Boyle and Power v Townsville City Council [2004] QLAC 94

LAND APPEAL COURT OF QUEENSLAND CITATION: Boyle and Power v Townsville City Council [2004] QLAC 94 PARTIES: Mercia E Boyle and the Estate of Ada I Power (Deceased) (appellants) v. Townsville City Council (respondent) FILE NO: LAC2003/0009 DIVISION: Land Appeal Court of Queensland PROCEEDING: Appeal from a decision of the Land Court in the matter of determination of compensation consequent upon the acquisition of land for sewerage purposes pursuant to the Acquisition of Land Act 1967 ORIGINATING COURT: Land Court of Queensland DELIVERED ON: 27 October 2004 DELIVERED AT: Townsville HEARD AT: Townsville MEMBERS: Justice Cullinane Mr JJ Trickett, President Mrs CAC MacDonald, Member ORDERS: 1. The appeal is dismissed. 2. The appellants pay the respondent's costs to be assessed. CATCHWORDS: RESUMPTION AND ACQUISITION OF LAND — TOWN PLANNING — PLANNING SCHEMES AND INSTRUMENTS — STRATEGIC PLANS — DEVELOPMENT CONTROL PLANS — DETERMINATION OF COMPENSATION — where Authority resumed land for sewerage purposes — whether Land Court erred in methods of valuation of land -- 1 of 15 -- 2 Integrated Planning Act (1997) Qld Local Government (Planning and Environment) Act (1990) Qld, s. 5.1(6A), Weightman v Gold Coast City Council (2002) 121 LGERA 161, considered Spencer v The Commonwealth (1907) 5 CLR 418, cited APPEARANCES: Mr PJ Lyons QC with him Mr RS Jones for the appellants Mr CL Hughes SC with him Mr RM Needham for the respondent SOLICITORS: Wilson, Ryan & Grose for the appellants Suthers Taylor for the respondent [1] This is an appeal by landowners against the decision of the Land Court on 19 December 2002 awarding compensation of $511,957.18, following the taking of land for sewerage purposes. Background [2] Mercia E Boyle and the Estate of Ada I Power (deceased) (the appellants) were the owners of a vacant parcel of land fronting Yule Street on Magnetic Island, with an area of 13.812 ha (the subject land), situated about 1.3 km north-west of Picnic Bay. On 3 November 2000, the Townsville City Council (the respondent) resumed the whole of that land for sewerage purposes. [3] The appellants' claim for compensation (as amended) was for $689,458.21, comprising land $675,000, valuation fees $6,875 and legal fees $7,583.21. The respondent's final valuation before the Court was for $475,000. The Land Court's determination of compensation at $511,957.18, included the value of the land taken at $497,500 and the agreed disturbance items of $14,457.18. [4] The appellants' notice of appeal contained seven grounds of appeal, contending that various findings by the Land Court were contrary to law and/or against the evidence and the weight of evidence. The appellants assert that the compensation for the land resumed should be assessed at $725,000, or alternatively $620,000, or $554,000. [5] The subject land was described in detail in paragraph [4] of the decision of the Land Court: "The subject land is severed almost centrally by a gully system running north to south then extending laterally (generally east-west) near to the Yule Street frontage. Falling away from mountainous areas which lie externally to the north, the areas of highest elevation on the subject land are in the north-eastern section of each physically severed area with moderate to undulating mainly south-westerly slopes, then steeply sloping lands into the gully systems, rising again to the Yule Street frontage. The land is described as being moderately to heavily timbered. Soils are of a decomposed granite type. There is a -- 2 of 15 -- 3 rock outcrop feature extending externally into the State land and there are areas with granite boulders within the subject land. Outlook from within the site is limited by existing vegetation. However ocean views are available from the elevated areas within the eastern and north-eastern sections." Town Planning [6] At the date of resumption the subject land was zoned "Residential 1" under the City of Townsville Planning Scheme. The minimum area for allotments created by subdivision in that zone is 600 m². The planning scheme includes a Strategic Plan, in which the subject land is designated as having a Preferred Dominant Land Use (PDLU) as "Park Residential", in which designation there is to be a minimum allotment size of 4,000 m², except within group title subdivisions where smaller lot sizes may be allowed, provided the total site density does not exceed 2.5 lots per ha. Lands so designated "are intended to provide a lifestyle option to that percentage of the population who wish to incorporate aspects of rural living in their residential environment." (Strategic Plan Section 2.15.2) The planning scheme also includes a Development Control Plan for Magnetic Island (DCP 6), s.4.1 of which refers to the subject land: "On the outskirts of Picnic Bay ... is an opportunity for a Park Residential development area. The particular constraints at the site and existing significant vegetation should be considered in its future development." [7] Section 4.1 of DCP 6 also identifies the subject land as Special Development Area No. 6 (SDA 6), which is "the preferred location for Park Residential development". However, it also provides that the Council will require that existing substantial vegetation be retained and any development be responsive to the on-site environmental elements of drainage, topography, vegetation and existing access. The Council is also required to have regard to the satisfactory resolution of on-site effluent disposal and any development is required to incorporate an appropriate setback buffer from the existing road frontage, which would include retention of vegetation along the road frontage. [8] Section 5.2.9 of DCP 6 makes specific reference to the subject land, (land designated SDA 6 at Picnic Bay), in relation to group title subdivision. It provides that the Council shall encourage the use of group title subdivision on land which is subject to significant site constraints, "provided that the proposal demonstrates increased preservation of existing vegetation on site, reduction in earthworks and a more efficient drainage system". [9] Before the Land Court, the case for the claimants (now appellants) was that the highest and best use of the subject land was for a mixed "Residential 1" and Park Residential style of development. The claimants relied on the valuation of Mr Eales, which was based on a conceptual layout for 29 lots, with 28 lots on the eastern severance (14 residential type lots ranging in area from 600 m² to 800 m² and 14 Park Residential lots with areas of 2,000 m²), and for one rural homesite with an area of approximately 8.612 -- 3 of 15 -- 4 ha on the western severance. It provided for an integrated waste water disposal system utilising a suitable package plant. [10] The case for the respondent was that the highest and best use of the land was for subdivision as Park Residential style development, with minimum lot sizes of 4,000 m². The respondent advanced two layouts, one for 12 lots, with 11 Park Residential lots on the eastern severance and with a large balance lot on the western severance and a second plan of 23 Park Residential lots with a park area of 1.386 ha. [11] Crucial to determining the highest and best use of the subject land was the Courts' interpretation of the town planning provisions. The claimants contended in the Land Court that despite the Strategic Plan and the Development Control Plan, considerable weight should be given to the fact that the land had been included in the "Residential 1" zone. The respondent argued that any development of the land would have to conform to the requirements of those forward planning documents and not conflict with them. [12] The Townsville Planning Scheme is a "transitional planning scheme" under the Integrated Planning Act 1997 (IPA) which requires that any development application for subdivision must be decided under s.5.1(6) and s.5.1(6A) of the Local Government (Planning and Environment) Act 1990 (P & E Act) . Section 5.1(6) enables the local government to approve, approve subject to conditions, or to refuse an application for reconfiguration. Section 5.1(6A) requires the local government to refuse the application if the application conflicts with any relevant strategic plan or development control plan and there are not sufficient planning grounds to justify approving the application despite the conflict. [13] Section 3.5.2 of the Strategic Plan imposes a limitation on the rights conferred by zoning. "The inclusion of land in a particular zone does not imply that part or all of such land is capable of being subdivided or is suitable for subdivision for purposes or uses permitted by this planning scheme. The extent of subdivision which may be undertaken will be determined in each case on receipt of detailed information." [14] It is clear that while the subject land is in the "Residential 1" zone, that does not mean any assessment has been made as to whether it is capable of being subdivided in that zone. Although the Council has the discretion to allow subdivision, in respect of each subdivision application, the Council is required to consider many matters, including those set out in sections 18.2.3 and 18.2.4 of the Strategic Plan. [15] In DCP 6, the subject land is not in the Park Residential PDLU, but that is one of the types of development promoted for the land. If Park Residential development is to occur at Picnic Bay, SDA 6 is the preferred location. [16] After considering the evidence and opinions of town planners Mr Dance (for the claimants) and Mr Schomburgk (for the respondent), the Land Court summarised the -- 4 of 15 -- 5 town planning issues at paragraph [26] in relation to the concept plan submitted by the claimants.  Mr Dance was of the opinion that the application for subdivisional approval in keeping with that concept plan was not in conflict with the Strategic Plan or the Development Control Plan and even if it was considered to be in conflict, there were sufficient planning grounds to justify the Council approving such an application.  Mr Schomburgk was of the opinion that such an application was in conflict with both the Strategic Plan and the Development Control Plan and there were no planning grounds sufficient to justify its approval. [17] The Land Court came to the conclusion (at paragraph [28]) that "prudent, well-informed persons" would accept that the claimants' concept plan for 29 lots did not represent a genuine proposal for group title subdivision and was therefore in conflict with DCP 6 and the Strategic Plan. Furthermore, the Court found that there were no planning grounds sufficient to justify Council approving such an application. However, the Court accepted that an application for Park Residential development, such as either of those proposed by the respondent, would not be in conflict with DCP 6 or the Strategic Plan and that prudent, well-informed persons would be confident that Council approval for such development would be forthcoming. [18] However, the Land Court did not conclude that the highest and best use was confined to Park Residential development, in which lots must have a minimum area of 4,000 m². After considering the provisions of the Magnetic Island DCP 6, the Land Court concluded (paragraph [37]) that group title subdivision of the eastern severance into residential lots could be achieved, provided the lot yield did not exceed 2.5 lots per ha, based on a total area of the site, in theory 34 lots. [19] The Court accepted that in a development of the land for residential lots of minimum size (600 m²), there would be little scope for meeting the requirement of retention of substantial vegetation and the other environmental objectives of DCP 6 and SDA 6. However, the Court felt that a group title subdivision proposal which could demonstrate that it allowed for greater preservation of vegetation could be more favourably considered. [20] While noting that 34 group title lots on the eastern severance from an area in excess of 5 ha would be significantly larger than residential lots of minimum size, the Court expressed the view that in such a group title subdivision the common property could be the key to protection of the natural vegetation and topography, "in meeting the Strategic Plan Park Residential objective of retention of the character of the land and minimisation -- 5 of 15 -- 6 of environmental damage, whilst meeting the intention of providing a potentially exclusive 'lifestyle option' for purchasers wishing 'to incorporate aspects of rural living in their residential environment'." (Paragraph [39]) The Court considered that individual lot entitlements in a relatively large common area retained in its natural vegetated state for environmental protection purposes, would be a potentially exclusive feature of group title subdivision of the land. [21] The Land Court concluded that a group title subdivision development could be designed which did not conflict with the Strategic Plan or the DCP. However, as the claimants' conceptual plan did not constitute an acceptable group title subdivision development proposal, any hypothetical development valuation exercise based on that plan was of no assistance. Nor was the Court able to relate the evidence of gross realisation or of development costs from the claimants' conceptual plan to the type of group title subdivision which would be capable of being approved. While declining to make findings relating to the evidence of the various experts about development costs, the Court considered the evidence of Mr Flanagan, the engineer for the respondent, to be generally more persuasive. The Valuation Evidence [22] Before the Land Court, both valuers, Mr Eales for the claimants and Mr Duncan for the respondent, had adopted the process of direct comparison with sales of in globo land as the primary method of valuation and each of them had checked the result by means of hypothetical development exercises. Mr Eales had arrived at an in globo valuation of $675,000, attributing $70,000 per ha to the 5.2 ha on the eastern severance and $36,000 per ha to the 8.612 ha on the western severance. His hypothetical development check valuation, based on the concept plan discussed earlier, resulted in a valuation of $680,000. Further valuations were made during the hearing based on Park Residential plans prepared by Mr Flanagan. From a 12 lot subdivision concept with 11 lots on the eastern severance and the balance area as one lot, Mr Eales arrived at a land value of $785,000. [23] Mr Duncan arrived at an in globo valuation of $475,000 by direct comparison with sales, attributing $57,500 per ha to the 5.35 ha on the eastern severance, $30,000 per ha to 5 ha on the western severance and $5,000 per ha to 3.462 ha of timbered drainage corridors and natural buffer. During the hearing, he also carried out hypothetical development exercises based on Mr Flanagan's concept plans, agreeing with Mr Eales that the 12 lot Park Residential concept yielding 11 lots on the eastern severance and a large balance lot on the western severance, produced the more economically viable result. The resulting land value was $490,000 generally supported his primary valuation. -- 6 of 15 -- 7 [24] Mr Duncan also considered a hypothetical development exercise similar to that carried out by Mr Eales based on the claimants' concept plan. Mr Duncan's conclusion was that the in globo values adopted by Mr Eales in his primary approach of $70,000 per ha for the eastern severance and $36,000 per ha for the balance area, could not be supported. [25] After considering in detail the in globo sales evidence used by each of the valuers in arriving at their primary valuations, the Land Court adopted Mr Duncan's in globo valuation of $57,500 per ha for the 5.35 ha eastern severance (which the Court thought to be generous), based on its highest and best use as Park Residential development and increased his assessment to $190,395 for the western severance as one large rural residential lot, to arrive at a total of $498,020. This equates to an in globo value of approximately $36,000 per ha, and when applied to the 13.812 ha of the subject land, results in a rounded figure of $497,500. This was the value of the land ultimately determined by the Land Court. [26] However, the Land Court also gave consideration to another direct comparison valuation based on a plan of development for group title subdivision, with 34 group title residential lots on the eastern severance and with the western severance as common area, which the Court had discussed earlier. By direct comparison with a sale at Yates Street, Nellie Bay, the Land Court found a value for the 5.35 ha eastern severance of $92,500 per ha, which included any added value from the common property, rounded to a value of $495,000. This, no doubt, would have been seen by the Land Court to support its other direct comparison figure of $497,500. The Check Valuations [27] The Land Court then turned to the evidence concerning the check valuations using the hypothetical development methodology, identifying the 12-lot Park Residential subdivision as the principal check method. However, the Court also gave some consideration to the hypothetical development of a 34 lot group title subdivision as a further check. [28] Both Mr Eales and Mr Duncan had undertaken hypothetical development exercises for a 12-lot Park Residential subdivision as designed by Mr Flanagan. However, as the Land Court noted, there was widespread disagreement between the two valuers. After considering the two approaches in some detail, the Court preferred Mr Duncan's overall hypothetical development exercise, (which included an allowance for GST), but made some adjustments. The Court commented that this check valuation exercise more closely supported the Court-adjusted primary valuation approach. -- 7 of 15 -- 8 [29] The Court also discussed the hypothetical development of a 34 lot group title subdivision, but in conceptual terms, rather than in any detail. That discussion appears at paragraph [89]: "Group Title Subdivision [89] From the extrapolation of criteria from the hypothetical development exercises conducted by the valuers relative to the claimants' mixed Park Residential/Residential proposal, then adoption of an in globo land value of $92,500 per ha based on direct comparison, for the 5.35 ha eastern section, I have calculated that a 34-lot group title subdivision would need to be capable of yielding an average $87,500 sale price per lot, post-GST, over a three-year selling period, if development costs averaged $40,000 per lot including interest and if a profit of 25% was to be achieved. The levels of value generally adopted by the valuers for developed sewered lots would suggest that such sale prices for the larger-than-average sized residential group title lots 'is within an acceptable range'. It is seen as arguable however whether a 25% allowance would be acceptable to a developer, even after allowance for GST implications, for this relatively large non-traditional subdivision, as a group title development." [30] Under the heading "Hypothetical Development Exercise Conclusions", the Court stated that it was considered necessary to undertake the analysis of the Park Residential 12-lot proposal because of the significantly different in globo valuation results reached by Mr Eales and Mr Duncan. The Court found this hypothetical development methodology to be helpful as a check against the direct comparison method in this case, "where the sales evidence of comparable in globo land is relatively weak". (Paragraph [90]) The end result supported the conclusions reached by direct comparison with the sales. [31] While not satisfied that either the 12-lot Park Residential subdivision or the group title development potentialities of the land identified conclusively its highest and best economic use, the Court found that the existence of alternative development potentialities would be a positive marketing feature from a vendor's point of view. [32] Having considered the check valuations, the Court determined the value of the land taken at $36,000 per ha, rounded to a total of $497,500. The Appeal to this Court [33] Six of the appellants' grounds of appeal are concerned with the type of development which could have been undertaken on the subject land. The other ground challenges the Court's finding of the in globo value. In their appeal to this Court, the appellants distilled those six grounds of appeal, into three submissions. The Appellants' First Submission [34] The appellants submit that Land Court erred in its check valuation by means of hypothetical development for group title subdivision by adopting a concept plan with 34 lots on the eastern severance and with the western severance being common property. They contend that if that check valuation was undertaken utilising only those matters which were mentioned by the Land Court in paragraph [89], the result would be a land -- 8 of 15 -- 9 value of $850,909. However, if the exercise was expanded to include all the items referred to by Mr Duncan in his hypothetical development exercise, the Court should have arrived at a land value of $619,948, significantly higher than the Land Court's determined value of $497,500. As the check valuation was undertaken because of the difficulty of finding reliable comparable sales as the basis for the primary direct comparison method, the appellants contend that such a different result in the check valuation identifies an error in the Court's direct comparison approach. [35] The respondent submits that the appellants have read far more into paragraph [89] than is justified, arguing that it is going too far to call it a hypothetical development exercise. [36] Before considering the appellants' argument, it is necessary to identify what we consider to be the significance of the check valuation in the reasoning of the Land Court. [37] Although the subject land is zoned "Residential 1", it has not been suggested by either party that a traditional residential subdivision would have obtained Council approval, because of the tension between the zoning and the Strategic Plan and the DCP. It is common ground that there are two types of development which are promoted in the forward planning documents. One is for a Park Residential subdivision with a minimum allotment size of 4,000 m². The second is a group title subdivision, provided there are not more than 2.5 lots per ha. In either case, SDA 6 provides that the Council will require that existing substantial vegetation be retained and any development be responsive to on- site environmental elements of drainage, topography, vegetation and existing access. There will also be need for on-site effluent disposal and appropriate setback buffer from existing road frontage. [38] The Land Court recognised those alternative possibilities and examined each of them to endeavour to determine the highest and best possible use of the subject land. First, the Court considered the evidence in relation to in globo values for both of the possible uses. It did so by adopting as a primary method of valuation direct comparison with sales. However, it was clear that the Court was not satisfied with the quality of the in globo sales evidence and therefore considered it necessary to have regard to a check on the result obtained by the primary method by means of the hypothetical development method of valuation. [39] The Land Court then undertook a check valuation exercise by means of the hypothetical development of a 12-lot Park Residential subdivision. The Court examined in detail the evidence of the two valuers and, although not adopting his valuation in total, preferred the evidence of Mr Duncan. That check valuation exercise supported the result which it had reached in the primary valuation method. -- 9 of 15 -- 10 [40] In paragraph [90] of the reasons for judgment, the Land Court concluded that the hypothetical development methodology had been helpful as a check against the valuation arrived at by the direct comparison method. However, this conclusion was expressed only with respect to the Park Residential hypothetical development, the Land Court being able to make findings as to the various components in that exercise because both valuers had addressed a 12 lot Park Residential proposal. [41] However, the Court was not satisfied that there may not be a higher and better use for the land. It therefore gave some consideration to the hypothetical development methodology in a group title subdivision. The Court did not go into the same degree of detail as in the earlier check valuation, but made the comments about aspects of the methodology which appear at paragraph [89]. [42] In our view, it would be wrong to place undue emphasis on what the Land Court said in paragraph [89]. The Court had reached a conclusion as to the value of the subject land at $497,500 by the direct comparison method. The Court then undertook a detailed check valuation by means of hypothetical development of a Park Residential subdivision which generally supported the Court's conclusion as to the in globo value. [43] Although the matters discussed in paragraph [89] are hardly findings, they seem to us to be what the Land Court considered to be the elements that would be necessary in a 34-lot group title hypothetical development to arrive at that in globo value. [44] The exercise seems to us to be no more than to confirm that the result could be achieved if certain assumptions were made. But those assumptions were not findings. The profit and risk factor of 25% was not a finding; the Court expressed doubts that 25% would be an acceptable figure to a developer for this type of development. Similarly, the assumed average development costs of $40,000 per lot do not seem to have any evidentiary backing. The Court discussed this together with the other difficulties with such a concept in paragraphs [39] to [43]. The other matters which the appellants regard as findings appear to us to be observations as to what would be required if such a value was to be achieved. [45] The appellants have attempted to demonstrate that the Land Court erred in undertaking the hypothetical development exercise. In doing so they have had to assume various elements in that process which do not appear in paragraph [89]. In our view, this is not appropriate. There is simply no evidence of what other elements the Land Court took into account. [46] Furthermore, even if the appellants were successful in demonstrating that the hypothetical development group title subdivision was incorrect, that does not lead to the conclusion -- 10 of 15 -- 11 that the determination of the Land Court is wrong. At best, that exercise could only be regarded as a secondary check valuation. The primary method of valuation, undertaken in two ways, was by direct comparison. That valuation was checked by means of a hypothetical development as a Park Residential subdivision. In our view, the hypothetical development by group title subdivision was considered simply to demonstrate that the Land Court had not overlooked any possible higher and better use for the subject land. Even then, the Court was not satisfied that either of the check methods had identified the highest and best economic use of the land, but thought that the alternative development potentialities would be a positive marketing feature. [47] We are of the opinion that the Land Court looked carefully at opportunities to maximise the value of the land taken and in doing so went beyond the cases put to it by both sides. For a Park Residential subdivision it is clear that the maximum benefit involved a smaller 12-lot Park Residential development, rather than the 24 lots originally proposed. However, the Court went further and examined the prospects of a 34-lot group title subdivision. It is in that check hypothetical development group title exercise that the appellants submit that errors have occurred which identify errors in the direct comparison approach. We do not accept that reasoning. In our view, the appellants did not succeed with their first submission. The Second Submission [48] The appellants' second submission is that the Land Court was in error in not accepting that the western severance had value as a separate allotment. Their argument relates to the Land Court's second direct comparison approach by means of what the Court considered to be an achievable group title plan of development and the Court's view that the eastern severance could be developed with 34 lots, with the western severance being common property. They argue that in the other direct comparison valuation, the Court attributed $190,000 as the contribution the western severance made to the in globo value as a large rural homesite. [49] The appellants therefore submit that the Land Court's approach did not identify the highest and best economic use of the land. They contend that a developer would not sterilise the western severance by not using it as a group title lot; a developer would make use of the western severance (or most of it) as an allotment and reduce the number of lots on the eastern severance to 33. If such an exercise was undertaken, they contend that based on Mr Duncan's evidence the lots on the eastern severance would have an average value of $87,500 and the western severance a value of $255,000, resulting in a value of $724,822. -- 11 of 15 -- 12 [50] The appellants suggest that a large allotment on the western severance would result in the same advantages that a large common area on the western severance would provide to the eastern severance lots. If the value of $190,000 found by the Court to be the contribution of the western severance to the in globo value and the Court's determination of the value of $497,500 for the eastern severance were both adopted, the resulting value of the land would be $687,500, which, the applicants contend, sits well with the earlier calculation of value. [51] The respondent submits that the appellants did not give proper weight to the Land Court's reasons for adopting that particular form of group title development, or to the other effects that would result if such a course was adopted. [52] In our view the appellants' argument ignores the finding of the Land Court that the existence and the extent of the common property in a group title subdivision could be the key to the protection of natural vegetation and topography, "in meeting the Strategic Plan Park Residential objective of retention of the character of the land and minimisation of environmental damage, whilst meeting the intention of providing a potentially exclusive 'lifestyle option' for purchasers wishing 'to incorporate aspects of rural living in their residential environment'" (paragraph [39]). [53] The Land Court found that the values for the individual lots in the eastern severance would have reflected the contribution of the common area. If the western severance was to be regarded as a large rural homesite then, in our view, it is unlikely that such values would be maintained for the 33 lots on the eastern severance. Nor is it likely that the western severance would have the same value as it did as a Park Residential lot. The effect of a package sewerage treatment plant and effluent disposal area, which we assume would have to come out of the western severance, would also have to be considered. [54] Retention of the western severance as common property was an integral part of the Land Court's findings as to what form of development would receive Council approval. It cannot be assumed that the objectives of the forward planning documents could be achieved if the western severance was an individual group title allotment, in the way that such objectives could be achieved if it was common property; there was nothing to suggest that the Council would approve such a proposal. Therefore, this argument also fails. The Third Submission [55] The appellants' third submission is in relation to the finding by the Land Court that "prudent, well-informed persons" would accept that the appellants' concept plan did not represent a genuine proposal for group title subdivision and that it was therefore in -- 12 of 15 -- 13 conflict with DCP 6 and the Strategic Plan. The appellants argue that it was not logical for the Land Court to reject the appellants' 29-lot plan, yet find that a 34-lot development on the eastern severance was consistent with the planning scheme. They contend that there would be greater protection of vegetation with 28 lots on the eastern severance than with 34 lots. [56] However, that argument seems to us to ignore the fact that the appellants' concept plan was not for a group title development, but for a mixed residential/Park Residential development. They have not persuaded us how a group title development based on their concept plan would have made provision for retention of substantial vegetation and be responsive to on-site environmental elements of drainage, topography, vegetation and existing access. On the other hand, the group title development envisaged by the Land Court made provision for those aspects with the large common area on the western severance. [57] The appellants submit that there were sufficient planning grounds for the Council to approve the plan upon which Mr Eales relied. The town planner, Mr Dance, had given evidence of his opinion that there were sufficient grounds. In addition, the land is in the "Residential 1" zone which, the appellants argue, is a strong indication of the land's suitability for development consistent with that zoning. [58] Therefore, the appellants contend, it was wrong for the Land Court to reject Mr Eales' valuation on the basis of rejection of the plan on which he relied. They argue that the Court had considered Mr Eales' valuation of $364,000 for the eastern severance to be well supported, if not conservative; adopting the Court's assessment of the western severance as contributing $190,000 to the in globo value, they suggest that the total value should have been assessed at least at $554,000. [59] In response to that argument, the respondent points out that the Land Court found Mr Eales' valuation of the eastern severance to be well supported, if not conservative, but only if it had immediate potential for mixed residential/Park Residential development. However, the Court made it clear that it did not accept that the plan would be seen as capable of receiving approval and even if it had, the process of obtaining approval would have significantly delayed the immediate potential. [60] Having determined that "prudent well-informed persons" would be confident that Council approval would be forthcoming for Park Residential development or that a group title subdivision was capable of being achieved that complied with DCP 6, the Court examined the valuers' direct comparison with the sales before determining a value for the land of $497,500. -- 13 of 15 -- 14 [61] As discussed previously, in accordance with the transitional planning scheme provisions of the IPA, it is necessary for the Council to refer to the P & E Act to decide an application for subdivision. Under s.5.1(6A), of that Act, the Council must refuse to approve an application if it conflicts with the Strategic Plan or a Development Control Plan and there are not sufficient planning grounds to justify approval. [62] The Court of Appeal in Weightman v Gold Coast City Council (2002) 121 LGERA 161, emphasised that this is a mandatory direction. In that case the Court of Appeal was dealing with an appeal concerning a development application for preliminary approval for a material change of use. The relevant provision was s.4.4(5A), of the P & E Act which is identical to the wording of s.5.1(6A) for subdivision applications. The Court of Appeal found that where the application conflicts with the forward planning documents, in order to determine whether there are sufficient planning grounds to justify approving the application despite the conflict, the decision maker should: " (1) examine the nature and extent of the conflict; (2) determine whether there are any planning grounds which are relevant to the part of the application which is in conflict with the planning scheme and if the conflict can be justified on those planning grounds; (3) determine whether the planning grounds in favour of the application as a whole are, on balance, sufficient to justify approving the application notwithstanding the conflict." (de Jersey CJ at 166). [63] This was essentially the process adopted by the Land Court in considering the appellants' original concept plan and in examining the various alternatives. In finding that "prudent well-informed persons" would conclude that the claimants' concept plan did not represent a genuine proposal for group title subdivision, the Court rejected the group title alternative for that plan. As we interpret the Land Court's reasoning, having set aside that group title alternative, as a mixed residential/Park residential development, the Court found that the plan was therefore in conflict with DCP 6 and the Strategic Plan. The Court also found that given such conflict, there were no planning grounds sufficient to justify the Council approving an application in accordance with that concept plan. [64] The reference by the Land Court to the conclusion reached by "prudent, well-informed persons" seems to us to be an extension of the concept of the well-informed "willing but not over-anxious vendor and purchaser" in the definition of market value established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In other words, the Land Court refrained from deciding on the validity of the appellants' concept plan, but instead considered the conclusion that would be reached by such "well-informed, prudent persons" about this crucial aspect of the potential of the land. The Land Court weighed the merits of the claimants' proposal against the planning documents by adopting that objective test. -- 14 of 15 -- 15 [65] Although the land is zoned "Residential 1", the forward planning documents require a development to preserve most of the vegetation, in addition to the other requirements. We do not accept that the appellants' concept plan could achieve that result. [66] In our view, it was open to the Land Court to make the finding that it did that "prudent well-informed persons" would not conclude that the appellants' concept plan was acceptable as a group title subdivision proposal and that it was therefore in conflict with the forward planning documents. Accordingly, the appellants' third argument cannot succeed. Ground of Appeal No. 7 [67] Although Ground 7 of the Grounds of Appeal challenges the Land Court's finding as to the in globo value, in their submissions to this Court the appellants have made no direct criticism of the Land Court's assessment of compensation based on comparable sales. Instead, they have challenged the Land Court's check group title hypothetical development exercise and contended that the Land Court should have considered the western severance as a separate allotment as one of 34 lots. [68] In our view, the appellants have not succeeded in establishing any of their grounds of appeal and therefore the appeal should be dismissed. Orders (i) The appeal is dismissed. (ii) The appellants pay the respondent's costs to be assessed. CULLINANE J JUSTICE OF THE SUPREME COURT JJ TRICKETT PRESIDENT OF THE LAND COURT CAC MacDONALD MEMBER OF THE LAND COURT -- 15 of 15 --