. The purchaser bought something which included more than the value of the land. The purchaser also bought the right to utilise the resumed land. No attempt has been made to value that. Under the circumstances, the sale cannot be used. It is simple as that.” [163] I wholeheartedly agree with Mr Cronin. It is clear from my reading of exhibit 31 that that agreement is certainly of value, and perhaps high value, to the purchaser of sale 1. No proper analysis can be made of that sale without taking that value into account. Tallagandra Road & Teys Road, Holmeview - Sale 2/07 [164] The submissions of the parties are similar for this sale as those relating to the Waterford sale already discussed. The appellant contends that as the site is well removed from the Gold Coast, and that significant work had been undertaken to gain both approvals for development and to get infrastructure in place, the sale should be disregarded.169 [165] Mr Bale acknowledged that sale 2 is in a remote location and used the sale as setting a floor value for 2007.170 [166] In my view, sale no. 2 is of only limited utility in assessing the unimproved value of the subject land as at 1 October 2007. I note that Mr Bale determined an analysed sale price for sale no. 2 of $1,529,072 per hectare excluding park/open space. Strawberry Fields - Sale 3/07 [167] As is the case for each sale referred to by Mr Bale for 2007, details of those sales are set out earlier in this decision. As regards Strawberry Fields, I note that Mr Bale arrived at an analysed sale price excluding park/open space of $1,128,485 per hectare. [168] From the appellants’ perspective, similar comments are made with respect to the Holmeview sale and Waterford sale. Again, the sale property is significantly remote to the subject property, a point readily conceded by Mr Bale who again relied upon his sale to identify a floor value in 2007. [169] In my view, this sale should be treated in like manner to the Holmeview sale (sale 2/07). Martha’s Vineyard - Sale 4/07 [170] The Strawberry Fields site is a sale on 29 December 2007 of some 153 ha of which there is a net site area of only 27.7 ha, the balance land being park/open space. The purchase price was set out over a staged payment plan over five years, assessed at a present value of $66,459,291. In Mr Bale’s view, the site requires substantial site improvements which led him to an analysed site value of $170,976,291. Mr Bale arrives at an analysed net site value of $6,172,429 per hectare. 169 See appellants’ submissions para 101. 170 See respondent’s submissions para 116(e). -- 64 of 71 -- 65 [171] In the appellants’ view, Martha’s Vineyard bears “absolutely no comparison either to the subject property or to any other sale”.171 [172] Mr Bale’s clear evidence172 is that this sale represents the high point of the market. [173] As Mr Fynes-Clinton pointed out in the respondent’s submissions “Mr Bale used it for no purpose other than to demonstrate the upper level of value for size comparable to Lot 18 in terms of anticipate type and density of development”.173 I am prepared to accept the Martha’s Vineyard sale, but only for the very limited purposes as confirmed by Mr Fynes-Clinton. In real terms, this sale is of almost no utility in assessing the appropriate unimproved value of the subject as at 1 October 2007. The Esplanade Coomera - Sale 5/07 [174] This sale is of a property of 4.918 ha, of which 1.5 ha are park/open space, leaving a net site area of 3.418 ha. Mr Bale has analysed the site area at $2,929,345 per hectare. With respect to this sale, it is to be noted that Mr Bale made an error in his original report174 in that he wrongly referred to the sale price as being exclusive of GST. Mr Bale corrected this error.175 It is pertinent to note that Mr Bale’s errors relating to GST resulted in his analysed site value falling from $3,199,971 per hectare to $2,929,345 per hectare; a reduction of almost $300,000 per hectare. It is again of some note that Mr Bale did not reduce his overall conclusions set out in exhibit 15 in light of this error. [175] In Mr Parsons’ view, the Esplanade sale is too small to be of any utility in making a comparison with the subject land.176 [176] Subject to making allowances for the relatively small size of the sale property, and noting of course Mr Bale’s reviewed valuation when he properly take accounts of GST, in my view sale 5 is one to which regard can be had for the purposes of the 1 October 2007 valuation. Cunningham Drive South Coomera - Sale 6/07 [177] As with sale 5, Mr Bale’s original analysis of sale 6 did not include a GST component, resulting in his analysed sale price, exclusive of park/open space, falling from $2,153,370 per hectare as originally set out in exhibit 15 to $1,955,493 per hectare as set out in exhibit 15F. Again, it is noteworthy that this reduction of some $200,000 per hectare did not cause Mr Bale to review his overall conclusions regarding the appropriate unimproved value of the subject as at 1 October 2007. 171 See appellants’ submissions para 104. 172 See transcript p.433. 173 See respondent’s submissions para 116(f). 174 Exh.15. 175 See exh.15D. 176 See transcript p.153. -- 65 of 71 -- 66 [178] Although this sale was subject to some debate between the valuers, in my view the sale should be quickly dismissed. It is a sale between state government departments. Accordingly, the sale is not reflective of an arms length transaction, and should not be considered. There is nothing in Mr Bale’s evidence which leads me to a different conclusion. Certainly, one can imagine instances where a sale between government agencies may be sufficiently removed, involving stand alone government business units operating independently, so as to satisfy the normal requirements for taking a sale into account. Mr Bale’s evidence however, in my view, does not give me any confidence to rely upon this sale. Conclusions regarding 2007 valuation [179] For site value purposes relating to the areas of developable land for 1 October 2007, Mr Bale assesses the value for Lot 43 at $2,000,000 per hectare and for Lot 18 at $1,425,000 per hectare.177 [180] In accordance with the sales evidence set out above for 2007, Mr Bale argues that his sales justify an increase of $175,000 per hectare with respect to Lot 18 from his 1 October 2006 figures. For completeness, I repeat that Mr Parsons argues that any increase in value was offset by the coming into existence of the Gold Coast PIP regime of January 2007. [181] I am prepared to accept Mr Bale’s evidence that there was an increase in value from 1 October 2006 to 1 October 2007 as regards site value for developable land on Lot 18. As I have noted, Mr Bale did not reduce his overall valuation as set out in exhibit 15 despite his corrections of errors made, some of which made a significant difference to the rate per hectare applied to developable land in Mr Bale’s view. Taking Mr Bale’s corrections into account and doing the best I can with such sales that I consider appropriate to have close regard to, in my view it is appropriate to increase the site value of developable land referrable to Lot 18 by $125,000 per hectare. As I have previously assessed the appropriate value for developable land referrable to Lot 18 as at 1 October 2006 in the sum of $1,175,000, the addition of $125,000 results in a rate per hectare value for the developable land on Lot 18 as at 1 October 2007 in the sum of $1,300,000. As regards Lot 43, consistent with Mr Bale’s evidence, the amount will remain unchanged from that which I have assessed for 2006, being $1,800,000. [182] It is of course apparent that I have not reduced, at this point, such sums by reference to, amongst other issues, the PIP charges as they came into existence in January 2007 as urged on me by Mr Parsons and Mr Cronin. I do believe that those PIP charges and other risks are matters which should be properly taken into account and I will do so in my final conclusions. 177 See exh.15B. -- 66 of 71 -- 67 Assessment of value as at 1 October 2006 [183] Adopting the approach as used by Mr Bale in exhibit 14D178 and consistent with exhibit 24 as provided by Mr Parsons, and including the sums I have determined based on the sales evidence with respect to Lot 43 and Lot 18 as at 1 October 2006, and preferring the developable works relating to Lot 18 and Lot 43 as set out in exhibit 24 as provided by Mr Parsons (relying upon, in particular, the report of Cozens Regan Williams Prove) which I have rounded to $15,000,000,179 the calculations are as follows: “Subject Site (Site Value less costs) Lot 43 9.97 hectares @ $1,800,000 / hectare $17,946,000 Lot 18 31.45 hectares @ $1,175,000 / hectare $36,953,750 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $55,964,307 Less costs of estimated bulk earthworks (including holding charges as per annexure) $15,000,000 Sub Total $40,964,307 Less 15% bulk $ 6,144,646 $34,819,661 Less 10% additional holdings costs to obtain further approval $ 3,481,966 Unimproved Valuation as at 1/10/2006 $31,337,695 ADOPT $31,300,000” Assessment of value as at 1 October 2007 [184] Applying a like methodology to that set out above for 2006, but using the sum of $1,300,000 for Lot 18 based on the 2007 sales evidence, and, in light of the evidence as set out in exhibit 5 at pages 10-16, increasing the estimated bulk earthworks including holding charges to $16,000,000, but not at this point taking into account important aspects relating to PIP charges as at January 2007; the nature of the preliminary approval of May 2007; and other matters of foresight as at 1 October 2007, my preliminary assessment as at 1 October 2007 is as follows: “Subject Site (Site Value less costs) Lot 43 9.97 hectares @ $1,800,000 / hectare $17,946,000 Lot 18 31.45 hectares @ $1,300,000 / hectare $40,885,000 Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557 Sub Total $59,895,557 Less costs of estimated bulk earthworks (including holding charges) $16,000,000 Sub Total $43,895,557 Less 15% bulk $ 6,584,334 Sub Total $37,311,223 Less 5% additional (holding) costs to obtain approval $ 3,731,122 Preliminary Unimproved Valuation as at 1/10/2007 $33,580,101” 178 At page 35, top half of page. 179 In rounding down this figure, I have taken into account the correct conclusions of Mr Fynes-Clinton in reply submissions of the respondent para 47. -- 67 of 71 -- 68 [185] I have referred to the above as a preliminary assessment of value with respect to the subject land as at 1 October 2007 because of important considerations relating to PIP charges, the preliminary approval, and other aspects of foresight. [186] The respondent complains that, for 1 October 2007, the appellant has not produced any evidence to show why the valuations should be reduced taking account of the PIP charges, preliminary approval and other matters. In my view however, the appellant in contending for their unimproved value for the subject property as at 1 October 2007 in the sum of $15,800,000180 adopting the exhibit 24 approach has taken into account the impact of these factors on the subject land as at 1 October 2007. [187] As I have already indicated, in my view the appellant is in error in giving the weight that they have to these factors as at 1 October 2006. [188] To set out in simple terms: in my view, as at 1 October 2006, it was the proper expectation of both the appellants and any prudent purchaser of the subject property that the approvals which had been applied for in 2002 would be approved by the Council pursuant to 3.1.6 of IPA. Additionally, the approvals were sought taking account of the then infrastructure charges applied by the Council and there was no relevant foresight held by either the appellants themselves nor a prudent purchaser as at 1 October 2006 of the imposition of the PIP regime by the Gold Coast City Council in January 2007; the golf course policy was still in its formulative stages and, as the development application had been made in 2002 and was anticipated to be granted pursuant to 3.1.6 of IPA; and there were no objections lodged by any members of the golf course to the development application; the issues relating to the golf course policy were not relevant as at 1 October 2006; and, for completeness, for like reasons the koala policies were not relevant as at 1 October 2006. For these reasons, I am of the firm view that the appropriate valuation for the subject land as at 1 October 2006 is $31,300,000 as set out above and no further discount is appropriate. [189] For the opposite reasons, it is my view that an additional discounting factor must be applied in this matter with respect to the 1 October 2007 valuation. In Mr Parsons’ view, the appropriate discounting figure is 30%. [190] There are clearly risks associated with the subject land as at 1 October 2007 which were not in existence as at 1 October 2006. I have already dealt in detail with the imposition of the Council’s PIP regime in January 2007. I have also, in great detail, shown the uncertainties that flow from the preliminary approval of May 2007 pursuant to 3.1.5 of IPA. It is significant that Mr Venn, the town planner called by the respondent was “quite astounded” by aspects of the 180 In identical terms to 1 October 2006. -- 68 of 71 -- 69 preliminary approval.181 Further, as at 1 October 2007, it is my view that a prudent purchaser would have had some concerns regarding the development of the golf course policy by the Council, and that foresight was confirmed by subsequent actions by Council regarding the preservation of golf courses on the Gold Coast. Additionally, I take note of Mr Parsons’ advice to Devine of February 2008 as discussed earlier in these reasons. As the authorities relating to foresight show, I do not have to guess as to what advice would be provided to a prudent purchaser of the subject property as at 1 October 2007 when I can simply have regard to the actual advice provided by Mr Parsons to a potential purchaser in February 2008. [191] By way of balance, it was also foreseeable as at 1 October 2007 that endeavours would be made by either the appellants, the Council, or both, to attempt to resolve the appeal relating to the preliminary approval of May 2007. Of course, the without prejudice offer made by the Council in August 2008 has not resolved the matter, but nevertheless the existence of the without prejudice offer goes to confirm a foresight that a reasonable prudent purchaser would have had as at 1 October 2007. [192] Taking all of these factors into account, I consider that there are significant risk factors applicable to the subject land as at 1 October 2007 which did not apply as at 1 October 2006. In my view, including for reasons as set out above, the deduction claimed of 30% by the appellants is somewhat overstated. A deduction of 20% is appropriate to take into account these significant risks.182 [193] Applying a reduction of 20% to the preliminary unimproved value as at 1 October 2007 of $33,580,101 amounts to $6,716,020. When this amount is deducted from $33,580,101, the sum reached is $26,864,081. Applying rounding, the appropriate unimproved valuation of the subject land as at 1 October 2007 is $26,900,000. Summary [194] For all of the reasons as set out above, the appellants have displaced the presumption of correctness, the appeals should be allowed, and the unimproved value of the subject land as at 1 October 2006 is $31,300,000, and as at 1 October 2007 is $26,900,000. Orders 1. The appeals are allowed. 2. The unimproved value of the subject land as at 1 October 2006 is fixed in the sum of Thirty One Million Three Hundred Thousand Dollars ($31,300,000). 181 See Transcript p.302 and the heading “Gold Coast City Council Golf Course Policy” in this decision. 182 It must be stressed that this reduction is only applicable for the 2007 valuation. Any reduction for future valuation years will be dependent on the risk then existing, if any. -- 69 of 71 -- 70 3. The unimproved value of the subject land as at 1 October 2007 is fixed in the sum of Twenty-six Million Nine Hundred Thousand Dollars ($26,900,000). PA SMITH MEMBER OF THE LAND COURT -- 70 of 71 -- 71 Postscript: It is appropriate that I take this opportunity to account for the delay in providing this decision. At the time when these appeals were originally heard, the membership of the Land Court was under considerable strain due to the retirement of long standing Members of the Court and the lack of new appointments. The matter was then further complicated by the passage of significant amendments to the VLA in 2010. The parties, by their joint position dated 4 June 2010, agreed that consideration of the appeals could proceed notwithstanding the amendments to the VLA. Unfortunately, at this time I was absent from the Court on long leave, and after my return to the Court I suffered a recurrence of a serious illness. It is pleasing that the State Government made two appointments of Members to the Land Court in 2010, thus restoring the number of Member of the Court to four plus of course the Judicial Registrar. As can be seen by the length of this decision, this matter was anything but a standard appeal under the VLA. It involved complex issues of planning law and valuation law. Importantly, I wish to stress that all of my observations as to the evidence of the witnesses were made at the time that each witness gave their evidence. I made substantial notes as to my findings and impressions of each witness at the time, and I retain a strong recollection of all aspects of this hearing. -- 71 of 71 --