Brian Francis Stevens & Sidney James Fassler v. Council of the Shire of Maroochy

[1993] QLC 37

LAND COURT,

BRISBANE.

10 December, 1993.

Re:	Claim for Compensation.
Resumption for Water Supply purposes.
Acquisition of Land Act 1967.
A93-54.

Brian Francis Stevens and Sidney James Fassler

v.

Council of the Shire of Maroochy

(Hearing at Maroochydore)

D E C I S I O N

This is a claim for compensation on the resumption by the Council of the Shire of Maroochy of Lot 1 on RP 90212 containing 1.502 hectares and being the whole of the land contained in Certificate of Title Volume 5681, Folio 21, Parish of Maroochy. The land was taken for water supply purposes as from 8 April, 1993. The claimants who are the registered proprietors of the land in fee simple served a claim for compensation on the respondent in the sum of $707,855 comprising -

Land $700,000

Valuer's fees $ 2,800
Legal fees $ 2,755

Cost of subdivisional plan $ 1,150

Cost of reassessment of subdivisional plan $ 500

Rates adjustment $ 650

An advance against compensation in the sum of $400,000 was paid on 7 September, 1993. In the hearing of the matter the claimants relied upon an assessment of compensation written by Mr R R Henderson, registered valuer, of Maroochydore. The assessment for land is in the sum of $700,000. The sum was the result of an exercise in hypothetical subdivision of the land into 11 lots, based on a plan of subdivision drawn by Greg Downes Surveys, Consulting Land Surveyors in 1988 on the instructions of the claimants. The respondent agreed that the claims made for legal and valuation fees and costs thrown away on plans were compensable and payable as claimed. The respondent was also prepared to accept that a rate adjustment in the sum claimed could be included in the sum assessed as compensation. Thus the issue turns on the value of the land taken.

The respondent called two valuers both of which made an assessment of compensation. Their assessments were primarily derived by the method of hypothetical subdivision of the land. The exercise performed by Mr C J E Eaton, registered valuer, employed by the Department of Lands yielded a land value of $380,000. The exercise performed by Mr P G Byrne, registered valuer of Taylor Byrne yielded a comparable sum. Mr Byrne worked on a plan of subdivision drawn by Messrs Jones Flint and Pike, Planners Surveyors and Cartographers. The plan provided for twelve lots, two of which were hatchet lots. The plan forming the basis of the assessment made by Mr Eaton was drawn by the Department of Lands. It provided for thirteen lots. Both plans included two hatchet shape lots in the south western section of the subdivision. Mr K E Covey of Covey and Associates, Engineers was called by the claimants to produce an estimate of the cost of the development of land if the Greg Downes plan was adopted. Mr K N Crocker of Crocker and Associates, consulting engineers, provided an estimate of development costs were the plan drawn by Jones Flint and Pike adopted. His evidence included an estimate of the costs of implementing the Greg Downes plan. It will therefore be necessary to decide which of the plans is the one likely be preferred by the hypothetical prudent purchaser but first, the location, nature and potential of the site requires some consideration. The resumed parcel has an area of 1.502 hectares. It is situated in Lang Street, Coolum which street is a fully bitumen sealed carriageway with concrete kerbing and channelling. Services in Lang Street, include electricity, water, telephone and sewerage. The site is about 1.5 kms from the patrolled surfing beach and shopping centre of Coolum. It however is a high site. The Lang Street frontage is in excess of 63 metres above sea level. From there the land slopes in a southerly direction falling in the south western corner to a level of about 30 metres and in the south eastern corner to a level of about 45 metres. A water reservoir will be constructed on the site. The site which is in the nature of a hatchet with the handle running in parallel with Lang Street is predominantly on the southern slopes of an escarpment or ridge lying behind Coolum and running from north to south before swinging towards the sea. Lang Street runs along the top of the ridge in an east west direction after leaving Grandview Drive and ends in a cul-de-sac. That part of the escarpment to the north above and below Grandview Drive is subdivided residential land possessing easterly or northerly views. Lang Street separates land on the north which possesses northerly views up Coolum Beach to Noosa from lands on the southern slopes with southerly, south eastern or south western views. The main body of the subject land (excluding an area of about 909 m2 of the handle on the eastern end which the Greg Downes plan proposes for Park purposes) may thus be said to occupy some of the southern slopes of the escarpment. It is accepted that a development of the land in subdivision under its zoning of "Residential B" as one site for the same purpose would require a sewerage pump station in the south west corner where the level of the land is around RL 30 metres. Sewerage would have to be pumped to the sewer manhole which is on the opposite side of Lang Street. An understanding of the topography of the block may be taken from the description of the site provided by Mr Byrne -

"The land is most elevated at a point about midway along the northern boundary adjacent to Lang Street where it has an elevation in excess of RL 63. From this point it enjoys excellent views of the beaches from Coolum to Sunshine Beach and the hinterland. These views however have the potential to be flawed by present and future development on the opposite side of Lang Street.

The land also enjoys excellent views to the south over the Hyatt Coolum and Golf Course to the Mooloolaba/Maroochydore skyline. A reasonably gentle knoll falls from the centre of the Lang Street frontage towards the south east corner of the block.

The land to the east west and the south of the knoll falls away very
steeply to an RL of 30 metres in the south west corner.

A ridge through adjoining land to the east blocks out the easterly ocean views common to much of the more elevated allotments on the eastern fall of the ridge between Eurungunder Hill and Toboggan Hill Lookout. Apart from a small area adjacent to Lang Street, most of the subject land looks south over the Coolum Hyatt to Point Cartwright."

Under the existing Town Plan the site could accommodate about 125 two bedroom units or 93 x three bedroom units. However the evidence from each valuer is that the prudent purchaser would subdivide and sell the land within the zoning and so afford individual purchasers the option of using a site for single unit residential purposes (which is a use not uncommon in the area of Residential B land) or for multi unit purposes. Were each of the subdivided lots put to a multi unit development it is the opinion of Mr Henderson that the preferred density would be of the order of four units per lot or about 47 in all.

Based on the Greg Downes plan (see attachment A) his unit density per lot and selling prices are stated as follows -	Lot 1 1080 m2	4 @ $27,500	$ 110,000
Lot 2 950 m2	4 @ $22,500	$ 90,000
Lot 3 1300 m2	5 @ $22,500	$ 112,500
Lot 4 1300 m2	5 @ $22,500	$ 112,500
Lot 5 1000 m2	4 @ $27,500	$ 110,000
Lot 6 1400 m2	5 @ $27,500	$ 137,500
Lot 7 1100 m2	4 @ $32,500	$ 130,000
Lot 8 1100 m2	4 @ $35,000	$ 140,000
Lot 9 1080 m2	4 @ $40,000	$ 160,000

Lot 10 1012 m2 4 @ $40,000 $ 160,000

Lot 11 900 m2 4 @ $37,500 $ 150,000

TOTAL (47 Units) $1,412,500

==========

From the above considerations and lot prices a land value was derived as

follows -

Gross Realisation $1,412,500

LESS: Legals on Sale $ 8,250

Commission of Sale $40,262

Advertising $ 5,500 $ 54,012

$1,358,488

Less allowance for Profit & Risk @ 30% $ 313,498

$1,044,990

LESS: Development expenses $276,835

Interest at 13% over half
expected selling period

(6 months) $ 17,994 $ 294,829

$ 750,161

LESS: Holding Charges @

13% (6 months) $ 48,760

$ 701,401 ==========

ADOPT: $ 700,000

It may be observed on perusal of the contour levels shown on the Greg Downes plan that the slope to the south east basically follows a ridge and is of a more gentle nature than to the fall to the south west. The proposed internal road is positioned by Greg Downes to the west of the ridge which although requiring greater engineering expertise than were it placed along the ridge was designed so as to preserve the elevated area bordering Lang Street for lot purposes and in the same vein make use of the better land on the eastern side. It may also be seen that the handle of the area comprising 909 m2 is proposed to be dedicated for park and that land is proposed for road widening purposes. The plan drawn by Jones Flint and Pike positions the internal road along the ridge. The road would enter the estate through the centre of the elevated area (between lots 9 and 10 on the Greg Downes plan) and follow the ridge to the south east ending in a cul-de-sac at about the position of numeral six (Lot 6 on the Greg Downes plan). The plan would yield three lots fronting Lang Street - one on the east of 910 m2 and two on the west of 910 m2 and 850 m2. It follows that the proposed lots to the east of the internal road in comparison with those on the Greg Downes plan lose depth (and consequently require greater road frontage). The plan would provide for four lots east of the road including the Lang Street frontage block. On the western side five lots are proposed including one on the corner of Lang Street and two large rear lots in the south western corner one of 1480 m2 and the other of 1730 m2. The Plan drawn by the Department of Lands has the internal road entering the estate in the position of the Greg Downs plan (providing for four lots facing Lang Street) and then swinging directly to the south east. The plan would provide for thirteen lots. However in common with the Jones Flint and Pike plan by moving the road along or partly along the ridge (which affords a better contour for construction purposes) hatchet shape lots result in the south western section. On the Department's plan two lots are provided in this position, one of 1124 m2 and the other of 1155 m2. On both the Department's plan and the Jones Flint and Pike plan access to these rear lots would be about the position of the boundary separating Lots 3 and 4 on the Greg Downes plan. In this position the contour is so severe that the feasibility of access is questioned. In fact, with the Greg Downes plan the evidence from Mr Crocker and valuers Byrne and Eaton is the effect that the highest and best use of lots in this part of the estate would be for "Residential A" purposes (single unit residences - pole houses) with garages positioned on a platform on the road alignment. Mr Covey agreed that a vehicle could not be driven down the slopes in this area of the estate. Mr Henderson was of the opinion that the Greg Downes plan would be the preferred plan for reasons including, the avoidance of hatchet shape lots and in preserving the better land for development purposes. The plan yields eleven lots against thirteen on the Department's plan and twelve on the Jones Flint and Pike plan. The significance in preserving the Lang Street frontage land is evident in the opinions of the valuers on possible selling prices of the lots. The opinions are as follows -

Lot Area Henderson Byrne Eaton

1	1080	$ 110,000 $ 110,000 $ 105,000
2	950	$ 90,000 $ 75,000 $ 75,000
3	1300	$ 112,500 $ 70,000 $ 85,000
4	1300	$ 112,500 $ 70,000 $ 85,000
5	1000	$ 110,000 $ 80,000 $ 80,000
6	1400	$ 137,500 $ 90,000 $ 100,000
7	1100	$ 130,000 $ 100,000 $ 90,000
8	1100	$ 140,000 $ 110,000 $ 100,000
9	1080	$ 160,000 $ 125,000 $ 140,000

10 1012	$ 160,000 $ 125,000 $ 130,000
11 900	$ 150,000 $ 120,000 $ 115,000 $1,412,500 $1,075,000 $1,105,000 ========== ========== ==========

Gross realisations obtained by valuers Byrne and Eaton on this plan may be compared with gross realisations they obtained from the plans adopted in their exercises. For twelve lots Mr Byrne obtained a gross realisation of $1,077,500. Development costs were estimated by Mr Crocker at $307,682 or $25,640 per lot. For thirteen lots Mr Eaton obtained a gross realisation of $1,125,000. Development costs were of the order of $350,000 or about $27,000 per lot. On the Greg Downes plan development costs are estimated by Mr Covey at $276,835 or $25,167 per lot. For the same plan but on the basis of a single carriageway as opposed to a split level road Mr Crocker estimated development cost at $355,170 or $32,288 per lot. The major differences between these two estimates lies in the inclusion by Mr Crocker of water and sewerage headworks contributions ($23,100); the provision of a sewerage pump station costing of the order of $80,000 in contrast with an estimate of about $30,000 and an allowance for rockwalling in road construction of $60,000 against an allowance of $21,000. When all the evidence is put together including the doubts which have been cast on a subdivision containing hatchet shaped lots and to the fact that the only real contest on both design and pricing of the proposed lots were directed at the Greg Downes plan, I am satisfied that the hypothetical prudent purchaser would follow the course I propose to adopt and would gauge what he might be prepared to pay for the englobo parcel from a consideration of that plan. In saying this I bear in mind the principles of

"The implications of Spencer's case [(1907) 5 CLR 418] for the issue thus raised are clear. The court is not, in my opinion, called on to enquire ultimately whether, as a fact, the planning authorities would have approved a relevant plan of sub-division. Rather it is called on to decide how a hypothetical prospective developer (who may be assimilated, in the present context, with the willing, but not anxious, hypothetical purchaser posed by the judgments in Spencer's case) would have viewed his potential financial return if he were considering a proposal that included one or other of the proposed plans."

These principles are relevant equally to the question as to how the estate could best be presented for marketing purposes. In that light it is not simply a question of the price a lot may fetch in the market at the relevant time but also how long it may take before it is sold. These considerations have been resolved by the valuers in concluding that it would be more prudent to subdivide and sell the land as "Residential B" land rather than to ascertain a value of the site as a single site having a potential to house about 90 units. In the process adopted for the purpose the valuers agree on a development and selling period of 12 months. They agree that the site is unique in that it is high land of substantial area in a "Residential B" zoning. They agree with respect to the escarpment area which I have identified earlier that "Residential A" and "Residential B" land is turned over at comparable prices. They agree that if the Greg Downes plan were adopted the estate would be purchased by a mixture of single unit purchasers and multi unit purchasers. They agree (notwithstanding that some englobo sales were referred to in evidence) that the land could not be compared with land on the flat areas around Coolum and that the best evidence of value lies in the sales of land on the escarpment in and around Lang Street and Grandview Drive. I add to this the conclusion which I have reached on the evidence and being another reason to distinguish sites on the flat land (in agreement with the opinion expressed by Mr Byrne) that potential unit buyers (or "Residential A" buyers) would comprise owner/user buyers or buyers for unit development for permanent letting -

"This land is a long way from the beach. Its not in the holiday letting situation or

anything like that. They're owner/user things or permanent letting units."

In the evidence of Mr Henderson he says that seven of the ten "Residential B" lots in Lang Street and opposite the resumed land have sold since 1989. The relevant lots and others which he referred to are located on attachment B. Moving from east to west along Lang Street the sales comprise firstly the sales of lots 1 to 4 on GTP1592 comprising -	Lot 1 824 m2 8/92 $65,000
Lot 2 840 m2 9/92 $70,000
Lot 3 738 m2 8/92 $75,000
Lot 4 711 m2 8/92 $77,000

He comments that these lots are below the level of Lang Street on steeper eastern slopes with ocean views to the east somewhat restricted by standing timber. In the area of the cul-de-sac Lot 6 on RP 202263 of 715 m2 sold in November, 1992 for $118,000. Lots 7 and 8 of 751 m2 and 850 m2 sold in December, 1990 for $220,000. Mr Henderson said that a residential dwelling has been constructed on Lot 7 whilst Lot 8 has remained vacant. Lot 9 of 1064m2 sold in January, 1989 for $130,000 and in March, 1990 for $170,000. Lot 10 sold in October, 1988 for $90,000 and resold in March, 1993 for $85,000. Opposite the subject land Lot 14 of 1055 m2 sold in March, 1989 for $82,000. This lot falls to the north. In this year the lot was developed with 6 x two bedroom units and a penthouse. The units were sold off the plan for prices around $150,000. In February, 1993 the developer of Lot 14 entered into a contract to purchase the adjoining Lot 13 of 1020 m2 for $140,000. It is anticipated that the purchaser will develop the lot with units similar to those on Lot 14 which are stepped down the slope each with views which cannot be built out to the north along Coolum Beach to Noosa. Moving further to the west subdivisions on Plan 189056 are on the northern alignment of Lang Street and subdivisions on Plan 189057 are on the southern alignment. In this area the lands are zoned "Residential A". Sales referred to by Mr Henderson in this vicinity are of Lot 4 on RP 189057 of 1000 m2 which sold in July, 1990 for $98,500 and Lot 24 on Plan 189056 of 1228 m2 which sold in October, 1991 for $84,000. He then refers to two sales which sold or were contracted for sale in July and September, 1993 and after the date of resumption. These sales comprise Lot 2 on RP 189057 of 1146 m2 which sold in July for $147,000 and Lot 23 of 1006 m2 on Plan 189056 which was the subject of a contract in September, 1993 for $124,000.

From his body of sales evidence Mr Byrne isolated the sale of Lot 13 in Lang Street for $140,000 and the sale of Lot 10 for $85,000 as the best evidence of value in the area at the date of resumption for residential B sites and in terms of residential A sales he referred to the sales of Lot 7 on RP 189057 of 1000 m2 which sold in December, 1992 for $71,000 and Lot 8 on the same plan which sold 1 February, 1993 for $92,500. He also referred to the sale of Lot 9 which adjoins Lot 8 in February, 1992 for $72,000. These three lots are accessed by a paved and rock retained service road from Grandview Drive. They are of higher elevation than the subject land. The 75 metre contour level runs along Grandview Drive at this point. The lots fall steeply to the east - in excess of 1 in 4. The 60 metre contour level passes through the lots to the rear. They are suitable for pole houses. They possess ocean views to the south east to Mooloolaba and in the opinion of Mr Byrne cannot be built out.

Amongst the market evidence considered by Mr Eaton there is the sale of Lot 6 in Lang Street for $100,000 in April, 1992, followed by the sale of the same land for $118,000 in November, 1992. In respect of residential A sales he referred to the sale of Lot 7 on Plan 189057 for $71,000 in December, 1992. In speaking about the sale of Lot 13 in Lang Street he said -

"What can you say about the price of lot 13, is it a relevant one to consider?-- Yes, I'd say it's relevant in that it is the only real sale, although it isn't even registered yet, it is the only sale so far in evidence that is a res. B site in the vicinity, although I find some difficulties with it mainly because its views and its aspect are solely northern views to the ocean, the coastline stretching from Coolum to Noosa and parts of the beach area behind there, whereas virtually all of the blocks in the Covey plan and in all of the plans have purely southern aspect. Only a few properties along the frontage really have any potential for a northern aspect and some of those are very restricted."

What can be seen from the sales evidence is that in the area of Lang Street only one lot has been developed for unit purposes. There is also apparent some inconsistency in the sales which may indicate a rise in the market between the sale dates for example the sale of Lot 14 in March, 1989 for $82,000 and the purchase of the adjoining Lot 13 in February, 1993 for $140,000, both of which on the evidence are suitable for unit development in the manner in which Lot 14 has been developed. Lot 9 which sold for the second time in 1990 for $170,000 is described by Mr Henderson as possessing "a good building site on easy sloping ridge with good north and east ocean views". This lot which adjoins Lot 10 at the rear if fully developed could on the evidence of Mr Byrne (including the contour map Exhibit 17) obliterate or seriously restrict views obtainable from Lot 10 which sold in 1988 for $90,000 and in 1993 for $85,000. In fact Mr Byrne is of the opinion that if $140,000 is accepted for Lot 13 (there is no suggestion to the contrary) then the purchase price of Lot 10 is reasonable at $85,000. On the other hand there is evidence that the purchaser has been offered more for the lot since purchase and there is evidence that the lot is valued for rating purposes in the sum of $117,000 which is not unrealistic when it is considered that Lot 6 sold for $118,000 in November, 1992. In the area of the Residential A sales is it evident again that some movement in the market has occurred. In the sales schedule appended to the reports of Mr Byrne and Mr Henderson Lot 24 on RP 189056 of 1228 m2 sold in October, 1991 for $84,000. The lot has views to the north which he says cannot be built out. In the evidence of Mr Henderson Lot 23 which adjoins the sale was sold in September this year for $124,000. Lot 2 which is across the road on the southern alignment sold in July, for $147,000. This lot at present enjoys views to the north and south east but as Mr Henderson points out "development of Lot 23 could substantially reduce northern view". The two sales are well after the relevant date. They appear to be inconsistent each to each moreso Lot 2 when compared with the sales of Lots 7 and 8 which sold in December, 1992 and February, 1993. The subject land was resumed in April, 1993. At that time Mr Henderson said that the market was flat. He put this down to the impending election. Since then he says that sales have picked up and that a slight increase occurred. Sales after the relevant date are admissible in evidence provided that in all the circumstances they are comparable, but if in the intervening period circumstances have changed they are of no assistance (see McCathie v. Federal the subject land fronting Lang Street have the potential to enjoy restricted northern views. Fourthly the bulk of the estate is below the ridge with views of each lot possibly being restricted in some way by a development on the adjoining lot below. Lots 2, 3 and 4 are accepted by both the engineers and the valuers as being too steep to allow for vehicular access down the allotment and hence on the weight of the evidence are suitable only for pole housing and this is particularly so if the internal road is a split level road. This evidence serves as a reminder which is not in dispute that buyers will comprise a number of multi unit and single unit purchasers. Fifthly on the same issue a vendor in attempting to push 8 multi unit sites (excluding Lot 2, 3 and 4) on the market with a potential density of 33 units, if Mr Henderson's opinions are taken as the prudent density, is not likely to find eight multi unit buyers in a matter of a couple of months when the attractiveness of the area for units can only be demonstrated at the date of resumption by one development of seven units. Sixthly, I agree with the evidence of Mr Byrne which is not really in dispute that if the estate is to be presented well, stamped concrete would be used in appropriate locations. On the Greg Downes plan the internal road is shown as a 16 metre road whereas the evidence of the engineers is that a split level road would require a width of 20 metres and a cul-de-sac area of about 26 metres.

Some of the frontage area of the lots would therefore be lost for road purposes. On the other hand Mr Cocker believes that a single carriageway is feasible in generally the same location. This may avoid any requirements for on street parking which it appears would be required with a split road level.

There is no dispute but for Lots 2, 3 and 4 that the remaining lots from an engineering and valuers appreciation could accommodate 4-5 units as stated by Mr Henderson without any significant problems. For the purpose of estimating the selling prices Mr Henderson had regard to the sale of Lot 13 as reflecting $35,000 per unit site. If the developer follows what was done with Lot 14 the sale would reflect a price per unit of $20,000. Those units sold for around $150,000. Mr Henderson would expect units on the subject sites to sell in a range from $120,000 to $200,000. The evidence of Mr Byrne is that on prices exceeding $150,000 there is buyer resistance and consequently units may take longer to sell. What he said about the likely buyers would also appear to be relevant.

It is agreed that the most valuable sites are those on the Lang Street frontage east of the internal road. These lots have an easy contour for development, will have some views to the north, much inferior on the evidence to those views which can be obtained from Lot 13, but will have some southern views. Overall I see the lots as being inferior to Lot 13. I would price Lots 9 and 10 at $130,000 and Lot 11 at $125,000. Lot 1 will be priced at $110,000. Lots 2, 3 and 4 when compared as sites with sites in Grandview Drive will be priced at $80,000, $85,000 and $85,000 respectively. Lot 5 will be priced at $95,000 and Lots 6 - 8 at $110,000, $105,0000 and $110,000. These prices reflect prices per unit/residential site as follows -

Lot 1 1080 m2	4 @ $27,500	$ 110,000
Lot 2 950 m2	homesite	$ 80,000

Lot 3 1300 m2 homesite $ 85,000
Lot 4 1300 m2 homesite $ 85,000

Lot 5 1000 m2	4 @ $23,750	$ 95,000
Lot 6 1400 m2	5 @ $22,000	$ 110,000
Lot 7 1100 m2	4 @ $26,250	$ 105,000
Lot 8 1100 m2	4 @ $27,500	$ 110,000
Lot 9 1080 m2	4 @ $32,500	$ 130,000

Lot 10 1012 m2 4 @ $32,500 $ 130,000

Lot 11 900 m2 4 @ $31,250 $ 125,000

The gross realisation of the estate thus becomes $1,165,000.

The issues in contention in the costs of implementing the Greg Downes plan between Mr Covey and Mr Crocker concern firstly provision for stamped concrete for which Mr Crocker would allow $15,000. Mr Covey agrees that an estate will present better with some stamped concrete. His workings have included a sum $10,000 for contingency which may be used to provide some stamped concrete. I am prepared to accept this evidence. This issue of rock walling for either a split level road or single carriageway would in the opinion of Mr Crocker cost $60,000. He later reduced the estimate to $55,000 in round figures by making use of batters where suitable. Mr Covey's estimate of $21,000 was in the nature of a provisional estimate. The evident of Mr Crocker is preferred on this point. On consideration of the capacity and likely cost of a suitable sewer pump station on evidence put to him Mr Crocker fairly conceded that a developer may satisfy the Council with provision of a pumping station the next grade above that quoted to Mr Covey by Mono Pumps (about $30,000). Although he agrees that the cost of the next level would be in the order of a few thousand dollars the purchaser would in my opinion err in his own favour in the absence of a more precise estimate. I propose to allow $40,000 for this item, $5,000 of which may be taken from the contingency fund allowed by Mr Covey. It seems on the evidence that at the date of resumption the Council would require a contribution to headworks for water and sewerage at the rate of $1210 and $1100 per lot respectively (10 lots). In July, the policy of the Council changed. Such contributions would no longer be required for this type of subdivision. However there is no evidence that the change was foreseeable at the relevant date. In proceeding with the exercise interest on development will be applied at the rate of earnings on guilt edge security at the relevant time - 7.5% see Consolidated Development Pty Ltd v. The Crown (1968) 35 CLLR 109.). A risk in profit factor of 30% in my opinion may be justified (see Turner v. The Crown (1962) 29 CLLR 53).

The final workings are as follows -

11 lot gross realisation $1,165,000

LESS: Legals on Sale $ 6,710

Commission on Sale $34,065

Advertising $ 5,500 $ 46,275

$1,118,725

Allowance for Risk & Profit 30% $ 258,167

$ 860,558

LESS: Development costs $338,935

Interest at 7.5% over half
expected selling period $ 12,710 $ 351,645

$ 508,913

LESS: Holding costs @ 7.5% for 6 months $ 18,395

$ 490,518

LESS: Rates $ 3,800

LESS: Land Tax $ 3,400 $ 7,200

$ 483,318 ==========

OR $485,000 in market figures.

Compensation for land will therefore be determined in the sum of $485,000. Compensation for disturbance is agreed in the sum of $7,855. Accordingly compensation under all heads is determined in the sum of $492,855.

An advance against compensation in the sum of $400,000 was paid on 7

September, 1993. The resumption took place on 8 April, 1993. from and including the date of resumption up to and including 6 September, 1993 (the day preceding the date the advance was paid) and thereafter on the sum of $92,855 up to and including the date the sum is paid.

President of the Land Court.

the Spencer case (1907) 5 CLR 418 and as more recently expressed in the context of a case of this nature by Wells J in De Ieso v. Commissioner of Highways (1981) 27 SASR 248. At 253 he said -

Commissioner of Taxation (1944) 69 CLR 1). There is no evidence that a rise in value was foreseeable at the date of resumption. Further the resumption itself has caused a change in circumstances in the immediate locality in that it has taken from the market whether for Residential A or Residential B purposes potential competition from eleven Residential B lots. In the circumstances I propose to assess the selling prices of the proposed lots on the subject land in the light of factual evidence available to a purchaser on search at the date of resumption. The considerations will include the fact that at the date of resumption only one block in the area has been developed for units. Secondly there is evidence of a clear distinction in value between lots with northerly views which cannot be built out and those with southerly views which cannot be built out - see for example the sales of Lot 24 on RP 189056 for $84,000 in October, 1991 and the sale of Lot 9 on RP 189057 in February, 1992 for $72,000. Thirdly only four lots of