d) Prevention of natural expansion of Brooms Head village or development of adjoining land.

In fact, Mr M.E. Ball, a consultant town planner, was of the opinion that had there been no steps in the resumption process, the Brooms Head village would have expanded and the northern part would have been rezoned for that purpose. But for the resumption process, in his opinion, if not developed wholly, the eastern part would have been developed as a resort, and the balance of the applicant's land would have been subdivided and developed for 40ha hobby farms and 1ha rural residential lots.

However, I am not satisfied that the failure to subdivide the subject land or to extend Brooms Head village or, apart from the actual acquisition, the lack of development of adjoining lands for resort or other purposes was a consequence of any step in the subject resumption process.

Mr J.H. Wilkie, an experienced agricultural scientist and horticultural consultant, assessed the categories of the land and its capability for agricultural use, and recommended a hypothetical agricultural development programme that could have been carried out on the subject land, had its use not been restricted by government as alleged. The feasibility of Mr Wilkie's proposal was supported in principle by Mr Carson and a neighbour, Mr W.A. Fanning.

Mr Wilkie also made an assessment of the losses in connection with the agricultural use of the land alleged to be incurred by the applicant, and which Mr Reen described as disturbance.

In Mr Wilkie's opinion, with a capital development cost of $770,000 which could have been, but was not expended, a loss of $25,000 was incurred by Mr Carson through disruption of the cane farming operation, and a loss of $539,000 on the operation of a beef enterprise. Mr Wilkie arrived at this "loss" of income by ignoring any amount for interest on expenditure on the hypothetical enterprise. Even if Mr Carson had such a claim, which I reject, the whole approach was unsatisfactory. In my opinion, to eliminate such an essential element as interest charges makes the whole exercise unreliable for any purpose in these proceedings, and I reject it.

In any event, I prefer the opinions of Mr J.B. Clarke, district agronomist, Mr W.D. Hoffmann, livestock officer, and Mr T.L. Reilly, economist (farm management). I accept that over the said period some agricultural use of the subject land was impeded, particularly whilst subject to notices pursuant to s.342V(3). However, whilst the Court must determine the value of the land to the owner, such dispossessed owner is not entitled to compensation for all losses flowing directly or indirectly from the resumption; see The Minister Administering the Heritage Act v. Haddad (1988) 67 LGRA 438. I also do not accept that Mr Carson, unaffected by steps, if any, in the resumption process, would have expended money to develop and improve his pastures as suggested by Mr Wilkie, or as assumed by the applicant's valuers. I am unpersuaded that in the agricultural development of the subject land prior to resumption Mr Carson suffered damage for which he is entitled to compensation.

I do not consider that rather than lose the subject land he would have paid any more for it at date of resumption than any other person; cf. Yates v. Darling Harbour Corporation, Cripps J, Land & Environment Court, 1st May, 1990 (unreported), and The Commonwealth v. Reeve and Anor [1949] HCA 22; (1949) 78 CLR 410, at 418. I am unpersuaded that for any reason, or that there is any evidence that the land had a special value to Mr Carson, or that he was entitled to compensation for disturbance.

Each valuer initially assessed compensation by the "before and after" method. The subject resumption involved the compulsory acquisition of only part of an unsubdivided parcel of land. The "before and after" valuation method is an acceptable tool, often employed by a valuer in such circumstances as one way of taking into account all elements of compensation to which the dispossessed owner is entitled. It is often the most appropriate method of valuation when the excised parcel is of unusual size or shape, or if other reasons make it likely to be difficult to sell or even unmarketable. This method is particularly appropriate to avoid the double counting of damages where questions of enhancement or severance arise; see Realty Corporation Ltd v. The Commissioner for Main Roads (1940) 14 LGR NSW 204, and Gosford Shire Council v. Green (1980) 48 LGRA 201.

However, the before and after method is not necessarily appropriate in all circumstances and has been rejected in a number of cases; see Hieronymus and Anor v. Minister for Education, Land & Environment Court, 29th June, 1989 (unreported), and the cases referred to in Proprietors of Strata Plan 20754 v. Council of the Shire of Hawkesbury, Stein J., Land & Environment Court, 25th July, 1989 (unreported).

The Court is not bound to adopt the before and after approach, and it appears to be inappropriate where, as in this case, each valuer eventually assigned little, if any, difference to the rate per hectare in each part of the exercise. As observed in the Hieronymus decision (supra), in such circumstances the exercise has no utility because the same result would be achieved by merely valuing the resumed parcel itself. It became common ground that compensation in this case should be assessed by determining the value of the resumed land as a separate parcel.

The applicant claimed that the highest and best use of the whole of his land at date of resumption was as an integrated tourist resort.

The main aspects of the land which are claimed to make it marketable for a tourist resort include:

2. The heathlands are unique and give a potential for the creation of golf links with lakes.

3. The canelands and improved pastures enable Asian tourists to see cattle in a natural situation.

4. The isolation of the land provides a different characteristic from that traditionally found along the coast.

5. It is rare to find a site on the coast having the size of the subject land with its varying topography.

Mr D.R. McInnes, an experienced town planner and expert in resort development, gave detailed evidence concerning the potential of the whole of the applicant's land for use as an integrated resort. He made an evaluation of the site and prepared a detailed concept for development. He strongly supported its potential for development for what is known internationally as a "sea ranch resort". Such development provides a full range of facilities such as beach, golf course, cattle and cane growing activities, a health and fitness centre, a conference centre, holiday accommodation, residential accommodation and a village. He examined the demand for holiday accommodation in the State generally, and the future of the industry as at the date of resumption. He investigated the history of the site, and the interest evidenced by experienced developers on adjoining land. He was of the opinion that in earlier years interest waned with respect to the subject and adjoining land because of environmental factors and government intervention. He was also aware of the unsuccessful attempts by government to promote the development of nearby land for a resort known as "Yamba Waters". He examined the locality and the site and strongly recommended its potential for development for a staged resort. He said he would have advised a potential buyer of the land at the date of resumption that development as an integrated resort would have had good prospects.

Mr McInnes was strongly supported by Mr Ball. Mr Ball also examined the history of the site and steps taken by the bureaucracy which he said interfered with the development of the tourist potential of the land and the locality. If asked to advise on the development potential at the date of resumption, he would have said that the land had obvious potential for major tourist development. He would have recommended further investigations and feasibility studies by experts such as Mr McInnes. He was of the opinion that staged tourism recreation development of various scales and form was appropriate for the land, including holiday villages and a destination tourism resort. Such development was permissible with consent without any need for rezoning.

Both experts concluded that the Maclean Shire Council was development oriented and would have encouraged such development. Mr Ball referred to interest by a developer at Sandon and by another near the subject land, and said that such proposals foundered owing to National Park interference. He was also of the opinion that there was good potential for rezoning of part of the land to provide for an expansion of the village at Brooms Head in the form of rural 1(c) zonings.

The destination resort potential of the whole of the land was supported by each of the applicant's valuers and also by Mr S.J. Connelly, an engineer/town planner with extensive experience in the subject area and who at one time was employed by the Ballina Shire Council as Deputy Chief Town Planner. In his opinion and for the reasons given by Mr Ball and Mr McInnes, the subject land had all the necessary features at the date of resumption which made it a desirable location for tourism development. In his opinion, the site met all relevant criteria.

The potential of the subject land for development, either as a destination resort or partly for a major resort, was denied by experts called by the respondent.

Jennifer Rand, now a consultant, was, at the date of resumption, Senior Development Planner with the Tourist Commission of N.S.W. and an adviser to government and the tourism industry on the development of land for tourist purposes. In her opinion, the subject land is not visually attractive and ocean views are limited. It is isolated, open and mainly treeless, with little variety types. Most of the land is a long distance from the ocean and does not offer still water access. The railway station at Maclean is closed, and the nearest express coach stop is at Grafton. The airports at Grafton, Ballina and Yamba are at an uncomfortable distance, and are not suitable for the type of aircraft needed to service a large resort on the subject land. In her opinion also, operators, travel consultants and conference organisers would have little interest in the Brooms Head area, and several State Government studies had excluded Brooms Head from recommendations of areas with tourist potential. In her opinion, Yamba is a far better location than Brooms Head, but does not compare with Coffs Harbour or the Cairns area as a support area for resort development. The resort components proposed by Mr McInnes are, in her opinion, poorly located and road access is poor. The site and the concept would not have been capable of getting appropriate finance. Prior to the acquisition or development of the subject land for resort purposes it would have been necessary to carry out a market or financial feasibility study for the proposed development. To be a success, any major resort would have to have a natural attraction such as the Barrier Reef or Ayers Rock. There has not been an integrated resort such as proposed by Mr McInnes in N.S.W. In fact, there is no developed example anywhere in Australia. She could not identify any tourist potential of any kind for the subject land at the date of resumption.

Miss Rand's opinions were supported by Mr Ingham, who considered that the Brooms Head area would serve only the local tourist market. In his opinion, however, some time after resumption a demand might exist on the land for a tourist complex comprising a caravan park/motel east of Sandon Road.

The availability of finance for large-scale tourist resorts was explained by Mr P.C. Beaumont, Senior Manager Corporate Lending at Bill Acceptance Corporation. I am satisfied that a purchaser would have been likely to obtain the necessary finance if the highest and best use of the whole or part of the subject land was for the purpose of resort development. Even Miss Rand conceded that in 1987 such funds were available, and that developers were interested in resort development.

The parties were in dispute as to the reasons why the nearby Yamba Waters proposal, which was promoted by the government, failed to proceed. There appeared to be a number of reasons: aboriginal land claims, environmental problems, slump in the real estate market, lack of water, lack of confidence, and the financial problems of the developer. It is not necessary nor appropriate that I determine the precise reason for the failure of that proposal to proceed. A prudent purchaser would be aware of the proposal and that for a number of different reasons it did not proceed. One thing is certain, the consent authority, the Maclean Shire Council, would most likely have strongly encouraged the subdivision of the subject land, or its development in whole or in part for a tourist development. It is also likely that in the political situation at date of resumption government would also have given support for such development, had there been no proposal for resumption for a National Park.

I have given careful consideration to all of the evidence, and in particular the expert opinions, with respect to the resort potential of the subject land. I am unpersuaded that the highest and best use of the applicant's land as at the date of resumption was for the development of the whole as an integrated destination resort. I prefer the opinions expressed by Mr Ingham, Mr Heath and Miss Rand concerning the demand and appropriateness of such large scale development on the subject land at that time. However, I do not accept opinions that at the date of resumption the subject land had no potential for sale for some significant form of resort development on the parcel east of Sandon Road.

Many of the attributes of the land claimed for the integrated resort would apply to the smaller portion, and of most significance is that it is a large, significant parcel in the one ownership, with adequate utilities and access, a long frontage to the Pacific Ocean, and adjoins an existing village. I consider that its proximity to Maclean and Yamba, whilst not comparable to areas such as Coffs Harbour, is acceptable. I am persuaded that, unrestricted by proposals for acquisition for a National Park, if placed on the open market the expert opinions and the comparable sales confirm that it would have been readily saleable for resort purposes. Of course, the important question in these proceedings is what price would such part of the subject land with such potential fetch in the open market at the date of resumption.

Mr Robertson was the only valuer to assess compensation on the basis that development of the whole of the land for a destination resort, of the type proposed by Mr McInnes, was the highest and best use of the land at date of resumption.

Assuming that at date of resumption the land had no development approval, he assigned a rate per hectare to the whole of the land of $7,500, which he deduced from an analysis of the sale of 1,392ha of land zoned Non-urban, located south of the village of Sawtell near Coffs Harbour. The vendor was APM Forests Pty Ltd and the purchaser Bonville Beach Hardwoods Ltd ("the APM sale"), and I accept that the sale price was $4,724,000 on 19th May, 1987. It was sold at about the same time as the resumption date, and would likely be subject to similar market conditions. It was common ground that the APM sale was the best available evidence because it has similar resort, rural and residential potential.

He calculated the area available for development on the APM land from a land use study prepared prior to sale for Coffs Harbour City Council by a planning consultant. He concluded that only 42.5% of the APM land was suitable for some form of development.

Mr Robertson considered that the said deduced rate of $7,500 was confirmed by -

a) sale I.M. Cratchley to Worgelle Pty Ltd of 109.2ha of coastal land for resort development near Red Rock village south of Coffs Harbour in February, 1988 for an analysed price of $718,000;

b) sale Aqua Del Ray International to Whitsunday Estates Pty Ltd of 1,538ha near Mackay in August, 1987 for $7,802 per hectare.

Mr Robertson's en globo valuation on this approach was $16,000,000.

Mr Robertson also carried out a most unusual valuation of the land as a proportion of anticipated development costs. He assumed $250,000,000 as the estimated cost of an integrated resort and, based upon what he accepted was comparable sales data, deduced that a developer would be prepared to pay 10% of likely development cost as land cost. He made a discount for lack of development approval and arrived at a value on that basis of $17,500,000. The invalidity of this approach was explained by Mr R.J.K. McIntosh, valuer, whose opinions in that regard I prefer. Mr Robertson said he used this method only as a check valuation. I share his apparent lack of confidence in this basis of valuation.

Mr Robertson also carried out a valuation by what he described as the "piecemeal" approach. He attempted to value the whole of the land as having potential for an integrated resort, but notionally divided it into parcels to accommodate the various types of tourist potential, i.e. six resort areas with rates ranging from $3,600 to $31,500 per hectare, giving a value of $10,250,000. As already stated, I am unpersuaded as to the potential of the whole of the subject land for a viable integrated resort at the date of resumption. It follows that I do not accept any valuation on that basis as appropriate for the assessment of compensation.

Each valuer also assessed compensation by hypothetical subdivision. Unfortunately, each initially relied upon a different plan and assumed substantially different yield, selling prices, selling periods, expenses, interest rates, and profit and risk factors. Engineering and town planning experts also differed, particularly as to yield, demand and development costs.

In each exercise, however, all valuers attributed some resort potential to a large parcel east of Sandon Road.

It was common ground that the portion west of Sandon Road and east of the ridge had potential for subdivision into rural 40ha and some rural residential 1ha lots. The experts were in dispute as to the extent of the demand, unaffected by National Park proposals, which was identifiable at the date of resumption. Mr D.G. Phillips, licensed real estate agent, had long experience in the Brooms Head area. He was of the opinion that at resumption date the market for small lots, i.e. 2ha or less, was depressed. However, the north coast of N.S.W., including the Maclean Shire, experienced significant population growth over a number of years prior to resumption date. I am satisfied that projections and surveys available at that time indicated a sufficient population increase to the year 2001 to warrant subdivision of the subject land west of Sandon Road. It is common ground that such Shire wide projections made no real estimate of demand for coastal land with ocean views. I have considered all surveys, reports and expert opinions, and prefer those of Mr Connelly. I am satisfied that a prudent purchaser at date of resumption would have been relatively optimistic, and recognised a demand for subdivision of part of the subject land west of Sandon Road identified by Mr Robertson into approximately one hundred 1ha lots, and the balance into 40ha or larger lots. Notwithstanding the pessimistic predictions of Mr D.E. Hume of the Department of Environment & Planning, I am satisfied that rezoning for such 1ha subdivision would likely have been supported by Council and achieved within twelve months. I am satisfied that it was reasonable to assume that all such lots would be developed and, depending upon price, sold within a two year period from date of resumption.

Mr Robertson carried out a number of valuation exercises on the hypothetical subdivision approach. His plan of subdivision was the most acceptable and maximised the number of 40ha parcels which could take the benefit of ocean views. However, such yield could only be achieved by incurring additional development costs. Mr Robertson assigned a value to the smaller resort and golf course portion in the following way. Excluding open space and land affected by SEPP 14, he selected an area of 122ha east of Sandon Road and added that to 125ha west of Sandon Road. He assigned $45,000 per hectare to the area east of Sandon Road, and $15,000 per hectare to that west of Sandon Road. He carried out a hypothetical subdivision exercise to that part and assigned a profit and risk factor of 15%.

He assumed a rural residential subdivision on part of the balance which, as I have said, I accept as reasonable. Many of such lots would enjoy ocean views and he assigned an average anticipated sale price of $55,000 with a 35% profit and risk factor with interest charges over nine months. However, whilst I accept that the sales evidence suggests that a premium would be paid for good ocean views, in each exercise Mr Robertson adopted what I consider to be unacceptably high sale prices. Had he adopted more realistic prices, his profit and risk factor and the selling period would otherwise have been reasonable, as were interest on acquisition and development expenses.

Mr Robertson also carried out a number of hypothetical exercises based upon the plan of subdivision relied upon by Mr Heath, but alternatively assuming profit and risk factors of 35%, 42% or 50%, interest rates of 18%, and selling periods of eighteen months or two years.

Mr Reen's hypothetical subdivision was, to some extent, similar to that of Mr Robertson. However, his exercise contained a fundamental error in that he virtually assumed that the land at date of resumption was rezoned to permit part subdivision into 1ha parcels. Such an assumption is unacceptable. He adopted interest charges similar to Mr Robertson's and, for the 1(a) component, a profit and risk factor of 27.5%. I found Mr Reen's assessment of the potential of the land for development and subdivision, and selling prices, overly optimistic, and selling periods were unreasonably short. For the above reasons, I found all of Mr Reen's and Mr Robertson's hypothetical subdivision exercises, including those based on Mr Heath's approach, extravagant and unconvincing.

Mr Reen carried out a grazing value of the land on instructions, and appeared to have had little confidence in the reliability of the exercise. I have considered this approach to valuation and the sales relied upon, and am similarly unimpressed.

Mr Heath's hypothetical subdivision valuation was based on a plan prepared by a person not called in evidence. He did not even produce the plan upon which he based his valuation of that part of the land having potential to be subdivided into 1ha allotments.

Mr N. Ingham, an experienced town planner and surveyor engaged by the respondent, was belatedly asked to comment upon the plan of subdivision considered by Mr Heath, but appeared unimpressed. It was subsequently described by Counsel for the respondent as |CF2.|PSI"not the most sophisticated"|CF1.|PSO. I agree.

In his exercise, Mr Heath's first step was to value approximately 70ha at $255,000, which he said reflected the rural residential, 1ha, potential of an allotment in the area west of Sandon Road. However, erroneously, this parcel was not originally included as an allotment in the hypothetical subdivision. To the balance of the land he assigned anticipated sale prices to the potential lots, e.g. seven 40ha lots at $130,000 each, i.e. $3,250 per hectare; a 385ha parcel at $850 per hectare; a 250ha parcel at $1,249 per hectare; a 250ha parcel at $1,500 per hectare; and a 250ha parcel at $1,000 per hectare. The parcel of 212ha east of Sandon Road was assigned a value of $700,000, i.e. $3,301 per hectare. The gross realisation for the sale of the land in subdivision was said to be $3,639,500, from which he deducted legal expenses and commission and thereafter applied a profit and risk factor of 50%. He deducted other expenses and development charges and interest thereon, and interest on acquisition for one year at 18%. After deducting the value of the retained land, he arrived at a value of $1,575,000.

Mr Heath carried out a supplementary hypothetical subdivision to substantiate the value assigned to the said parcel with rural residential potential. That exercise assumed subdivision in two stages, the first 33 lots selling over a period of four years at an average of $38,000 per lot with a profit and risk factor of 45% and interest at 18%. The second stage was for 30 lots with a selling period of a further four and a half years, at an average of $35,000, a profit and risk factor of 50% and interest at 18%. The value of the land was also deferred for four and two-thirds years. Mr Heath was therefore of the opinion that the unsubdivided 70ha had a value of $255,000, which he later revised to $330,000, i.e. $4,714 per hectare.

Mr Heath carried out a number of other hypothetical subdivision exercises, also including all potential lots. However, I found all of Mr Heath's hypothetical subdivision exercises unacceptable for a number of reasons, but in particular -

a) no plan of subdivision relied upon provided a satisfactory lot layout or reasonable yield;

b) in each exercise, yield and value assigned to lots was, in my opinion, generally low, selling periods unrealistically long, yet profit and risk factors and other deductions high.

I am unpersuaded that a prudent and not over-anxious vendor and purchaser, conscious of all relevant market factors at date of resumption, would have come together at a price based on Mr Heath's calculations or gloomy predictions.

Mr Heath also relied mainly on the APM sale for his en globo valuation, but because that land had timber thereon with a value at sale date said to be $400,000, he adjusted the price to $4,376,000. He made appropriate enquiries and a detailed comparison with the subject land.

For such valuation, Mr Heath also referred to sales -

A2: Koppers Australia Pty Ltd to Peter Kurts (Developments) Pty Ltd, which was a sale of a large grazing block of 1,876ha in late 1985 for $460,000. It is approximately the same distance from Maclean as the subject land, but inferior. It was purchased by a developer and partly subdivided. Mr Heath said it indicated the lower end of the market for rural lands with subdivision potential.

B1: Andruce Pty Ltd to Landbrokers (Inc) Pty Ltd. This was a large, well developed grazing property of 901ha at Nerong Park, purchased in July 1986. There was some confusion as to the exact price, but I accept it to be $514,000, i.e. $570 per hectare. The land had some coastal views with limited access through Crown land to a lake. The Pacific Highway was 6.5kms away via a gravel road and the land had potential for subdivision into 100ha allotments. Mr Heath said it was agriculturally superior to the subject land, but otherwise did not have the same potential.

Mr Heath valued the subject land en globo at $885 per hectare, i.e. $1,613,550. I am unconvinced that his analysis of the comparable sales justifies the low value he assigned to the subject land.

Mr Heath's preferred method of valuation was a direct comparison of parts of the subject property with sales of large parcels, but with an allowance for the magnitude of the subject property.

In that exercise he first assessed a value for the 212ha parcel east of Sandon Road and relied upon sales -

B1: (supra) i.e. Nerong Park, 901ha in July 1986 for $514,000.

B4: Two sales of land at Safety Beach north of Woolgoolga.

One such sale was of 8.25ha to the Department of Environment & Planning of ocean front land in August 1987 for $140,000, and the other a sale of the adjoining 60.15ha in April 1988 for $450,000 ($7,500 per hectare). Mr Heath considered the sale to be superior to the subject land because of its highway exposure, future urban potential and proximity to Coffs Harbour.

C2: At Hawkes Nest a 40ha parcel sold in November 1985 for $142,000, and a 43ha parcel sold in October 1986 for $117,000. Both sales were said to have low-key tourist development. They were close to a golf course, sewage treatment works and Newcastle. They had poor views. Mr Heath considered these sales indicated a minimum level for the eastern parcel.

C3: A 46ha parcel at Diamond Beach sold in April 1983 for $300,000. The sale was on terms and had a consent for a caravan park.

C4: A 45ha parcel sold for $230,000 in March 1987, to establish a prawn farm and for cane growing. It is a block with high dunal system in close proximity to Ballina, and was considered by Mr Heath to be in a more attractive location than the subject land, but regarded as inferior because it lacked water and had no elevation.

Mr Heath was of the opinion that the 212ha coastal portion had only limited potential for tourist development, e.g. a small caravan park. From the said sales he assigned to this parcel a value of $700,000, i.e. about $3,300 per hectare.

The 1,235ha parcel east of the ridge and west of Sandon Road was valued by Mr Heath at $1,100 per hectare, and for this valuation he only considered the said sale B1, i.e. Nerong Park at $570 per hectare. Mr Heath relied only upon his professional judgment for such massive adjustment to the sale price. On this approach, after an allowance for size, he arrived at a nett value for the subject land at $1,660,000. In my opinion, sale B1, Nerong Park, had little comparability to any part of the subject land, its location or potential. I find this exercise by Mr Heath unacceptable.

Whilst regrettably the valuers differed significantly on almost all aspects in the assessment of compensation, it was common ground that the APM sale was the most important evidence available for the determination of the value of the subject land. Each valuer attempted to analyse the site, its potential and the circumstances surrounding the sale. Unfortunately, they could not agree upon the size of discrete areas or the respective development potential.

Mr Robertson identified five physically separated portions of the APM sale which also had different development potential, i.e. approximately - "A" 464ha - Resort

Mr Heath notionally divided the APM sale property into three sectors -

- Coastal section: 569ha beach front lands and low country.

- Central section: 533ha residential, rural residential, industrial.

A large proportion of the APM land would be likely to be limited or unavailable for any form of development. Access to the resort land would be expensive to construct. However, I consider that a further notional division of the resort land into discrete wetlands and undevelopable land is arbitrary and too hypothetical to be reliable.

I accept the following comparison with the subject property.

Concessional 17 2, but can be allotments retained by owner.

The APM land had been investigated and its potential assessed by experts prior to sale. The vendor and purchaser would have been fully aware of the proximity of some of the land to urban areas, and also its potential for rural or rural residential subdivision. I do not consider that with such potential the stands of potentially saleable forest timber had any effect upon the purchase price.

In some analyses of the APM sale, the valuers assumed that the purchaser carried out the traditional hypothetical subdivision valuation, with various assumptions including profit and risk factors, as would be required to determine a claim for compensation. Working backwards, the valuers then sought to separate the prices paid for the various parts for the land sold, and apply such figures to the resumed land. Not surprisingly, such complicated exercises applied to a comparable sale suggested a vast range of different values, and had an air of unreality.

I am satisfied on the evidence that the prime purpose for the acquisition of the APM land was to develop a major resort on the coastal lands. In more realistic analyses, the purchaser of the APM land was presumed to have first determined the price for the land with resort potential, and then merely added a sum which reasonably reflected the potential for subdivision and sale of the balance. I am persuaded that this is the most appropriate approach.

The valuers cannot agree on the boundaries of the portion of the APM land which the parties would have identified as having tourist potential, and they are most difficult to define. For the purpose of analysis of the APM sale, I accept that no more than 464ha of the coastal land would have been regarded by the parties as having real tourist resort potential. It is common ground that only a small proportion of such land would actually have been available for physical development. The parties would have looked to comparable sales with similar features to determine the value of that part.

It is common ground that the Cratchley sale of 109.2ha of coastal land at Red Rock for $800,000 on 8th February 1985, is of great assistance in the determination of value of comparable land with resort potential at the date of resumption. The sale took place in a depressed market more than two years prior to the APM sale. It was purchased on a terms contract which, when adjusted, indicated a price of $718,000, i.e. approximately $6,500 per hectare. The sale is within twenty minutes by road to Coffs Harbour and adjoins a village comparable to that at Brooms Head, but is closer to the Pacific Highway and has a public school within a short distance. The land is in a number of lots, narrow, with a long frontage to the beach and also a public road. Most of the land is heath country and almost half is affected by wetlands controlled by SEPP 14. A high primary sand dune along a Crown reserve restricted ocean views. Development approval had been granted for subdivision. The land was subject to a 7(f1) zoning which prohibited any significant resort use. However, I am satisfied that the land was purchased for such purposes in anticipation of gaining rezoning and approval for the erection of a five-star hotel and golf links, together with a caravan park and the like.

In all the circumstances, notwithstanding differences and that the APM land is very much larger, I consider that the parties to the sale would have been likely to have assigned approximately a similar rate per hectare paid for the Cratchley land to that part of the APM land with tourist potential, i.e. approximately 464ha at about $6,500 per hectare.

That deduced rate for the land with resort potential appears reasonable if compared with sales of superior resort land which have been referred to earlier, i.e. -

a) $7,802 per hectare paid in August, 1987 for 1,538ha at Mackay;

b) $7,500 per hectare paid in April, 1988 for 60.15ha near Safety Beach.

If in the APM sale the purchaser was apparently prepared to pay about $3,000,000 for approximately 464ha of that land with resort potential, the parties also apparently agreed that the unsubdivided non-urban balance of about 928ha had a value of approximately $1,724,000, i.e. about $1,858 per hectare.

I note that in a similar exercise Mr Reen estimated that the purchaser of the APM land paid $3,000,000 for 509ha with resort potential. That indicated to him that $1,724,000 was paid for the balance of 823ha, i.e. $2,095 per hectare.

If appropriate rates deduced from the APM sale are applied to the subject land, they suggest a value in the order of:

212ha resort parcel east of Sandon Road, say $1,380,000

On the analysis of the sales evidence, I do not consider any deduction for "magnitude" as suggested by Mr Heath is warranted.

I accept that the APM transaction is the most useful sale at the relevant time of coastal land with resort potential. That land has a number of features and characteristics similar to that of the resumed land. In particular, each has a long frontage to the ocean, and is part wetlands and part timbered land. Each is physically separated into a number of separate parcels with somewhat similar development and subdivision potential.

The land in the APM sale had proximity to Coffs Harbour, which is a major tourist centre and, in my opinion, its location and potential for resort development was superior to that of the subject land. The parcel with resort potential was much larger than that on the subject land, but it contained significantly larger proportions of unusable wetlands. The balance had somewhat similar rural and rural residential potential and was smaller than the unsubdivided parcel west of Sandon Road. However, it also had some urban potential and comprised a number of readily saleable concessional lots. Whilst the subject land would probably yield more rural lots, the selling period would probably be extended and the developer would incur additional expenses and risk. The APM land was only two-thirds the size of the resumed land. Nevertheless, for all the above reasons, and making the necessary assumptions, I would expect that at resumption date if the resumed land was sold as one unsubdivided parcel, it would realise a lower overall price than that obtained for the APM land.

The numerous hypothetical subdivision exercises were helpful as check valuations, but the inevitably wide range of nett land value derived by variation of assumptions emphasised the hazards of relying too much on the hypothetical approach. In any event, values should not necessarily be applied directly to the subject land from detailed analyses of comparable sales or valuation exercises with mathematical precision. Hypothetical valuation exercises are not as helpful as comparable sales evidence, and are best used as tools to assist the Court to determine the price at which the parties would also come together in the "selling approach" explained in Spencer v. The Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418.

However, and for all of the above reasons, I am persuaded that the said deduced rates from the APM sale are supported by the other sales evidence, and should be employed in the determination of the value of the subject land. Doing the best I can, I consider that at the date of resumption a prudent vendor and purchaser of the resumed land would come together at a sale price of $3,700,000.

1. Compensation assessed at three million seven hundred thousand dollars ($3,700,000).

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|CF2.|PSIMatter|CF1.|PSO: M.E.A CARSON v. THE MINISTER

|CF2.|PSIHearing Dates|CF1.|PSO: 30th April to 24th May, and

|CF2.|PSIAppearances|CF1.|PSO: Applicant - J.J. Webster with Mrs J. Kelly

|CF2.|PSISolicitors|CF1.|PSO: Applicant - Gadens Ridgeway