Bruce Small Estates Pty Limited v Chief Executive, Department of Natural Resources [1996] QLC 159

LAND COURT BRISBANE 17 December, 1996 Re: Appeals against Various Valuations Valuation of Land Act 1944 Local Government: GCCC-Gold Coast (AV96-292, 293, AV95-471-478) Bruce Small Estates Pty Limited v. Chief Executive, Department of Natural Resources D E C I S I O N 1. The appellant, Bruce Small Estates Pty Ltd (“BSE”), has lodged ten appeals against decisions of the Chief Executive of the Department of Natural Resources (“the Chief Executive”) disallowing its objections to the unimproved valuations of land located in the local authority of the Gold Coast City Council and the subject of Valuation No. 129-11504/160080 (“the subject land”). Four of the appeals related to the Chief Executive’s decision dated 24 July, 1995 relating to the valuation of the land as at 30 June, 1993, four to his decision dated 24 July, 1995 relating to the valuation as at 1 January, 1995 and two to his decision dated 2 July, 1996 relating to the valuation of the land as at 1 January, 1996. 2. At the hearing, BSE was represented by Mr Needham of counsel and the Chief Executive by Mr O’Connor, a Principal Legal Officer in his Department. Oral evidence was given on behalf of BSE by Mr Paul Murphy, a registered valuer, Mr Jeffrey Griffiths, a registered professional engineer and by Mr William Morris, who is an engineer with a Master of Business Administration. Mr Peter Grennan, a valuer in the Department of Natural Resources, gave evidence on behalf of the Chief Executive. Reports from Mr Murphy, Mr Griffiths and Mr Grennan were admitted in evidence together with other written material to which I will refer in the course of these reasons. THE ISSUES [1996] QLC 159 -- 1 of 28 -- 2 3. The parties had resolved a number of issues raised by the appeals. In view of that, Mr Needham indicated that he would not argue the jurisdictional issue raised by Appeal AV95-478. As the subject land that has been valued is a residential subdivision, there have been split valuations as the lots are subdivided. This has led to there being more than one valuation in any one year. Rather than considering each valuation, the parties agreed that only three matters, one in respect of each year under consideration, should be argued as test cases. They are AV95-474 in relation to the valuation as at 30 June, 1993, AV95-477 in relation to the valuation as at 1 January, 1995 and AV96-293 in relation to the valuation as at 1 January, 1996. 4. The parties also agreed that, for the purposes of the valuations at each date, the land is to be considered as it existed on the date of the issue of the respective valuations. It follows that, for the purposes of the valuations as at 30 June, 1993 and 30 June, 1995, the land is to be considered as at 2 May, 1995 and for the valuation as at 1 January, 1996, the land is to be considered as at 21 February, 1996. 5. The issue to be resolved in this case turned upon the appropriate method to adopt in valuing the subject land. Three methods were discussed. The first was the direct sales, or comparable sales, method. That method was rejected on behalf of BSE and, in its place, it was proposed that I should adopt a “discounted cash flow” method (“DCF”). The “hypothetical development” method (“HD”) was proposed on behalf of the Chief Executive. THE PROPERTY DESCRIPTION AND UNIMPROVED VALUES ASSESSED BY THE CHIEF EXECUTIVE Property description at 2 May, 1995 (dates of valuation: 30 June, 1993 and 1 January, 1995) 6. In assessing the unimproved value of the subject land as at 30 June, 1993 and 1 January, 1995, regard is to be had to the land as at 2 May, 1995. At that time, I find, the land can be described as 53.073 hectares of freehold land situated in the County of Ward, Parish of Nerang comprising: . Lot 107 on Registered Plan No. 218372 -- 2 of 28 -- 3 . Lots 1, 2, 7 and 15 on Registered Plan No. 854402 . Lots 105, 106 and 108 on Registered Plan No. 816717 . Lots 31, 59, 64 and 66 on Registered Plan No. 856695 . Lots 67 to 69 and 100 on Registered Plan No. 856696 . Lots 45 to 48, 52, 76, 77 and 80 to 85 on Registered Plan No. 882003 . Lots 49, 50, 63, 71 to 73, 75 and 86 to 91 on Registered Plan No. 882004 . Lots 93 to 96, 98, 99 and 109 to 114 on Registered Plan No. 882005 . Lots 18 to 26 on Registered Plan No. 882022 . Balance of Lot 997 on Registered Plan No. 854395. 7. The Chief Executive had issued a decision assessing the unimproved value to be $8,300,000 as at 30 June, 1993. In respect of the unimproved value of the subject land as at 1 January, 1995, he had assessed it to be $15,350,000. In his valuation report, Mr Grennan, who did not prepare the original valuations in any of these matters, had assessed it to be $13,255,210 (say $13,250,000). Property description at 21 February, 1996 (date of valuation: 1 January, 1996) 8. In assessing the unimproved value of the subject land as at 1 January, 1996, regard is to be had to the land as at 21 February, 1996. At that time, I find, the land can be described as 49.6045 hectares of freehold land situated in the County of Ward, Parish of Nerang comprising: . Lots 1,7 and 15 on Registered Plan No. 854402 . Lots 105 and 106 on Registered Plan 816717 . Lots 31 on Registered Plan No. 856695 . Lots 52 and 80 to 84 on Registered Plan No. 882003 . Lots 50, 72 and 86 to 88 on Registered Plan No. 882004 . Lots 93, 94, 99 and 111 to 114 on Registered Plan No. 882005 . Lots 18 to 21 and 23 to 26 on Registered Plan No. 882022 . Lots 92, 115 to 121 and 145 to 150 on Registered Plan No. 894214 . Lots 122 to 127 and 140 to 144 on Registered Plan No. 894215 . Lots 128 to 139 on Registered Plan No. 894216 . Lots 178 to 191 on Registered Plan No. 894217 . Balance of Lot 997 on Registered Plan No. 854395. 9. The Chief Executive’s valuation of the unimproved value as at 1 January, 1996 was $14,950,000. Mr Grennan’s written valuation was $12,405,802 (say $12,400,000). THE LAND -- 3 of 28 -- 4 10. There was no disagreement among the parties and the witnesses as to the general description of the subject land, In light of that and on the basis of the evidence in general and on the basis of the oral and written evidence of Mr Murphy and Mr Grennan and of the aerial photograph in particular, I have made a number of findings of fact which I will now set out. 11. The subject land is a partly developed and irregular shaped residential subdivision known as Benowa Waters at the Gold Coast. It adjoins a high quality and established residential area and is situated in the Parish of Nerang, County of Ward. It is bounded by Edinburgh Road on its eastern boundary and by the Nerang River on its western and southern boundaries. Kilbreck Street and Benowa Road are at its northern extremity. All roads are full width bitumen roads with concrete kerbing and channelling. Easy access is available to Benowa Waters by road. The Nerang River is navigable at that point and provides good boating access to the ocean. 12. In its unimproved state, the subject land was entirely low lying and below the Q100 flood level required for residential development within the Gold Coast City Council area. It required filling and I have given details of this below. On the basis of Mr Murphy’s report, I find that two borrow pits existed on the land prior to 1985. Soil had been removed from those pits and used in BSE’s earlier projects. The total excavation area of the two borrow pits was approximately 4 hectares. That represented approximately 25% of the area of the lake which will ultimately exist at the site of those borrow pits at the southern end of the land. The total surface area of the lake will be in the order of 15.7 hectares. 13. Benowa Waters is zoned “Residential - Dwelling House” under the Gold Coast City Council Town Planning Scheme which was gazetted on 11 February, 1994. At its meeting on 11 December, 1992, the Gold Coast City Council resolved to approve an application to subdivide the land, which then comprised 59.23 hectares, subject to a number of conditions. The approval allowed subdivision of the land into a total of 432 allotments in accordance with Plan No. 9136B. I find that the estimated length of time to complete the development of Stages 24 -29 is 101/2 years. THE LAND FILL AND PLANNED STAGES OF DEVELOPMENT -- 4 of 28 -- 5 The land fill 14. Evidence as to the filling of the subject land was given by Mr Griffiths. He has worked on the design and construction of subdivisional works on the Gold Coast for over ten years and has been involved with Benowa Waters since 1992. He is familiar with Stages 21 to 24 of the subdivision. His evidence, both oral and in his written report, was not contradicted by any other evidence and, on that basis, I accept it and will set out the findings of fact I have made. 15. The Gold Coast City Council has specified the 1 in 100 year flood level for Benowa Waters to be in the range of RL4.3m and RL4.5m. The natural surface of the land varied from approximately 1.5m at its lowest point to about 3m but the majority of the site was between 1.5m and 2.5m. To ensure that the site is not flooded in a 1 in 100 year flood, it has required filling of depths of up to 3.0 metres. In relation to Stages 24 onwards, this has meant that the level of filling has ranged between the flood level, which on average is 4.4m, to some 600mm or 700mm higher. It follows that, on average, the land fill for Stage 24 has been filled up to an average between 4.7 and 4.8 metres. 16. Edinburgh Road on Benowa Waters’ eastern boundary had been built as part of stages developed further to the east. In building the road, the land was filled and sloped onto the subject land. As a consequence, some fill was placed on the subject land but there is no evidence as to the amount of that fill. 17. As provided in the approved plan for the subdivision, the source of the fill used on the subject land is the drainage reserve at its southern end. That drainage reserve, which will ultimately be a lake, provides the balance flood storage capacity for BSE’s development and had been used for fill for earlier stages of BSE’s project. The drainage reserve has become a deep hole which will ultimately vary in depth between 10 and 18 metres. As soil is removed, water flows through a layer of sand some half a metre thick and running between the Nerang River and the drainage reserve. Up to four pumps are used to remove the water to enable soil to be removed. That water is run through sediment ponds to clear it of contaminants and then pumped into the Nerang River. -- 5 of 28 -- 6 18. The soil removed from the drainage reserve consists mainly of marine clay. Marine clay has a very high moisture content and, in its natural state, is not adequate for structural fill for housing or earthworks. Its unsuitability comes from its long term settlement when it carries a load. Settlement occurs as the water slowly squeezes from the marine clay matrix. In order to use it as structural fill, it must be dried and so stabilised. Marine clay is dried by spreading it in a thin layer approximately six inches thick over a large area. The sun dries it and it is ploughed and turned to ensure that it is dried. Costs are incurred both in ploughing and turning and also in the time that must be taken to ensure that the soil is adequately dried. Each layer must be thoroughly dried before the next is added and so any significant rainfall added four to five days to the drying time on the subject land. Generally, the marine clay is dried on the land where it is to be used as structural fill. 19. A marine clay substrata underlies the subject land and exists in depths up to 14 metres. In order to stabilise the land for building, the marine clay must be compressed to remove its water. That is done by the placement of a 2 metre thick preload layer over the land to simulate the ultimate load of a house. When it has settled to the level required, the excess of soil is removed and the land is ready for the civil and electrical works to be undertaken. Over 80% of the subject land has been pre-loaded in this way for periods ranging between 9 and 24 months. 20. The presence of marine clay has determined the way in which the roadworks are constructed. As marine clay fill forms the subgrade material for the roads and as it has a very low load bearing capacity, the depth of the road pavement has been made up to 600mm in thickness rather than the usual 200mm required on good quality subgrade material. The low load bearing capacity of marine clay has also had an effect upon the manner in which drainage pipes have been laid. In order to prevent their sinking, they have been placed on foundations generally made of cobble sized rocks down to 20mm aggregate. As the site has required very large stormwater pipes, the foundations have also been substantial. The planned stages of development 21. Again based on the evidence of Mr Griffiths, I find that the development of Benowa Waters was planned on the assumption that the next stage of the development would be ready and available for release when all of the lots from the previous stage -- 6 of 28 -- 7 had been sold. It is important to achieve this in order to maintain a cash flow and to assist in defraying the development costs, or the interest on those costs, on each stage. It is also important in order to ensure that the sales unit always has lots to sell and is properly occupied. THE DEVELOPMENT YIELD 22. I find that, in accordance with the approval given by the Gold Coast City Council, Benowa Waters is to be developed with a mix of residential allotments comprising dry, lake and river lots. Of the 432 allotments approved, 278 are to be dry, 73 lake and 81 river allotments. There is a different mix of these types of allotments at each stage of the development. That mix for each stage is: Stage Dry Lake River Total 21A 17 - - 17 22 36 - 4 40 23 37 - 6 43 21B 9 - - 9 24 43 - 7 50 24A 31 - 4 35 25 58 - 8 66 26 47 - 7 54 27 - 36 - 36 28 - 18 21 39 29 - 19 24 43 Total 278 73 81 432 (Exhibit A, page 7) Development at 2 May, 1975 23. As at 2 May, 1995, Benowa Waters comprised a total land area of 53.073 hectares. That finding is consistent both with Mr Murphy’s report and that of the Mr Grennan. On the basis of Mr Murphy’s report, which was not contradicted, Stages 21, 22 and 23 had been developed. Of the lots developed in those stages, 63 allotments with a combined land area of 4.799 hectares remained unsold or subject to a contract of sale which had yet to be settled. The unsold allotments included 10 river allotments ranging in area from 1,000 to 1,494 square metres with an average of 1,100 square metres. The remaining 53 allotments were dry allotments ranging in area from 580 to 1,040 square metres. On average, the area of a dry allotments had an area of 700 square metres. -- 7 of 28 -- 8 24. The balance of the land area consisted of Stages 24 to 29 and comprised approximately 48.274 hectares to be developed with a total of 323 residential allotments in accordance with the table reproduced in paragraph 22 above. Included in that 48.274 hectares was to be a lake of approximately 15.7 hectares. At this time, the lake had already been partly excavated to provide fill for Stages 21 to 23 as well as for some fill already placed on Stages 24 and 24A. Development at 21 February, 1996 25. As at 21 February, 1996, I find that Stage 24 had been developed. Again both Mr Grennan and Mr Murphy agreed that Benowa Waters then comprised a total area of 49.6045 hectares. I find on the basis of Mr Murphy’s evidence that a total of 159 residential allotments had then been developed. Of these, 83, with a combined area of 6.0853 hectares, remained unsold or subject to contracts of sale which had not yet settled. A total of 70 of the 83 allotments were dry allotments with areas ranging from 580 square metres to 1,040 square metres. On average, the dry allotments had an area of some 700 square metres. The remaining 13 were river allotments varying in area from 985 to 1,494 square metres and averaging an area of approximately 1,100 square metres. 26. The balance of the land area consisted of Stages 24A to 29.and comprised approximately 43.5192 hectares. That land was to be developed with a total of 273 residential allotments in the mix shown in the table in paragraph 22 above and also included the proposed lake which continued to occupy approximately 15.7 hectares. By this time, soil had been removed from the borrow pit for Stages 21-24. Some soil had also been removed and placed on Stages 24A and 25. COSTS OF DEVELOPMENT 27. Mr Griffiths had prepared estimates for the costs of civil construction for Benowa Waters at June, 1993, January, 1995 and January, 1996. In relation to each time period, he had prepared an estimate for each stage within Benowa Waters and also an expenditure chart for each stage. In preparing his estimates, he said in his oral evidence, he had not allowed for the additional costs which will be incurred in the later stages of the development in attempting to dry marine clay on the confined area -- 8 of 28 -- 9 of land remaining to be developed. Those costs are not known and will be incurred some years in the future. No amount has been allowed for contingencies in the estimates prepared by Mr Griffiths. His estimates for civil construction for each stage included costs for establishment/fees/testing, dewatering, clearing, stripping and replacing top soil, earthworks, placing preload, civil works, revetment, power/Telstra, Council charges and consultants’ fees. MARKETING THE ALLOTMENTS 28. Again my findings have been based on the evidence of Mr Murphy as it has not been contradicted and I am satisfied that he has supported it with appropriate enquiries with BSE and the Department of Natural Resources. 29. I find that marketing of Benowa Waters began in April, 1993 with the release of 17 dry residential allotments in Stage 21. By October, 1996, a total of 159 allotments (17 river and 142 dry) had been released. A further 35 allotments (4 river and 31 dry) were completed in Stage 24A but had yet to be released as the Gold Coast City Council had yet to seal the plans. A total of 112 allotments had been sold. Of these, 7 were wet and were sold for an average price of $307,700. The remaining 105 were dry allotments and sold for an average price of $103,500. The rate of sale of the allotments has varied over the months since April, 1993. As at 21 February, 1996 the average rate was approximately 2.5 allotments per month but, earlier on 1 January, 1995, it had been approximately 3.8 allotments per month. COMPARISON WITH OTHER DEVELOPMENTS General market conditions 30. Both Mr Grennan and Mr Murphy gave evidence regarding the general market conditions for in globo land on the Gold Coast during the late 1980s and 1990s and were in general agreement. On that basis, I find that there was a considerable demand for that land in the flood plain if it was either suitable or had been approved for resort, residential and golf course development. This resulted in a considerable increase in the price for in globo flood plain land throughout the Gold Coast region. This demand decreased significantly with the advent of the 1990s but, in 1995, interest re- emerged for large integrated resort sites. On the basis of the evidence of Mr Murphy, who addressed this aspect, I find that the majority of the interest in in globo land has -- 9 of 28 -- 10 been for land suitable for development with “dry” and small residential allotments. There are only limited stocks of such land available. 31. Again on the basis of Mr Murphy’s evidence, for he was the only witness who addressed this aspect, I find that the majority of the demand for land at 30 June, 1993 was for in globo land suitable for development into dry residential allotments. The demand was for land which did not involve environmental issues, filling of land, high external costs or up-front lags in the development process. 32. By January, 1995, I find that there had been an increase in the demand for low lying in globo land suitable for waterfront residential allotments and that demand had strengthened towards the end of 1994. That demand remained at 1 January, 1996 although purchasers exercised caution in relation to properties which exhibited the difficulties I have described in the previous paragraph. The former Sanfam site or Burleigh Cove 33. On the basis of the evidence of both Mr Grennan and Mr Murphy, I find that the land comprises 54.77 hectares in all. It was purchased by Rylehall Pty Ltd on 1 March, 1995 in two lots for $7,900,000 or an average of $144,240 per hectare. I find on the basis of the evidence of Mr Grennan that the sale occurred in two lots. One comprised 36.59 hectares and was sold for $4,3000,000 or $117,518 per hectare. The other comprised 18.18 hectares and was sold for $3,600,00 or $198,019 per hectare. The Chief Executive has attributed an unimproved value as at 30 June, 1996 and 30 June, 1996 of $6,000,000 or $110,000 per hectare. 34. I find on the basis of the evidence of Mr Murphy, who gave a general description of the land, that it is low lying and flood prone. A lake of some 10 hectares is proposed as part of the development which has been approved for higher density mix of residential development, including small lot houses, town houses and walk-up home units. It is zoned “Special Residential” and “Residential A” to allow for that development. It has been approved for the development of 88 standard dry allotments, 94 lakefront residential allotments, 132 small residential allotments, 233 dry and lakefront allotments and 115 three storey walk-up units. Forty months is estimated as the period of the development. -- 10 of 28 -- 11 35. Mr Griffiths was familiar with the former Sanfam site as Cardno & Davies, with whom he is associated, had undertaken a study into the environmental impact of this development on the quality of the water in Burleigh Lake. Mr Grennan also had knowledge of the development. They agreed, and I find as a consequence, that approximately 50% of the subdivisional land area of the site was underlain by marine clay and required preloading. Mr Griffiths’ evidence was that preloading to a depth of 1 metre was required for a period of 6 months. Mr Grennan stated that it was required for 18 months. Both agreed that the fill used at the Sanfam site was obtained from a quarry at Reedy Creek and so was quarry grade material. As quarry grade material it had a far greater load bearing capacity than marine clay. As a consequence, the roads could be built of a minimum thickness and the problems with laying drainage pipes are greatly reduced. 36. Mr Griffiths estimated that the cost of the fill from Reedy Creek would be in the order of $8-10 per cubic metre but was unfamiliar with the total amount of fill required at the site. Mr Grennan estimated it to be $25 a square metre. The Dong Ah site 37. It was generally agreed, and I find, that the Dong Ah site is a development incorporating a golf course resort and is located on the Merrimac flood plain at Robina. It is zoned “Special Facilities” for the development of a hotel, accommodation units and dwellings. The site was purchased by Dong Ah Australia Pty Limited (“Dong Ah”) in three sales. The first, for 62.6301 hectares, took place on 22 December, 1994 and the second, for 51.8723 hectares, took place on 15 March, 1996 although its purchase was negotiated at the same time as the first. The total area of 114.5 hectares acquired in the first two sales was purchased for $16,500,000 or $144,105 per hectare. The analysed sale price attributed to this land after the deduction of $114,502 for improvements was $16,385,498. An unimproved value of $14,450,000 was attributed to the land as at 1 January, 1996. That equates with an attributed unimproved value of $126,200 per hectare on a pro rata basis or a value of $300,000 for each of the 15 hectares of high land and $100,000 for each of the 99.5 hectares of low land. 38. I also find on the basis of Mr Murphy’s evidence that Dong Ah entered a third transaction in which it acquired 27.035 hectares. That took place in June, 1995 when -- 11 of 28 -- 12 it acquired an irregular shaped, mostly low lying and flood prone parcel of land for $3,450,000. Approximately 4 hectares of the land was flood free. It is zoned part “Commercial Industry”, part “Public Open Space” and part “Special Facilities”. It adjoins the other land purchased by Dong Ah and was to be developed as part of the one estate. 39. I also find, and again Mr Grennan and Mr Murphy are in general agreement, that the property is located in close proximity to the Robina Town Centre and a proposed railway. The outlook from the property is to the west and directed to the Pacific Highway. A small portion of the land on the eastern boundary is elevated and two smaller portions of land on the western boundary are also elevated. Somewhere between 15 and 20 hectares is elevated and so flood free while the remaining land is flood prone. 40. Taking Dong Ah’s land overall, it comprises and area of 141.535 hectares and was purchased for a total of $19,950,000. That equates with a rate of $140,954 per hectare. 41. It is located on marine clay. I accept Mr Griffiths’ evidence that, from an engineering point of view, a golf course requires top dressing and some marginal filling of a metre or a metre and a half but does not require preloading. Settlement of a golf course does not matter as it will not bear a structural load. Surfers Paradise International Raceway 42. Both Mr Grennan and Mr Murphy referred to the sale of this land but each referred to its sale at different times. As a consequence, different areas were involved. Mr Grennan’s sale occurred on 6 June, 1988 for $15,802,000 (or $158,384 per hectare) for land comprising 99.77 hectares. That sale was made by Daikyo Australia Pty Ltd to Kohshin Australia Pty Ltd (“Kohshin”). 43. Mr Murphy referred to a sale in September, 1993 when further land had been added to the original holding. The land then comprising 116.87 hectares was “sold” for $5,000,000 at a rate of $42,783 per hectare. The land was acquired from Kohshin by Nifsan Developments Pty Ltd (“Nifsan”) together with another development by way of a company acquisition. The total consideration was $13,500,000. -- 12 of 28 -- 13 44. I find that this property is a large irregular shaped parcel of land comprising various allotments presently used as a raceway and light aircraft field. It is low lying land in the Merrimac flood plain with a small elevated knoll situated in the western section of the property. Approval for its waterfront development with 750 homes on 45 hectares has received a deemed refusal from the Gold Coast City Council. 45. A further property comprising 22.01 hectares and adjoining the Surfers Paradise International Raceway was purchased by Nifsan in August, 1993 for the sum of $2,750,000 or $124,943 per hectare. It is an irregular shaped land holding bisected by a drainage channel. The land is low lying and flood prone but is well located near the Palm Meadows golf course. The property was purchased by the purchaser of the Surfers Paradise International Raceway for development with it. Mr Murphy was familiar with the marketing of the property and was satisfied that it had been properly marketed. CONSIDERATION Burden of proof 46. As Mr O’Connor submitted, section 33 of the Valuation of Land Act 1944 (“the Act”) provides that every valuation of land made by the Chief Executive is deemed to be correct until proved otherwise or until altered. In this case, the Chief Executive has already accepted that the valuations for 1 January, 1995 and 1 January, 1996 are incorrect for he has led evidence through Mr Grennan to that effect (see paragraphs 7 and 9 above). No such concession has been made in respect of the valuation for 30 June, 1993. 47. Also as Mr O’Connor submitted, BSE carries the burden of proof in this case. That is the effect of sub-section 56(2) of the Act. Application of sub-section 25(1) of the Valuation of Land Act 1944 48. Sub-sections 25(1) and (2) of the Act provides that “(1) Notwithstanding any other provision of this Act except subsection (3), where an owner subdivides land into 6 or more parts the parts that continue to be owned by the owner (being not less than 6) shall be deemed to form a single parcel and shall be valued as such pursuant to this Act -- 13 of 28 -- 14 (notwithstanding that the same may not adjoin) and in valuing that parcel any enhancement in the value thereof by reason of works carried out by that owner on the land so subdivided shall be disregarded. (2) However, the unimproved value of that parcel shall be not less than 5 times the average unimproved value of the parts continuing to be so owned and for the purpose of determining the unimproved value of each such part it shall be taken to be a part to which this section does not apply.” Sub-section 25(3) relates to situations in which land is used for the purposes of a single dwelling house or for farming and is not relevant in this case. 49. Sub-section 25(1), which was formerly numbered sub-section 11D (1), was considered by Mr Carter in Riverside Drive Estate Pty Ltd v Valuer-General (1989) 12 QLCR 165. The Valuer-General had determined the unimproved value for a series of residential lots, in globo land and the balance area of the Riverside Drive Estate at Townsville. As a result of agreements between the parties, the court was concerned only with the unimproved value of the subdivided parcels. 50. The appellant had argued that the component part for headworks and approval costs should be excluded from the valuation of the subdivided area on the basis that anything external to the subdivided area should be excluded from the valuation. It was the intention of sub-section 11D(1), it argued, that the land be viewed as if it were not subdivided. The Valuer-General had distinguished between work within the boundaries of the subdivision and that external to it. On his behalf it was argued that, with regard to work carried out by the owner within the boundaries of the subdivision was to be disregarded. It followed that the enhancement in value given by roads built by the owner within the subdivision is to be ignored. So too was expenditure on such items as survey fees, internal drainage, sewerage connections. The headworks and approval costs were a different matter, the Valuer-General argued. Those charges should be added on the basis that they add to the value of the land when compared with neighbouring land in respect of which there are no headworks and approvals have not been obtained. The land could be expected to fetch more in the market place. In any event, it is a well established principle that, in order to value land, it must be valued in the environment in which it existed at the relevant date. -- 14 of 28 -- 15 51. Mr Carter considered whether sub-section 11D(1) was ambiguous and concluded: “Section 11D(1) of the Valuation of Land Act is in some ways difficult to interpret but I cannot see it as being ambiguous. The difficulty to me is to understand what the Legislature envisaged in using the word ‘parts’. Is a part each and every individually surveyed lot and the balance area of a subdivision or is it any group of adjoining lots and the balance area? I think it is fair to say that what is meant is that a part is each individual lot. Of course the reference to parts is really only relevant if the ultimate paragraph of Subsection 1 comes into operation. I might now say that in this case it clearly does not.” (page 169) 52. With regard to the headworks charges and approvals, Mr Carter concluded: “Having considered the submissions on the matter, and giving Section 11D(1) of the Act its plain and natural meaning, I am of the opinion that it is appropriate for the Valuer-General to add to the in globo value of the land the contributions made by the owner of the subdivided land for headworks charges and approvals. They certainly add to the value of the land and can be distinguished from works carried out by the owner of the land which cause enhancement in the value of the subdivided land, which has to be disregarded.” 53. Both Mr O’Connor and Mr Needham referred to a judgement of Mr Wenck in Tebuk Pty Ltd v Chief Executive, Department of Lands (unreported, AV93- 149,150,582, 12 August, 1994). In that judgement, it was recorded that the valuer for the appellant had referred to Mr Carter’s judgement and been guided by it in determining his valuation. In considering the application of sub-section 11D(1), Mr Wenck said: “While the calculations had not been extended to show compliance with section 11D of the Act, it is clear that, at least as far as the subdivided unsold lands were concerned, the benefits associated with the provisions of the Act had been considered. Mr Nobes apparently followed departmental interpretation and policy as to the application of the legislation. In this matter, that policy was explained in the following example:- Where: Raw land in globo value is $100,000 per hectare Estimated residential lot yield is 10 lots/hectare Estimated average lot size is 700 sq. metres Estimated subdivided land yield per hectare 7,000 sq. metres Raw land value required to provide 7,000 sq. metres of -- 15 of 28 -- 16 subdivided land $100,000 Estimated value of headworks charges paid at $4,000 per lot $40,000 Value of 7,000 sq. metres subdivided land with headworks charges paid $140,000 Value of 1 hectare of subdivided land equals $200,000. Mr Kelaher believes that the method employed by the Department is not in compliance with the Act, nor does it follow the decision in the Riverside Drive Estate Pty Ltd appeal (supra). As I understand the appellant company’s submission in this regard, the Department’s approach is said not to disregard ‘any enhancement ... by reason of the works’ as required by the provisions of section 11D of the Act. It is submitted that, in the example as provided by Mr Nobes as being departmental policy, the excision of reserves such as new roads, cannot be effected until the necessary works are constructed, and consequently adoption of the net area value does not disregard the works. The advocate for the Department argued that it would be taking the intended benefit too far, unless the ‘destruction’ of part of the raw land was considered. To illustrate the Department’s contention he gave the example of 10 hectares of in globo land worth $1,000,000 increasing to $1,400,000 when headworks to the value of $400,000 were paid prior to subdivision. If the land was subdivided into 7 hectares of developed land it would be unreasonable for the developer to expect a valuation under section 11D to be less than $1,400,000 or $200,000 per hectare for the net 7 hectares remaining. In this example, the basis suggested by Mr Kelaher would result in a valuation of 7 hectares at $100,000 plus actual headworks charges of $400,000 totalling $1,100,000. The Department’s policy would result in a valuation of $1,400,000. I do not agree that the Department’s approach is wrong or in conflict with the legislation. The enhancement from the works is disregarded. The enhancement in value results from the in globo land becoming a net area, capable of residential subdivision without loss of land for infrastructure such as roadworks. In globo land if peculiarly favoured by such a situation would clearly be more valuable than in globo land incapable of providing the same net yield, although otherwise comparable. There is an element of artificiality introduced by the estimation of net yield from any particular parcel, but the legislation in itself provides for an artificial result. Subject to the legislative exclusion such as provided by section 11D, it is the land as it exists which falls to be valued.” (pages 16-17) 54. Mr O’Connor argued that the reasoning adopted by Mr Wenck was correct and should be applied. Mr Needham argued that it was not correct. He argued that an enhancement in value for the in globo land had indeed resulted from the fact that it -- 16 of 28 -- 17 had become a net area capable of subdivision without loss of land for infrastructure such as roadworks but that this enhancement had resulted from the developer’s carrying out work on the subdivided land. The roads it has developed have been handed to the public and sub-section 25(1) is intended to ensure that it should not pay any enhancement in the value of its remaining land simply because it has given roads to the public. Why should the severing of the road be taken into account when other costs, such as bituminising the road and undertaking earthworks, are not, Mr Needham asked. 55. In considering the arguments and the interpretation of sub-section 25(1), I have had regard to the Second Reading Speech of the then Minister for Environment, Valuation and Administrative Services in moving the motion that the Valuation of Land Act and Other Acts Amendment Bill be read a second time (Legislative Assembly, Hansard, 7 March, 1985). I have had regard to it in order to determine the purpose of the provision in accordance with section 14A of the Acts Interpretation Act 1954 and in accordance with the principles expressed in Alexandra Hospital v Blewett (1984) 56 ALR 265. 56. The Minister said: “The principal Act is also amended in relation to the method of valuing larger subdivided estates which remain in the hands of the original subdivider. Under the present Act, from the time of registration of a plan of subdivision, each allotment is valued separately and the total value of the allotments discounted for multiple holding. The developer is therefore required to pay rates upon the increase in value which follows his own expenditure on development works, thus increasing his holding charges. The provisions of the Bill will require the Valuer-General to value estates of six or more allotments as a single parcel, provided they continue to be owned by the original developer. Any enhancement in value by reason of the development works carried out by the developer on the subdivided land will be excluded from that valuation. Small estates of five allotments or fewer will be valued in the normal manner. However, where estates are valued under the new provisions, the valuation shall not be less than five times the average unimproved value of the parts continuing to be owned by the original developer. This latter safeguard is -- 17 of 28 -- 18 necessary to prevent estates containing more than five allotments having lower valuations than estates containing five allotments or fewer.” (page 3849) 57. Having considered both the case of Riverside Drive Estates and that of Tebuk Pty Ltd and sub-section 25(1) in the light of the Minister’s statement, it seems to me that the former case set out the principles I am required to follow in applying sub- section 25(1). Those principles were not explicitly discussed in Tebuk Pty Ltd but that case does not seem to me to be inconsistent with those principles. Mr Wenck was considering the effect of yield potential on the unimproved value of in globo land. That which was being considered was a derivation of the application of the hypothetical development method in assessing the value of land. That method, which I refer to in greater detail below, requires a consideration of the net yield which can hypothetically be achieved from an area of land and does not take any account of the value added by the specific development undertaken by the developer. Where there are direct comparable sales, it is but one method of undertaking the task of ascertaining the unimproved value of the land. It must be used with care for, as Dixon CJ said in Turner & Anor v The Minister of Public Instruction (1956) 95 CLR 245 it, “... contains a number of factors all of which seem to depend on little or nothing more than opinion and it may be supposed that widely different results may be produced by variations in detail, though no given variation may itself seem considerable. It would appear natural therefore for a judicial valuer to seek to check his result by reference to as many sources of information and inference as may be found, even if he might consider that they would not provide him, had they stood alone, with a satisfactory independent basis for an ultimate conclusion.” (page 268) The valuation methodologies 58. Three different methodologies of valuation were explored in this case and I will consider each. Comparable sales or the direct sales methodology 59. If comparable sales evidence is available it is clearly the best evidence of the value of the subject land. In this case, however, none of the sales is directly comparable. That is not to say that I have entirely disregarded them for, even though I -- 18 of 28 -- 19 am not satisfied that they can used alone, they are one of the sources to which Dixon CJ referred and by which the result may be checked. 60. The Burleigh Cove sale is comparable in terms of its area, its low lying and flood prone nature and its location next to an existing waterfront development. Its value as a comparable sale diminishes, however, when regard is had to its lack of a river frontage and its less favourable location when compared with the subject land. Its higher density mix of residential development will also diminish its value as a comparison for I accept Mr Murphy’s evidence that the mix will enable it to be marketed to different parts of the market at the same time. This is so even though, as Mr Grennan said, the market may be less receptive to townhouse style development than in times past. The subject land, by contrast, is limited to a much smaller part of the market being able to offer only dry or wet allotments in that part of the market looking for allotments zoned “Residential A”. Finally, the length of time estimated for the completion of the development, some 40 months, would indicate that the development and the manner of its progress are significantly different from the subject land’s with its estimated time of completion of some 101/2 years. 61. The Dong Ah sales occurred within an appropriate time frame but there are differences between the land and the subject land which are of some significance. In the first place, the nature of the developments is different. The subject land is being developed as residential allotments while the Dong Ah land is to be developed as a golf course based resort with residential property. Its development costs will be substantially different from those of the subject land in view of the significant amount of flood prone land to be devoted to a golf course and so not requiring any significant level of filling or pre-loading and in view of the higher percentage (some 13%) of land which is not subject to flooding. 62. The Surfers Paradise International Raceway sales have inherent difficulties in being used as comparable sales. It is the date of the first sale in 1988 which detracts from its value in this exercise. As I have already found, the state of the market for in globo land in the 1980s was considerably different from its state in 1993 when demand had significantly decreased (see paragraphs 30-31 above). Even when -- 19 of 28 -- 20 interest returned in the mid 1990s, I have found that the interest was more in land suitable for dry and small residential allotments. Consequently, a sale of land in 1988 for a development such as the waterfront residential development proposed (although not yet approved) on the land by Nifsan is not indicative of the market for such land in the mid 1990s. 63. The sale in September 1993 is also tainted by its being acquired as part of a company acquisition although the sale in August of that year was not similarly affected. It is for an area less than half of the subject land but cannot be entirely discounted as a comparable sale given its location next to a developed residential resort and its location generally although it does not have a river frontage. 64. Mr Grennan has adopted a figure of $325,000 per hectare for the in globo subject land in relation to the valuations for 1 January, 1995 and 1 January, 1996. This is not supported by any of the sales. It is significantly higher than that attributed in 1994 to the elevated sections of the Dong Ah land and makes no allowance for the significantly higher development costs which must be incurred in relation to the lower lying subject land. It is higher than that achieved in 1995 for a portion of the former Sanfam or Burleigh Waters land. 65. Taking into account the sales evidence and the differences I have found in the land and the reliability of the sales, I regard Mr Murphy’s assessment of the unimproved value of the rate per hectare of the land to be more in line with the sales evidence. He has made his final calculation in relation only to the developable land and so has excluded the area of the lake. While I have accepted his rate per hectare at each of the relevant dates, I have applied it to the whole of the area of the subject land. I have done that as the pro rata prices I have given per hectare for the comparable sales takes no account of whether or not all of the land may be subdivided into allotments. In reaching a pro rata price, no account is taken of the fact that some portions of the sales attracted a higher price per hectare than other portions. Having done that with the comparable sales, I should do the same with the subject land and apply a consistent rate per hectare to the whole of the subject land. -- 20 of 28 -- 21 66. I find the unimproved values indicated by the sales evidence to be: Valuation Date Land Area Hectares Rate $/Hectare Assessment (Rounded) 30 June, 1993 53.073 $140,000 $7,430,220 1 January, 1995 53.073 $150,000 $7,960,950 1 January, 1996 49.6045 $150,000 $7,440,675 The hypothetical development methodology 67. Mr Grennan valued the subject land on the basis of a hypothetical development. The basis of this method is that the amount which a prudent and willing, but not anxious purchaser would pay for in globo land, is the amount which the land would realise if it were subdivided, less all of the costs incurred in effecting that subdivision and less an amount for profit and risk. The subdivision must conform with any requirements of, for example, the Gold Coast City Council, and so it is an assumption inherent in the method that not all of the land will be capable of subdivision and that a proportion will need to be set aside for such uses as roads and parkland. In this case, the subdivision has been approved and so the number of lots is known and need not be assessed in any hypothetical fashion. 68. The profit and risk factor used in Mr Grennan’s calculations was 331/3%. The basis on which he had reached this figure was the subject of some discussion during the hearing. He said that it is an “industry standard” (transcript page 70) for the Gold Coast. In other areas, a different figure is applicable. Consequently, it is 40% in Brisbane, a little more in Pine Rivers and 25% in Toowoomba. Mr Grennan said that he had applied a figure of 39% for a development called “Pacific Pines” to “fit their price” but he had used 331/3% for the Coomera Woods site and the developer’s assessment had been so close to his that it did not matter (transcript page 70). When asked to identify the factors that are taken into account in ascertaining the profit and risk factor, Mr Grennan said that part of it relates to the development’s size but that it was mainly the industry standard. He had, he said, used it consistently in cases such as Dreamworld Productions Pty Ltd v Chief Executive, Department of Lands (unreported, 21 September, 1994, V94-23, AV94-79 and AV94-80). 69. I have considered whether I should accept the figure of 331/3% as the appropriate profit and risk factor to apply in this case and have found it difficult to do so. It seems to me, and this is supported by the evidence of Mr Morris, that the profit -- 21 of 28 -- 22 and risk factor is one whose percentage in any particular project will be determined by a number of factors. Some of those will be directly related to the state of the market at any particular time including the demand for that type of development, the buoyancy of the market in that area and the expected rate of sale of such a subdivision. These in turn will be affected by other factors including the size and nature of the property to be developed. The costs of development will also be relevant. 70. In addition to these factors, which largely relate to the risk, an allowance needs to be made for the developer to achieve an acceptable level of return from the capital invested in the project. The latter relates to the profit aspects of the profit and risk factor and will again be dependent upon various factors including the length of time before the developer can recoup its capital investment. 71. The best way in which the profit and risk factor can be assessed is by considering comparable developments in comparable markets over comparable time spans. That is a difficulty in this case for I have found that there has been no evidence analysing any sales in this manner. Consequently, I have no evidence which guides me as to the range in which the profit and risk factor should lie and which supports the particular figure Mr Grennan has ascribed to the particular circumstances of Benowa Waters. I note that Mr Wenck had similar misgivings in the Dreamworld case and, in the absence of any evidence to support a figure of 331/3% for the profit and risk factor, did not accept it. 72. It follows that I have concluded that I cannot apply the hypothetical development methodology because a variation in such a figure will necessarily have substantial implications in the overall calculations and determination of the final value. The discounted cash flow methodology 73. The discounted cash flow method (DCF) is described in Practice Standard No. 2 (“PS”) issued by the Australian Institute of Valuers and Land Economists Incorporated (“AIVLE”) on 1 September, 1996 as: “... a form of financial analysis which incorporates the projection of a series of cash flows over a period of time from which measures of financial return can be calculated. In regard to property, cash flows are typically rent and -- 22 of 28 -- 23 proceeds from sales, from which outgoings and development expenses are deducted. Both inflows and outflows are projected during the term of the cash flow. An initial capital injection is usually imputed at the start of the cash flow to reflect any up front capital outlay (eg. purchase price). Similarly, a terminal value is usually imputed at the end to reflect the value of potential income beyond the term of the cash flow.” (Exhibit F, paragraph 4.1) 74. The DCF method did not find favour with the High Court in the case of Albany & Ors v The Commonwealth of Australia (1976) 12 ALR 201. In that case, Jacobs J said: “ I return now to the valuation by the plaintiff’s valuers upon the basis of a discounted cash flow. Although I propose to analyse the factors and assumptions which have been made in this valuation, I should now say that I am not satisfied that this could be an acceptable method of valuation in the present case. I express no opinion upon the question whether or not, in other circumstances and in other cases, a method of valuation by way of discounting the anticipated cash flow is a proper method of valuation of land. There is not sufficient material before me upon which I could express a concluded opinion upon this matter. As I have earlier stated, none of the valuers who gave evidence (except Mr Fenwick) has previously applied this method in the valuation of land. There is no evidence that the application of this method has either in theory or in experience produced results consistent with methods of valuation based on comparable sales or on that method of valuation upon the basis of hypothetical subdivision which has, where necessary, been applied in the past.” (page 210) 75. Having expressed those reservations, his Honour considered the factors and assumptions which had been made by the plaintiff’s valuers in the DCF. Those factors and assumptions included the probable commencement and completion time as that would affect the amount of interest payable on the initial purchase price and the discount that must be allowed on the incoming moneys from sales. Other factors related to the likely number of lots to be obtained from the subdivision, the cost of development per lot, the prices to be obtained, the period of time over which the cash would flow in from sales and the rate of discount of cash flow. 76. Twenty years after the Albany case was decided, the AIVLE now considers that the method can be used as an appropriate method of valuation and analysis for income producing property, development projects and land subdivisions (PS, paragraph 3.2). Mr Morris, who works with developers by undertaking feasibility studies to assist them in determining whether to buy properties and assisting them in the negotiations, obtaining the approvals and managing the project. Included among -- 23 of 28 -- 24 their advice is an evaluation of sites and advice upon the price which developers should pay for land. He has provided such advice in relation to various clients in respect of developments on the Gold Coast. In providing that advice, I accept that Mr Morris uses the DCF methodology and that he and his firm, Prodap Services Pty Ltd, have never used a profit and risk factor methodology. I also accept on the basis of the evidence of both Mr Morris and Mr Murphy that it is acknowledged as the appropriate methodology by developers and institutional investors. 77. I find that, like the hypothetical development methodology, the DCF is still dependent upon certain assumptions being made and included in the calculations. The AIVLE makes it clear in its Practice Standard that specified standards must be met in relation to the purchase and selling costs, rest periods, terms of the cash flow, the terminal value reflecting the property’s value at the end of the term, an analysis of the sales evidence to support the DCF and cash flow results. 78. Attached to Mr Murphy’s report is his DCF analysis. I find that its format appears to meet the standards set out in the AIVLE’s Practice Standard. For each quarter of the development, it sets out the developed stock, gross realisations for each type of allotment, selling costs of the stock at 4.0% of the gross realisations, the net realisation on the sale of the stock and that net realisation escalated at rate of 5.0%, the cost of the land purchase plus acquisition costs, the development costs and the development costs escalated at a rate of 5.0%, the quarterly cash flow, interest, quarterly cash flow after interest and the cumulative cash flow (Exhibit A, Annexures 6a,b and c, 7a, b and c and 8a, b and c) 79. In this case I am satisfied that the figures used for the gross realisations of the allotments are firmly based in that they are derived directly from Plan No. 9136B approved by the Gold Coast City Council (see paragraph 13 above). The amount to be realised in respect of each allotment is, I find, properly based on the amounts realised on allotments at Benowa Waters and by reference to comparable sales at Cabana Boulevard and Naranja Crescent. The rate of sale is known and set out at paragraph 29 above. 80. The land purchase costs are known. The development costs, I find, accord with those set out in the civil development costs and the construction/expenditure -- 24 of 28 -- 25 programmes set out in Mr Griffiths’ report (Exhibit B) over the 42 quarter length of the project. The interest rate has been conservatively based at 8% for 30 June, 1993, 10% for 1 January, 1995 and 9% for 1 January, 1996. Those interest rates are either the same as, or within 0.3% of the interest rates for 10 year Commonwealth bonds at the relevant times. They are some 3% less than the interest rates offered for construction finance at the relevant times. 81. The figure allowed for the Internal Rate of Return (“IRR”) for the length of the project and before interest was either 27.4% or 27.5%. After interest it was variously 23.6% at 30 June, 1993, 22.5% at 1 January, 1995 and 23.2% at 1 January, 1996. The IRR is “The discount rate at which the net present value inclusive of ‘opening value’ is equal to zero. That is, the discount rate which makes the sum of the present value of positive and negative cash flows equal to zero, thereby equating to the return from the property based on the assumptions adopted in the Discounted Cash Flow.” (PS, paragraph 24) 82. Mr Murphy had assessed the figures he used for the IRR adopted in his DCF calculations on the basis of three developments. Those developments were Heritage Gardens, Somerset Place and Burleigh Cove. None of these developments equated precisely with that of Benowa Waters and I will not reproduce the details given in Mr Murphy’s report as to each (Exhibit A, pages 39-40). Each was developed over a period of some forty months and so significantly more quickly than that proposed for Benowa Waters. The IRR shown for each property after interest varied between 21.7% for Somerset Place and 24.0% for Heritage Gardens. The development costs for Heritage Gardens and Somerset Place were fairly close but those for Burleigh Cove were more than twice as much as either of the other two. Some of the difference in those development costs would be attributable to the larger area of Burleigh Cove but also to the need to undertake greater earthworks than were required in the other two. The IRR selected by Mr Murphy is in the middle range of the IRRs calculated on these actual developments and I am satisfied that it is an appropriate figure to adopt. 83. In light of my examination of the basis of the DCF, I am satisfied that, in this case, it is appropriately based and provides an indication of the market price of the land at the relevant dates. I accept, therefore, that the DCF methodology indicates that -- 25 of 28 -- 26 the following purchase prices for the land are indicated given the IRR appropriate for the following dates: Date IRR (before interest) Land Purchase Price Rate per hectare 30 June, 1993 27.4% $6,800,000 $140,863 27.4% $7,500,000 $155,363 27.5%1 January, 1996 $6,150,000 $141,317 84. The rate per hectare obtained by the DCF method is comparable with that obtained by the direct sales or comparative sales method. I note that the land purchase price has been calculated on the basis of the usable land (i.e. the subject land excluding the lake) whereas I have, for the reasons I gave at paragraph 65 above, calculated it on the basis of the total area of the land. I would add that the “unusable” land cannot be regarded as without value in the DCF methodology. In the case of the subject land, it provides the material used to fill the developable land. That is a value it has. The “unusable” land also adds value to the lakefront allotments which the DCF methodology assumes will realise greater returns than standard dry allotments. It would, therefore, be unrealistic to treat the lake as having no value and excluding it from the assessment. 85. Taking into account the value per hectare assessed by reference to each methodology, I have determined that BSE has discharged its burden of proof in establishing that the valuation of the Chief Executive is incorrect. I find that it has established that the appropriate valuation as at each date is:the higher of the valuations assessed as at each date by the comparable sales and DCF methodologies i.e. Valuation Date Land Area Hectares Rate $/Hectare (Rounded) Assessment 30 June, 1993 53.073 $140,000 $7,430,000 1 January, 1995 53.073 $155,000 $8,225,000 1 January, 1996 49.6045 $150,000 $7,440,000 86. It follows that I have allowed each of the appeals. As only three of the appeals were regarded as test cases, I have made specific orders in relation to those three matters. I have reserved further consideration in relation to the remainder of the matters should there be a difficulty in the application of the orders to them, -- 26 of 28 -- 27 87. For the reasons I have given, I 1. in relation to Appeal No AV95-474, I (1) allow the appeal; (2) set aside the determination of the Chief Executive dated 24 July, 1995 that, as at 30 June, 1993, the unimproved value of the subject land is $8,300,000 ; and (3) determine that, as at 30 June, 1993, the unimproved value of the subject land is $7,430,000 2. in relation to Appeal No AV95-477, I (1) allow the appeal; (2) set aside the determination of the Chief Executive dated 24 July, 1995 that, as at 1 January, 1995, the unimproved value of the subject land is $15,350,000 ; and (3) determine that, as at 1 January, 1995, the unimproved value of the subject land is $8,225,000. -- 27 of 28 -- 28 3. in relation to Appeal No AV96-293, I (1) allow the appeal; (2) set aside the determination of the Chief Executive dated 2 July, 1996 that, as at 1 January, 1996, the unimproved value of the subject land is $14,950,000; and (3) determine that, as at 1 January, 1996, the unimproved value of the subject land is $7,440,000 4. in relation to Appeal Nos AV96-292 and V95- 471 to 473,475 and 476 I (1) allow each of the appeals; and (2) adjourn further consideration to a date to be fixed. SA FORGIE MEMBER OF THE LAND COURT -- 28 of 28 --