In that case, the owner of land zoned part Residential and part Recreation obtained consent to subdivide the land into 14 lots. The effect of the subdivision was to cause the land zoned for Recreation (which was eventually resumed) to become landlocked. The Court of Appeal, in upholding the decision of Bignold J at first instance held that:

"[t]he limited access to the land zoned 6(c) created by the subdivision was a direct response to the zoning of that land and as such had sufficient connection with the resumption process as to require that the landlock created by the subdivision be ignored for the purposes of the valuation."

Therefore, the Court, in assessing value in the present case, is required to ignore the effect on value, not only of all planning restrictions imposed on the Overton land that have a direct connection with the scheme to include the land as part of "the Georges River Parklands", but also any such effect of all acts and representations by the planning authorities, and/or the owners, which have a sufficient connection with that purpose.

However, a "characteristic or attribute of land which affects its value must be taken into account in the assessment of compensation even if the planning restriction which is a step in the process of resumption is dependant upon that characteristic or attribute." (The Crown v Murphy (1990) 71 LGERA 1 at 4 ).

Thus, evidence of any ecological or visual significance of the subject land that affects its value must not be ignored, even if it was at least partly for those reasons that the land was intended to be included in a State Recreation Area or a National Park.

The above principles can be seen as guidance as to how in practice the Court may achieve its primary objective "to ensure, if possible, that the dispossessed owner is placed in the same position in money terms after, as he was prior to the resumption." (per Hemmings J, in Hieronymus and Ors v Minister for Education, unreported, Land & Environment Court 29 June 1989)

The competing contentions as to the nature of that "position" should be set out now.

* Had the land not been earmarked for acquisition to include it in the Georges River National Park, it would have been zoned to permit residential development;

* In 1984, the applicant would have applied for, and obtained, development consent for a retirement village concept that would have included 88 units on the acquired land (Scenario 1);

* Alternatively, consent would have been obtained in 1995 for an extension to the existing retirement village over the acquired land (Scenario 2);

* Such retirement village use represents the highest and best use of the acquired land;

* The nett value of the land based on this use is $4,190,000 for Scenario 1 or $3,320,000 for Scenario 2;

* Alternatively, the acquired land could have been developed as a 9, 5 or 4 lot residential subdivision, with a value of $1,200,000 if 9 lots, or $965,000 if 4 lots.

* The history of the Overton land reveals that no one ever seriously considered development on the acquired land;

* Quite apart from the desire to include the land in the Georges River National Park, the acquired land was long identified as environmentally sensitive, and, therefore, would have either been subject to an environmental protection zoning, or residentially zoned but with some form of control, which would have effectively prevented any, or any substantial, development from taking place;

* The highest and best use of the acquired land could not be an extension to the retirement village, as this use is only relevant in association with the retained land. A hypothetical purchaser other than the owner would not buy lot 11 to put a retirement village on it;

* Furthermore, Council would never have given consent to either of the retirement village concepts advanced, due to the environmental constraints of the development site;

* Even if consent were obtained, the costs associated with the hypothetical development, when measured against the realistic returns that could be expected, would render the proposal economically unfeasible;

* 9, 5 and 4 lot subdivision proposals would not have received development consent, again due to the environmental constraints of the site, and they too would have been economically unfeasible;

* The highest and best use of the acquired land is as a single dwelling site, or alternatively, it has no development potential at all;

* The value of the acquired land as a single dwelling site is $84,000;

* Alternatively, it is worth $250,000, on the basis of its special value to the owner.

The applicant relied on the following witnesses:

* Geoffrey Twibill, Director of Devine Erby Mazlin, an architect with 36 years' experience in the design of buildings for retirement living (Exhibits Z and ZC)

* Ken Willis, Principal of Ken Willis and Associates, town planning consultants, formerly Chief Town Planner at Hornsby Council from 1966 to 1989 (Exhibits E and F)

* Adrian Minnaard, Principal of Adrian Minnaard Town Planning Consultants, formerly Chief Town Planner at Bankstown City Council from 1974 to 1990 (Exhibits G and H)

* Dr Kevin Mills, Principal of Kevin Mills & Associates Pty Ltd, environmental consulting firm, an ecological and environmental consultant since 1982 (Exhibit K)

* Christine Purdon, Principal of Purdon Associates Pty Ltd, planning and social research consultants, since 1985 (Exhibit J)

* Graham Whitely, Quantity Surveyor for 28 years with Hugh B Gage P/L, and a director since 1988 (Exhibit T)

* Ken Stubbs, Principal of K.R Stubbs & Associates, engineering consultants, in practice since 1979 (Exhibits R and S)

* Warren Wiley, Principal in W C Wiley & Associates, electrical contractors (Exhibits P and Q)

* Roy Free, Bushfire Management consultant, with more than 40 years experience with NSW Forestry Commission (Exhibit U)

* Rodney Jeffrey, Principal of Jeffrey & Katauskas, geotechnical consultants, for 21 years (Exhibits L and M)

* John Merton, Chairman of Directors of the Sanders Group of Companies (a real estate company), with 32 years experience in real estate matters (Exhibits V and W)

* John James, Managing Director of Overton Investments P/L

* John Lockyer, Principal of Lockyer Construction Company, civil engineering contractors, with experience in the civil engineering construction business since 1971 (Exhibits N and O)

* John Robertson, Principal of John Robertson & Associates, real estate valuers, with 20 years experience in valuation (Exhibits S and ZS)

The respondent relied on the following witnesses:

* Michael Neustein, Managing Director, Neustein & Associates, Architects and Town Planners, planning consultant since 1980 (Exhibit 13)

* Neil Ingham, Principal of Ingham Planning, town planning consultants, in private practice since 1968 (Exhibit 14)

* Ian Chalmers, engineer and cost estimator with Australian Water Technologies (Exhibit 8)

* Graham Wilson, senior engineering geologist with Douglas Partners (Exhibit 6)

* Michael Boyden, Principal of Boyden and Partners Civil Engineers P/L (Exhibits 1 and 2)

* Sharyn Cullis, a local activist, Secretary of the Georges River Environmental Alliance, and ministerial appointee to the Georges River Catchment Management Committee (Exhibit 38)

* James Spencer, an engineer with Boyden and Partners Civil Engineers Pty Ltd (Exhibits 1 and 2)

* Brian Elton, Director of Brian Elton Associates, planning, housing and social quality consultants (Exhibits 10 and 11)

* Kevin Gothard, formerly Director of Stanton Hillier Parker, Real Estate Valuers, a valuer with 34 years experience (Exhibit 16)

* Shane D'Arcy, Chartered Quantity Surveyor with Page Kirkland Partnership since 1984 (Exhibit 7)

* Philip Edmonds, Managing Director of Edmonds & Associates, a real estate valuer since 1962 (Exhibit 15)

* Francis Fanning, Principal of Gunninah Holdings P/L, Environmental Consultants (Exhibit 12)

* Barry Tozer, Principal of Tozer & Associates, Consulting Construction Engineers, with experience as a consulting engineer since 1979 (Exhibits 3 and 4)

10. WHAT ZONING WOULD HAVE APPLIED TO THE SUBJECT LAND, HAD IT NOT BEEN REQUIRED FOR A PUBLIC PURPOSE?

In accordance with the San Sebastian principle, as enshrined in s 56(1)(a) of the JTCA, the Court must ignore the effect on the value of the acquired land of all the planning restrictions imposed on it which have a direct connection with the scheme to include the land as part of the Georges River State Recreation Area or National Park.

Mr Webster for the applicant contends that the Open Space zoning that applied to the land at the date of resumption should properly be regarded as a step in the resumption process and set aside for the purposes of assessing compensation.

Consequently, he argues, the Court must consider the question posed in the above heading - what would have been the zoning of the acquired land had it not been required for the public purpose for which it was resumed?Mr Webster contends that the relevant period for the Court to consider is the last time the land was dealt with by a planning instrument, namely 1978-1979 (the time of gazettal of the IDO and the Bankstown Planning Scheme). As there has been no opportunity for the land to be rezoned since that time, the real question, in the applicant's submission, is: what would have been the zoning in 1979?

The applicant argues that, in 1979, the acquired land would have been zoned residential 2(a)(3) - the same zoning that was applied to the retained land - with the only restriction being the 30 metre foreshore building line.

In this regard the applicant relies on the evidence of both Minnaard and Willis, two experienced local government planners who are now private consultants.

Minnaard's evidence was essentially that Council and the SPA gave the subject land a low priority in respect of acquisition. Council in particular did not seek to be in a position to acquire the land, in view of the existing open space in the locality. Accordingly, had the land not been reserved as County Open Space to be acquired by the State, it would have been zoned residential 2(a)(3), like the adjoining land.

Willis took a similar approach, contending that Council would not have accepted the responsibility for acquisition of the land for Open Space (because there was sufficient open space already in the locality) and that, had the land not been earmarked for acquisition, it would have been anomalous to zone part of the unsubdivided parcel differently from the main part of the land. He concluded that Council would have zoned the whole of the Overton land as Residential 2(a)(3) and would have used its Foreshore Building Policy (DCP 6) to control any development proposed for the foreshore land.

Mr Hale for the respondent argues that the applicant did not make out that a residential zoning that allowed development on the subject land would have applied. He disputes the contention that the Open Space zoning must necessarily be set aside for the purposes of the assessment of compensation. He argues that the applicant has not shown that there was a decrease in the value of the land caused by the carrying out of the public purpose (the County Open Space zoning). The applicant has not proved that "but for" the zoning the land would be worth more.

The decrease in value arising from the zoning is said to be the restriction on development, but Mr Hale contends that there were so many other factors, apart from the rezoning, that contributed to the restriction on development on the land, that it could not be said that "but for" the zoning the land would be free of its restrictive effect.

In particular, he emphasised the following factors which contributed to the restriction on development, independent of the zoning:

(i) the environmental sensitivity of the land, as identified by Council and the Department; and

(ii) the agreement reached between the parties to dedicate at least part of the subject land in exchange for the residential zoning of the retained land.

In respect of (ii), Mr Hale relies on DTR Securities Pty Ltd v Sutherland Shire Council, (1993) 79 LGERA 88, to contend that the Department or its predecessor, in the event of an application to develop below the cliff face, could have sought some sort of specific performance to prevent the applicant from departing from the assumption which led to the re-zoning, namely, the dedication of the foreshore land. This contention must immediately be discounted, since it is quite clear that a formal agreement between the parties was never reached as to the offer of dedication. I agree with the opinion expressed in a memo from Mr Steve Allen, Deputy Manager of the relevant branch of the Department, to Mr S Shortis, that "the offer of dedication was effectively withdrawn" at the time of the disagreement over the extent of land involved in the proposed dedication. (Exhibit Y, folio 392).

This is further borne out by the fact that the development consent granted in 1984 for The Heritage did not contain a condition enforcing the dedication, which would have made the situation analogous to DTR Securities.

Mr Hale further contends that the question of determining the zoning that would have applied but for the County Open Space zoning is not decided simply by looking at the circumstances of the zoning in 1979. He argues that clause 87 of the Bankstown Planning Scheme requires updating of the scheme, and that it would have been likely that a review of zoning in the 1980's or 1990's would have led to the imposition of a non-urban, environment protection zone. This submission is supported by Neustein's evidence.

Alternatively, Mr Hale relies on Ingham's evidence. Ingham's opinion was that a residential zoning would have applied to the land, but that Council or the State planning authorities would have imposed some sort of control (eg, a site-specific DCP, or the creation of a Foreshore Scenic Protection Area, or Foreshore Building Line) which would have effectively restricted any development from taking place on the land.

Ingham based his conclusions on his observation that there was no evidence from the site history that Council, the State planning authorities, or even the Overtons themselves, ever seriously considered that the subject land would ever be used for a normal urban use. The offer by the Overtons to dedicate at least part of the subject land indicates an acknowledgment that the area should not be developed. The rezoning of the retained land took place on the basis that the subject land was to be dedicated, although, for some reason, a formal agreement was not reached. The long-held and consistent attitude of the planning authorities against development on the land confirms for Ingham its great environmental importance (see Exhibit 34).

Therefore, the respondent contends that, even without the Open Space zoning, the restriction on development on the subject land would have nevertheless occurred, either through the imposition of an environment protection zone sometime in the 1980's or 1990's, or through specific planning controls (as outlined above).

I agree with the applicant's submission that the relevant period to consider in determining the question of the alternative zoning is the last time the land was dealt with by a planning instrument. To determine the question by supposing that there may have been a review, when in fact this has not happened, and that the review would have led to the imposition of an environment protection zoning, although none existed under the Bankstown Planning Scheme, is too speculative an approach. I note that three of the four town planners, including Ingham, agreed that the proper approach is to look at the situation in 1979.

The question, then, for the Court to determine is whether the evidence of the negotiations between the relevant planning authorities and the Overtons in relation to the zoning decision in 1978/79, best lends itself to the interpretation of Minnaard and Willis, or that of Ingham.

It cannot be doubted that the history of dealings regarding the Overton land reveals a consistently negative attitude from Council and the various State planning authorities towards development on the acquired land, if not, in earlier years, on the whole of the Overton land.

Apart from a subdivision application in 1960, to which the CCC responded by requesting a revised plan which provided for residential development to commence 20 feet back from the cliff, there appears to be little evidence to support the view that (residential) development was seriously contemplated by Council, the State planning authorities, or the Overtons.

However, the interpretation and weight that the Court gives this evidence must be tempered by the facts that there was clearly an intention to acquire relevant portions of the Overton land for parkland purposes from at least as early as 1954, and that, therefore, the reservation of the total site for County Open Space under the Cumberland Planning Scheme in 1951 can also be regarded as a step in the resumption process.

Consequently, the subsequent actions and representations of all the parties, and in particular those of the resuming authority, must be analysed cautiously, as they are obviously coloured by the known intention of the authority to acquire the subject land for the public purpose.

The pertinent question is whether the generally negative attitude of the authorities towards the possibility of residential development on the land can be attributed solely to the desire to include the land as part of the Georges River National Park, or whether there were also other reasons for that attitude, for instance, the ecological or visual significance of the land itself.There is certainly some evidence that suggests that Council and the State planning authorities regarded the land as environmentally sensitive, apart from its value as part of the National Park.

A Council report in December 1970 expressed misgivings as to whether the land could be residentially developed "in a manner compatible with the protection of the natural environment". The report was concerned with the visual impact of development on the appearance of the headland, noting (as quoted above in section 3):

"[t]he view of similar headland subdivisions across the river in the Sutherland and Hurstville Municipalities, show the rather adverse effect that this standard form of development can have on the appearance of the headlands. Natural growth is considerably reduced, earthworks of road construction are blatantly visible, and the design of the residences and the materials used are often in conflict with the natural environment." (Exhibit Y, folio 133).

On 8 July 1975, the Planning Division Board of the PEC resolved "to permit some limited form of selected residential development which would enable retention of the escarpment for open space purposes with possible provision for a public lookout with suitable access". (Exhibit Y, folio 186).

In 1976, in response to a submission from Council concerning proposed development and zoning of, the land, the PEC advised the Lands Department that Council's submission did not "adequately provide for the preservation of the maximum possible area of the existing natural environment." (Exhibit Y, folio 201).

Furthermore, it is likely, from a common sense point of view, that the authorities would have regarded the land as possessing some degree of sensitivity, simply from noting its steeply sloping nature and scenic prominence. This was likely the case, even though the authorities may have more commonly referred to the public purpose as the reason for opposing development on the land. Balanced against this is the evidence that Bankstown Council, in 1961 and 1970 resolved to seek a residential zoning for the whole of the Overton land.

Despite the clear evidence that the relevant planning authorities were generally negative towards the prospects of residential development on the land, and that at least part of the reasons for this attitude was the environmental sensitivity of the site (separate from the public purpose), I prefer the Minnaard view that the zoning that would have applied to the site, had it not been required for its addition to the nearby parklands, would have permitted residential development.

It is hard to ignore Minnaard's intimate knowledge of the attitudes of Council and the process of negotiations that actually occurred at the relevant time. I accept his opinion that, had the land not been required for parkland purposes, Council and the State planning authorities would have imposed a zone that allowed for certain forms of development on the subject land (subject to EPAA s 90 and other planning considerations), notwithstanding that the land had a certain environmental sensitivity.

Accordingly, I find that, had the land not been required for the public purpose for which it was resumed, it would have been zoned Residential 2(a)(3), as was the retained land, with the only restriction being a 30 metre Foreshore Building Line.

11. WHAT IS THE HIGHEST AND BEST USE OF THE LAND?

The competing contentions outlined above in sections 7 and 8 define the dispute between the parties as to what is the highest and best use of the acquired land, and they are summarised again here for convenience.

The applicant contends that the highest and best use of the land is as a site for 88 retirement village units, for which consent would have been obtained in 1984, when the application for The Heritage was processed (Scenario 1), or was likely to have been obtained in 1995, as an extension to the existing retirement village (Scenario 2).

The applicant claims that the nett market value of the land based on this use is $4,190,000 (Scenario 1) or $3,320,000 (Scenario 2).

Alternatively, the applicant claims that the land could have been developed as a 9 or 4 lot subdivision, with a market value of $1,200,000 or $965,000 respectively.

The respondent claims that the highest and best use of the land is as a single dwelling site, or alternatively, that the site has no development potential at all. The market value of the land as a single dwelling site is submitted as $84,000.

In Harvey v Burwood Municipal Council, unreported, 30684/91, 7 May 1993, Bignold J adopted a statement (in D Brown's Land Acquisition 3rd ed para 3.19) of the broad principles that must be established by a claimant asserting a highest and best use, and I also respectfully adopt it, and restate it here:

"(a) the use must be legal - it must come within the planning and building regulations;

(b) the use must be within the realm of probability and it must be likely, not speculative or conjectural; and

(c) the use must be of a kind to come within the imagination of a particular purchaser."

Before considering whether the Retirement Village concept is a use "within the realm of probability" and "not speculative", it is necessary to deal with some preliminary legal arguments raised by the parties concerning that concept.

11.1.1 Can the Retirement Village Concept be considered in the absence of a claim of special value?

The respondent argues that there is a legal impediment to even considering the Retirement Village concept for the following reasons:

* There is no suggestion that lot 11 on its own has as its highest and best use a use as a retirement village - that use is only relevant in association with the retained land.

* As a `stand-alone' parcel, the applicant values the land at its highest at $1,200,000. Therefore, it is necessary to establish the legal basis for the additional $2,100,000 to arrive at the $3,300,000 estimated value of the land as a site for units.

* The most likely characterisation of that "premium" is "special value", but it has not been pleaded or argued by the applicant.

* The applicant explains the premium as representing the market value of the land as assessed on a "before and after" approach to valuation. However, the "before and after" approach is not an approach to determine market value alone.

* Therefore, there is no legal basis for considering the hypothetical retirement village.

In my opinion, the applicant was correct in taking the view that it was not open to it to claim special value.

Special value is defined in s 57 of the JTCA to mean "the financial value of any advantage, in addition to market value, to the person entitled to compensation which is incidental to the person's use of the land."

The critical part of the definition is the last clause - the advantage to the owner must be incidental to the use of the land. This principle was described by N A Hemmings QC in Valuation Principles and Practice, 1st ed, 1997, as follows: "Special value can only arise where at the time of compulsory acquisition, the owners have actually put the property to some use for which it is specially well suited."

In the present case, the applicant had not put the subject land to any particular use, and it was vacant at the time of acquisition. Accordingly, the land had no special value to the owner (Jovist Pty Ltd v Campbelltown City Council, (1970) 19 LGRA 134).

Alternatively, if it is proper to regard "the land" within the s 57 "special value" definition as meaning the whole of the Overton land prior to this resumption, I am of the opinion that there is no financial advantage to the Overtons, as a consequence of their use of the land as a retirement village site, that goes beyond the market value of the land.

This is based on my conclusion, for the reasons set out below, that the highest and best use of the land, when viewed from the perspective of the hypothetical purchaser, could be as a site for retirement village units, subject to economic feasibility and the likelihood of obtaining consent. Accordingly, the market value of the land incorporates any advantage that might flow from the existence of The Heritage.

I do not think that the applicant is barred from adopting the "before and after" method to assess the market value of the land. Whilst in most cases of partial acquisition, the "before and after" method is used to determine a value that takes into account issues of enhancement and severance, I can see nothing in the case law that says the method can be used only when these issues are present.

Indeed, the broader principle that comes through is that the appropriate method to be adopted is that which leads to the most just result for the dispossessed owner. (see The Proprietors of Strata Plan 20754 v The Council of the Shire of Hawkesbury, unreported, Stein J, 25 July 1989, 30409/88; Hieronymus v Minister for Education, unreported, Hemmings J, 29 June 1989, 30344/88)

In determining the highest and best use of the land in the present circumstances, I think that it is appropriate to consider the use to which the whole of the Overton land could have been put before the resumption, assuming a residential zoning, and then comparing that with what could have been done with the land after the resumption. This approach is similar to that taken by Perrignon J in Daly v Manly MC, (1983) 50 LGRA 301, where His Honour said that his valuation exercise "adopts what I regard as the relevant part of the before and after method."

Prior to the resumption, the highest and best use of the land could have been as a site for a retirement village that extended over the escarpment.

This might have been a use contemplated by the owners of the land, but equally it might have been considered by another hypothetical purchaser with a view to amalgamating with the existing village. That this is a realistic prospect is borne out by the evidence before the Court of the Willandra sale, where just such a scenario occurred.

After the resumption, the land could only be used for the purposes of the existing retirement village, confined to the retained land.

Accordingly, I am of the opinion that the Court can consider the Retirement Village concept as potentially the highest and best use of the subject land, subject to questions (discussed below) of economic feasibility, and whether it was likely to receive development consent.

11.1.2 Can the applicant assume that it would have obtained development consent for the Retirement Village concept in 1984 (Scenario 1)?

Mr Webster for the applicant contends that the valuation of the land should proceed on the assumption that consent would have been obtained for the Retirement Village concept in 1984. His reasons are that, in 1984, had the subject land not been required for a public purpose:

* The applicant would have lodged a development application incorporating the proposal for 88 units on the subject site;

* Council would have received a recommendation for approval from its then Chief Town Planner (Minnaard) and would have accepted the recommendation;

* A proper application of the San Sebastian principle, as applied in Lasseter requires the Court to set aside all steps in the resumption process that affect the value of the land. If these steps are set aside, the above scenario should be assumed, there being no evidence to the contrary before the Court.

It is established that the resumed land is generally to be valued at the resumption date in its then present condition (Yates Property Corporation Pty Ltd v Darling Harbour Authority (1991) 73 LGRA 47) ("Yates").

This doctrine is subject to the San Sebastian principle, namely, that planning restrictions applying to the land that affect its value and which are directly connected to the public purpose for which the land has been resumed are to be disregarded in the valuation exercise.

The San Sebastian principle was further defined in Lasseter's case to require the Court to set aside physical conditions of the land which are the direct consequence of the resumption process.

In essence, the applicant's contention is that the Court should set aside the "consentless" condition of the land in 1995, as that condition, as in Lasseter, was a direct result of the resumption process.

However, I do not accept that this scenario can be compared to that which occurred in Lasseter, where the landlocked condition of the land was a direct and actual consequence of the subdivision that was seen as a step in the resumption process.

Here, the link is far more tenuous. There is no guarantee that consent would have been granted in 1984 for the 88 units, even with a strong recommendation from Minnaard. There was in fact no application in 1984. The specific proposal for the 88 units was not even devised until 1996. The Court cannot assume so speculative a proposition. The "consentless" condition does not bear a sufficiently direct connection to the resumption process.

Accordingly, the general rule, that the resumed land should be valued at the resumption date in its then present condition, should apply.

Therefore, in determining whether the Retirement Village concept is the highest and best use of the subject land, I will only consider Scenario 2 of the applicant's case, in which a hypothetical purchaser would obtain consent in 1995 to extend The Heritage on to the acquired land.

11.1.3 Is the Retirement Village concept "within the realm of probability", or is it "speculative"?

There are two components to the above question relevant to the present case:

(a) Is it likely that the concept would have obtained development consent?

Mr Webster for the applicant relies principally on the evidence of Minnaard that Council would have approved an application based on the Twibill proposal (the owner's Retirement Village concept) at the date of the resumption.

Mr Hale for the respondent relies on Ingham and Neustein, who contend that the application would have been refused because of the environmental constraints of the site and the unacceptable impacts of the proposed development.

The differences of opinions in respect of the relevant development controls and key environmental constraints of the site are summarised as follows:

Ingham notes the conclusion in the Gunninah report dated May 1995 that, with respect to native fauna and flora, "the preferred option would be the restriction of any development on the subject site....to maintain a link between other reserves in the area." He contends that this indicates that the need to retain bushland on the land is significant, because development of the subject site would remove a vital link in the large strip of open space which lines the foreshore of the Georges River.

Minnaard claims that an extension of the retirement village on to the acquired land would have no adverse impact on the adjoining bushland, as all landscaping would be with indigenous species and all runoff would be controlled and go directly to the river. The provision of a 30 metre foreshore reserve by any development would retain much of the bushland located on the lower flatter area and provide a good link between reserves.

I do not think the development would be refused consent on the basis of SEPP 19 considerations. Generally I agree with Minnaard that the provision of a 30 metre foreshore reserve would provide a sufficient link between reserves. Furthermore, in my opinion, appropriate conditions in respect of landscaping and runoff control could have been imposed to ensure the development was not inconsistent with the aims of SEPP 19.

Ingham contends that, given the sensitivity of the site, the Foreshore Building Policy could have required the protection of more than the minimum 30 metres of foreshore land, such that development would effectively be precluded on the subject site.

Minnaard claims that the Policy aims and objectives were essentially for the control of dwellings and did not envisage a development as hypothetically proposed. In any event, in his view, a development which preserved the 30 metre foreshore, took into account the site contours, and preserved, where possible, the existing landscape (as did the Twibill proposal) would have been approved by Council.

I accept Minnaard's evidence on this point. I note that he claims there are several examples of privately owned land along the Georges River and Salt Pan Creek where development has been approved to within 30 metres of the foreshore, and it seems reasonable to conclude that, notwithstanding the more extreme topography of the Overton site, the applicant could also have obtained permission to develop the land to that line.

Other planning controls that Council would have had to consider include DCP 12 - Medium Density Housing Development, DCP 13 - High Density Housing Code, DCP 14 - Flood Prone Land Policy, and SEPP 5 - Aged and Disabled Housing. I do not think that the hypothetical development would have been refused consent by reason of Council's consideration of any of these policies.

Neustein contends (and Ingham agrees) that "the preservation of the natural characteristics of the site as part of a cohesive landscape unit along the foreshore of this part of the Georges River is considered essential." Ingham notes comments by Council and the State planning authorities in respect of earlier proposed development schemes that not only should the lower Overton land be protected, but also areas adjacent to the top of the cliffs. The land was rezoned on the basis that development would be restricted to ensure only minor visibility from the Georges River. Ingham interprets this evidence as indicating an attitude that the land should be protected for visual reasons, regardless of its zoning. Therefore, he asserts that Council, in considering the visual impact of the hypothetical development in the context of SEPP 19, DCP 6 and section 90 of the EPAA, would not allow development on the site.

Minnaard contends that a principal feature of the Georges River is the 30 metre foreshore reservation. The intermediate area, if well landscaped, blends in. The most direct visual impact from the water is foreshore development which, in this case, would be a 30 metre reserve. Consequently, the development of the upper slope would not have a dramatic impact.

A report regarding the geotechnical constraints of the subject site and the impact of the retirement village concept on the land was prepared by Douglas Partners in December 1995. The report concluded that the hypothetical development was geotechnically feasible, although the preferred development option involved the removal of the majority of unstable/marginally stable cliffline sections.

According to Ingham, the necessity to remove such large areas of the cliff, and to execute other substantial stabilisation works would significantly impact upon the visual and environmental quality of the area. Consequently, such a development would not be approved when considered pursuant to section 90 of the EPAA.

Minnaard's view is that, notwithstanding the geotechnical features of the site, the Douglas Partners report indicates the site is capable of development, and that the hypothetical development would not have impacted on the environmental quality of the area to such an extent that it would have warranted refusal by Council.

Ingham notes Free's recommendations that included a 30 metre fire protection zone to the western boundary and a 7 metre fuel free zone to the eastern boundary. Ingham submits that these recommendations contribute significantly to the site being generally undevelopable.

Minnaard notes that the site is not in a declared risk area and is isolated from the main bushland areas by the river, Alford's Point Bridge, and the bridge approaches. Further, on the western side of the site there is an unmade road reserve. He notes that the proposal would be adequately protected, with the use of the road reserve as a fuel free zone and other protective measures (as detailed in Free's report) which would not preclude development on the site.

Generally, the Court prefers the evidence of Minnaard in the above matters. Again, it is difficult to bypass his more intimate knowledge of actual Council attitudes towards development in this area. Other examples of development to the foreshore line in the locality show Council's willingness to permit selected development, subject to appropriate landscaping controls. Despite the fact that there are obvious environmental constraints to development on the subject site, I accept Minnaard's opinion that these constraints would not preclude Council from granting approval to the hypothetical development.

The question of the feasibility of the Retirement Village concept was primarily addressed by the hypothetical development analyses of valuers Robertson (relied on by the applicant) and Edmonds (for the respondent).

There were very substantial differences between the parties in respect of most aspects of this analysis.

Robertson estimated Gross Realisations for the development at $24,016,000; Edmonds' estimate was $19,028,000. Robertson's estimate of development costs was $14,622,492; Edmonds' figure was $25,155,750.

Robertson found a positive value of $3,320,000 for the development at the end of his analysis; Edmonds reached a negative value of at least $12,126,083.

I accept the submission made by Mr Hale for the respondent that the prudent hypothetical purchaser, faced with the prospect of spending at least $14M on the development, would generally adopt a cautious attitude - certainly not the most optimistic one - towards the question of feasibility.

One observation that can be made about the applicant's analysis (as noted by Mr Hale for the respondent) is that if Robertson's estimated Gross Realisations are only ten percent too optimistic and his estimated development costs ten percent too low, the development is not economically feasible. Alternatively, if the appropriate figure for development costs is $3.3M more than the one adopted by Robertson, the village concept becomes impractical. I find that the evidence strongly points to this being the likely outcome.

The greatest disparity between the parties in the feasibility analysis is on the subject of development costs. Robertson relied on a costs estimate prepared by Whitely, which put construction costs at $11,421,147. Edmonds relied on D'Arcy who estimated construction costs at $21,486,000.

These vast differences can essentially be reduced to two factors: the scope of works included in the analysis and the assumed quality of finish.

Mr Webster for the applicant contends that D'Arcy included many items in his costs analysis that were not in fact in the hypothetical proposal, and that he assumed a far higher quality of finish than would be required.

Mr Hale for the respondent argues that the applicant, in its approach to estimating development costs, has excluded from its analysis key items that a developer of the subject site in the real world would have to include. The applicant has confined the scope of works to the bare minimum in order to cut costs on paper, when, in reality, a significantly wider scope of works would have to be undertaken. Furthermore, he contends that the quality of finish adopted by Whitely is considerably inferior to the quality assumed by Robertson in estimating the gross realisation on the units.

In examining the evidence on this matter, the Court has in mind the position of the hypothetical purchaser, attempting to decide whether the retirement village concept is a realistic use of the subject land. As noted above, the hypothetical purchaser is likely to approach the question cautiously, as there would be much money at risk.

Essentially, the hypothetical purchaser would want to be assured that Whitely's estimate is sufficiently precise, and would not embark on a project that would subsequently turn out to be unfeasible. If there were reasons for suspecting that Whitely's estimate was too low, to perhaps the extent of $2M-3M, the hypothetical purchaser would abandon the village concept as an unrealistic proposition.

At the same time, the hypothetical purchaser in the possession of D'Arcy's evidence would want to be convinced that D'Arcy had drastically overestimated costs, in the order of at least $7M-8M, to be satisfied that the project could realistically go ahead.

I am of the opinion that a prudent hypothetical purchaser, in light of the evidence of Whitely and D'Arcy, would consider the retirement village proposal too risky a venture.

Firstly, as acknowledged by Whitely, any costs analysis for a proposal of this nature can be only so precise. There are many factors that could lead to wide fluctuations in the actual end cost that the developer would have to face. For instance, an estimator cannot determine with precision whether the range of tender prices from subcontractors will be generally low or high, because this depends on factors affecting the particular subcontractor at the time of the tender, such as the general level of industry activity and the amount of other work the subcontractor is involved with at the time.

The imprecision of any cost estimate is exacerbated in this case by the difficult nature of the site and the relatively complex works that would be involved. Consequently, it would be reasonable for the hypothetical purchaser, in possession of the estimates of Whitely and D'Arcy, to not place absolute faith in Whitely's estimate as representing a precise upper limit of likely costs.

Secondly, I find that Whitely's approach underestimated the true cost of the hypothetical development by excluding certain items that, in reality, would have to be built. For instance, the cost of the lift to gain access to the new development, the cost of constructing the suspended slab over the car park and the cost of the road to the car park were not costed by Whitely, on the premise that these items should properly be allocated to stages 5 and 6 of the existing development.

I find this to be an artificial distinction, because any developer of the site for the proposed purpose would, in reality, be confronted with those costs. They would need to be taken into account in assessing feasibility. The applicant cannot assert that the highest and best use of the subject land is as a use in association with the existing retirement village on the retained land and then exclude from consideration the actual financial implications of developing the site in that way.

The items mentioned above were estimated by D'Arcy to cost (in total) $1,312,000.

Thirdly, I find that the quality of finish adopted by Whitely does not correspond to that assumed by Robertson. Whitely gave evidence that he understood that the quality of the development would be "the basic to medium standard that you would expect to provide in the western suburbs".

Robertson stated in his report that the overall thrust of the Twibill proposal is to provide units "with high quality finish". Merton gave evidence that The Heritage is promoted as providing "affordable luxurious retirement accommodation" and that "no expense [is] spared in maintaining it to the highest quality". Robertson acknowledged in evidence that the units for the Twibill proposal would be of a higher quality finish than the existing units.

Accordingly, I find that the approach of Whitely to fixing rates, in assuming a "basic to medium standard", was generally too low.

The rates adopted by D'Arcy seem more consistent with the quality of finish that was hypothesised. Furthermore, I accept his explanation that his higher rates for certain items were related to his taking into account the difficulties of the site, eg, access difficulties for brickworks. The unusual constraints of the site clearly suggest that costs might generally be higher than standard rates.

Whilst not making a finding as to the precise amount of likely construction costs, I think that the appropriate figure is closer to D'Arcy's estimate than to Whitely's. I am certainly satisfied that the appropriate amount is more than $3.3 M in excess of Whitely's estimate, since it excluded at the very least $1.312 M of necessary costs, and assumed a quality of finish which was generally too low.

On this analysis alone, the development is not feasible.

Furthermore, it is my view that Robertson was too optimistic in estimating the rate of sale of the units. The rate of sale plays a part in development costs. The longer the selling period, the greater are the interest charges on the land and construction costs. Robertson estimated that it would take three years to build and sell all the units, based on a rate of sale of three units per month, in addition to the resale of existing units. In my opinion, the evidence shows that such estimates are overly optimistic.

The actual experience of the Overtons in selling units in The Heritage provides guidance as to what selling period a hypothetical purchaser might reasonably expect for the proposed new units, notwithstanding certain limitations in making a direct comparison. It is noteworthy that it took 13 years from the beginning of planning to the selling of 124 units in stages 1 to 4; the selling period for the initial 46 units was 6 years (December 1985 to November 1991); and it took almost 3 years to build and sell 12 units comprising stage 4A.

Consequently, Robertson's estimate that it would take 3 years to build and sell all 88 units of the proposed development seems overconfident.

Furthermore, Merton acknowledged that the dispute between management and residents that was well underway by August 1995 would make units in the retirement village very difficult to sell. This further suggests that the appropriate estimate of the rate of sale of units should be more conservative than that adopted by Robertson.

This conclusion is supported by the fact that both Merton and Edmonds (both of whom have considerably more experience than Robertson in the sale and valuation of retirement units), adopted more conservative rates of sale than were adopted by Robertson. Merton adopted a rate of sale of three units per month including the resale of existing units.

Edmonds estimated a selling period of ten years. This estimate was based on a direct extrapolation of the average rate of sale in The Heritage, which is not entirely reliable as an approach because of certain adjustments that ought to be made concerning the different conditions affecting the existing village and the hypothetical development. Nevertheless, it obviously represents a considerably more conservative outlook than the one adopted by Robertson, and such an outlook, in my opinion, is more consistent with the evidence of the actual experience of Overton, clearly a relevant yardstick to apply.

The interest on construction costs on Robertson's figures (adopting 12% p.a.) is $1,487,033 per annum. The simple interest on land costs (at 8%) is $278,200 per annum. Clearly, then, if Robertson has underestimated the selling period, as I think he has, these costs alone could easily derail the hypothetical development as an economically viable proposition.

When this is considered with my earlier finding that Whitely significantly underestimated construction costs, it clearly leads to the conclusion that the project could not, on the evidence, be reasonably regarded as feasible.

Accordingly, the hypothetical purchaser would not have viewed the retirement village concept as "within the realm of probability". It would have been regarded by a prudent purchaser as "speculative". It cannot, therefore, be considered the highest and best use of the subject land.

Evidence was presented to the Court in relation to a variety of hypothetical residential subdivision concepts, as potential uses of the acquired land, alternative to the retirement village proposals.

The applicant contended for either a 9 or a 4 lot subdivision, in accordance with design concepts prepared by Stubbs.

Neustein for the respondent considered five alternative concepts, including 9 lot and 5 lot subdivision proposals.

An area of contention between the parties was the feasibility of these proposals in terms of the likelihood of a hypothetical purchaser obtaining development consent.

The evidence of the town planners relied on by the applicant was far less emphatic in support of these proposals, when compared with their detailed analysis and strong support for the retirement village concept.

Willis expressed his opinion that the 9 and 4 lot concepts prepared by Stubbs would have been approved by Council, but his comments reflect relatively unenthusiastic and qualified support. He regarded the 9 lot proposal as requiring modification to provide for Fuel Free and Fuel Reduced zones, due to the proximity of bushland on both sides of the site. He commented on the disadvantage of obtaining access through The Heritage for the 4 lot proposal.

In cross-examination, Willis said that he would not favour a subdivision that relied on access through the existing village. He also said that he would tell a hypothetical purchaser that a 5 lot subdivision with a single house on each lot would not be practicable because of the costs involved.

Minnaard made only the barest of general comments in support of the residential subdivision proposals. In his report in reply, under the heading "Likely development", he states that "a further alternative would be a 4 or 9 lot subdivision served by a right of way through the existing retirement village." There is not, however, a detailed analysis of the proposal, comparable to his evidence in respect of the retirement village concept.

In contrast, Neustein considered in detail five alternative development concepts, including a 9 lot subdivision proposal and a 5 lot subdivision proposal, concluding that a development application based on these proposals would warrant refusal.

He commented that the 9 lot proposal would create potentially adverse social and traffic impacts associated with access through the retirement village for other than aged persons housing. He also noted the adverse visual impacts to the cliff face, and the alteration of flora and fauna habitat along the cliff top from the development.

With respect to the 5 lot proposal, Neustein stated that "adverse flora and fauna impacts, and significant geotechnical impacts associated with the effect of the road on cliff line stability would make the concept undesirable."

In oral evidence Neustein said of the 9 lot concept designed by Stubbs that it was "much, much less likely" to be an appropriate subdivision, compared with the 9 lot option he considered and rejected in his own written report. This was due to the fact that the Stubbs proposal entailed significantly more cutting into the cliff, with consequent destruction of the rock formation. It would not, in his view, "get a serious run through council".

Similarly, Neustein rejected Stubbs' 4 lot proposal because of the significant amount of excavation involved, in addition to the reasons he expressed for rejecting the 5 lot proposal he analysed (adverse flora and fauna impacts, visual impacts, etc).

Ingham did not specifically address the alternative concepts in detail, although he made it quite clear in his report and in oral evidence that he would have advised a hypothetical purchaser that the site was not suitable for any development.

I find the evidence of Mr Neustein persuasive on this point. It is clear that any development on the site, not associated with the existing retirement village use, would have considerable difficulties with access, either because of the undesirability of mixing traffic through the retirement village, or because of the practical and economic difficulties of access via Dilke Road. Furthermore, the proposals would involve adverse visual and geotechnical impacts, particularly for the concepts advanced by the applicant.

The evidence presented by the applicant would not, in my opinion, give a hypothetical purchaser sufficient confidence that he or she would be likely to obtain development consent for any of the proposals. On the town planning evidence presented by both parties, a hypothetical purchaser would not regard any of the proposals as feasible. Because the chances of obtaining consent for these developments would appear to a prudent purchaser to be remote, he or she would not be likely to consider them realistic options.

For all these reasons, I conclude that the highest and best use of the subject land cannot be as a site for residential subdivision.

Having made this finding, it is unnecessary to consider the economic feasibility of these proposals, although the evidence suggests that there could also be real difficulties in this regard.

Neustein advanced as a possible development concept for the acquired land, a single detached dwelling, and concluded that a development application based on this concept would warrant refusal, principally because of adverse social and traffic impacts associated with access through the retirement village for other than aged persons housing, unacceptable visual impacts, and adverse drainage impacts on the foreshore land.

I do not accept that the chances of such a development option obtaining consent are remote. The social and traffic impacts associated with access through the existing retirement village, which was a significant factor against the residential subdivision proposals, would be minimal; similarly, the visual impacts would be much less than those in the alternative proposals that have been discussed, and would not, in my view, be a basis for refusing consent. I am satisfied that the drainage and geotechnical impacts of such a development would have been relatively unintrusive and could have been acceptably dealt with by the imposition of appropriate conditions.

The respondent's valuer, Gothard, ascribed a gross value of $300,000 to the land as a site for a single dwelling lot (notwithstanding Neustein's opinion that the chances of the development obtaining consent would be remote), and assessed the net value of the land at $84,000, after deducting the costs of site preparation, provision of services, drainage, and provision of an `inclinator', and applying a 25% profit and risk element.

Hence the respondent concedes, and I accept, that the single dwelling proposal is an economically viable option.

As the use of the land as a site for a single dwelling is "within the realm of probability", and having rejected all of the alternative development hypothesies advanced by the parties, I, therefore, determine that such is the highest and best use of the subject land.

It is common ground between the parties that the heads of consideration in s 55 of the JTCA relevant to this matter, apart from "Special Value" dealt with above in section 11.1.1, are "Market Value", "Disturbance" and, "Severance".

Gothard's gross value of $300,000 was based on Neustein's concept of a 550 square metres single homesite with a 200 square metre footprint. His approach was to identify what a hypothetical purchaser would pay for a site of 550 square metres, and ascribe a nominal or even negative value to the remainder of the 1.3 hectares, in light of the extra responsibilities that would attach to maintaining a large area of mostly unusable land (eg, weed and bushfire control). The concept assumed that access would be procured through The Heritage.

He acknowledged that he did not find any sales of land directly comparable to the acquired land. His valuation was based on sales of significantly smaller properties that were comparable in size only to the homesite area component of the subject land.

The two main "comparables" relied on by Gothard were the sales of 1A Valley Road, Padstow Heights, and 117A Fowler Road, Illawong.

1A Valley Road is a waterfront lot in Padstow Heights comprising 1,548 square metres, which sold in February 1993 for $290,000. It is described by Gothard as the "best sale of waterfront land in the area", with pleasant views to the south and south-east, and a good building area, before sloping steeply to the water.

117A Fowler Road, Illawong is described as a `relatively steep' waterfront property, comprising 1,496 square metres. It sold for $300,000 in December 1994. Gothard emphasised the benefit of this property's northern aspect, of particular importance for getting the sun in winter. He also noted that Illawong is generally regarded as a far more desirable residential location than Padstow Heights.

These two sales, in Gothard's view, set the upper limit of the value of the acquired land in this case at $300,000 for a single homesite.

Gothard also relied on the sales of 1 Villiers Road, Padstow (a 1,046 square metre property of poor quality land with difficult access which sold for $168,000) and 17 Raftree Street, Padstow Heights (a very steep 1,593 square metre property which sold for $110,000) to demonstrate the severe discount that occurs for steep, and/or poor quality land, and/or with poor access.

Robertson criticised Gothard's valuation in his report in reply: "The comparable sales of waterfront land with similar topography indicate this is a gross under estimate of the value of such a site." Robertson did not, however, submit an alternative value, nor did he specify the comparable sales on which he based his comment. Consequently, it is difficult for the Court to give much weight to these criticisms.

Also, no evidence was called to support the market value the Valuer General arrived at in the discharge of his statutory functions regarding the resumption (Exhibit ZB).

Gothard based his valuation of both the residential subdivision concepts and the single homesite on the same comparable sales, so it is reasonable for the Court to have regard also to the properties relied on by Robertson in his residential subdivision valuation.

However, I do not think that the sales relied on by Robertson support a higher value than $300,000 for the land as a single homesite.

23 Arthur St, Bonnet Bay is a 664 square metre property that sold for $310,000. In my view, given that this is a waterfront property with a northern aspect, in a superior location to the acquired land, it supports Gothard's value of $300,000 for the subject site.

Robertson also relied on the sales of four properties in Fowler Road, Illawong: 30B Fowler Road - a 1,523 square metre waterfront property which sold for $327,000 in December 1996; 115 Fowler Road - a 685 square metre non-waterfront property which sold for $250,000 in April 1996; 123 Fowler Road - a 1,943 square metre property with magnificent views which sold for $430,000 in September 1995; and 117A Fowler Road (which is common to Gothard's analysis above).

Again, when the appropriate adjustments are made to take into account the superior location of Illawong and its better northerly aspect, as well as the steeply sloping nature of the subject site and its problems with access, these sales do not contradict or derogate from Gothard's figure of $300,000 for the subject land as a single homesite.

Accordingly, I accept Gothard's figure of $300,000 as the appropriate gross value of the subject land.

There being no evidence to the contrary, I also adopt the figures he relied on in respect of the estimated preparatory costs as follows:

When these costs are deducted from the gross value of $300,000, the net amount is $104,787, rounded to $105,000.

Having assumed that the proposal is likely to obtain development consent, I do not think it is appropriate to apply any profit and risk factor based on potential difficulties in the consent process.

Accordingly, I assess the "market value" component of the compensation payable in respect of the acquired land in this case as $105,000.

The parties agreed that the question of "disturbance" should be left for determination, if needed at all, until after the Court had decided the principal issues in the case, namely highest and best use, and market value.

The only matter remaining for determination at this stage then is the "severance" claim made by the applicant.

Mr Webster for the applicant claims that compensation is payable in accordance with s 55(f) of the JTCA for the "lost potential" of the retained land caused by the resumption process.

Section 55(f) of the JTCA requires the Court to have regard to "any increase or decrease in the value of any other land of the person at the date of acquisition which adjoins or is severed from the acquired land by reason of the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired".

On the basis of Minnaard's evidence that, but for the Open Space zoning, the acquired land would have been taken into account in granting the 1984 consent, Mr Webster argues that Council would normally allow a developer to take land zoned for open space into account when determining the floor space ratio of a proposed development.

However, because in this instance the land was zoned County Open Space, and because Overton would be entitled to compensation for the land, once acquired, Council did not permit Overton to take the area of the subject land into account when determining the maximum density of development on the retained land in 1984. Accordingly, they lost the benefit of being able to develop the retained land for the additional units, which is, at the maximum, 128 units.

The applicant concedes that it would have been difficult to justify such a density on the retained land, but argues that, in any event, the inability to have that land available, or taken into account, had an immense effect on the development potential and use of the retained land.I do not accept that this loss is compensable under s 55(f). I reject the claim for similar reasons to those underpinning my rejection of the applicant's Scenario 1 argument, outlined above in section 11.1.2.

The land must generally be valued at the date of resumption in its then existing condition (Yates). The acquisition of the acquired land did not decrease the value of the retained land at the date of the acquisition.

As outlined in the discussion of the Scenario 1, the Yates principle is subject to the San Sebastian rule, as applied in Lasseter, so that the Court must set aside conditions of the land which are the direct consequence of the resumption process and which affect the land's value.

Here, there is not a sufficiently direct connection between the condition asserted by the applicant - the lost development potential of the retained land - and the resumption process. The Court cannot assume a higher development potential as a basis for awarding compensation when a development application for the additional units was never lodged and where there is no evidence before the Court that it was likely to have been approved.

Accordingly, I reject the severance claim of the applicant.

In assessing compensation, the Court can look only at how the land might realistically have been used, had it not been required, and eventually acquired, for a public purpose.

During its lengthy deliberation on this matter the Court has been mindful of the hardship suffered by successive generations of the Overton family over very many years as a result of their long and difficult dealings with relevant authorities concerning the subject land. They have not been able to use the land for any practical purpose since 1979, whilst still paying rates for it, and have borne the uncertainty surrounding its use and possible acquisition since its reservation as County Open Space in 1951.

However, the picture that emerges from the evidence is that this site was always problematic for development, and that the Overtons did not seriously contemplate it - their 1970 offer to dedicate most of the land suggests that they did not believe it could be profitably used.

The evidence before the Court reveals that it would have been impractical to develop the land for any purpose other than as a single homesite. The evidence clearly indicates that all of the more ambitious hypothetical development concepts put to the Court are unrealistic, either because of difficulty in obtaining consent, or the practical difficulties of execution inherent in the nature and location of the site, or because they are or were not economically feasible.

The Court has, therefore, determined that the appropriate and just compensation for the acquisition of the subject land can be assessed only on the basis of its development potential as a site for a single dwelling.

On that basis, the amount of compensation to which the applicant is entitled, excluding any entitlement for disturbance, would be $105,000.

Accordingly, the matter should be stood over to allow the applicant to consider its position in the context of the reasoning within this judgment, and decide whether to negotiate "disturbance" or argue it before the Court.

The Court can then proceed to make final orders in regard to compensation.14. ORDERS

In light of the above, the Court makes the following formal orders at this stage:

1. Liberty is granted to either party to apply on two days notice to have the Court finally determine the appropriate compensation.

3. All the exhibits may be returned, except Exhibit ZB (which is an annexure to the Class 3 application).

I HEREBY CERTIFY THAT THIS AND THE PRECEDING 62 PAGES ARE A TRUE AND ACCURATE RECORD OF THE REASONS FOR JUDGMENT HEREIN OF THE HONOURABLE JUSTICE T.W. SHEAHAN.