McIntyre and North Burnett Regional Council

[2009] QLC 66

LAND COURT

BRISBANE

17 JUNE 1999

In the matters of the determination of the compensation payable consequent upon the resumption by the Chief Executive, Department of Transport, for future road requirements under the provisions of the Acquisition of Land Act 1967 and Transport Planning and Coordination Act 1994 of an area of about 6 hectares being Lot 2 on RP 855863, County of Nares, Parish of Smithfield. (A97-43)

Heavey Lex No 64 Pty Ltd and S Paino
v.
Chief Executive, Department of Transport

J U D G M E N T

Heavey Lex No. 64 Pty Ltd owned a parcel of land of 37.43 ha at Smithfield, north of Cairns. On 23 October 1995 a Notice of Intention to Resume issued under the provisions of the Acquisition of Land Act 1967 (AOL Act) and the Transport Planning and Coordination Act 1994 and a proclamation taking "an area of about 6 hectares … for future road requirement purposes" from that land was published on 22 March 1996. On 7 August 1998 the area of the taking was confirmed by proclamation to be 5.973 ha.
         An initial claim dated 21 August 1997 was lodged by Heavey Lex No. 64 Pty Ltd (Heavey Lex) claiming:
Land, severance and injurious affection               $14,425,000.00
         Disturbance  $587,771.70

There was also lodged on that date a claim from Salvatore Paino claiming:
Value of palms $8,800,000.00
Severance costs $34,100.00

The claim in relation to the palms related to a large number of palm trees growing on the land owned by Heavey Lex before the resumption. Mr Paino is a principal of Heavey Lex and grew the palms on the land under a lease granted to him by the company. The part of Mr Paino's claim relating to the palms was abandoned by him during the hearing, it having been subsumed by an amendment to the Heavey Lex claim. Both claims were heard together with the consent of the parties. In these reasons I will make reference to Heavey Lex where that is required, however, when reference is made to activities undertaken by Mr Paino, it will be understood that that should generally be taken as a reference to Mr Paino acting on behalf of the company.
         During the hearing the Heavey Lex claim was amended on two occasions with the leave of the Court with the result that the claim as finally relied upon by Heavey Lex was reduced to $11,300,000 for loss of land and palm trees. That was based on the reduction of land value before resumption of $1,477,250; and a reduction in the value of palms from $1,734,000 before resumption to $60,000 after. The figure of $11,300,000 for compensation was arrived at after a rounding down of the after resumption values of land and palms. The claim for disturbance by Heavey Lex and severance costs by Mr Paino were not addressed in the evidence heard initially, the claimants wishing to defer consideration of those matters until the question of compensation relating to the loss of land and the palm trees is considered and decided upon.
         The respondent constructing authority assessed compensation at $1,420,000 for loss of land, including severance and injurious affection, and with no amount being provided for with respect to the palm trees on the resumed land at the date of resumption.
         Throughout these reasons I will refer to the land owned by Heavey Lex either before or after the resumption as the "subject land". I will generally also refer to the claimants in plural.
         Smithfield is found to the north of Cairns once one passes over the flood plain of the Barron River. Smithfield is a satellite dormitory suburb situated in what is known as the Marlin Coast area at the foothills of the McAllister Range, which encloses the flat coastal strip of what I might generally refer to as the Cairns region. Smithfield is 16 km north-west of Cairns and is well settled with average to above average residences near the town centre and with large acreage allotments on the more elevated slopes. The suburb boasts the Smithfield Shopping Centre, the emerging Smithfield Town Centre, the James Cook University Campus, a State high school, ambulance, fire and police stations, whilst there is a primary school located in the adjoining suburb of Caravonica.
         The subject land is roughly square in shape and is located with its north-western truncated corner fronting the McGregor Road Roundabout. Its western boundary to the Captain Cook Highway is 620 to 640 metres, depending on the point on the truncation from which the measurement is taken, whilst the McGregor Road frontage is about 538 metres. The southern boundary of the land is 611.33 metres and the eastern boundary is 620.22 metres. The resumption takes a belt of land through the subject from the south-east to the north-west, leaving an area of 8.461 ha in a western severance and 22.999 ha in the east.
         The subject land has a gradual fall towards the east and south-east away from the highway and McGregor Road. A drain, referred to locally as Chinaman Creek, enters the subject land from McGregor Road at about the midpoint of that boundary, whilst a further drainage area is to be found in the south-west of the land where a drain enters from the highway and traverses easterly and then southerly through that part of the subject land. There is a demountable caretaker's residence, potting shed, greenhouse and other improvements associated with the palm plantation on the subject land, together with some ground-floor slabs associated with the Gemini Park Resort proposed development. None of these improvements is on the resumed area.
         Apart from the few structures that I have mentioned, the subject land was vacant at the time of resumption and was bordered on the east and the south by similarly vacant land, either used or intended to be used for cane-farming purposes. To the north of the subject land on the other side of McGregor Road is to be found a single lot residential subdivision area and the Campus Shopping Village occupies the north-east quadrant of land facing the McGregor Road Roundabout. McGregor Road is a two-lane roadway with an eastern section fronting the subject land and a western section travelling past the University Campus. The Captain Cook Highway is a four-lane divided carriageway where it abuts the subject land on the land's western boundary.
         This case involved the hearing of evidence and submissions over a four-week period, there being 1,369 pages of transcript and 29 witnesses, some of whom were called more than once. There were 160 exhibits or parts of exhibits. These included a range of voluminous reports from experts including those of three valuers who produced a total of 12 valuations of various parts of the subject land on either a before or after-resumption basis.
         The claimants were represented by Mr DR Gore QC and Mr SM Ure, whilst Mr RM Needham led Mr RS Jones for the respondent. The list of witnesses includes
Salvatore Paino – a claimant and the principle of the company which is the registered proprietor of the subject land, gave evidence.
Neville James Bates – once the managing director of the North Queensland Daikyo Company and a land development consultant. He was called by the claimants to provide evidence on a number of matters.

Richard Anthony Collingwood Bramley – described in his curriculum vitae as a "tourism analyst specialising in strategic planning, market analysis, project feasibility studies and the management of nature based tourism". Mr Bramley was called by the claimants to give evidence with respect to the tourist potential of the subject land.
Keith Rodley Bryars – a consulting civil engineer gave evidence for the respondent concerning the proposed bypass.
Christopher Gerard Buckley – a town planner, gave town planning evidence for the claimants.
Louis Aaron Challis – an acoustical engineer gave evidence for the claimants on the matter of noise immission from the Captain Cook Highway and the proposed bypass.
Michael Cabella Challoner – a town planner gave town planning evidence for the respondent.
Aldo Costantino – a businessman from Italy gave evidence through an interpreter about an option and contract he had entered into over part of the subject land.
Brian William Cox – a registered valuer gave evidence with respect to the claimed tourist potential of the subject land.
Allen John Crawford – a registered valuer gave valuation evidence for the claimants.
Patrick Vincent Flanagan – a consulting civil engineer gave evidence for the respondent relating to costs of development and to subdivision plans used by Mr Crawford for valuation purposes.
Richard Formby Gillman – a chartered accountant was a co-author of the "Deloitte's Report" a document dealing with the financial feasibility of the proposed "Gemini Park Resort".
Terence Joseph Gould – a registered valuer gave valuation evidence for the respondent.
Robert Charles Holland – a consulting traffic engineer gave evidence for the claimants on the issue of access to the subject land and associated matters.
Ian William Hooley – a commercial real estate agent gave evidence relating to attempts by the claimants to sell the balance land following resumption.
Paul Joseph Johnson – a chartered accountant was a co-author of the "Deloitte's Report".
Frederik Hendrik Kamst – an acoustical engineer gave evidence for the respondent on similar matters referred to by Mr Challis.
Kathleen Killalea – the franchisee of the BP service station located near the subject land gave evidence for the claimants concerning the prospect of a service station development on the subject land.
Bevan Thomas Lynch – an architect gave evidence for the claimants with respect to the design of the proposed "Gemini Park Resort".
Michael Wayne McCracken – a retail analyst, trained as an economic geographer gave evidence for the claimants relating to the commercial potential of part of the subject land.
Alan Charles McPherson – a consulting civil engineer gave a range of evidence for the claimants including costs of development of the proposed "Gemini Park Resort" and subdivision plans relied upon by Mr Crawford.
Jon Mark Norling – a management consultant specialising in the property field gave evidence for the respondent on the topic covered by Mr McCracken.
John William McDonald – landscaper and nursery proprietor gave evidence for the respondent regarding the value of palms on the resumed land.
Kenneth Richard McKay – a golf course architect gave evidence for the claimants concerning the 9 hole par 3 golf course included in the "Gemini Park Resort" concept plan.
Grant Harold Phillips – a licensed surveyor provided evidence for the claimants relating to subdivision payments for the subject land.
Andrew Charles Prowse – a landscape architect gave evidence for the claimants regarding the landscaping of the proposed "Gemini Park Resort" and on matters connected with the value of the palms growing on the subject land.
Randall Wayne Warren – a registered valuer gave valuation evidence for the claimants.
Jeffrey Clifford Weigh – described as having "15 years' experience in the tourism and leisure industry especially in the fields of tourism marketing development and research" gave evidence in response to that provided by Mr Bramley.
William Graham Wilkes – a quantity surveyor gave evidence for the claimants relating to the estimated costs of development of the "Gemini Park Resort".
The purpose of the resumption is to provide land upon which a road bypass is intended to be constructed, servicing north-south traffic and taking that traffic, or at least part of it, away from the presently built-up Smithfield area. It will provide a useful context for the following discussion if I first of all introduce the proposed bypass structure.
         THE PROPOSED BYPASS STRUCTURE
According to Mr Challoner's Report the need for a bypass was first recommended by a Connell Wagner Report in May 1980, "Captain Cook Highway (Cairns to Buchan Point) Strategic Plan Update". This was followed by the "Cairns-Mulgrave Regional Transport Study" (1993) which recommended the identification and preservation of a corridor in association with a range of scenarios considered in the study. The need for a bypass was confirmed in "the Captain Cook Highway – Smithfield Bypass Planning Report" (April 1995); called the "April 1995 Bypass Report" below. This report also considered, amongst other things, the possible upgrading of the Captain Cook Highway as an option. Bypass route options were considered in an August 1995 report entitled "Captain Cook Highway – Smithfield Bypass Review of Route Options" called the "August 1995 Bypass Report" below. That report also made reference to the option of upgrading the Captain Cook Highway which would include the construction of an overpass over the McGregor Road Roundabout.
         The land resumed for the bypass enters the subject land at a point about two-thirds the way along the southern boundary of the land towards the east, then sweeps in a north-westerly direction and exits around the north-west corner of the land. The bypass then travels over the McGregor Road Roundabout. A plan in evidence shows the "chainages" within the subject land commencing at 3,200, where the bypass enters the land, and finishing at 3,850 at the point of exit. Whilst the term "chainage" was employed, I take the figures to refer to metres. The intention is that the road will be constructed largely at the same level as the surrounding land up to chainage 3,500, where elevation will commence towards the overpass at the McGregor Road Roundabout, however, noticeable elevation of about 1.5 metres will not occur until chainage 3,600, that is about two-thirds of the way into the subject land from the point of entry at the south. At chainage 3,700 the elevation is 5.5 to 6 metres; at chainage 3,800 it is 7.5 metres and at 3,850 it is 8 metres. That elevation is taken from the ground level to the surface of the carriageway. Mr Holland said that the height of the bypass as it travelled over the roundabout was greater than the 5.5 metres that he would have expected. The structure of the bypass as it spans the roundabout is not unlike a bridge, with the existing roundabout travelling between pylons to that "bridge". It will be appreciated from my description of the track of the bypass through the subject land that there is, in effect, a severance of the land into two parcels and an access road referred to later in these reasons as a "link road" is proposed to travel under one of the spans of the bypass connecting McGregor Road to the western severance.
         The structure of the proposed bypass, though not finalised in March 1996, as I understand it, provides for two lanes of two-way traffic to be constructed in Stage 1, with Stages 2 and 3 providing for widening to a four then possibly a six-lane divided road, respectively. There is an entry ramp onto the bypass from McGregor Road East for traffic travelling in a southerly direction, though no exit is provided from the bypass in a similar location for north-bound traffic or traffic coming from the north. Mr Holland commented that this was a poor design feature as it would be usual for drivers to anticipate exiting from a bypass in the same location as a point of entry. No entry ramp is provided onto the bypass at McGregor Road for traffic travelling north.
         Following the track of the bypass "bridge" structure over the McGregor Road Roundabout, it reduces elevation until at a point about 400 metres north of the roundabout it meets and continues at the level of the existing Captain Cook Highway. Some 600 metres north of that point, or about 1 km north of the McGregor Road Roundabout, a roundabout has been constructed at Reed Road which, amongst other things, allows for traffic travelling in a northerly direction to make a U-turn and head back towards the south. Traffic moving southerly from that point or points further north can exit the Captain Cook Highway about 400 metres north of the McGregor Road Roundabout, then move into McGregor Road or continue travelling along the Captain Cook Highway. An interchange will be constructed at about Catanna Road to the south of the subject land to allow traffic travelling northerly along the bypass to exit there and move towards the Captain Cook Highway. Traffic coming from the north, which remained on the bypass as it passed the subject land, could also exit at this interchange.
         Drawings tendered by the respondent show that noise amelioration works in the form of a 2 metre vegetated mound topped with a 3 metre fence are proposed to border the bypass where it travels at ground level through the subject land. As the bypass commences elevation, the effectiveness of that noise amelioration measure would diminish and a 3 metre high solid acoustic fence is proposed for each side of the elevated structure. As I read the drawings, there would be some overlap between the point of commencement of the 3 metre high fence on the elevated structure and the end point of the ground level noise amelioration works. I am not aware whether the specification of those noise amelioration works was known at March 1996.
         About 25 metres from the eastern side of the carriageway in the Stage 1, or 2 development, will be the western boundary of the eastern severance of the subject land. At the conclusion of Stage 1 the eastern boundary of the western severance of the subject land will be removed some 60 metres from the edge of the carriageway, however, that distance will be lessened as Stages 2 and 3 are undertaken, whenever that might be.
         The Holland Option
         Mr Holland acknowledged that the Department of Main Roads was considering two road grade options which are relevant for our purposes in about March 1996, namely the construction of the bypass through the subject land and the construction of an overpass over the McGregor Road Roundabout within the Captain Cook Highway alignment. He acknowledged that anyone visiting and inquiring of the Department at that time would have been told about these two options and would have been advised that it was anticipated that construction would commence during the period year 2000 to 2005. Nevertheless, Mr Holland holds the view that the construction of the bypass, and for that matter an overpass within the Captain Cook Highway alignment, would be an unwarranted response to the traffic management requirements. He said that on the data that he had, the McGregor Road Roundabout in its format at March 1996 provided an acceptable level of service and that that would remain the case until at least the year 2016. He said also that there was a third option to those being considered by the Department, that being the provision of a traffic light controlled or "signalised" intersection in place of the roundabout, which would have allowed a graduated upgrading of the highway to six lanes. A six-lane roundabout would, of course, be impractical.
         Mr Holland said that a signalised intersection would be a less expensive solution than either the bypass or the overpass solution and had the added advantage of providing a means for pedestrians and cyclists to move from one side of the Captain Cook Highway to the other. In circumstances where traffic flows freely north/south via a roundabout, that cross-highway access is not safely available. There are other options available to provide for pedestrian access across the highway and, indeed, an underpass has been constructed in the vicinity of the southern end of the subject land. Nevertheless, Mr Holland said that he would have advised a client in March 1996 that his option of the introduction of a signalised intersection and the upgrading of the Captain Cook Highway, as required, to six lanes, would have been sufficient to manage traffic requirements along that corridor for the following 20 to 30 years.

         Mr Bryars' firm was involved in the preparation of the April 1995 and August 1995 Bypass Reports dealing with the overpass and bypass options and in the identification of the route for the bypass. He thought the signalised intersection proposal to be a less desirable option, which would generally be found only in urban areas where cost was an inhibiting factor. He said that there was little net gain in moving from a signalised four-lane structure to a signalised six-lane structure, there being much greater gains achievable by the construction of an overpass. His firm had, in a report entitled "Traffic Management Network Study Old Mulgrave Shire districts" (August 1995) (called the "Traffic Network Study" below) proposed the construction of a signalised intersection south of the subject land at Stanton Road, however, in cross-examination said that that option was dictated having regard to the costs of the alternatives. Mr Bryars said that the construction of a bypass would be less disruptive to traffic in the process of the construction than would a signalised intersection and that, in any event, the practice these days was not to adopt a graduated strategy by moving through a signalised intersection approach to an overpass, but rather to move directly to the overpass option. He explained that traffic lights interrupt traffic flow and that the Captain Cook Highway corridor is designed as a free-flowing route.
         Importantly, Mr Bryars said that the bypass project is not simply based on the efficiency of the intersection of the Captain Cook Highway and McGregor Road. The bypass provides for other benefits, some of which I have outlined above, whilst the most obvious additional benefit is that traffic using the bypass will not disrupt and clutter up the Smithfield area.
         I turn now to Mr Holland's suggestion that the McGregor Road Roundabout would have operated adequately until the year 2016. Mr Holland had regard to 1995 traffic flow data and, based on a 2.6% per annum compounded growth rate, he concluded that volume capacity ratios of 65% during the morning peak hour and 66% during the evening peak hour could be achieved in the year 2016. That is, average delays would be minimal. He said that the level of service would be classified at "A" level and that under those circumstances the intersection would be judged to be operating at an acceptable level of service and delay under 2016 conditions. He explained that only when an 85% to 90% volume capacity ratio was identified would there be an unacceptable level of service.
         Mr Bryars said that the 2.6% per annum compounded growth rate was appropriate for the Captain Cook Highway when viewed as at the March 1996 date, but that that figure did not take into account the higher potential growth along McGregor Road both to the east and west, given the high level development opportunities there which would feed traffic onto that road. McGregor Road, he said, was operating at a very low traffic base in March 1996 and a 2.6% growth rate on such a low base would produce an erroneous result. In addition to that point I notice that the 2.6% growth rate is calculated having the traffic counts in 1995 as the start point, compared with predicted traffic counts by Eppell Olsen included in Mr Bryars' tendered statement and which I understand is based on modelling which was carried out some time after March 1996. Earlier traffic counts indicated an average 4.5% to 5.5% growth on the highway since 1986. If I have regard to that evidence which was available in March 1996 and cater for the point that Mr Bryars made about the need to assume a higher level of traffic growth on McGregor Road, then the volume capacity ratios calculated by Mr Holland under the Year 2016 conditions would be higher than the percentages he indicated. What those percentages would be I do not know, however, my appreciation of the evidence is that, viewed as at the time of resumption, Mr Holland would have, equipped with the best information available at that time, predicted an earlier upgrading of the Captain Cook Highway than his evidence indicated would be the case. However, this does not detract totally from the point being made by Mr Holland for I think it would still be valid for him to conclude that any upgrading of the Captain Cook Highway, either by the construction of an overpass or of a bypass, was not imminent in 1996 and that some years would elapse before such an upgrade would be contemplated. Indeed, as I discuss in more detail later, the resumption in the present case is out of sequence, the timing of the present resumption being influenced by the prospect of Mr Paino proceeding with development of the subject land. I am less convinced, however, that a signalised intersection solution is appropriate for the McGregor Road Roundabout, however, I acknowledge Mr Holland's professional view on that matter. A prudent purchaser, considering the acquisition of the subject land in March 1996, would have received advice from the Department of Main Roads that both the bypass option and the overpass option were being considered by that Department and would have independently been advised by Mr Holland that a signalised intersection was, in his view, a suitable option. I return to this matter later. I will now embark upon a discussion of matters of interest in the history of the subject land.
HISTORY OF THE SUBJECT LAND
Salvatore Paino is of Italian extraction, having arrived in Australia at the age of 20 in 1949. In due course he moved into the real estate industry, owning his own agency for a number of years. In 1968 he constructed the Gemini Hotel containing 96 rooms, a penthouse, restaurant, shops and conference rooms at Randwick in Sydney, and after some mediocre trading of that enterprise under separate management, he took over the hotel and achieved above average occupancy levels by capitalising on the nearby airport market. For some years he conducted a travel agency business from the hotel. In 1989 he purchased a hotel and motel in Griffith comprising 63 rooms and two self-contained units and again raised the occupancy levels following a refurbishment. He has subsequently acquired a hardware store at Randwick, and purchased 56 acres of beachside land at Narooma on the south coast of New South Wales and a further area at Manyana, south of Sydney. He had planned to develop a convention centre on the Narooma land, however, the town planning approval included conditions which he found to be unattractive.
           In 1986 Mr Paino first travelled to Cairns with an eye to acquiring a property there to extend his hospitality interests. I am not sure whether he had been to Cairns previously, however, said that he was impressed with the potential of Far North Queensland as a tourist destination. Initially he sought to purchase land on the Cairns Esplanade in the Central Business District (CBD) where the "Tradewinds" has since been constructed. That transaction fell through so he looked further afield and settled on the subject land at Smithfield. At that time neither the Skyrail nor the Tjapukai Aboriginal Cultural Park (Tjapukai Centre) nor the Australian Woolshed tourist attractions were developed in the area, however, Mr Paino saw the subject land as providing certain advantageous features: the land was flat and relatively flood-free; there was a nice line of trees positioned along the Captain Cook Highway alignment; the land was "centrally located" in that it provided the opportunity for access to the beaches, the Smithfield Shopping Centre, Kuranda, Port Douglas and Cairns and he saw the potential for commercial development on part of the land in the north-west section. Apparently without the benefit of advice from consultants of the type who gave substantial evidence before me, Mr Paino took a 12-month option over the land in 1986 and completed the purchase in July 1987. That was at a time of a very active market in the Cairns region for tourist resort development sites. Mr Buckley described the period as the "heady days" of the 1980's.
           Mr Paino said that he had in mind the development of a resort in the eastern section of the land and well prior to the resumption, had a view that such a resort would be marketed to European travellers, particularly Italians. He retained the services of George James, an architect in Cairns, and gave him instructions for plans to be drawn for a 560-room resort which, he said, given its distance from the beaches, "needed to have its own atmosphere". Through a number of design changes which I need not detail here, the size of the resort became that of 550 rooms and on 29 February 1988 an application for consent from the local authority was lodged, with approval emerging on 18 April of that year. He called the project the "Gemini Park Resort" which I will refer to, simply, as the Gemini Resort.
           Given the need for extensive landscaping on the land to contribute to the development of the resort's atmosphere and given the considerable costs involved in purchasing mature plants in the marketplace, Mr Paino took advice from a landscape architect, Eugene Herbert, and commenced planting a substantial palm and plant nursery in December 1987.
           Later in 1988 the Mulgrave Shire Council applied to rezone an extensive area of land to the east and south of the subject land for the purpose of a General Industry subdivision. Mr Paino objected to that move and was successful in an appeal before the then Local Government Court. An amended proposal subsequently emerged and, in spite of Mr Paino's further objection and appeal, was approved. That second proposal was substantially smaller than the original and Mr Paino became aware that the Shire Council intended to dispose of a large part of its land, excluding the rezoned portion, to Daikyo, a company owned by Japanese interests. Following the purchase of that land Daikyo entered into a conditional contract to purchase the subject land and the palms growing there for $9,400,000, however, that contract was not completed. I discuss the detail of that transaction later in these reasons.
           Mr Paino said in the statement tendered that it was his intention to commence construction of the Gemini Park Resort within two to three years after the date of local authority approval. There were, however, certain matters which he said militated against that plan coming to fruition and, indeed, construction was not commenced until 1995 and even then, apparently not in earnest. The reasons which Mr Paino said impeded his construction plans included:
·the appeals against the Shire Council in relation to their general industry subdivision proposal;
·the Daikyo proposal to purchase the subject land;
·proceedings in the Land Court in November 1993 relating to the resumption of an area of land fronting the Captain Cook Highway by the then Queensland Department of Transport;
·Mr Paino's ill health which led to a major surgery procedure in 1994.
·persistent rumours that the Department of Main Roads was proposing to acquire part of the land for the purpose of a bypass road;

Mr Paino made contact with the Department of Main Roads in Cairns concerning their proposals and maintained that contact over a period of almost four years. Whilst certain optional road development proposals were mentioned to Mr Paino during this period, nothing concrete emerged. He took advice from Colin Beard, a traffic engineer, who told him that he could not foresee a bypass over the subject land as being a probability. Nevertheless, Mr Paino remained concerned about the prospect of a resumption and, as he put it, being concerned also that his town planning consent may lapse if construction did not commence, he started construction in 1995. As I understand it, construction briefly commenced in March 1995 and then again in about September of that year.
           Mr Paino had, in August 1994, made application to the Mulgrave Shire Council to rezone about 5.9 ha of the subject land for the purpose of a Medium Density Residential (MDR) development and that application was approved subject to conditions in December of that year. The MDR land is in the western sector of the property. Mr Paino appealed against certain of the conditions of the approval and on 24 April 1995 a consent order was made in the Planning and Environment Court which included, amongst other things, the following:
"7.   Exclusion Area
(a)     The 'Exclusion Area" is the area (of the subject land) which is shown on Queensland Transport Drawing No. MCG.4, and which is proposed to be resumed or otherwise acquired by the State of Queensland for the purpose of the Smithfield Bypass.

(b) Should the State of Queensland not have acquired by agreement or completed the resumption of the exclusion area within the six (6) month period this condition (save for paragraph (g)) shall cease to have effect.

(c) The applicant shall not construct any structure or commence any development on the Exclusion Area for a period of 6 months from the date of this order.

(d) Within seven (7) days from the date of this order, the applicant will provide to the Queensland Department of Transport a metes and bounds description of the subject land, as outlined in green on the attached copy of Queensland Transport Drawing No. MCG.4. In the event of delay in the provision to Queensland Department of Transport of that description, the period of 6 months referred to in sub-paragraph (b) hereof shall be extended by the extent of any such delay.

(e) ….

(f) In the event that the State of Queensland does resume or otherwise acquire the exclusion area within the period(s) referred to above, an access corridor not exceeding 28 metres in width shall be permitted across the Smithfield Bypass corridor within the acceptable corridor location bandwidth shown on Queensland Transport drawing No. MCG.4."

Now the evidence is not totally clear, however it appears that the metes and bounds description was supplied on about 9 May 1995 thus the six months' period required in the Court's order would conclude on 9 November. I note, however, that the "exclusion area" applies only to the land the subject of the MDR rezoning and not to the area identified for the tourist resort development. Construction on that resort land could, on my understanding, have proceeded unabated. Nevertheless, it appears that Mr Paino did not recommence construction until about September 1995. He said in his statement that he hoped that construction would provoke the Department into making a final decision concerning a resumption, but also that construction was undertaken to preserve his planning approval. He said that he was also concerned to preserve two contracts for sale that he had over interests in the subject land, one with Aldo Costantino and one with Almax Pty Ltd. I discuss these transactions later in these reasons. Exactly how initiating construction would affect these contracts is not clear to me unless the point is that a decision by the respondent to not resume part of the land would have maintained these contracts on foot.
The Notice of Intention to Resume dated 23 October 1995 then issued and was received by Mr Paino shortly after that date. He had commenced construction of five of the accommodation blocks by that time, however, took advice and stopped construction.
Mr Paino's statement records that negotiations proceeded with the Department "in an effort to try and persuade them not to proceed with the gazettal of the resumption". In apparent conflict with this evidence is evidence in the form of a letter from Mr Paino's solicitors dated 27 November 1995 to the Queensland Department of Transport advising "no objection will be raised in connection with the taking of the land". The letter went on to say that Mr Paino was willing to have the land transferred by agreement, which I take to be a reference to an agreement under s.15 of the AOL Act. A meeting was subsequently held in December 1995 attended by Mr Paino, his solicitor and representatives of the respondent. At that meeting Mr Paino confirmed that no objection would be made and he sought assurance from the respondent that the taking of the land would occur as soon as possible. Later on 19 March 1996 Mr Paino wrote a letter to Mr Santoro, a Minister in the Queensland Government, asking that the taking of the land be expedited if the Minister for Transport was convinced that the resumption was necessary. The letter said that Mr Paino would, however, prefer that the resumption did not proceed.
I understand all of this evidence to show that Mr Paino simply wanted an end to the matter, either way. He wanted to know for certain whether the land was to be taken and he was concerned that the ongoing suspension of construction activity could lead to the lapsing of the town planning consent. He understood that consent could lapse in March 1996 so by the time he wrote to Mr Santoro he would have been understandably anxious for a decision.
I will record my observation that the relationship between Mr Paino and the respondent Department appears to have been somewhat strained. Part of that strain was contributed to by the Department taking virtually the whole six month period following the abovementioned order of the Planning and Environment Court in April 1995 to issue the Notice of Intention to Resume. Given the timing of the issue of this Notice, the Department would not have completed the resumption within the specified six-month period, in any event. In addition to this, an officer of the Department had in March 1993 written to the Shire Council seeking the revocation of the resort development consent approval on the misguided understanding that there would be a reduction in compensation flowing from such an action. I am not sure as to when Mr Paino became aware of this letter, however, Mr Paino developed the impression that the Department was postponing resumption action until his town planning consent expired. It is not difficult to form the view that the respondent was motivated by its own interest and with limited regard to the position of the landowner. Mr Gould observed that the taking of the subject land was premature and that it was the only taking thus far for the bypass project. Mr Paino, it seems to me, forced the hand of the respondent which had a concern that development of the land may enlarge compensation.

Gemini Park Resort

Plans showed the proposed resort occupying 28.873 ha over all but the north-west quadrant of the subject land.
Mr Lynch, an architect, provided a description of and commentary on the component parts of the Gemini Park design. Mr James was the original architect, and Mr Lynch was not involved in any part of the design of the resort, nor for that matter in the changes made to that design on a number of occasions, the latest such change being made about three weeks before the hearing of the matter commenced. He was asked by the claimants to review the proposal to develop the Gemini Resort and in pursuit of that brief, he reviewed the drawings prepared in 1987 by the original architect together with subsequent changes and he carried out an inspection of the site. He also had discussions with a representative from the office of the original architect. Mr Paino said that he often had difficulty getting into contact with Mr James who travelled widely, so decided to retain Mr Lynch. From Mr Lynch's evidence I gained the understanding, however, that Mr James' office was still involved in Gemini Resort design matters up to three weeks before the hearing commenced.
Mr Lynch said that the design concept of Gemini Park envisages a tropical resort created by the use of extensive landscaping and he referred to the Sheraton Mirage Port Douglas Resort and the Cairns Colonial Club Resort as examples where extensive and mature tropical landscapes contribute to the presentation of the accommodation facility. He drew attention to the exclusion of cars from the internal areas of the resort, with all movements within the resort being either on foot or by the use of golf buggy style transport. This arrangement is, he said, similar to that of the Hyatt Coolum Resort in the Sunshine Coast area. The description of the facilities proposed within the resort area was as follows:

(i)220 luxury units, each unit having an enclosed area of approximately 38 square metres plus an external verandah/balcony. Corner units are larger (42 square metres);

(ii)340 budget/family units, each unit having an internal area of 36.5 square metres plus an external verandah/balcony. Corner units are larger (41 square metres;

(I draw attention to this description indicating that there would be 560 units in total whereas the local authority approval was for 550 units.)
(iii)man-made pools, suitable for swimming;

(iv)refreshment centres and barbecues located throughout the resort precinct;

(v)covered ways connecting all accommodation buildings, reception building, restaurants and bar building, and recreation centre;

(vi)a network of footpaths and bicycle paths throughout the resort, plus required maintenance roadways;

(vii)main reception building incorporating porte cochere, entry lobby, administration offices, lounge areas, bar and dining room facilities;

(viii)convention and restaurant building incorporating separate restaurant and bistro dining areas, bar and function rooms;

(ix)ampitheatre for outdoor entertainment with covered stage area;

(x)entry gate structure for security and entry statement purposes;

(xi)child minding centre incorporating indoor play and sleeping areas and covered external play area;

(xii)manager's residence;

(xiii)management staff accommodation;

(xiv)transport centre;

(xv)workshop, laundry and stores;

(xvi)staff accommodation;

(xvii)nursery;

(xviii)9 hole par three golf course incorporating a water golf practice range;

(xix)tennis courts;

(xx)croquet court;

(xxi)Italian bowls (boccé);

(xxii)lawn bowling greens;

(xxiii)recreation clubhouse;

(xxiv)playground;

(xxv)equestrian track and horse stable facilities;

(xxvi)bird sanctuary;

(xxvii)jogging tracks and resort paths;

(xxviii)central car park for 590 vehicles. (The car park was to be in the open and did not provide any protection in the form of roofing.)

(xxix)an orchard.

Mr Lynch's report noted that there had been certain amendments to the original master plan and these amendments comprised:
·    a reduction in the size of the main reception building by removing unit accommodation and retail shops and scaling down other facilities;
·    the combining of restaurant and bar building and convention centre into the one building of more modest dimensions whereas previously two buildings were included in the design;
·    deletion of an interpretive centre;
·    deletion of a management and staff training building;
·    a reduction in the size of both the luxury (previously 41 m²) and budget/family units (previously 39.5 m²).

It will be convenient if I mention now that the construction of units, which commenced on the land in 1995, was at the earlier larger size. I am left wondering whether the Gemini Resort design presented to me represents the development that would have resulted had the resumption not taken place and had construction continued to completion. I put that concern aside, however, as it seems to me that the claimants' case is put on the basis that the Gemini Resort as represented in the various plans and other evidence placed before me, or some reasonable variation of that, constitutes the highest and best use of 28.876 ha of the subject land.
Each of these design changes to which I have referred had the effect of reducing the cost of development, however, the changes were appropriate in Mr Lynch's view, either because built spaces such as the convention facility were too large, or because others such as the interpretive centre were of questionable benefit to the overall resort concept. The circumstances leading to each of the changes were not all explained, however, the reduction in the size of the main building was said by Mr Paino to have come about following discussions with Mr Aldo Costantino who had entered into an option agreement then a contract to purchase an interest in the planned resort.
Mr Lynch saw the Gemini Resort as having the following attributes:
·    proximity and easy access to Cairns International Airport;
·    well located with good exposure to the Captain Cook Highway;
·    good road access afforded by the intersection of Captain Cook Highway and McGregor Road;
·    creation of a tropical landscaped haven and building accommodation designed to meet two major market sectors; firstly, international European tourists providing large and comfortable rooms, and secondly, spacious family units, fully self-contained;
·    a pedestrianised internal environment within the resort with motorised transport limited to buggy transportation provided by the resort;
·    a well-planned internal environment utilising tropical landscaping and water bodies;
·    a varied and visually pleasant recreation precinct aimed at the European traveller and Australian family; recreation planned to be both aesthetically pleasing and to encourage participation for casual recreation rather than the serious sportsman who would seek out other facilities located nearby eg. Paradise Palms Golf Course;
·    creation of a strongly internally focused haven from which guests venture out to explore the tourist attractions of far north Queensland;
·    location of the accommodation facilities to achieve appropriate setbacks and buffering from external traffic influences;
·    provision of a choice of dining facilities within the resort.

It will be seen that some of Mr Lynch's points agree with comments made by Mr Bramley and which I introduce later in these reasons, though in some respects the language of the architect creates a slightly different perception. I refer, for example, to Mr Lynch's reference to "a strongly internally focused haven from which guests venture out" as being consistent with, though expressed differently from, Mr Bramley's description of the Gemini Resort as providing sufficient attractions on-site to entertain and distract guests once they return from their enjoyment of the tourist attractions that FNQ has to offer.
Mr Lynch was aware that it was intended that the Gemini Resort attract European and domestic guests. Though he did not claim any expertise in tourism marketing, he did say that he thought the resort would be an attractive one being of a standard between the Cairns Colonial Club and the Sheraton Mirage at Port Douglas.
He described the architectural design of the buildings as "relying upon North Queensland design characteristics of large overhangs, verandahs, loggias and lattice work to create a simple and economical construction heavily reliant upon informal building groupings and lush tropical landscape to create an inviting environment." The design showed the guest accommodation in the form of two-storey blocks each containing 20 guest units adjoining a central service corridor through which, at ground level, the electric buggies could be driven. The accommodation blocks are separated and surrounded by extensive landscaping. Each unit has a balcony or a patio. The luxury units have a higher standard of furniture and fittings than the budget/family units and enjoy a more favourable location in the site. The luxury units are clustered in the central to southern part of the site within close proximity to the central reception and associated facilities whilst the budget units are located in the north-east corner of the site, some of which would abut McGregor Road. Mr Lynch agreed that the units were of standard size in the marketplace, but said they would have a better aspect than, for example, the Cairns Colonial Club where the outlook is towards the entrance to the units. Air conditioning is provided in the form of wall-mounted units apparently referred to as "wall rattlers" in the industry. The recreation facilities are located across the southern portion of the land, though the swimming pools and tennis courts are placed near the accommodation.
Mr Lynch was not aware of the details of the proposed staging of the development, though observed that the master plan layout allows for such a staging to take place, balanced against market demand. Mr Lynch was aware of the estimated costs for the development prepared by Mr Wilkes and he said that a staged development having regard to the economy of the type of construction and design, made good economic sense. He referred to the Mirage Port Douglas development as being an example of high cost construction and a single stage development, which makes it difficult to achieve an acceptable return on investment. He also referred to the Cairns Colonial Club which combined "relatively cheap land" with a simple uninspiring architectural design, but with great emphasis being placed on extensive tropical landscaping. He placed the Cairns Colonial Club at a level above the cheaper hotel and motel accommodation available elsewhere in Cairns.
The building designs included in Mr Lynch's report and the other evidence of layouts provided, revealed evidence of changes in design over time, to which I have referred, and it became apparent during cross-examination that other changes and refinements might need to be addressed. For example, the access into the resort area and the porte cochere and entry statement to the resort proper would need to be designed to take into account the access required to the commercial land in the north-west of the subject land and the MDR portion which includes student accommodation, each of which would use the same access taken from McGregor Road. It was also noticed that there had been a change in the skylight design for accommodation buildings and Mr Lynch agreed that some other allowance would need to be made for adequate lighting into the central core of those buildings.
Mr McKay, a golf course architect, had been approached by Mr Paino towards the end of 1993 to design the golf course primarily for the use of resort guests. In Mr McKay's opinion the course is a legitimate nine hole par three course including bunkering and putting greens which are typical of a traditionally sized golf course. Mr McKay budgeted $350,000 in 1996 for the proposed golf course based on his standard fees for the design and construction of greens, tees, watering system, bunkers and the development of fairways in what he said was essentially a scaled-down model of his usual golf course work.
Mr McKay has not visited the subject land, but was provided with a master plan layout, boundary plan and contour plan, had information concerning the soil type and was aware that the land had previously been a cane farm. He was confident that the design that he had arrived at could be accommodated within a $350,000 budget. Indeed, he said that a golf course can be built to almost any budget depending upon the standard required. He said that his practice was to supply a master plan of the course or the layout plan and to then design the particular aspects of the course such as green shape, size and position, bunkering, etc., in the field as construction advanced. In this way he could be sure that the golf course is appropriate to its location and environment. Decisions are taken in the field having regard to the budget of the client.
Mr McKay was cross-examined concerning his costings and was asked a range of questions which led to the suggestion that his $350,000 figure was too low. No witness was produced from the respondent's side positively addressing the question of Mr McKay's golf course costing and given this and his credible response to cross-examination, I am comfortable in accepting the $350,000 figure. I am a little less comfortable about some aspects of the course layout, however, that may be more a matter of my lack of expertise as a golfer.

This may be a convenient point to include reference to some observation made about the facilities in the proposed resort.

Mr Bramley said that the broad choice of onsite activities, attractions and food choices, including restaurants, do-it-yourself cooking options and the opportunity for guests to pick their own fruit would provide guests with a full day's activity without leaving the resort. He said in that sense the proposed resort is fully self-contained. He thought that the Gemini Resort concept would appeal to a broad cross-section of international and domestic markets and that that would give the resort the capacity to attract different markets throughout the year, thereby reducing off-season downturns. Mr Weigh criticised some of the facilities included in the concept design. He was very much focused on two propositions in his criticism. First, he was concerned that facilities should maximise revenue to the resort owner and in this regard said, for example, that self-cook barbecues, and guests picking their own fruit would deny revenue to the resort. Second, he said that it should be acknowledged that guests would seek entertainment in the form of the attractions in the region such as the rain forest and the reef, thus making the range of facilities in the design somewhat superfluous. He stressed that tourists come to FNQ to experience the region's natural features. He added that some of the facilities such as the golf course and the equestrian activities would be expensive to maintain, but with the prospect of limited return. He said also that he doubted that lawn bowls would be a real attraction for the expected clientele. The various facilities offered in the concept design are not generally found in resorts in the Cairns region. This raises in my mind the question of whether they will really act as attractants or whether they will simply become under-utilised facilities which must continue to be maintained.

VALUATIONS

Both sides employed the "before and after" method of valuation, a method which has the advantage of providing an assessment of the loss of land value together with the impact of severance and injurious affection damage resulting from the resumption (see, for example, Brisbane City Council v. Lansbury (1977) 4 QLCR 502).
Valuers from each side prepared "before" valuations based on the three areas or "parcels" of the subject land indicated by the zoning or proposed uses at the date of resumption. Parcel 1 comprised an area of 6.057 ha of land zoned for MDR development, that parcel being located abutting the Captain Cook Highway. To the south of Parcel 1 and to its east across to the eastern boundary and northerly to McGregor Road was Parcel 2 which had an area of 28.873 ha and at the date of resumption was zoned "rural", but had town planning consent which would have allowed the development of a tourist resort. To the north of Parcel 1 was Parcel 3, an area of 2.5 ha fronting McGregor Road to the north and facing the McGregor Road Roundabout and Captain Cook Highway to the west and north-west. Parcel 3 is located on the truncation created by a previous resumption from the Heavey Lex land.
In the after resumption situation the original parcel is cut into two severances. That to the west became identified as Parcel A during the hearing and this has an area of 8.461 ha. The eastern severance was divided into two parcels: the larger one, Parcel B, was identified by both sides for residential development, whilst Parcel C (in the north-west corner of this severance) was nominated for commercial usages. Each party had a different view of the area that might be devoted to commercial uses, so each side had a different view as to size of Parcels B and C respectively. I will, however, throughout these reasons, refer to the parts of the subject land in the before and after resumption scenarios by the "Parcel" identifications that I have employed above.
Mr Gould carried out both the before and after valuations for the respondent. Mr Warren assessed the value of Parcels 1 and 3 on the before resumption basis, whilst Mr Crawford provided the valuation evidence for Parcel 2 before resumption and the combined value of Parcels 1, 2 and 3, relying on Mr Warren's assessments for Parcels 1 and 3 in that exercise. Mr Crawford also carried out the after valuation for the claimants.
Some of the palms on the subject land are located on each of the parcels, however, the valuers approached their task on the assumption that the palms were notionally removed and their value is established separately and discussed later in these reasons. There were some improvements on Parcels 1 and 2 to which neither Mr Warren nor Mr Gould applied a value for the purpose of assessing compensation as they were not taken in the resumption.
Each of the parcels is irregular in shape, but not so unusual in shape as to make any substantial impact on the before resumption valuation. There is, however, some impact on the "after" value, particularly with respect to Parcel A.
It may be useful if I set out the values settled upon by each side in both the before and after situations.
For the claimant

Before             Parcel 1  $2,400,000
  Parcel 2  $8,500,000
  Parcel 3  $1,100,000
  $12,000,000
  Less discount for combination of parcels 7.5%             $900,000

$11,100,000

After Parcels A and B $1,270,000
Parcel C $285,000

Less discount for combination of parcels 5% $77,750

$1,477,250
For the Respondent

Before

Parcel 1  $1,962,720
  Parcel 2  $3,053,875
  Parcel 3  $625,000

$5,641,595

Rounded to $5,640,000
After

Parcel A  $l,615,980
  Parcel B  $2,041,875
  Parcel C  $562,500
  $4,220,355

Rounded to $4,220,000

Mr Warren approached his task by valuing both Parcel 1 and Parcel 3 as independent titles, therefore having assumed dedicated access. He acknowledged in cross-examination that the size of the overall subject land and the time and cost associated with the development of such a piece of land would limit the number of purchasers in the marketplace who would be attracted to and be capable of purchasing the land and therefore there would be some impact on the resultant value of the land. Notwithstanding this, he took into account what he saw as an added advantage or synergy in the development of these parcels together with Parcel 2 on the assumption that the Gemini Resort to be developed there would add value to both Parcels 1 and 3. Mr Crawford incorporated Mr Warren's values for parcels 1 and 3 into his overall before value for the subject land and discounted the aggregate value by 7.5% to take into account that each parcel did not have independent access and status but stood as part of the overall site. In his after valuation a lower discount of 5% was applied given the reduced aggregate value and the fact that he valued Parcels A and B, though separated by the resumed land, as a single residential development. Mr Gould also applied a discount but his rate was 10% and he applied it to the value of Parcel 1 only. I understand that he did this because he saw Parcels 2 and 3 as being purchased by a single developer who would reserve Parcel 3 for possible commercial development as that potential ripened. Each side's approach to the application of a discount is internally consistent and I need not confront the issue of any discount to be applied until I consider the substantive valuation issues. I will now consider the before resumption valuations and will first consider the valuation of Parcel 2 by Mr Crawford.
PARCEL 2 – TOURIST RESORT USE
Mr Crawford valued this parcel on the basis that it had a highest and best use for tourist resort development. His valuation for Parcel 2 on this basis was $8,500,000. Mr Gould valued the parcel for residential subdivision. Mr Crawford relied on sales evidence in carrying out his actual valuation, and I will come to those sales later, but in identifying the highest and best use of the 28.873 ha of Parcel 2, he placed reliance on the reports of others. He said that he first considered the contents of each report before deciding to accept it, and that he had sufficient expertise on each of the topics covered by the reports to ensure a competent consideration of their contents. Although his report did not say as much, I understand his valuation to be based on the proposition that the Gemini Resort comprised the highest and best use of Parcel 2. I conclude this because of the fact that he relied on the 550 units included in the resort design in the process of his comparison with sales; and because he relied on reports which were directed at the Gemini Resort concept.

He said that he placed reliance on the reports of Mr Buckley and Mr Bramley and on what I call the "Deloitte's Report" later in these reasons. He also took advice from Mr Lynch, however that appears to have been general in nature, only, and need not be further considered here. It will be appropriate then, before I comment further on Mr Crawford's valuations of Parcel 2, that I consider the evidence of Mr Buckley and Mr Bramley as well as the Deloitte's Report.
           Planning – Tourism Use
           In 1988 the subject land was subject to the 1975 Town Planning Scheme for the then Mulgrave Shire, that Shire subsequently combining with the Cairns City local authority area in late 1995. On 20 April 1988 the Mulgrave Shire gave town planning consent for "accommodation units and ancillary uses" to allow the development of a tourist resort on Parcel 2 of the subject land including 550 accommodation units. The land was then zoned "Rural C" under the prevailing scheme. The language of the town planning consent does not readily indicate a tourist resort usage, however, is consistent with the language of the scheme then in existence. There was some argument between the parties as to whether the town planning approval included certain features such as the golf course and the equestrian facilities in the Gemini Resort plan but both Mr Buckley and Mr Challoner agreed that consent would have been forthcoming had it been required. Mr Challoner expressed the view that the approval applied to the whole of the subject land, however, this opinion did not develop into an issue of substance between the parties as in 1996 Parcel 1 was approved for rezoning to the MDR zone and Parcel 3 would require rezoning to allow commercial use or for part of that land to be devoted to further MDR development.
           The application for town planning consent for the tourist resort indicated an intention to double the size of the resort to 1,100 rooms, clearly a substantial size when one considers Mr Buckley's comment that a 550 room resort comprised "one of the larger resort approvals issued". In any event, no action has been taken to expand the resort approval to the size indicated.
           Mr Buckley thought that Parcel 2 was land suitable for a tourist resort from a planning point of view, especially given its proximity to nearby man-made tourist attractions. He also saw some support in the form of the town planning history of the subject land. First there was the local authority consent under the 1975 plan. In 1993 the "Rural" zone which had applied to the land in 1988 was continued and under the new scheme the Gemini Resort proposal would have been a consent use. At the date of resumption for the bypass, the 1995 draft scheme had been on display and the local authority was considering submissions. That scheme continued with the "Rural" zoning of the land under which zone a tourist resort development was a permissible use. In addition, however, the 1995 scheme included in a "tourist strategy diagram A-4" a designation of the site as "major future tourist accommodation" and such a designation, in Mr Buckley's view, conveys to those interested in the general area of the subject land the view that the land would be expected to develop as a major tourist facility. There was also included in the 1995 draft scheme a "housing strategy diagram" which indicated that the subject land was suitable for housing. Both diagrams were supported by language in the Strategic Plan indicating suitability of the land for both tourism and residential purposes. Of course, it is a matter of common sense that land may be suitable for more than one purpose in a town planning context. Nevertheless, it was argued from the claimants' side that the designation of the subject land as a major tourism site is evidence relevant to establishing its highest and best use. It was pointed out that the housing strategy diagram was more broad brush than the tourist strategy diagram. This is clearly so as it included existing resorts within the designated housing areas. From the respondent's side it was argued that the designation on the 1995 "tourist strategy diagram" was probably a reflection of the existing town planning consent together with the fact that in November 1994 the claimants had received building approval and had subsequently commenced construction. The claimants' response to these points was to say that the Daikyo land to the east of the subject land was also designated for major tourism accommodation, but was not the subject of town planning consent nor a building approval. I note that this Daikyo land had initially been thought of as a tourist resort site, however, the evidence was that Daikyo had changed its plans and decided to develop this land as residential land in association with a golf course. I note also that the designation on the tourist strategy diagram also applied to a number of sites including the Trinity Cove Resort site at False Cape on which the establishment of a tourist resort appeared quite remote at the date of resumption of the subject land.
           The local authority did not choose to designate the subject land as a tourism site in the planning scheme which came into existence in 1993, a scheme which marked the subject land as a discrete residential area, a designation quite inappropriate for the development of major tourism facilities. Of course, at that time the town planning consent for Parcel 2 was in existence, however, the building approval had not issued.
           The zoning of land in a town plan, or identified support for a particular use within a planning scheme is not an indication by itself of the highest and best use of the land. Certainly in the instant case the local authority has clearly indicated its support for the development of the Gemini Resort on the subject land, both by way of the grant of consent and the building approval, and by the designation of the land as a major tourist accommodation site in the tourism strategy diagram which was part of the 1995 draft scheme. In Gallagher v. Brisbane City Council (1975) 2 QLCR 368 the Land Appeal Court said:
"Now, while the zoning of land pursuant to a town plan will always affect the highest and best use of land at a particular date, and to that extent the value, it does not create that highest and best use. It may facilitate the immediate realisation of that highest and best use or, at the other end of the scale, it may totally prevent such realisation. In between these two, zoning may work to postpone, or defer, full or any realisation of the value of the highest and best use, until some intermediate action is taken and completed. But, in our view, the highest and best use remains the same throughout, and, on the basis that the highest and best use on resumption date is different from the permitted use as of right of the land under the zoning on that date, the dispossessed owner is entitled to receive the present value of that highest and best use of the land on resumption date, so long as such present value exceeds the permitted use as of right value on that date, where the zoning provisions prevent the immediate realisation of the highest and best use value." (at 381).
The existence of town planning consent or the identification of a supportive local authority is evidence relevant to the establishment of the highest and best use of land, for without local authority approval, or the prospect of it, a proposed highest and best use may be nothing more than a forlorn hope. Equally, it is not the case that such local authority support is conclusive of an acceptance in the marketplace that the economic highest and best use is consistent with the local authority's planning views. Indeed, as I relate later in these reasons, there are numerous examples of local authority approval for tourist resort development not being acted upon or even replaced by zonings permitting residential development. If I direct my mind to the evidence that I have outlined above concerning the town planning history of the subject land, I cannot conclude anything other than that the local authority did indeed support the development of the Gemini Resort on the subject land, however, would probably have also supported residential development on Parcel 2 of that land. Indeed, both sides readily assumed that local authority approval for residential subdivision of Parcel 2 would have been forthcoming.

THE BRAMLEY REPORT

Visitation

Far North Queensland (FNQ) is a popular tourist destination attracting both domestic and international visitors wishing to experience the Great Barrier Reef, the rainforest, the Atherton Tableland, including the small town of Kuranda in particular, and various adjunct activities such as those provided by the Skyrail Cableway.
The Skyrail facility comprises a cableway carrying a number of gondolas which each seat up to six people and which convey passengers over the canopy of the rainforest between the Smithfield terminal and the terminal at Kuranda on the Atherton Tableland. Passengers are able to alight at stations along the way to walk into the rainforest along constructed pathways. There is also an exciting few minutes when the gondola travels high over the Barron River. An expansive view of the coastline to the north and south of Cairns from the Skyrail is also had. The Tjapukai Centre is located adjacent to the Skyrail Smithfield terminal and provides a range of visual cultural experiences focusing on Aboriginal culture. The Freshwater connection is an old railway station where tourists can board old-fashioned railway carriages and travel up to Kuranda or, alternatively, disembark at Freshwater if returning from Kuranda by train. Kuranda is a small town on the Atherton Tableland and features a variety of tourist attractions. The Australian Woolshed theme attraction which was proposed for development at the time of resumption is now to be found about 2 km south of the subject land along the Captain Cook Highway and apparently replicates a similar facility located at Ferny Grove in Brisbane. Tourist accommodation is supplied in the Cairns CBD and in other locations on the coastal strip, particularly northerly from the city.
Mr Bramley's terms of reference were "to assess the suitability of the Heavey Lex site for a proposed resort (Gemini Park Resort)" and "to provide an opinion on the impact of the road resumption … on the original resort concept". I can say in summary that his conclusion was favourable to the development of the Gemini Resort. Mr Weigh was called by the constructing authority to deal with this topic. He does not support the view that the development of the resort on Parcel 2 of the subject land would be prudent.
           Both Mr Bramley and Mr Weigh provided statistical data of the historical visitation trends and forecasts for the Far North Queensland (FNQ) area. This data came from a variety of sources and was presented in the form of a large number of tables, which I will not reproduce here. Their various data tables led these gentlemen to paint a picture of the historical visitation to FNQ in quite positive terms. There were some differences between the data each of those witnesses supplied, however, the trends indicated were similar so I will largely refer to one set of data only: Mr Bramley's. Notwithstanding the similarities in the historical data, each of these experts had different views as to what the future might bring for the Gemini Resort.
           Mr Bramley produced figures showing that international visitor numbers to FNQ for the years 1989 to December 1995 had increased at an average 14.1% per annum and 6.6% for visitor nights during that period. The demonstrated trends are better than either Australia or Queensland as a whole. Domestic visitations have grown at a lesser rate than for international visits, however, for the period 1988-89 to 1993-94 the average annual rate was 6.1% for visitors numbers and 3.6% for visitor nights. Again the FNQ figures are higher than the national or Queensland averages. Domestic data after the 1993-94 year is not easily compared with the earlier years, given a different collection and processing methodology.
           Mr Bramley recorded that growth in the number of international visitors to Australia has been largely attributable to an increase in holiday travellers, however, this increase is of less significance in FNQ where the holiday component of total visitations has been historically high. He mentioned figures of 88% visitations comprising the FNQ holiday segment in 1989 and 92% in 1994. Domestic holiday growth to FNQ grew from 60% of total visits in 1989-90 to 77% in 1993-94 when at the same time the figures were stable elsewhere in Queensland as a whole, but had fallen nationally.
           Averages, it is appreciated, may often conceal a more detailed picture. In the case of the increase in international visitations there was not a gradual trend from 1989 to 1995, there being a substantial increase in visitors between 1991 and 1992 of 393,000 to 508,000; a nil increase through to 1993; an increase to 589,000 in 1994; then a flatter increase to 605,000 in 1995. The average duration of stay in hotels and motels in FNQ by international visitors during that period showed a similar unevenness and demonstrated a reduction in average length of stay down to about four nights around the date of resumption. This length of stay is somewhat shorter than earlier years and, in Mr Bramley's opinion, is a result of an increase in the number of Japanese visitors who usually stay for shorter periods than other international visitors. The domestic trends are similarly uneven and actually show a reduction between 1991-92 and 1992-93, with an upward movement in 1993 and 1994 in visitor numbers, but still not back to the 1991-92 level. Domestic visitor nights showed a similar trend and again a reduction in the duration of stay.
           International air services arriving at the Cairns Airport brought an increased number of passengers to FNQ with an annual average increase in numbers of 28.3% for the 1986 to 1995 period on Mr Bramley's figures. Domestic services for the period 1985-86 to 1994-95 showed an average increase of 13.6% per annum in passenger arrivals, though the absolute number of domestic visitors arriving by air was higher being more than double the international arrivals (778,000 to 329,000 respectively) in the 1995 year.
As I have said, somewhat different interpretations were placed on the data by the respective experts and the topic of air passenger arrivals provides a suitable focus to discuss that difference in viewpoint. If I take, for example, a table presented by Mr Bramley concerning international arrivals, this notes an increase from 87,000 passengers in 1988 to 145,000 in 1990, 287,000 in 1992, 366,000 in 1994, then a move downwards to 329,000 in 1995. Domestic passenger arrivals reveal a more undulating picture, with 248,000 arriving in 1985-86, 387,000 in 1987-88, 268,000 in 1989-90 up to 589,000 in 1991-92, then 931,000 in 1993-94 and down to 778,000 in 1994-95. Both Mr Bramley and Mr Weigh agreed that the conclusion of the domestic airline pilots' strike in 1990, of which we are all aware, contributed to the substantial increase in domestic passengers in the following year, however, Mr Bramley was of the view that the 1991-92 increase reflected a continuation in growth, as well as a release of pent-up demand. Mr Bramley suggested that the increase in domestic arrivals in 1993-94 resulted largely from the deregulation of domestic airlines, which led to the introduction of the Compass 1 and Compass 2 Airlines and a level of fare competition and fare reduction, which increased the number of passengers. He conjectured that by 1994-95 fares had returned to the previous levels and that this had brought about a reduction in the number of domestic visitors.
Mr Bramley's explanation for the variation in international passenger arrival largely focused on what he termed "capacity constraints" in accommodation in the FNQ area. He did say that the airline pilots' strike may have contributed to some extent to the variation in figures as intending arrivals may have been concerned as to domestic connections, however, that was not a matter that he spent a lot of time on in evidence. The "capacity constraints" argument, as I understand it, says that the number of arrivals did not grow, indeed it went down, between 1994 and 1995 because intending visitors could not secure accommodation . He said, and Mr Weigh agreed with this, that the peak month in FNQ for hotel and motel occupancies is August when these establishments operate at close to capacity. Actual occupancy levels may not be 100% for that month because of cancellations by wholesalers and individual "no-shows". Such late cancellations militate against the prospect of other wholesalers taking up the spare capacity or in individual arrivals matching their accommodation requirements with that which becomes available. Historical data indicates that supply appears to outweigh demand in terms of actual occupancies during this August period and certainly for the balance of the year, however, Mr Bramley's argument is that there is unsatisfied demand in the form of potential visitors who simply did not come to FNQ because accommodation was not known to be available. He cites support for this rationale in the November 1995 Rider Hunt publication which deals with tourism, amongst other things, and which refers to a "slow down in tourism growth due to a shortage of hotel rooms for overseas visitors". This reference, I might add, is to Queensland as a whole and is not specific to FNQ.
           It is important to note that Mr Bramley's views concerning "capacity constraints" is a deduction which he draws from the evidence and does not comprise direct evidence. As I understand the proposition, it is contrary to other evidence which he gave that the drop in occupancy rates in FNQ expressed as a percentage is explained by an increase in the supply of rooms above the increase in demand. Indeed, Mr Weigh wrote in his report that "at 22 March 1996, there had been five consecutive quarters of declining occupancies for hotels in Far North Queensland". Mr Bramley's proposition also appears to me to be in conflict with the fact that the number of international arrivals has dropped in absolute terms during the period from 1994 to 1995, a trend which would appear to me to release pressure on accommodation supply coming from that particular sector of the tourist market. There is also the observable fact that there was a new substantial resort development which had taken place around the date of resumption was at Treetops in Port Douglas and the poor occupancy rates achieved there did not reveal that that particular facility was able to readily soak up any excess demand.
           I think the most plausible explanation for the downward movement in international arrivals is that there has been a reduction in demand during the period from 1994 to and including 1995. Putting aside the possible causes of the passenger downturn, Mr Bramley put the view that whilst the 1995 data revealed a negative trend, a prudent developer would look at the trend overall and not simply that one year. He said also that negative growth in previous years had come back into positive territory, though I was not directed towards data that supported that proposition. From the constructing authority's side Mr Weigh observed that the 1995 international arrival figures should be interpreted as a "serious interruption to what had been a very strong pattern of growth" and would flag that growth would not continue at the previous high levels indefinitely. Nevertheless, Mr Weigh agreed that FNQ is "one of the important growth regions for tourism in Queensland" and was drawn in cross-examination to agree that much of the data concerning historical visitation must be viewed positively.

         I inspected each of these sales and those inspections assisted me in my understanding of the evidence. The first transaction is, in truth, not a sale, however, both valuers agreed that the failure of the transaction to settle was not a matter which detracted from the suitability of the transaction as a guide to valuation. This University Heights transaction was the subject of a contract entered into in December 1996 and involved the sale of an area of 51.71 ha for $5,000,000. At the date of contract the land was zoned "Special Facilities", the contract of sale being subject to the rezoning of part of the land to "Residential 2", together with a small area of about 2,500 m² of "Local Business". As part of the marketing campaign for the land, a development analysis was prepared by Mr Flanagan's firm in December 1995 and that revealed, amongst other things, that the land would require external costs totalling $1,600,000 for water supply, sewerage and roadworks connections. In his approach Mr Gould said that the contract price should therefore be adjusted to $6,600,000 when comparisons are made with land which already has these services at the boundary. This adjusted sale price analyses to about $128,000 per ha for the transaction. Mr Gould noted that an area of about 7.15 ha in various sections of the property was described as not being available for development, however, it was Mr Crawford's understanding that an area of about 10.695 ha was indicated by the purchaser as being excluded from development. On Mr Gould's figure of 7.15 ha the usable area became 44.56 ha and on the adjusted sale price that reflects a value of $148,000 per ha for the usable land.
         The land is severed into two completely separate parcels, the southern section being of an area of 38.45 ha and the northern one having 13.26 ha. The southern parcel fringes the northern boundary of the James Cook University Campus and has a frontage to the Captain Cook Highway where a 10-metre buffer strip has already been set aside. The northern parcel fronts Moore Road, which is accessed off Discovery Drive to the south of the Paradise Palms development. Watercourses cut both parcels of land and each is of undulating to steep topography and is vegetated in parts.
         Mr Gould said that the University Heights land is capable of producing "interesting lots" on subdivision, certainly on my observation during inspection lots with greater interest than might be available from Parcel B on the subject land. Mr Gould expressed the view that the University Heights land is superior in location and topography to Parcel B and that subdivided allotments would be more attractive and would sell at a higher price than would be achievable on the subject land. Given his approach to the noise-affected land in both Parcel 2 and Parcel B, he said that a typical ha of usable residential subdivisional land on the subject property would be inferior to the $148,000 per ha on the basic property.
         Mr Crawford acknowledged the poor shape of the basic property, its separation into two parcels and the high costs for development. He said that the property was probably best referred to in valuing the residential portion of the subject land in a before resumption situation as the University Heights property fronted Captain Cook Highway and not the new higher structure associated with the planned bypass. It is my appreciation of the evidence that the shape of the University Heights property is to its disadvantage compared with the subject land, whether before or after resumption, but that the quality of development on the basic property would far outstrip what was achievable on either Parcel 1 before resumption or Parcel B after. I think that in the after resumption scenario there is a deleterious effect on the perception of Parcel B from a residential perspective, together with the unknowns associated with the impact that the bypass will finally have, whereas in the case of the University Heights property, the Captain Cook Highway is a known feature albeit one which will carry the combined traffic flowing past the subject land to the west and through the bypass to be constructed. There is a roundabout at the junction of the Captain Cook Highway and Reed Road to the east of the northern parcel of the University Heights land, however, I am not aware whether the construction of that roundabout was foreseeable at the date of contract.
         Mr Gould's second residential in globo sale, which I will call the Caravonica sale, took place in August 1995 following negotiations commencing early in 1994 with a contract resulting at $1,250,000 for an area of 33.4 ha. The sale was subject to rezoning the land from "Rural" to allow a mixed residential subdivision over the bulk of it and a "Commercial" zoning of about 1.446 ha at the corner of Brinsmead-Kamerunga Road and Fig Tree Drive. A significant area of the land, which is subject to occasional flooding, is set aside as park, with Mr Gould estimating that an area of about 8.5 ha of additional parkland/drainage area has been contributed above normal requirements. Additionally, the Department of Main Roads has a future requirement over a further 1.6 ha, leaving a usable area of 23.3 ha. Extraordinary earthworks required to provide flood immunity would cost $1,500,000 and Mr Gould, consistent with his practice where such costs are known, has added that to the sale price to come up with an overall sale figure of $2,750,000 equivalent. On the assumption that the commercial and buffer areas would take 1.5 ha of the sale property and that that land has a premium value equal to twice the value of the residential land, he analysed the sale to show a value of $111,000 per ha. Mr Crawford was aware of the sale, though was not able to comment on the detail of the cost and area figures that I have included above. He was, however, critical of the reasoning employed by Mr Gould, saying that with a high level of floodplain land the sale was difficult to analyse on the "broad-brush approach" and that he was unaware as to whether the purchaser took into account the extraordinary earthworks and costs and land area calculations in the same manner as employed by Mr Gould. Mr Crawford contrasted Mr Gould's approach with his own in the employment of the hypothetical subdivision method, which he said "had regard to the changes between sites". I must comment on that suggestion.
         Comparability between sales is a question of fact (See Gosford City Council v. Manufacturers Mutual Insurance Ltd (NSW Court of Appeal 28 October 1981) and the manner in which valuers compare sales with land being valued generally involves a consideration of differentials between the properties with adjustments being made for those features. (See Waalt Homes Pty Ltd v. Road Construction Authority (1987) 64LGRA 346 at 352-356). The hypothetical subdivision method does not, however, have the advantage of demonstrating differences between sites or "changes", to use Mr Crawford's language, unless the method is used as a means of comparing sites. As a stand-alone method applied to the land to be valued, it does not reflect what in globo sales in the marketplace reveal. I return to my consideration of the sale.
         The sale land is situated at the north-western corner of the intersection of Brinsmead-Kamerunga Road and Fig Tree Road, Caravonica. Brinsmead-Kamerunga Road is a major arterial access corridor, which connects the suburbs of Caravonica, Kamerunga and Redlynch to the district road network. Fig Tree Drive apparently services the small rural residential subdivision to the west but, on Mr Gould's understanding, is one possible alternative for a new Kuranda Range road connection. He was uncertain whether knowledge of that was in the public domain at the time of the sale and acknowledged that even if it were, the proposal would be nowhere near as significant as that which impacts upon the subject land after resumption. He said that the subject land is marginally superior to the value per ha shown by the sale because of the subject's proximity to the university and its preferred address. Nevertheless, he said that the subject was not superior to the sale land in terms of land quality.
         Mr Gould said that he would have expected that the Caravonica sale would have taken place at a higher figure than $111,000 per ha and that the gap between the University Heights sale and the Caravonica sale was greater than he would have predicted. Nevertheless, he thought that these two transactions were the most useful in valuing the in globo residential component of the subject land and in so doing he selected the unaffected component of the subject land at a value of $125,000 by placing the subject between the values reflected in these two transactions.
         His third sale comes from the Village Estate at Intake Road, Redlynch, that sale having taken place in May 1996 for $2,200,000. The land area was 15.79 ha. Mr Crawford also included this sale in his valuation and both valuers agreed that the sale was out of line being a high sale. Nevertheless, counsel for the respondent sought to place reliance on this sale in a limited but important way, and I need to discuss the sale further.
         The purchaser was aware at the date of purchase that additional costs would be involved in importing fill to allow subdivision of parts of the land towards the east of the property. Mr Gould was not aware of the extent of these additional costs. He did, however, provide a measurement of a drainage easement over the land, that is 8,217 m², which reduces the net usable area to 14.9683 ha. On the basis of that usable area he analysed the purchase price to a figure of $139,000 per ha, which is similar to the figure calculated by Mr Crawford.
         Mr Crawford was not aware that at the date of acquisition of the Village Estate property a proposed major road corridor had been initiated along the north-eastern alignment of the subject property, with an overpass being designed to cross the Brinsmead-Kamerunga Road near the very small northern boundary of the site. The sale land has a shape roughly similar to the State of Queensland and the road corridor travels, in effect, along the coastline with the overpass being located in what I might call the Thursday Island area. Subdivision development has commenced in the south-west corner of the sale land and a sensible subdivision would provide for parkland in the area near the proposed overpass, which is some distance from the presently subdivided lots and would generally not be an imposing structure viewed from the residential sites on the sale land. I say this both having regard to photographic and oral evidence and my inspection of the sale land on two occasions.
         The conclusion that I have just drawn is relevant to the respondent's suggestion that even though the sale land is a high sale, it nevertheless indicates that the purchaser was willing to pay a substantial price for land which it was known would be affected by a major road corridor and overpass. Certainly, general regard can be had to the proposition that a high price was paid in circumstances where a road project and overpass was to be developed, but not only are the road projects different in their anticipated impact on the adjoining land, but when one has a transaction where the purchaser demonstrated a level of imprudence in establishing an excessive purchase price for that land, one must wonder whether that imprudence extended to a meaningful consideration of the proposed road project.
         Mr Crawford was not aware of the proposed road project at the time he selected this sale for inclusion in his valuation, however, that knowledge convinced him even more that the sale land price was excessive.
         Mr Gould included in his valuation the sale of a 461 ha site located about 6 km south of the village of Redlynch, the sale having occurred in April 1994 for $3,150,000. A high proportion of the sale land comprises steeply sloping rainforest ridges not available for development. Mr Gould calculated that, at most, the available area is about 86 ha. On that basis and having regard also to external costs of the order of $4,800,000, he analysed the sale price to a figure of $92,000 per ha. The sale land referred to as the Fedwood property had been acquired by Fedwood Pty Ltd, a Japanese company, for $8,000,000 in September 1990. The purchaser's intention on that occasion was the development of a resort/golf course/condominium development.
         Owing to the location and topography of the sale land, which is to be found in a somewhat isolated pretty little valley; and the high proportion of external costs, Mr Gould elected to not rely on the sale. The highest and best use of the sale land, in Mr Gould's opinion, is for residential development. I will now mention briefly Sales 5 and 6 included in Mr Gould's valuation. His Sale 5 located at Woree sold for an analysed price of $81,000 per ha in April 1998 and, given the date of sale, was not relied upon by Mr Gould. Sale 6 is located at White Rock and an area of 9.248 ha sold there in November 1995 for $800,000 or $113,000 per ha. In Mr Gould's opinion that land is inferior in location and aspect and would yield allotments which would be expected to sell at a lower value than those able to be produced on the subject property. I note that this sale is for a smaller area than either Parcel B or Parcel 1 and that I have generally been advised that a smaller area will result in a higher per unit price for subdivision land.
         Mr Gould's Sale 7, Rainforest Meadow at Edmonton, was also included in Mr Crawford's valuation, though Mr Crawford made reference to it for the purpose of establishing lot values in support of his hypothetical subdivision method.          The in globo sale land involved the sale of 72.88 ha, however, the bulk of that land comprises very steep rainforest with a result that only 15.126 ha is usable. The balance land has since been dedicated to open space. On the basis of the usable area, the sale price of $1,725,000 calculates to an analysed figure of $114,000 per ha. The sale took place in May 1995. Whilst Mr Gould preferred in globo sales near the subject land, and Edmonton is south of the City of Cairns on the southern fringe of the Cairns urban area, he did express the view that the sale land was inferior overall to the residential component of the subject property. It was suggested that Mr Crawford had formed his view about the allotment prices on the in globo sale by employing hindsight, nevertheless there was some agreement between him and Mr Gould in that Mr Crawford said that allotment prices on the subject land could not be greater than those in the sale property. Mr Gould thought that allotment prices on the sale would be priced higher than on the subject land, though in converting that view into an in globo comparison he added the point that the higher development costs and anticipated length of selling period in the case of Rainforest Meadow would more than offset the lot price advantage.
         Mr Gould's eighth residential sale was also located at Edmonton and its analysed price of $85,000 per ha provided support for the level of value observed in the Rainforest Meadow sale. Mr Gould saw his Sale 8 as being significantly inferior to the subject land's residential component.
         Mr Gould's Orchid Glen sale at Edmonton was also referred to in Mr Crawford's valuation. The sale was negotiated at the end of 1994, which was in Mr Gould's view the peak of the residential market in the Edmonton area, though the contract date was March 1995. I understand Mr Crawford to be of the view that the residential market peaked in late 1995. The sale price for the land was $6,600,000 and, excluding certain road licences which were attached to the land, the area was 66.008 ha. The contract price was payable on vendor terms and Mr Gould analysed the sale price in these circumstances to an effective sale date figure of $6,000,000 or $91,000 per ha. Mr Crawford's figure was $92,462 per ha.
         At the date of sale the land was zoned "Rural" but had an approval for conditional rezoning to "Residential". The local authority required the developer to contribute an estimated $1,500,000 towards external water supply and sewerage connections, however, Mr Gould's advice is that Council agreed to refund this up-front contribution by way of future credits against headworks contributions per subdivided allotment. In his valuation Mr Gould wrote that the sale land was much larger than the subject and would be expected to average a similar allotment price to lots on the subject property. Nevertheless, he thought that lower priced lots would be developed first of all and with the higher prices being achieved later in the project. Given this, and the up-front investment in the provision of infrastructure, he saw the sale property as being much inferior to the subject residential component. Mr Crawford referred to this sale for the purpose of extracting a profit and risk allowance and in considering costs of development, as well as lot prices. He said that the realised sale price of lots would be equivalent to those on Parcel B backing onto the bypass reserve, however, he thought internal lots on Parcel B would be superior.
         Mr Gould's tenth residential sale was also located at Edmonton and sold in April 1994 for $3,700,000 or $90,000 per ha for the 44.22 ha in the sale. That rate per ha was arrived at following an adjustment of the sale price to cater for an exchange of land which was part of the transaction. Mr Gould said that the sale land would be capable of yielding subdivided lots of a slightly higher value than lots created on the subject property, however, because of the low yield expected from the sale land, it is considered much inferior to the usable subdivision land on the subject. Mr Crawford was not asked to comment on this sale.
         I pass over Mr Gould's Sale 11, a sale also included in Mr Crawford's valuation. This sale was not relied upon by Mr Gould as being high and out of line and was employed by Mr Crawford using the benefit of hindsight.
         Mr Crawford referred to a sale at Shaws Access Road, Redlynch, which took place in April 1995. The sale price was $550,000 and the land area was 24.94 ha, therefore producing an analysed price of $22,053 per ha. In the context of the other sales evidence, this sale is unusually low and Mr Crawford expressed the unchallenged view that the sale is below other market evidence and ought not to be relied upon. He said that the sale land would yield 6.9 lots per ha, which is much lower than the common average of 10 lots per ha, however, there also appears to be another reason as to why the sale price was so low. There was evidence introduced from the respondent's side in the form of a contour plan indicating that there was a steep drop of up to 8 metres over a distance of only 20 metres from the road frontage to the land and into the sale land itself. This feature of the sale land was not observed by Mr Crawford during his inspection. Mr Gould knew the sale land and said that there was an association between the vendor and purchaser, however, given Mr Crawford's evidence that the sale took place at auction, this aspect may not have had a pronounced effect on the sale price, although Mr Crawford expressed the view that the vendors could be regarded as having been anxious as the sale took place after a partnership split.
         Mr Gould said that sales in Smithfield, Caravonica and Redlynch would be expected to provide better comparisons than sales in the Woree, White Rock and Edmonton areas, which are in general, areas with lower valued lands.
         Mr Crawford, on the other hand, thought it appropriate that, in carrying out the valuation of Parcel B, reference be made to sales in the less prestigious areas south of Cairns as the bypass has the effect of lowering the status of the land in Parcel B. Mr Gould appeared horrified that one would seek to rely on sales at Edmonton, for example, on the basis that if he was valuing the land in Parcel B for a commercial client, a sale at Edmonton would not be seen as a suitable basis. The point is that we are not here valuing land for a commercial client, but for the purposes of compensation. I think therefore that some reference to the sales south of Cairns does provide some guidance in establishing the after resumption values.

         I accept that the University Heights sale and the Caravonica sale are of greatest use in establishing the before resumption value of Parcel 2 and I accept that Mr Gould's valuation is supported by those sales, together with the Fedwood sale. In drawing this conclusion I am not endorsing Mr Gould's method of valuing the noise-affected component of Parcel 2.
I think his valuation of Parcel B is, however, a different matter. One small matter I will mention is the location of the link road. One disability with the location of the link road on the west of the bypass is that whilst it is tolerably within the 400-metre AMCORD standard, as the crow files, it is well outside that standard if one has regard to the fact that residents in the east wishing to, say, catch a bus on the link road would need to target the position where the link road goes under the bypass and in some instances that is a greater distance than 400 metres from residential lots that might be located in the south-eastern part of Parcel B.
I have already outlined my view that Mr Gould has not adequately taken into account the visual, noise and psychological impacts of the bypass. The sales at Edmonton and Woree that I have discussed above lead me to the view that Parcel B should have a value between the level of $80,000-$90,000/ha shown by the bulk of the southern sales and the $114,000/ha shown by the Caravonica sale, which must represent the ceiling value in my view. I will settle on an overall value of $100,000 per ha, that is $1,841,800 for the usable Parcel B land.
         Parcel A - Valuation
         I will use the above conclusion in placing a valuation on Parcel A. That parcel, it will be recalled, is substantially noise-affected, having in Mr Gould's view only 1 ha of "typical residential" land. I will, in comparison with the $100,000/ha on Parcel B, place a figure of $90,000/ha on Parcel A usable land, that is, $603,990 overall.
         I am aware that the combined value of Parcels A and B that I have arrived at ($1,841,800 + $603,990 = $2,445,790) is substantially greater than the value placed on those two parcels by Mr Crawford ($1,270,000) using the hypothetical subdivision method. His valuation of Parcel A, it will be recalled, was based on a more intense development than single lot residential subdivision. The sales evidence simply does not support the level of value adopted by Mr Crawford for those two parcels.
         I now need to consider the before and after value of the palms on the subject land.
PALMS
         The claim for palm trees was based on the claimants' view of the value of the palms for inclusion in the Gemini Resort. Palms grown on the subject land and sufficiently mature at the date of completion of the resort would allow for an immediate lush landscaping to be created, would save money in terms of the purchase of palms and would provide for easier relocation and planting according to the claimants' side. Mr Crawford valued the palms before resumption at $1,734,000. I need not inquire further into his method of valuation, given my finding that the development of a resort such as the Gemini Resort did not comprise the highest and best use of the Parcel 2 land.
         Mr Crawford's after resumption valuation of the palms was $60,000. In the case of his alternative valuation for Parcel 2 as residential in globo land, he valued the palms before resumption at $100,000 and maintained the $60,000 after valuation figure. I will come to the basis of the production of these figures shortly.
         Mr McDonald was retained by the respondent to value the palm trees on the resumed land. He was also involved in the process of the respondent calling for tenders for the stock on the resumed land, but there was no evidence of any tender prices being received.
         In carrying out his instructions, Mr McDonald first of all counted and identified the stock on the resumed area. I will not list the detail of the various species included in his count which identified 8,354 individual plants in the ground. There were other plants in containers located on the resumed portion of the subject land before resumption, but these do not fall for further consideration under this heading as they do not form part of the land. Evidence to which I will refer later indicates that there were about 19,000 plants on the balance land.
         Mr McDonald has no formal qualifications with respect to horticulture, however, has operated a landscaping business and a nursery since 1991. There was no objection to his giving evidence on the matter of the value of the palms.
         In his valuation of the plants on the resumed area, Mr McDonald said that the stock was planted too closely together, with the result that some of the plants displayed certain undesirable features: a stretched form, that is where the trunk size is thinner than it ought to be; inadequate wind and sun hardening; a greater susceptibility to disease; and difficulties in harvesting. He said that the close planting had a particularly deleterious effect on clumping species and most of these were yellow in colour indicating nutrient deficiency. Mr Prowse said that fertilising of the palms would readily address that deficiency. He also said that the undesirable features resulting from close planting could generally be managed during the process of selection and transplanting of palms, particularly where they are used on site. He pointed out that the close planting of the palms on the subject land was carried out with the Gemini Resort project in mind. Mr McDonald also said that some of the inground species would be unsuitable for relocation because of the sensitivity of these species to transplanting, however, other evidence that the largest plant nursery in Cairns had an interest in those plants led me to the view that even though these plants might be sensitive to transplanting, they are nevertheless used by nurseries and landscapers.
         Mr McDonald's valuation of the inground stock proceeded by first saying that the cost of a 100 litre container palm delivered on site would be about $126.25. He expressed the view that such plants are generally used in the landscaping industry in Cairns, a view with which Mr Prowse disagreed. Mr McDonald calculated that the removal of inground palms would cost about $123.75 each and that there would be additional costs associated with the purchase price of each plant, the cost of transport to the plant's final destination and with further allowance being made for any plant loss. He reasoned therefore, although this reasoning is not apparent on the face of his valuation report, that no value could be assigned to the inground stock, apart from, Dracaena marginata, which I discuss below. The claimants challenged both Mr McDonald's estimate of the cost of containerised palms and the cost of extraction of inground palms.
         Mr McDonald placed a value of $3,925 on one plant species only, Dracaena marginata and as I understand his valuation report, that figure represents the total value of the stock on the resumed land. He expressed the view that the Dracaena could be relocated for use in landscaping or as nursery stock.
         The establishment of a value of the palm trees and associated plants on the subject land before resumption, and after, is not an easy matter. First there is the question of whether such plants fall for valuation at all, given that they are part of the freehold and therefore would generally fall for consideration as part of the process of valuing the land. That is, vegetation would not usually be valued separately from the value of the land on which such vegetation is growing. In the instant case, however, we have a large number of plants established in a plantation form for the purpose of use in landscaping and each of the valuers has made it clear that he has not included the value of those plants as part of the highest and best use of each of the relevant parcels which were valued. In such circumstances, the palms are capable of having a value independent of the value of the land on the basis that either the palms are capable of separate sale, or of inclusion in the land in such a way as to add value to its highest and best use. I think that summarises the view taken in Richardson v. Roads and Traffic Authority of New South Wales (1996) 90 LGERA 294. In the particular circumstances of that case the Court found a special value in the palm trees there, a proposition not relevant in the matter with which I am dealing.
         Mr Prowse was retained by the claimants to attempt to sell the palms located on the balance of the subject land following the resumption. He carried out a comprehensive advertising and direct mailing campaign calling for tenders, with the successful tenderer to "ideally remove the trees within 180 days of the tender acceptance". Five formal responses were received and details of three of those were included in a letter which was tendered in evidence. One of the tenders was subject to conditions which I would describe as being favourable to the tenderer, whilst others were for a small number of plants for particular projects. Another tender identified 1,709 plants in total sought for purchase and that tender price was for $51,300. Another tender offered a lump sum of $66,535 for all of the palms. That price was based on the tenderer's undertaking that he was offering to buy about 19,000 palms. This analyses to a price of about $3.50 per palm.
         Now it may have been possible for the claimants to have negotiated with two or more of the tenderers other than the last-mentioned tenderer to arrive at a higher gross price than any individual tender, however, whether that would have produced a successful outcome is a matter of conjecture. Mr Crawford elected to rely on the tender of $66,535 in forming his view as to the value of the palms on the subject land following resumption, first because it was an unconditional offer and second, because it was concerned with all of the palms, not some of them. There are some difficulties in relying on that offer in valuing the palms and these include: the fact that the tenderer has not apparently inspected the palms, though it may have been the case that someone inspected them on his behalf; and the fact that the whole tender process and the offer in the context of that bears the characteristics of a "fire sale", not an orderly disposal of the palms at the best available price.
         Notwithstanding the reservations I hold about reliance on the tender price to which I have referred, I think it is the best evidence of value that was presented to me. I acknowledge that Mr McDonald was thorough in the task that he carried out and that he appeared to honestly hold the opinions that he expressed. Nevertheless, I have in the form of the offer of $66,535 some evidence direct from the marketplace concerning the value of the palms, not simply evidence of opinion. In these circumstances I am prepared to place reliance on that tender price.
         Mr Crawford said that the tender price should be discounted to cater for costs associated with achieving a sale of the palms and therefore he discounted the tender price to a figure of $60,000. I accept this figure. With that opinion in hand, Mr Crawford reasoned that the before value of all 27,000-plus palms estimated to be on the land would be about $100,000. I notice that in striking a figure of $100,000 Mr Crawford appears to have slightly increased the value per palm based on the tender price which he has relied upon, whereas I would have thought that the larger the number of palms, the greater prospect of the price per palm being discounted. I do not intend to apply a discount as I have no evidential basis for doing that, however, I also have no reason to increase the price per palm above the tender price. Accordingly, I would strike the before resumption valuation of the palms on the subject land at $3.50 per palm. On the basis of there being 27,354 (19,000 + 8,354) palms on the land before resumption, the before value of the palms would be $96,000 in round figures or $90,000 after the deduction of selling costs. The difference between the before resumption value of the palms and the after resumption value calculates to $30,000 and that is the amount of compensation which I will award under this head of claim.
CONCLUSION
         In summary, I find that the before resumption value of the subject land and palms is:
Parcel 1  $2,205,000
         Parcel 2  $3,053,875
         Parcel 3  $875,000
         Palms  $ 90,000

Total $6,223,875
Rounded up to $6,225,000

The after resumption value of the land retained by the claimant company together with the palms is:
Parcel A  $603,990
         Parcel B  $1,841,800
         Parcel C  $383,600
         Palms  $60,000

Total $2,889,390
Rounded up to $2,890,000

Compensation for loss of land and palms would therefore be assessed at $3,335,000 based on the following calculation:
Before value $6,225,000
Less after value $2,890,000

Difference $3,335,000

I will not determine compensation at this figure at this stage as there are some issues yet to be addressed. There is the question of the disturbance claim by Heavey Lex and the severance claim by Mr Paino. In addition, there is the question of interest.

An advance in the amount of $1,200,000 has been paid, however, the parties are yet to inform me of the date of payment.

RP SCOTT
MEMBER OF THE LAND COURT

[2009] QLC 66

19 May 2009