Buckler v Department of Natural Resources and Water
[2011] QLC 7
•4 March 2011
LAND COURT OF QUEENSLAND
CITATION: Buckler & Anor v Department of Natural Resources and Water [2011] QLC 0007 PARTIES: Patricia Dawn Buckler and Patrick Buckler
(appellants)v. Chief Executive, Department of Natural Resources and Water
(respondent)FILES NO: AV2007/0858 and AV2008/0988 DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual valuations of land under the Valuation of Land Act 1944 DELIVERED ON: 4 March 2011 DELIVERED AT: Brisbane HEARD AT: Brisbane MEMBER: Mr PA Smith ORDER: 1. The appeals are allowed.
2. The unimproved value of the subject land as at 1 October 2006 is fixed in the sum of Thirty One Million Three Hundred Thousand Dollars ($31,300,000).
3. The unimproved value of the subject land as at 1 October 2007 is fixed in the sum of Twenty-six Million Nine Hundred Thousand Dollars ($26,900,000).
CATCHWORDS: VALUATION - use of sales - which sales comparable - remote area sales - inter-government sales - option agreements
VALUATION - methodology - site value for developable area - deductions - costs of fill and holding charges
TOWN PLANNING - preliminary development approval - risk - infrastructure charges - Priority Infrastructure Plan (PIP) - planning policies (golf courses) - Koala Conservation Plan
PRACTICE AND PROCEDURE - grounds of appeal - restrictions imposed by such
EVIDENCE - expert opinion evidence - reasoning process - basis - need for objective facts
EVIDENCE - events after relevant date - permissible to use such to confirm a foresight
Valuation of Land Act 1944
Integrated Planning Act 1997APPEARANCES: Mr B Cronin for the appellants
Mr S Fynes-Clinton for the respondentSOLICITORS: DLA Phillips Fox Lawyers for the appellants
Legal Counsel, Legal Services, Department of Natural Resources and Water for the respondent
Table of Contents
Paragraph Page
Background............................................................................................. 1........................... 4
The Hearing............................................................................................ 8........................... 6
Relevant Legislative Provisions............................................................ 12......................... 6
Presumption of Correctness of Valuation.............................................. 15......................... 7
Threshold Matter - Grounds of Appeal................................................. 18......................... 8
Planning Law Issues............................................................................... 29......................... 10
Respondent’s attack on Mr Ransom’s Planning Evidence.................. 34......................... 13
What was approved by the preliminary approval of May 2007........... 40......................... 17
Preliminary Approval - a red herring..................................................... 45......................... 19
The Gold Coast City Council’s golf course policy................................ 49......................... 20
Priority infrastructure plan district park................................................ 65......................... 26
Infrastructure charges............................................................................ 74......................... 30
Koala conservation plan......................................................................... 81......................... 33
Bridge to Nowhere.................................................................................. 86......................... 34
Evidence of events post valuation date - hindsight,
or confirmation of a foresight............................................................... 92......................... 34
Valuation evidence - general observations........................................... 98......................... 38
Valuation Evidence - Mr Parsons.......................................................... 107....................... 40
Valuation Evidence - Mr Bale............................................................... 113....................... 44
The Devine option.................................................................................. 120....................... 54
Analysis of Sales..................................................................................... 123....................... 55
Napper Road.................................................................................. 123....................... 55
Santa Maria Court......................................................................... 129....................... 57
‘The Parc’ Inland Road, Tugun................................................... 135....................... 58
Leada Developments Site.............................................................. 141....................... 60
Genesis........................................................................................... 144....................... 60
Waterford Sale............................................................................... 147....................... 61
Conclusion - site value of developable area of Lot 18
as at 1 October 2006............................................................................. 150....................... 61
Conclusion - site value of developable area of Lot 43
as at 1 October 2006............................................................................. 153....................... 62
Analysis of Mr Bale’s 1 October 2007 sales........................................ 157....................... 63
Nerang Broadbeach Road - Sale 1/07.......................................... 159....................... 63
Tallagandra Road and Teys Road, Holmeview - Sale 2/07......... 164....................... 64
Strawberry Fields - Sale 3/07........................................................ 167....................... 64
Martha’s Vineyard - Sale 4/07...................................................... 170....................... 64
The Esplanade Coomera - Sale 5/07............................................. 174....................... 65
Cunningham Drive, South Coomera - Sale 6/07......................... 177....................... 65
Conclusions regarding 2007 Valuation.................................................. 179....................... 66
Assessment of Value as at 1 October 2006........................................... 183....................... 67
Assessment of Value as at 1 October 2007........................................... 184....................... 67
Summary................................................................................................. 194....................... 69
Orders................................................................................................................................... 69
Postscript............................................................................................................................... 71
Background
[1]This is an appeal by Patricia Dawn Buckler and Patrick Buckler (“the appellants”) against valuations by the Chief Executive, Department of Natural Resources and Waters (“the respondent”) pursuant to the Valuation of Land Act1944 (the VLA),[1] which valued the appellants’ property situated at Gold Coast Highway, Helensvale in the sum of $39,000,000 as at 1 October 2006[2] and $44,000,000 as at 1 October 2007.[3] The appellants contend in their notices of appeal for valuations of $13,250,000[4] and $5,000,000[5] respectively. At the hearing of these matters, the appellants led evidence for valuation in each year of $18,300,000[6] or, in the alternative, of $15,800,000.[7]
[1] It should be noted that the VLA has now been repealed and replaced by the Land Valuation Act 2010. However, the provisions of the VLA continue for the purposes of this appeal.
[2] Exh.1A.
[3] Exh.1B.
[4] Exh.1B.
[5] Exh.2.
[6] Exh.7.
[7] Exh.24.
[2]The subject site consists of two contiguous parcels described as Lot 43 on SP180511, which has an area of 19.097 ha, and Lot 18 on RP868223, which has an area of 64.905 ha, making a total area of 84.002 ha. The land is situated at Helensvale in the City of Gold Coast, situated more or less directly opposite the Helensvale Town Centre, but separated from it by the Brisbane Gold Coast railway line. Helensvale railway station adjoins the land.
[3]Lot 43, the northern parcel, is currently used as a golf driving range. It has no substantial improvements, other than earthworks to create a filled future development site which were carried out in about 1994, pursuant to a development approval from the Albert Shire Council.[8]
[8] Albert Shire Council town planning consent 560/30/1348, issued in July 1982, reproduced in Exh. 6, volume 1, Attachment F.
[4]The easements below relate to Lot 43:
·Easement in Gross No. 701894185 burdening the land to Council of the City of Gold Coast over Easement B on RP902270 (sewerage purposes)
·Easement No. 708130890 burdening the land to Lot 12 on RP880356, Lot 42 on SP151645 and Lot 4 on SP117549 over Easements B and C on SP171927 (access purposes)
·Part/Surrender No. 709027346 over Easement B on SP171927 (road direction)
·Easement No. 708130897 burdening the land to Lot 42 on SP151645, Lot 12 on RP880356, Lot 4 on SP117549 over Easement C on SP171927 (access purposes)
·Easement No. 708130921 benefiting the land over Easements D, E and F on SP171927 (access purposes)
·Easement No. 708901132 burdening the land to Lot 18 on RP868223 over Easement C on SP171927 (access purposes)
·Easement No. 709776157 burdening the land to Lots 4-8 on SP182836 over Easements D and E on SP180537 (drainage purposes)
[5]Lot 18, to the south, is the site of Gold Coast Country Club, comprising an 18-hole golf course, clubhouse and associated minor buildings. It has no other substantial improvements, again with the exception of relatively significant earthworks carried out to construct the golf course in or about 1988 pursuant to a development approval issued by the Albert Shire Council.[9]
[9] Albert Shire Council town planning consent 560/30/2214, issued in November 1988, reproduced in Exh.6, Volume 1, Attachment F.
[6]The following easements are noted on the title for Lot 18:
·Easement in Gross No. 701894185 burdening the land to Council of the City of Gold Coast over Easement A on RP902270 (sewerage purposes)
·Easement No. 708130921 benefiting the land over Easements D, E and F on SP171927 (access purposes)
·Easement No. 708901132 benefiting the land over Easement C on SP171927 (access purposes)
·The land has direct vehicle access to the Gold Coast Highway via Country Club Drive, and there is also a road bridge over the railway, just south of the station, providing a direct road connection from Country Club Drive to Helensvale Town Centre and beyond. Further south, a second bridge has been constructed across the railway to connect the subject land (Lot 18) to the southern part of the broader Helensvale commercial centre. The bridge does not enter the subject land, and no road connections presently exist at the bridge ends. It was referred to through the hearing as “the bridge to nowhere”.
[7]Although there are substantial issues in dispute between the parties relating to town planning issues, the town planning experts’ joint report[10] sets out in paragraph 1 the extent to which the town planners reached agreement on basic statutory information. Relevantly, the town planners agree that:
[10] Exh.8.
(a)at the relevant dates Lot 43 was within Precinct 2 of the Helensvale Town Centre LAP;[11]
(b)Lot 18, the Southern Precinct, was within the South Helensvale Structure Plan of the Emerging communities Domain, of which 20.8 ha was designated as Urban Residential and the balance as Open Space comprising 44.1 hectares;[12]
(c)Both parcels are within the Urban Footprint of the SEQ regional Plan;[13]
(d)On 7 May 2007 the Gold Coast City Council granted a preliminary approval over the site which is subject to appeal to the Planning and Environment Court;[14]
(e)Any future subdivision of the land for residential purposes under the current planning scheme would have to be undertaken via a separate impact assessable development application;[15]
(f)The preliminary approval has development parameters of 620 dwelling units at a density of 13 units per hectare on Lot 18, and 550 dwelling units at a density of 43.8 on Lot 43.[16]
[11] Exh.8, para 1(k).
[12] Exh 8, para 1(m).
[13] Exh.8, para 1(n).
[14] Exh.8, para 1(c) and (d).
[15] Exh.8, para 1(e).
[16] Exh.8, para 1(s).
The Hearing
[8]The hearing lasted for eight days, including one day spent on an inspection, but not including time spent on an application relating to additional evidence, and issues relating to substantial amendments to the VLA. In total, there were some 500 pages of transcript; 48 exhibits; 124 pages of submissions supplemented by oral submissions; as well as an “agreed position” with respect to the VLA Amendment Act of 2010.[17]
[17] See Agreed Position filed 10 June 2010.
[9]The appellants were represented by Mr B Cronin of Counsel, instructed by DLA Phillips Fox, Lawyers. At the hearing, the appellants called oral evidence from John Arthur Williams, a civil engineer; David Ransom, a town planner; and Lloyd Sydney Parsons, a valuer.
[10]The respondent was represented by Mr S Fynes-Clinton of Counsel, instructed by Legal Services, Department of Natural Resources and Water. The respondent called evidence at the hearing from John Nigel Burn Venn, a town planner; Mr Patrick Buckler, one of the appellants called under subpoena; and Derek Rodney Bale, a valuer.
[11]I have fully considered all of the evidence placed before me. In the reasons that follow I refer to the salient points but not all the evidence that I have relied upon in reaching my decision.
Relevant legislative provisions
[12]Pursuant to s.13 of the VLA, the respondent is required to determine the unimproved value of the land. Relevantly, s.31(1) of the VLA says as follows:
“3.(1) For the purposes of this Act —
‘unimproved value’ of land means —(a)in relation to unimproved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require; and
(b)in relation to improved land – the capital sum which the fee simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that, at the time as t which the value is required to be ascertained for the purposes of this Act, the improvements did not exist.”
[13]I note that the subject land in this matter is improved. Accordingly, put simply, the task is to find the market value of the land on the assumption that none of the improvements are on the subject land. An assessment is then undertaken as to the highest and best use of that land.
[14]As the then President said in Fairfax v Department of Natural Resources and Mines:[18]
[18] [2005] QLC 0011 at paras [11] and [12].
“The principles for determination of the ‘market value’ of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. I that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a raise or fall in the value of the property. (See Griffith CJ at 432 and Isaacs J at 441).
It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:
‘Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but – as with other commodities – the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date – and that is evidenced by sales’.”
I respectfully agree with these observations.
Presumption of correctness of valuation
[15]I now turn to s.33 of the VLA, which states as follows:
“33 Status of valuation
Any and every valuation, or alteration of the valuation, of any land made, or purporting to be made, under this Act by the chief executive shall be deemed to be correct until proved otherwise upon objection or appeal or until altered or further altered.”
[16]This section was considered by the High Court in the case of Brisbane City Council v The Valuer-General for the State of Queensland 1977-78 140 CLR 41 where Justice Gibbs (as he then was) made the following observation at page 56:
“In my opinion once it is shown that in making the valuation the Valuer-General acted upon a wrong principle, or made a serious error of act, the presumption created by 2. 13(7) is rebutted.”
It should be noted that s.33 of the VLA is in essentially the same terms as what was then s. 13(7) of the Act.
[17]Although it is necessary for the Court to be mindful of the “equity and good conscience” guidelines enshrined in s.7 of the Land Court Act 2000, this Court is not an investigative tribunal. As the Land Appeal Court relevantly said in Qualischefski & Ors v The Valuer-General,[19]
“… However, upon appeal a statutory onus of proof is case upon the appellant and he has to accept, within the confines of the grounds set out in his Notice of Appeal to the Land Court, the burden of proving the Valuer-General incorrect. Neither this Court nor the Land Court in the subject jurisdiction may assume the role of an investigating tribunal requiring the Valuer-General to substantiate his case . …”[20]
[19] (1979) 6 QLCR 167 at 172.
[20] See also Two v The Valuer-General (1978) 5 QLCR 378 at 381 (LAC).
Threshold matter – grounds of appeal
[18]As regards the appellants’ appeal against the respondent’s 1 October 2006 valuation, the appellants’ grounds of appeal are stated in the following terms:[21]
“The valuation is wrong in, and contrary to, law
The valuation is excessive
The valuation does not take into account the sales of comparable properties
The valuation does not take into account the value or extent of improvements to the subject property
The valuation is out of relativity with the unimproved capital value of comparable properties”
[21] Exh.1.
[19]For the 2007 objection, the appellants’ grounds of appeal contained identical grounds of appeal to those contained in the earlier appeal, but also included the following additional ground of appeal: [22]
“The valuation does not take into account the limited potential of the property for development owing to its use as a golf course”
[22] Exh.2.
[20]The respondent asserts that the manner in which the appellants have chosen to word their grounds of appeal have different consequences for the two appeals. Specifically, the respondent asserts that the grounds of appeal with respect to the 2006 valuation are much narrower than those which apply for the 2007 valuation. Mr Fynes-Clinton, for the respondent, had this to say in his reply submissions:[23]
“2. The Respondent submits, as an overarching submission, that none of the town planning issues about which Mr Ransom gave evidence, are reasonably able to be asserted to relate, either expressly or by necessary implication, to any of the stated grounds of appeal in AV2007/0858. As the Appellants are strictly bound by those grounds of appeal, all of this evidence should be rejected as irrelevant to the stated grounds, regardless of its merits otherwise.
3.A similar submission is made in AV 2008/0988, except that it is accepted that the additional ground of appeal concerning existing use of the land is a golf course is a sufficient basis upon which to introduce the evidence about the “golf course policy” (only).”
[23] Respondent’s reply submissions p.2.
[21]Mr Cronin for the appellants asserts that the grounds of appeal are sufficiently wide to allow the Court to consider all of the evidence raised during the appeal. In Mr Cronin’s view, although the “golf course ground was not used in the 2006 appeal, the common ground asserting that the valuation does not take into account the sale of comparable properties:
“necessarily implies that the comparable properties did not have the limited potential owing to the subject land’s use as a golf course. The grounds of appeal are not restricted and no sensible or reasonable argument can be advanced that the grounds of appeal limit any of the arguments raised by the appellants.”[24]
[24] Appellants’ reply submissions p.2 para 2.
[22]At the time of filing the appeals, s.56 of the VLA relevantly provided as follows:
56How to start an appeal
(1) An appeal shall be instituted by filing in the Land Court registry a notice of appeal.
(2) Such notice shall state the grounds of appeal and the appeal shall be limited to the grounds so stated, and the burden of proving any and every such ground shall be upon the owner.
[23]It is common ground between the parties that the appellant is unable to rely on grounds of appeal outside of those listed in each appeal in light of s.56 as then enacted. The operation of s.56 of the VLA, then numbered as s.21(3) of the VLA, was considered by the Land Appeal Court in the case of Franklin v Valuer-General.[25] The Court made the following observations:[26]
“The provisions of the Valuation of Land Act as to the appeal procedure are restrictive in their operation, more especially to an appellant who has made his appeal on narrow and particular grounds rather than on a broad general ground such as ‘the valuation is excessive and contrary to law’. The language used by the Legislature is mandatory and binding not only on the parties but also on this Court and the Land Court.”
[25] (1978) 5 QLCR 181.
[26] At page 184.
[24]One of the quirky features of appeals under the VLA has been that those appellants who go to the detail of explaining exactly what their nature of objection is often make their grounds of appeal so restrictive that they are unable to lead evidence as to matters of significant concern to them regarding the valuation complained about simply because such evidence does not properly fall under the heads of one of their specific grounds of appeal. On the other hand, those experienced in filing grounds of appeal in the Land Court often file grounds of appeal worded in the most general way possible and thus tend to capture each and every possible aspect of appeal that could be raised in evidence at the hearing of the appeal. I call this situation “quirky” as those appellants who attempt to specify their grounds of appeal in a meaningful way are often caught short at a hearing, whilst those who file grounds of appeal which, in real terms, reveal nothing to either the respondent or to the Court of what the actual grounds of appeal are, have free rein to admit whatever evidence they choose on appeal.
[25]In essence, the respondent in the case at hand is attempting to rely upon the use of a restrictive ground of appeal by the appellant in 2007 to make the stated grounds of appeal in 2006 even more restrictive. Whilst at first glance there may appear to be some logic to the respondent’s argument, in my view it cannot stand close scrutiny. So much was all but conceded by Mr Fynes-Clinton during oral argument when he said:[27]
“It’s accepted that the court’s general approach is that once a broad issue such as the matter of comparable sales is raised then all of the matters which input into a proper consideration of comparable sales are at least inferentially raised”.
[27] Transcript p.464.
[26]In my view, the question is not so much whether the 2006 grounds of appeal are limited by their failure to include the specific ground of objection relating to the golf course policy as contained in the 2007 grounds of appeal, but rather whether, if the specific ground had not been included in the 2007 appeal, all of the evidence adduced by the appellant could have been sustained by the general grounds of appeal set out in both notices of appeal. In my view, the answer must be a resounding yes.
[27]In my view, whilst the appellants are limited to the grounds of appeal as set out in their notices of appeal, the broad nature of those notices of appeal is sufficient to encompass all of the evidence presented by the appellants at the appeal hearing of both valuation appeals.
[28]One final important point should be made before I leave this topic. As Mr Fynes-Clinton said in his oral submissions:[28]
“So Sir the only point that the respondent wishes to persist with in a forceful way in that regard in fact links in with the first subject matter of my oral address, so if I can proceed with that”
The point that Mr Fynes-Clinton was making was that, in the respondent’s view, the appellants failed to bring any evidence before the Court, in either the tendered reports or oral evidence of witnesses, relating to issues of the golf course policy; the PIP park and the risk of third party appeals, with respect to the 2006 valuation. This of course is fundamentally a different argument than whether or not evidence falls within a stated ground of appeal. At this point, I make no findings regarding the nature of the evidence adduced by the appellants with respect to either the 2006 appeal or the 2007 appeal. Any such comments will be made, insofar as they are necessary, under various headings that follow relating to both the evidence given, specific issues raised, and the grounds of appeal.
[28] See Transcript p.464.
Planning law issues
[29]A significant aspect of the evidence and submissions with respect to these appeals relates to planning law issues. In an intriguing twist, these same issues, at least in an interrelated form, are currently the subject of an appeal by the appellants against a decision of the Gold Coast City Council relating to the approval granted by the Council on 7 May 2007 with respect to the land in question in these appeals. As regards the Court’s role with respect to the planning issues generally, Mr Fynes-Clinton for the respondent had this to say in his submissions:[29]
“Given the way in which the Appellants have presented their case, the Court is required, before it turns to consider and determine the ultimate valuation issues, to determine a number of discrete issues of planning law, all relating to the proper construction of the Integrated Planning Act 1997 (‘IPA’). Ultimately, these issues all relate to determination of the highest and best use of the subject land, particularly the southern parcel (Lot 18). In the ordinary course, first instance resolution of construction issues under that Act is the province of the Planning and Environment Court. However, neither that Court, nor the Court of Appeal on appeal from that Court, have previously been called upon to squarely consider a number of the particular IPA issues raised by this appeal. These submissions therefore deal with each of those issues in what is intended to be to be a logical sequence, before turning to deal with the ultimate valuation issues.”
[29] At para 21.
[30]Mr Fynes-Clinton expanded upon his view as to the role of this Court in the determination of the valuation appeals at hand during his oral submissions.[30] Mr Fynes-Clinton firstly referred the Court to the judgment of Callinan J in Boland v Yates Property Corp Pty Ltd.[31] Specifically, Mr Fynes-Clinton referred to paragraphs [272] to [274] of Boland where His Honour had this to say:
“[272] An intending prudent developer of a project such as the respondent here had in mind would inevitably require investigations, studies, plans and information of the kind to which I have referred and which would necessarily involve the services of professionals such as town planners, engineers and others, not only perhaps to obtain, or enhance the chances of obtaining, planning approval but also to place itself in a position to satisfy financiers if it has to borrow to complete the development, and prospective tenants or licensees that a tenancy or a licence in it would be an obligation worth incurring.
[273] … If what the respondent did [had] not been done, then it would be unlikely that any purchaser would pay a price which included a component for the by now demonstrable, realisable, potential of the property for its highest and best use as a market. And a purchaser would have been in as good a position to take advantage of the site in its cleared state as the respondent. None of this is in disparagement of the respondent’s efforts. But their site-specific nature meant that Yates would have no interest in withholding their fruits from a purchaser and every reason to provide them to ‘talk up’ the price of the land.
[274]Any vendor who failed to capitalise on this work by not extolling to a purchaser its consequential, demonstrable, realisable potential would be highly imprudent. And any reasonable purchaser would expect, and know that the price would reflect this potential. It is not a case of the purchaser’s buying, as it were, the plans and the work done in respect of proving up the potential as one of the examples given by the Full Court would suggest. It is merely that, to use the language of Griffith CJ in Spencer’s case, each party to the transaction should be regarded as being fully conversant, or as Isaacs J said, perfectly acquainted with the subject, that is to say the subject land with all of its potential. It follows that the more work, the more proving up that is done by the vendor before the sale, the more any uncertainty as to the realisation of the potential will be reduced, and the higher the price will be. [my emphasis]”
[30] See Transcript p.466-7.
[31] [1999] 74 ALJR 209.
[31]Mr Fynes-Clinton then on to submit as follows:[32]
“As Mr Justice Callinan points out it’s in the vendor’s interests, and we are talking about an objective vendor not a vendor with some particular subjective view of the world that would have it act in a way which is not objectively rational, the objectively rational vendor will make available and will authorise and the objectively rational purchaser will take up the opportunity to identify and investigate all matters relevant to the planning potential of the subject land. So in this case as at 2006 the evidence is that the hypothetical prudent purchaser would make its inquiries of the council and would have relevant material supplied to it by the vendor because that’s in the vendor’s interests, it would know the situation, it would know that Mr Ransom has told the court that there was an application that’s been in since 2002, that it’s been through a number of processes and delays and what one might call hurdles, or at least potential hurdles, and it’s now got to the point as at 1 October 2006 where the process is complete from the applicants’ point, where it’s before the council for decision and whereas Mr Ransom says a favourable decision is to be expected. The Court is invited to consider where in the evidence there is anything to suggest that that informed purchaser would have the slightest concern about these asserted development risks. I don’t want to be repetitive sir and the point is developed. The question is asked, somewhat rhetorically, the answer is that as at October 2006 on the evidence the application was in, it was expected to be approved and the asserted risk issues on the evidence were matters of simply no concern at all, matters which, as the court will recall, had not been raised by the council at any stage of the approval process as barriers to approval and were not raised between 1 October 2006 and the approval date of May 2007 as barriers to approval.
The evidentiary point that’s being focused on therefore is this, the risk issues simply weren’t risk issues in 2006 and that’s not a matter of this side asserting that from the Bar table, that’s the position on the appellants’ evidentiary case. Therefore, logically, the only use which the appellants could seek to make of these risk issues, assuming they were made out on the evidence, is to mount a case before the court that because of the way the preliminary approval was issued and because of the way in which the future development approval processes could then call in consideration such as the golf course etc. that matters had taken a significant turn for the worse by 2007 as compared to the sunny picture in 2006 which Mr Ransom confirmed. That is in my submission the only use which the appellants could make of all this evidence in the way the appellants have constructed their case that 2007 is a different picture and a different ball park because of all these risk issues that simply weren’t on the horizon in 2006.”
[32] At Transcript p.466-7.
[32]Both Mr Fynes-Clinton and Mr Cronin also referred me to the Planning and Environment Court decision of Serenity Lakes Noosa Pty Ltd v Noosa Shire Council.[33] In that case, Judge Wilson SC provided helpful observations as to the principles to be generally adopted when construing conditions in a planning approval. His Honour adopted submissions of Mr Trotter as follows:[34]
[33] [2007] QPEC 005.
[34] At [6].
“(a)where a planning approval is ambiguous, it should be construed in a manner which places the least burden on the land owner;
(b)if a condition is imposed which restricts an approval, it should be expressed fairly;
(c)in construing an approval, the search is not for what the Council may have intended or what, if it had been interrogated about various possibilities, it would have said it intended; each approval must speak according to its written terms, construed in context but having regard to its enduring function;
(d)it has long been recognised that use rights are determined from the approval itself, which may include other material by express or necessary implication;
(e)the nature and extent of any approved development must be determined by construing the document of approval, including any plan or other document which it incorporated, aided only by that evidence admissible in relation to construction which establishes or helps to establish the true meaning of the document as the act of the relevant authority, not the result of a bilateral transaction between the applicant and the Council;
(f)in construing an approval a Court is not dealing with an Act of Parliament and an overly technical approach is not called for. The words should not be scrutinised in the same way as words used by the parliamentary drafts-persons;
(g)extrinsic evidence, in the forms of expert evidence, may be admissible to explain technical terms. This may extend to explaining the nature of the site so that the impact and meaning of a condition can be understood; and
(h)extrinsic evidence is also admissible to understand the physical state of the land at the time of the approval. This may include identification of things like existing vegetation and specific features referred to by the conditions.” (footnotes omitted)
[33]The above reference is of assistance because, as set out in paragraph [7] of this decision, one aspect where there was agreement between the evidence of the town planners was that on 7 May 2007 the Gold Coast City Council granted a preliminary approval over the land the subject of these appeals. The Council’s letter of 8 May 2007 together with the preliminary approval are set out in full in Exhibit 6 at pages 315 to 331. I will refer to various aspects of the preliminary approval in the pages that follow.
Respondent’s attack on Mr Ransom’s planning evidence
[34]Mr Fynes-Clinton for the respondent urges the Court to treat Mr Ransom’s evidence with respect to the preliminary approval as worthless. In his submissions, Mr Fynes-Clinton had this to say:[35]
[35] At para 39.
“39. There seems little point in being overly diplomatic about this issue. Any suggestion that a preliminary approval is not legally binding to vest development rights (to the extent stated in the approval), or that the rights so vested can be taken away by the local government as part of a subsequent development permit process for the development, is fundamentally misconceived to the point of being farcical. Yet it is exactly such a proposition which lies at the heart of the whole of Mr Ransom’s evidence about the asserted “worthlessness” of the preliminary approval. It is, with respect, Mr Ransom’s evidence on this issue which is of no worth.”
Not surprisingly, Mr Cronin for the appellants has quite a different view of Mr Ransom’s evidence. I will carefully analyse the evidence, so far as it is relevant, with respect to various aspects of the planning evidence later in this decision. However, one overarching submission made by Mr Fynes-Clinton regarding the Court’s receipt and handling of Mr Ransom’s evidence needs to be carefully considered at this point. At paragraphs 12 and 13 of his submissions, Mr Fynes-Clinton made the following observations:
“12. Ordinarily, it would be a trite and unnecessary observation to state that the Court must decide the appeals based upon the evidence presented and findings on disputed ultimate facts made, on the balance of probabilities, based upon the evidence presented. That observation is made in this case because of what is submitted to be a range of extraordinary assertions throughout the Appellants’ case by which they seek to have the Court adopt a view of the facts, based upon assertions of opinion by expert witnesses, which is quite divorced from what the objective evidence reveals to have actually occurred in the real world.
13.In this regard, it is important not to lose sight of the basic evidentiary principle that the opinions of expert witnesses are, in themselves, worth little or nothing. What is of value to the Court is the reasoning process applied by the expert witness allowing one to go from objective primary facts to an opinion about an ultimate fact in dispute. That process has no value unless the expert has correctly identified the objective primary facts, and logically and coherently reasoned from those facts to the opinion expressed. This is not just a matter of admissibility where the ordinary ‘rules’ might be relaxed having regard to s 7 of the Land Court Act 2000. Purported expert opinions which do not comply with the principles for admissibility of expert evidence are opinions without a proper evidentiary foundation, and are therefore probative of nothing. There can be no warrant in this Court for permitting any material departure from the rules of expert evidence seminally stated by Heydon JA (as he then was) in Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, at 743-744. To do so would be to act upon purported evidence which has no legal relevance to matters in issue and no probative value, in relation to those matters.
[35]For his part, Mr Cronin refers to the respondent’s attack on Mr Ransom and, indeed, on Mr Parsons, as “inappropriate, inaccurate and misplaced”.[36] Mr Cronin also referred me to numerous aspects of Mr Ransom’s evidence which he submitted should be accepted by the Court as relevant expert evidence with respect to various issues.
[36] Appellant’s reply submissions para 38.
[36]Mr Fynes-Clinton in the passages referred to above referred to statements of Heydon JA in Makita. Due to the force of Mr Fynes-Clinton’s submissions, it is appropriate to consider what Heydon JA had to say in detail:[37]
“In short, if evidence tendered as expert opinion evidence is to be admissible, it must be agreed or demonstrated that there is a field of ‘specialised knowledge’; there must be an identified aspect of that field in which the witness demonstrates that by reason of specified training, study or experience, the witness has become an expert; the opinion proffered must be ‘wholly or substantially based on the witness’s expert knowledge’; so far as the opinion is based on facts ‘observed’ by the expert, they must be identified and admissibly proved by the expert, and so far as the opinion is based on ‘assumed’ or ‘accepted’ facts, they must be identified and proved in some other way; it must be established that the facts on which the opinion is based form a proper foundation for it; and the opinion of an expert requires demonstration or examination of the scientific or other intellectual basis of the conclusions reached: that is, the expert’s evidence must explain how the field of ‘specialised knowledge’ in which the witness is expert by reason of ‘training, study or experience’, and on which the opinion is ‘wholly or substantially based’, applies to the facts assumed or observed so as to produce the opinion propounded. If all these matters are not made explicit, it is not possible to be sure whether the opinion is based wholly or substantially on the expert’s specialised knowledge. If the court cannot be sure of that, the evidence is strictly speaking not admissible, and, so far as it is admissible, of diminished weight. And an attempt to make the basis of the opinion explicit may reveal that it is not based on specialised expert knowledge, but, to use Gleeson CJ’s characterisation of the evidence in HG v The Queen (at 428 [41]), on ‘a combination of speculation, inference, personal and second-hand views as to the credibility of the complainant, and a process of reasoning which went well beyond the field of expertise’.”
[37] Makita, at para [85].
[37]Certainly, there are aspects of Mr Ransom’s evidence which, taken on their own, may lead one to have concerns as to the value of his expert evidence applying the formula set out by Heydon JA in Makita. For instance, when referring to the Gold Coast City Council, Mr Ransom had this to say during cross-examination:[38]
[38] Transcript p.85.
“Without getting sidetracked, it is a fundamental premise of your report and evidence to this Court that the developers must assume that the council would break the law?--
I wouldn’t term it so harshly as ‘break the law’. What I would say is that I am aware of numerous instances where council have basically done whatever they pleased irrespective of what the legal situation was. I have numerous instances of that occurring that I am aware of.
The Gold Coast City Council is a very poor corporate citizen that disregards the law?--
Again, I wouldn’t term it that harshly but I don’t, sort of, have a high regard for the level of rigour that they apply to things all the time. It is quite inconsistent is what I would say. That is a risk for a prospective purchaser and that is something I would certainly inform them of, were I asked to give them due diligence advice in considering the purchase of a site.
Can I then ask you to make a further assumption that Gold Coast City Council as a public authority does in fact comply with the law. I am asking you to make that assumption?--I can make that assumption for this exercise but -----
You don’t agree with it?--Well, it is inconsistent. Sometimes they do, sometimes they don’t. The council is a political organisation and often decisions get made for political reasons and the law is not exactly adhered to.
I appreciate that you are disclaiming any of the more harsher extreme terms that I use, but you really are telling the Court that the Gold Coast City Council is or can be a rogue council, aren’t you?- -In certain circumstances I guess I am, yes.”
Like comments were confirmed by Mr Ransom during re-examination by Mr Cronin:[39]
“In terms of making decisions of the council, the expression ‘rogue’, what do you really understand that expression to mean, in terms of the way in which it was expressed to you earlier?--Look, you can’t generalise about the council. It is like any big organisation. There are people within it who make correct and lawful decisions and there are many instances where there is no political interference in the application process. By the same token there are many other instances where you do encounter an attitude of council taking the view that they are right irrespective of what the law says and if you don’t like it then you are welcome to pursue an appeal, if you have sufficient resources to fund that particular process. That does happen.”
[39] Transcript p.120.
[38]Mr Ransom’s evidence as regards the Gold Coast City Council being a “rogue” council is inextricably linked to his expert opinion that there are risks associated with the preliminary approval given by the council in May 2007 which any developer interested in purchasing the subject land would be properly advised of during any due diligence. In his primary submissions, Mr Cronin set out details of other evidence relating to uncertainty associated with the site, including evidence by Mr Venn, the town planner called by the respondent. I adopt Mr Cronin’s reasons set out in paragraph 62 of his submissions, which are relevantly as follows:
(a) Mr Ransom spoke about the uncertainty of the position with respect to infrastructure charges and that some people had walked away from purchasing a site when told about the infrastructure charges;[40]
[40] Transcript p.34, L5-15.
(b) Mr Ransom spoke about the uncertainty attaching to the risk of submitter applications as a result of the impact assessment nature of the further approvals following the preliminary approval;[41]
[41] Transcript p.119, L6.
(c) The area of uncertainty with respect to the version of the planning scheme against which any future development application will be assessed was said by Mr Ransom to be an area of uncertainty;[42]
(d) Mr Ransom spoke about the uncertainty of dealing with the local authority which might use a Court as a mechanism to deliver bad news to the community;[43]
(e) Mr Parsons referred to the risk and uncertainty in relation to district parks and golf courses with respect to the land;[44]
(f) Mr Parsons said there was a lot of uncertainty about the PIP charges and that there was also uncertainty in the marketplace about them;[45]
(g) Mr Parsons was asked about uncertainty associated with applications to fill flood prone land. After some objection Mr Parsons said that there were difficulties attaching with obtaining such approvals;[46]
(h) Mr Venn, when asked whether the golf course policy represented a degree of uncertainty about the development, although not agreeing that there was uncertainty, he did agree that the policy specifically identified Lot 18;[47]
(i) When asked about the difficulty of how a local authority imposes its desire to obtain land under the priority infrastructure plan, Mr Venn agreed there was some uncertainty about that;[48]
(j) When asked about a number of actors it was put to Mr Venn that any person acquiring the land would expect a high level of uncertainty in obtaining full development rights. Mr Venn said that high level was too strong a phrase but rather agreed that there was a level of uncertainty but at the lower end, not at the upper end;[49]
(k) When asked about the Council’s desire for a district park and about there being no discussions about it prior to its inclusion in the plan, Mr Venn agreed that there was uncertainty about that and that there would be an element of uncertainty for a purchaser;[50]
(l) Mr Parsons said that there was a risk of obtaining access to the bridge near the golf course to enable residential development.[51]
[42] Transcript p.119, L33-36.
[43] Transcript p.120, L7-15.
[44] Transcript p.164, L5.
[45] Transcript p.216, L45 to Transcript p.217, L2.
[46] Transcript p.251, L40-45 and Transcript p.252, L38.
[47] Transcript p.293, L13 and L30-35.
[48] Transcript p.300, L10-15 and Transcript p.311, L40.
[49] Transcript p.317, L18-30.
[50] Transcript p.318, L45 to Transcript p.319, L1-21.
[51] Transcript p.160, L13.
[39]As regards the evidence of both Mr Venn and Mr Ransom, it is my view that both gave credible evidence to the Court as to their respective expert opinions relating to the planning issues in dispute in this matter. They were both subject to rigorous cross-examination, which they both withstood well. On all substantive matters, their views as expressed in their reports were adhered to throughout cross-examination. Both Mr Ransom and Mr Venn referred extensively to the factual evidence contained within numerous documents and assisted the Court with their expert opinion as to the contents of those documents from a planning perspective. Both Mr Ransom and Mr Venn gave, in my view, their honest expert opinion as to the various matters upon which their expert advice was sought. They both fully comprehend and take seriously, in my view, their obligations as experts to the Court. Both have considerable experience in the town planning field. Of course, in some respects their expert opinions differ. That is often the case when experts give evidence to any Court. Where their evidence differs, and to the extent that such differences are relevant to the ultimate outcome of the appeals at hand, I set out below under various headings my preference for the evidence of one expert over the other.
What was approved by the preliminary approval of May 2007?
[40]Much has been said by both parties to these appeals as to the nature of what was actually approved by the Gold Coast City Council in May 2007. Much of the evidence of Mr Venn and Mr Ransom, and indeed the submissions, focused on the question as to whether or not the approval was made by the Council pursuant to s.3.1.5 of the Integrated Planning Act 1997 (“IPA”) or s.3.1.6 of IPA. To begin with, it is appropriate to set out the provisions of sections 3.1.5 and 3.1.6 which as at the relevant date in May 2007 provided as follows:
3.1.5 Approvals under this Act
(1)A preliminary approval approves development (but does not authorise assessable development to occur)—
(a)to the extent stated in the approval; and
(b) subject to the conditions in the approval.
(2)However, there is no requirement to get a preliminary approval for development.38
(3) A development permit authorises assessable development to occur—
(a) to the extent stated in the permit; and
(b) subject to—(i) the conditions in the permit; and
(ii)any preliminary approval relating to the development the permit authorises, including any conditions in the preliminary approval.
______________________________________
38.Preliminary approvals assist in the staging of approvals.
3.1.6 Preliminary approval may override a local planning instrument
(1)This section applies if—
(a)an applicant applies for a preliminary approval; and
(b)part of the application states the way in which the applicant seeks the approval to vary the effect of any local planning instrument for the land.
(2) Subsection (3) applies to the extent the application is for—
(a) development that is a material change of use; and
(b) the part mentioned in subsection (1)(b).(3)If the preliminary approval approves the material change of use, the preliminary approval may, in addition to the things an approval may do under part 5, do either or both of the following for development relating to the material change of use—
(a) state that the development is—
(i) assessable development (requiring code or impact assessment); or
(ii) self-assessable development; or
(iii) exempt development;
(b) identify any codes for the development.
(4) Subsection (5) applies to the extent the application is for—
(a) development other than a material change of use; and
(b) the part mentioned in subsection (1)(b).(5)If the preliminary approval approves the development, the preliminary approval may, in addition to the things an approval may do under part 5, do either or both of the following for the development—
(a) state that the development is—
(i) assessable development (requiring code or impact assessment); or
(ii) self-assessable development; or
(iii) exempt development;
(b) identify codes for the development.
(6)To the extent the preliminary approval, by doing either or both of the things mentioned in subsection (3) or (5), is different to the local planning instrument, the approval prevails.
(7)However, subsection (3) or (5) no longer applies to development mentioned in subsection (3)(a) or (5)(a) when the first of the following happens—
(a)the development approved by the preliminary approval and authorised by a later development permit is completed;
(b)any time limit for completing the development ends.
(8)To the extent the preliminary approval is inconsistent with schedule 8 or 9, the preliminary approval is of no effect.
[41]A number of basic observations should be made regarding approvals pursuant to 3.1.5 and 3.1.6 of IPA. To begin with, it is clear that approvals under 3.1.5 and 3.1.6 are both classified as “preliminary approvals”. Insofar as it is relevant to the case at hand, there is one fundamental difference between a 3.1.5 approval and a 3.1.6 approval. Preliminary approvals made pursuant to 3.1.6 have the advantage that, with respect to subsequent development permits required to give final affect to the development, such permits are code assessable rather than impact assessable where relevant, the assessment level may also be self assessable if it is consistent with the preliminary approval. Additionally, a 3.1.6 preliminary approval may identify development specific codes for the particular development which will displace any otherwise applicable codes in the planning scheme to the extent of any inconsistency. This situation is to be contrasted with an approval pursuant to 3.1.5 which necessitates that future development permits be impact assessable.
[42]I am in no doubt that the appellants in making their application in 2002 were seeking code assessable approvals pursuant to 3.1.6 of IPA. It is equally clear what was approved by the Council on 7 May 2007; that is, Council’s approval is as it is stated to be pursuant to s.3.1.5 of IPA. Although there were some suggestions put to witnesses that perhaps the approval of the Council contained a simple typographical error and meant to refer to 3.1.6 of IPA, I reject any such suggestions. Firstly, there is no evidence before the Court to support such contentions. Additionally, the evidence that is before the Court, including internal papers produced by Council in the lead up to the decision, clearly show that at one point an approval pursuant to 3.1.6 of IPA was proposed, but that prior to the final decision being made by Council there was a change of view in Council such that the approval was made pursuant to s.3.1.5.
[43]One final observation in this regard should be made. It is suggested that, by their nature, some of the conditions set out in the approval are properly made pursuant to s.3.1.6 of IPA and not 3.1.5. In my view, relying upon the fundamental principles as enunciated by Judge Wilson in Serenity, this issue is easily resolved. As His Honour said, where a planning approval is ambiguous, it should be construed in a manner which places the least burden on the landowner.[52] Accordingly, it is my view that insofar as any aspects of the preliminary approval relate to code assessable provisions pursuant to 3.1.6, those conditions, despite the preliminary approval being classified as a 3.1.5 approval, are capable of being construed in favour of the appellants as code assessable. I note however that the bulk of the approval falls within 3.1.5 even with this concession in favour of the appellants necessitating that almost all future permits would be impact assessable.
[52] See Serenity at [6] and para 32.
[44]I should also make the observation that the above comments relate in simple terms to what was approved by the Council in May 2007 from a valuation perspective in assessing unimproved value under the VLA. The nature and extent of any risk that may be considered by any hypothetical prudent purchaser consequent to that approval is considered under a separate heading.
Preliminary approval – a red herring?
[45]In his reply submissions, Mr Fynes-Clinton submits, at paragraph 12, that the highly prominent issue in the case for the appellants regarding the preliminary approval is a complete irrelevance. The respondent urges the Court not to allow the prominence which the appellants seek to give to the issue to be allowed to obscure that irrelevance. Specifically, Mr Fynes-Clinton states that “a bright scarlet herring is of no more forensic assistance to the Court than an ordinary red one”.
[46]Clearly, for the reasons enunciated earlier in this decision, it is the task of this Court to determine the appropriate valuations of the subject land pursuant to the VLA as at 1 October 2006 and 1 October 2007. I have already discussed in detail the relevant tests to be applied in this regard, including the time-proven test from Spencers case. In my view, it is not necessary that I reach any final concluded views as to the various planning issues relied upon extensively by the appellants. That however, is not the point of the evidence adduced by the appellants. What the appellants have sought to do by their evidence is to demonstrate their view of planning issues that related to the land as at 1 October 2006 and 1 October 2007 and, in light of those planning issues, interpolate what a hypothetical prudent purchaser would take into account when considering the price that would be paid for the subject land. Seen in this way, the evidence led by the appellants is neither a scarlet nor red herring, or any other colour herring for that matter. It is simply a factor which a hypothetical purchaser would be considered to take into account as at the relevant valuation dates; nothing more and nothing less. The impact of such considerations on the actual unimproved value of the subject land will be a matter for close consideration of the valuation evidence read in light of the town planning evidence.
[47]The respondent contends that the appellants have not in fact linked any of the town planning evidence to their valuation evidence, thus reinforcing the respondent’s “scarlet herring” view. However, in my view it is necessary, in order to properly understand the appellants’ case, to appreciate the town planning evidence and then to consider how that evidence has been used, or adopted, if at all, by the valuers in their evidence.
[48]I now turn to an examination of various town planning issues.
The Gold Coast City Council’s ‘golf course policy’
[178]Although this sale was subject to some debate between the valuers, in my view the sale should be quickly dismissed. It is a sale between state government departments. Accordingly, the sale is not reflective of an arms length transaction, and should not be considered. There is nothing in Mr Bale’s evidence which leads me to a different conclusion. Certainly, one can imagine instances where a sale between government agencies may be sufficiently removed, involving stand alone government business units operating independently, so as to satisfy the normal requirements for taking a sale into account. Mr Bale’s evidence however, in my view, does not give me any confidence to rely upon this sale.
Conclusions regarding 2007 valuation
[179]For site value purposes relating to the areas of developable land for 1 October 2007, Mr Bale assesses the value for Lot 43 at $2,000,000 per hectare and for Lot 18 at $1,425,000 per hectare.[177]
[177] See exh.15B.
[180]In accordance with the sales evidence set out above for 2007, Mr Bale argues that his sales justify an increase of $175,000 per hectare with respect to Lot 18 from his 1 October 2006 figures. For completeness, I repeat that Mr Parsons argues that any increase in value was offset by the coming into existence of the Gold Coast PIP regime of January 2007.
[181]I am prepared to accept Mr Bale’s evidence that there was an increase in value from 1 October 2006 to 1 October 2007 as regards site value for developable land on Lot 18. As I have noted, Mr Bale did not reduce his overall valuation as set out in exhibit 15 despite his corrections of errors made, some of which made a significant difference to the rate per hectare applied to developable land in Mr Bale’s view. Taking Mr Bale’s corrections into account and doing the best I can with such sales that I consider appropriate to have close regard to, in my view it is appropriate to increase the site value of developable land referrable to Lot 18 by $125,000 per hectare. As I have previously assessed the appropriate value for developable land referrable to Lot 18 as at 1 October 2006 in the sum of $1,175,000, the addition of $125,000 results in a rate per hectare value for the developable land on Lot 18 as at 1 October 2007 in the sum of $1,300,000. As regards Lot 43, consistent with Mr Bale’s evidence, the amount will remain unchanged from that which I have assessed for 2006, being $1,800,000.
[182]It is of course apparent that I have not reduced, at this point, such sums by reference to, amongst other issues, the PIP charges as they came into existence in January 2007 as urged on me by Mr Parsons and Mr Cronin. I do believe that those PIP charges and other risks are matters which should be properly taken into account and I will do so in my final conclusions.
Assessment of value as at 1 October 2006
[183]Adopting the approach as used by Mr Bale in exhibit 14D[178] and consistent with exhibit 24 as provided by Mr Parsons, and including the sums I have determined based on the sales evidence with respect to Lot 43 and Lot 18 as at 1 October 2006, and preferring the developable works relating to Lot 18 and Lot 43 as set out in exhibit 24 as provided by Mr Parsons (relying upon, in particular, the report of Cozens Regan Williams Prove) which I have rounded to $15,000,000,[179] the calculations are as follows:
[178] At page 35, top half of page.
[179] In rounding down this figure, I have taken into account the correct conclusions of Mr Fynes-Clinton in reply submissions of the respondent para 47.
“Subject Site (Site Value less costs)
Lot 43
9.97 hectares @ $1,800,000 / hectare $17,946,000
Lot 18
31.45 hectares @ $1,175,000 / hectare $36,953,750
Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557
Sub Total$55,964,307
Less costs of estimated bulk earthworks
(including holding charges as per annexure) $15,000,000
Sub Total$40,964,307
Less 15% bulk $ 6,144,646
$34,819,661
Less 10% additional holdings costs to obtain further approval $ 3,481,966
Unimproved Valuation as at 1/10/2006 $31,337,695
ADOPT$31,300,000”
Assessment of value as at 1 October 2007
[184]Applying a like methodology to that set out above for 2006, but using the sum of $1,300,000 for Lot 18 based on the 2007 sales evidence, and, in light of the evidence as set out in exhibit 5 at pages 10-16, increasing the estimated bulk earthworks including holding charges to $16,000,000, but not at this point taking into account important aspects relating to PIP charges as at January 2007; the nature of the preliminary approval of May 2007; and other matters of foresight as at 1 October 2007, my preliminary assessment as at 1 October 2007 is as follows:
“Subject Site (Site Value less costs)
Lot 43
9.97 hectares @ $1,800,000 / hectare $17,946,000
Lot 18
31.45 hectares @ $1,300,000 / hectare $40,885,000
Add Park & Open Space 42.5823 hectares @ $25,000/ha $ 1,064,557
Sub Total$59,895,557
Less costs of estimated bulk earthworks
(including holding charges) $16,000,000
Sub Total$43,895,557
Less 15% bulk $ 6,584,334
Sub Total$37,311,223
Less 5% additional (holding) costs to obtain approval $ 3,731,122
Preliminary Unimproved Valuation as at 1/10/2007 $33,580,101”
[185]I have referred to the above as a preliminary assessment of value with respect to the subject land as at 1 October 2007 because of important considerations relating to PIP charges, the preliminary approval, and other aspects of foresight.
[186]The respondent complains that, for 1 October 2007, the appellant has not produced any evidence to show why the valuations should be reduced taking account of the PIP charges, preliminary approval and other matters. In my view however, the appellant in contending for their unimproved value for the subject property as at 1 October 2007 in the sum of $15,800,000[180] adopting the exhibit 24 approach has taken into account the impact of these factors on the subject land as at 1 October 2007.
[180] In identical terms to 1 October 2006.
[187]As I have already indicated, in my view the appellant is in error in giving the weight that they have to these factors as at 1 October 2006.
[188]To set out in simple terms: in my view, as at 1 October 2006, it was the proper expectation of both the appellants and any prudent purchaser of the subject property that the approvals which had been applied for in 2002 would be approved by the Council pursuant to 3.1.6 of IPA. Additionally, the approvals were sought taking account of the then infrastructure charges applied by the Council and there was no relevant foresight held by either the appellants themselves nor a prudent purchaser as at 1 October 2006 of the imposition of the PIP regime by the Gold Coast City Council in January 2007; the golf course policy was still in its formulative stages and, as the development application had been made in 2002 and was anticipated to be granted pursuant to 3.1.6 of IPA; and there were no objections lodged by any members of the golf course to the development application; the issues relating to the golf course policy were not relevant as at 1 October 2006; and, for completeness, for like reasons the koala policies were not relevant as at 1 October 2006. For these reasons, I am of the firm view that the appropriate valuation for the subject land as at 1 October 2006 is $31,300,000 as set out above and no further discount is appropriate.
[189]For the opposite reasons, it is my view that an additional discounting factor must be applied in this matter with respect to the 1 October 2007 valuation. In Mr Parsons’ view, the appropriate discounting figure is 30%.
[190]There are clearly risks associated with the subject land as at 1 October 2007 which were not in existence as at 1 October 2006. I have already dealt in detail with the imposition of the Council’s PIP regime in January 2007. I have also, in great detail, shown the uncertainties that flow from the preliminary approval of May 2007 pursuant to 3.1.5 of IPA. It is significant that Mr Venn, the town planner called by the respondent was “quite astounded” by aspects of the preliminary approval.[181] Further, as at 1 October 2007, it is my view that a prudent purchaser would have had some concerns regarding the development of the golf course policy by the Council, and that foresight was confirmed by subsequent actions by Council regarding the preservation of golf courses on the Gold Coast. Additionally, I take note of Mr Parsons’ advice to Devine of February 2008 as discussed earlier in these reasons. As the authorities relating to foresight show, I do not have to guess as to what advice would be provided to a prudent purchaser of the subject property as at 1 October 2007 when I can simply have regard to the actual advice provided by Mr Parsons to a potential purchaser in February 2008.
[181] See Transcript p.302 and the heading “Gold Coast City Council Golf Course Policy” in this decision.
[191]By way of balance, it was also foreseeable as at 1 October 2007 that endeavours would be made by either the appellants, the Council, or both, to attempt to resolve the appeal relating to the preliminary approval of May 2007. Of course, the without prejudice offer made by the Council in August 2008 has not resolved the matter, but nevertheless the existence of the without prejudice offer goes to confirm a foresight that a reasonable prudent purchaser would have had as at 1 October 2007.
[192]Taking all of these factors into account, I consider that there are significant risk factors applicable to the subject land as at 1 October 2007 which did not apply as at 1 October 2006. In my view, including for reasons as set out above, the deduction claimed of 30% by the appellants is somewhat overstated. A deduction of 20% is appropriate to take into account these significant risks.[182]
[182] It must be stressed that this reduction is only applicable for the 2007 valuation. Any reduction for future valuation years will be dependent on the risk then existing, if any.
[193]Applying a reduction of 20% to the preliminary unimproved value as at 1 October 2007 of $33,580,101 amounts to $6,716,020. When this amount is deducted from $33,580,101, the sum reached is $26,864,081. Applying rounding, the appropriate unimproved valuation of the subject land as at 1 October 2007 is $26,900,000.
Summary
[194]For all of the reasons as set out above, the appellants have displaced the presumption of correctness, the appeals should be allowed, and the unimproved value of the subject land as at 1 October 2006 is $31,300,000, and as at 1 October 2007 is $26,900,000.
Orders
1.The appeals are allowed.
2.The unimproved value of the subject land as at 1 October 2006 is fixed in the sum of Thirty One Million Three Hundred Thousand Dollars ($31,300,000).
3.The unimproved value of the subject land as at 1 October 2007 is fixed in the sum of Twenty-six Million Nine Hundred Thousand Dollars ($26,900,000).
PA SMITH
MEMBER OF THE LAND COURT
Postscript:It is appropriate that I take this opportunity to account for the delay in providing this decision. At the time when these appeals were originally heard, the membership of the Land Court was under considerable strain due to the retirement of long standing Members of the Court and the lack of new appointments. The matter was then further complicated by the passage of significant amendments to the VLA in 2010. The parties, by their joint position dated 4 June 2010, agreed that consideration of the appeals could proceed notwithstanding the amendments to the VLA. Unfortunately, at this time I was absent from the Court on long leave, and after my return to the Court I suffered a recurrence of a serious illness.
It is pleasing that the State Government made two appointments of Members to the Land Court in 2010, thus restoring the number of Member of the Court to four plus of course the Judicial Registrar.
As can be seen by the length of this decision, this matter was anything but a standard appeal under the VLA. It involved complex issues of planning law and valuation law. Importantly, I wish to stress that all of my observations as to the evidence of the witnesses were made at the time that each witness gave their evidence. I made substantial notes as to my findings and impressions of each witness at the time, and I retain a strong recollection of all aspects of this hearing.
2
2