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Leacy v Sunshine Coast Regional Council[2015] QLC 8

Leacy v Sunshine Coast Regional Council[2015] QLC 8

LAND COURT OF QUEENSLAND

CITATION:

Leacy v Sunshine Coast Regional Council [2015] QLC 8

PARTIES:

Kenneth George and Edna Joyce Leacy

(applicants)

v

Sunshine Coast Regional Council

(respondent)

FILE NO:

AQL033-08

DIVISION:

General Division

PROCEEDING:

Application for compensation under the Acquisition of Land Act 1967

DELIVERED ON:

15 April 2015

DELIVERED AT:

Brisbane 

HEARD ON:

14 - 18, 21, 22 and 25 October 2013

HEARD AT:

Caloundra

PRESIDENT:

CAC MacDonald

ORDER:

*

CATCHWORDS:

Compulsory Acquisition – land resumed for recreation, park and flood purposes – determination of compensation under s 20 of the Acquisition of Land Act 1967 – where it is contended that part of the land resumed is capable of development for residential purposes – highest and best use issue

Town Planning – where most of the land subject to flooding – where no satisfactory road access at the date of resumption – likelihood of development approval for residential subdivision for the flood–free portion – whether road connections from a residential estate to the north would have been achievable but for resumption scheme – evidence of post–resumption events not considered  

Town planning – Point Gourde/San Sebastian principle – open space designation under the Caloundra City Plan 2004 to be ignored – rural designation under the 1996 planning scheme – likelihood of obtaining approval for residential development under the 1996 scheme – consideration of planning issues – whether approval also likely under the Caloundra City Plan notwithstanding that zoning is ignored

Valuation methodology – englobo direct comparison – delay and risk factors associated with development approval – rate per lot basis – hypothetical subdivision method, limitations of

Acquisition of Land Act 1967

Integrated Planning Act 1997

Local Government (Planning and Environment) Act 1990

Sustainable Planning Act 2009

Beck v Council of the Shire of Atherton (1991) QPLR 56

Brewarrana Pty Ltd v Commissioner of Highways (1973) 32 LGRA 170

Brisbane City Council v Mio Art Pty Ltd (2011) QLCR 285

Coastal Estates Pty Ltd v Bass Shire Council (1993) 79 LGERA 188

Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196

ISPT Pty Ltd v Melbourne City Council [2008] VR 447

McPherson v Caloundra City Council [2005] QLC 43

Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565

Spencer v The Commonwealth of Australia (1907) 5 CLR 418

Webster v Caboolture Shire Council (2008) 167 LGERA 342

Weightman v Gold Coast City Council (2002) LGERA 161

Woolworths Limited v Maryborough City Council [2006] 1 Qd R 273

APPEARANCES:

Mr GW Diehm QC with Mr S Ure of Counsel, for the applicants

Mr DR Gore QC with Mr M Gynther of Counsel, for the respondent

SOLICITORS:

Butler McDermott for the applicants

Garland Waddington for the respondent

Background

  1. [1]
    This decision deals with a claim for compensation arising out of the compulsory acquisition of land under the provisions of the Acquisition of Land Act 1967 (the Act). The land was resumed by the Council of the City of Caloundra on 18 February 2005 for "recreation grounds, park, flood prevention and flood mitigation purposes". The land taken was described as Lot 606 on CG 4306, having an area of 86.13 ha and being the whole of the land in Title Reference 16099079 in the Parish of Bribie.
  2. [2]
    At the date of resumption the land was owned by Kenneth George and Edna Joyce Leacy as joint tenants. Mr Leacy passed away in 2011, and the proceeding has been continued by Mrs Leacy in her own capacity and in her capacity as personal representative of her late husband's estate.
  3. [3]
    The land was taken by the Council of the City of Caloundra but, following a reorganization of the local authorities in Queensland, that Council has been succeeded by the Sunshine Coast Regional Council, the respondent in these proceedings.
  4. [4]
    The claimants' final claim is for the amount of $6,351,800 calculated as follows: 

 6.252 ha of potential development land, part filled, at   

 $600,000 per/ha      $3,751,200

 Balance land of 80.02 ha at $32,500 per/ha   $2,600,650

         $6,351,850

    Adopt   $6,351,800

The claimants also sought compensation in respect of disturbance items in the sum of $18,686.25, interest, and an order that the respondent pay the claimants' costs.

  1. [5]
    The amount of the valuation finally put in evidence by the respondent was $2,570,000 calculated as follows -

Land

4.1 ha of flood free grazing land at $153,000 per/ha      $627,300

82.03 ha of flooded, grazing and environmentally sensitive

Melaleuca forest at $23,500 per/ha, cleared and fenced  $1,927,705

         $2,555,005

Improvements

 Shed    $9,750

 Yard/Shed   $2,500         $12,250

         $2,567,255

     Adopt    $2,570,000

The issues

  1. [6]
    The fundamental issue in contention was the highest and best use of the resumed land as at the date of resumption. The claimants' case was that the highest and best use was residential subdivision for part of the land with the balance land used for rural purposes. The respondent submitted that the highest and best use of the land was a single rural lot for continued rural pursuits and the right to accommodate a single detached dwelling, farm outbuildings and other farm structures.
  2. [7]
    The claimants proposed three possible developments for the subject land -
    1. 4.082 ha of residential development (42 lots) with the balance land of 82.14 ha to be used for rural purposes.
    2. 6.252 ha of residential development (66 lots), part filled, with the balance land of 80.02 ha for rural purposes.
    3. 14.2 ha of residential development (145 lots), part filled, with the balance land of 71.93 ha for rural purposes.

The area of the proposed residential development is located in the north/north western portion of the subject land.

  1. [8]
    At the hearing, senior counsel for the claimants, Mr Diehm QC, submitted that a prudent purchaser would be satisfied that the second proposal (the 66 lot development) represented a reasonable development of the subject land and the claimants' final case was calculated on that basis.
  2. [9]
    Neither the first nor the third proposal was abandoned by the claimants as potential development proposals for the subject land, but in view of the claimants’ election not to pursue the 145 lot proposal, I have not considered the evidence relevant to that proposal. The 42 lot proposal will be considered as an alternative to the 66 lot development.
  3. [10]
    All of the development scenarios raised issues which, senior counsel for the respondent Mr Gore QC contended, were fatal to their successful development. Accordingly, evidence was given on behalf of each party by traffic engineers, hydrologists, civil engineers, town planners and valuers.

Valuation principles

  1. [11]
    The effect of the resumption was that the claimants’ estate and interest in the land taken was converted into a right to claim compensation[1]. Section 26(1) of the Act provides that the Land Court has jurisdiction to hear and determine all matters relating to compensation under the Act. As at the date of resumption, s 20 of the Act provided[2] -

"20 Assessment of compensation

  1. (1)
    In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also to the damage (if any) caused by either or both of the following -
  1. (a)
    the severing of the land taken from other land of the claimant;
  1. (b)
    the exercise of any statutory powers by the constructing authority otherwise injuriously affecting such other land.
  1. (2)
    Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken.
  1. (3)
    In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken.
  1. (4)
    But in no case shall subsection (3) operate so as to require any payment to be made by the claimant in consideration of such enhancement of value."
  1. [12]
    The seminal authority on determining the value of land for the purpose of assessing compensation is the decision of the High Court in Spencer v Commonwealth[3]. Griffiths CJ said[4]:

"In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring ‘What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’  It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together."

  1. [13]
    Isaacs J said[5]:

"In the first place the ultimate question is, what was the value of the land on 1st January 1905?

…The facts existing on 1 January 1905 are the only relevant facts, and the all important fact on that day is the opinion regarding the fair price of the land, which a hypothetical prudent purchaser would entertain, if he desired to purchase it for the most advantageous purpose for which it was adapted. The plaintiff is to be compensated;  therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him.

To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."

  1. [14]
    It follows that the subject land is to be valued on the basis of its highest and best use, that being “the most advantageous purpose for which it was adopted”. In ISPT Pty Ltd v Melbourne City Council[6], the Victorian Court of Appeal accepted that:

“Highest and best use represents the most profitable potential use to which land can be put having regard to both planning and like controls and the circumstances of the land. It is to be distinguished from the present use of the land;  although the present use might also be the highest and best use. When land is sold, the market values the land at its highest and best use:  as buyers will not be constrained to continue the existing use;  and the seller will seek to achieve the highest price for the land. This is why highest and best use is relevant in assessing value, whether improved value or site value.”

Further, the Court said[7]:

“It is implicit in this formulation that both vendor and purchaser are to be regarded as aware of the potentially most advantageous use of the land and not simply its current use, when formulating the relevant value. Such potential is a circumstance which necessarily affects the value of the land either advantageously or prejudicially.”

The land

  1. [15]
    At the date of resumption the western boundary of the subject land adjoined Meridan Way (previously known as Sunset Drive). The land was roughly rectangular in shape, generally low lying and traversed by a number of tributaries of Currimundi Creek which flows eastwards along the southern boundary of the land. The eastern section of the land was heavily vegetated. Part of the northern boundary of the subject site adjoined Easement A on Lot 14 on RP 217211 which separated the subject site from the Kawana Forest Estate (which was being developed as a residential estate) and the Pacific Lutheran College. A mains water supply pipeline was located on the easement. A proposed railway corridor known as "CAMCOS" ran north/south through the eastern part of the land. The subject land was also bisected by a proposed "multi-modal transport corridor" ("MMTC") since constructed and known as the Caloundra-Mooloolaba Road.
  2. [16]
    Some distance north of the Kawana Forest Estate, the Mooloolah River runs from a generally south-west position, north then east then north. Currimundi Creek is a tributary of the Mooloolah River, the subject land lying within the Currimundi Creek catchment. During flood events larger than the 10 year ARI (Average Recurrence Interval), flood water from the river flows into the Currimundi Creek system. Most of the subject land lies below the Q100 flood level and is subject to flooding. However 4.082 ha of the subject land lies above the Q100 flood line.
  3. [17]
    As at the date of resumption, the Caloundra City Plan 2004 (CCP) was in operation and the subject land was included in the Open Space – Sport and Recreation Precinct of the Caloundra West Planning Area of that plan. It was agreed that that zoning reflects the scheme underlying the resumption and therefore is to be ignored for the purposes of assessing compensation[8]. The parties are not agreed on what the zoning of the subject land might have been under the 2004 Plan, in the absence of the scheme. Previously, under the Caloundra City Planning Scheme 1996, the land was in the Rural zone.
  4. [18]
    The Kawana Forest Estate is a master planned estate of some significant size which emanated from an agreement between the State government, local government and the developer in 1996. There is an overall development approval in place and varying stages of the development have been the subject of formal application and approval by Council from time to time. The most relevant stages of the development for the purpose of these proceedings were stages 7, 8 and 9 which were the subject of a final application by the developer in August 2005.

Access

  1. [19]
    Evidence in relation to the access issues raised by the claimants' development proposals was given by traffic engineers Mr CL Beard for the claimants and Mr M McAnany for the respondent. Mr Beard is the director of Beard Traffic Engineering Pty Ltd. Mr McAnany is the CEO of McAnany Consulting Pty Ltd. Both have extensive experience in traffic and traffic impact assessment issues.
  2. [20]
    During the course of preparation for hearing, Mr Beard and Mr McAnany met and produced a joint report[9]. The joint report noted that, as at the date of resumption, the only practical potential vehicular access to the possible development portion of the subject land was from Sunset Drive. However, Mr Beard and Mr McAnany agreed that it would not have been desirable to have a residential development reliant on vehicular access via Sunset Drive because that road was subject to flooding.
  3. [21]
    A development plan prepared on behalf of the claimants in 2007 by JB Goodwin Midson and Partners and showing a development area of 9.869 ha was appended to the traffic engineers’ joint report. This was not the claimants’ final development proposal but its significance was that it showed road access to the proposed development area of the subject land from the north, via Red Cedar Drive. As the traffic engineers noted, Red Cedar Drive did not exist at the date of resumption but was created when the original road reserve for Red Cedar Drive was registered on 16 May 2007, as part of the development proposal for the land immediately to the north of the subject, Kawana Forest Estate.
  4. [22]
    When Red Cedar Drive was created in May 2007, it was separated from the northern boundary of the subject land by Easement A. However, the Negotiated Decision Notice for a Preliminary Approval for Stages 3 ‒ 7 of Kawana Forest Estate, issued by the Caloundra City Council on 2 February 2004, required that the water main easement be dedicated as a pathway reserve[10]. On 30 May 2007, SP 198942 was registered, effectively converting what had been Easement A to dedicated road. This had the effect, the joint report said, of providing dedicated road access to the subject site at the southern end of Red Cedar Drive, which is aligned towards the eastern end of the proposed development area of the subject and the southern end of Rapanea Street, which is aligned towards the western end of that area.
  5. [23]
    The traffic engineers also agreed that because lawful dedicated road access to and from the north was not available until 2007, residential development of the subject land would have been premature at the date of resumption, from a purely traffic engineering point of view. They said that the current design of Red Cedar Drive was such that it would be able to accommodate satisfactorily the traffic generated from the subject development, as proposed by JB Goodwin Midson, and that linkage to the proposed development would not increase the traffic flows in Red Cedar Drive beyond an acceptable level. Nevertheless, it was recognized that there might be town planning issues such as "the reasonable community expectations" of existing residents of Kawana Forest, if Red Cedar Drive were to be extended into the proposed development. Mr Beard and Mr McAnany agreed that this was an issue that should be considered by the town planning experts.
  6. [24]
    Mr Beard considered that in the absence of the resumption, overall planning for the area would have been expected to provide for urban development of that part of the subject site which was not flood prone, as well as the adjoining lands to the north, although no such development could have occurred until vehicular traffic access via the northern land became available. Mr McAnany's opinion was that this may not have been the case as town planning, zoning and other issues not considered by the traffic engineers, may have resulted in no part of the resumed land being considered for residential development.
  7. [25]
    Mr Beard also considered, in relation to the "reasonable community expectations" referred to above, that such issues would not arise if the overall planning for the area had incorporated extensions of Red Cedar Drive and/or Rapanea Street from the outset, to facilitate development of all the lands which were not flood prone. He said that the lack of available road access from the north to the subject site, as at the date of resumption, did not mean that the land was unsuitable for residential development in the near future. Sequential development of land parcels is normal practice in residential subdivisions, he said. Had the non-flood prone part of the subject been designated for future residential development, the subdivision to the north would have been reasonably required to provide internal road layouts consistent with the overall precinct development, including part of the subject site.
  8. [26]
    Further, although "reasonable community expectations" might be an issue for town planners, Mr Beard’s experience was that the town planners would defer to the opinion of traffic engineers in respect of the acceptability or otherwise of traffic volumes, traffic speed, traffic congestion levels and the adequacy of proposed pedestrian facilities etc.
  9. [27]
    Mr McAnany considered that Mr Beard's position was too simplistic and that this issue should be addressed by the town planning experts.
  10. [28]
    As to the timing of any application for development of the subject land by the hypothetical prudent purchaser, Mr Beard thought it would have been sensible to lodge an application for preliminary approval as soon as possible so that the Council had the opportunity to ensure that the traffic planning for the subject development and the Kawana Forest Estate was coordinated satisfactorily. However he also said that in reality most prudent purchasers would wait for some certainty about exactly what the road layout to the north was going to be and then do the development to the south.
  11. [29]
    The proposals now relied upon as development scenarios have emerged subsequent to the JB Goodwin Midson plan appended to the joint traffic report. Both the 145 lot and 66 lot proposals differ from the JB Goodwin Midson plan in that the road connection proposed is via both Red Cedar Drive and Rapanea Street. The 42 lot proposal is also different from the JB Goodwin Midson plan in that the 42 lot scenario proposed access to three residential lots and the balance area of the subject land from Sunset Drive. Mr McAnany noted this was contrary to the agreement in the joint report that vehicular access via Sunset Drive was not desirable. Mr Beard agreed but said that in his opinion the reconfiguration of the three proposed allotments should have been via a connection to Rapanea Street rather than Sunset Drive. In his opinion the potential for the three house sites remained.
  12. [30]
    Mr McAnany also pointed out that, although the Rapanea Street road reserve extends to the road reserve along the northern boundary of the subject land, the actual carriageway of Rapanea Street falls short of that and ends at Wilkiea Street. The section of the road reserve south of Wilkiea Street contains a driveway to Lot 318 of the Kawana Forest Estate development, and landscaping. Mr Beard's response was that if the part of the subject site which was not flood prone had been designated for future residential purposes, Rapanea Street could have and should have been constructed to a different standard to take account of the need for a connection as shown in the subdivisional plans. Mr McAnany agreed to the extent that, if the proposed development of the subject land had been approved prior to the approval of the Kawana Forest Estate development, the connection to Rapanea Street should have been achievable subject to the same reservations about the connection to Red Cedar Drive set out in the joint statement.
  13. [31]
    It is to be observed that a great deal of the evidence set out above relating to the road layout and development of the Kawana Forest Estate related to events that occurred after the date of resumption, 18 February 2005. In accordance with the principles discussed in Brisbane City Council v Mio Art Pty Ltd[11], post resumption events cannot be taken into account in assessing the value of the estate or interest of the claimant in the land taken, as s 20(2) of the Act requires that value to be assessed as at the date of resumption. Other evidence was also given as to post resumption activities. Part of the resumed land was converted into sporting fields by the Council. On 2 September 2005, in the context of considering a development application for approval to reconfigure a lot, the Caloundra City Council issued an Information Request requiring the developers of Kawana Forest Estate to revise the subdivision plan to provide a road reserve at the end of Red Cedar Drive (Easement A) with a reserve width of 17 m which may provide for the future extension of Red Cedar Drive into the adjacent property now owned by Council[12]. The Information Request also required a pedestrian/cycle link between the end of Rapanea Street and Sunset Drive[13].
  14. [32]
    In its Response to the Request, JB Goodwin Midson, for the developers, said that it was not their intention to extend Red Cedar Drive south to the subject land, as the effect might be that Council would create road access to the proposed sports field from Sunset Drive which was contrary to the Development Control Plan. Further, it was not intended for Red Cedar Drive to be a through road, as the road hierarchy would not accommodate the consequential traffic volume. In addition, CalAqua, the water authority responsible for the water main in the easement area was concerned that the pipeline was not deep enough to accommodate the construction of a road above it[14].
  15. [33]
    Although these documents came into effect after the date of resumption, Mr Beard said that they confirmed that planning was continuing on the assumption that the land to the south would be developed as sporting fields rather than an urban use. In any event, he said, if the flood free land to the south had been designated for urban development rather than sporting fields, an overall layout for the area could have provided for the extension of Red Cedar Drive and/or Rapanea Street without any possibility of a through road connection to Sunset Drive.
  16. [34]
    Senior Counsel for the respondent, Mr Gore QC, submitted that lack of access was a threshold difficulty confronting the claimants' case because - 
  • The adjacent land to the north was part of a master-planned community which was under the control of one developer and subject to a different planning regime from the subject. The primary risks were -
    1. a)
      that the adjoining developer (Stocklands) would resist any proposal to extend the road network within its land to the subject land;
    2. b)
      that the planning for the main road in question (Red Cedar Drive) did not contemplate access to the subject land.
  • The history of the documentation surrounding the development of the master-planned community showed that -
    1. a)
      the January 2000 traffic engineering report made it clear that the street that would later become Red Cedar Drive would only provide access to the Pacific Lutheran College site with no access to residential lots within the Kawana Forest Estate. Access further to the south and west would only be for emergency services.
    2. b)
      Red Cedar Drive has only ever been shown as the lowest order of street in the road network hierarchy for Detailed Planning Area (DPA 10).
    3. c)
      A request by the Council to provide for the future extension of Red Cedar Drive was met with the response set out above.
    4. d)
      The history of Easement A showed that it was never intended to be a vehicular roadway and that CalAqua was concerned about the development of any hard infrastructure over the water main.
    5. e)
      It was notable that the boundaries to DPA 10 were both clear and clearly defined at the time of the planning report of 3 July 2000 that led to the approval of Master-plan No. 1.
  1. [35]
    In the result, Mr Gore submitted, it was inescapable that a prudent purchaser/developer would view the lack of access as involving an area of high risk for any residential development potential that the subject land otherwise had.
  2. [36]
    Mr Diehm submitted that -  
  • As at the date of resumption, the hypothetical purchaser and vendor would have known of the master-planning process with respect to the Kawana Forest Estate development. Indeed one of the potential purchasers could have been the Kawana Forest Estate developer.
  • Parties performing due diligence would know of the negotiated decision notice which required that the easement proposed along the southern boundary be dedicated as a pathway reserve and they would also know of the drawing made part of Exhibit 36 and approved by the Council on 4 January 2005 that showed each of Rapanea Street and Red Cedar Drive extending across that easement to the subject land[15].
  • The development application for stages 5 to 9 of the Kawana Forest Estate was lodged with Council on 5 August 2005 and page 3 of that document refers to a proposed reconfiguration drawing for those stages dated 10 May 2005. It would readily be inferred, as at the date of resumption, that the developer was nearly ready to proceed at the time that it did with respect to this application. It would be surprising if the Council was not also aware of the developer's progress with respect to this master-planned community. That inference would be drawn having regard to the very close monitoring of the whole of the project that appears to have been involved. The inference can be readily drawn particularly in the absence of the Council calling direct evidence to prove otherwise.
  • Therefore, the would-be purchaser and vendor would know on 18 February 2005, that the relevant stage of development was imminent. They would anticipate that a development application by the owner of the subject land could be made sufficiently contemporaneously with the Kawana application. At the time, it would also have been anticipated that the connection from the north would occur sometime sooner than May 2007, when it eventuated.
  • The concerns expressed by the developer that Council's requirement that the easement be dedicated as a pathway or roadway were about the impact on the developer's estate of through traffic from Sunset Drive. The concerns were not about the situation created by any of the hypothetical developments proposed by the applicant. The unchallenged expert evidence was that there were no traffic volume problems for the road network caused by any of the claimants' proposals.
  • There was no reason to suppose that, in the context of a development application for residential subdivision of the subject land, the developer would have formally appealed the imposition of a condition about the dedication of the easement as a pathway or roadway. That would have been even more the case if the developer were itself the hypothetical purchaser.

Conclusions about access issues

  1. [37]
    Leaving aside, at this stage, the planning issues raised by the traffic engineers, it is clear that, from an engineering point of view, the design of Red Cedar Drive was such that it could accommodate the traffic generated by the Goodwin Midson proposal and that linkage to the proposed development would not increase the traffic flows in Red Cedar Drive beyond an acceptable level. Similarly, the three development scenarios finally proposed by the claimants which proposed connections via both Red Cedar Drive and Rapanea Street would not increase the traffic levels to an unacceptable level.
  2. [38]
    The more difficult question to be addressed is the lack of access to the proposed development at the date of resumption. That question is to be considered with the mind of the hypothetical prudent purchaser.
  3. [39]
    On that date, I consider that such a purchaser would be aware of the master planning process for the Kawana Forest Estate development. The purchaser would know of the negotiated decision notice issued on 2 February 2004 which required that the water main easement along the southern boundary of the Kawana Forest Estate be dedicated as a pathway reserve and that the Map approved by Council on 4 January 2005 (appended to Exhibit 36) showed Red Cedar Drive extending across the easement and both that street and Rapanea Street captioned “Access Street/Place”.
  4. [40]
    Although the planning for Red Cedar Drive did not contemplate access to the subject land for a residential subdivision, that may be explained by the fact that there was no plan for subdivision of the subject land proposed at the date of resumption. The purchaser, however, would know, as a result of appropriate enquiries, what progress the Kawana Forest Estate developer had made towards lodging a development application for stages 5 to 9 of the Estate and, therefore, I consider that the purchaser and vendor would anticipate that a development application for the subject could be lodged in sufficient time to enable Council to deal with both applications in a coordinated way. Similarly, the construction of Red Cedar Drive and Rapanea Street could be coordinated with the proposed development of the subject, to provide appropriate access.
  5. [41]
    It is possible that Stocklands, the developer of the Kawana Forest Estate, would be a potential purchaser of the subject. However, there remains the risk that Stocklands would oppose the proposal that the estate road network be used to enable development of the subject land. The response of Council to such opposition would in part, I consider, depend on the planning issues referred to previously and whether it was satisfied that there was a need established for the residential development of the subject land. These issues are dealt with later in this decision. However, on the assumption that both may be resolved in favour of the owner of the subject land, I consider that the prudent purchaser could expect that any opposition by Stocklands would not prevent approval of a development application. This is because there were no grounds, from a traffic point of view, on which such a proposal could reasonably be refused and if access were not permitted via Red Cedar Drive and Rapanea Street, no other practical access would be available.
  6. [42]
    There is also the problem that access to the subject land from the north would require vehicular and other passage from Red Cedar Drive and Rapanea Street across the former Easement A where the water main is located. While there was some evidence that CalAqua, the water authority, was concerned that the water main would not be sufficiently protected if vehicular traffic were allowed to cross the main, there was no compelling evidence to establish that the issue was such as to prevent development of the subject.
  7. [43]
    As there was no access available to the subject land for residential purposes as at the date of resumption, the prudent purchaser would be aware that obtaining access would involve negotiations with the Kawana Forest Estate developer and the Council. Further, the development of the subject would be dependent on the progress of the Kawana Forest Estate development and timing of that development would not be within the control of the prudent purchaser. Nevertheless, the prudent purchaser would be aware of the progress that had been made with the Kawana Forest Estate development as at the date of resumption and would expect to be able to coordinate the development of the subject with the ongoing development of Kawana Forest. I consider that the prudent purchaser would conclude that suitable access could be obtained via Red Cedar Drive and Rapanea Street although such a purchaser would know that there was some risk involved and that delay in obtaining access was likely. That risk and delay would adversely affect the price that such a purchaser would pay for the subject land which is a matter I will return to, when considering the value of the subject land.

Flooding issues

  1. [44]
    As stated above, the subject land is affected by flooding from the Mooloolah River-Currimundi Creek system. The susceptibility of the land to flooding is relevant to determining the highest and best use of the subject land as at the date of resumption, in particular whether any part of the land could be developed for residential subdivision purposes.
  2. [45]
    Both parties called experts on flooding issues. Mr Michael Della of Cardno was called by the claimants. Mr Della is a civil engineer with 21 years of experience in the fields of flooding and stormwater draining. The respondent called Mr Shannon Dooland of Sinclair Knight Merz (SKM). Mr Dooland is a hydrological engineer.
  3. [46]
    Mr Della said that a flood study of the Mooloolah River-Currimundi Creek system had been carried out for the Sunshine Coast Regional Council by engineering consultant SKM with the results set out in their report entitled Mooloolah River-Currimundi Creek Flood Plain, Flood Study and Stormwater Management Plan - Final Report (July 2002). The flood inundation plan presented in the report showed that the majority of the site is inundated during a 100 year ARI flood although an area of land along the northern boundary of the site is shown to be above the 100 year ARI flood level. Mr Della said the area of that land is 4.479 ha. The 100 year ARI flood level near the northern boundary of the site is 3.33 m AHD (Australian Height Datum).
  4. [47]
    Using an excerpt of the flood model for the flood study provided by SKM, Cardno carried out flood modelling to determine the area of land which could have been developed within the site. The modelling demonstrated that an area of 14.2 ha could be provided along the northern boundary of the site for development. Allowing for batters along the southern and eastern sides of the fill platform, the total area available for development would be approximately 13 ha. Mr Della and Mr Dooland agreed that the flood model uses the same earthworks levels as those assumed in the civil engineering report and therefore the flood model is consistent with the civil engineering earthworks model.
  5. [48]
    Mr Della and Mr Dooland prepared three joint statements on flooding issues, the third of which represented their final agreement[16]. They agreed that the 2002 SKM report represented the best available information regarding flooding behaviour in the vicinity of the subject site, as at the date of acquisition.
  6. [49]
    They also agreed that, based on the results of the flood modelling undertaken by Cardno, the following earthworks could be undertaken within the subject site without causing an unacceptable increase in flood levels in a 100 year ARI flood event (existing climate) -
  • Filling an area of land of 13 ha in the northern part of the site;  and
  • Cutting areas within the site as shown in the drawing attached to the joint report.

The engineers agreed that those earthworks represented no loss of floodplain storage within the site up to the 100 ARI flood level (existing climate).

  1. [50]
    Mr Della and Mr Dooland also agreed that the flood modelling carried out by Cardno did not include the filling and stormwater drainage infrastructure associated with the MMTC. If that corridor were to be included an amended development footprint would be required. Subsequently, Mr Della did provide an amended development report which took into account the MMTC[17]. Mr Della and Mr Dooland agreed that the issue of whether the MMTC should be included in the hydraulic analysis of the subject site is a town planning matter rather than an engineering matter.
  2. [51]
    In his individual report[18], Mr Della said that the inclusion of the MMTC would not affect the total area of 14.2 ha available for development within the site. His revised modelling in which he took the MMTC into account showed that a revised 13 ha development area did not cause an unacceptable increase in flood levels[19].
  3. [52]
    Alternatively, Mr Della said, a smaller development of 6.252 ha, with reduced cut and fill, could have been carried out. Only a small amount of fill would be required below the 100 year ARI flood level and therefore only minor compensatory earthworks would be required in the floodplain.
  4. [53]
    A third option, with a development area of 4.082 ha, could also have been undertaken. This would require no filling below the 100 year ARI flood level. Such a development ought to have no impact on flood levels and would require no compensatory earthworks in the floodplain to offset filling. However Mr Della noted that some cut of the floodplain was proposed for this option, to provide fill for the development. In Mr Della's opinion, the MMTC would not impact these two smaller development layouts because they are located well away from the MMTC.
  5. [54]
    Mr Gore conceded that there was substantial agreement between the hydraulic engineers on flooding issues. Both accepted that for the 4.082 ha and 6.252 ha scenarios the modelling showed that there would not be measurable changes in the peak flooding conditions, and no adverse impact on adjacent lots.
  6. [55]
    Mr Gore also submitted that while the flooding issues may be capable of being managed in an engineering sense, the proposed development involved interference with the natural condition of the subject land. Accordingly, Mr Gore submitted, it was apparent that the flooding and filling issues would have been important areas of risk for a prudent developer to take into account, even with the best engineering advice. The Council's policy on flooding was evident in S1.1 of the flood management code in the CCP that -

"Filling and excavation work do not occur on land identified on a Planning Area Overlay Map as being subject to the Flood Management Overlay."

This raised the issue of whether such works would be approved.

  1. [56]
    Further, evidence of the work carried out by the Council for the sportsground was irrelevant because the works are post-resumption events which are irrelevant to any assessment of value or to any suggestion that it bears on the position that the hypothetical prudent purchaser may have taken at the resumption date.

Conclusions about flooding issues

  1. [57]
    It is apparent that, from an hydraulic engineering perspective, the necessary cut and/or fill on the floodplains for the 4.082 ha and 6.252 ha proposals could be carried out with no adverse effect on flood levels or adjacent lots. A prudent purchaser would be aware of that advice. However the respondent has raised questions as to whether such works would not be approved because of the terms of the relevant planning provisions. Those questions are considered below in the town planning section.

Civil Engineering costs

  1. [58]
    The parties were not agreed as to the costs of development of any of the proposed hypothetical residential development, as at the date of resumption. Civil engineer Dr Trevor Johnson of Cardno was called by the claimants and Mr McAnany by the respondent. Prior to the hearing, the engineers met twice and prepared joint reports. The second joint report dated 3 December 2010[20] set out the areas of agreement and disagreement between the engineers.
  2. [59]
    The engineers’ costs estimates for the 66 lot and 42 lot developments were as follows:

Proposal

Engineer

Estimate

66 lots

Johnson

McAnany

$7,604,535

$7,848,669

42 lots

Johnson

McAnany

$4,822,420

$4,939,422

  1. [60]
    The differences in the experts relate to the cost of –
  • Strip, stockpile and respread topsoil
  • Earthworks cut to fill and compact
  • Preparation of environmental management plan
  • Implementation of environmental management plan
  • Level 1 compaction control,

factored up for consulting fees (12%), contingencies (15%), insurance (0.6%), GST (10%) and QLeave (0.35%) Most of the differences flow from the different unit rates adopted by Dr Johnson and Mr McAnany: 

 

Johnson estimate ($/m³)

McAnany estimate ($/m³)

  1. Strip/stockpile and respread topsoil

$7.20

$8.00

  1. Excavate/haul and place fill

$5.00

$6.30

  1. [61]
    Dr Johnson said that his rates were based on actual rates for civil engineering projects undertaken on the Sunshine Coast in 2005, in particular rates quoted in September 2005 for a project in Kawana, referred to at the hearing as the Regatta North site. He said that the quantities involved were for a significantly smaller project than that contemplated on the Leacy site. He had access to three competing quotes for the Regatta North work, by Neumann Contractors, Blacklaw Civil Contractors and Shadforths Civil Engineering Contractors. The rates per m³ for strip, stockpile and respread of topsoil varied from $6.94 to $9.80, with Shadforths’ quote being $7.20 which was the amount adopted by Dr Johnson in his estimate for Leacy. Dr Johnson said that given that the Regatta North rates were for much smaller quantities than specified for Leacy, were closer in time to the date of resumption, postdate it, and were for the same contractor (Shadforths) as quoted by Mr McAnany, he felt entirely justified in using the rate of $7.20 for topsoil earthworks.
  2. [62]
    For the cost of the excavation, haul and placement of fill, the three contractors involved in the Regatta North project quoted earthworks rates per m³ varying from $4.43 to $10.77. Again, said Dr Johnson, for much smaller volumes than Leacy. The rates per m³ quoted by Shadforths varied from $4.34 to $7.17 with the majority of the work quoted at between $4.34 and $5.52. Dr Johnson therefore adopted a rate of $5/m³ which he considered to be reasonable given the likely economies of scale present on the Leacy project.
  3. [63]
    Dr Johnson disagreed with Mr McAnany’s opinion that the rates quoted for the Regatta North projected should be increased because of increased moisture content in the Leacy land. In Dr Johnson’s view, because the Regatta North quote was given in September 2005, that is at the beginning of the wet season, in relation to work which would have been carried out in the next few months, the quotes supplied for that project would take into account the additional moisture content anticipated on that property during the wetter months.
  4. [64]
    Mr McAnany’s evidence was that, in October 2010, he had contacted a local contractor, Shadforths Civil Engineering Contractors Pty Ltd, by telephone and email, and asked them for unit rates that would have been appropriate in 2005 for an operation of the magnitude of the Leacy project. The unit rates given to Mr McAnany by Shadforths were those used by him in his estimate.
  5. [65]
    Dr Johnson’s belief was that despite Mr McAnany’s evidence that he had requested unit rates that would be appropriate in 2005, the rates quoted by Shadforths came from a quotation given on 8 March 2006 for a project at Maroochydore known as Wises Farm. Dr Johnson said there were a number of reasons for the rates to be lower for the subject land than those quoted for Wises Farm. The quantities for Wises Farm were much smaller than those anticipated for the Leacy project and it was entirely reasonable to expect that the rates would decrease with increasing volumes as economies of scale came into play. He also pointed out that the subject land was resumed more than a year earlier than the Wises Farm estimate. In Dr Johnson’s opinion the rates should generally be lower for an earlier time. He provided further evidence based on information taken from Rawlinsons Australian Construction Handbook (29th edn, 2011), that the construction index rose by 6.9% from 31 March 2005 to 31 March 2006[21]. Consequently, Dr Johnson considered that Mr McAnany’s figures (and his own) were likely to over-estimate the actual rate which would have applied in February 2005.
  6. [66]
    Mr McAnany’s response was that he had asked for and received from Shadforths the rates applicable for the Leacy project as at March 2005. This was confirmed by the copies of the emails between Mr McAnany and Shadforths. Mr McAnany went on to say that in his opinion rates may vary between projects or indeed within the one project depending on site conditions. As the Leacy land is located in a floodplain, any preliminary estimate would have to assume that the material to be handled would be extremely wet. Therefore, Mr McAnany said, one would expect the unit rates to be at the higher end of the scale tendered by the contractors. In his opinion the Wises Farm development required similar work to the Leacy project for the 145 lot proposal in relation to the stripping, stockpiling and respreading of topsoil.
  7. [67]
    Similarly, in relation to the excavation, haul and placement of soil, Mr McAnany’s opinion was that the rate would vary depending on site conditions. For the Leacy project the haul distance for the earthworks would be relatively large and any preliminary estimate would have to assume that the material to be handled would be extremely wet. Again Mr McAnany considered that the Wises Farm development was similar to the 145 lot proposal for the Leacy land.

Conclusions about civil engineering costs

  1. [68]
    The engineers have approached the task of costing the earthworks in different ways. Dr Johnson used rates quoted for specific projects on the Sunshine Coast. Of the range of rates available, he selected rates that he considered to be appropriate taking into account the economies of scale and timing of the works on the subject site.
  2. [69]
    Mr McAnany contacted a contractor who supplied rates that were site specific and required no adjustment. While Dr Johnson challenged the rates given to Mr McAnany, I am not prepared to disregard Mr McAnany’s evidence on the basis of Dr Johnson’s challenge, in the absence of any evidence from the contractor as to what the estimate was based on.
  3. [70]
    It remains to decide which rates would be adopted by the prudent purchaser. Neither methodology is perfect. In my opinion, the prudent purchaser would consider that there are sound reasons for adopting either of the engineer’s costings as both appear to be reasonable. Since this is a compulsory acquisition case, the well-known liberal estimate approach[22] should be adopted and Dr Johnson’s rates used. 
  4. [71]
    Accordingly, the rates to be adopted for the earthworks are:
  • 66 lots    $7,604,525   $115,220/lot
  • 42 lots    $4,822,420   $114,819/lot

Need for Residential Land

  1. [72]
    The claimants called Mr Joel Taylor of Macroplan Dimasi to establish the need for new residential land in the relevant area, as at the date of resumption. Mr Taylor is an economist who has worked since 2000 in the field of market, demographic research and site identification.
  2. [73]
    Mr Taylor considered the need for residential land based on a highest and best use methodology, taking into consideration the requirements of an efficient land market and an adequate supply. For the purpose of this assessment, Mr Taylor used 2006 ABS Census Population and Housing Census data which, he said, was the best indication of demand and supply as at 2005. He also used the 2011 ABS Census data to understand the current residential market and likely outcomes for the site beyond 2005. Mr Taylor’s assessment considered the demand for residential lots over the period 2006 to 2011 in Meridan Plains and the Study Area, Caloundra North Statistical Local Area.
  3. [74]
    Mr Taylor concluded from his study, that there was significant demand for residential land and houses leading up to 2006. There was continued demand after 2006 with an overall increase in residential building approvals in the 6 years to 2011-12. The Study Area experienced 3.3% population growth between 2006 and 2011. Average household sizes within Meridan Plains and the Study Area were lower than for Metropolitan Brisbane suggesting an increased dwelling requirement for households. There was a sustained strong preference for separate house dwellings within the Study Area.
  4. [75]
    Mr Taylor’s supply analysis revealed that dwelling growth increased roughly in line with growth in demand. Mr Taylor concluded that, given the strong residential market sustained over the past 10 years, residential land zoned and delivered within the Study Area would have attracted home buyers easily.
  5. [76]
    Under cross examination by Mr Gore, Mr Taylor said that although he had relied on 2006 data (that is data available only after the date of resumption), it was the best data available and, he considered, it reflected the enquiries that a prudent developer would have made at the point of resumption. Mr Taylor conceded that, as his assessment of supply was based on historical records of dwelling growth, it did not reflect the growth of land, in the Study Area, that was designated for residential development and the likely take up rate of that land.
  6. [77]
    Mr Vann, the town planner called by the respondent, accepted that the MacroPlan report was helpful in identifying that there was some level of need at the time of resumption. However he considered that need would not have been a compelling ground as there was at least 6 to 9 years of supply and the prospect of major new areas coming on line.
  7. [78]
    Mr Brown, the town planner called by the claimants, said that it was relevant that the MacroPlan report was discussing the need for a 15 year supply plan of land zoned for residential purposes. In his opinion Caloundra South and Palm View were distinctly different from the subject land in terms of potential availability for development. They were new urban growth areas separated from existing urban development and required major planning, engineering and infrastructure before any development would be carried out. By contrast, the relevant part of the subject land was immediately adjacent to existing urban development, was a logical extension to that development and was able to be serviced from the existing urban area. Furthermore, the only substantive constraint was the issue of flooding for which an engineering solution was available.
  8. [79]
    There was also evidence from Mr Henderson, the valuer called by the claimants, that there was market demand for englobo parcels for residential development throughout the Sunshine Coast.
  9. [80]
    While there were flaws in Mr Taylor’s selection of data and his analytical approach, I have concluded that the claimants’ evidence as a whole demonstrates that there was a need for residential development such as that proposed and in the absence of evidence from the respondent that there was an oversupply of residential land in the relevant area, have concluded that the prudent purchaser would be satisfied that there would be a market for the lots resulting from the residential subdivision of the subject.

Town Planning

  1. [81]
    As noted above, the Caloundra City Plan 2004 (CCP) was in operation as at the date of the resumption but the parties agreed that the designation of the subject land (Open Space – Sport and Recreation Precinct) under that Plan is to be ignored because that zoning reflects the scheme underlying the resumption. The land was zoned Rural under the previous town plan, the Caloundra City Planning Scheme 1996.
  2. [82]
    Mr Diehm submitted, and I accept, that a prospective purchaser would be aware that, as at the date of resumption, he or she could lodge a development application to be assessed against the CCP which came into effect on 29 September 2004. Alternatively, within two years of that date (that is before 29 September 2006), a development application (superseded planning scheme) could be lodged asking the assessment manager to assess the application under the 1996 planning scheme.
  3. [83]
    The prudent purchaser would also be aware that in September 2004 the owners of the subject land had lodged an application for preliminary approval overriding the planning scheme for residential development for part of the land. On 4 November 2004, the Council issued an Information Request. There was no response to that Request before the land was resumed.

The 1996 Planning Scheme

  1. [84]
    In the 1996 scheme, the Strategic Plan set out the preferred dominant land uses to guide development within the City. The subject land was designated Urban on the Strategic Plan. The intent of the Urban designation was to indicate those areas which were developed or considered suitable for predominantly urban purposes.
  2. [85]
    Further detail with respect to the preferred dominant land use in the area where the subject land is located was found in Development Control Plan No. 3 – Caloundra (DCP3) where most of the subject land was designated Non-Urban with the eastern portion of the site identified as “Open–Space – Natural Parkland”.
  3. [86]
    Section 2 of DCP3 described the Non-Urban elements as follows:

This designation covers that part of the flood plain that is predominantly used for rural activities. It is zoned “Rural” and is not available for urban development. Rezonings for urban development will not be supported within this designation.

  1. [87]
    The intent for the Non-Urban designation was: 

4.14 Non Urban -

  1. (i)
    Intent – this designation has been applied to an area in the Mooloolah River floodplain that is cleared and used for farming purposes. It is intended that this area remain rural in character.
  2. (ii)
    Implementation – Council will not favourably consider development applications for urban uses and or activities that would allow residential uses in the flood plain.
  1. [88]
    The subject land was zoned Rural. The intent of the Rural Zone was:

To conserve areas of cultural, open space and scenic significance and to facilitate a broad range of rural activities. Some non-rural uses which complement or provide a service to rural areas may be allowed.

  1. [89]
    Part 6 of the Planning Scheme dealt with subdivision and s 6.2(2) relevantly provided:
  1. “(a)
    Without in any way limiting the discretion of Council, it will be sufficient reason to refuse an application if:

…

  1. (ix)
    provision is not made within the subdivision for connection between existing and proposed roads within or external to the land to be subdivided;  or

…

  1. (xii)
    provision is not made for satisfactory access to each proposed allotment.”
  1. [90]
    Town planners were called by both parties - Mr Denis Brown of Planning Australia by the claimants and Mr Greg Vann of Buckley Vann Town Planning by the respondent. The town planners met twice prior to the hearing and produced two joint reports filed on 3 June 2011[23] and 29 June 2012[24].
  2. [91]
    The first joint report considered an hypothetical development proposal for the land, based on drawing 5325-SK1 of 15 November 2010, which showed a subdivision of 145 lots. The second joint report considered two further plans:
  1. (a)
    Plan No. 1849-11 of 6.252 ha showing 69 lots, prepared on or about 5 September 2011;  and
  1. (b)
    Plan No. 1849-5 of 4.098 ha showing 43 lots, prepared on or about 9 November 2011.
  1. [92]
    The experts agreed that an application involving development as shown on all of the proposals would be subject to impact assessment. They also agreed that the proposals conflicted with DCP3 because of the Non-Urban designation of the subject land. This meant that the Council must refuse a proposal for urban uses unless there were sufficient grounds to approve it, despite the conflict.
  2. [93]
    The Caloundra City Planning Scheme 1996 is a transitional planning scheme under the Integrated Planning Act 1997 (IPA)[25]. Under the previous legislation, the Local Government (Planning and Environment) Act 1990, any of the proposed residential subdivisions on the subject land would have required an application for rezoning. Pursuant to s 6.1.30(3)(a) of IPA, such applications must be decided under s 4.4(5) and (5A) of the Local Government (Planning and Environment) Act. Section 4.4(5A) provided:
  1. “(5A)
    The Local Government must refuse to approve the application if –
  1. (a)
    the application conflicts with any relevant strategic plan or development control plan;  and
  2. (b)
    there are not sufficient planning grounds to justify approving the application despite the conflict.”
  1. [94]
    In Weightman v Gold Coast City Council[26] the Court of Appeal considered the effect of s 4.4(5A):

“Sufficient planning grounds

The proposal must be refused in such a situation if there are not sufficient planning grounds to justify the approval despite the conflict. The discretion, as White J observed in Grosser v Council of the City of the Gold Coast, is couched in negative terms, that is, the application must be dismissed unless there are sufficient grounds. This is a mandatory requirement. If there is a conflict, then the application must be rejected unless there are sufficient planning grounds to justify its approval despite the conflict. The primary judge wrongly held that it was directory only. 

In order to determine whether or not there are sufficient planning grounds to justify approving the application despite the conflict, as required by s 4.4(5A)(b) of the P & E Act, the decision maker should:

  1. examine the nature and extent of the conflict;
  2. determine whether there are any planning grounds which are relevant to the part of the application which is in conflict with the planning scheme and if the conflict can be justified on those planning grounds;
  3. determine whether the planning grounds in favour of the application as a whole are, on balance, sufficient to justify approving the application notwithstanding the conflict.

The first task required of the decision-maker, as the learned primary judge recognised, is to consider the nature and extent of the conflict. The conflict may be minor or major in nature or indeed anywhere on the continuum between those two extremes. The conflict in this case is a major one, arising as it does from an absolute prohibition on the height of any development exceeding the maximum stipulated height of three storeys.” 

  1. [95]
    The planners disagreed about whether there were sufficient grounds to justify approval of a development application for urban residential development as proposed, despite the conflict with the planning scheme. Mr Brown considered that the development proposals exhibited sufficient planning grounds to warrant approval. Mr Vann was of the view that they did not.
  2. [96]
    Mr Brown’s reasons for his opinion may be summarized as follows:
  1. (i)
    The conflict with the 1996 Planning Scheme was in reality in the nature of a technical conflict. The Planning Scheme did not include any detailed analysis of the characteristics of the subject land. It did not recognize that the northern part of the land as shown on the drawings was capable of being developed without causing adverse impacts and would occupy only a small portion of the site.
  1. (ii)
    The scale and type of development proposed were relevant in assessing the extent of conflict and whether there were sufficient grounds to overcome any conflict with the planning scheme. Because the development encompassed a relatively small portion of the totality of the subject land, the rural character of the balance of the land was retained. Further, there were benefits offsetting any conflict including:  the proposals met an identified need for further land for residential purposes;  they were a logical extension to existing urban development, and they made efficient use of existing infrastructure. These were all matters which obtained support from the South East Queensland Regional Plan (SEQRP).
  1. (iii)
    The land proposed for development was suitable for residential development, based on the ground truthing undertaken.
  1. (iv)
    The proposed development formed a logical extension to an existing suburban residential area, was compatible with adjoining land uses and made efficient use of adjoining urban infrastructure and services.
  1. (v)
    The development had the potential for connectivity to the roadwork immediately to the north and was adjacent to the land immediately to the north, which was developed for urban purposes.
  1. (vi)
    There was an identified need for additional residential allotments which could be met by the proposed development.
  1. (vii)
    Approximately 90% of the subject land would remain as non-urban land.
  1. (viii)
    The designation in the draft SEQRP 2005 of the land in the urban footprint.
  1. (ix)
    The land in Quandong Street and on the western side of Red Cedar Drive was developed with access to Quandong Street. This indicated an intention to extend Red Cedar Drive to allow for further development to the south of its current location, or at least that provision should be made for the potential development of the subject land.
  1. [97]
    Mr Brown said that DCP3 had been prepared in the absence of detailed flood modelling of the Mooloolah River floodplain. Section 4.14 of DCP 3 appeared to focus on retaining an appropriate rural character and ensuring the safety of persons and property by not approving urban development which would, potentially, be subject to flooding and isolated from flood free land. Four hectares of the subject land is above the floodplain. A total area of 14.3 ha of developable land could be provided, by filling, without impacting adversely on other properties. The proposed filling did not conflict with s 4.14 because the additional development land is an extension of flood free land. Access to the filled land would be across flood free land.
  2. [98]
    Mr Vann’s opinion was that the proposals involved a substantive conflict with the deliberate position of the planning authority, rather than a technical one. He said that the proposals were in direct conflict with a specific intention of the planning documents not to allow residential development on the subject land but rather to treat the existing site boundary between the subject land and the Kawana Forest Estate as the extent of development. In Mr Vann’s opinion:
  1. (i)
    There was no evidence to suggest that the use of the cadastral boundary between the subject site and Kawana Forest Estate was based on lack of ground truthing.
  1. (ii)
    Both the design of Kawana Forest Estate and the absence of legal road access at the time of resumption reinforced the view that road access to the subject site was not intended from the estate.
  1. (iii)
    The percentage of the land that may or may not be developed was irrelevant against the intent that it may not be developed. The size of the parcel involved must be considered. The proposal to develop 145 lots over a total of 14.42 ha was in an area not planned for such development.
  1. (iv)
    Inclusion of the land in the urban footprint reflected the intention for a major sporting facility, not support for urban residential development.
  1. (v)
    The traffic arrangements for Red Cedar Drive and Quandong Street reflected the planning for the Pacific Lutheran College. Red Cedar Drive is a cul-de-sac that does not indicate any intention or extension south of the subject site.
  1. [99]
    Mr Vann said that the planning scheme provisions and development approvals to facilitate the Kawana Forest Estate maintained and respected the defined edge or boundary between the area intended for urban residential development to the north, maintained the subject site in the Rural zone and did not provide for urban residential development. It was relevant that the Kawana Forest Estate and the Pacific Lutheran College were the only areas of urban development west of the MMTC. In his opinion the urban development that had occurred in that area arose from the particular circumstances of the Kawana landholding development lease arrangement and not a general intention to pursue urban development in the wider area west of the MMTC. The Kawana Forest Estate development “turns its back” on the subject site and was not designed to encourage urban residential development there. Similarly the infrastructure planning involving the easement for water supply along the southern boundary of the Kawana Forest development indicated that intent.
  2. [100]
    Mr Vann also said that there was a philosophical position established under DCP3 of the 1996 planning scheme to protect the floodplain and avoid cutting and filling activities.
  3. [101]
    Accordingly, Mr Vann considered that there was considerable risk for a prudent purchaser that the proposals that relied on filling the floodplain would not have been approved by the Council and, quite possibly, the Planning and Environment Court if a refusal were appealed. There would be significant time, cost and resources involved in seeking such approval.
  4. [102]
    Mr Brown did not agree that there was anything immutable about the boundary of the Rural zone. In particular, he referred to Council documents where it had been recognized that there was an area of 6 ha above Q100 which had residential potential (Summary of Potential Land Acquisition Sites, June 2000), and that there were at least 2 ha above Q100 level (Background to Agenda Report dated 25 September 2001). He pointed to the fact that the development approval for part of the land in Kawana Forest Estate, dated 6 July 2000, included a condition relating to part of the land immediately north of the subject, now occupied by the Pacific Lutheran College. The condition required, in effect, that part of the land was to be protected by a covenant to protect the natural vegetation on the site. The covenantor was permitted to clear approximately 1 hectare to create sporting facilities if, by December 2002, an alternative site adjoining the College was not available.
  5. [103]
    Mr Brown said that the only site available for the alternative sporting facilities was the subject land. Development of the subject land for sporting facilities relating to an educational establis hment was impact assessable under the 1996 planning scheme. In Mr Brown’s opinion, it followed that the function of Red Cedar Drive included servicing the sporting facilities and showed that the boundary of the Rural zone was not immutable.
  6. [104]
    Mr Vann’s response was that while the development of part of the subject land for sporting facilities associated with the school might technically be considered an urban purpose, such use would be low key, open in scale and generally consistent with the 1996 scheme to retain the non-urban character of the land. Mr Vann also considered that uses such as an aged persons home would conflict with the 1996 planning scheme. Further, the use by the school of the subject for sporting purposes would not have automatically meant that Red Cedar Drive would have been used to access the sporting facilities. It would have been logical for the school to access the land through its existing campus.
  7. [105]
    Mr Brown also referred to four developments on land within the Rural zone under the 1996 planning scheme – Halcyon Parks Retirement Village, the Oasis Retirement Village, Meridan College and land to the south of Parklands Boulevard. Mr Brown’s opinion was that Council’s approval of these developments demonstrated that Council was prepared to consider certain developments in the Rural zone on their merits and did not regard the boundary of the Rural zone as immutable. Mr Brown also noted that 35 other types of development including aged persons homes were “subject to consent” in the Rural zone.
  8. [106]
    Mr Brown said that Council had approved the Halcyon Park development even though the land was principally in the Non-Urban designation of DCP3 and in the Rural zone of the 1996 scheme. He said that records from 2002 and 2008 showed that the development was facilitated by removal of soil from land within the Q100 level to build up areas of the site to be above Q100. He considered the subject land to be analogous.
  9. [107]
    Mr Vann said the four developments relied on by Mr Brown as demonstrating that Council had exercised its discretion and approved developments in the Rural zone were distinguishable from the proposed development on the subject. The 1996 planning scheme was designed to operate under the then Local Government (Planning and Environment) Act, which intended rezoning to occur to effect development in locations which the strategic planning supported. There was no such support for the subject.
  10. [108]
    With regard to the developments referred to by Mr Brown, Mr Vann said:
  • The Parkland Estate was not below the flood line and was in an area contemplated for urban development in the Strategic Place where it was designated Low Density Residential.
  • Halcyon Gardens was designated part Low Density Residential and part Non-Urban in DCP3. Although partly affected by flooding, there was an intent shown in the 1996 Plan that it was partly suitable for development with an indicative extent which could be understood as relating to the flood line. The development approval was for a relocatable home park rather than residential lots.

Mr Vann said that Council officers had consistently taken the view, when processing the development application, that the line between the Low Density Residential and Rural areas on the site was intended to depict the flood line. They accepted that it was appropriate to adopt the actual flood line as the boundary of development and that no development should occur below the flood line. A condition was imposed recommending development approval above the flood line, but not below. Council refused the whole of the development. That decision was the subject of an appeal to the Planning and Environment Court which approved the development and allowed development in the flood affected area. Mr Vann’s opinion was that, notwithstanding that decision, Council would have continued to take the same position as its officers in relation to flood prone land.

  • Meridan State College was designated mostly Low Density Residential;  a small area was affected by Open Space : Natural Parkland and indicative “Linkages”. The land is not affected by the Q100 flood line. It has been developed for a State college, not a residential subdivision.
  • Oasis Retirement Village was mostly designated Low Density Residential with a small area affected by Open Space : Natural Parkland. The land is not affected by flooding and has been developed for a retirement village, not a residential subdivision.
  1. [109]
    Mr Diehm submitted that there was a technical conflict only in respect of the 42 lot subdivision because the Non-Urban designation had been misapplied. With regard to the 66 and 145 lot proposals there was conflict with the Non-Urban designation of the subject land but there were sufficient planning grounds to warrant approval despite the conflict.
  2. [110]
    Those grounds were:
  1. (i)
    The designation of the high land as Non-Urban was incorrect. In Beck v Council of the Shire of Atherton [27] Quirk DCJ said: 

“There may be cases where a departure from the strategic plan could be justified;  where for example the planning strategies which it represents, having been overtaken by events (or for some other reason), clearly no longer have any application;  or where it can be demonstrated plainly the land has been given a designation on the basis that was and remains invalid.”

Figure 2 of DCP3 allocated all of the subject land to the Mooloolah River/Currimundi Creek floodplain designation. It was apparent that the “floodplain” referred to in the intent for the non-urban designation was determined by the Q100 flood level as demonstrated in the Planning Study[28].

It was common ground between the parties that some 4.2 ha of the subject land along its northern boundary is above the Q100 level. Insofar as DCP3 designated this land as non-urban it was simply incorrect. This error was partially corrected in the CCP where Map CWP2[29] showed the high land in the north of the subject land not being constrained and not subject to the flood management overlay provisions.

  1. (ii)
    With regard to the allocation to the Rural zone, the land was not good quality agricultural land and therefore was not of agricultural significance. There was no suggestion that it had open space or scenic significance. The designation of the subject land as rural may be a reflection of the fact that for some time it had been put to rural use, namely cattle grazing.

The fact that land was allocated to the Rural zone was not an inhibition to its being developed for residential purposes[30]. Under the old pre-IPA regime, an application could be made for rezoning. Post IPA, an application for a material change of use could be made, to facilitate uses in accordance with the Residential A zone pursuant to the 1996 scheme.

A prospective purchaser would be aware that there were, nearby, examples of land in the Rural zone in the 1996 Scheme being approved for residential purposes:

  1. (a)
    Halcyon Gardens was designated Urban in the Strategic Plan and was zoned Rural. The northern part of the subject land was designated Non-Urban pursuant to DCP3. In 2003 it was approved for a relocatable home park.
  2. (b)
    The Oasis Retirement Village was designated Urban pursuant to the Strategic Plan and was zoned Rural. It was approved for a retirement village, a development residential in nature.
  3. (c)
    Parklands Estate was zoned Rural and was designated Low Density Residential pursuant to DCP3.

A prospective purchaser at the relevant date would reasonably assume, that had the Council in 1996 not been mistaken about the fact that 4.2 ha of land was above the Q100 level, the 1996 Scheme would have allocated that land to the Low Density Residential - designation and the balance land on the floodplain to the Non-Urban designation, as was the case with the Halcyon Gardens designation.

  1. (iii)
    As at the date of resumption, the prospective purchaser would be aware that the three development scenarios could be developed without any material adverse, hydrological impact. There would be no material increase in afflux level, either upstream or downstream of the subject land and no loss of floodplain storage. Indeed as a consequence of the balance cut and fill approach to be utilized, there would in all scenarios be an enhancement of floodplain storage. There would be no impact on drainage lines, natural hydrological systems, land forms and the flood conveyance to the floodplain.

Specifically the 42 lot proposal involved no fill below Q100 and only involved some cut on the balance land. The 66 and 145 lot proposals did involve fill below the Q100 line around the margins of the elevated land above Q100.

The prospective purchaser would know at the relevant time that in the immediate vicinity there were examples where approvals had been granted to permit fill below Q100 for the purposes of development – at Pacific Lutheran College, Kawana Forest Estate in its north-east corner and Halcyon Gardens.

Council had, post resumption, developed the subject land for a district level sporting complex which involved earthworks on some 16.8 ha and fill in the floodplain to provide a building pad for the sports building centre. The claimants’ 66 and 145 proposals did not create a fill platform in the floodplain such as the Council work has.

  1. (iv)
    The proposal would satisfy a need for well located, attractive residential allotments.
  1. (v)
    The proposal would make efficient use of the existing infrastructure in Kawana Forest Estate and the soon anticipated MMTC infrastructure and the proposed CAMCOS rail infrastructure.
  1. (vi)
    The proposal supported the principles in the draft SEQRP with the efficient use of urban land.
  1. (vii)
    The proposal constituted a logical extension to the Kawana Forest Estate.
  1. [111]
    Mr Gore submitted that the master planning approval process established under the Kawana Waters Development Agreement (KWDA) and Development Control Plan No. 1 – Kawana Waters (DCP1) was somewhat unique in that it sat outside the Integrated Development Assessment System created by the Integrated Planning Act 1997 and continued under the Sustainable Planning Act 2009.
  2. [112]
    The northern boundary of the subject land adjoined Detailed Planning Area 10 (DPA 10) within DCP1 in the 1996 scheme. DCP1 was incorporated into the 1996 planning scheme to give effect to the development of land subject to the KWDA. Part 7 of DCP1 provided, inter alia, that:

“The Council has adopted the Master Planned Community Development Process (MPCD) for the purpose of implementing the DCP in the major undeveloped portion of the DCP Area in recognition of the following salient factors:- 

  1. (a)
    all the major areas of undeveloped land in the DCP Area are under the ownership or control of the one developer, the Master Developer, which provides a unique opportunity for a fully integrated approach to the Planning, Subdivision and Development of the Kawana Waters Community Development Area;  and

…

  1. (d)
    the desirability of providing greater flexibility in the statutory provisions controlling such a large scale, comprehensively planned urban Development to ensure the diversity of land use type, form and distribution essential to the creation of a fully integrated community which meets the needs of all its residents.”
  1. [113]
    Section 4.16(2)(k) of DPA10 said that the DPA is “generally surrounded by open space”, provided the opportunity for an integrated neighbourhood development and provided that the Master Plan prepared for the whole of DPA10 should ensure, inter alia, that the development recognize the following criteria:
  1. (i)
    the nature and form of development of the DPA would preserve the flood storage capacity and flow characteristics of the floodplain;

…

  1. (iv)
    the proximity to the open space that will generally surround the DPA area;
  1. (v)
    there shall be no access other than pedestrian and bikeway to Sunset Drive.
  1. [114]
    Mr Gore said that the Master Plan for the area, approved by Council in September 1999 was a Structure Plan which showed the DPA10 area in the Urban designation with supporting School and Neighbourhood Centre clients. None of the maps suggest any form of interaction from DPA10 to the south or west.

Conclusions about 1996 Planning Scheme

4.082 ha residential development

  1. [115]
    In my opinion, the hypothetical prudent purchaser, properly advised, would form the view that, as at the date of resumption, an application for a material change of use could be made to facilitate uses on the subject’s 4.082 ha of flood free land in accordance with the Residential A zone, pursuant to the 1996 scheme. Such an application would be likely to succeed as would an application for development approval for a 42 lot residential subdivision, because there appear to be sufficient planning grounds to warrant approval.
  2. [116]
    Although most of the subject land was designated Non-Urban under DCP3, it appears that the underlying reason for that designation was that the land was considered to be in the floodplain. Thus s 2 of DCP3 says that the Non-Urban designation “covers that part of the flood plain” that is predominantly used for rural activities and s 4.14(i) says that the Non-Urban designation has been applied to an area in the Mooloolah River floodplain that is cleared and used for farming purposes. That the location of the land in the floodplain was the basis of the Non-Urban designation is confirmed by the implementation criterion in s 4.14(ii), namely that “Council will not favourably consider development applications for Urban uses and/or activities that would allow residential uses in the flood plain”. The 4.082 ha is not in the floodplain.
  3. [117]
    The subject land was zoned Rural. It is common ground that the land is not of cultural, open-space or scenic significance.
  4. [118]
    I consider that the prudent purchaser would also conclude that there are other good planning reasons for granting approval, as identified by Mr Diehm in his submission. As discussed above, I have accepted the evidence that there was a need for new residential allotments which could in part be met by this proposal. The evidence has also established that the floodplain capacity will not be adversely impacted by the proposal, although the 42 lot development would have required reduced earthworks over a small area of the floodplain to lift the allotment levels to comply with Council guidelines in relation to flooding immunity. The proposal will make efficient use of the infrastructure in Kawana Forest Estate and indeed constitutes a logical extension to that estate. Further, I have accepted Mr Brown’s evidence that the purpose of s 4.14 of DCP3 appears in part to be to ensure the safety of persons and property by not approving urban development which would be potentially subject to flooding. The 42 lot proposal does not infringe that purpose.
  5. [119]
    Mr Vann’s evidence was that the planning documents reflected a specific intention of the planning authority not to allow residential development on the subject land and that the existing site boundary between the subject and Kawana Forest Estate demarcated the residential development from the rural land.
  6. [120]
    As noted earlier, the Kawana Forest Estate is a master planned estate and the development in the area immediately north of the subject land reflects the plans and intentions of the developer, the Council and the State government. While I accept that the planning documents and design of the estate do not appear to envisage any connection with the subject land, it is to be recalled that the estate was developed on the basis that the subject land was to be used for sporting purposes. I do not consider that the planning documents go so far as to show an intent that there be no residential development on the subject land. The clear demarcation between the subject land and Kawana Forest Estate appears to be explained primarily by the land ownership of the respective sites, reinforced by the zoning of each. In other words, the boundary is a matter of fact and, in my opinion, does not reflect any inherent reason for drawing the line as to permissible development at that particular point. Similarly, the design of Kawana Forest Estate may be explained on the basis that in fact, no residential development was planned on the subject land. It cannot be inferred from that fact that no residential development was permissible.
  7. [121]
    Mr Vann’s evidence was that the Kawana Forest Estate and the Pacific Lutheran College were the only areas of development west of the MMTC and that those developments reflected the particular planning arrangements in place to facilitate the Kawana Forest Estate. While that is a factor to be taken into account in considering whether there are sufficient planning reasons for approval of the 4.082 ha development, I do not consider that it is sufficient to cause refusal of the application. The proposed development is small, lies above the floodplain and could have been integrated with the Kawana Forest development.
  8. [122]
    On balance then, I consider that the prudent purchaser would conclude that it is likely that the appropriate approvals could be obtained permitting residential development of 4.082 ha but would expect that there would be some delay in obtaining those approvals.
  9. [123]
    It would also be necessary that approval be obtained for access to the subject via Red Cedar Drive and Rapanea Street. As discussed above, as at the date of resumption there was no access to the site, either existing or planned, to enable residential development. I decided in relation to that issue that subject to resolution of the planning issues raised by the traffic engineers, the prudent purchaser would conclude that suitable access could be obtained to the subject but that such a purchaser would know that there would be some risk and delay in obtaining access.
  10. [124]
    I have already dealt with most of the planning issues raised by the traffic engineers. There remains the question of whether use of Red Cedar Drive as access to the proposed development would be contrary to the reasonable community expectations of the Kawana Forest Estate residents.
  11. [125]
    In my opinion, the prudent purchaser of the subject land would not consider that this is a factor which would persuade the Council to refuse development approval. As discussed above, the prudent purchaser would expect to be able to coordinate approval and development of the subject with the development of the relevant stages of the Kawana Forest Estate. That being the case, the expectations of a purchaser of land in that Estate  would be formed with knowledge of the proposed development of the subject. The prudent purchaser would, I consider, take the view that on that basis opposition to the proposal from those residents would either be non-existent (if the approvals for the subject were given before the sale of the Kawana Forest Estate lots) or limited.
  12. [126]
    The risk and delay in obtaining road access and development approval would be taken into account by the prudent purchaser in fixing a price to be paid for the subject based on the 42 lot development proposal.

6.252 ha residential development

  1. [127]
    The applicants contended that the highest and best use of the subject land as at the date of resumption was a 66 lot residential development of 6.252 ha with the balance land of 80.02 ha to be used for rural purposes. Both flooding engineers agreed that there would not be measurable changes in the peak flooding conditions caused by such a development and there would be no adverse impact on adjacent lots. The development would require cut and fill as part of the development area is below the 100 year ARI flood level. Mr Della’s opinion was that only minor compensatory works would be required in the floodplain. From an hydraulic engineering perspective therefore such a development would not cause adverse interference with the floodplain.
  2. [128]
    There remains the question of whether the town planning issues raised by the respondent would be resolved differently in the mind of the prudent purchaser, in relation to the 66 lot development which would require development of 2.17 ha of the floodplain, unlike the 42 lot development.
  3. [129]
    I consider that the prudent purchaser would conclude that there would have been a significant risk, if an application to develop the 66 lot proposal had been made under the 1996 planning scheme, that approval would have been refused because the additional 2.17 ha is in the floodplain.  The risk is such that it is unlikely that such a purchaser would have entered into an unconditional contract at a price for the subject land calculated on the basis that such a development would be approved.
  4. [130]
    Halcyon Gardens was the only one of the four developments in the Rural zone relied on by Mr Brown where part of the approved development was below the Q100 line and where cut and fill was allowed on the floodplain. Unlike the subject, part of the land in that development was designated Low Density Residential and the development approved was a relocatable home park. The evidence was that the Council had initially rejected the development application and the development only proceeded because the Planning and Environment Court allowed an appeal against that decision. I do not consider that the prudent purchaser would take any significant comfort from that approval, particularly in the light of Mr Vann’s evidence that in his opinion the Council would in future, continue not to approve developments in the floodplain. 
  5. [131]
    Although the evidence is that the 66 lot development would not adversely affect the floodplain, when viewed solely from an engineering point of view, I have already said that I consider that the underlying reason for the Non Urban designation of the subject under DCP3 was that the land was considered to be in the floodplain. Section 4.14(ii) of DCP3 says that Council will not favourably consider development applications for activities that would allow residential uses in the floodplain. I have accepted Mr Vann’s evidence that there was a philosophical position established under DCP3 to protect the floodplain and avoid cutting and filling activities. Given the terms of s 4.14(ii) and in the light of Mr Vann’s evidence I consider that the part of the proposed development below the Q100 line would create a major conflict with the planning scheme, as referred to in Weightman v Gold Coast City Council, in that the purpose of s 4.14(ii) is to prohibit development in the floodplain.

Caloundra City Plan 2004

  1. [132]
    The subject land is included in the Open Space – Sport and Recreation Precinct in the Caloundra West Planning Area in the CCP. It is also included in the Open Coastal Plain in Overlap DEO Map 4 Character and Identity elements (includes inter-urban break). The Open Coastal Plain landscape character type on Map DEO 4 extends over a wide area and includes land further to the north within Birtinya which is being developed for suburban residential purposes. The land is not within the Emerging City or Indicative Urban Area. The whole of the land is included in Good Quality Agricultural Land on Map DEO 2.1.
  2. [133]
    The subject land is not part of the area shown as Sub Regional Intra-Urban Break on Map DEO 4. However land immediately to the west of the subject land is shown as Sub-Regional Intra-Urban Break on that map.
  3. [134]
    Map CWP2 is the overlay map for Caloundra West which includes a suite of other constraints. Part of the area proposed for development is subject to flood management and a very small part of it is within natural wetlands and waterways.
  4. [135]
    Map CWP4 forms part of the provisions for the Caloundra West Planning Area and includes the subject site as part of a large section of the northern part of that planning area identified as “constrained land not intended for development”.

Designation of subject land in the absence of the scheme of resumption

  1. [136]
    Mr Brown considered that, in the absence of the scheme of resumption, the high ground on the subject land would have been included in the Emerging Community Precinct, in common with other land with similar characteristics such as the Oasis Retirement Village land and the Meridan College land which also contained constraints to development identified on Overlays and the Planning Area Code Map. The constraints on the subject relating to water-uses and flood management were capable of being resolved, he said, because the subject land was included in the Urban footprint in the draft SEQRP, the land above Q100 was flood free, unconstrained infrastructure, services and facilities such as water supply and sewerage were available in the Kawana Forest Estate, and access to the subject land was potentially available.
  2. [137]
    Mr Vann described Mr Brown’s conclusion that the land would have been included in the Emerging Community Precinct as highly speculative. Mr Vann said that the CCP clearly identified the MMTC as the boundary to urban development which was confirmed by s 6.5.2(a) of the Caloundra West Planning Area Code. Council had consistently maintained a policy position of retaining the Mooloolah River floodplain in a natural state and limiting disturbance. Inclusion of the land in the Emerging Community Precinct would have cut across this policy position and been inconsistent with the recommendations of earlier flood studies.
  3. [138]
    Mr Vann took the view that the fact that the scheme of resumption was on foot at the time of preparation of the CCP did not mean that, in the absence of the scheme, the part of the land not subject to flooding would have been designated for urban residential development. Other land adjoining Kawana Forest Estate to the west, which was similarly not flood affected, had not been included.
  4. [139]
    In my opinion, the evidence was not sufficient to establish that, in the absence of the scheme underlying the resumption, the high ground of the subject would have been included in the Emerging Community Precinct. The difference in development rights available on the sites relied on by Mr Brown under the 1996 planning scheme, as compared with the subject, was such that the comparison is not sustainable. Further, the history of the planning instruments applicable to the site and the Kawana Forest Estate was such that it seems unlikely that the zoning would have been altered. The southern boundary of the proposed development of the Kawana Forest Estate to the north provided a clear demarcation between that estate and the subject. No suitable road access was available to the subject at the time the CCP came into effect. While I concluded that any application for a material change of use of the high land would have been likely to succeed under the 1996 planning scheme, there was nothing to suggest that the designation of that land would have been altered by the Council in the absence of a trigger of that nature to achieve that result.

Development application under the CCP

  1. [140]
    However, Mr Diehm submitted that, even if the higher land on the subject had not been designated Emerging Community Precinct in the absence of the resumption scheme, an application for development approval such as proposed by the claimants would have succeeded. Mr Gore submitted that such an application would not have succeeded.
  2. [141]
    The planners agreed that an application for any of the three proposed developments was impact assessable under the CCP.
  3. [142]
    Section 3.5.14 of IPA provides:

“3.5.14 Decision if application requires impact assessment

  1. (1)
    This section applies to any part of the application requiring impact assessment.
  2. (2)
    If the application is for development in a planning scheme area, the assessment manager’s decision must not –
    1. (a)
      compromise the achievement of the desired environmental outcomes for the planning scheme area;  or
    1. (b)
      conflict with the planning scheme, unless there are sufficient planning grounds to justify the decision despite the conflict.”
  1. [143]
    In Webster v Caboolture Shire Council[31] Brabazon DCJ, having referred to the Explanatory Note to the Bill which proposed s 3.5.14, said in relation to the word “compromise”, that:

“That note refers to a decision which “threatens” the achievement of a DEO. The idea of a threat is consistent with the dictionary definition of “compromise”:  to expose to risk or danger, to imperil, to involve in a hazardous course … exposed to risk, danger or discredit – OED.”

  1. [144]
    In Woolworths Limited v Maryborough City Council[32], Fryberg J said:

“Conflict” in this context means to be at variance or disagree with. It describes a quality of a relationship between the subject (the decision) and a part of the predicate (the scheme). Unlike “compromise” in para (a), it implies no particular impact by a subject upon an object. A determination that there has been a breach of the requirement that “the assessment manager's decision must not … conflict with the planning scheme” requires the identification of the decision, the identification of some part or parts of the scheme with which the decision might be said to conflict and a decision whether the former conflicts with the latter. Only if such a determination has been made is it necessary to consider whether there are sufficient planning grounds to justify the decision.”

  1. [145]
    Mr Brown’s opinion was that there was no good reason why a development application ought not to have been approved under the CCP. He said that, on the basis that the zoning of the subject land under the CCP is to be ignored, the question of whether a development application would be approved under the CCP is to be determined by considering the merits/constraints rather than in a forward planning perspective.
  2. [146]
    In Mr Brown’s opinion, the zoning of the land as Open Space – Sporting and Recreation purposes did not mean that the land was not suitable for other purposes. For reasons similar to those which he gave in relation to the 1996 scheme, Mr Brown considered that the land was suitable for developments such as those proposed. He added that other land has been developed for urban purposes in the general locality of the subject land even though shown on Map CWP4 as being constrained land, not intended for urban development. For example, the majority of the Halcyon Parks Retirement Village site, the whole of the Oasis Retirement Village site and part of Meridan College were so included. Further, other land so shown and located at Turnbury Street, Meridan Plains was currently being developed for suburban residential purposes. In Mr Brown’s opinion, these examples illustrated the generalized nature of the mapping and the need for ground truthing investigations when assessing the suitability of land for urban development.
  3. [147]
    Mr Vann referred to Desired Environmental Outcomes (DEOs) 2, 3, 5 and 6 of the CCP. These are paraphrased below.
  4. [148]
    2.3.1 DEO No. 2 deals with the wellbeing of the whole community and provides for the integration of new communities with existing communities, such that the development in newly emerging communities (such as Caloundra West and Master Planned communities) is integrated with the character, scale and movement networks of existing developed areas, and contributes to a sense of community belonging and social cohesion.
  5. [149]
    Given the evidence discussed above, I have accepted Mr Diehm’s submission that the subject proposal does not conflict with this DEO. Rather the proposal is integrated with the Kawana Forest Estate and proposes the utilization of the infrastructure and road system.
  6. [150]
    2.4.1 DEO No. 3 provides that Caloundra’s City’s natural resources are managed in a sustainable way to maintain biodiversity etc. These natural resources include – (3) water resources such as the Mooloolah River and their tributaries and groundwater where – (b) the occurrence of filling and other potentially damaging activities within floodplains is avoided.
  7. [151]
    Mr Vann said that there was a clear intent to avoid filling and other potentially damaging activities within floodplains. Two of the development options require cutting and filling of the site to address flooding issues which directly cut across DEO3(3)(b).
  8. [152]
    I will consider this DEO when discussing my conclusions in relation to the CCP.
  9. [153]
    2.6.1 DEO No. 5 provides that Caloundra City is an accessible city served by efficient, safe and convenient movement systems offering a choice of transport modes which support orderly and sequenced development where urban growth boundaries are maintained and a pattern of development is promoted that reduces private vehicle dependency and increases potential for use of public transport, cycling and walking.
  10. [154]
    Mr Diehm submitted and I accept that the subject proposals do not threaten the achievement of this DEO. The evidence shows that the development proposed is orderly and sequenced in that it adjoins and integrates with the approved Kawana Forest Estate development. It integrates with its road system which makes use of and supports the MMTC infrastructure.
  11. [155]
    2.7.1 DEO No. 6 provides that Caloundra City is supported by physical and social infrastructure systems which meet the differing needs of coastal and rural communities and which provide for the optimum use of resources and existing infrastructure capacities where urban growth boundaries are maintained and the flood carrying capacity of waterways, wetlands and floodplains is not adversely affected by development.
  12. [156]
    I have also accepted Mr Diehm’s submission that there is no compromise of any of the nominated desired environmental outcomes in this regard. The proposal makes efficient use of the high land and the flood carrying capacity of the floodplain is not adversely affected by the development.
  13. [157]
    The Planning Area Overall Outcomes are in s 6.5.2 of the Caloundra West Planning Area Code which provides:
  1. “(1)
    The Planning Area Overall Outcomes are the purpose of the Caloundra West Area Code.
  1. (2)
    The Planning Area Overall Outcomes sought for the Caloundra West Planning Area Code are the following: 
  1. (a)
    Caloundra West is an integrated residential community …
  1. (b)
    The western and northern boundaries of the Planning Area (as defined by the alignment of the Multi Modal Transport Corridor) are maintained as the limit to coastal urban development in order to:
  1. (i)
    protect the integrity of the inter-urban break between the Caloundra Coastal Urban area and communities in the south of the Maroochy Shire;
  1. (ii)
    retain the flooding characteristics of the Mooloolah River floodplain;  and
  1. (iii)
    enable the efficient delivery of essential urban infrastructure

…

  1. (d)
    Development in the Emerging Community Precinct, in the western part of the Planning Area, provides for a series of interconnected neighbourhoods which includes a mix of low to medium density housing including detached houses, duplex dwellings, multiple dwellings and retirement communities.

…

  1. (f)
    Development in the Planning Area responds to site constraints, retaining significant vegetation and protecting the flood carrying capacity of the Mooloolah River floodplain. The sense of identity and arrival to Caloundra from the west is protected by retaining and supplementing a corridor of bushland adjacent to Caloundra Road.

…

  1. (p)
    Development in the Planning Area does not compromise the provision and operation of the proposed CAMCOS Public Transport Corridor, the Multi Modal Transport Corridor (MMTC) and Caloundra Road Areas adjacent to the CAMCOS corridor included in the Open Space – Conservation and Waterways Precinct are retained for their environmental, acoustic and visual buffering value.
  1. (q)
    Development in the Planning Area implements best practice environmental management to achieve a high standard of water quality entering Currimundi Creek and Mooloolah River catchments.” 
  1. [158]
    Mr Vann said that Map CWP4 showed that the subject land is bisected by the MMTC. He also said that the overall outcomes reflected a planning principle of maintaining a limit or boundary to urban development. They also reflect the strategic plan that development maintains the flooding characteristics of the Mooloolah River floodplain.
  2. [159]
    The northern boundary of the planning area is the northern boundary of the subject land. Mr Diehm submitted that there was no utility in s 6.5.2(2)(b) because the Council always intended to develop the subject land with coastal urban development, namely the district sports field. In any event, Mr Diehm said, the proposed developments would protect the integrity of the inter-urban break, would have no adverse impact on and would retain the flooding characteristics of the Mooloolah River floodplain and utilize efficiently the infrastructure in Kawana Forest.
  3. [160]
    As with the 1996 planning scheme, Mr Vann said that there was a philosophical position established in the higher level provisions under DEO3 of the CCP to protect the floodplain and avoid cutting and filling activities. This position was also supported by the overall outcomes for the local area and specific code provisions in relation to protecting natural hydrological systems. Even though the proposed earthworks for the two larger developments on the subject may technically comply with the flood code requirements, such an outcome would conflict with the test relating to maintaining natural hydrological systems and landforms.
  4. [161]
    The Planning Area Specific Outcomes for the Caloundra West Planning Area Code are found in s 6.5.3. Mr Vann considered that the following specific outcomes were relevant to the proposals to fill the floodplain:

Specific Outcomes

Acceptable solutions for self-assessable development and probable solutions for assessable development

Flood

  1. 05
    Where land may be below the 100 year ARI   flood level or otherwise liable to flooding, the risk of flooding is investigated and established prior to development.

 

S5.1  No probable solution prescribed

  1. 06
    Development does not materially increase flood levels on other land.

S6.1   No probable solution prescribed.

  1. 07
    Natural hydrological systems, landforms and drainage lines and the flood conveyance capacity of floodplains and waterways are maintained.

S7.1   No probable solution prescribed.

  1. 08
    Development and public infrastructure has an acceptable level of flood immunity, providing for the protection of development at an acceptable level of risk.

S8.1Development complies with Probable Solutions S4.1, S4.2, S5.1, S5.2 and S5.3 of the Flood Management Code.

 

S8.2 Reconfiguring a lot provides for minimum lot sizes and flood free building sites which comply with the probable solutions for flood immunity provided in probable solutions S2.3, S2.6 and S8.3 of the Reconfiguring a Lot Code.

  1. [162]
    Mr Vann said that, even if a suitable engineering solution could be devised to ensure no decrease in flood storage capacity, the 66 lot proposal conflicted with specific outcome (SO) 07 because earthworks necessarily involve modification of natural hydrological systems, landforms and drainage lines. He ultimately acknowledged, however, that any conflict may be technical but pointed out that in not dissimilar circumstances the Council took a very strong stance about not allowing filling.
  2. [163]
    Mr Della considered that SO 07 was directed towards a holistic approach whereby the landforms maintained the direction of drainage flows on the subject. He said that the specific outcome was complied with and if the alteration to the floodplain was a conflict it would only be a technical conflict.
  3. [164]
    Mr Diehm submitted that Mr Vann had conceded that if the proposal resulted in no adverse impact but resulted in a positive enhancement, the conflict would be merely technical. Mr Diehm also submitted that when SO 07 was read as a whole and in context it contemplated development rather than prohibiting it. That was irreconcilable with Mr Vann’s interpretation.
  4. [165]
    The majority of the subject site is affected by the Flood Management Overlay, the exception being some land along the northern boundary. The Flood Management Code includes the following Specific Outcomes and Probable Solutions relevant to the proposed development:

Specific Outcomes

Probable solutions

 

Development in Areas Subject to Flooding

 

01 Development is undertaken such that: 

  1. (a)
    there is no afflux in flood levels when the completed development scenario (including cumulative potential) is compared with the pre-development scenario (i.e. no increase in peak water level);
  2. (b)
    there is no loss of flood storage volume;
  3. (c)
    natural hydrological systems are protected
  4. (d)
    natural landforms and drainage lines are maintained to protect the hydraulic performance of waterways;  and
  5. (e)
    there is no detrimental impact on flood evacuation routes or to counter disaster procedures or systems.

 

S1.1 Built structures and filling and excavation work to not occur on land identified on a Planning Area Overlay Map as being subject to the Flood Management Overlay.

  1. [166]
    Mr Vann considered that the proposed 66 lot development competed with SO 01(c) and (d) because earthworks necessarily involved modification to natural hydrological systems, landforms and drainage lines. He said that there is a clear direction in the Flood Management Overlay provisions for the protection of floodplains, and that buildings, fill and excavation works do not occur on flood prone land. This aligns with s.2.4.1 DEO No. 3(3)(b), set out above, and the Caloundra West Planning Area Code requirement to maintain natural hydrological systems, land forms and drainage lines. The development proposal conflicted with these policy directions.

Conclusions about development applications under the CCP

  1. [167]
    In my opinion the prudent purchaser would consider that the 42 lot proposal does not conflict with or compromise the DEOs in the CCP. Although such a proposal does appear to conflict with s 6.5.2(2)(b) of the Caloundra West Planning Area Code, I consider that there are sufficient planning grounds to justify approval of such an application, for the reasons I relied on in relation to the 1996 planning scheme.
  2. [168]
    The 66 lot proposal raises more difficult issues. Mr Vann’s opinion that there was a clear direction in the Flood Management Overlay provisions for buildings and filling not to occur on land subject to flooding is open to question. S 1.1 which is to that effect is identified as a “Probable Solution” only, thus leaving the door open for other solutions. Specific Outcome 01 opens with the words “Development is undertaken such that”, which implies that development may occur provided the outcomes in (a) to (e) are met. However SO 01(c) and (d) require that natural hydrological systems are protected and that natural landforms and drainage levels are maintained to protect the hydraulic performance of waterways. Paragraph (c) may be interpreted to mean that the only way in which the hydrological systems may be protected is by not allowing any development that impacts, whether adversely or not, on those systems. Alternatively, it may mean that development that impacts on the natural hydrological systems will be permitted, provided the impact is not adverse. Similarly, paragraph (d) may be interpreted to mean that development is permitted provided the hydraulic performance of the waterways is protected or it may mean that the only development that will be permitted is development which maintains the natural landforms and drainage lines.
  3. [169]
    Specific Outcome 07 in the Caloundra West Planning Area Code suffers from the same ambiguity as SO(1)(d) in the flood overlay.
  4. [170]
    DEO No. 3(3)(b), which states that “the occurrence of filling and other potentially damaging activities within the floodplain”, does not amount to an absolute prohibition of filling. The DEO can be interpreted as meaning that it is only damaging activities that are to be avoided. The evidence is that the cut and fill associated with the 66 lot proposal would not adversely affect the floodplain.
  5. [171]
    On balance, therefore, I consider that the prudent purchaser would be advised that development in the floodplain would be allowed provided the specific outcomes in the Planning Area Code and Flood Management Code are met. Such requirements could be met by development that maintains the flood conveyance capacity of floodplains and waterways and the natural hydrological systems, so that the natural landforms and drainage lines are protected. I have reached this conclusion because, despite the possible interpretations of the relevant provisions of the Flood Management Overlay and the Planning Area Code, the weight of the planners’ evidence was that the development would be allowed. Mr Brown considered that to be the case and, in the end, Mr Vann conceded that any conflict may be technical.
  6. [172]
    The result is that I have concluded that the prudent purchaser would consider that it is likely that Council would approve the 66 lot development although the risk of refusal is greater than in relation to the 42 lot development. An appeal to the Planning and Environment Court may be necessary and such an application may well involve significant time, cost and resources to obtain approval. A prudent purchaser would be aware of those factors and would take that into account in calculating the profit to be made from the proposed development, and the price to be paid for the subject land.

Parties’ Valuations

  1. [173]
    Mr RR Henderson of Bob Henderson Valuers Pty Ltd was called by the claimants to give valuation evidence and Mr AF Carrick of AF Carrick and Associates was called by the respondent. Both witnesses are registered valuers.
  2. [174]
    Mr Henderson valued the subject land using three methodologies –
  1. (i)
    as englobo land, on the basis of three different development areas;
  1. (ii)
    on the basis of three different development areas at a rate per lot, plus balance land; 
  1. (iii)
    on the basis of three hypothetical residential subdivisions.
  1. [175]
    Mr Carrick valued the land as a Rural zoned property by direct comparison with rural sales and the Land Court decision of McPherson v Caloundra City Council[33].

Mr Henderson

Englobo direct comparison

  1. (i)
    4.082 ha of potential development land $2,653,300

 @ $650,000/ha

 Balance land of 82.14 ha @ $35,000/ha $2,874,900  

          $5,528,200

  1. (ii)
    6.252 ha of potential development land  $3,751,200  

part filled @ $600,000/ha

Balance land of 80.02 ha @    $2,600,650

$32,500/ha

          $6,351,850

       Adopt   $6,351,800

Rate per lot

  1. (i)
    4.082 ha of potential development land $2,625,000

of 42 residential lots

42 lots @ $62,500/lot    

Balance land of 82.14 ha @ $35,000/ha $2,874,900

          $5,499,900

  1. (ii)
    6.252 ha of potential development as

64 residential lots with part filled area and

2 lots amalgamated to balance area

64 lots @ $60,000/lot   $3,840,000

Balance land of 80.02 ha @ $32,500/ha $2,600,650

          $6,440,650

       Adopt   $6,440,600

Hypothetical subdivisions

  1. [176]
    The details of Mr Henderson’s calculations are not set out at this point. His valuations were:
  1. (i)
    42 lot residential subdivision with 3 lots amalgamated

 to the balance land       $3,821,000

  1. (ii)
    66 lot residential development with 2 lots

amalgamated to the balance land     $4,748,000

Mr Carrick

  1. [177]
    Mr Carrick’s valuation was: 

Land

4.1 ha – flood free grazing land @ $153,000/ha       $627,300

82.03 ha – flooded grazing and environmental sensitive

Melaleuca forest @ $23,500/ha cleared and fenced   $1,927,705

          $2,555,005

Improvements

  Shed    $9,750

  Yard/shed $2,500           $12,250

          $2,567,255

      Adopt    $2,570,000

Valuation evidence

  1. [178]
    The claimants’ final claim, $6,351,800, appears to be based on Mr Henderson’s valuation of the land using the 6.252 ha englobo direct comparison method. In his initial valuation report[34] Mr Henderson identified 21 sales for the purpose of his valuation. In a subsequent statement dated 2 October 2013[35] Mr Henderson provided an indication of the weight that he had attributed to each of the sales

Land Court decision - McPherson v Caloundra City Council[36]

  1. [179]
    It is convenient, initially, to set out relevant details of the Land Court decision in McPherson v Caloundra City Council which determined compensation for the resumption, on 12 December, 2003, of land owned by the claimant McPhersons.
  2. [180]
    The land is located at Sunset Drive, Meridan Plains approximately 750 m west of the subject. It had an area of 73.59 ha, and was burdened by an easement in gross for drainage purposes. The land contained an exploitable reserve of sand of unknown quantity. The agreed highest and best use of the land as at the date of resumption was for a dwelling house (immediate), sundry grazing (immediate and continuing until ripe for extractive industry) and extractive industry (estimate 5 to 10 years from date of acquisition).
  3. [181]
    The Land Court relied principally on two sales, the “Brett Leacy” sale and the “Ken Leacy” sale, to determine compensation. The McPherson property and both those Leacy properties are located on Sunset Drive, to the west of the subject. Prior to the sales, the Leacy family owned four lots in close proximity to one another, three of which were the subject of the Brett Leacy and Ken Leacy sales, the fourth being the subject property.
  4. [182]
    In the current matter, the Brett Leacy sale is Mr Henderson’s Sale 4 and Mr Carrick’s Sale 2. The Ken Leacy sale is Mr Henderson’s Sale 3 and Mr Carrick’s sale 2.
  5. [183]
    The Court found the value of the McPherson land to be:

7.1 ha flood free land @ $153,000/ha    $1,086,300

66.49 ha flood prone land @ $23,500/ha    $1,562,515

which includes

50 ha pasture improved grazing land at $1,000/ha       $50,000

         $2,698,815

      Adopt   $2,699,000

Mr Henderson’s sales

Sale 1

  1. [184]
    This property is situated at Parklands Boulevard, Meridan Plains, has an area of 11.96 ha and, Mr Henderson said, was sold on 20 April 2004 for $7,320,000 or $612,040/ha[37]. Mr Henderson described the property as vacant undulating land with a curved frontage to Parklands Boulevard, and located within 1.5 kms of the subject land. There is a drainage easement of approximately 1 hectare running through the middle of the land. The property was zoned Emerging Community Precinct and is within the urban footprint of the SEQ Plan. Mr Henderson considered the sale to be slightly inferior to the subject in physical terms, without taking into account the difference in zoning.
  2. [185]
    The property was subdivided, subsequent to the sale, into a 137 lot residential development, with development costs of approximately $75,000 per lot.
  3. [186]
    Mr Henderson said that he had relied on the sale as providing guidance for the per metre value of developable land in the 144 lot development. He said that a higher rate per hectare was applicable to the 66 and 42 lot developments because of the smaller land area.
  4. [187]
    Mr Carrick said that, ex GST, the sale reflected $612,040/ha and $53,431/lot. At the time of sale, the sale property did not have dedicated or formed access, although legal but not dedicated vehicular access was available via a benefit easement across an adjoining lot. The sale price factored in the absence of dedicated Parklands Boulevard and the cost of constructing access to the proposed Parklands Boulevard, he said.
  5. [188]
    Mr Carrick considered the sale property to be vastly superior to the subject’s hypothetical residential englobo parcels by virtue of its location, inclusion in the Emerging Community Precinct, access, and development costs of $75,000 per lot.
  6. [189]
    I concluded above that the development costs to be calculated for the subject were 42 lots - $114,819/lot and 66 lots - $115,220/lot

Sale 2

  1. [190]
    This property was vacant land situated at Sunset Drive, Meridan Plains located about 600m to the south of the subject. It has an area of 16.195 ha and sold on 16 March 2004 for $14,640,000 or $903,983/ha. Mr Henderson said that the sale property was bounded by Sunset Drive along its southern and western boundaries. The land was elevated at the southern end of the property and sloped gently to the north, to lower lying land. It has been developed as a college, post the sale.
  2. [191]
    Mr Henderson considered that Sale 2 had some relevance for valuing the subject development land, but less than Sale 1 because the sale is a superior property.
  3. [192]
    Mr Carrick said that the sale price was $13,272,727 excluding GST which reflected a price of $819,557/ha excluding GST. The property yielded approximately 179 lots so that the price per lot was $74,149. Mr Carrick noted that 1.9 ha of the sale property had the potential for 37 lots to back on to a park. The development costs were $46,225/lot (14 January 2004).
  4. [193]
    Mr Carrick considered that the sale property was vastly superior to the subject’s residential englobo land by virtue of its location, frontage to two streets, inclusion in the Emerging Community Precinct, lot development costs and an active development application lodged by the vendor with the Caloundra City Council on 23 December 2003, for a Development Permit for a Material Change of Use to establish a Residential A development and reconfiguring of the lot into 66 lots (first stage). The purchaser had advised that the existing development application would be pursued.

Sale 3

  1. [194]
    Mr Henderson said that Sales 3 and 4 were of some relevance in valuing the rural portions of the subject land, subject to the qualification that the sale land is inferior to the subject, no part of it had any development potential and the sales are earlier in time in a rising market.
  2. [195]
    Sale 3 is the Ken and Edna Leacy sale, referred to in the McPherson decision as the Ken Leacy sale. It is Mr Carrick’s Sale 2.
  3. [196]
    The property is located at Sunset Drive and Meridan Road, Meridan Plains. It has an area of 127.902 ha and sold on 2 March 2004 for $4,880,000. The property comprises 2 adjoining parcels (Lots 4 and 5) of grazing country with frontages to the Mooloolah River. Approximately 13 ha of Lot 5 is above the Q100 Level. At the time of sale, the property was improved with a low set dwelling and shed on Lot 5. Both Mr Henderson and Mr Carrick accepted that the sale analyzed to $23,529/ha for flood prone land. The sale also showed $153, 024/ha for the flood free land.
  4. [197]
    Mr Carrick’s opinion was that the sale was relevant for the assessment of compensation for the subject land. He said that the Leacy sales did not support Mr Henderson’s application of $30,000/ha and $35,000/ha for the subject’s flooded balance area rural lots. That rate represents an increase of 28% and 49% respectively by comparison with the Leacy sales rate of $23,500/ha. Mr Carrick said that the increased rate applied to the subject’s flooded land by Mr Henderson related to a period from 2 March 2004, the date of the Leacy sales, to 18 February 2005, the date of the subject acquisition. He said that Mr Henderson had not provided any reasoned comparable flooded rural sales that supported an increase of rural values of 28% to 49% over the specified one year period.

Sale 4

  1. [198]
    This sale is the Brett Leacy sale referred to in the McPherson decision. It is Mr Carrick’s Sale 1.
  2. [199]
    This property is situated at 476 Sattler Road, Meridan Plains. The property has an area of 86.66 ha and sold for $2,440,000 on 3 March 2004. The sale analyzed to $23,529/ha.
  3. [200]
    Mr Henderson described the sale property as a long parcel of flood prone grazing land with a northern frontage to the Mooloolah River, developed with a good quality brick dwelling on a raised platform, shed and yards.
  4. [201]
    Both Mr Henderson’s and Mr Carrick’s comments as to the applicability and relevance of this sale were the same as they had made in relation to the Ken and Edna Leacy sale, set out immediately above.

Sale 5

  1. [202]
    This 12 ha property is located at Sunset Drive, Meridan Plains, immediately adjoining the McPherson land and over the road from the Leacy sales. The property sold on 8 January 2004 for $950,000.
  2. [203]
    In oral evidence, Mr Henderson said that he did not consider the sale to be comparable at all with the subject. Although it was a sale in the area, it did not have any relevance to the valuation of the subject land.

Sales 6 - 9

  1. [204]
    Sales 6, 8 and 9 are located on the Bruce Highway at Palmview. Sale 7 is located on the Bruce Highway at Sippy Downs. Mr Henderson said the sales were not particularly helpful in arriving at a value for the subject land. They merely showed the level of interest in purchasing land with development potential.

Sales 10 and 11

  1. [205]
    Sale 10 is a 16.14 ha property situated at Yandina-Coolum Road and South Coolum Road, Coolum Beach. Sale 11 is a 31.51 ha property located at 581 David Low Way, Pacific Paradise.
  2. [206]
    Mr Henderson said that the sales were not particularly helpful in arriving at a value for the subject land. They merely showed a level of interest in purchasing land with development potential.

Sale 12

  1. [207]
    This 42.24 ha property is located at 80 Burtons Road, Bridges. The property sold on 16 August 2004 for $2,000,000. Mr Henderson assessed the value of the improvements on the land as at the date of sale at $200,000, and thus he analyzed the sale to a land value of $1,800,000 or $42,612/ha.
  2. [208]
    Mr Henderson described the property as containing lower flats rising to undulating land with a small area of red soil. He said the property was included in the draft SEQ regional plan of October 2004 as Rural designated land. He also said that the property had been resold on 29 June 2005 for $2,550,000 and subsequently included as possible industrial land in the SEQ plan dated 30 June 2005. That designation had subsequently been removed.
  3. [209]
    Mr Henderson said the August 2004 sale supported a value of $35,000/ha for the flood prone rural land on the subject. While it was not directly comparable with the subject, it was evidence of the value of flood affected rural parcels within reasonable proximity to the subject and closer to the date of assessment. He had not relied on the resale for the purposes of his valuation.
  4. [210]
    Mr Carrick described the property as an attractive rural/rural residential property intersected by Browns Creek and a water course. Soils are red, reddish brown and grey. The property was previously used for sugar cane production and subsequently for ginger production. Parts of the land would be subject to flooding from Browns Creek. Mr Carrick said that there were unresolved issues with the potential use of this sale property, and that Mr Henderson had not identified the highest and best use for the property. The sale property was included in the Regional landscape and Rural Production Area, not a Rural Precinct, under the Draft SEQ Regional Plan. In Mr Carrick’s opinion, the sale was neither comparable nor relevant.

Sales 13 - 15

  1. [211]
    These sales are all situated at Maleny. Sale 13 was a 23.4739 ha property which sold on 18 August 2004 for $1,500,000 or $63,901/ha. Sale 14 is a 64.75 ha property which sold on 18 August 2004 for $2,500,000. Mr Henderson analyzed the sale to a land value of $2,200,000 or $34,000/ha. Sale 15 is a 42.23 ha property which sold on 15 March 2006 for $2,125,000. Mr Henderson analyzed the sale to $1,875,000 or $44,400/ha.
  2. [212]
    Mr Henderson said that the sales were not of great assistance in the sense that they are in a significantly different area and involve a significantly different market. They were included because in the absence of truly comparable sales they provide some evidence in support of values for the rural part of the subject.
  3. [213]
    Mr Carrick’s opinion was that none of the sales were comparable or relevant.

Sale 16

  1. [214]
    This 2.02 ha property is situated at the corner of Sunset Drive and Parklands Boulevard, Little Mountain. It sold on 28 May 2004 for $1,750,000 or $866,337/ha.
  2. [215]
    Mr Henderson described the property as a vacant parcel of regrowth timber, a well located site which subsequently sold on 16 September 2005 for $2,200,000 and then resold on 24 September 2010 for $3,190,000 ($1,579,208/ha). The property was zoned Emerging Community.
  3. [216]
    Mr Henderson considered the sale of some relevance as it was a small parcel of developable land and reflected the demand for such parcels but he agreed that the sale was vastly superior to the subject.
  4. [217]
    Mr Carrick said the sale is located opposite the proposed Parklands Boulevard CAMCOS Railway Station. Mr Henderson’s evidence was that this was a possibility only. Mr Carrick said that the property had potential for unit development or a local shopping centre because of its location as Council had demonstrated a preference for medium density home unit developments in the Emerging Community Precinct on sites within walking distance of the proposed railway station.

Sales 17 - 21

Sale No.

Date of Sale

Area

Sale Price

Rate/ha

17

August 2004

6.2 ha

$10,000,000

$1,612,903

18

1 June 2005

4.827 ha

$9,200,000

$1,905,946

19

29 June 2005

2.246 ha

$3,530,000

$1,571,683

20

12 September 2005

1.95 ha

$2,500,000

$1,282,051

21

6 June 2006

4.7 ha

$8,000,000

$1,702,128

  1. [218]
    All of these sales are situated at Peregian Springs. Mr Henderson said that the sales were not directly relevant but in the absence of other comparable sales, they provided evidence of demand for developable parcels.
  2. [219]
    Mr Carrick pointed out that the rates/ha applied to the subject’s three englobo residential areas are $600,000/ha, $700,000/ha and $750,000/ha. His comment was that there was no explanation of how the Peregian Springs Sales rate/ha support the englobo residential rates per hectare applied to the subject. Four of the sales have sale dates subsequent to the date of acquisition. In Mr Carrick’s opinion, the Peregian Springs sale were not comparable or relevant.

Kawana Forest Sales

  1. [220]
    Mr Henderson relied on sales in the Kawana Forest Estate to support the gross realization figures in his hypothetical subdivisions. He said that 284 allotments in the Kawana Forest Estate had been sold between 2003 and 2007 at an average lot size of 533 m² and an average price of $178,433. 28 sales were transacted to February 2005 showing an average price of $229,684 for an average lot size of 581 m². 46 lots were sold at an average price of $253,314 and an average lot of 688 m² in the 2003 to 2007 period. Mr Henderson subsequently provided a schedule of 10 sales that he relied on. Those properties had an average size of 528 m² and sold for $212,815.

Two more englobo sales

  1. [221]
    Mr Henderson also referred to two additional englobo sales which occurred after the date of acquisition. The first of these was a 4.153 ha parcel at Village Way, Little Mountain which sold on 26 July 2006 for $2,272,727 ($547,250/ha) ex GST. The land was filled at a cost of $70,000, showing a cost per lot of $61,650.
  2. [222]
    The other sale was a 43.53 ha property at 166 Parklands Boulevard, Meridan Plains which sold on 26 September 2007 for $38,000,000 ($872,961/ha). The property was burdened by a drainage easement of 3.8142 ha which reduced the area available for development.
  3. [223]
    Mr Henderson said that those sales had not been directly applied but were included as showing the trend of englobo parcels on the Sunshine Coast in the immediate before and after periods and in the absence of other comparable sales evidence at the time of resumption.
  4. [224]
    Mr Carrick did not consider either of these sales to be comparable or relevant.

Mr Carrick’s valuation evidence

  1. [225]
    Mr Carrick assessed the value of the subject land by consideration of Rural sales and other material. He relied on the McPherson Land Court decision, the Brett Leacy sale, the Ken and Edna Leacy sale and his analysis of the Brett, Ken and Edna Leacy sales on a combined basis.
  2. [226]
    Mr Carrick’s conclusion were that -
  1. (i)
    The Land Court in McPherson applied $23,500/ha to the Leacy’s flooded land in assessment of compensation. In fact the Court’s decision was that the value of the McPherson land was $23,500/ha for flooded grazing land.
  1. (ii)
    The Brett Leacy sale analyzed to $23,529/ha for 84.661 ha of flood affected grazing land and uncleared forest areas.
  1. (iii)
    The Ken and Edna Leacy sale analyzed to $153,024/ha for 13.48 ha of flood free land.
  1. (iv)
    The combined Brett, Ken and Edna Leacy sales analyzed to $23,065 ha for 200.713 ha of flooded, grazing and uncleared land.
  1. [227]
    In Mr Carrick’s opinion the McPherson property and the Leacy sales were overall similar to the subject Leacy land. All of these properties are zoned Rural and are similarly located. The subject Leacy property is included in the Draft SEQ Regional Land Use Category Urban footprint whereas the McPherson property and the Leacy sales are not. Mr Carrick considered that the inclusion of the subject property in the Urban footprint did not cause an increase in the value of the subject as a rural lot.
  2. [228]
    Mr Carrick conducted an RP Data search and was unable to find any sales of large rural lots comparable with the subject in the calendar years 2004 and 2005. There was no conclusive evidence of any increase in rural values between the date of the Leacy sales in March 2004 and the subject acquisition on 18 February 2005.
  3. [229]
    Mr Carrick therefore considered that the McPherson decision and the analyzed Leacy sales remained relevant at the date of acquisition and applied $153,000/ha to the subject’s flood free land and $23,500/ha to its flooded land.
  4. [230]
    Mr Henderson conceded that there were no sales of comparable rural land in the Caloundra area after the Leacy sales of March 2004. The next sale of rural land was in September 2007 of 43.53 ha at 166 Parklands Boulevard, for $38,000,000 ($872,960/ha).

Valuation of subject land

  1. [231]
    I have concluded previously that the prudent purchaser of the subject land, as at the date of acquisition, would consider that it was likely that an application for material change of use and development approval would have been successful under the 1996 Planning Scheme for a subdivision of 4.082 ha of residential lots, with the balance land of 82.14 ha to be used for rural purposes. There would probably be delay in obtaining development approval as it would be necessary also to obtain road access to the subject land through the Kawana Forest Estate via extensions to Red Cedar Drive and Rapanea Street. I concluded also that the risk and delay attached to obtaining similar approvals under the 1996 Planning Scheme for development of 6.252 ha for residential subdivision with the balance land of 80.02 ha to be used for rural purposes, made it unlikely that any prudent purchaser would purchase the land at a price calculated on that basis.
  2. [232]
    I decided also that it was unlikely that, in the absence of the scheme of resumption, the developable part of the subject land would have been rezoned to Emerging Community under the 2004 CCP. However, I consider that the prudent purchaser would expect a similar result under the CCP in relation to the 4.082 ha development proposal as set out above in relation to the 1996 planning scheme.
  3. [233]
    The terms of the 2004 CCP are such that the prudent purchaser may decide that there is a higher possibility of a successful development application for the 6.252 ha proposal than under the 1996 planning scheme. Nevertheless the purchaser would be aware that there would be considerable risk and delay, and possible expense involved in such an application which may not be successful.
  4. [234]
    The subject land should be valued on those bases.

Englobo direct comparison

Development land

  1. [235]
    Mr Carrick did not value the subject land on the basis that any part of it was able to be developed for residential purposes. Mr Henderson valued the development land as follows –

4.082 ha @ $650,00/ha  - $2,653,300

6.252 ha @ $600,00/ha  - $3,751,200

  1. [236]
    Mr Henderson relied primarily on his Sale 1 as the basis of those valuations and Sale 2, to a lesser extent. Sales 6 – 11 and 17 – 21 showed the demand for land with development potential. Sale 16 was of some relevance, he said, as a small parcel of developable land which reflected the demand for such parcels.
  2. [237]
    The evidence was that Sale 1 reflected $612,040/ha and $53,431/lot ex GST. While Sale 1 appears to be the most comparable sale with the subject developable land, I do not consider that it supports the values attributed to that land by Mr Henderson. Although the sale took place approximately a year before the date of acquisition, I consider that the prudent purchaser would form the view that the sale property was superior to the subject in terms of the sale’s location, zoning and lower development costs per lot. Neither the subject property nor the sale had formed legal access as at the relevant dates. While there were differences in the obstacles to achieving access, I have treated the properties as comparable in this aspect, other than that I consider the delay in obtaining access to the subject was likely to be greater than for the sale. The delay and risk attached to obtaining development approval for the subject must also be taken into account in comparing the properties.
  3. [238]
    Sale 2 is of less assistance. The sale analyzed to $819,557/ha, approximately $150,000 to $200,000/ha more than the values applied by Mr Henderson to the developable parts of the subject. While Mr Henderson said that the sale was superior to the subject, he did not explain the basis on which he made the significant adjustments necessary to arrive at a rate for the subject as compared with the sale. Mr Carrick regarded the sale as vastly superior, which I accept as a more accurate comparison, for the reasons identified by him.
  4. [239]
    Sale 16 is clearly superior to the subject in terms of its location and zoning. Mr Henderson has valued the developable land on the subject at $650,000/ha (4.082 ha) or $600,000/ha (6.252 ha), some $266,000 to $210,000 less than the May 2004 sale. The disparity between the sale price and the value attributed to the subject demonstrates the difficulty in applying the sale for the purpose of valuing the subject. The resales of the property on 16 September and 24 September 2005 show dramatic increases in the prices paid which would appear to reflect the location of the sale property opposite a proposed/possible railway station.
  5. [240]
    The remaining sales of developable land relied on by Mr Henderson were only relevant, he said, to showing the level of interest on the Sunshine Coast in development land, at the relevant time. I have accepted this evidence as showing that there was a demand for residential development land at that time.
  6. [241]
    Mr Henderson also relied on two more englobo sales to show the trend of englobo parcels on the Sunshine Coast. As both of these sales occurred well after the date of resumption and, on Mr Henderson’s own evidence, the market was rising, I do not consider that those two sales should be used for the valuation of the subject.
  7. [242]
    No evidence was given as to how the lack of access, appropriate zoning and development approval would be taken into account by the prudent purchaser in fixing a purchase price for the developable land on the subject. The delay and risk in overcoming these obstacles must be factored in as must the costs of obtaining the necessary approvals. To be balanced against those factors is the fact that the proposed developable areas on the subject are smaller than the sale which would point to a higher value per hectare for the subject.
  8. [243]
    Mr Carrick’s evidence was that no prudent purchaser would enter into an unconditional contract to purchase the land for development purposes, given the uncertainties as to the likelihood of obtaining the appropriate approvals. I do not accept that evidence as I consider that a prudent purchaser would recognize that the land does have development potential as discussed above.
  9. [244]
    The $612,000/ha paid in Sale 1 provides a ceiling for the valuation of the subject developable land. The prices paid in Sales 2 and 16 were higher. The difficulty is that adjustments must be made for the superiority of the sale in relation to its location, zoning and lower development costs, as well as its larger size and the delay and risk in obtaining access and development approval for the subject. There is no direct valuation evidence as to how this may be done.
  10. [245]
    In an ideal world, evidence of sales of property more directly comparable with the subject would be available. That is not the case here. And, as will be seen below, I have rejected the valuations based on a rate per lot, and hypothetical subdivision basis. I consider that a reliable valuation can be made on the basis of the sales evidence as the sales are not so different from the subject that they should be rejected on the basis that they are not comparable. In the circumstances, I will have to do the best I can. For the 4.082 ha proposal, I consider that the prudent purchaser would pay a price of $500,000/ha, as compared with the $612,000/ha paid in Sale 1. This would reflect appropriately the differences between the sale and the subject. Accordingly, the 4.082 ha of potential development land should be valued at $2,041,000. Relying on the same evidence and reasoning, I consider that the 6.252 ha of developable land on the subject should be valued at $425,000/ha. This reflects the larger area of developable land in this scenario, as compared with the 4.082 proposal. It also reflects the higher risk attached to obtaining the necessary development approvals for the larger development and the costs associated with developing the flood prone area of that development. It is noted that Mr Henderson adopted a lower rate per hectare of $50,000 for the larger development as compared with the smaller.
  11. [246]
    Accordingly, the 6.252 ha of potential development land should be valued at $2,657,100.

Balance land

  1. [247]
    As set out above, Mr Henderson valued the balance land of 82.14 ha at $35,000/ha in the 4.082 ha development scenario and $32,500/ha for the balance land of 80.02 ha in the 6.252 ha proposal. Mr Carrick valued 82.03 ha of flooded land at $23,500/ha cleared and fenced.
  2. [248]
    Mr Henderson relied on Sales 3, 4 and 12 in support of his valuation of the balance land. He also said that Sales 13 – 15 provided some evidence of value for the rural part of the subject, although the sales are in a significantly different area and involve a significantly differed market. Mr Carrick applied the McPherson decision and Mr Henderson’s Sales 3 and 4 for his valuation.
  3. [249]
    I consider that the prudent purchaser would accept that Sales 3 and 4 were most relevant for valuing the subject’s balance land. The McPherson decision is also relevant. Sale 12 is located some distance from the subject and appears to be superior to the subject in terms of its soils which have supported agricultural production. It is unclear what the zoning of the land was at the date of the August 2004 sale or its highest and best use. It is therefore difficult to apply the sale. I do not consider that Sales 13 – 15 are relevant to the valuation of the subject. The sales are in a significantly different area and market from the subject.
  4. [250]
    I do not accept that the prudent purchaser would consider that Sales 3 and 4 support Mr Henderson’s valuations of the balance land. Those sales show a value of $23,529/ha for flood prone land. The sales took place some 12 months before the date of acquisition.
  5. [251]
    I have not accepted Mr Henderson’s evidence that the market for rural land was rising in the interim period. Mr Henderson produced a list of sales and resales of rural zoned property in the period 2003 to 2006[38] to support his opinion that the market for rural land had risen in the relevant period. Such evidence as there was about these transactions was not persuasive. Five of the resales related to improved land and there was no analysis of the resales. A sixth property was zoned rural residential and also included improvements in the resale. Two of the remaining sales were pineapple farms. The four remaining transactions related to vacant land varying in area between approximately 15 ha to 20 ha, areas significantly smaller than the balance land. Three of these resales took place after the date of acquisition. The fourth was located at Donnybrook, a considerable distance from the subject.
  6. [252]
    Further, I have not accepted Mr Henderson’s evidence that the subject balance land is better located than Sales 3 and 4.
  7. [253]
    The McPherson determination of the value of the flooded land on that property was $23,500/ha. Mr Henderson said that the McPherson land was overall inferior to the subject because of its zoning, location and the date of assessment in a rising market. I do not consider that the prudent purchaser would accept that comparison. Both the McPherson land and the subject were in the Rural zone of the 1996 planning scheme. As with the Leacy sales, the prudent purchaser would not consider the McPherson land to be inferior, as compared with the subject, in location. The determination shows the value of the McPherson land as at 12 December 2003. Again there was no evidence to support Mr Henderson’s opinion that the market for rural flood prone land rose between that date and the date of acquisition of the subject.
  8. [254]
    Accordingly, I consider that the prudent purchaser would pay $23,500/ha for the flood prone area of the subject land, which be valued at $23,500/ha.
  9. [255]
    In the case of the 4.082 ha development the value of the balance land is 82.14 ha x $23,500 or $1,930,290. The value of the improvements ($12,250) should be added.
  10. [256]
    For the 6.252 development, the balance area is 80.02 ha. The value of the balance land is 80.02 ha x $23,500 or $1,880,470. The value of the improvements ($12,250) should be added.

Valuation on rate per lot basis

  1. [257]
    Mr Henderson applied a rate of $62,500/lot for his valuation of the 4.082 ha (42 lots) of developable land on a rate per lot basis and $60,000/lot for the 6.252 ha (64 lots). He applied $35,000/ha to the balance land in the 42 lot development and $32,500/ha for the 66 lot development.
  2. [258]
    Mr Henderson relied on the analysis of Sale 1 which showed $53,431/lot and his first additional englobo sale (Village Way, Little Mountain) which showed $61,650/lot to reach his figures of $62,500/lot and $60,000/lot for the subject. He conceded under cross examination that he had applied the same basic assumptions in this exercise as he had applied in his englobo valuation. He also conceded that for practical purposes this valuation exercise did not add materially to the englobo analysis.
  3. [259]
    I have already found that Sale 1 is superior to the subject and therefore I do not accept that the rate per lot applied to the subject should be higher than that shown by the sale. Mr Henderson also said that he had not directly applied the sale of the property at Village Way, Little Mountain, and as noted previously, it is an after sale which took place on 26 July 2006.
  4. [260]
    In the circumstances, I do not consider that the evidence supports the values applied to the lots by Mr Henderson. The rates applied to the balance land by Mr Henderson are the same as he used in his englobo valuations which I have dealt with above. 

Hypothetical subdivision

  1. [261]
    Mr Henderson’s calculations supporting his valuation of the land on the basis of two hypothetical subdivisions are as follows:
  1. (i)
    42 lot residential development with 3 lots amalgamated to the balance land:

Gross Realization:

39 residential Lots @ average of approx. 700m²

assessed @ $255,000 per Lot        $9,945,000

3 Lots (2706m²) amalgamated to balance rural

land (979m² + 833m² + 894m²)           $382,500

Balance land of 82.14 hectares assessed @

$35,000 per ha          $2,874,900

Total gross realization:        $13,202,400

Less:

Legals on Sales        $330,750

Commission on Sales       $348,060

Advertising          $26,000       $404,810

           $12,797,590

Less:

Allowance for Profit & Risk @ 25%       $2,559,518

           $10,238,072

Less Development Costs:

Assessed at      $4,822,420

Interest @ 10% for ½ expected selling

period (6 months)         $241,121    $5,063,541

             $5,174,531

Less:

Rates & Titles Office Fees        $12,000

Interest @ 10% for 1 year          $1,200         $13,200

             $5,161,331

Less:

Holding Charges @ 10% for 2½ years       $1,173,030

             $3,988,301

Less:

Legals & Stamp Duty on purchase          $152,000

             $3,836,301

Less:

Interest on Legals & Stamp Duty @ 10%           $15,200

Total           $3,821,101

Valuation:       Adopt    $3,821,000

  1. (ii)
    66 lot residential development with 2 lots amalgamated to the balance land:

Gross Realization:

64 residential Lots @ average of approx. 700 m²

assessed @ $255,000 per Lot      $16,000,000

2 Lots (2850 m²) amalgamated to balance rural

land (1466 m² + 1384 m²)           $250,000

Balance land of 80.02 hectares assessed @

$32,500 per ha          $2,600,650

Total gross realization:         $18,850,650

Less:

Legals on Sales          $49,500

Commission on Sales       $500,516

Advertising          $39,000       $589,016

          $18,261,634

Less:

Allowance for Profit & Risk @ 25%

            $3,652,327

          $14,609,307

Less Development Costs:

Assessed at      $7,604,525

Interest @ 10% for ½ expected selling

period (9 months)         $570,339    $8,174,864

            $6,434,443

Less:

Rates & Titles Office Fees        $19,000

Interest @ 10% for 1 year          $1,900          $20,900

             $6,413,543

Less:

Holding Charges @ 10% for 2½ years        $1,457,623

             $4,955,920

Less:

Legals & Stamp Duty on purchase           $189,000

             $4,766,920

Less:

Interest on Legals & Stamp Duty @ 10%            $18,900

Total:              $4,748,020

Valuation:       Adopt     $4,748,000

  1. [262]
    It can be seen that the values reached by Mr Henderson using this methodology are considerably lower than the values reached by using the comparative englobo sales method which raises difficulties with the reliability of both methodologies.
  2. [263]
    However, on examination of both, I consider that it is the valuation based on the hypothetical subdivision method that should be discarded. A fundamental difficulty with the adoption in this matter of the hypothetical subdivision methodology is that there is authority that the method should not be used where the development is not to be carried out within a reasonable time. In Brewarrana Pty Ltd v Commissioner of Highways[39], Wells J said:

“The evidence leaves me in no doubt that, once again, the question resolves itself into one of degree. Plainly a calculation based on a hypothetical subdivision will not be vitiated simply because some very slightly delay might be experienced before realization could begin, but an inordinate delay of, say, several years could, equally plainly, render the whole undertaking so speculative that a conclusion as to value would be wholly unreliable.”

  1. [264]
    A further difficulty is that there was no evidence given by Mr Henderson as to why he adopted a rate of 25% for profit and risk[40]. Mr Carrick’s evidence was that an allowance for profit and risk of 25% assumes that the site is ripe for immediate development, with all development approvals in place. Again there was no evidence to support Mr Carrick’s opinion.
  2. [265]
    Nevertheless, I prefer Mr Carrick’s opinion as I consider that a profit and risk factor of 25% is not sufficient to deal with the delay and risk factors associated with these developments. It is noted that in the further amended claim and statement of facts dated October 2012 of the subject, Mr Henderson adopted a profit and risk factor of 30% for the then 69 lot scenario. In my opinion the prudent purchaser would consider that the risks and delay are such that a profit and risk factor of at least 30% would be warranted.
  3. [266]
    It is well recognized that changes to the profit and risk factor can significantly affect a valuation based on this methodology. For example if, in the 42 lot development, a profit and risk factor of 30% were adopted, the deduction would be $3,839,277 as compared with 25% or $2,559,518. As can be seen, this widens the gap between the result reached by the hypothetical subdivision methodology as compared with the value reached by the comparative rates method.
  4. [267]
    There are other difficulties with Mr Henderson’s calculations. One is that Mr Henderson assessed the interest on development costs for the 42 lot development at 10% for half the expected selling period (6 months) and on the 66 lot development at 10% for half the selling period (9 months). He has not allowed for the development period in those figures.
  5. [268]
    The second is that in the 42 lot development Mr Henderson has valued the 3 lots, (totalling 2,706 m²), amalgamated to the balance rural land at $382,500, which is half the rate he adopted for the residential lots. His justification for that was that development costs had been incurred in relation to the amalgamated lots. However that is not market evidence of what that land would bring when incorporated into the balance land.
  6. [269]
    In summary, I have grave reservations as to whether the hypothetical subdivision method should be used for the valuation of the developable land on the subject because a prudent purchaser would know that there was risk and delay inherent in the proposed development. If such an exercise were to be undertaken a profit and risk factor of at least 30% should be adopted. Further the errors in Mr Henderson’s calculations would need to be amended. My conclusion is that the whole exercise as presented is unreliable and should not be used in the valuation.

Compensation

  1. [270]
    There are some minor discrepancies between the parties’ figures as to the areas of land adopted by each in their calculations of compensation. The figures below are the areas identified by the claimants. I will hear the parties as to the correct areas to be adopted.
  2. [271]
    Compensation is to be determined on the following basis:

Value of land

6.252 ha of developable land @ $425,000/ha    $2,657,100

80.02 ha of rural flood prone land @ $23,520/ha    $1,880,470

Value of improvements            $12,250

          $4,549,820

        Adopt  $4,550,000

  1. [272]
    I will also hear the parties as to interest and costs before making final orders.

CAC MacDONALD

PRESIDENT OF THE LAND COURT

Footnotes

[1]  Section 12(5) Acquisition of Land Act 1967.

[2]  The relevant reprint of the Acquisition of Land Act 1967 is No. 4C.

[3]  (1907) 5 CLR 418.

[4]  At 432.

[5]  At 441.

[6]  [2008] VR 447 at [41].

[7]  At [38].

[8]  In accordance with the law stated in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands (Trinidad) [1947] AC 565 and Housing Commission of New South Wales v San Sebastian Pty Ltd (1978) 140 CLR 196.

[9]  Exhibit 4.

[10]  Exhibit 17A, p 41.

[11]  (2011) 32 QLCR 285.

[12]  Exhibit 17A, p 56.

[13]  Exhibit 17A, p 57.

[14]  Exhibit 17A, p 59.

[15]  Exhibit 36 is an Assessment of Compensation Summary prepared by Mr A Carrick of AF Carrick and Associates, Urban and Rural Valuers, for the Sunshine Coast Regional Council. The map referred to is Attachment M to the Summary and is Map 3, Precinct Estate Plan, apparently prepared on behalf of the developers of the Kawana Forest Estate. It shows Red Cedar Drive and Rapanea Street captioned “AccessStreet/Place”.

[16]  Exhibit 7, dated 2 February 2011.

[17]  Exhibit 21, [19].

[18]  Exhibit 19, [14].

[19]  Exhibit 21, [12].

[20]  Exhibit 3.

[21]  Exhibit 15.

[22] Commissioner of Succession Duties (SA) v Executor Trustee and Agency Co of South Australia Ltd (1947) 74 CLR 358 at 373, 374.

[23]  Exhibit 8.

[24]  Exhibit 9.

[25]  Now repealed and replaced by the Sustainable Planning Act 2009.

[26]  (2002) LGERA 161 at 173, 174.

[27]  [1991] QPLR 56 at 59.

[28]  Page 9, paragraph 3.

[29]  Exhibit 44.

[30]  Exhibit 23, Mr Brown, Mr Vann T6 – 61, ll 30 – 35.

[31]  (2008) 167 LGERA 342 at [103].

[32]  [2006] 1 Qd R 273 at [23], footnote omitted.

[33]  [2005] QLC 43.

[34]  Exhibit 24.

[35]  Exhibit 27.

[36]  [2005] QLC 43

[37]  Mr Henderson’s report incorrectly says $611,018/ha, Exhibit 24 p. 4).

[38]  Part of Exhibit 26.

[39]  (1973) 32 LGRA 170 at 181.

[40]  See Coastal Estates Pty Ltd v Bass Shire Council (1993) 79 LGERA 188 at 198.

Close

Editorial Notes

  • Published Case Name:

    Leacy v Sunshine Coast Regional Council

  • Shortened Case Name:

    Leacy v Sunshine Coast Regional Council

  • MNC:

    [2015] QLC 8

  • Court:

    QLC

  • Judge(s):

    MacDonald P

  • Date:

    15 Apr 2015

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
Beck v Atherton Shire Council (1991) QPLR 56
2 citations
Jump To
Cite 1 - (1991) QPLR 56
Cite 2 - (1991) QPLR 56
Brewarrana Pty Ltd v Commissioner of Highways (No 1) (1973) 32 LGRA 170
2 citations
Jump To
Cite 1 - (1973) 32 LGRA 170
Cite 2 - (1973) 32 LGRA 170
Brisbane City Council v Mio Art Pty Ltd (2011) QLCR 285
1 citation
Jump To
Cite 1 - (2011) QLCR 285
Brisbane City Council v Mio Art Pty Ltd and Greener Investments Pty Ltd (2011) 32 QLCR 285
1 citation
Jump To
Cite 1 - (2011) 32 QLCR 285
Coastal Estates Pty Ltd v Bass Shire Council (1993) 79 LGERA 188
2 citations
Jump To
Cite 1 - (1993) 79 LGERA 188
Cite 2 - (1993) 79 LGERA 188
Housing Commission of NSW v San Sebastian Pty Ltd (1978) 140 CLR 196
2 citations
Jump To
Cite 1 - (1978) 140 CLR 196
Cite 2 - (1978) 140 CLR 196
ISPT Pty Ltd v Melbourne City Council [2008] VR 447
3 citations
Jump To
Cite 1 - [2008] VR 447
Cite 2 - [2008] VR 447
Cite 3 - [2008] VR 447
McPherson v Caloundra City Council [2005] QLC 43
3 citations
Jump To
Cite 1 - [2005] QLC 43
Cite 2 - [2005] QLC 43
Cite 3 - [2005] QLC 43
Pointe Gourde Quarrying and Transport Co. Ltd. v Sub-Intendent of Crown Lands (1947) AC 565
2 citations
Jump To
Cite 1 - (1947) AC 565
Cite 2 - (1947) AC 565
Spencer v The Commonwealth (1907) 5 CLR 418
4 citations
Jump To
Cite 1 - (1907) 5 CLR 418
Cite 2 - (1907) 5 CLR 418
Cite 3 - (1907) 5 CLR 418
Cite 4 - (1907) 5 CLR 418
Succession Duties (SA) v Executor Trustee and Agency Co. of South Australia Ltd (1947) 74 CLR 358
1 citation
Jump To
Cite 1 - (1947) 74 CLR 358
Webster v Caboolture Shire Council & Ors (2008) 167 LGERA 342
2 citations
Jump To
Cite 1 - (2008) 167 LGERA 342
Cite 2 - (2008) 167 LGERA 342
Weightman v Gold Coast City Council (2002) LGERA 161
2 citations
Jump To
Cite 1 - (2002) LGERA 161
Cite 2 - (2002) LGERA 161
Woolworths Ltd v Maryborough City Council (No 2)[2006] 1 Qd R 273; [2005] QCA 262
2 citations
Jump To
Cite 1 - [2006] 1 Qd R 273
Cite 2 - [2006] 1 Qd R 273

Cases Citing

Case NameFull CitationFrequency
Leacy v Sunshine Coast Regional Council (No. 2) [2015] QLC 394 citations
1

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