Locke v The State of Queensland

[1998] QLC 58

LAND COURT

BRISBANE

25 MAY 1998

Re:  A97-68 and A97-69
Determination of compensation -
Resumption of land by the State of Queensland -
Acquisition of Land Act 1967

R. & A.M.S. Locke (A97-68)
and
R. & A.M.S. Locke and R.G. & M.L. Macfarlane (A97-69)
v.

The State of Queensland

J U D G M E N T

By proclamation published in the Government Gazette on 24 October 1997, land as described below was taken from that date by the State "for the purpose of dealing with in any manner in which Crown land may be dealt with under the Land Act 1994 i.e. strategic land management".

The land is situated at Cunningham Drive, Coomera, being two separately surveyed lots

described as:

Lot 37 on RP 187881, area 3.001 ha, the whole of the land in Title 16457159, Parish of

Coomera (A97-68);

Lot 39 on RP 187881, area 3.005 ha, the whole of the land in Title 16457161, Parish of
Coomera (A97-69).

The claims for compensation for the taking of Lot 37 and Lot 39 were each originally in the amount of $2,125,000.

There was agreement between the parties that both matters should be heard together. At the commencement of the hearing leave was sought to amend the claims as follows:

Lot 37

Land Value	$1,200,000
Disturbance Items

Valuation Fees	$6,000
Legal Fees	$5,827 $11,827

Total $1,211,827

Lot 39

Land Value	$990,000
Disturbance Items

Valuation Fees	$5,500
Legal Fees	$5,827 $11,327

$1,001,327

While reserving its rights to argue any implications relating to costs, the respondent did not object to the amendment of the claims and leave was granted accordingly.

The respondent's final valuations, excluding disturbance items, were in the amounts of

$850,000 for Lot 37 and $500,000 for Lot 39.
Background to Resumption

On 17 October 1996, the Commonwealth Government, at the request of the Queensland Government, lodged a bid with the Bureau of International Expositions for the right to stage an Exposition (Expo) on the Gold Coast. Subsequently a 295 ha (approximately) site bounded by the Pacific Highway, Foxwell Road and Cunningham Drive, Coomera, was selected as the preferred location for staging the event - should it proceed. The owners of land forming part of the site were advised, in early December 1996, of the State's interest in negotiating to acquire their land. Accordingly, a number of owners entered into negotiations with the State and some sales were successfully concluded. The claimants here however were unable to reach agreement with the State on a purchase price. Resumption of the land then took place, by agreement, on 24 October 1997.

Resumed Land

The resumed land comprises two non-contiguous lots located fronting, on the western side, Cunningham Drive, Coomera, northerly of Foxwell Road in close proximity to the east of the Coomera Railway Station. The railway was recently constructed and opened in 1996.

Lot 37 is vacant land while Lot 39 accommodates a substantial dwelling. The land is now within Gold Coast City previously having been within Albert Shire before the amalgamation of those local governments in March 1995.

Locality

Located to the south-west of the railway station near adjacent to the Pacific Highway is the Dreamworld Theme Park. To the north and north-west of the station to the Pacific Highway is a large tract of undeveloped land approved to be developed as a residential estate with associated golf course, commercial centre and entertainment-orientated uses. For the purposes of these matters that proposed development will be referred to as "Coomera Woods". Easterly of Cunningham Drive along Foxwell Road land use is currently dominated by its original rural- residential style subdivisional development into lots of about 3 ha.

Nature of Land

Lot 37 is of irregular shape, physically comprising an elevated ridge running north-south through its middle with easy to moderate slopes to the road frontage and towards the rear.

Lot 39 is of near rectangular shape, physically comprising an elevated east-west ridge along the northern boundary with southerly and south-westerly slopes which are variously described as ranging from "moderate" to "steep".

Both lots are elevated above the railway station to their rear.

Services

Electricity and telephone services were available to the lands at the date of resumption. Town water and sewerage reticulation will not be available until mains infrastructure is extended into the locality.

Roads and Access

Cunningham Drive is a bitumen strip sealed roadway with gravel shoulders, connecting at its southern extremity to the bitumen sealed Foxwell Road. Physical access onto the lands is easy.

Town Planning Controls

Town planning controls contained in the 1995 Albert Shire Planning Scheme remained in force at the date of resumption.

Zoning

The resumed lands were zoned "Future Urban". Approval had been granted for rezoning

part of the lands to "General Commercial" and part to "Residential Multi-Unit".

Strategic Plan

The planning scheme included a Strategic Plan in which the preferred dominant land use

(PDLU) designation of the general locality was "Urban Residential". The resumed land was

included within a major business centre PDLU designation.

The stated intent of the major business centre designation was:

"Major business centres are to serve populations ranging from 30,000 upwards and are intended to accommodate higher order retailing, business, administrative, entertainment, cultural and other community facilities."

In s.1.4.12.2 of the Strategic Plan, Major Business Centre Objective 1 Implementation Criterion (iii) relates to Coomera and states:

"Coomera is a new centre intended to be comprehensively planned and developed in association with the proposed railway station. It will provide shopping, commercial and service functions more (sic) planned population growth in the Coomera area. Its fullest development will have to await substantial growth in this area, which may not occur straight away. Depending on development staging either Helensvale or Coomera will develop to meet the needs of both areas until population growth reaches a level that supports major facilities at both centres."

1997 Draft Strategic Plan

A proposed new Strategic Plan for the whole of the new city of Gold Coast was placed on

public exhibition in the latter half of 1997. In this plan, the status of the Coomera Business
Centre is upgraded from major business centre to regional business centre and states:

"Coomera is designated as the major centre within the Gold Coast/Brisbane corridor south of Beenleigh. The centre is sparsely developed at present, but is central to the preferred growth front located to the north-west of the Southport/Surfers Paradise area, and is strategically located on the Brisbane/Gold Coast railway corridor and the Pacific Highway. Theme parks provide the major source of employment in the centre at present, however a wide range of employment generating developments will be supported by Council. The exact footprint of the Business Node will be shown on the Coomera Development Control Plan. The World Exposition (Expo) bid for Coomera, if successful, will fast-track development in this centre."

Development Control Plan (DCP)

The resumed land is contained within the area currently subject to the 1995 Albert Shire

Planning Scheme's DCP 5 - Albert Corridor.

Although the Coomera Town Centre designation is depicted symbolically on the DCP map, there is no dispute between the parties as to the subject lands being included in the intended town centre.

Coomera Charrette Planning Study (Charrette)
In 1995 Albert Shire Council conducted an interactive community planning exercise, a

Charrette, in respect of Coomera. The Charrette has no statutory basis but its principles have been used by Gold Coast City Council in the assessment of planning applications. As part of the exercise a structure plan (indicative plan) was produced for the town centre. That plan indicated mixed commercial and residential uses on the eastern side of the railway station. The subject properties were indicated as being within the residential medium density area. The actual rezoning approvals which include a commercial content were, in that sense, in conflict with the indicative plan.

Rezoning Approvals
An application for rezoning of part of Lot 37 from "Future Urban" to "General

Commercial" was made in 1995. The application was subject to Planning and Environment Appeal No. 440 of 1995 on a deemed refusal basis as the application and others in the area had been deferred by Council pending finalisation of the Coomera Charrette and any resultant DCP. The appeal had been dealt with by Council in conjunction with two other appeals for adjacent land (Lot 38 and Lot 1). Following negotiations a consent order was obtained in relation to the application approving the rezoning of that part of the land subject to the application to the "General Commercial" zone and part to the "Residential Multi-Unit" zone. It was ordered by consent that the application be approved subject to an extensive series of conditions, including finalisation of a Plan of Development for the site and submission of a metes and bounds plan for the area to be rezoned. The rezoning application related to about two-thirds of the area of Lot 37. There was no dispute that the potential of the remaining area of Lot 37 was for rezoning to "General Commercial". In the valuation exercise, the State accepted, and there was no dispute from the claimants, that the rezoning potential of Lot 37 was as follows:

19,500 m²	-	"General Commercial"
10,500 m²	-	"Residential Multi-Unit".

An application to rezone the whole of Lot 39 from "Future Urban" to part "General Commercial" and part "Residential Multi-Unit" was submitted to Gold Coast City Council in 1996 and approved subject to a number of conditions on 7 March 1997. The approval required submission of a Plan of Development and submission of metes and bounds description for the areas to be rezoned. In its valuation exercise on this land the State accepted, and there was no dispute from the claimants, that the rezoning potential of Lot 39 was as follows:

9,015 m²	-	"General Commercial"
21,035 m²	-	"Residential Multi-Unit".

Town Planning Evidence

Town planning evidence was given by Ms S.M. Vigar for the claimants and Mr M.C. Challoner for the respondent. There was no conflict of opinion in that the future development potential of the lands had been established through their inclusion within the area identified for the future Coomera Town Centre.

There were differing views as to the appropriateness of the rezoning approvals which had been granted. Mr Challoner held the opinion that exclusive multi-unit residential use would have been more appropriate, given the elevated sloping nature of the land and its location relative to the station and the overall town centre as had been identified. In his opinion, residential use would have maintained what he interpreted to be indicated by the Charrette planning study.

Ms Vigar was of the opinion that it would be wrong to place too heavy a weight on the indicative plan of potential uses in the Charrette. In her opinion it could be expected that the indicative plan would alter significantly when a specific DCP was prepared for the Coomera Town Centre. She saw mixed use development as being a principle emphasised in the Charrette for the whole of the town centre including the area easterly of the railway station.

In the end result, there was no dispute that while the acquisition of the subject and adjacent lands by the State had terminated the planning procedures necessary to put into effect the approved rezonings, those approvals could be accepted as establishing the highest and best potential use of the land as being for mixed "General Commercial" and "Residential Multi-Unit" development.

The differing town planning opinions as to the weight which should be placed on the development potential of various lands within the identified town centre as suggested in the Charrette indicative plan, led to opposing views as to the manner in which the town centre might be expected to evolve. Mr Challoner had no doubt that the Foxwell Road frontage lands and the area westerly of the railway station, both north and south of Foxwell Road linking with the Dreamworld site was both topographically and geographically best suited for any eventual intense retail and commercial town centre development if and when demand warranted such development. He interpreted the objective within s.11.2 of the Charrette - "to encourage the development of a strong regional shopping and commercial centre with strong connectivity to the Dreamworld Theme Park" - as dictating that the business and commercial development should be mainly concentrated to the west of the railway and as shown on the indicative plan (Figure 16) in the Charrette.

As I understood Ms Vigar's evidence, she did not identify any particular location within the designated town centre as being more or less favourable, from a planning point of view, for any business component of development. Ms Vigar was the principal consultant involved in the preparation of the Albert Corridor DCP. It was her evidence that Coomera had been consciously selected as the primary regional business centre for the Albert Corridor Area (that part of the then Albert Shire straddling the Pacific Highway from the Albert River in the north to Gaven in the south). The Coomera Railway Station site had been intended to be the focus for the town centre development, which in turn had been intended according to Ms Vigar, to be "a mixed use centre, so that it is a 24-hour centre that includes business and residential uses. It has a wide range of higher order uses - uses that would serve the region and the regional population including educational uses and entertainment uses, commercial, retail and residential uses". She did agree that the initial stages of development of the town centre area would be expected to identify with the Foxwell Road frontages. However she disagreed with the opinion of Mr Challoner that the subject properties would not be expected to be developed individually "but only as part of a larger development which can overcome the topographical constraints of slope and drainage". In her view, the two subject properties were "really no different to any of the other smaller properties within the town centre area ... each of those properties will need to be planned in context of the surrounding area".

Ms Vigar said that it had been deliberate when no specific site within the town centre had been nominated, for example, as the regional retail centre. She said that one of the key concepts in the Strategic Plan and as elucidated in the DCP, was that "the town centre must be more than just a shopping centre and that it's important that the full range of commercial uses and residential uses and community facilities be there, that it's not just a freestanding regional shopping centre". While she accepted that some areas would have more commercial than residential content, the intent of the DCP was that there would not be areas that are solely commercial or retail. Ms Vigar agreed that while it was possible to develop a mixture of commercial and residential uses on sloping topography such as on the subject lands, the flatter lands westerly of the railway, either north or south of Foxwell Road, would present less construction problems for a shopping centre type of development. She held the opinion that when the specific Coomera DCP was completed, it would encourage the use of the "Comprehensive Development" zone. She expected that the Foxwell Road frontage lands, currently zoned "Future Urban", would be included within the "Comprehensive Development" zone with precincts providing for a mix of uses, but not exclusively commercial development. Realisation of Town Centre Development Potential

The Coomera Railway Station came into service in 1996. There was no town centre orientated development in proximity to the station at the date of resumption. The existing township development including convenience shopping was located well to the south adjacent to the eastern side of the Pacific Highway frontage and southerly of the Dreamworld development.

The Albert Corridor DCP described the Coomera Sector as one of six planning sectors and one which will have the largest population of the communities within the DCP area (65,000- 70,000 persons). Within the town centre, it was envisaged, for planning purposes that up to 70,000 m² of retail floor space and 37,300 m² of commercial and office floor space could be required.

Another sector was the Helensvale Station Sector where in that town centre it was envisaged that up to 33,600 m² of retail floor space and 17,900 m² of commercial and office floor space could be required, to cater for an ultimate population in the order of 35,000-40,000 persons. The evidence was that already there is about 5,000 m² of retail floor space in the Helensvale Sector and a proposal for a further 38,000 m² (scaled down from 59,000 m²). There are objections to the proposal and the Council has indicated its opposition to any development in excess of that envisaged by the DCP.

It seems to be common ground amongst those experts who addressed this competitive factor that a retail development even of the order envisaged in the DCP at Helensvale would have an impact on the development potentiality of the Coomera Town Centre, at least in the short to medium term. If the Helensvale applicant was successful in having the scaled-down proposal approved, that would of course, have even greater impact.

The DCP had envisaged that residential development at Coomera would commence during the period 1993 to 1998 with town centre commercial/office/retail/industrial development taking place between 1998 and 2008. Residential development had not eventuated, at least in the vicinity of the town centre east of the Pacific Highway. According to Ms Vigar that was a direct result of the failure of the significant Coomera Woods proposal to commence as had been planned and expected. That failure had been caused, it seems, by a dispute regarding the contractual ownership of the development site which had led to as yet unresolved litigation. Ms Vigar accepted that the locality had, and still needed a "kick-start" such as would have been provided by the Coomera Woods proposal. Once a development front had been opened, necessary developmental infrastructure such as the provision of water and sewerage could have been expected to create population increase and demand for town centre amenities. She agreed that a primary trade area population of 30,000 persons could be accepted as the necessary support for a town centre of regional status.

The respondent had engaged the services of Mr J.M. Norling, Associate of the Institute of Chartered Accountants; Chartered Management Consultant, Institute of Management Consultants; Member, Market Research Society of Australia; who holds the professional qualifications of Bachelor of Commerce. Mr Norling practises as an "urban development consultant". It was explained that "economic and urban research", the field in which Mr Norling practises, is the discipline of applying economics, market research, geography, statistics and finance to "solving property solutions". Key elements of economic and urban research were said to be the matching of demand (population needs) to supply (competitive developments) and an understanding of what is needed to ensure successful operation of property developments.

Mr Norling's brief was to provide an assessment of the need for commercial and residential development of the subject lands. The objectives of his study were identified as being to:

• develop time frames for commercial development on the subject land;

• determine the extent of such development;

• develop time frames for any residential development on the subject land;

• determine the extent of such development;

• indicate the likely future development elsewhere in the vicinity of the Coomera Railway Station; and

• investigate distinguishing features between the subject lots (i.e. 37 and 39) from the nearby Lot 28.

In order to achieve the objectives of this study, Mr Norling stated that the following research tasks were undertaken and data sources utilised:

• inspection of the site and surrounding land;

• review of the Strategic Plan, Development Control Plan No. 5, and the Coomera Charrette Planning Study 1995;

• definition of a catchment area for commercial facilities at Coomera;

• estimation of the current population within the catchment area, based on the results of the 1986, 1991 and 1996 Australia in Bureau of Statistics Censuses and dwelling commencement data and building approval data to June 1997;

• projection of the population and household numbers within the catchment area on the basis of historical growth trends, assessment of the land available for future residential development and known information relating to the status of various residential estates in the area;

• assessment of the demographic and socio-economic characteristics of the catchment area population;

• examination of the results of the 1993/1994 ABS household expenditure survey; and

• discussions with town planning officers of Gold Coast City Council to obtain information concerning the status of land identified as urban within the catchment area.

Based on the location of existing and proposed competing centres, existing and proposed changes to the immediate road network, the location of natural and engineered boundaries and the boundaries of Census Collection Districts, Mr Norling adopted a defined Total Trade Area for the town centre, made up of a Primary Trade Area and a Secondary Trade Area. The Total Trade Area population had been estimated as 5,730 persons and 1,773 dwellings in June, 1986. Based on ABS Censuses, these figures increased by an average 7% per annum to June, 1991, then 12.2% per annum to June, 1996, to be 14,265 persons and 5,073 dwellings. In the year to June 1997 the estimate of increase "based on building approval information" had slowed to 4.5%"due to a depressed residential market during this period". Mr Norling then carried out population projections for the period to 2011. He found it difficult to prepare "accurate projections" for the trade area due to the time period and the uncertain status of many landholdings in the Primary Trade Area. He estimated that the population in the Secondary Trade Area will near capacity by 2011 and that the population in the Primary Trade Area "will increase in the future as a result of capacities being reached elsewhere and the resolution of a number of constraints to the Area". He estimated that the Primary Trade Area population will, in 2011, approximate one-quarter of capacity "consistent with Council's opinion that capacity will not be reached in this area for another 40 years".

He predicted that the current population (on his estimate for the Total Trade Area) of 14,903 persons was "expected to increase at 6.2% per annum over the next 14 years". He expected that Primary Trade Area population would reach 15,000 persons by 2011 with 19,500 persons residing in the Secondary Trade Area by that date. He said that during the early stages of the development of the Coomera Town Centre the critical population is that within its Primary Trade Area on the basis that the population in the Secondary Trade Area would not be attracted to Coomera until a sub-regional centre was developed. He suggested that the likely staging of Coomera Town Centre would be as follows, including relevant land areas for retail and associated commercial uses:

Neighbourhood Centre - 4,000 m² floor space - population threshold 10,000 - year 2005 -

3 ha.

District Centre - 10,000 m² floor space - population threshold 20,000 - year 2012 - 6 ha.

Subregional Centre - 20,000 to 30,000 m² floor space - population threshold
40,000/60,000 - year 2016 - 13 ha.

Regional Centre - 50,000 m²+ floor space - population threshold 120,000 - year 2030+. Mr Norling believed that "the indicative plan contained within the Coomera Charrette

Planning Study 1995, represents a likely layout of the retail and commercial facilities at capacity".

Depending upon achievable plot ratios, he estimated that the area of commercial land proposed by existing zoning approvals, on the subject lands alone, would represent if developed as retail, 10% of the total space envisaged in the DCP or if developed for office facilities, 46% of the total commercial space designated for the town centre. He did not accept that quantum of development as being achievable because in his opinion:

• the majority of retail and commercial activity will initially develop to the south of the station;

• any retail and commercial facilities east of the railway will initially develop on the Foxwell Road frontage (Lots 16 or 28);

• the subject lands do not have existing or proposed major road exposure and are of "steep terrain";

• retail or commercial development on the subject lands "would need to rely upon servicing a population which lies to the north or east of the railway station ...".

Mr Norling did not think that the commercial content of the subject lands would ever be developed. Even if it was however, such development would not, in his opinion, be supported by demand until after 2011. He did offer the opinion that the subject lands were well suited to residential development. However, "despite the subject lands being currently suitable for medium density residential dwellings in the fullness of time, they will not be successful in attracting suitable tenants or owner occupiers until the range of basic facilities around the Coomera Railway Station is significantly enhanced. This form of development is unlikely to be supportable on the subject lands before 2011."

Mr Challoner expressed the opinion that despite the rezoning approvals on the subject land being in conflict with the Charrette plans, those approvals "undoubtedly suggest that their highest and best use is for medium density residential and commercial purposes. However the level of development in the area suggested development for such purposes was premature at the date of acquisition and could well be premature for some years to come. This is a matter which has been addressed in detail by Mr Jon Norling".

Ms Vigar agreed with Mr Norling's opinion that it must be considered likely that the early stages of the town centre will be developed in the vicinity of the station and that other things being equal land that has the highest visual exposure and is easier to develop (has less engineering constraints) is likely to be developed first.

Apart from not agreeing with Mr Norling's interpretation of the intent of the DCP, and his findings relative to the development potential of the subject land, Ms Vigar was of the opinion that his population projections were too low and that it was "extremely likely" that population levels will be much higher than projected for 2011. She said that historically development on the Gold Coast has been subject to intense development fronts in particular areas which move on as an area is built out, providing extremely high percentage growth rates in new areas as new suburbs are created from "green field" areas.

It has been necessary to discuss at some length some of the evidence of Mr Norling. It was clear that the respondent placed considerable weight on his opinion which appeared to be supported by in-depth research. Nevertheless, forecasts of the type in which Mr Norling has engaged in this exercise, are beyond proof. As Mr Norling himself said, his projections could be either exceeded by "actual reality" or reality would fall short of the projections.

Ms Vigar had the need to consider patterns of local growth as an ingredient in her specific town planning exercise associated with the 1995 DCP. Clearly the DCP predictions for residential growth in the Coomera sector were far too optimistic. On her evidence, that has been largely due to the delays associated with the Coomera Woods development proposal. It seems to be well known that there has been and remains internal dissent between those involved in that development. The very large Coomera Woods holding dominates the growth potential of the sector and had its development proceeded as planned in the early nineties, the statistics on which Mr Norling relied so heavily would have altered and probably quite dramatically so. The Coomera Woods site remains the key to the growth potential in the sector and I am unable to accept that Mr Norling's predictions have given sufficient weight to that potential growth front.

Mr Norling's evidence as to the probable development trends, relative to Foxwell Road and the railway station, is not seen to call on any peculiar area of expertise limited to his profession. Similarly it seems logical to expect that this town centre was so designated to allow progressive growth for a variety of commercially orientated uses to regional standards, well into the future. It is not clear however, when Mr Norling considered the potential of the subject lands, whether he placed any real weight on the intent of the DCP, as interpreted by Ms Vigar, in that the development throughout the whole of the town centre, and on both sides of the railway, was intended to be fully integrated. It seems to me that Mr Norling's opinions as to futuristic potential of specific sites did not, or did not fully, take into account that integration intent but instead concentrated too heavily on location as it presented itself at the present time, heavily favouring the exposed Foxwell Road frontage lands.

When it comes to acceptance of the highest and best permitted use of the resumed lands I will be guided by the evidence of the town planners in preference to that of Mr Norling. However, I accept that the location of the subject lands should be seen to be of an inferior nature, as at the date of resumption, in comparison with other lands in the designated town centre at least for commercial development of a retail nature. Even if the timing of development of the subject lands could not be regarded as being of short-term potential, it would be wrong in my opinion to ignore the zoning approvals which had been obtained.

The question then to be decided is what the resumed land was worth in the marketplace which existed for land of that type, not ripe for development for its highest and best permitted use.

Valuation Evidence

Valuation evidence was given for the claimants by Mr L.S. Parsons, a registered valuer in private practice, and for the respondent by Mr G. Crowley, registered valuer, employed by the Department of Natural Resources.

Mr Parsons' Valuations

The amended claims for compensation under the heading of "Land Value" were based on

Mr Parsons' valuations which were as follows:

Lot 37

3.001 ha "Future Urban" land with rezoning approval

on part to "Residential Multi-Unit" and "General Commercial"

zones @ $40 m² = $1,200,400

Adopt $1,200,000

Lot 39

3.005 ha "Future Urban" land with rezoning approval for

part "General Commercial" and part "Residential Multi-Unit"

Zones @ $33 m² Adopt $990,000

Mr Parsons held the view that as the principle behind the DCP was to designate a town centre with mixed use development throughout, it was preferable to interpret an overall mixed use level of value for the total area of each individual lot. He described each lot as comprising in globo land suitable for future development as part of the town centre.

With regard to Lot 37 he noted that the rezoning approval applied to that part of the land furthest from the railway station. He saw it as reasonable to assume that the balance of Lot 37 being closest to the station had potential for commercial uses. That was the same basis upon which Mr Crowley had made his valuation.

Approximately 30% of Lot 39 was included in the "General Commercial" rezoning approval, the balance being "Residential Multi-Unit".

Mr Parsons interpreted the sales evidence to show "a distinct pattern of (value) decreasing in accordance with the distance from the railway station and transit centre" and increasing for land with zoning or approvals which allowed commercial uses.

Included in the factors to which he had given specific regard in his valuation of the subject lands were the "proposed road patterns which integrate future development on both the eastern and western side of the railway station"; "the timing strategy for development within Coomera as outlined in the Albert Corridor Development Plan" and the "highest and best use being an integrated residential/commercial development with the earlier stages of development comprising the residential component".

The sales evidence on which Mr Parsons relied was common with part of the evidence forming the valuation basis of Mr Crowley. The overall sales evidence will be discussed later. It had been Mr Parsons' opinion that the dwelling on Lot 39 added no value to the land for its highest and best potential use for multi-unit residential and general commercial development.

Mr Crowley's Valuations

Mr Crowley's valuations were as follows:

Lot 37

19,500 m² (commercial component) @ $35/m²
10,500 m² (medium density residential component) = $682,500

@ $16/m² = $168,000

Total	$850,500
Adopt	$850,000

Lot 39

9,015 m² (commercial component) @ $27.50/m²	=	$247,912
21,035 m² (residential component) @ $12/m²	=	$252,420
Total	$500,332
Adopt	$500,000

Mr Crowley also holds town planning qualifications. His verbal evidence indicated real doubt as to the appropriateness of the land having been rezoned for uses as approved, particularly with regard to the commercial content. He suggested that the zoning applications had been speculative with, in his opinion, no demonstrated intent for development to be undertaken. Instead the intent behind the rezoning procedure as he saw it, had been directed towards the marketing of the land in globo. At the time the valuation reports were written, Mr Crowley saw the development potential of the land as being medium to long term. His verbal evidence suggested that had the opinions of Mr Norling been known to him earlier, he would have been influenced to take an even more pessimistic view as to the timing of the development potential of the subject land. He did not see the individual subject lots as having "stand-alone" development potential, but recognised, in his valuation approach, he said, the fact that an aggregation of several lots existed through individual and joint ownership by members of the one family. The benefits of the land being in effective aggregation were said to be related to the correction of the shape disability of Lot 37, together with the potential being available for an overall integrated and staged development. While the existence of the aggregation was accepted by Mr Crowley as having been a positive feature it was not made obvious how that was expressed, in monetary terms, in his valuation.

Regardless of his views as to the commercial development potential of the subject lands, Mr Crowley accepted that the benefit of doubt should be resolved in favour of the dispossessed owners. He had decided to recognise the perception of highest and best potential use as indicated by the rezoning approvals. He saw it as necessary then to apply levels of value to each component of use as approved.

He had applied levels of value which in his opinion were supported by eight sales of land with commercial development potential and two sales of land with residential development potential.

Sales Evidence

The scheme underlying these resumptions is clearly related to Queensland's bid to stage the Expo. There had been perceived a technical difficulty in resuming land for that purpose before the bid had been accepted. It had however, been necessary for a site to be selected and promoted as the proposed venue. On 6 December 1996 when the decision had been made to proceed with the bid, the owners of the individual properties making up the overall selected site were advised of the proposal. There had been no public knowledge of the proposal prior to that date.

There had been sales of two individual lots within the designated town centre in 1994 subsequent to the public display of the town planning scheme which came into force in 1995. Both sale lots were situated fronting Foxwell Road easterly of the railway line. The first had been purchased by Jefferson Properties Pty Ltd (Jefferson). That lot backed onto the eventual eastern car-parking area of the railway station. Approval had been obtained by Jefferson for rezoning to "General Commercial" with consent for partial use as a service station. Plans had been approved in principle for the balance of the land to be developed with a building designed to accommodate retail showroom and commercial tenancies. The second sale to Maxrose Pty Ltd (Maxrose) adjoined the Jefferson property to the north-east, also fronting Foxwell Road. The Maxrose purchase had been shortly after the Jefferson purchase but at a significantly higher level of value. Subsequent to its purchase by Maxrose, part of that land had been rezoned to "General Commercial". Mr Parsons had considered the Maxrose purchase to be at what appeared to be a high level of value although at a time when different circumstances had existed as to the perceived strategic location of that property. There had been in existence a strong proposal to construct a "Gold Coast Motorway" easterly of the Pacific Highway, the route of which passed easterly of the Coomera Town Centre with a Foxwell Road connection. Subsequent to the Maxrose purchase that plan had been "shelved", in early 1996, when the decision had been taken to instead widen the existing Pacific Highway. Nevertheless Mr Parsons saw the Maxrose purchase as one which should not be ignored, being demonstrative of the positive effect of the identification of the town centre in the then proposed DCP.

Mr Crowley had clearly been concerned as to the influence the Maxrose purchase might have had on market value considerations. He was convinced that the sale was not indicative of true market value even at the date of purchase. He had interviewed both the vendor and a representative of Maxrose and "discovered" unusual circumstances which had made the sale "difficult to interpret and verify as correct interpretation of the stated price". His verbal evidence however indicated that the "unusual circumstances" related not only to a vendor finance arrangement at the time of sale but also to subsequent unrelated borrowings against the property. Maxrose had property related development experience, albeit interstate, but Mr Crowley believed that the directors' expectations relative to the potential of the sale property were unrealistic. He saw it as worthy of note that the vendor had "offered the opinion that the price paid was unique and would not be realisable now due to the significant subsequent factors such as the Charrette process and alterations to the South Coast Motorway plan".

Mr Parsons had interviewed the vendor in the transaction and found nothing unusual in the vendor finance arrangement which had involved a substantial deposit and a commercial rate of interest. There had been no default by the purchaser in mortgage repayments. The vendor had informed him that the contract had been otherwise unconditional. The vendor also advised that higher offers had been received at about the time of sale but on conditional contract bases which were unacceptable.

The Maxrose purchase, in July 1994 had been in the amount of $2,500,000 for Lot 28 RP 170754 having an area of 3 ha, showing $83/m². An area of about 1.5 ha had subsequently been rezoned to "General Commercial". Mr Crowley's evidence was that the purchase of the Maxrose land was being negotiated by the State "with the current offer standing at $1,200,000".

The Jefferson property, being Lot 16 on RP 835942 containing 1.289 ha, was purchased for $610,000 (on Mr Crowley's evidence) in May 1994 to show $47/m² for a smaller, better shaped and located site with easier topography than the adjoining Maxrose land. A purchase price of $920,000 ($71/m²), with its "General Commercial" rezoning approval then in place, had been negotiated by the State, the contract date being 15 September 1997.

Mr Parsons suggested that although the rezoning approval had been obtained by Jefferson since the original purchase, the increase in value, shown by the sale to the State, did not suggest that the shelving of the South Coast Motorway proposal had been considered to have any significant adverse effect on values for potential commercial sites in the town centre.

To the west of the railway, the following purchases had been negotiated by the State:

(ii)      Lot 23 on RP 835942 - 2.986 ha - 11 September 1997 - $1,575,000 ($53/m²) - purchased from Domo Nominees Pty Ltd (Domo)- zoned "Local Business". The north-eastern corner of Lot 23 adjoins the railway station. Mr Crowley's evidence was that the existing zoning was inappropriate, having been effected many years prior to the DCP. His evidence was not in conflict with that of Ms Vigar insofar as he saw the appropriate zoning of land in the location of the Domo land as being "Comprehensive Development". However, he was at odds with Ms Vigar in that he did not see a mix of commercial/residential development as being appropriate or such mixed development as being the intent of either the DCP or the Charrette for this location. Mr Parsons also saw a stand-alone "Local Business" zoning as being inappropriate for the Domo land although he interpreted the sale to the State as indicating a premium in value having been paid due to its existing zoning. In his opinion, for a rezoning proposal not to be seen as being in conflict with the intent of the DCP, some residential component would need to be included in any rezoning and development proposal.

This sale land was described by Mr Crowley as being at low to medium elevation but with good drainage. Mr Parsons described the land as initially falling below the Foxwell Road frontage, falling from west to east and intersected by a gully. He saw the need for earthworks and drainage. The main body of the site is separated from the railway land by a surveyed lot severed from but in the same holding as the Coomera Woods aggregation.

It was Mr Crowley's evidence that an earlier auction of this site had resulted in it being passed in at $1,200,000 with "the asking price understood to be about $1.5 million".

(iii)     Lot 33 on RP 170754 - 3.54 ha - 21 August 1997 - $1,520,000 ($43/m²) - purchased from F and M Weightman - zoned "Future Urban" with no rezoning approvals. This land adjoins (ii) above, to the west. Mr Crowley described the land as being at medium elevation, generally level, falling away to the east at the rear, developed with a 252 m² low-set brick dwelling and outbuildings with "no added value in the price paid". Mr Parsons' description of the land was generally similar to that of Mr Crowley.

(iv)     Lot 34 on RP 170754 - 3.4 ha - 21 August 1997 - $1,400,000 ($41/m²) - purchased from F and M Weightman (Mr Crowley) or M Wilson and P Weightman (Mr Parsons) - zoned "Future Urban" with no rezoning approval. This land adjoins (iii) above to the west. Mr Crowley described the land as being at low to medium elevation with an easy rise to the rear while Mr Parsons described it as being gently undulating.

Other Commercial Sales

Other sales referred to by Mr Crowley in his valuation basis were as follows:

(a) Lot 2 on WD 6004 - 3.253 ha - 22 May 1997 - $1,600,000 ($49.18/m²) - zoned "Commercial Industry" - sold by Force 10 Holdings Pty Ltd to the State of Queensland. This land comprises an irregular shaped lot with about 330 metres frontage to the Pacific Highway. Mr Crowley described the land as comprising a filled and level area on the southern boundary rising gently to a ridge of medium elevation. Mr Crowley had considered this land to be superior pro rata to the subject land due to location, topography and exposure to the highway.

This land was not included in the proposed Expo site, although it adjoined it to the west. It was required by the State for road purposes.

Mr Parsons had not included the sale due to its zoning being inferior to the "General Commercial" component of the subject properties together with a physical constraint caused by a gully severance. His firm had been involved in the settlement negotiations. While there were difficulties in comparing the site and its potential with the subject sites, he believed the level of value shown by that settlement could only support his valuation of the subject lands.

(b) Lot 3 RP 888004 - 6,161 m² - 22 July 1997 - $650,000 ($105.50/m²) - Norfolk Estates Pty Ltd to S and K Harris. This land is zoned "Local Shopping" and is situated within an established residential estate at Ormeau, with all services available. Mr Crowley described the land as being considerably superior pro rata to the commercial component of the subject lands due to size, topography and availability of services.

Mr Parsons did not accept that it was possible for a cogent comparison to be made, the subject land being within a designated town centre and the sale land being a site in a small convenience shopping centre.

(c) Lot 4 RP 911286 - 3,147 m² - 24 September 1997 - $340,000 ($108.04/m²) - Leda Developments Pty Ltd to Likala Pty Ltd. This land is a stand alone convenience shopping site zoned "Local Shopping" situated at the entrance to a developed residential estate westerly of the Pacific Highway at Coomera. Mr Crowley saw the land as being considerably superior pro rata to the commercial component of the subject land due to size, location, established surrounds, topography, availability of services with immediate development potential.

As with (b) above, Mr Parsons did not accept that a cogent comparison of this land with the subject lands was possible.

Sales Evidence - Residential Component

Mr Crowley's valuation of the residential component was based on the evidence provided by the sales of two adjoining lots in Beattie Road, Coomera, to the one purchaser, and another sale in Days Road, Coomera. Details of those sales are as follows:

Beattie Road aggregation, with approval for "64 Zero Lot Line Housing or 94 Town Houses" - July 1995 for $650,000 including dwelling, showing $17.70/m² (Mr Crowley $18.21/m²) as a development site excluding dwelling. Mr Crowley described the sale land as considerably superior pro rata to the residential component of the subject lands, "due to services and terrain".

Mr Parsons' investigation revealed that the Beattie Road land was zoned "Future Urban" with rezoning approval to "Special Residential" with maximum density of 94 units. He had been advised that development of the site would require 37,000 cubic metres of fill at an estimated cost of $300,000. Payment of drainage infrastructure works of $37,801 was also required. The land was under contract of sale at the time of the hearing for $850,000. That contract price, with the site developed with fill and drainage would show a value of $32.37/m². Mr Parsons considered the subject lands to be superior due to shape, topography, potential for part commercial development, and higher approved residential density as part of the designated Town Centre.

Mr Crowley's response was that the subject land had no water or sewerage services capable of connection in the absence of other development in the locality and earthworks would still be required to cut and level the land. His comparison had been made on an in globo basis not as site improved ready for development.

Lot 1, Days Road, Upper Coomera ($14.62/m²) to the Corporation of the Synod of the Diocese of Brisbane. The land is situated immediately to the west of Abrahams Road at its intersection with the western alignment of the Pacific Highway reserve. Mr Crowley described the land as comprising "an easy low ridge top to low wet areas; has good access; to be developed as a school; remote to services". In his opinion "the sale is superior pro rata to the residential component" of the subject lands "due to easier topography".

Mr Parsons' evidence was that the site had been purchased contemporaneously with the adjoining Lot 2 containing 7,705 m² for a total price of $1,550,000. The purchase price had been subsequently apportioned as $1,200,000 for Lot 1 and $350,000 for Lot 2. He said the sale had been conditional on rezoning of Lot 1 to "Special Facilities (Educational Establishment, Church and Child Care Centre)" and Lot 2 to "Special Facilities (Service Station and Shop)". Mr Parsons accepted that the apportionment of the sale price was fair. In his opinion the development potential of Lot 1 would otherwise have been limited to a special residential intensity of development and the price paid was related to that potential. However, its potential was deleteriously affected by the topography with, in his opinion, an area of about 35% of the total being low lying and intersected by a gully as was shown on a tendered contour plan. In his opinion the residential components of the subject lands were difficult to compare with the sale property but were significantly superior due to location within the town centre, potential for earlier availability of services and higher residential density potential.

Mr Parsons also provided the evidence that in September, 1997 the purchaser of Lots 1 and 2 had contracted to purchase the adjoining lot to the south being Lot 97 (to become Lot 700 on SP 103978 - subject to resurvey after Main Roads resumption - containing 2.972 ha for $740,000, zoned "Special Residential". The sale was however subject to rezoning of approximately 9,000 m² adjoining Abrahams Road (and adjoining Lot 2 above) to "Special Facilities (Service Station and Fast Food)". The land had been on the market and listed for sale at $800,000 and Mr Parsons did not believe that the adjoining owner factor had influenced the contract price. The sale would show about $25 per m² overall on a potential mixed use basis. Again, Mr Parsons believed the subject lands were more valuable on a mixed use basis, due to their location within the town centre, higher commercial component and residential density and earlier availability of services.

Mr Crowley's opinion was that if that contract settled, then the 9,000 m² with commercial type rezoning potential would equate the apportioned value for the frontage Lot 2 adjoining (approximately $45/m²) leaving a "Special Residential" component of about $335,000 for an area slightly greater than 2 ha, reflecting a value of about $16/m². Such a result would not have altered his valuation of the residential component of the subject land.

Summary of Sales Evidence and Findings

Commercial Component
Both valuers have relied heavily on the completed settlements in connection with the

State's acquisition process for the proposed Expo site. Mr Crowley has been closely involved with those settlements. Although the degree of Mr Parsons' involvement, if any, with negotiations relative to completed settlements was not disclosed, he was clearly well acquainted with the results of those settlements.

It is generally accepted that the preferred valuation basis for assessments of compensation for land resumed, in connection with a scheme, should be found in the evidence of open market sales of comparable land but free from any suggestion of taint from that resumption scheme. The reasons for such preference were well exposed in this matter. For example, it was submitted on behalf of the State that rather than allow negotiations to stall, it was logical that a generous attitude would have been taken in reaching settlements. If anything, it was submitted the State could have been seen in the circumstance of this uncertain scheme, to have been an over-anxious purchaser, prepared to pay a premium level of value together with amounts for "disturbance items" which the vendors could not achieve in the open marketplace. The State also would have preferred to avoid the costs and risks involved in having the question of compensation litigated. The claimants, not surprisingly, countered that potentially dispossessed owners having had their ability to deal openly in the marketplace effectively sterilised once the announcement of the State's proposal had been made, were forced to either negotiate settlements or be left in the stressful position of uncertainty. It was further suggested that such owners were in a comparable if not worse position than the State when it came to the risks, delays and costs involved if the decision had to be taken to litigate the question of compensation.

As Hardie J found in Woollams v. The Minister (1957) 2 LGRA 338, there is no principle of law which requires settlements between a resuming authority and dispossessed owners to be rejected completely as evidence of value. It is, in the end result, a question of the weight which should be given such evidence particularly if other evidence is available. It is in the circumstances where directly comparable evidence is not available when there becomes a need to give weight to such evidence.

Jacobs J in Celtic Agencies Pty Ltd v. South Australian Land Commission (1978) 40 LGRA 172 at p.175 said:

"There is ample authority, which I need not cite, for the proposition that other transactions with the acquiring authority must be viewed with great caution if they are sought to be used as a measure of market value but they are not inadmissible as evidence. Particularly is that so where, as here, there is virtually no other evidence of value in the locality at the relevant time, since the advent of the commission seems to have driven private developers from the market."

In these matters it seems to me that Mr Crowley's opinions relative to the worth of the commercial Jefferson land has been supported by untainted evidence. The Maxrose sale is not of specific assistance, except to highlight the volatility of a market when potential is recognised, but realisation of that potential is futuristic. While Mr Parsons rejected the evidence of the two small, fully developed "Local Shopping" sites in the residential suburbs within the Albert Corridor, there is, as I see it, some upper limit check provided to give support to the Jefferson settlement albeit not on a directly comparable basis. Similarly, while it came in a roundabout fashion, the evidence relative to the apportionment of value in the sale of Lot 2 in Abrahams Road adjacent to Lot 1 Days Road, also seems to offer broad support to the Foxwell Road settlements.

For what it is worth, I have gained little assistance from the evidence provided by the negotiated settlement between Force 10 Holdings and the State. That settlement was in connection with a road resumption and Mr Crowley was not directly involved. Mr Parsons seemed to have a more precise knowledge of that settlement and the nature of the land involved. While he believed the negotiated level of value supported his valuations, he clearly had not seen the settlement as providing basic evidence of value, when his valuation was being prepared.

Mr Parsons, in cross-examination, was asked to apportion his applied "mixed-use" values to the commercial and residential components of each lot. His suggested apportionment was as follows:

Lot 37

Overall mixed use value	(30,010 m²)	-	$40 m²
Apportioned as:

Commercial component	(19,500 m²)	-	$50 m²
Residential component	(10,510 m²)	-	$35 m²

Lot 39

Overall mixed use value	(30,050 m²)	-	$33 m²
Apportioned as:

Commercial component	(9,015 m²)	-	$45 m²
Residential component	(21,035 m²)	-	$30 m²

Mr Parsons accepted that the Foxwell Road frontage commercial lands were superior through exposure, and generally more level topography, to the commercial components of the subject lands. He did not accept, as Mr Crowley had done, that the Domo or Weightman properties, and properties westerly of the railway would be regarded as being within the retail core of future town centre development. He believed that rezoning applications for these lands would be in conflict with the intent of the DCP, unless such applications provided for mixed use, including residential, development. He accepted that the levels of value shown by the Jefferson, Domo and Weightman settlements were reasonable. He did not accept that the level of value shown by the Weightman settlements, for example, should be regarded as indicative of pure commercial development potential, but instead mixed use development potential.

Through Mr Parsons was tendered a copy of the indicative development proposal which had accompanied the Expo land. That showed development linked across the railway with the main entrance off Foxwell Road in the west but the central focus and pavilion areas to the east. As he understood it, the Expo siteworks would involve the cutting and levelling of the slopes in the east and the filling of the low areas to the west. He envisaged the Expo development as being complementary to the intent of the DCP, with integrated development throughout the town centre, focusing on the railway station.

The difficulty that I have with the evidence of value provided by the Foxwell Road settlements is that Mr Crowley was adamant that each settlement was concluded on the basis that the relevant lands each had full commercial development potential. I am able to accept that the Jefferson land had the earliest and stand-alone commercial development potential. The Jefferson settlement showed $71/m² for a relatively small site area. The Domo land was zoned "Local Business", although each of the relevant experts saw that as an inappropriate zoning, the "Comprehensive Development" zone being more appropriate. The difference between the parties was that such rezoning was seen by the claimants and their experts to incorporate mixed uses, while the respondent's experts saw the land westerly of the railway as eventually being the retail core of the town centre, but with no stand-alone development potential in the short term. The Domo settlement reflected $53/m². Strangely Mr Crowley warned that it would be wrong to make comparisons with that site strictly on a unit of area basis, although he agreed that it had not been valued on a site basis. He referred to the excision of an area of back land for railway purposes as having some influence on the pro rata value, but the relevance of that was not clear. Then there were the Weightman settlements at $43/m² and $41/m² respectively for Lots 33 and 34, both lots being zoned "Future Urban" with no rezoning approvals in place. Those lots were each of about the same size, and about 15% larger than the Domo site. Lot 33 adjoined Domo to the west and was, as a consequence, further from the railway station. Lot 34 adjoined Lot 33 to the west. Two factors were identified as accounting for the $2/m² difference between Lots 33 and 34 - the increasing distance from the railway station and minor physical inferiority of Lot 34. However, the evidence suggests that the Domo land is inferior in physical quality to both.

If it was to be accepted that the zonings of the Domo and Weightman lands could be disregarded for the reason that they all had rezoning potential for the same highest and best use as commercial lands, then regardless of the distance from the railway station, either the Domo settlement seems high in comparison with the Weightman lands or the Weightman settlements were low in comparison.

It seems more likely that the existing "Local Business" zoning of the Domo land was seen, if not by Mr Crowley, at least by Domo to provide specific development potential. It would follow that if the Weightman settlements were correct in comparison, the uncertainty of specific rezoning approval, certainly to allow total commercial development, would be one of the factors causing the prima facie disparity.

I am able to accept that a significant component of commercial development would attach to the potential of the Weightman lands, but it could not be assumed, in my opinion, that total overall rezoning to allow pure commercial use, was devoid of risk. It was Mr Crowley's evidence that the Weightman settlements and particularly that of Lot 34, afforded the best evidence for the valuation of the commercial components of the subject lands.

I prefer Mr Crowley's approach in identifying the two components of value, to Mr Parson's broader mixed use basis. I also am persuaded that the apportioned analysis of the mixed use value applied by Mr Parsons has revealed an over-valuation of the commercial components. That would be heightened if the apportioned value to the residential component was also too high.

I have decided to increase marginally Mr Crowley's valuation of the commercial component of the subject Lot 37, on the basis that for like with like comparison, the Weightman settlements were not of land with specific "Commercial" rezoning approval. That would also apply to the commercial component in Lot 39. Also with regard to Lot 39, I have concluded that although the commercial component is further removed from Foxwell Road, it is of a relatively smaller area, and with similar potential for integrated development as most of the designated town centre lands.

I will adopt $37/m² for the commercial component in Lot 37 and $32.50/m² for the

commercial component in Lot 39.
Residential Component

Mr Crowley used the two sales in Beattie Road and Days Road as his valuation basis for the residential component. Mr Parsons, having adopted the "mixed use" basis had no specific evidence of value for the residential component.

I did not find Mr Crowley's basis to be convincing. The later contract on the Beattie Road lands indicated that there had been significant movement in the market for that land after the earlier date of sale on which Mr Crowley had relied. His evidence was that he had been constrained by the Beattie Road sale as to finding the upper level of value which could reasonably be applied to the subject lands.

Mr Parsons was able to provide another picture as to the relative quality of the land involved in both sales used by Mr Crowley. I found unconvincing the opinion of Mr Crowley that land requiring significant filling and drainage, as did both the sale lands for full development, should be regarded as more attractive land for development for residential purposes than elevated sloping land - requiring shaping by cutting and levelling. I was not convinced that the Beattie Road land for example was physically superior to the subject land which was elevated, enjoying outlook. However the Beattie Road location must be regarded as having potential for earlier development due to its location relative to existing development and services infrastructure.

It did not appear to me that Mr Crowley had taken a generous attitude when comparing the much larger size and the lower density of potential development of the Days Road land in comparison with the individual subject lands. The ability of the individual sites off Cunningham Drive to offer integrated development through amalgamation was first conceded by Mr Crowley as being an advantage but an advantage which seemed to have been then negated, in Mr Crowley's opinion, by the resultant amalgamated size factor.

Although not directly comparable and better fitting a "mixed use" check, I saw the evidence which Mr Parsons provided relative to the Abrahams Road land (Lot 97 containing 2.972 ha) to be of some assistance in considering the residential component valuation evidence. The Abrahams Road contract, on analysis, would suggest a residential level of value of no less than (on my calculations) $14/m² for that land, with no services available and lesser density development potential. Although the topographical features of the subject land seemed to be of concern to Mr Crowley, I found his general attitude towards the more complete evidence introduced through Mr Parsons relative to the topography of the residential sales, to be somewhat inflexible.

However, I found Mr Parsons' apportionment of value to the residential component of the subject lands, even on the better evidence he provided, in respect of both Mr Crowley's sales, to suggest earlier development potential of the subject lands than could reasonably have been predicted at the date of resumption.

I have decided to adopt a residential component value of $20 per m² for the relatively small area of that classification within Lot 37. I will adopt $17.50/m² for the relatively larger area of residential component in Lot 39.

Residence on Lot 39

Both valuers in their valuation approach found that the highest and best use of both the subject properties related to the permitted uses under the rezoning approvals. Neither found the substantial dwelling on Lot 39 to add any value based on the adopted highest and best use.

The replacement cost of the dwelling was estimated by Mr Parsons to be in the vicinity of $500,000. It was his opinion that if Lot 39 had no higher use potential than as a rural residential site as originally surveyed, the dwelling together with ground improvements including an in ground swimming-pool and tennis court, would add value of $330,000 to the land. Mr Crowley was a little more conservative in his estimate of the added value of the residential improvements, on that same hypothetical basis.

Mr Crowley, in his considerations as to highest and best use, had seen the residential value of the property as being $490,000. On that basis he ascribed a value of $200,000 for the land as a rural residential site.

There was some disagreement between the valuers as to the rural residential site value. Mr Parsons provided evidence of sales of several vacant sites of around 3 ha in close proximity to the subject properties at prices in the range of $285,000 to $325,000. Mr Parsons' inquiries had revealed that at least one of the purchasers had intended to construct a dwelling on the purchased site. Mr Crowley believed that sale prices at that level of value included some premium for future residential subdivision potential.

In Mr Parsons' opinion the improved value of the property if restricted to single dwelling residential use would have been $650,000.

Both valuers eventually agreed that if the highest and best use potential of Lot 39 was unlikely to be realised in the short term then the improved property would be expected to be more attractive in the marketplace than if it was vacant. The added value of the dwelling under those circumstances, it was suggested, might relate to its ability to offset, through equivalent rental considerations, the holding costs of the land in the period until the potential for higher use ripened. Mr Crowley pointed out that as opposed to vacant land, there would be some eventual demolition costs involved at the time that the potential matured. He also pointed out that a substantial dwelling, although apparently of somewhat lesser standard than that on the subject, had also existed on one of the Weightman lots, yet the settlement was effected on the basis that the dwelling had added no value to the land. Also pointed out was the fact that a dwelling of some substance had existed on the Maxrose property but allowed to fall into a state of dereliction since its 1994 purchase.

The level of land value which I have decided to adopt for Lot 39, is the reflection of the present market value of the land with deferred development potential for its highest and best use. Mr Norling's evidence, if accepted, would have that development period deferred for a very long term. Mr Crowley's valuation was intended, as I understood it, to reflect a medium to long-term deferral. Mr Parsons' evidence indicated that he had not discarded the DCP predictions relative to development timing. With Coomera Woods remaining in globo, there seems no basis for anticipation of commencement of the town centre development within the time frame predicted in the DCP. Mr Parsons did, however, hold the opinion that the multi-unit residential development on the subject Lot 39 would precede its commercial development.

It seems to me to be clear that no prudent purchaser of Lot 39 would have envisaged, at the date of resumption, any form of multi-unit residential or commercial development in the short term.

There is evidence before the Court (in connection with the advance payment) that a rental of $350 per week had been charged the claimants by the respondent for a period subsequent to the date of resumption. That would suggest a gross rental value for the property as improved, of $18,200 per annum. After potential vacancies, maintenance and outgoings specifically associated with the residential improvements a net rental value of $14,000 per year would seem to be achievable. The present value of such annual net income for say five years at an investment rate of 10% would be about $53,000 and for 10 years at 10% about $86,000.

In the absence of specific evidence in this regard, it seems to me to be logical that a prudent vendor would ask - and a prudent purchaser pay - a premium for this property over and above its present land value for potential development because of the existence of the substantial dwelling.

I have decided to allow a premium of $2.50/m² for the land area, or $75,000, in

recognition of the existence of the improvements.
Disturbance Items

The Court was advised during the hearing that the respondent agreed to the payment of the amounts in the amended claims for compensation under the headings "Legal and Valuation Fees". Those amounts will be awarded accordingly.

Determination of Compensation

In summary, compensation is determined as follows:

Lot 37

Land - Adopt 19,500 m² "General Commercial"

rezoning potential @ $37/m²	$721,500
- Adopt 10,510 m² with "Residential Multi-Unit"

rezoning approval @ $20/m² say $210,000

Total - Loss of Land	$931,500
Disturbance

Valuation Fees	$6,000
Legal Fees	$5,827 $11,827

Total Compensation $943,327

Lot 39

Land - as vacant
9,015 m² with "General Commercial"

rezoning approval @ $32.50/m²	say	$293,000
21,035 m² with "Residential Multi-Unit" rezoning approval @ $17.50/m²	say	$368,000
$661,000

In practical figures - Adopt $660,000

Improvements

Added value of residential improvements $75,000

Total - Loss of Land and Improvements	$735,000
Disturbance

Valuation fees Legal Fees	$5,500
$5,827 $11,327

Total Compensation $746,327

Interest

Lot 37 - R. & A.M.S. Locke
An advance against compensation in the amount of $850,000 was made on 28 October

1997. There is no evidence before the Court as to the date of payment, if payment has been made by the claimants, of the valuation and legal fees. It is ordered that interest at the rate of 6% per annum be paid by the State on the amount of Nine Hundred and Thirty-one Thousand Five Hundred Dollars ($931,500) for the period commencing on and including 24 October 1997 up to and including 27 October 1997 then on the amount of Eighty-one Thousand Five Hundred Dollars ($81,500) for the period commencing 28 October 1997 up to and including the day immediately preceding the date on which the final payment is made.

Lot 39 - R. & A.M.S. Locke and R.G. & M.L. Macfarlane

An advance against compensation in the amount of $500,000 was made on 28 October

1997. There is no evidence before the Court as to the date of payment, if payment has been
made by the claimants, of the valuation and legal fees.

It is ordered that interest at the rate of 6% per annum be paid by the State on the amount of Seven Hundred and Thirty-five Thousand Dollars ($735,000) for the period commencing on and including 24 October 1997 up to and including 27 October 1997 then on the amount of Two Hundred and Thirty-five Thousand Dollars ($235,000) for the period commencing 28 October 1997 up to and including the day immediately preceding the date on which the final payment is made.

RE WENCK

MEMBER OF THE LAND COURT