F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General (No 2) [2019] QLC 25

1 *Pursuant to the Land Court Rules 2000, rule 21 (Power to correct mistakes), this is a corrected decision, issued on 11 August 2021, and replaces the original decision issued on 31 May 2019. LAND COURT OF QUEENSLAND CITATION: F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General (No 2) [2019] QLC 25* PARTIES: F A Pidgeon & Son Pty Ltd ACN 009 710 810 (appellant) v Valuer-General (respondent) FILE NO: LVA075-17 PARTIES: 310 Ann Street Nominees Pty Ltd ACN 152 245 933 (appellant) v Valuer-General (respondent) FILE NOs: LVA073-17 LVA074-17 DIVISION: General Division PROCEEDING: Appeals against valuations under the Land Valuation Act 2010 DELIVERED ON: 31 May 2019 DELIVERED AT: Brisbane HEARD ON: 4, 5, 6, 10, 11 & 12 July 2018; 5, 6 & 7 September 2018 and 18 February 2019. HEARD AT: Brisbane MEMBER: PA Smith ORDERS: As regards LVA075-17, 300 Ann Street, Brisbane: 1. The appeal is allowed. -- 1 of 104 -- 2 2. The site value of 300 Ann Street, Brisbane as at 1 October 2015, is determined in the sum of Ten Million, Six Hundred and Eighty-Five Thousand Dollars ($10,685,000). 3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court. 4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019. As regards LVA073-17, 310 Ann Street, Brisbane (freehold plus leasehold): 1. The appeal is allowed. 2. The site value of 310 Ann Street, Brisbane (freehold plus leasehold) as at 1 October 2015, is determined in the sum of Twenty-Two Million, and Twenty-Three Thousand Dollars ($22,023,000). 3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court. 4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019. As regards LVA074-17, 310 Ann Street, Brisbane (freehold only): 1. The appeal is allowed. -- 2 of 104 -- 3 2. The site value of 310 Ann Street, Brisbane (freehold only) as at 1 October 2015, is determined in the sum of Twenty-One Million, One Hundred and Fifty Thousand Dollars ($21,150,000). 3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court. 4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019. CATCHWORDS: REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where appellants object to valuation – where subjects are located within Brisbane CBD – where site value is the basis of valuation – where the highest and best use of the subjects are agreed as commercial office towers – where some comparable sale locations are in a different locality to the subject – where sales have a different highest and best use to the subject – where sales are described as secondary evidence – where infrastructure concessions relating to student accommodation sales are a consideration – where it is contended that there is a “merged market” – where expert opinion adjustment is required – where the issue of bona fide sales under s 18 of the LVA is a relevant consideration REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where expert evidence presented is heavily criticised by parties – where the appellants called lay witness from the Valuer- General’s Department – where a student accommodation developer gave evidence on the state of the market REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where it is contended an expert did not base expert opinion on facts – where the respondent submits the appellants should not be able to call witnesses from the Valuer-General’s Department because land valuation appeals are a hearing de novo – where the appellants submit the commercial office market was stagnant between 2010 and October 2015 -- 3 of 104 -- 4 Land Valuation Act 2010, s 16, s 17, s 18, s 19, s 22, s 169, s 170 Australian Executor Trustees Ltd v Propell National Valuers (WA) Pty Ltd [2011] FCA 522, applied Brewarrana Pty Ltd v Commissioner for Highways (No 2) (1973) 32 LGRA 170; 6 SASR 541, applied BWP Management Ltd v Valuer-General (No 2) [2018] QLC 30, applied Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588; [2011] HCA 21, followed F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General [2018] QLC 27, cited Fairfax v Department of Natural Resources and Mines [2005] QLC 11, applied GPT Re Limited (as responsible entity) & Anor v Department of Natural Resources and Water [2009] QLC 78, applied GPT RE Limited v Valuer-General (No 2) [2018] QLC 9, applied Lacey v Attorney-General for the State of Queensland (2011) 242 CLR 573, cited Liat Nominees Pty Ltd v Chief Executive, Department of Lands [1996] QLC 160, followed Makita (Australia) Pty Ltd v Sprowles (2001) 52 NSWLR 705, followed Meiers v Valuer-General [2012] QLC 19, applied Multiplex 240 Queen Street Landowner Pty Ltd v Department of Natural Resources, Mines and Water [2007] QLC 10; (2007) 28 QLCR 20, considered Spencer v The Commonwealth of Australia (1907) 5 CLR 418, followed Steers v Valuer-General [2012] QLC 12, applied Valuer-General v Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 39925 [2018] QLAC 7, followed YFG Shopping Centres Pty Ltd as TTE & ors v Valuer- General [2018] QLC 37, cited APPEARANCES: R Traves QC with S McCarthy (instructed by Otto Martiens) for the appellants S Fynes-Clinton (instructed by In-house Legal, Department of Natural Resources, Mines and Energy) for the respondent Background [1] These are appeals against decisions on objection relating to site valuations under the Land Valuation Act 2010 (LVA). -- 4 of 104 -- 5 [2] The property descriptions and interrelationship are a little complex so I will refer to the detail of their descriptions. File LVA075-17, in which F A Pidgeon and Son Pty Ltd is the appellant, relates to property described as Lot 3 on RP 211213 located at 300 Ann Street, Brisbane City. [3] The appeal for 300 Ann Street relates to the decision on objection dated 25 January 2017 which resulted in a decrease of the site value from $12 million to $11.5 million as at 1 October 2015.1 The appellants contend by their notice of appeal for a site value of $8.7 million as at 1 October 2015.2 The appellants ultimately contended for a site vale of $9,290,000.3 [4] The other two files considered in this decision are files LVA073-17 and LVA074-17. Lot 2 on RP 124155 and a leasehold property known as Lot 1 on Crown Plan AP 3495 relate to file LVA073-17. LVA074-17 relates only to the freehold lot described as Lot 2 on RP 124155. Both the freehold and leasehold lots are collectively referred to as 310 Ann Street, Brisbane City or 36 Wickham Terrace, Brisbane City, throughout the evidence in these appeals. I will refer to them collectively as 310 Ann Street. The appellant for both 310 Ann Street appeals is 310 Ann Street Nominees Pty Ltd. [5] The appeal for 310 Ann Street, LVA073-17, relates to the decision on objection dated 25 January 2017 which resulted in a decrease of the site value from $31 million to $26 million as at 1 October 2015.4 The appellant contends by its Notice of Appeal for a site value of $16,780,000 as at 1 October 2015.5 The appellant ultimately contended for a site vale of $19,200,000, made up of $18,460,000 for the freehold lot plus $740,000 for the leashold lot.6 [6] The appeal for 310 Ann Street, LVA074-17, relates to the decision on objection dated 25 January 2017 which resulted in a decrease of the site value from $30 million to $25 million as at 1 October 2015.7 The appellant contends by its notice of appeal for 1 Ex 1 page 110. 2 Ibid page 88. 3 Appellants’ written submissions, [327]. 4 Ex 1 page 62. 5 Ibid page 38. 6 Appellants’ written submissions, [326]. 7 Ex 1 page 86. -- 5 of 104 -- 6 a site value of $16,360,000 as at 1 October 2015.8 The appellant ultimately contended for a site vale of $18,460,000.9 The subjects 300 Ann Street [7] This land is situated within the “uptown”, but nevertheless fringe, precinct of the Brisbane CBD. It is an established secondary commercial precinct of the CBD and is surrounded by a number of commercial office towers. The subject land is in within 350 radial metres of the Brisbane GPO, within 400 radial metres of the Queen Street Mall, and within 200 radial metres of the Brisbane Central train station. [8] The subject land is situated on the corner of Ann Street and Creek Street. The site is improved with a 16-level building which was completed in 1988. It comprises ground floor retail space, three levels of above-ground parking for 98 cars, and 12 floors of B-Grade office accommodation. Two of the car parking levels extend 594 m² over an adjoining parcel of leasehold land. The total net lettable area is 6,900 m². [9] The area of the land is 1,050 m2. In their joint expert report (Exhibit 4), the valuers agreed that this subject property has an irregular land shape; 35.973 metres of Ann Street frontage; no assigned flood level development restrictions; vehicular and pedestrian access via Ann Street; and is burdened by three easements.10 [10] The valuers describe easements impacting the subject land in the following way: “Easement No. 601270330. Burdening Easement A (7.6m * 0.95m = 7m²), B (16.2m * 0.65m = 11m²) & C (4.264m * 0.65m = 3m²) to Lot 4 RP223387 for the purpose of right of way.”11 [11] The highest and best use of the land is for a commercial office tower at the level and in the form of development currently (that is, as at 28 March 2018) erected on the land. This is due to the impact of the adjoining rail infrastructure. The subject land is well suited to commercial office use due to its location and surrounding development, its size, shape and dimensions, its street frontage, its vehicular and pedestrian access and exposure, natural light and views. 8 Ibid page 64. 9 Appellants’ written submissions, [326]. 10 Ex 4, [11]–[12]. 11 Ibid [12]. -- 6 of 104 -- 7 310 Ann Street [12] LVA073-17 concerns Property ID 1228060, comprising a freehold property known as Lot 2 on RP 124155 and a leasehold property known as Lot 1 on Crown Plan AP 3495. LVA074-17 only concerns Property ID 40142341, comprising the freehold lot described as Lot 2 on RP 124155 (that is, the same freehold property as in LVA073- 17)12. [13] Lot 2 on RP 124155 is 2,257 m2. The image below is taken from paragraph 15 of Exhibit 3. The pink shaded area shows Lot 2. It is important to note that Lot 1 (in white bordering the top left hand corner of Lot 2) is not part of Lot 2 and is a different Lot 1 to that further described below for 310 Ann Street. [14] Lot 1 on Crown Plan AP 3495 is 520 m2. The image below is also taken from paragraph 15 of Exhibit 3. The area marked in yellow shows the leasehold property on Lot 1. The interconnections between Lot 1, Wickham Terrace, and Turbot Street should be noted, as the plan depicts at its bottom. The land in pink is not only Lot 2, but wrongly includes in pink the Lot 1 in white in the above diagram. 12 Appellants’ written submissions, [282]. -- 7 of 104 -- 8 [15] Collectively, the subject land for 310 Ann Street is situated on the fringe of the Brisbane CBD between Ann Street and Turbot Street. It is predominantly a commercial precinct, of a secondary nature within the CBD with a number of commercial office towers. [16] At the date of valuation, the property comprised a 21-storey B-grade office building which was under refurbishment. Upon completion of the refurbishment the building was upgraded to an A-grade standard office building. The refurbishment included a building façade replacement, internal base building refurbishment, and building services upgrade. Three levels of above-ground carparking are provided within the building. The building has a net lettable area of approximately 18,400 m². [17] The property adjoins a State Heritage Place and a Local Heritage Place (270 Ann Street – All Saints Anglican Church). The subject land is in within 350 radial metres of the Brisbane GPO, within 400 radial metres of the Queen Street Mall, and within 200 radial metres from the Brisbane Central train station. [18] The valuers were in agreement that the land is irregular in shape; has a 43.01 metre Ann Street frontage and a 36.79 metre Wickham Street frontage; pedestrian access from Ann Street; vehicular access from Wickham Terrace via leasehold Lot 1; is without imposed flood level restrictions on development; has a cross fall from north to south of approximately 8 metres; and is burdened by two easements: -- 8 of 104 -- 9 Easement number 601730533. Burdening Easement A (220 m2) in Strata on RP 852844 for railway purposes; and Easement number 702093662. Burdening Easement (457 m2) on RP 893936 for the purposes of right of way (railway tunnel purposes).13 [19] The below image shows both easements burdening 310 Ann Street. [20] The highest and best use of the land is for a 21-storey commercial office tower consistent with the existing development on the land as at 28 March 2018. This highest and best use takes account of the impact of rail corridor. The subject land is well suited to commercial office use due to its location and surrounding development, its size, shape and dimension, its street frontage, its vehicular and pedestrian access, exposure, and natural light and views. The hearing [21] At some stage during the case management of these files, files LVA071-17 to LVA076-17 were ordered to remain as separate cases but be heard together. Two of these files, namely, LVA071-17 and LVA076-17, were settled on the first day of hearing. [22] The other four files, however, remained joined, and the evidence in one matter would be the evidence in the others, to the extent relevant. The hearing of these four appeals together significantly hindered progress both during the hearing and in my judgment 13 Ex 3, [16]. -- 9 of 104 -- 10 writing process. Without doubt, LVA073-17, 074-17, and 075-17, being 300 Ann Street and 310 Ann Street, were very easy to hear together given their close proximity and the same comparable sales. The same cannot be said about LVA072-17 however. In that matter, the appellant primarily relied upon an entirely different sale not in the CBD. Although the other sales from the other matters were also considered, save for Sale 8, there were some particular points of difference for LVA072-17. This resulted in the hearing, and the submissions, being more complicated than necessary. With the benefit of hindsight, it would have been better for these files to have been case managed so that the evidence for 300 and 310 Ann Street was heard first, followed by the evidence for LVA072-17 (with the evidence for 300 and 310 Ann Street as relevant being evidence in LVA072-17) with separate submissions. To hopefully increase the clarity of my decisions, I have decided to separate LVA072-17 and write my decision for that matter standalone to the rest. [23] The hearing of these matters, including time for oral submissions, took up a total of 10 days. Due to the underestimation by the parties of the time it would take them to conduct these appeals, these matters were partly heard over a six-day period from 4 July 2018. The remainder was then heard for three days starting 5 September 2018. [24] The parties then prepared written submissions which were supported by oral submissions on 18 February 2019. [25] A total of four witnesses gave evidence at the hearing of these three appeals. Two of those were experts who gave opinion evidence in the area of valuation. The other two were lay witnesses called by the appellants. [26] For completeness, a general application was made by the Valuer-General on the seventh day of hearing to have two subpoenas set aside. My ex tempore decision is available and explains my reasons for dismissing the Valuer-General’s application in this regard.14 [27] Mr Grant Jackson was called as an expert valuer for the appellants, and Mr Benjamin Hart for the respondent. Mr Jackson and Mr Hart gave their oral evidence concurrently. The evidence of the expert valuers took a total of five days, at least. 14 F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General [2018] QLC 27. -- 10 of 104 -- 11 [28] The evidence of the valuers was interrupted on two occasions so that the subpoenaed lay witnesses could give their evidence to the Court. [29] On day seven of the hearing, Mr Stephen Cross was called by the appellants by way of subpoena. Mr Cross was the delegate of the Valuer-General who actually made the decision on objection against which these appeals have been brought. [30] Another person from the Valuer-General’s Office, Mr Denis Wall, the officer within the Department which makes recommendations about what should be done with objections and what objection decisions should be made, was also subpoenaed to give evidence by the appellants. Subsequent to the evidence of Mr Cross, though, the appellants decided that it was not necessary to call Mr Wall to the stand.15 [31] The second lay person to give evidence to this Court was Mr Timothy Weston. Mr Weston was represented by Mr Allan Lonergan from Colin, Biggers, and Paisley Lawyers. Mr Weston gave evidence regarding confidential aspects of spreadsheets put before the Court. Due to the confidential nature of some of the exhibits put to him, those cannot be disclosed. The valuation process [32] It is the responsibility of the respondent, pursuant to the provisions of the LVA, to undertake valuations of all properties throughout Queensland. Those valuations are the basis for rating and land tax and related purposes. [33] In an appeal against the Valuer-General’s decision on objection (valuation appeal), an appellant bears the onus of proof for each of the grounds of appeal articulated in the appellant’s notice of appeal.16 If the appellant meets the onus of proof, the task for this Court is to either confirm the valuation of the Valuer-General, or make the correct valuation under the LVA by reducing or increasing the Valuer-General’s valuation subject of the appeal.17 There is a recent Land Appeal Court decision on this point. 15 T8-11, lines 26 to 29. 16 Land Valuation Act 2010, s 169(3) 17 Ibid s 170. -- 11 of 104 -- 12 [34] In Valuer-General v Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 3992518(Tennyson Reach) the Land Appeal Court considered the interaction between ss 169(3) and 170 of the LVA. The Land Appeal Court was unanimous in its conclusion that the appellant had to satisfy the onus of proof, based on all of the evidence before the Court, before consideration was given to s 170. As her Honour Justice Dalton put it: “If the Body Corporate did not satisfy that onus, its appeal should have been dismissed. Section 170(b) of the LVA did not change that position. It did not mean that the Member was compelled to make a valuation in circumstances where the appellant before him had not satisfied its onus of proof.”19 [35] Similarly in Tennyson Reach, I had this to say (his Honour Member Cochrane concurring): “As I understand the operation of the LVA, the Court has a duty to undertake a two-step process in considering an appeal. The first step is to determine whether or not the evidence in its totality supports the case put by an appellant that the issued valuation is in error, on the balance of probabilities, so that the onus of proof is discharged. If the onus of proof is discharged, the second phase of the evaluation to be undertaken by the Court comes into play. That is, what is the correct valuation of the subject land? The Court can only get to a consideration as to the correct valuation of the subject land and thus, s 170(b) of the LVA, in circumstances where the onus of proof has been discharged.”20 [36] Returning to my evaluation of the valuation process, once the appellant has discharged the onus of proof, consideration is then to be given to s 170 of the LVA. How is this Court to make a proper determination? In this regard, I note with approval what his Honour Member Isdale said in Steers v Valuer-General: “[8] The use of sales to provide comparisons of value is well established. In NR and PG Tow v Valuer-General (1978) 5 QLCR 378, the Land Appeal Court constituted by Stable SPJ, Mr Smith and Mr Carter said at page 381: ‘Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties.’ 18 [2018] QLAC 7. 19 Valuer-General v Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 39925 [2018] QLAC 7, [32]. 20 Valuer-General v Body Corporate for ‘Tennyson Reach’ Community Titles Scheme 39925 [2018] QLAC 7, [50]. -- 12 of 104 -- 13 [9] This Court is required to follow the decisions of the Land Appeal Court and accordingly must prefer the evidence of comparable sales to the method contended for by the appellant, simply increasing a previous value by a factor of 10. Mr Steers did not explain why this particular multiplier and not some other one should be applied.”21 [37] Market value is a relevant feature to consider under the LVA. As then President Trickett said in Fairfax v Department of Natural Resources and Mines: “[11] The principles for determination of the ‘market value’ of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of a property. (See Griffith CJ at 432 and Isaacs J at 441). [12] It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land in Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that: ‘Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but - as with other commodities - the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date - and that is evidenced by sales.’”22 [38] The concept of a bona fide sale in the Spencer test23 has, in essence, been codified in s 18 of the LVA. As the question of what is, or is not, a bona fide sale has been raised as an issue in this appeal, it is essential to closely consider the specific provisions of the LVA. 21 [2012] QLC 12. 22 [2005] QLC 11. 23 Spencer v The Commonwealth of Australia (1907) 5 CLR 418. -- 13 of 104 -- 14 [39] Section 16 of the LVA provides that, for deciding the value of land, all land is taken to be granted in fee simple; that is, freehold. Section 17 then goes on to provide as follows: 17 What is the land’s expected realisation (1) The expected realisation of land under a bona fide sale is the capital sum that its unencumbered estate in fee simple might be expected to realise if that estate were negotiated for sale as a bona fide sale. (2) In this section— unencumbered means unencumbered by any lease, agreement for lease, mortgage or other charge. [40] Bona fide sale is then described in s 18 of the LVA: 18 What is a bona fide sale (1) A bona fide sale, for land, is its sale on reasonable terms and conditions that a bona fide seller and buyer would require assuming the following (the bona fide sale tests)— (a) a willing, but not anxious, buyer and seller; (b) a reasonable period within which to negotiate the sale; (c) that the property was reasonably exposed to the market. (2) For subsection (1), in considering whether terms and conditions are reasonable, regard must be had to— (a) the land’s location and nature; and (b) the state of the market for land of the same type. (3) To remove any doubt, it is declared that if— (a) there is a sale of the land in question; and (b) the bona fide sale tests are complied with; the sale is a bona fide sale. (4) In this section— land in question means land whose value is being decided. [41] Section 19 of the LVA provides as follows: 19 What is the value of improved land (1) If land is improved, its site value is its expected realisation under a bona fide sale assuming all non-site improvements for the land had not been made. (2) However, the land’s site value is affected by any other relevant provisions of this chapter. [42] Various statutory assumptions for existing uses are set out in s 22: 22 Assumptions for existing uses (1) This section does not apply for a Land Act rental valuation. (2) In deciding land’s site value, the following must be assumed (the existing use assumptions) — (a) the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, (each an existing use) on the valuation day; -- 14 of 104 -- 15 (b) improvements may be continued or made to the land to allow it to continue to be used for any existing use. (3) To remove any doubt, the following are declared for the existing use assumptions— (a) they do not prevent regard being had under section 17 to any other purpose for which the land might be used; (b) in deciding the site value, new non-site improvements may be hypothesised instead of non-site improvements actually used for an existing use. [43] Other sections of the LVA are also relevant. Section 169(1) provides that an appeal is by way of rehearing. Further, s 169(3) places the onus of proof for each of the grounds of appeal on the appellants. Importantly, it should be noted that appeals under the LVA are to be determined on what is essentially the balance of probabilities.24 Submissions of the parties [44] Both the appellants and the respondent filed extensive written submissions to support their cases. The parties also had the benefit a full day of oral submissions to supplement their written submissions. [45] The substance of the appellants’ appeals are that the respondent’s assessment of the site value for the subject parcels of land is excessive, not in accordance with the LVA, and thus, contrary to law and erroneous because it is not supported by comparable sales evidence. The appellants submit that if the Court considers that site value assessed is in accordance with the LVA, then the value arrived at is not supported by comparable sales evidence. [46] The appellants did not provide a summary of their position that can easily be transferred to my determinations. Therefore, the appellants’ positions are extracted and/or summarised where relevant. [47] At a glance through this decision, it may appear that more focus has been given to the appellants’ submissions rather than those of the respondent. I assure the parties that this is not the case. The process of summarising the respondent’s submissions was made easier because of the summary that it provided. It should be noted though that I have referred throughout these reasons to the body of the respondent’s submissions. The details of the appellants’ submissions are indeed longer, not only because of the absence of a summary, but also because their overall submissions are approximately 24 Meiers v Valuer-General [2012] QLC 19, [27]. -- 15 of 104 -- 16 three times the length of the respondent’s submissions. I confirm that I have read all of the submissions of the parties extensively. [48] Although they came second in time, I will set out the respondent’s summary of their submissions first, and then deal with the appellants’ submissions as well as considering more details of the respondent’s substantive submissions. [49] The following paragraphs have been taken from pages 5 to 7 of the respondent’s written submissions (the summary of the respondent’s position in these appeals) to which I have added the respondent’s paragraphs 11 and 12: “11. The competing valuations are still some way apart. The controversies that underly the final differences between the contended figures, and that the Court will need to resolve for the purpose of deciding these two appeals, are primarily (if not wholly) controversies between the valuers. For introductory purposes, it is sufficient to identify those controversies as: (a) selection of the sales to be used as comparable sales, including, in particular, whether CBD/CCNP properties which were purchased with an intent at the time that they be developed for purposes other than as a commercial office tower may be relied upon (or given material weight) in deriving a site value for the appeal sites; (b) whether a sale at 55 Elizabeth Street, which was purchased with the intent (subsequently carried out) of commercial office tower development may be relied upon (or given material weight) as a comparable sale in circumstances where the sale took place nearly 5 years before the valuation date; (c) the proper analysis of sales at 38 Wharf Street and 97 Elizabeth Street, relied upon by both valuers, in terms of whether the sale prices require adjustment for what Mr Jackson describes as a “premium” paid by the purchaser to the vendor in each case, equal in value to a reduction in Brisbane City Council infrastructure charges available developers of student accommodation, that the being the purchaser’s intended use in each case. 12. Apart from those specific matters, the divergence in valuation opinion also involves, as would be expected, differing views as to comparison of the sales to the subject, in terms of the usual attributes of size, shape, dimension, aspect, easements, `location, frontage, development potential and, for one comparable sale (62 Ann Street), heritage restrictions applying to the sale but not the subjects. 13. The Respondent’s ultimate submission that all three appeals should be dismissed is underlain by the following premises which the Respondent submits to reflect the evidence and the applicable law: (a) for land within the Brisbane CBD it is incorrect to assert, a priori, that identifying the highest and best use (“HBU”) at a -- 16 of 104 -- 17 given point in time excludes or renders of very little weight sales within the CBD where the use intended by the purchaser was different from the HBU identified for the subjects; (b) that is because, for land covered by the City Centre neighbourhood plan (“CCNP”), CP2014 provides that a diverse mix of “Centre activities”, including residential, commercial, retail, services and entertainment are code assessable8 and anticipated to co-exist in close proximity to each other; (c) that is not to say that some parcels within the CBD are not inherently more attractive for one particular form of code assessable development as compared to others, but it is to assert firmly and fundamentally that: (i) it is the advantageous qualities enjoyed by particular parcels, rather than the particular type of development as such, which will lead to a higher price being paid for that land relative to other parcels in the CBD; (ii) it is part of the task and professional expertise of a valuer to adjust for such advantages (or relative disadvantages) when applying sales to the subject; (d) in that planning context, Mr Hart has acted in accordance with proper principle in: (i) having regard to a basket of sales within the Brisbane CBD area, all of which had the same code assessable use rights as the properties subject to appeal and were, broadly, of comparable size and shape; (ii) analysing those sales to establish a range of site values reflecting the CBD sales evidence; (iii) assessing the appeal properties as overall inferior or superior to the sales comprised in that range, and assessing a value for each appeal property which puts it at an appropriate point within that range; (e) to the extent that Mr Jackson asserts that it is only properties purchased with a specific intent for commercial office development that are of any reliable assistance in valuing 300 and 310 Ann Street, that assertion is contrary to contemporary principle; (f) Mr Jackson’s assertion that a “premium” was paid for the purchase of 38 Wharf Street and 97 Elizabeth Street is not supported by the evidence – vehement assertion is not enough if the evidence relied upon is not objectively probative of the assertion (g) the 55 Elizabeth Street sale is far too dated to provide reliable evidence for the purposes of the 300 and 310 Ann Street appeals; …25 (i) if the foregoing premises are accepted, Mr Hart’s valuations, derived by applying his comparable sales to the respective appeal sites, have a sound basis in fact and principle which Mr Jackson’s valuations do not; 25 (h) relates only to the LVA072-17. -- 17 of 104 -- 18 (j) Mr Hart’s evidence should therefore be preferred over that of Mr Jackson in relation to the matters upon which they are in substantial disagreement, and that will necessarily lead to Mr Hart’s valuation opinions is being preferred to those of Mr Jackson. 14. If the Respondent can satisfy the Court that these premises are correct, it must logically follow that the Appellants have in each case failed to discharge their onus, and that all 4 appeals must be dismissed.” [50] In relation to 13(f), above, the appellants’ reply submissions outline why the appellants contend that the respondent’s premise is invalid and does not explain the effect of the evidence.26 The appellants go on to say: “(a) the concessions were known to the market, including: (i) the vendor; and (ii) the student accommodation developers; (b) Mr Jackson’s enquiries of the vendor’s agent reveal that the selling agent was well aware of the interest from student accommodation developers and attempted to secure the benefit of those concessions for the vendor; (c) the purchase price is an input into the financial feasibility models which represent the highest price that a purchaser can afford to spend on the land in order to secure a site which: (i) is suitable for student accommodation; and (ii) once developed, can deliver to the purchaser their desired net return on the investment taking into account all costs, including the infrastructure charges; (d) it is the ability to develop the site and achieve the desired net return on the investment which: (i) is the desired financial benefit the purchaser obtains from the transaction; and (ii) the governing consideration for a purchaser in determining whether to purchase the land; and (e) the availability of the concessions drove purchasers for student accommodation sites to pay more for, in order to secure, those parcels of land which were suitable for student accommodation and enabled the purchasers to achieve their desired net return on investment, than would a developer intending a commercial or other use.”27 [51] The respondent outlines a useful summary of the applicable law relevant to LVA matters in paragraphs 16 to 20 of its submissions. [52] In its reply submissions, the appellants make the broad contention that the respondent’s submissions “lack proper foundation or are contrary to the evidence”.28 The appellants provide an example of why this is so in paragraph 4 of its submissions, 26 Appellants’ reply submissions, [89]. 27 Ibid [94]. 28 Ibid [4]. -- 18 of 104 -- 19 which need not be repeated for the purposes of this decision as it relates to LVA072- 17. [53] The appellants saw fit, in their reply, to respond to nearly all points made by the respondent in its paragraph 13 as outlined in [49] of this judgment. Responding to those points, the appellants relevantly say the following: “(13)(a) The submission rest on a false premise. The Appellants do not assert that a different highest and best use between a sale and subject property renders the sale, a priori, incapable of comparison to the subject. Rather, the point is that an approach which assumes that a purchaser will pay the same for a site irrespective of use is prone to lead to error. Mr Jackson did not disregard sales for other uses, but had regard to the individual parcels, their attributes and features, and the evidence regarding the intentions of the purchaser. (13)(b) This proposition is accepted, as far as it goes. However, it does not go very far to say that the scheme contemplates a variety of uses – so do most schemes, and most zones. (13)(c) The Respondent accepts that some parcels within the CBD are more attractive for one form of development than another and, implicitly, that developers for different purposes will pay more, or less, for the same parcel. The relationship between use, and price, is conceded by the Respondent. Moreover, some “advantageous qualities enjoyed by particular parcels” are more important to one type of use, over another. Thus, it is not the particular features of a site which determine its value regardless of use. Rather, the evidence shows that it is the particular features of a site which make it of greater or lesser value for purchasers intending one use or another. As Mr Hart conceded in cross examination the price paid for a purchaser intending a particular use does not demonstrate what a would be purchaser intending for a different use would pay for the same site (see: T4-94 L 29-35; T4-48 L 1-5; T4-49 L 21-33). (13)(d) As we submit in our primary submission, it misunderstands and misuses the planning scheme to regard sales as necessarily comparable merely because they fall within the same permissive planning scheme. Mr Jackson did not categorise the sales as “just CBD sales.” He, unlike Mr Hart, had regard to the factors of each sale which determine its reliability as a comparator; of which use is merely one. Mr Hart’s comparison of his “range” of sales in the CBD produced unsustainably high levels of value and required an opaque process of adjustment to reach his contended for Site Values. Mr Jackson’s preferable approach was to reveal his process of reasoning in the overall level of adjustments required in comparing sales properties to the subjects. (13)(e) Mr Jackson asserts no such thing. Rather, the point is that sales for the same use provide a more reliable indicator of -- 19 of 104 -- 20 value than do sales for different uses. Mr Jackson’s proposition is consistent with the contemporary principle referred to by the Respondent. In ISPT v Melbourne City Council (2008) 20 VR 447, the Court of Appeal emphasised that whether the highest and best use should be regarded as a single use or a broad range of uses will always be a question of fact. Mr Jackson recognised that the constrained highest and best use of the subject – an agreed fact – for low rise commercial development did not permit a reliable inference of value to be drawn from high rise residential sales, in a different part of the CBD, struck for record prices for that use. Indeed, there is unchallenged evidence that residential development in any form is not viable at 300/310 Ann Street. (13)(f) Mr Jackson’s clarified his evidence regarding what he meant by the purchaser paying a premium for the student accommodation sites: the advantage for someone wishing to develop student accommodation afforded by the concessions is that they are able to pay more (sic) the site than a purchaser intending a different use for which valuable development cost concessions are unavailable. The purchaser receives a financial benefit in that it is able to secure a site suitable for its intended form of development which, once developed, will yield its desired rate of return. Moreover, the evidence shows that the market was aware of the fact of the concessions. Naturally, limited supply of suitable sites for that particular use and increased demand inevitably increased the price of land for a particular use, in circumstances where the developers could as a result of the concessions secure land suitable to generate the net return rate which was a precondition of transacting to purchase the land. Mr Jackson’s evidence is hardly “vehement assertion” (a phrase more aptly applied to aspects of the Respondent’s submissions, see for example footnote 121). Mr Jackson’s evidence was supported by the evidence of Mr Weston, and common sense. On the other hand, the absurdity in the contention that the benefit of an incentive (by way of a concession) to a purchaser be passed in whole to the vendor (and yet still remain an incentive) is not dealt with in the Respondent’s submission. (13)(g) For the reasons set out in our primary submissions and dealt with below, the Court can place weight on the sale because the market for commercial office development was stagnant, and indeed, may have worsened, between 2011 and 1 October 2015.” (emphasis in original) Submissions regarding the valuation evidence [54] The appellants are critical of Mr Hart in their submissions, particularly in relation to the methodology he adopted to complete his valuation and sales analyses. The appellants consider Mr Hart’s analyses to be incorrect due to his lack of consideration -- 20 of 104 -- 21 of a particular use for each parcel of land. It is the appellants’ submission that Mr Hart’s comparisons were unreliable from the start which in turn impacted his entire analysis for the two subject properties on Ann Street.29 [55] The respondent submits that the Counsel for the appellants has gone so far as to criticise Mr Hart’s valuation evidence as failing to comply with the rules of expert evidence by not exposing his reasoning regarding the application of the sales to the subject in each appeal. The respondent submits that the appellants’ Counsel, is “patently incorrect to make that accusation”.30 Furthermore, the respondent alleges that Mr Jackson’s approach shows his conclusions but does not “enlighten the reader with any obvious explanation as to his reasoning for adopting those percentage figures”. (emphasis in original) [56] The respondent goes on to provide that the application of comparable sales to a property is inherently subjective, evaluative, and incapable of mathematical expression. The respondent considers Mr Jackson’s “percentage adjustment” approach to be a way to beguile the Court into finding his approach is more rigorous or objectively testable than Mr Hart’s approach.31 The respondent says Mr Jackson effectively acknowledged this during oral evidence32 and that it would be “an error of law for the Court to be so beguiled”.33 [57] The respondent cites authorities in this regard.34 The cases are: (1) FCT v St Helen’s Farm Pty Ltd (1981) 146 CLR 338, 381 (Mason J): “As with the assessment of damages, especially in personal injury cases, the valuation of property by a court has many of the characteristics of a discretionary judgment. Valuation is a matter of estimation, not of precise mathematical calculation. It certainly involves the making of a value judgment in the metaphorical as well as the literal sense.” (2) Mario Piraino Pty Ltd v Roads Corporation (1990) 76 LGRA 263 (Gobbo J): “By contrast detailed adjustments of unit rates derived from comparable sales were used by the other valuers. Often there were as many as six or seven different percentage adjustments for such 29 Appellant’s written submissions, [230]. 30 Respondent’s written submissions, [158]. 31 Ibid [159]. 32 Ibid [160] citing T 8-135, line 6 to T 8-136, line 4. 33 Ibid [159]. 34 Ibid [160]–[161]. -- 21 of 104 -- 22 matters as time, size, shape, location, freeway exposure, planning permission and services. All of those adjustments were matters of judgment. Very few of them were capable of meaningful support by analysis of sales evidence. The whole structure of percentage adjustments had an illusory air of certainty and reliability about it. It could, of course, be said that one might be better able to challenge the weight placed on particular factors. But it also meant that they provoked long questioning about the percentage rates adopted and alleged inconsistencies in analysis of other sales. The detailed percentage adjustment analysis method, sometimes but not always accompanied by supporting analyses themselves founded on like adjustments, is a relatively new phenomenon in valuation practice in this Court. It was not the method adopted by the experienced valuers of yesteryear such as Mr Burnham or Mr Pelton who once they had analysed the sale to a unit rate, such as land clear of improvements, then gave a reasoned explanation of the factors of similarity and dissimilarity and why in the light of those factors they settled upon their valuation figures.” [58] The respondent says it is a material flaw in Mr Jackson’s comparisons that no allowances are made for differences between the sales and the appeal properties for shape and dimension. The respondent says this is a general observation but provides the following example to support its point: “…97 Elizabeth Street is, relatively, a very long narrow block, with 20 metre street frontages and 90 metre depth. Both Ann Street sites have a much more regular shape and have accommodated development of a size and shape which simply could not be carried out on 97 Elizabeth Street.”35 [59] In its reply, the appellants submit that the respondent has mischaracterised the difference between the valuers and the appellants’ submissions in its description of the appellants’ position regarding the evidence of Mr Hart’s approach and any contrast to Mr Jackson’s “percentage adjustment approach”.36 [60] The appellants go on to say that there were a number of reasons why they characterise Mr Hart’s approach as unreliable, including his proposition that a purchaser pays the same for the land the subject of the sales he relied on, whatever the use.37 [61] In response to the respondent’s submissions regarding what it describes as the “percentage adjustment” approach, the appellants say that submission is unfair because the opposite was put to Mr Jackson during cross-examination by the 35 Respondent’s written submissions, [162]. 36 Appellants’ reply submissions, [165]. 37 Ibid [166]. -- 22 of 104 -- 23 respondent. The appellants point to day eight of the transcript where Counsel for the respondent suggested to Mr Jackson that the percentages applied were “nothing more than a way of representing your professional but ultimately evaluative opinion about the differences between the properties and that there is no mathematical formula which produces those figures?”.38 [62] The appellants point to Mr Hart’s acceptance that Mr Jackson’s approach is a useful and not unusual one which illuminated his process of reasoning. The appellants ask the rhetorical question of “what error of law would there be in finding, on all of the evidence, that Mr Jackson’s approach was more forthcoming than that of Mr Hart?”.39 [63] Mr Hart did agree that Mr Jackson’s evidence presented in table form does illuminate his reasoning and that the use of tables to present valuation evidence has “some utility” and is not unusual. Mr Hart did go on to say, in effect, that there are some limitations in the way Mr Jackson has approached his task by way of percentages. Mr Hart acknowledges this approach is different to his own. The exchange between Mr Traves QC and Mr Hart was as follows: “MR TRAVES: …This is, can I suggest to you, a very useful table because it does illuminate Mr Jackson’s reasoning. MR HART: It does illuminate, yes, I agree. MR TRAVES: And it’s very useful for that reason, can I suggest to you? MR HART: It’s – it has some use, yes. It’s useful. MR TRAVES: And it’s far from being unusual, can I suggest to you, that valuers should, either through a table form or through the description in their reports, that they should attempt to identify, and as far as possible, articulate the extent of their adjustments for various important factors? MR HART: It has some utility. MR TRAVES: In fact – and it’s far from unusual - - - MR HART: - - - I think. MR TRAVES: - - - that they should seek to do so? MR HART: I don’t – yeah, it’s not unusual, but - - - 38 Ibid [167] citing T 8-135, lines 7 to 11. 39 Ibid [168]. -- 23 of 104 -- 24 MR TRAVES: So can I suggest there’s nothing unusual about Mr Jackson trying to articulate his thoughts in relation to the value; nothing unusual about that? MR HART: No, it’s not unusual. It’s what needs to be done. MR TRAVES: And can I suggest to you that it’s a point of very marked contrast with your approach? MR HART: Oh, well, I believe I’ve adopted the – a traditional approach where I’ve identified the various aspects of comparison and made – and put them in writing. MR TRAVES: Apart from the allowance which you make as a conservative adjustment, and putting aside, for example, the different treatments you’ve given to easements, but just looking at all of the other broader factors to which you refer, can you point to one example in these four appeals where you have actually articulated the extent of the adjustment? MR HART: No. MR TRAVES: All right. Have you heard of the expression ‘speaking valuation’? MR HART: Yes, I have. MR TRAVES: Can I suggest to you respectfully that your valuation does not speak in the same way as Mr Jackson’s speaks, as an exposure of yours or his reasoning? MR HART: I would disagree with that because I don’t necessarily know what those – each of those elements refer to when it says ‘size’, because something like shape and dimensions isn’t mentioned. The adoption of just five or 10 per cent, in round numbers, again is – you know, has its limitations, but, you know – so I think it’s a different approach. I agree.”40 [64] The appellants say it is not the individual percentage adjustments that require attention, but the overall adjustment arrived at by Mr Jackson’s evaluative process of reasoning. In the appellants’ submission, Mr Jackson’s reasoning appears on the face of the JERs.41 [65] The below table outlines the valuers’ positions with respect to the sales, as well as identifying the way in which the sales are referred to in this judgment. The sale numbers were amended during the course of the hearing so that they would be referred to consistently throughout all appeals. 40 T 9-44, line 14. 41 Appellants’ reply submissions, [170]. -- 24 of 104 -- 25 [66] The respondent says that the valuation evidence of Mr Jackson is fundamentally flawed by reason of: (a) Mr Jackson’s incorrect analysis of the sales 38 Wharf Street and 97 Elizabeth Street; and (b) Mr Jackson’s reliance, without sufficient justification, on the sale of 55 Elizabeth Street which took place, in effect, nearly 5 years prior to the date of valuation.42 [67] In relation to (a), the appellants’ reply submits that those sales are not so markedly different to preclude any reliance upon them. The appellants suggest those two sales can be contrasted to the 2014 residential sales, which are markedly different so as to be incompatible with the highest and best use of the Ann Street properties.43 [68] Further, in relation to Sale 2, the appellants submit: “Mr Jackson’s evidence confirmed that the sale is of limited utility in comparing to the subject properties not only because of their different use but for a ‘whole host of reasons’ including the configuration of the site not lending itself to commercial development and the level of adjustment required to compare it to the subject. Mr Jackson described the sale as ‘secondary’ but given it was a 2015 sale he attempted to make some use of it (T8-173 L 22-29).”44 (emphasis in original) [69] Regarding point (b), above, in relation to Sale 5 (55 Elizabeth Street), overall, the appellants’ submissions go to the state of the market at the time between February 2011 and the date of valuation and what is referred to as a “secondary location”. These 42 Respondent’s written submissions, [172]. 43 Appellant’s reply submissions, [73]. 44 Appellants’ reply submissions, [76]. -- 25 of 104 -- 26 submissions are considered by me further in my decision under the heading “Residential apartment market issue”. [70] The appellants, also, in their reply, identify what they calls an “important concession” by the respondent in relation to sales requiring a lower adjustment to move from the analysed sale price to an inferred value for the subject being preferable to sales which require a greater level of adjustment.45 [71] For Sales 1 and 2, the appellants say that infrastructure concessions available to developers of student accommodation in the Brisbane CBD adds value to a purchaser and are therefore, relevant to adjustments in value. Adjustments made to Sales 1 and 2 by the appellants’ valuer were not because the purchasers of those sales “paid a premium to market”. “It was made because purchasers of a property with a highest and best use of student accommodation had the benefit of the highly valuable concessions which purchasers of developments with different highest and best uses did not”.46 [72] The respondent recognises, in its submissions, that infrastructure credits are not owned by a vendor, nor able to be sold by the vendor, but clarifies its position that that is not decisive of itself “because a premium is only paid where there is some particular motivation for the purchaser which is idiosyncratic to that purchaser.”47 In this case, the respondent emphasises that the concessions: “(a) did not in any sense attach to or run with the land; (b) were not pre-paid by the vendor; and (c) depended entirely on the purchaser’s own choice to undertake a particular form of development within a particular time frame”48 (emphasis in original) [73] In response to the Valuer-General’s submission, the appellants say the respondent has misunderstood Mr Jackson’s evidence and overlooks important evidence in these appeals regarding the effect of infrastructure credits on the market for student accommodation development sites in the CBD.49 Further, the appellants say it would be absurd if, “as [the respondent] says, the benefit of the concession is all passed to the vendor, then it can only be passed to the vendor by an increase in the purchase 45 Ibid [39]. 46 Appellants’ written submissions, [90]. 47 Respondent’s written submissions, [93] (emphasis in original). 48 Ibid [93]. 49 Appellants’ reply submissions, [87]–[88]. -- 26 of 104 -- 27 price… And, if all the benefit is passed to the vendor, then that must be the full value of the concession.”50 [74] The appellants comment upon the respondent misunderstanding or mischaracterising the evidence of Mr Jackson on numerous occasions in their reply submissions.51 The appellants’ submission regarding the concessions point is neatly summarised is its reply at paragraphs 110 and 111: “The point is a consequence of fundamental market dynamics: limited supply and increased demand inevitably increased the price of land for a particular use, in circumstances where the developers could as a result of the concessions secure land suitable to generate the net return rate which was a precondition of transacting to purchase the land. The value obtained by the purchaser is securing the site the development of which will secure the desired return on investment. It must be borne in mind that the student accommodation developers are not land bankers. The sites are purchased for a purpose, which is to develop the land into a viable business and then, after a period of time, sell the business. It is therefore artificial to speak of the benefit of the concessions being lost to the purchaser. The benefit is the site which can be developed and then sold for the desired rate of return.” [75] I consider and make findings regarding the issue of the infrastructure credits in detail under the heading “Infrastructure credits for student accommodation”. Specific submissions regarding 310 Ann Street [76] The parties both agreed, for the purposes of these appeals, that the highest and best use of 310 Ann Street is a 21-storey commercial office tower consistent with development on the land as at 28 March 2018.52 [77] The appellants’ observations regarding this subject can be summarised as follows: (a) the existence of the rail corridor beneath the property is a significant point of difference to other sales in evidence.53 (b) the property lacks flexibility in the use of its frontage to Wickham Terrace due to the freehold lot obtaining street frontage to Wickham Terrace via the leasehold lot.54 (c) the respondent seems to contend that regardless of the highest and best use of the subject, the land value is the same.55 50 Ibid [97]. 51 Ibid [70]; [88]; [96]; [104]; [108]; 52 Appellants’ written submissions, [285]. 53 Ibid [283]. 54 Appellants’ written submissions, [284]. 55 Ibid [285]. -- 27 of 104 -- 28 (d) the subject is located in a secondary location as a commercial development in the Brisbane CBD; it is on the periphery of the western side of the CBD.56 (e) it has relatively poor amenity as a commercial location; is located between two busy arterial roads; and has relatively poor pedestrian access.57 [78] The appellants submit it is a rather surprising result that Mr Hart achieved the same figure of $25,000,000 in Exhibit 358 as did the Valuer-General in making its decision on objection, despite the assumptions markedly changing.59 In this regard, the appellants note the following: (a) no highest and best use was identified for the decision on objection; (b) the only constraints on development when the decision on objection was made were imposed by the planning scheme; (c) the site penalties associated with the railway corridors had not been brought to account for the decision on objection;60 (d) the parties now have an agreed highest and best use – that being, commercial high rise of the nature and size of the existing development; and (e) allowances have now been made for site penalty costs.61 [79] The appellants go on to observe that the objection decision applied a rate of $12,000/m2, whereas Mr Hart started with $12,600/m2, resulting in the same figure as the decision maker, notwithstanding the changes.62 The appellants submit this clearly cannot be correct. [80] The appellants contend that Mr Jackson’s opinion is that the agreement as to highest and best use, together with the identification of engineering costs relating to the railway, should have led to a significant correction downward of the assessment of site value.63 The appellants conducted an exercise in [292] of their submissions and submit that exercise illustrates that Mr Jackson’s opinion in this regard is correct. [81] In applying the sale properties to this subject, the Valuer-General makes clear its reliance on Mr Hart’s evidence regarding comparability in Exhibit 3; his subsequent allowances for the impact of the rail corridor; the burden of the railway easements; 56 Ibid [286]. 57 Ibid [286]. 58 Joint Expert Report – 310 Ann Street, Brisbane (36 Wickham Terrace). 59 Appellants’ written submissions, [287]. 60 Ibid [288]. 61 Ibid [289]. 62 Ibid [290]. 63 Ibid [293]. -- 28 of 104 -- 29 and the site penalty costs for additional works during construction due to the existence of the railway.64 [82] The respondent points out the agreed figure for site penalty costs for the existence of the railway as $1,371,000. The respondent also emphasises that the issue of the allowances made for the impact of the rail corridor are a distinct and separate issue to the burden of the railway easements preventing substantial development above the railway lines.65 [83] The respondent’s submissions for 310 Ann Street make clear that the respondent relies upon Sales 1, 2, 6, and 7.66 Submissions relating to 300 Ann Street [84] For 300 Ann Street, the highest and best use was agreed to be a commercial office tower at the level, and in the form, of development as existed at 28 March 2018.67 [85] In regard to the agreed highest and best use of this subject, the appellants point out that that agreement is the respondent’s third position on highest and best use. The first being when the respondent made its decision on objection without the identification of a highest and best use; the second, when the respondent assessed site value for the subject based on its highest and best use being residential, with ground level retail; and third, the agreed position. This leads the appellants to the submission that, in the respondents view, highest and best use does not have impact on site value.68 [86] The submissions of the appellants relating to 300 Ann Street include: (a) Based on Mr Jackson’s opinion, this property is at the bottom range of commercial office space in the Brisbane CBD – Eage Street, Creek Street, Queen street, Adelaide Street, George Street, and Elizabeth Street being superior commercial office locations.69 (b) This property is located adjacent to a four-lane main road, making it a very busy, dusty, and noisy location.70 (c) Mr Hart agreed that there is not direct vehicular or pedestrian access from Creek Street.71 64 Respondent’s written submissions, [165]. 65 Ibid [165]. 66 Ibid [167]. 67 Appellants’ written submissions, [317] citing Ex 4 at [26]-[27]. 68 Ibid [317]. 69 Ibid [318]. 70 Ibid [318]. 71 Ibid [319] citing T6-85 line 20-23. -- 29 of 104 -- 30 (d) Mr Jackson’s adjustments for 310 Ann Street apply equally to 300 Ann Street and therefore the appellants’ submissions regarding 310 Ann Street also apply to 300 Ann Steet.72 (e) There is a large difference between the valuers regarding the deduction for the burdened area of this subject – the appellants submit that the space above 310 Ann Street can be used, whereas the burdened area on 300 Ann Street can not be.73 (f) The considerations concerning 300 Ann Street and 310 Ann Street are very similar.74 [87] In the respondent’s submission, quite different from the appellants, the easements burdening this subject are not so significant so as to inhibit the development potential, convenience, or the cost of development.75 The respondent goes on to submit that Mr Jackson’s reduction of 77% is not supported by evidence and is excessive in comparison to the unburdened rate.76 In the respondent’s submission, it is excessive particularly in light of Mr Jackson’s deduction of only 25% for 310 Ann Street where the “railway easements run through a substantial part of the property and effectively prevent both basement car parking and building work of any substance, both below and above ground.”77 [88] In its reply submissions, the appellants respond to the respondent’s contention that Mr Jackson’s reduction of 77% is excessive in the following way: “207. …it would be surprising if an easement burdening the land did not inhibit development potential and costs. Indeed, as Mr Jackson observed, the only possible use of the space burdened by the easement was support columns for the benefit of the adjoining owner, Queensland Rail (T9-87 L 1-12). … 209. Mr Hart’s basis for adopting a 25% reduction assumes that the easement burdening 300 Ann Street is the same as that burdening 310 Ann Street. He was asked to explain his rationale for adopting 25% and said ‘…it’s the same percentage discount as the agreed percentage discount on the 310 Ann Street easements. So that’s been – that’s – that’s been a guide in terms of my adoption of a similar – same discount to – to – to these – to these – to these easements’ (T9-86 L 4 – 7). 210. Mr Hart’s view is unsound. As Mr Jackson explained, the easements burdening 310 Ann Street are less onerous because they permit construction of an office development above the area burdened by the easements thus using that space for commercial purposes (T9-86 L 15-17). Accordingly, that space has value. By contrast, the easement burdening 300 Ann Street ‘…are to the 72 Ibid [322]. 73 Appellants’ written submissions, [323]. 74 Ibid [324]. 75 Respondent’s written submissions, [168]. 76 Ibid [168]. 77 Ibid. -- 30 of 104 -- 31 benefit of someone else for – for columns of which they’re effectively – apart from support in part for someone else are useless for the commercial benefit. So they’re – they’re – they’re not the same and they shouldn’t be treated the same’ (T9-86 L 17-20).” (citations in original) [89] The appellants say in their reply that there is “no logical gap or sequitur in [Mr Jackson’s] evidence: he has explained, cogently, while some sales for different uses may be of more use than others. The criticisms which follow in the Respondent’s submissions again proceed on a false premise.” [90] The submissions of the parties relating specifically to the sales presented is considered in my analyses of the valuation evidence later in this decision. The parties’ initial observations regarding the sales and their application to the subjects [91] The appellants emphasise as a notable point, in their submissions, that the evidence of Mr Jackson that the subjects are unsuitable for residential high rise development is unchallenged. Thereby concluding, that the “basket of sales” approach (which includes residential sales of very high magnitude) is unreliable”. The appellants in their submissions emphasise the difficulty in comparing sales which have different uses. [92] The respondent, though, considers there to be a mixed market and therefore relies upon residential sales in its submissions and supports Mr Hart’s use of such sales to determine the value of the subjects. I consider submissions relating to the mixed/merged market in my reasons below under the heading “Residential apartment market issue”. [93] The appellants contend the preferable starting place to be with Sale 6, 62 Ann Street; that other sales corroborate the proper application of Sale 6; that Sale 8 needs to be applied with caution together with the secondary evidence of the commercial market; and that Sale 8 and Sale 1 provide some use when properly analysed. [94] The appellants submit, specifically, that Sale 1 is affected by the concessions issue and therefore, is only of secondary utility in comparing to the subject. The appellants -- 31 of 104 -- 32 rely upon evidence from confidential exhibits, Mr Weston, and Mr Jackson to support its contention of adjustments to Sales 1 and 2.78 [95] The appellants note that Sale 1 has difficulties due to its different use. The appellants go on to say the following regarding the application of this sale: “Of the other sales, 38 Wharf Street is of some corroborative utility. It must be recognised, at the outset, that the sale presents difficulties because of the different use. There is no evidence that a commercial purchaser would have paid a similar price for that land as the purchaser did for student accommodation purposes. On the other hand there is good reason to think it would not have done so: a developer of land for student high rise accommodation was the highest bidder; the majority of the expressions of interest were from developers of student high rise accommodation; the state of the commercial market was relatively poor and there had not by the valuation date been a commercial sale in the CBD for four years; the anecdotal evidence that student accommodation developers were paying 20% more than even residential developers; the existence of generous concessions on infrastructure charges for the developers of high rise student accommodation, which had sparked a proliferation of development of that nature. Moreover, the Valuer General in the exercise of its statutory function had reduced the value of that parcel to $13,172/m2; that was similar to (although lower than) Mr Jackson’s analysis of $13,441/m2 and Mr Hart agreed that the re-issued valuation was reasonable. In all of those circumstances, doing the best one can, it is not unreasonable for the purposes of the appeal to move from the basis that a commercial purchaser would have paid not more than $13,441/m2 for that land (indeed, there is a strong argument that a commercial purchaser would have paid less). Mr Jackson reasons a 30% adjustment from 38 Wharf Street to 310 Ann Street, and the Respondent an adjustment in the order of 20%. If Mr Jackson’s adjustment of 30% is adopted, a figure of $9,408/m2 is achieved; if the Respondent’s adjustment of 20% is made to the analysed rate of $13,441/m2, then the figure is $10,752/m2.”79 [96] The respondent is of the opinion that the premium applied by Mr Jackson for Sale 1 is not made out on the evidence.80 In the respondent’s opinion, Mr Hart is correct in making adjustments for size for this sale, given the subject is much larger than the sale, giving the subject more flexibility to construct an office building with larger floor plates than possible on the sale, utilising areas above the railway line for open space and access.81 78 Appellants’ written submissions, [95]. 79 Appellants’ written submissions, [306]. 80 Respondent’s written submissions, [13]. 81 Ibid [167](a). -- 32 of 104 -- 33 [97] The respondent goes on to criticise Mr Jackson’s adjustments of 10% for locality and corner/street frontage, contending that there is no basis to say that the sale is inferior from these perspectives.82 [98] The appellants submit Sale 2 is also affected by the concessions issue and therefore, this sale is only of secondary utility in comparing to the subject.83 [99] In its written submissions, the following can be deciphered from the appellants’ position: (a) The development potential of the land is significantly higher than the subject and has superior street frontage than the subject.84 (b) The important question regarding street frontage is how it can be used; for this sale the frontage may be used in the form of a walk-through retail arcade. This option does not exist for the subject due to its location and the presence of the railway.85 [100] The respondent says there is no objective basis upon which it can be determined that Sale 2 is in a materially superior location for commercial office development, particularly where: “most of the commercial development in the CBD (including in and around the Golden Triangle) is well separated from the Queen Street Mall and major retail development - if being close to the Mall and other non-commercial activities was an important locational factor for commercial office development, one would have expected Brisbane’s concentration of commercial office development to be very close to the Mall and the heart of the City generally, but the facts are that it is not”86 [101] The respondent also says that Mr Jacksons adjustment of 5% for street frontage is wholly unsustainable where the subject (310 Ann Street) has street frontages to Ann Street and Wickham Terrace. [102] In paragraph 103 of the appellants’ submissions, the appellants list the reasons for Mr Jackson’s decision not to rely on Sales 3 to 5 as follows: “103. Mr Jackson considered the sales, but determined not to rely on them. He set out his reasons in Exhibit 3 at paragraph 197 (Record page 981). They were: (a) Each sale is in a vastly different area of the Brisbane CBD; (b) Each sale has a highest and best use of residential apartment development, incompatible with the agreed highest and best use of the subject property; 82 Ibid. 83 Appellants’ written submissions, [309]–[310]. 84 Ibid [312]–[313]. 85 Ibid [313]. 86 Respondent’s written submissions, [167](b). -- 33 of 104 -- 34 (c) One sale (443 Queen Street) is situated on the Brisbane River with uninterrupted views and aspect; (d) Each sale has received approval for high rise development (up to 80 storeys) compared to the low rise nature of the subject property; (e) Two sales (30 Albert Street & 240 Margaret Street) are situated within a recognised residential precinct of the Brisbane CBD in close proximity to the Botanical Gardens and Brisbane River; (f) All the sales sold in 2014 in a market which was conducive to residential apartment development which differs from October 2015; (g) Ann Street is predominantly a commercial precinct with Ann and Turbot Streets being high traffic volume arterial roads through the CBD compared with the quieter and more pleasant environment for residential development in Albert and Margaret Streets and overlooking the Brisbane River in Queen Street; (h) Based on Mr Jackson’s enquiries with an experienced real estate agent in selling and marketing residential apartments in the Brisbane CBD, it is not viable or feasible to consider residential apartment development in Ann Street – see Annexure 13.” [103] The respondent, in its submissions, jumps from Sale 2 to Sale 6, those being Mr Jackson’s sales. [104] On the evidence of Mr Jackson, the development potential of Sale 6 has not been impacted by the heritage issues associated with the site so as to affect comparability with the subject properties.87 The valuers agreed that at the valuation date, Sale 6 would lend itself to a commercial use based on its large size and lack of residential development in the CBD. [105] The appellants’ submit that Mr Jackson’s evidence is important in relation to Sale 6 for a number of reasons and that these reasons make the sale a useful comparator: (1) The sale occurred in the same street as the subject, albeit, in a superior part of that street; (2) The sale has two street frontages and size and therefore good flexibility; (3) It is being developed consistent with the commercial highest and best use of the subject; and (4) It sold only two months after the date of valuation.88 [106] The appellants criticise Mr Hart’s consideration of this sale as being “opaque by comparison and unconvincing”. The appellants say there is no reason why Mr Jackson’s quantification of the adjustments should not be accepted as Mr Hart did not 87 Appellants’ written submissions, [134]–[135]. 88 Appellants’ written submissions, [298]. -- 34 of 104 -- 35 attempt to quantify any of the adjustments nor did he challenge Mr Jackson’s figures.89 [107] The appellants point to substantial areas of agreement between the two experts regarding Sale 6 during their oral evidence: “301. That said, and notwithstanding Mr Hart’s reluctance in Exhibit 3 to apply the sale, again, in oral evidence, he substantially agreed with Mr Jackson. Mr Hart agreed that it is reasonable to make use of Sale 6 in considering the Site Value of the properties with commercial highest and best use (T6-10 line 44 – T6-11 line 3). He agreed it was reasonable to compare 62 Ann Street given its commercial potential with 310 Ann Street and that he had done that (T6-10 L44 – T6-11 L3). He was of the view that 62 Ann Street was very suitable for high rise commercial development (T5-126 L12). He also agreed that, at the valuation date, its predominant use would lend itself to a commercial use (T6-11 line 30; see also Jackson at T6-12 L13-23, and T6-13 and 6-14, where Mr Jackson refers to other commercial development in the area). The reasons for that include that the site is relatively large (T6-11 line 35 – 45), the relative lack of residential development in that precinct of the CBD (T6-12 line 1- 9), and that at the date of valuation, the precinct was predominantly commercial in nature (T6-13 line 30). Mr Jackson gave like evidence at T6-12. 302. Having agreed as to the utility of the sale, the evidence of Mr Jackson and Mr Hart was not far apart on its proper application to the subject. The Appellant maintains the correctness of Mr Jackson’s opinion as to the value of the subject at $9,500/m2. But, as we will seek to demonstrate, so far as the application of 62 Ann Street is concerned the valuers are not far apart. 303. Mr Jackson had identified five issues as requiring small adjustment (see 12 Exhibit 3 p 1082): size (5%), location (-5%), corner/street frontage (-5%), development potential (-10%) and heritage (5%), resulting in a (-10%) adjustment in total to the subject. Mr Hart did not express a view in Exhibit 3 as to the extent of these adjustments. However, in his oral evidence he agreed the sale was capable of sensible comparison (T9-46 L1-5). Further, the following may be gleaned from Mr Hart’s evidence: (a) Both valuers agreed there should be an adjustment for size. In Mr Jackson’s opinion, because the sale property comprises five separate lots on two separate street frontages, the discount for size is less than it otherwise would be (Exhibit 4 at [102]). Mr Jackson allowed 5%. Mr Hart said that “on the fly”, he would allow 10- 15% difference for size, which Mr Jackson said was a bit excessive for the reasons he had given (Hart T9-41 L9-10; Jackson T9-41 L15). Mr Hart said that this adjustment was not something to which he had given considered attention (Hart T9- 41 L47- T9-42 L2). However, he had had every opportunity to do so. For arguments sake, and taking into account Mr Jackson’s more considered evidence in this respect than Mr Hart, and Mr Hart’s willingness to countenance 10%, allow 10%. 89 Ibid [300]. -- 35 of 104 -- 36 (b) As to location, Mr Jackson believed the location of 62 Ann Street to be superior to 310 Ann Street (T9-43 line). Mr Hart agreed that 62 Ann Street is a better commercial location than 310 Ann Street (T9-43 L 37). In the absence of another estimate from Mr Hart, allow the -5% adjustment for location that Mr Jackson allowed (a conservative allowance, it is submitted, given the superiority of location for 62 Ann Street and the existence of the railway line). (c) As to corner/street frontage, Mr Hart gave no evidence disputing Mr Jackson’s adjustment. It is reasonable to conclude that 62 Ann Street’s level, two street frontage is superior to 310 Ann Street. Mr Hart was of the view that the subject’s frontage to Creek Street was not as good as it would be for a flat parcel (T6-85 L11), so allow Mr Jackson’s -5% adjustment. (d) Development potential, allow the -10% that Mr Jackson allowed and that Mr Hart allowed in respect of development potential at paragraphs 332 of Exhibit 3 and 38 of Exhibit 4, and in respect of 375 Turbot Street in comparison to Barry Parade. This is entirely sensible: the same considerations apply, and there are no use or height constraints on 62 Ann Street as are agreed for 310 Ann Street. In Mr Jackson’s opinion, the development potential of the sale property is significantly greater than the agreed highest and best use of the subject, being a ‘…relatively low rise commercial development (20 storeys)…’ (Exhibit 4 at [105]). The superior development potential is demonstrated by the 36 storey student accommodation approval on the Turbot Street frontage of the sale property and a subsequent approval for a 32 storey office tower on the Ann Street frontage of the sale property (Exhibit 4 at [106]). (e) Mr Hart said Mr Jackson’s allowance of 5% for the heritage issue was ‘a bit light on’ (T9-53 L1), but offers no further figure. In Mr Jackson’s opinion, the heritage considerations associated with the Turbot Street frontage do not significantly diminish the development potential of the land (Exhibit 4 at [103]). He notes the sale property is not affected, like the subject property, by complications associated with development over and adjacent to a railway line (Exhibit 4 at [104]). Mr Hart agreed that there were ‘…certainly ways and means around dealing…’ with the heritage portion of the sale property (T9-39 line 45). He agreed such ways and means had been demonstrated by subsequent development application on the property while still achieving a very significant level of development (T9-40 line 5). For arguments sake, make an allowance generous to Mr Hart of 10%. This would leave no net total adjustment applying the analysed rate for 62 Ann Street of $9987/m2, rounded to $10,000/m2. This figure is at irreconcilable odds with Mr Hart’s analysed value for the subject of $12,600 per square metre for the unburdened portion of the subject.” (citations in original) [108] The respondent’s submissions regarding this Sale are: “Mr Jackson’s 5% adjustment in favour of the subject for size is premised on the proposition that its existing registered lot layout facilitates sale of development sites fronting Ann Street and Turbot Street as separate sites, so that the sale need not be considered for comparison purposes as a single lot of 5,478 m², but his premise is unsupported by the evidence in the sense that -- 36 of 104 -- 37 all of the development proposals for 62 Ann Street which were put before the Court for consideration involved either integrated development over the whole of the site or (in the case of a student accommodation proposal which did not proceed), integrated use of the Turbot Street fronting parcel for access to the Ann Street fronting parcel; Mr Jackson has, with respect, understated the issues raised by the heritage component of the sale in the sense that, unlike the typical case where heritage buildings or components must be protected and retained, with some degree of refurbishment, the developer of 62 Ann Street has to physically reconstruct components of the historic market shed under the close supervision of Brisbane City Council and Queensland Heritage - while it may be accepted that a design can be achieved which will have the result that the heritage aspects do not limit the obtainable GFA, those very specific and unusual heritage restoration requirements, coupled with the fact that there can be no building over the heritage components (except by cantilevering over the shed but not the building on the frontage) mean that a 5% adjustment reflects a too narrow and unrealistic view of the extent to which the heritage requirements disadvantage the sale as compared to the subject (which has no such requirements);”90 [109] The appellants submit that Mr Jackson regards Sale 7 as the least comparable of the 2015 sales.91 [110] The respondent criticises all Mr Jackson’s adjustments relating to size and location; as well as the lack of adjustment regarding the subjects frongrage.92 [111] In relation to Sale 8, the appellants submit the following: (a) Mr Jackson recognised the age of this sale posed some difficulty but did considerable work to establish the commercial market was unlikely to have moved materially since the sale.93 (b) It is orthodox to consider and “winnow” what it can from the sale; it would be unorthodox to ignore the sale. (c) Elizabeth Street is a superior commercial location to the subject, and Mr Jackson’s 10% adjustment for the subject is reasonable. (d) The figure of $10,061/m2 provides corroboration for the proper application of 62 Ann Street.94 [112] Mr Jackson spent time investigating the state of the commercial market surrounding Sale 8. The valuer puts forward the proposition that the utility of this sale depends 90 Respondent’s written submissions, [167](c). 91 Appellants’ written submissions, [314]. 92 Respondent’s written submissions, [167](d). 93 Appellants’ written submissions, [305]. 94 Ibid [305]. -- 37 of 104 -- 38 upon the Court’s finding that the commercial market between the relevant dates had been relatively stable.95 [113] Mr Jackson relied on this sale because the highest and best use had been agreed and identified as commercial. It is submitted by the appellants that there is no commercial sale around the date of valuation of the subjects and that the age of Sale 8 does not render the sale incomparable.96 [114] The appellants provide that the lack of sales for a commercial office use after February 2011 is limited which demonstrates the little demand leading up to October 2015. In respect of the market and Sale 8, the appellants submit the following: “First, the total level of vacancy in the Brisbane CBD in January 2011 prior to Sale 8 was 9.6% compared to a total level of vacancy in July 2015 of 14.9%. Total stock in the CBD increased from January 2011 from 2,054,239m² to 2,158,290m² in July 2015. Secondly, net level absorption of total office space (i.e. space leased and taken up in the market) leading to January 2011 was ‘relatively healthy’ reflecting in three consecutive six monthly periods of positive net absorption (January 2010, July 2010, and January 2011). By comparison, the net level absorption in July 2015 was, in Mr Jackson’s opinion, a ‘complete contrast’ to January 2011. Negative net absorption rates were recorded in July 2014 (- 8284m²), January 2015 (-21, 552m²), and July 2015 (-16,573m²). Mr Jackson also notes the importance of recognising that the negative net absorption had been present in the CBD market from July 2013 and remained negative until January 2016. Thirdly, in respect of A Grade commercial office stock: (i) the total level of vacancy in January 2011 prior to Sale 8 was 5.7% compared to 12.3% in July 2015, and A Grade stock increased in from 785,245m² in January 2011 to 864,317m² in July 2015 which corresponded with increasing supply of A Grade stock in the market. This demonstrates real net absorption of commercial office space; and (ii) the level of net absorption (i.e. space leased and taken up in the market) of A Grade Stock was healthy leading up to January 2011 (with three consecutive six monthly periods of positive net absorption), whereas the clear trend of negative net absorption from July 2014 onwards: July 2014 (-3,118m²), January 2010 (-5,161m²) and July 2015 (-24,686m²). Fourthly, in respect of A Grade stock, face rents and incentives increased between February 2011 and October 2015. Face rents for A Grade office space in the CBD in February 2011 at the time of Sale 8 ranged from $750m² to $850m² with incentives being offered in the range of 25% to 30% of gross rent. By contrast, face rents for A Grade commercial office space in October 95 Ibid [139]–[140]. 96 Appellants’ written submissions, [141]. -- 38 of 104 -- 39 2015 ranged from 550/m² to $650/m² with incentives being offered in the range of 35% to 40% of gross rent. Fifthly, Mr Jackson notes the commercial office market would have been further discouraged at the date of valuation by pending supply in the market. For those reasons, it is submitted that Mr Jackson’s opinion that adopting a similar level of value to that analysed for the 55 Elizabeth Street sale is a generous assessment for a site with commercial highest and best use at the date of valuation. In his evidence, Mr Jackson confirmed the appropriateness of applying Sale 8 due to the lack of any market movement between 2011 and 2015. All of the market parameters in 2015 for commercial office space were inferior compared to late 2010 and early 2011. On that basis, applying a generous assessment given the data indicating deterioration in the market between the date of Sale 8 and the date of valuation, Mr Jackson has reasonably concluded there was no market movement.97 (citations omitted) [115] The respondent does not consider Sale 8 to be of any reliability when determining the site values attributable to the subject properties. The reason behind the respondent’s position is that the sale is too far dated to be of use. [116] The respondent criticises Mr Jackson’s thesis that there had been no material market movement for commercial land between the sale of Sale 8 in 2010/11 without sufficient evidence. The respondent considers Mr Jackson’s evidence to fall far short of being compelling in this regard. The respondent says this Court would require compelling evidence before the sale could be considered.98 [117] The respondent goes on to say: “It is submitted that when the Court considers all of these aspects of the evidence, it will be simply unable to conclude at any level of confidence that the market demand on 1 October 2015 for land to be developed for commercial purposes was so low that the market value of CBD land intended to be developed for such purposes was unmoved for nearly 5 years from November 2010 to October 2015. Given the acknowledged increase in CBD land values considered more broadly, as evidenced by the sales, such a position is counterintuitive, unsupported by sales evidence, and not one which can be adopted on the narrow basis proposed by Mr Jackson having regard to all of the countervailing indicators just referred to. It is submitted that when the Court considers all of these aspects of the evidence, it will be simply unable to conclude at any level of confidence that the market demand on 1 October 2015 for land to be developed for commercial purposes was so low that the market value of CBD land intended to be developed for such purposes was unmoved for nearly 5 years from November 2010 to October 2015. Given the acknowledged increase in CBD land values considered more broadly, as evidenced by the sales, such a position is counterintuitive, unsupported by sales evidence, and not one which can be adopted on the 97 Appellants’ written submissions, [147]–[151]. 98 Respondent’s written submissions, [146]. -- 39 of 104 -- 40 narrow basis proposed by Mr Jackson having regard to all of the countervailing indicators just referred to.”99 Overview impressions of the Court regarding the witnesses Stephen Cross [118] Stephen Cross is a Principal Valuer for the State Valuation Service and is therefore an employee of the respondent. He was subpoenaed by the appellants to give evidence. It must be stressed that, although he has professional qualifications as a valuer, his evidence was strictly limited to that of the decision maker for the decisions on objection. [119] I was impressed by the way in which Mr Cross paused in his evidence whenever he was concerned that a question asked of him had roamed into his area of valuation expertise. Mr Cross is to be commended for the manner in which he gave his evidence in what I am sure were difficult circumstances for him. [120] I accept Mr Cross as an honest, reliable witness. I accept his evidence. Timothy Weston [121] Timothy Weston is the CEO of Student One Pty Ltd, the operator of three student accommodation sites in the Brisbane CBD which include 38 Wharf Street and 97 Elizabeth Street. [122] In his role as CEO of Student One, Mr Weston is familiar with the majority of the aspects of the development of student accommodation sites. He has considerable experience in the student accommodation industry since 2000, both in Australia and overseas. [123] Mr Weston is familiar, in broad terms, with how Excel models, known as feasibility models, work to produce a price to be paid for land. Mr Weston acknowledged that he was not the author of the two confidential exhibits before the Court. However, he did supply some inputs into the confidential models. His evidence was that he was comfortable in providing evidence to the Court on the processes associated with the models. 99 Ibid [155]. -- 40 of 104 -- 41 [124] The evidence of Mr Weston is of assistance to the Court in explaining the mind of developers regarding the concessions point. As Mr Weston was not the author of the confidential models, his evidence in that regard is of more limited utility than his general evidence regarding the concessions and how the market viewed them. [125] Mr Weston impressed me as an open, honest, frank witness. He was careful never to divulge in open Court confidential information. I accept his evidence, and in particular, his evidence generally, regarding the market view of the concessions. I also accept his evidence as to the way in which feasibility models operate and the purpose they serve. Grant Jackson [126] Mr Jackson has an impressive CV. He obtained his qualifications as a valuer in 1989 with an Associate Diploma in Valuations from RMIT. He is a Fellow of the Australian Property Institute (API), a past Councillor of the Victorian Divisional Council of the API, a member of the Divisional Professional Board of the API, a registered valuer in Queensland, a practising real estate valuer in New South Wales, a licensed valuer in Western Australia, and a certified practising valuer. [127] Mr Jackson is the Chief Executive Officer (CEO) of m3property. He lists his experience as involving all property types including CBD office accommodation, major shopping centres, industrial estates, residential subdivisions, residential properties, and numerous specialised properties. He has appeared in courts and tribunals throughout Australia. [128] Mr Jackson and Mr Hart produced two JERs which relate to each subject property. The JER for 310 Ann Street is Exhibit 3 and Exhibit 4 is the JER for the 300 Ann Street subject. [129] I will not repeat what is said in the submissions of the parties regarding the merits and the weight that should be given to Mr Jackson’s evidence. It must also be noted that I have made certain findings regarding the evidence of Mr Jackson as part of my evaluation of a number of points and questions which required answers. I will not repeat those comments either. -- 41 of 104 -- 42 [130] Taking all of my conclusions, all of his evidence, and all of the submissions into account, I find, in the main, Mr Jackson to have given reliable evidence to the Court save for a number of specific exceptions which I have detailed. Speaking overall, and in general terms, I mainly prefer the evidence of Mr Jackson to that of Mr Hart. Benjamin Hart [131] Mr Hart holds a Bachelor of Business Management - Real Estate and Development from the University of Queensland and was placed on the Dean’s Honours Roll in July 2004 for outstanding academic achievement. He is a certified practising valuer and an associate member of the API. [132] Mr Hart supervises, manages, and coordinates a team in the State Valuation Service responsible for all statutory land valuation assessments in the Brisbane CBD and fringe areas, which equates to approximately 15,000 of valuation records. Mr Hart has provided expert evidence before the Land Court of Queensland in court proceedings and has also participated in preliminary conferences and mediations convened by the Court. [133] Just as I did for Mr Jackson, I will not repeat what is said in the submissions of the parties regarding the merits and the weight that should be given to Mr Hart’s evidence. It must also be noted that I have made certain findings regarding the evidence of Mr Hart as part of my evaluation of a number of points and questions which required answers. I will not repeat those comments here. [134] Taking all of my conclusions, all of his evidence, and all of the submissions into account, I find, in the main, Mr Hart to have given less reliable evidence to the Court than Mr Jackson, save for a number of specific exceptions which I have detailed. Reasoning of the Court [135] The approach that I have taken to determining these appeals is to set out a number of points and questions relating to key issues that need to be addressed, based on the submissions of the parties and the evidence presented. -- 42 of 104 -- 43 Expert opinion point [136] I will start with what may be described as the “expert opinion point”. The questions for my consideration in this regard are: Did Mr Jackson properly base his expert opinion on facts? Did Mr Jackson give expert opinion evidence which should not be admitted (or be given no/little weight) given the authorities on expert evidence? [137] The respondent makes its submissions on this point at paragraphs 38 to 46 of its submissions. As the respondent correctly points out, the fact that most of the evidence upon which this Court acts in valuation appeals is opinion evidence brings into sharp and important focus the relationship between the relaxation of the rules of evidence generally which applies in this Court, and the rules relating to the admissibility of expert evidence. [138] The respondent points to the principle of general law about the admissibility of expert evidence reflecting an underlying premise that opinions are held by everyone, and are not, in themselves, evidence of any fact. A special exception is made for expert opinion evidence on the basis that, despite not being evidence of fact, it can supply the Court with a testable methodology or process of reasoning from primary facts to a conclusion on an ultimate fact in issue. [139] For that reason, an expert’s opinion, in itself, has little weight. What is important, is the full exposure (and testing where required) of the reasoning process by which the expert has started with proved or admitted facts and then reasoned to his or her conclusion. [140] I agree with the respondent’s proposition that the general law requirements in order for expert opinion evidence to be admissible (and have weight) are now well-settled and were concisely expounded and summarised by Heydon JA, as his Honour then was, in Makita (Australia) Pty Ltd v Sprowles.100 The respondent summarised them this way: 100 (2001) 52 NSWLR 705, 743–4 -- 43 of 104 -- 44 1. there must be a field of specialised knowledge which permits reliable conclusions to be drawn from particular facts in a way which could not reliably be done by an ordinary person on the street; 2. the witness must demonstrate that, by reason of specified training, study or experience, the witness has become an expert in that field or a relevant aspect of that field; 3. the opinion given must be wholly or substantially based upon that particular expert knowledge; 4. the opinion must be based upon facts which are proved, either in direct factual testimony by the expert, or by other admissible evidence of those facts; 5. the facts must form a proper foundation for the opinion which is sought to be drawn from them; 6. the witness must explain how he or she has applied his or her specialised knowledge to the relevant facts in order to reach the asserted expert opinion, that is, he or she must explain and justify the methodology or reasoning, based upon expert knowledge, which has led from the fact to the conclusion. [141] That statement has been directly endorsed by the High Court in Dasreef Pty Ltd v Hawchar.101 [142] The respondent says that the evidentiary role of expert evidence, which gives it its value but also limits its utility, is that it supplies the Court with a methodology or other logical process of reasoning by which the Court can be assisted in its task of reasoning from primary facts to ultimate conclusion in a way that it could not reliably do without that assistance. I agree. [143] As dealt with in the topics that follow below, I have found that Mr Jackson did not have a sufficient factual evidentiary basis on which to base the 100% allowance for the concessions for which he contended for Sales 1 and 2. That conclusion is of course supported by, and consistent with, the authorities put forward by the respondent applying to expert opinion evidence. I did however find for Sales 1 and 2 that there was sufficient factual evidence to support a partial allowance for the concession; just not the full 100% opined by Mr Jackson. Thus understood, even as 101 (2011) 243 CLR 588, 604; [2011] HCA 21. -- 44 of 104 -- 45 regards the concession point for Sales 1 and 2, Mr Jackson did produce compelling evidence to illustrate a partial percentage allowance for the concessions. [144] In like manner, as regards Sales 3, 4, and 5, I have found in the topics below concerning those sales that Mr Hart did not provide an adequate factual basis on which to lay the foundation for his opinion that those sales were comparable to the subjects. As regards those sales, Mr Hart failed the evidentiary tests required of experts giving opinion evidence as well. [145] Both Mr Jackson and Mr Hart gave a significant amount of evidence, particularly in oral form, to the Court. It is not surprising, but nonetheless regrettable, that on occasion both Mr Jackson and Mr Hart expressed expert opinions not based on sound factual evidence. [146] Having regard to the full body of evidence and the opinions of Mr Hart and Mr Jackson, and the assistance of the submissions in this area by the parties, I have specifically referred in these reasons to any critical aspects of the evidence in which I am satisfied that either or both expert has not had the factual basis present to make out the opinion that they express. Rehearing point [147] I now turn to what may be described as the “rehearing point”. This issue has stemmed from a difference between the parties as to the relevance of evidence presented by Mr Stephen Cross (an employee of the respondent), and the interpretation of s 169 of the LVA. I note, again, for the purposes of this decision that subpoenas issued against two employees of the respondent were sought to be set aside by the respondent. By my decision in F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General102 I refused the respondent’s application. I also found in that decision that, because the appellants were attempting to lead evidence from the departmental employees so late in the process, leave of the Court would be required before they could give evidence. I subsequently gave leave for Mr Cross to be called to give evidence. 102 [2018] QLC 27. -- 45 of 104 -- 46 [148] Mr Cross gave evidence to the effect that he made the “final decision” for each of the decisions on objection103 and that having signed the decision on objection he did not depart from the reasoning contained within it.104 He was provided with a recommendation by Mr Wall, and would ask for any further information if he thought it necessary to do so.105 [149] In the respondent’s discussion of a rehearing in its submissions, the respondent submits that there is nothing in the statutory scheme for LVA appeals which constitutes those appeals as any form of review of the decision-making process at the objection decision stage.106 [150] The Valuer-General further submits that the question as to whether the “rehearing” referred to in LVA s 169(2) is a hearing de novo or a narrower form of appeal right does not appear to have been directly addressed under the LVA, and appears to have been given little consideration under preceding legislation. The respondent says that that may have perhaps been because, having regard to the way in which appeals have always run before this Court (as adversarial litigation with each party calling evidence from the witnesses it chooses), the issue was never thought to be contentious. The respondent contends that such limited authority as can be found supports the proposition that the present appeal is a hearing de novo in the full sense of that term. This is an important issue in terms of the scope of admissible evidence, including evidence called by way of subpoena, in valuation appeals under the LVA.107 [151] The respondent went on to submit that if its submissions were accepted, that would have two particular consequences: “(a) as a matter of broad principle, it is neither required nor relevant for an Appellant to demonstrate that the valuation issued as the outcome of the objection decision process exhibits some kind of ‘legal, factual or discretionary error’, as that is the circumstance under which an appellate body may intervene under an appeal by way of rehearing in the narrow sense, but is a circumstance which is simply irrelevant in the context of a hearing de novo because it is the statutory site value of the subject land, not the reasoning or other aspects of the decision-making process for the objection decision which is the subject matter of the litigation consequences; 103 T 7-63, line 20. 104 T 7-65, lines 28 to 30. 105 T 7-63, lines 15 to 18. 106 Respondent’s written submissions, [24]. 107 Ibid [25]. -- 46 of 104 -- 47 (b) for this particular case, the evidence which was called, over objection, from Mr Cross is demonstrated to have no relevance as a matter of law - senior counsel for the Appellant Mr Traves QC was clear in disavowing any intention to rely upon the evidence of Mr Cross as expert opinion evidence, and it can therefore be treated as nothing more than evidence about the way in which the objection decision was made - in a hearing de novo that is probative of nothing between the parties as they have joined issue on the grounds of appeal, expert reports and the oral evidence of their expert witnesses.”108 (citations omitted, emphasis in original) [152] In their reply, the appellants say that the respondent has sought to define the appeal by reference to general classifications of appeals rather than by proper construction of the statute from which the appeal is derived. The appellants cite and mention that the High Court has warned against this error, referencing Lacey v Attorney-General for the State of Queensland (2011) 242 CLR 573 at [57]. [153] The appellants say, properly construed, the LVA contemplates that an error in reasoning made by the respondent in deciding a decision on objection may be relevant to discharging an appellant’s onus. In this case, the appellants say it can be shown that errors in the reasoning on the decision on objection are logically probative of the grounds of appeal.109 [154] It was the respondent in these proceedings, the Valuer-General, who was the appellant in the appeal in the Tennyson Reach matter earlier referred to in this decision. In that case, the Valuer-General successfully argued before the Land Appeal Court that the proper construction of the LVA is that it is necessary for an appellant to first discharge the onus of proof before the Court is permitted to go on to consider the appropriate site value for the land in question under the LVA. [155] I agree with the appellants’ submissions that as a result, the evidence of Mr Cross as the decision-maker on the notice of objection is relevant, because these appeals are not, as they are so often colloquially referred to as, appeals against the LVA value of land, but are in fact appeals against the Valuer-General’s decisions on objection (valuation appeal). As I said in my analysis of the legislative principles, in appeals against decisions on objection, appellants bear the onus of proof for each of the grounds of appeal articulated in notices of appeal. 108 Ibid [26]. 109 Appellant’s reply submissions, [12]–[13]. -- 47 of 104 -- 48 [156] So what then are the grounds of appeal in in these matters? For 300 Ann Street, I need to go no further than grounds of appeal 1 and 2. Ground 1 relates to the appellants’ contention that the highest and best use of the land is for commercial office development. Ground 2 states that the development of the land for student or residential accommodation purposes does not represent its highest and best use.110 As regards 310 Ann Street, identical grounds are relied upon as above except they are numbered grounds 2 and 3. [157] As the appellants correctly point out, Mr Cross acknowledged that the decision on objection with respect to 310 Ann Street was made without having regard to a particular highest and best use.111 Mr Cross explained that the basis for his failure to do so was because the parcel is notionally vacant and has the same zoning as other CBD sales, they are treated on an equivalent basis.112 Mr Cross’ evidence was that he decided that the development potential was constrained only by the planning scheme and the presence of the easement on the land. [158] Mr Cross said that no highest and best use was adopted for the valuation of 300 Ann Street on the same premise as the decision on objection for 310 Ann Street.113 Mr Cross decided that the development potential of the land was not constrained in any way other than by the planning scheme.114 [159] For completeness, I note that the respondent’s decisions on objection disclose very little information on the decision to the appellants. The decision on objection for 300 Ann Street was to reduce the valuation from $12 million to $11.5 million. The reason for the decision was stated as follows: “When compared to similar properties, the delegate decided a change in the valuation should be made.”115 [160] As regards 310 Ann Street, the decision on objection was to reduce the valuation from $31 million to $26 million. The reasons for the decision were stated as follows: “When compared to similar properties, the delegate decided a change in the valuation should be made. 110 Ex 1 page 91. 111 T 7-65, lines 43 to 44. 112 T 7-65, line 44 to T 7-66, line 2. 113 T 8-8, line 43. 114 T 8-9, line 8. 115 Ex 1 page 110. -- 48 of 104 -- 49 An error or omission in the valuation was made and therefore it has been amended”116 [161] The Valuer-General correctly contends in cases such as Tennyson Reach and the appeals at hand that appellants bear the onus of proof in their appeal against the decision on objection, but then provides little detail in the decision on objection. However, when the appellants in these cases set out grounds of appeal clearly challenging the decision-making process for the decision on objection, the Valuer- General then seeks to exclude, or render as nugatory, any evidence from the decision- maker which may be relevant to the appellants proving one or more of their grounds of appeal. [162] Mr Cross clearly gave evidence which was relevant to the appellants discharging their onus of proof as regards the appeal grounds relating to highest and best use. The evidence of Mr Cross is relevant to the grounds of appeal and will be given such significance as is warranted in determining whether or not the appellants have discharged the onus in each appeal. [163] I should mention something further in this regard. My comments above should not be taken as in any way endorsing a fishing exercise by an appellant in seeking to call LVA decision-makers. The grounds of appeal must relate to the decision on objection and the evidence that can be given by a decision-maker must be pertinent to a ground or grounds of appeal. Any appellant who seeks to call evidence from an LVA decision-maker, in circumstances other than those I have identified, would run a severe risk of either being found to embark on a fishing exercise or acting frivolously and vexatiously and would run a considerable risk of awards for costs being made against it. Merged market theory point [164] The evidence of Mr Cross was that, in making his decision on objection, he was guided by what he referred to as the “merged market” theory. [165] Mr Cross gave evidence that, in making his decision, he had regard to the merged market theory as expressed in a prior case by then President Trickett: “And what at that time did you understand the decisions to mean? What was the theory, in other words?---Well, I can – I have an excerpt from the 116 Ibid page 62. -- 49 of 104 -- 50 decision that explains it by the previous Land Court President which I think summarises it pretty well. And this is quoting Mr Trickett, then President Trickett, and he says: I have reached the conclusion that the relevant date of purchase of development sites in the CBD, whether for commercial or for residential purposes, were competing in the same market. Each site would then be developed in the manner which would provide the developer with the maximum return, regardless whether that be retail, commercial or residential. Thank you. Now, what’s the evidence upon which you rely – that being a 2003 decision, what’s the evidence upon which you relied – it was in relation to a 2003 valuation – what’s the evidence you – first of all, did you apply in your decision that merged market theory?---What we applied was, as I said earlier, the – the sales [indistinct] sites. They – each site can – you know, notwithstanding size, can entertain a similar use and we – we compared them directly to the subject properties.”117 [166] Mr Cross also gave the following evidence: “…So I was asking Mr Cross – you’ve read to us the passage from the case about the merge market theory and I asked you a question about what evidence you based your view upon which you proceeded that the merge market theory was valid in 2015. MR CROSS: Well, the only evidence I had was the most recent sale as being 62 Ann and 62 Ann Street was December ’15. All the other sales admittedly were student accommodation and [indistinct] apartments. Sixty- two Ann which has again – [indistinct] but, I mean, this is all subsequent events, but it was a sale two months after the date which sort of reaffirmed or belief.”118 [167] The evidence of Mr Cross continued the next day on this point: “Now, yesterday, I was asking you some questions about the merged market theory, and I said to you – I asked you a question about what evidence you based your view upon, upon which you proceeded, on the basis – that a merged market theory was valid in 2015. Now, you said: Well, the only evidence I had was the most recent sale as being 62 Ann Street in December 2015. Yet when we look at the objection decision, that sale does not appear in the document?---No, it’s not one of the sales listed. Reference is made to it, I think, in some of the commentary, I thought, in the valuer’s response to point 3 on page 2 which, again, I mean – again, this is – in terms of - - - Yeah, I see it. All right. I’ve got that. Thank you. So it’s not listed as a sale, but there’s reference to it is your point?---Yeah, that’s correct.119 … 117 T 7-67, lines 29 to 45. 118 T 7-69, line 43 to T 7-70, line 5. 119 T 8-3, lines 1 to 15. -- 50 of 104 -- 51 “Have you given – is there anything else apart from the fact of the sale, a commercial sale, is that the only fact upon which you rely in supporting the merged market theory?---It’s the predominant fact. Thank you. Is there any other fact that you want to tell us about?---No.”120 [168] The authority that Mr Cross was speaking about was then President Trickett’s determination in the case of Multiplex 240 Queen Street Landowner Pty Ltd v Department of Natural Resources, Mines and Water121(Multiplex 240 Queen Street). In that case, then President Trickett specifically considered the merged market theory. His Honour had this to say: “The Theory of Merged Markets [161] Mr Denman conceded that the highest and best use of the subject land and the appeal property at 239 George Street, was for development for commercial office towers with ground floor retailing. However, after his second adjustment to the sale of 6 Queen Street, Mr Denman claimed that the highest and best use of the three other appeal properties would be for residential purposes. Indeed, he went further and expressed the view that each site in the CBD, excluding the retail Mall area, was equally suitable for commercial or residential use. [162] Mr Jackson rejected those contentions, maintaining that there were distinct markets for commercial and residential uses and that such use was generally dictated by location; the residential sales took place in residential precincts, while the commercial sales were confined to the traditional commercial precinct. [163] However, from the evidence in all these appeals, I have reached the conclusion that at the relevant date purchasers of development sites in the CBD, whether for commercial or for residential purposes, were competing in the same market. Each site would then be developed in the manner which would provide the developer with the maximum return, regardless of whether that be retail, commercial or residential. This 'theory of merged markets' as it was called, was evident in the sales considered by the Land Court in the Perpetual Trustee Company case. After referring to Mr Jackson's evidence distancing himself from the residential sales and suggesting the Court could disregard them (which was again his evidence in the present appeals), the Land Court said: 'I do not accept Mr Jackson's evidence … to the effect that the market evidence showed that residential development was not actively pursued in the main commercial office areas of the CBD. I agree with Mr Kirby that this was not so as evidenced by the development of the Felix site and the significant residential component within the Riparian development.' [164] In the Perpetual Trustee Company case, both valuers had regard to residential sales as well as commercial sales, because at the relevant dates there was evidence of 'strong demand' by developers 120 T 8-7, lines 34 to 38. 121 [2007] QLC 10; (2007) 28 QLCR 20. -- 51 of 104 -- 52 of high-rise residential buildings. While accepting that the market did not differentiate between commercial and residential sites, the Land Court emphasised that this did not necessarily mean that residential buyers would be prepared to pay the same price for the same sites, nor that the same sites would be of equal interest to commercial and residential buyers. [165] Mr Jackson had given evidence in that case that sales for commercial office space yielded a 'slightly higher' rate/m². However, in the present cases, Mr Jackson had obviously changed his view and contended that the residential sales were irrelevant. [166] In determining the 2001 appeal in the Perpetual Trustee Company case, the Land Court stated that the Aurora, Felix and Emerald Tower sales offered the best evidence of value for the relevant part of 175 Eagle Street. Quite clearly, the Court regarded the residential sales as appropriate as a basis for determining the unimproved value of that property, which the Court had found to have a highest and best use for commercial development. I have come to the same conclusion in the present cases. … [171] The appellant contended that the market in the CBD could be compartmentalised into commercial and residential. However, it seems to me that distinction was no longer so apparent, given the encouragement of the planning scheme for residential development throughout the CBD and the increasing nature of such development. Individual developers may prefer one type of development to another, but many developers have the capacity to undertake both residential and commercial development sometimes in the same development, for example, Riparian and Vision. Mr Jackson conceded that purchasers of sites for residential development could be in competition with purchasers of sites for commercial development, but would be looking for different attributes. [172] The fact that most sales for residential development are in the so- called residential precinct was explained by the fact that the area is a secondary location, with more sites available and ripe for development than in the traditional commercial precinct. [173] The appellant contended that the later residential sales were in a market which was driven by demand for residential property and are not truly comparable with the subject lands. However, from the evidence given in the Perpetual Trustee Company case and from letters written by Mr Jackson to his clients before the commencement of these cases, it is clear that Mr Jackson did not always regard residential sales as entirely irrelevant. Indeed, in his advice to his clients he referred to residential sales, but not the later ones. In fairness, however, Mr Jackson advised that the highest and best use of the appeal lands could not be residential, because of his interpretation of the QNI Metals case, which I have found to be mistaken. [174] Therefore, I accept that the evidence of the residential sales is not only relevant, but is a crucial part of the sales pattern for determining the unimproved values of the present appeals. Mr Jackson's contended valuation levels of $3,000/m² and less for any of the appeal lands are rendered quite untenable by the evidence of the residential sales.” (citations omitted) -- 52 of 104 -- 53 [169] As the respondent strongly puts it is its written submissions at paragraph 71: “Mr Jackson’s proposition that there are distinct and separate markets for land intended at the time of purchase to be put to different uses is a proposition that this Court cannot accept in the context of the Brisbane CBD, its planning framework and the established pattern of mixed development (as at the valuation date of 1 October 2015) absent market evidence which goes beyond a mere assertion by Mr Jackson” (footnote included - A mere assertion by an expert, without supporting facts – in this case evidence to establish that there is no competition for sites in the CBD between potential purchasers who have different development intentions - contravenes the rules of expert evidence, is strictly inadmissible despite s 7 of the Land Court Act 2000, and in any event can be given no material weight). [170] The appellants certainly do not agree with the respondent’s submission. Specifically, the appellants have this to say in their reply: “82. The Respondent’s submission at paragraph 71 suffers from a lack of definition. What is, and what is not, a ‘market’ is a complicated question, capable of different definitions depending upon the context. Mr Jackson [sic] contention was that commercial developers at the relevant date were not prepared to pay nearly the same for development sites as were residential developers (or for that matter, student accommodation developers): in that sense, there were different markets. It is a simple and unremarkable proposition. In broad terms the evidence lies in the level of activity and prices paid by the residential and student accommodation purchasers, and the absence of commercial buyers over a number of years. 83. Mr Hart’s approach, supported by the Respondent, that the ‘relevant market is the market for CBD redevelopment sites’ simply serves to distract from and obfuscate the true exercise, which is to seek out and find the best sales for comparison purposes given the agreed highest and best use for the subject sites. It serves also to cloak the obvious errors in Mr Hart’s approach to the process of comparison.” (citations omitted). [171] In my view, there is not much mystery to the merged market theory. Such a theory, however, simply cannot be accepted and carried forward from valuation year to valuation year without a proper evaluation of market evidence. Perhaps the evidence of the market will be an appetite for any land for development, whatever the purpose, like it was in 2003. Perhaps it will be that the market, because of issues of oversupply, economic imperatives, downturns, or the like, will be more discerning as to the particular attributes of particular properties. [172] It is certainly true that there are common planning procedures in place for blocks of land within the Brisbane CBD. There can be no more fundamental point in the valuation methodology than that, in the best of circumstances, in determining a value for a property, the best source to look for are sales on or around the time of the -- 53 of 104 -- 54 valuation (or acquisition in the case of acquisition matters) which, as near as possible, reflect the core attributes of the subject property. This is a concept as old as Spencer, and it remains just as valid today. Of course, it can often be difficult finding sales which closely resemble a subject property. The task of the valuer is then to consider the sales and to take into account differences with the subject to make the two comparable. The closer the similarities between the subject and sale property, the less the adjustment that has to be undertaken. On the other hand, the more the differences between a subject and sale property, the more analysis required until you reach the point where the sales are so different to the subject that they cannot reliably be made comparable and they are set aside. [173] Clearly for the Brisbane CBD, a good starting point is the fact that, on paper, in accordance with the planning scheme, all properties in the CBD have a common underlying regulatory scheme in which to work, that being the City Centre Neighbourhood Plan (CCNP). I have no doubt that, for many Brisbane CBD properties, a merged market did exist at the valuation date. Based on the evidence I have heard in this case, the submissions, and the authorities, such a merged market would exist in circumstances where the highest and best use of a property (property X) fell within multiple classifications, such as commercial, residential, mixed retail/commercial and/or residential, student residential, and the like. Any sale properties in the CBD which were also suitable, on a highest and best use basis, for multiple forms of development would clearly be comparable to property X, including sales which were purchased purely for land banking. [174] In addition, a merged market in the CBD would exist at times when the market for properties for sale within the CBD was such that all purchasers, whatever their preference for proposed development, were on the lookout for any properties that they could find. As I read the decision of then President Trickett in Multiplex 240 Queen Street, that was the state of the market which the evidence in Multiplex 240 Queen Street showed, leading to his Honour’s conclusion that a merged market existed in the CBD in 2003. Given the same facts as then President Trickett had before him, I have no doubt that I would reach the same conclusion as he did. [175] The facts of the market as at, and before, 1 October 2015 are very different to those which were before then President Trickett for 2003. -- 54 of 104 -- 55 [176] As the market evidence in the cases before me makes clear, properties in the Brisbane CBD in 2015 did not neatly fall into a one-size-fits-all category. 300 and 310 Ann Street are clear examples of this. Speaking in broad terms, their highest and best use is for relatively low rise (20-storeys or so) commercial buildings. Part of the reasons for this is the general location of 300 and 310 Ann Street on the fringe of the CBD, well away from the Brisbane River and any river views. Specifically regarding these two properties, there is the added burden of a railway tunnel passing underneath. It is common ground between the parties that factors such as this resulted in both 300 and 310 Ann Street gaining the highest and best use classifications that they received. [177] I simply cannot accept, given the market conditions existing in 2015, that a sale site having a highest and best use of a residential tower of say 80-storeys, with commanding views of the Brisbane River, can be seen as directly comparable to 300 and 310 Ann Street for the reason that they are all located within the Brisbane CBD with the same planning scheme (CCNP) and are thus, part of the same “merged market”. In my view, to so find, given the facts of the case at hand, and the market evidence at and around the valuation date, would be an absurd result. Experience has taught me in determining valuation matters that, if an outcome I am proposing would be considered an absurd result, that probably means that I have the law and/or the facts of the case wrong. [178] I accept the evidence of Mr Jackson, supported, at least in part, by Mr Hart, that as at the valuation date there were clearly different purchasers in a different market seeking to purchase land suitable for a 20-storey commercial development on the fringe of the CBD, when compared to purchasers in the market for land suitable for an 80-storey development in a prime CBD location with commanding views of the Brisbane River, even allowing for the fact of the CCNP. On the facts as presented in this case, that is how the market works. Such an outcome is neither surprising nor absurd. [179] Distinctions such as highest and best use and other attributes will often come down to a matter of degree, and always to the overall market evidence. That is what the art of expert valuation evidence is all about. [180] It follows that I prefer the evidence of Mr Jackson over that of Mr Hart as regards his analysis of the Brisbane CBD market at, and in the years prior, to the valuation date of 1 October 2015. I stress that I make such finding in a general way only, and on the -- 55 of 104 -- 56 particular facts of these appeals. There are analyses of some sale properties in these matters before me in which I prefer, for specific points of difference, the analysis of Mr Hart over that of Mr Jackson. On other occasions, I do not find for the proposition put by either Mr Hart or Mr Jackson, such as the analysis of both experts with respect to concessions arising in certain student accommodation sales. [181] Specifically in the aspect of student accommodation concessions, I have found that the factual evidence does not support Mr Jackson’s opinion of a 100% allowance for the concession; likewise, I have found that the factual evidence does not support Mr Hart’s allowance of nil for the concession. As I have determined later in these reasons, the facts call for an outcome which falls somewhere in between those two extremes. Residential apartment market issue [182] Under this heading, the ultimate question for my consideration is: are Sales 3, 4, and 5 reliable sales of comparison to the subjects? [183] In relation to Sales 3, 4, and 5, the appellants rely upon the residential apartment market between the dates of the sales and 1 October 2015, and the evidence of Mr Jackson, to contend that these are not reliable sales of comparison.122 [184] The appellants rely upon Mr Jackson’s evidence to submit that the market for new residential apartments experienced its lowest level of supply between 2010 and 2017; in 2014 the demand for high rise residential accommodation was high; and in 2015 there was a spike of new apartments and therefore little demand to develop high rise residential accommodation in 2015.123 [185] The appellants submit that Sale 4 (30 Albert Street) was not reasonably exposed to the market, and therefore the sale must be approached with caution. I will address that question separately. The appellants go on to say that all Sales 3 to 5 are not comparable to any of the subject properties in these appeals. [186] In Exhibit 3, Mr Jackson has this to say: “196. Mr Hart relies upon three (3) sites purchased for high rise residential apartment development as his primary evidence. It is evident significant weight is placed on these sales by Mr Hart given the conclusion of value he adopts for the subject property. In my 122 Appellants’ written submissions, 44. 123 Ibid [112]. -- 56 of 104 -- 57 opinion, without significant reliance on those sales, Mr Hart would derive a significantly lower assessment of site value for the subject property. 197. I have placed no weight on these sales for the following reasons; • Each sale is in a vastly different area of the Brisbane CBD • Each sale has a highest and best use of residential apartment development, incompatible with the agreed highest and best use of the subject property. • One sale (443 Queen Street) is situated on the Brisbane River with uninterrupted • views and aspect. • Each sale has received approval for high rise development (up to 80 storeys) compared to the low rise nature of the subject property. • Two sales (30 Albert Street & 240 Margaret Street) are situated within a recognised residential precinct of the Brisbane CBD in close proximity to the Botanical Gardens and Brisbane River. • All the sales sold in 2014 in a market which was conducive to residential apartment • development which differs from 1 October 2015. • Ann Street is predominantly a commercial precinct with Ann and Turbot Streets being high traffic volume arterial roads through the CBD compared to the quieter and more pleasant environment for residential development in Albert and Margaret Streets and overlooking the Brisbane River in Queen Street. • Based on my enquiries with an experienced real estate agent in selling and marketing residential apartments in the Brisbane CBD, it is not viable or feasible to consider residential apartment development in Ann Street. Annexure 13. 198. I believe each of the residential apartment sales offer no assistance to assessing the site value of the subject property and there are better sales in closer proximity with superior comparative features to compare and adopt.” (emphasis in original) [187] Mr Jackson then goes on to a more in-depth analysis of Sales 3, 4, and 5. [188] Mr Hart in Exhibit 3 has this to say regarding Sale 3: “Location and Surrounding Development 261. Sale No.3 is in an inferior location for commercial office development in comparison with the subject. It is located outside the established commercial office area which is further away from the Brisbane Central Station and Brisbane GPO. 262. Sale No.3 is in a more preferred location for residential development because of its proximity to the Botanic Gardens. It adjoins several dated office buildings and the 90-storey Sky Tower development currently under construction. The surrounding development consists of several vacant redevelopment sites. The Abian Tower, located in the corner of Alice and Albert Street is the only recently completed residential development in this area. -- 57 of 104 -- 58 263. The location and the surrounding development of Sale No.3 are considered to be inferior in comparison with the subject property for commercial office purposes. Land Size, Shape and Dimensions 264. Sale No.3 has a land size of 1,715 m² and width of 40.447 metres and a depth of 42.39 metres. It has a smaller land size in comparison with the subject but a superior and more efficient shape and dimensions for development. 265. Sale No.3 could accommodate a development with a greater amount of GFA and building height in comparison with the subject. 266. The shape and dimensions of Sale No.3 is considered to be superior in comparison with the subject. Street Frontage and Topography 267. Sale No.3 has a single 40.447 metre to Margaret Street and is considered to have inferior street frontage in comparison with the subject. 268. The topography of Sale No.3 is considered superior in comparison to the subject. Other Considerations 269. Sale No.3 is identified as being impacted by flooding for development purposes. This is less preferred in comparison to the subject and an allowance has been considered to reflect the impact on developing a site impacted by flooding from the Brisbane River. Easements and Rail Corridor 270. Sale No.3 has no easements listed in title and is not impacted by a rail corridor. Sale No.3 is considered superior in relation to these attributes in comparison to the subject.” (emphasis in original) [189] Mr Hart put his contentions for Sale 4 this way in Exhibit 3: “Location and Surrounding Development 271. Sale No.4 is in an inferior location for commercial office development in comparison with the subject. It is located outside the established commercial office area which is further away from the Brisbane Central Station and the Brisbane GPO. 272. Sale No.4 is in a more preferred location for multi-unit residential development in comparison with the subject because of its proximity to the Botanic Gardens. 273. The location and the surrounding development of Sale No.4 are considered to be inferior in comparison with the subject for commercial office purposes. Land Size, Shape and Dimensions -- 58 of 104 -- 59 274. Sale No.4 has a smaller overall land size in comparison to the subject and is affected by a 365 m² heritage listed laneway identified as Lot 11 on RP1073. The remaining area, identified as Lot 9 on SP142332, is 1,642 m². This portion is smaller than the subject but superior in terms of shape and dimension in comparison to the subject. 275. This portion could accommodate a development with a greater amount of GFA and building height. 276. The purchaser, post-sale, gained approval for high residential tower with basement parking over Lot 11 and Lot 9. The development of the ground, podium and towers levels are restricted to Lot 9. 277. When making a comparison to the subject based on the overall rate, an allowance has been considered reflect the inability to develop over the laneway, the requirement to preserve the heritage features and provide and maintain vehicular access to the adjoining sites. Street Frontage 278. Sale No.4 has a street corner frontage of 88 metres and is considered superior in comparison with the subject. Other Considerations 279. Sale No.4 is identified as being impacted by flooding for development purposes. This is less preferred in comparison to the subject and an allowance has been considered to reflect the flooding impacts to this site. Although the minimum ground levels of Sale No.4 are lower, the topography is considered superior in comparison to the subject. 280. Sale No.4 is impacted by burdening easements and is impacted by heritage constraints. It is not impacted by a rail corridor.” (emphasis in original) [190] For Sale 5, Mr Hart said the following in Exhibit 3: “Location and Surrounding Development 281. Sale No.5 is in a superior location for both residential and commercial office development in comparison with the subject. It has a Queen Street address but is located further away from the Queen Street Mall and Brisbane GPO. 282. Sale No.5 has a Brisbane River frontage and has superior views, natural light and air in comparison with the subject. 283. The location and the surrounding development of Sale No.5 are considered to be superior in comparison with the subject. Land Size, Shape and Dimensions 284. Sale No.5 has a land area of 2,183m² and has an irregular rectangular shape. The size, shape and dimensions are considered to be similar in comparison with the subject. 285. Sale No.5 is currently being developed into a residential tower with GFA of 31,553 m² and a building height of 40-storeys. The GFA and building height is considered superior in comparison to the subject. -- 59 of 104 -- 60 Other considerations 286. Sale No.5 is impacted by various constraints. Its topography, riparian frontage and flooding risk impact on the construction of foundations and basement levels. 287. Sale No.5 is impacted by various town planning constraints. They include a heritage listed wall located on the site, the requirements to address and demonstrate protection of numerous significant views and vistas of the adjoining heritage listed Customs House, the Story Bridge and the kangaroo Point Cliffs. The site is also impacted by a significant landscape tree that is subject to a vegetation protection order. These constraints carry some risk and impact on the redevelopment and an allowance has been considered to reflect these constraints when making a comparison with the subject. 288. Sale No.5 has two minor burdening easements and are located in areas that do not impact the existing basement areas.” (emphasis in original) [191] It is immediately apparent that Mr Jackson and Mr Hart have very different views as to the applicability of Sales 3, 4, and 5 to the subjects. Such differences were only exemplified during the concurrent evidence. The difference of opinion is hardly surprising. In this regard, it must be remembered that Mr Jackson did not rely upon Sales 3, 4, and 5, relying only on Sales 1, 2, 6, 7, and 8.124 On the other hand, Mr Hart specifically relies on sales 3, 4, and 5 as part of the five sales that he primarily relies upon, being sales 1, 2, 3, 4, and 5. He considers Sales 6, 7, and 8 to be of no assistance or only of very limited assistance for comparison purposes with the subjects.125 [192] The respondent, in its submissions, had the following to say as regards Sales 3, 4 and 5: “52. The contentious sales at 30 Albert Street, 240 Margaret Street and 443 Queen Street: (a) are located within the unique Brisbane CBD locality; (b) in terms of planning regulation, are subject to exactly the same planning regime involving a broad range or mix of uses all being code assessable; and (c) are in the same general order site area as the subjects - a little smaller than 310 Ann Street and 375 Turbot Street, and a little larger than 300 Ann Street, but not in either case by orders of magnitude. 53. Importantly, consideration of such sales by Mr Hart did not involve a proposition that ‘… every site in the CBD as equally valuable for development, whatever the use.’ it involved what one might have thought would be an uncontentious proposition that every site in the CBD which is subject to the same planning controls and which has been purchased for redevelopment is a site which assists the 124 Ex 3, page 11, table. 125 Ibid [289]–[315]. -- 60 of 104 -- 61 valuer in determining levels of value paid for redevelopment sites within the unique Brisbane CBD locality over a relevant time period. 54. Mr Hart’s asserted ‘recant’, an assertion forming part of a prolix attack on his reliance upon the sales rejected by Mr Jackson, is not in fact made out on the evidence. Mr Hart was happy to ‘concede’ that, at a particular point in time, the contentious residential sales do not reflect a level of value which would have been paid by a purchaser who could only use those properties for commercial development. He was happy to accept that their particular location and qualities make it more likely that they would be developed for residential rather than commercial office purposes. However, none of that gainsays the fundamental proposition that they are sales with sufficient points of comparability that to disregard them in the process of inferring a value for the appeal sites would be an error in terms of failing to have regard to the whole of the (limited) sales evidence relevant to Brisbane CBD values as at 1 October 2015. 55. Despite the lengthy and vituperative nature of the attack on Mr Hart’s credibility appearing in the Appellants’ submissions, the attack has little substance. The evidence referred to in support of those submissions by the Appellants reveals nothing more than the fact that Mr Hart took into consideration matters which distinguished the appeal sites from the sales, and applied his professional judgement to put the appeal sites (which he never suggested should be valued at the same amount per square metre as any of the residential or other sales) into their proper place in the range of values revealed by the sales evidence. Mr Hart’s approach was evaluative, as is the approach of any valuer. It was consistent with principle, and involved him undertaking the difficult but necessary task of placing the value of the appeal properties at an appropriate point within the range revealed by relevant sales. Ultimately, the Appellants’ attack does no more than reveal the impossibility of a valuer being quantitatively precise in circumstances where the range or basket of sales with which the valuer must necessarily and properly deal have sufficient points of comparison to make them relevant, but sufficient differences to make the process of comparison challenging. Mr Hart did not shirk from the challenge.” (citations omitted) [193] The appellants’ response was emphatic: “59. We emphasise the agreed highest and best use of the subject properties at 300 and 310 Ann Street being for a constrained commercial development in the present form of the land. Of course, the development is so constrained because of the physical constraints on the land imposed by the presence of the rail corridor. In light of the agreed highest and best use, it is not open to say that the subject properties have any potential for residential use or for mixed residential and commercial use. Indeed, Mr Jackson’s evidence based on his inquiries with Mr Roubicek of Colliers International supports the proposition that residential development on Ann Street is not viable, or to use the language of Morris J in ISPT, not a ‘realistic option.’ 60. Nor is there evidence which demonstrates what a purchaser intending a commercial use, or a mixed commercial and residential use, would pay for sites in the same residential precinct of the CBD -- 61 of 104 -- 62 in 2014 (or indeed, 2015). In fact, as Mr Hart conceded in cross examination, the residential sales were strong and represented record prices (T5-105 L 1-14); that at the valuation date, a commercial purchaser may not be prepared to pay the same site for sites as a residential buyer (T4-94 L 29-35); and to take 30 Albert Street, that it was unsuitable for commercial development (T4-96 L 5-10). The Respondent’s submissions at paragraph 47(d) should be read in the context that there is no evidence that a commercial development would have occurred at the 2014 residential sale sites (certainly not at those prices) , and we have noted the evidence that a residential development would not have occurred on the Ann Street sites. 61. Thirdly, the inapplicability of the 2014 residential sales is underscored by the near 60% adjustment required to those sales in order to compare them to the subject properties. Contrary to the Respondent’s submissions, the adjustment cannot be adequately explained by ‘conservatism’ or the exercise of ‘professional judgment’ (c.f. Respondent’s Submissions at [55] – [56]). Despite ample opportunity to clarify how Mr Hart reasoned the adjustments, they remain opaque. In that regard, we repeat our submissions regarding Mr Hart’s approach at paragraphs 214 - 246 of our primary submissions. Given the relatively few sales in or around the CBD from which to reason, the need to transparently set out his reasoning in making a 60% adjustment becomes all the more important. Mr Hart failed to do so and the Court should have no confidence in his reasoning in placing reliance on the 2014 residential sales. 62. Mr Hart’s opaque process of reasoning leading to such a substantial adjustment in comparing the 2014 residential sales is the approach criticised by Baker J in Australian Executor Trustees Ltd v Propell National Valuers (WA) Pty Ltd [2011] FCA 22 where his Honour said: ‘What a court does not expect a valuer to do is to list a number of property sales said to be directly comparable to the subject property and then to simply nominate the value that the subject property is said to carry. To do this has an air about it of speculation, something which good valuation practice is designed to avoid. As far as possible, the detail of the reasoning behind the valuation ascribed to a subject property by way of comparison to broadly comparable properties which have been sold needs to be laid out in the valuation.’” (emphasis and transcript references in original) [194] Sales 3, 4, and 5 were specifically referred to in ISPT Pty Ltd v Valuer-General; ISPT Custodians Pty Ltd v Valuer-General [2018] QLC 6 (ISPT 2018). I can do no better than quote from paragraphs 129 to 130 of the appellants’ submissions, which include a quote from ISPT 2018: “This Court’s previous findings with respect to Sale 3, 4, and 5 -- 62 of 104 -- 63 129. In ISPT Pty Ltd v Valuer-General; ISPT Custodians Pty Ltd v Valuer-General [2018] QLC 6, this Court made the following findings in respect to Sale 3, 4, and 5: ‘As to the sales in 2014 namely: 443 Queen Street, 240 Margaret Street and 30 Albert Street, I agree with the submissions made by Mr Anderson of Queens Counsel for the appellant. In his written submissions Mr Anderson said as Follows: “24. It is evident they were sales in a different market for a different use, severely limiting their comparability. Mr Jackson has given them little weight … for that reason. He does not discard them, as Mr Hart does in relation to the three sales at 55 Elizabeth Street, 304 George Street and 62 Ann Streets (see his reference to each of those sales in paragraphs 146, 153 and 165 of Ex. 14) but it is clear they do not feature high in the exercise. 25. It is equally clear that the sales are of limited comparability. Mr Jackson’s evidence was that they were sales into the peak of the residential market – a market that no longer existed with the same level of excitement at the date of valuation. His evidence is supported by market research conducted by Place Advisory and which appears in the tables on page 44 of Ex.14 (page 9 of that document). Strangely, it (the distortion in the residential market) appears also to be the position of Mr Hart who (as developed further elsewhere in these submissions) cites as a reason for the conservative downwards adjustment of his first arrived at site value for each subject, ‘continuing market demand for redevelopment sites in the Brisbane CBD driven by offshore investors’ Which he explained in oral evidence to be reflected ‘in those residential sales in 2014’ (T2-31/15), prompting him to refer to the sale at 30 Albert Street for example, as evidencing a ‘massive increase’ (T2-31/15). 26. In this respect also it remains particularly curious that, as noted above, the Valuer General can maintain a position that the same five sales that supported the valuation when the subjects were considered highest and best use residential, can support the same valuation despite the change to highest and best use commercial. The sales readily enough support a higher figure for a residential highest and best use, but to say they support the same value at a different use is something else.”’ 130. Mr Jackson’s evidence in these appeals is that his approach is consistent with the Court’s findings that Sale 3, 4, and 5 were in a different market, for a different use which therefore severely limits their comparability. For the reasons developed below in respect of the application of the sales, it is respectfully submitted that Mr Jackson’s approach is correct.” (emphasis in original) [195] I accept the evidence of Mr Jackson regarding Sales 3, 4, and 5. I also accept the submissions of the appellants regarding these sales. Further, in my view, the criticisms of Mr Hart set out in the appellants’ reply on these sales is well-made. -- 63 of 104 -- 64 [196] In addition, I note, and concur with, as far as differing cases but involving the same sales allow me to, the observations made by his Honour Member Cochrane in ISPT 2018 concerning Sales 3, 4, and 5. [197] It follows that Sales 3, 4, and 5 are not of assistance for comparability purposes with the subjects. Was Sale 4 (30 Albert Street) reasonably exposed to the market? [198] Before leaving Sale 4, for completeness, I will also consider whether or not, in light of s 18 of the LVA, this sale was reasonably exposed to the market. [199] The appellants refer to this issue at paragraphs 125 to 128 of their submissions. They correctly point out that Sale 4 was not placed on the market by the vendor and both valuers agreed it was an off-market transaction.126 The vendor received an unsolicited offer from an overseas purchaser to acquire the property. The offer received was almost double what the vendor had paid for the site six months before. The vendor had purchased the property in December 2013 for $18,750,000 and sold it in July 2015 for $35,000,000.127 [200] The appellants note the following evidence from Mr Jackson regarding off-market transactions: “MR JACKSON: Consistent with my experience, when an owner of a property is approached off market, the owner immediately has an advantage in the bargaining process. When you get an unsolicited approach and your property is not on the market, that gives you a position of strength, because someone is coming to you and coercing you to sell a property which otherwise is not on the market. So there – my experience tells me that there must be a premium attached in that situation, to encourage the vendor to sell the property, in circumstances where the property is just simply not on the market.”128 [201] In light of Mr Jackson’s evidence, the appellants submit that it stands to reason that the sale included a premium, as the vendor was content to sell without exposing the property to the market. Further, the appellants contend that “the unusual circumstance of the price almost doubling in six months must surely mean the sale should be approached with caution”.129 126 Mr Jackson T 5-112, line 36; Mr Hart T 5-113, line 19. 127 Ex 3, page 36 and Ex 1, page 985. 128 T 5-118, lines 5 to 12. 129 Appellants’ written submissions, [127]. -- 64 of 104 -- 65 [202] The appellants also refer to the evidence of Mr Hart where he said: “MR TRAVES: Just to adopt the look of the words of the Act. Mr Hart, I suggest to you that the sale doesn’t fall within the definition of a bona fide sale because the property was not reasonably exposed to the market? It was not, was it? MR HART: It was not reasonably exposed to the market. MR TRAVES: And it wasn’t a bona fide sale for the purpose of the Act? MR HART: I can’t comment on that, yeah.”130 [203] The respondent made submissions in this regard at paragraph 59: “…In that regard, while it is accepted that the sale of 30 Albert Street was not one which resulted from a market campaign, Mr Jackson agreed that it was an arm’s length sale to a sophisticated purchaser (T5-91, l9-20). The President has recently held that the Spencer test, as effectively codified in ss 18 and 19 of the LVA, does not necessarily determine the evidentiary utility of a comparable sale (YFG Shopping Centres Pty Ltd as TTE & ors v Valuer- General [2018] QLC 37). The question is one of evidentiary value.” (citations included) [204] I have reviewed YFG Shopping Centres Pty Ltd as TTE & Ors v Valuer-General, and in my opinion, the respondent has misconstrued what the President was indicating in that case. [205] I considered the impact of s 18 of the LVA and whether or not a sale not put to market met the requirements of the section in BWP Management Ltd v Valuer-General (No 2).131 Relevantly, I had this to say: “[152] There are a number of key elements to the statutory test of a bona fide sale. For current purposes, the important element is found in s 18(1)(c) which states that the property was reasonably exposed to the market. [153] In normal circumstances, a property will be found to have been reasonably exposed to the market when the property was, by one way or another, advertised as being for sale. That does not necessarily mean that the vendor engaged a real estate agent who marketed the property. The vendor could market a property themselves sufficiently widely to comply with s 18(1)(c). Importantly, however, it is a requirement that the property is reasonably exposed to the market. … [157] The property was not put to market. Perhaps if it had been marketed the property would have caught the interest of another shopping centre developer. Perhaps Aldi or another supermarket would have shown interest. We will never know and it is quite improper to speculate. The simple fact is that the property was not put to 130 T 9-33, lines 21 to 29. 131 [2018] QLC 30. -- 65 of 104 -- 66 market. It does not, therefore, meet the requirements of s 18(1) of the LVA and is not a bona fide sale. [158] For completeness, I should note the precursor words in s 18(1). They set out that a bona fide sale is a sale on reasonable terms and conditions ‘that a bona fide seller and buyer would require assuming the following (the bona fide sale tests)’. Subdivisions (a) (willing but not anxious buyer and seller), (b) (reasonable period to negotiate the sale) and (c) as referred to above, then follow. [159] Section 18(2) deals with considerations as to factors to have regard to, in determining whether terms and conditions are reasonable. Section 18(3) then goes on to provide that, to remove any doubt, if there is a sale of land in question and the bona fide sale tests are complied with, the sale is bona fide. [160] It is not the case that valuers can simply assume (relying on the word ‘assuming’ in s 18(1)) that the bona fide sale test has been complied with because, for instance, they consider the sale price reasonable, and leave it there. Where the facts clearly show that any or all of s 18(1)(a), (b) or (c) do not apply, the sale cannot be a bona fide sale for the purposes of s 18. This is the case even if the Spencer test may have allowed, in certain circumstances, a different outcome. The specific, clear wording of s 18 in this regard must prevail.” [206] Nothing that has been submitted to me in the current matters leads me to depart from the conclusions that I reached on s 18 in BWP. It follows that Sale 4 (30 Albert Street) was not reasonably exposed to the market in light of the provisions of s 18 of the LVA and therefore, such sale must be excluded from consideration. Was Sale 2 (97 Elizabeth Street) reasonably exposed to the market? [207] I note that, like Sale 4, Sale 2 was also an off-market transaction.132 [208] Despite that fact and the provisions of s 18 of the LVA, both valuers were of the view that the sale was bona fide as it was negotiated by experienced agents and the purchase price was considered to reflect the market for a sale property with similar characteristics and development potential to Sale 2. [209] As a result of the view of each valuer, the evidence as to the bona fides of the sale are scant. Nevertheless, on what evidence I have before me, it does not appear to be in dispute that the sale was not marketed and, for that reason alone, despite the view of the valuers, the same conclusion as regards the applicability of s 18 of the LVA to this sale applies. 132 Ex 3, [149]. -- 66 of 104 -- 67 Infrastructure credit point [210] The following questions are particularly relevant to this point: Did the infrastructure credits received by student accommodation developers result in those developers paying a premium of equal value to the infrastructure credit when purchasing land for student accommodation developments? In the alternative, did the limited number of sites suitable for generating the required demand for student accommodation sites, combined with the increased demand created by the existence of the concessions, drive developers of student accommodation to pay more for the sites than would a commercial or residential developer to whom the reduced development costs were unavailable, thus creating a market for student accommodation sites as a separate and distinct part of the general Brisbane CBD market at the time the concessions were in existence? [211] These questions relate specifically to Sale 1, 38 Wharf Street, and Sale 2, 97 Elizabeth Street. It should be noted at the outset that of the sales under consideration as comparable sales for 300 and 310 Ann Street, Sales 1 and 2 are the only sales on which Mr Jackson and Mr Hart arrived at differing analysed figures. The point of difference between Mr Jackson and Mr Hart for Sale 1 and Sale 2 is that of the impact of infrastructure credits. Of course, I am referring only to the point of difference as to the analysis of Sales 1 and 2. On the question of comparability of all of the sales to the subject lands, there is marked difference between the valuers. [212] There are a number of aspects relating to the above questions to which the parties agree. It is common ground between the parties that the Brisbane City Council and Queensland Urban Utilities announced in March 2015 reductions in the infrastructure charges otherwise payable in respect of student accommodation developed pursuant to development approvals taking effect between 1 July 2014 and 30 June 2017. [213] Another point of agreement is that the question of whether the concession should prompt an adjustment is a matter of evidence not principle. I agree. In this regard, I refer to the frequently cited case of Brewarrana Pty Ltd v Commissioner for Highways (No 2).133 I note that passages of Brewarrana were put to both valuers and 133 (1973) 32 LGRA 170; 6 SASR 541. -- 67 of 104 -- 68 they expressed broad agreement.134 In Brewarrana, after a useful description of the process of comparison between sales and the subject, the Court continued at 179–180: “Adjustments must, of course, always be made every time reasoning of that kind is undertaken. For example, in relation to the land itself and the circumstances appertaining to it, it may be necessary to consider such matters as topography, location, size, shape, land use (actual and potential), scope for, and difficulties of, development, services and amenities; and in relation to the transaction of sale, the valuer must weigh such things as the character, business relationships and any other special considerations that induced or may have induced them to conclude the contract at the selling price agreed as well as the dates when the contract of sale and the transfer were concluded or effected… There is no hard and fast rule by which a valuer can draw the line that clearly separates the sales that are comparable from those that are not. It is a matter of degree. Some adjustment is always necessary but too much adjustment may render it unsafe to use a sale.” [214] It must also be noted that this point was considered by his Honour Member Cochrane in the case of ISPT 2018, referred to earlier. In that case, Member Cochrane was faced with the same question as to whether or not the student development concessions applied to exactly the same sales under consideration (that is, Sales 1 and 2). In ISPT 2018, Member Cochrane did not accept the adjustment contended for in that case to the sales as contended by Mr Jackson because no real weight could be given to the figures when no proper explanation for their generation had been given to the Court.135 [215] The appellants contend that ISPT 2018 can be distinguished from the current matters because significant additional evidence to that before the Court in ISPT 2018 was placed before the Court in the current matters. The respondent contends that, in reality, little additional evidence has been placed before the Court, meaning that the concessions should be disregarded just as they were in ISPT 2018. Specifically, the respondent says at paragraph 103 of its submissions that ISPT 2018 is only superficially distinguishable from the current appeals in the sense that the appellants have introduced a body of evidence about the issue which was not before the Court in that case, and that evidence simply does not demonstrate the proposition to which it is purportedly directed. [216] One consideration raised by the respondent regarding Sales 1 and 2 is that the vendor had “nothing to sell”. I accept the submissions of the appellants that, as a matter of 134 T 5-46, line 15 to T 5-49, line 10; T 5-53, line 20 to T 5-53, line 20; T 5-56, line 35. 135 ISPT Pty Ltd v Valuer-General; ISPT Custodians Pty Ltd v Valuer-General [2018] QLC 6, [65]– [66]. -- 68 of 104 -- 69 principle, that is not a valid argument. Brewarrana said nothing, in the context of the process of comparing a sale to a subject, about the party to such a sale having “something to sell”. Nor is the distinction applied as a matter of practice. An adjustment in the course of the comparative process may be made because the sale is in a flood prone area compared to the subject; or is of an irregular shape compared to the subject; the list goes on. The point is always to consider the sale so that it may be compared more directly to the subject. I have highlighted the word compared because the very important distinction must be made between any attempt to adjust a purchase price of a sale property to reflect the market value of that sale property (which for reasons I discuss below is not appropriate) and an adjustment made as part of the comparison process (which is part of the normal valuation process). [217] I now turn to the evidence regarding the concessions. In their submissions, the parties have taken me to extensive parts of the evidence to support their contentions regarding the concessions. The evidence is lengthy. It is important, however, to repeat at least some of the relevant evidence in this decision. [218] The first port of call are the valuers JERs, Exhibits 3 and 4. Explaining his reasoning for disagreeing with Mr Jackson’s opinion on the concession, Mr Hart had this to say in Exhibit 3: “56. Although the purchaser estimated the potential infrastructure charges of their proposed development before buying the site and lodging a development application, it is not appropriate to adjust the sale price to reflect any potential reduction in infrastructure charges unless the charges have been paid for by the vendor. The vendor only has infrastructure credits to sell that relate to the existing buildings that are to be demolished. The vendor is not aware had no interest in the proposed development. 57. No adjustment to the sale price is necessary as the terms and conditions reflect the usual terms and conditions of a bona fide sale. The sale was marketed and negotiated by experienced agents and the evidence indicates the sale was bona fide. 58. The sale price was determined by the process of negotiation between a prudent vendor and purchaser. This sale price is within market parameters based on the other sales evidence in the market in the relevant period. 59. No adjustment to the sale price is necessary as this adjustment relates to the proposed redevelopment of the sale which is specific to this purchaser only.” [219] In the same JER, Mr Jackson supported his position as follows: “118. Following the provision of extensive confidential material from the purchaser of the property and further enquiries which I have made -- 69 of 104 -- 70 with both the purchaser and selling agent, I have been able to establish the following; 119. The purchaser was; • Fully aware of the student accommodation infrastructure concessions being provided by Brisbane City Council (BCC) and Queensland Urban Utilities (QUU). • Sought expert external advice to assist them in calculating the level of concession they would receive in developing student accommodation on the property. • Undertook detailed financial modelling including the adoption of reduced headworks charges (infrastructure concessions) to inform them of the price they should pay for the land. • Based their purchase price of the land on their financial model which including the benefit of infrastructure concessions. … 121. The property sold for $14,000,000 to a Singaporean developer El Camino Priority 1 Pty Ltd (Valpariaso Capital) for the development of student accommodation. As part of the marketing campaign of the property, the agents appointed to sell the property, CBRE, obtained an independent valuation of the property to assist in establishing the asking price during the sales campaign. That independent valuation was at an amount of $9,500,000. 122. The vendor set a reserve for the sale of $10,000,000 and received a total of nine (9) expressions of interest for the property. The majority of interest was closer to the vendors expectation around $10,000,000 with one local developer submitting an expression of interest at $12,000,000. 123. The purchaser submitted the highest offer of $14,000,000 well above all other offers and $2,000,000 above the highest offer received from local developers. Enquiries with the marketing agent revealed that the price achieved for the property was well above the vendors expectations and well above all local domestic developers. I enclose a copy of the agents summary of the sale which helpfully sets out the independent valuation amount, vendors expectation, domestic developer interest and the eventual purchaser as Annexure 2. 124. It is evident in my opinion from the extensive sales campaign, the independent valuation advice received, the level of interest and value expressed from domestic developers that the eventual price achieved for the property of $14,000,000 was a premium to its market value. Infrastructure Concessions 125. In my opinion the higher price paid was influenced by their desire to develop student accommodation and the generous concessions they could receive from both Brisbane City Council (BCC) and Queensland Urban Utilities (QUU) in undertaking that form of development. I enclose as Annexure 3 an outline of the level of concessions being provided by both BCC and QUU to developers of student accommodation in the 2015 year. 126. The level of concession was generous in that BCC halved the infrastructure cost for a one (1) bedroom suite from $4,000 to $2,000. The same generous discount applied to both two (2) and three (3) bedroom suites. The normal charge for a 2 bedroom suite of $8,000 was halved to $4,000 and the normal charge for a 3 bedroom suite of $12,000 was halved to $6,000. Four (4) bedroom -- 70 of 104 -- 71 suites also received a generous discount with the normal cost being reduced from $12,000 to $8,000. 127. The purchaser was able to inform themselves of the potential benefit to be received from the generous infrastructure concessions in a pre- lodgement meeting they undertook with BCC before the purchase of the land. On 4 March 2015 planners on behalf of Valpariaso Capital met with BCC to discuss their development proposal for student accommodation. After that meeting Valpariaso Capital entered into a Contract of Sale to purchase the land on 28 April 2015. I enclose a copy of the pre-lodgement meeting minutes with BCC as Annexure 4. 128. I have also been provided with a series of email correspondence from the purchaser which highlights that independent advice was received from expert Town Planners at Urbis setting out the infrastructure concession they would receive based on their proposed development of the land. This correspondence was provided prior to the purchase of the property and was utilised to inform the purchaser in buying the land. Annexure 5. 129. In the case of 38 Wharf Street, these generous concessions provided a competitive advantage to those developers with a preference to develop student accommodation. In my opinion this is a logical reason for the basis of a premium being paid for the land. Purchaser Considerations 130. I have received a volume of confidential documents from the purchaser which have been provided to the parties on a confidentiality undertaking. Those documents in my opinion substantiate that the purchaser was; • Fully aware of the student accommodation infrastructure concessions being provided by Brisbane City Council (BCC) and Queensland Urban Utilities (QUU). • Sought expert external advice to assist them in calculating the level of concession they would receive in developing student accommodation on the property. • Undertook detailed financial modelling including the adoption of reduced headworks charges (infrastructure concessions) to inform them of the price they should pay for the land. • Based their purchase price of the land on their financial model which including the benefit of infrastructure concessions. 131. I have contacted the purchaser and verified with them that the infrastructure concessions provided were a matter they were fully informed about, they calculated the benefit of and took it into account in the price they were prepared to pay for the land. Annexure 6. Vendor Considerations 132. I have also made enquiries with the selling agent on behalf of the vendor. The agent has confirmed the vendors knowledge in the market of the generous infrastructure concessions on offer for developers of student accommodation. The vendor in offering the property to the market was aware of the interest from student accommodation developers and the benefit they could receive in -- 71 of 104 -- 72 reduced infrastructure charges and therefore were able to pay more for the land. Annexure 7.” (emphasis in original) [220] Not surprisingly, both Mr Hart and Mr Jackson during their concurrent evidence were subject to extensive questioning by Counsel. The following is but one example: “MR FYNES-CLINTON: All right. I’ll start with some questions to Mr Jackson. These infrastructure concessions, you’d accept the proposition that they were intended to encourage developers to undertake a particular form of development, namely student accommodation; you’d accept that, wouldn’t you? MR JACKSON: Yes. MR FYNES-CLINTON: Right. And they were therefore a council incentive to the developers of that particular kind of development, the council saying, ‘You come along and do this, which we want, and we’ll give you a financial encouragement to do so’? MR JACKSON: Yes. MR FYNES-CLINTON: Mr Hart? MR HART: Yes, I agree. MR FYNES-CLINTON: All right. And, Mr Jackson, that would be an attraction to a developer of student accommodation because, all other things being equal, that developer would get a better return on its investment as compared to the situation if it had to pay the full infrastructure charges? MR JACKSON: All things being equal, yes. MR FYNES-CLINTON: All right. Well, I’d suggest to you there’s no point offering a financial incentive unless it’s something that’s going to encourage a developer to think, “I can do better out of this financially than I would have done otherwise.” That’s fair, isn’t it? MR JACKSON: Well, it’s an incentive to encourage that form of development in the – in the designated area, and in particular the Brisbane CBD, and it’s something which a student accommodation developer would take into account in – based on their financial aspirations. MR FYNES-CLINTON: It’s a financial incentive to the developer which, all things being equal, will improve the developer’s bottom line compared to paying ordinary charges; yes or no? MR JACKSON: It may assist them to purchase the property. Whether it improves their – their bottom line will be a function of what they might ultimately pay for the land at the outset. MR FYNES-CLINTON: All right. So you MR JACKSON: That – that’s how it works in – in – in the normal market circumstance, that when one looks at all those particular factors such as headworks charges, as you – what you’re talking about, infrastructure -- 72 of 104 -- 73 charges – that all forms part of the model as to what someone can – whether it’s student accommodation, office building, a hotel or some other form of development. MR FYNES-CLINTON: All right. When you talk a model about where someone can pay – I thought you agreed with me yesterday, but if I’m wrong correct me, that when one does a financial model or a feasibility estimating a cost of expenses, that will tell you whether the development is viable and the most you can pay for the land. I thought you agreed with me yesterday. MR JACKSON: Yes. What – what – the proposition you put to me yesterday was – in a very broad sense – is that when someone undertakes a financial model, first of all, it needs to be feasible, viable, yes – that’s logical – and that will – and that is a tool or a model that they will use to inform themselves of what they should pay for the land. That’s right. MR FYNES-CLINTON: I’ll put the proposition to you. It’s a tool or model that informs them as best one can in advance as to the most they can pay for the land and still get an acceptable return. MR JACKSON: Yes, that’s – that’s better. Yeah, I agree with that. MR FYNES-CLINTON: A rational purchaser will not set out to pay the most they can for the land. They will set out to pay what the market requires them to pay. Agree? MR JACKSON: No, your question is not really in sync with how the market works. In relation to – when you say they won’t seek out to pay the most for the land, they will seek out to pay what they can afford to pay for the land. Whether that be the most or not will be determined during the process of sale. MR FYNES-CLINTON: Can I suggest to you they will seek to pay what they regard as fair market value for the land and if that is no more than their model shows other – the development was viable, but my question to you is this: having done a feasibility, they won’t go out and say, “This is how much we want to pay for the land”. They will say, “This is the most we can afford to pay. Let’s go to the market and see what it’s going to cost”. MR JACKSON: I think reality is they will say, “This is what we will pay for the land”, based on their feasibility. That’s consistent with my experience. MR FYNES-CLINTON: All right. So just to be very clear, your proposition and your evidence to the court is that if a feasibility study says X dollars is the most we can pay for the land to make this work the developer will go out and seek to pay that much for the land? That’s your proposition; correct? MR JACKSON: That’s – that’s why they do the feasibility, yes. … MR FYNES-CLINTON: And I’m sorry, I don’t want to be repetitive but I think you agree with me the feasibility will tell them the most they can afford to pay for the land and still make a decent return. -- 73 of 104 -- 74 MR JACKSON: That’s correct, yes. MR FYNES-CLINTON: Right. Okay. We’ll leave it there. HIS HONOUR: Mr Hart? MR HART: Yes, I agree with – that is certainly the – it would be the upper end of what they can afford. Obviously, they would pay less if – if the market said less or if the – you know, if the sites they were looking for were less than that price, of course, they would purchase it. It would go straight on to their profit on – you know, if – if they were to pay less than that projected residual land price. MR FYNES-CLINTON: So, Mr Jackson, as we said, you’ve proposed the adjustments. I’ve already mentioned them. Can I suggest this: what you are telling the court, in effect, is that for this particular purchaser, El Camino, which is the same purchaser for both sites, this purchaser was aware that it had the possible benefit of concessional charges from the council and that the purchaser having that – and just to be clear, that was a benefit available to it only because of the particular type of development it proposed for it? MR JACKSON: Correct. MR FYNES-CLINTON: You agree with that. Mr Jackson, what you’re really saying to the court in simple but clear term is this: this particular purchaser of both sites having a benefit available to it only because of its particular form of development and which would otherwise improve its bottom line returns gave away the whole of that benefit to the vendor? That’s the effect of what you’re saying, isn’t it? MR JACKSON: Yes. The purchaser utilised that benefit in the marketplace to secure the site with the advantage over all other purchasers. That’s correct. MR FYNES-CLINTON: Well, just to be clear – because my proposition was: the purchaser having that concession available to it for its particular form or development chose to give the entire value of that concession as effectively a gift to the vendor. MR JACKSON: Well, I – I – gift is a bit of an emotive word. If you want to use that, that’s your word. But it’s been put beyond doubt in the confidential discovery of evidence that’s precisely what they did. MR FYNES-CLINTON: All right. Now, are you talking about documents that are before the court or something else you haven’t shown us? MR JACKSON: The documents before the court.”136 [221] Later that same day, the following evidence was given by Mr Hart and Mr Jackson: “MR TRAVES: Can I put to you another matter of principle: 136 T 5-3, line 43 to T 5-7 line 11. -- 74 of 104 -- 75 Providing there is more than one prospective purchaser for a use that may take advantage of the concession, it is probable that the price will be affected by the concession, whether or not the vendor know of it. MR HART: Yeah, I – I disagree with that. MR TRAVES: Just think about it, Mr Hart. Let’s say you’ve got three or four or five or six purchasers, all wishing to develop student accommodation on 38 Wharf Street, all with the benefit of the concessions on the infrastructure charges. The vendor’s completely ignorant of them. Right? And yet those purchasers are each competing with one another, are they not, to buy the property? MR HART: Yes, they’re competing with one another. Yes. MR TRAVES: And you can take it to public auction, and they would bid against each other, bringing to bear, such as they might, the infrastructure concessions. And the price, I suggest to you, would be affected whether or not the vendor knew of the infrastructure concessions or not. MR HART: I think the price would be affected by – by many – many other elements. To – to isolate that effect to just the concession – and, again, if there’s several different student accommodation developers, I’d – I’d imagine they would have several different versions of what they propose to – to – to do and the charges that they’re going to pay. So I think – yeah, I disagree with that proposition. MR TRAVES: Mr Jackson, can I ask you to comment upon the proposition? MR JACKSON: Oh, I think it’s – it’s logical. If you’ve got a number of purchasers who wish to put the same use on the property, and they’re all aware of the – the same concession and benefit on offer, then that’s going to create a competitive tension and influence the price they’re prepared to pay. MR TRAVES: It really comes back, and I’ll be fair to you, Mr Hart, the decision of Justice Isaacs in Spencer v The Commonwealth [1907] 5 CLR 418 to 427 – sorry – 441 – this proposition and it’s one I’ve given you before: That is practically the same as asking what is the highest sum a purchaser would give, because we must assume the owner would be willing to take the best he can get. I mean, doesn’t that make common – isn’t that proposition correct? And doesn’t it give the falsity – I withdraw that – the incorrectness light in terms of your evidence? MR HART: No. MR TRAVES: Doesn’t it demonstrate that what you say is wrong? MR HART: No, I don’t because, you know, if there was three – if there was a number of student – student development – developers contending for this site, well, they should be – they would be contending for – for various other sites in the CBD. So yeah, no, I – I disagree. -- 75 of 104 -- 76 MR TRAVES: You’re aware, aren’t you, that in respect of 38 Wharf Street and in respect of 97 – let me just go with 38 Wharf Street for the moment – that the predominant interest was in fact from purchasers of student accommodation? There’s evidence of that in Mr Jackson’s notes. MR HART: The note of 2018? MR TRAVES: Yes. MR HART: Yeah. MR TRAVES: He speaks of most of the purchasers being student accommodation. MR HART: That’s MR TRAVES: Pretty important stuff, Mr Hart, isn’t it, in the context of these concessions? MR HART: Well, the – what I can recall from the – the – the conversations I’ve had with the selling agent when the property was under contract, there was not only developers – local developers, but there were also investors. It sounds like that comment that – the later comment is – is certainly a – a – a real refinement of – of the general comments that I got from – at the time three years ago.”137 [222] There is one key element in the evidence in which I clearly prefer the evidence of Mr Jackson over that of Mr Hart. Mr Hart refers to Sales 1 and 2 as market evidence of CBD sales. He then uses those sales and others as part of his comparable sales in assessing the value of the subject properties. Mr Jackson is of the opinion that Sales 1 and 2 are market evidence of CBD land suitable for student accommodation. He therefore casts the net of the market much more narrowly than Mr Hart. The evidence before me supports Mr Jackson’s opinion; there is adequate and proper factual material for Mr Jackson to base such opinion on. In that way, this case does differ from ISPT 2018. [223] It is without doubt that purchasers of student accommodation, during the period in which the concessions were available, had a marked commercial advantage over other potential purchasers (particularly in the CBD which I am concerned with) such as purchasers for the purposes of commercial office development, residential apartments, land banking, and the like. So, for the purposes of the first question, did purchasers of student accommodation at the time of the concessions pay a premium on the sale price? 137 T 5-59, line 3 to T 5-60, line 32. -- 76 of 104 -- 77 [224] There is no doubt that at least at some stages during his consideration of this matter, Mr Jackson certainly thought that a premium was paid. He referred to the purchase price of $14 million for Sale 1 as being “a premium to its market value” (see the reference at paragraph 124 of Exhibit 3 above). [225] Mr Jackson’s evidence in the JER is at odds with what then President Trickett noted in the case of Liat Nominees Pty Ltd v Chief Executive, Department of Lands: “In my opinion, the Fenton Nominees case is not authority for the making of such adjustments to sale prices. It is well established that a valuer must accept the actual sale price of a property which he intends to use as the basis for the valuation of another property. As Pike J. of the NSW Land and Valuation Court said in re Collins (1936) Vol IV The Valuer 156: 'You cannot take a sale at a price, and say, "That was the sale price, but in my opinion it is not the correct price; I am going to alter the price paid by this particular purchaser". If that is done in the analysis of sales, one might just as well reject the whole of those sales, and simply say what is the witnesses' opinion of the land to be valued.'”138 [226] I note that Liat was specifically referred to, and followed, by then President MacDonald in Body Corporate for Wendall Court & Anor v Valuer-General.139 I concur. [227] It is a significant error for Mr Jackson to have attempted to amend a purchase price paid for a property per se. It may well be the case that a purchaser has paid much more for a property than they should have paid; that, however, is not a reason to adjust the purchase price. That would be a reason to give very close consideration to whether or not the purchaser was over anxious and therefore the sale was not a bona fide sale. Quite simply, a sale either reflects the market and is a bona fide sale, or it does not reflect the market, which brings its bona fides into question (leaving to one side those instances where a sale may reflect the market but still not be a bona fide sale because of some infringement of s 18 of the LVA – see my heading “was Sale 2 (97 Elizabeth Street) reasonably exposed to the market?” regarding Sale 2 as an off-market sale earlier in these reasons). [228] It is clear from Mr Jackson’s concurrent evidence that at some time between when he wrote the JERs and his oral evidence, his analysis for Sales 1 and 2 changed from 138 [1996] QLC 160, 12. 139 [2015] QLC 16, [95]. -- 77 of 104 -- 78 talking about a premium being paid above market, to the impact that the concession made for the purpose of comparing Sales 1 and 2 to the subjects. It is of regret that Mr Jackson did not see fit to amend paragraph 124 of Exhibit 3. [229] The answer to the question “Did the infrastructure credits received by student accommodation developers result in those developers paying a premium of equal value to the infrastructure credit when purchasing land for student accommodation developments?” must, in light of the evidence, and consistent with the authorities above, be no. The evidence shows that the developers of the student accommodation paid market value. There is no evidence before me that shows that those purchasers were in any way over anxious, from a bona fides perspective. [230] That then leaves for consideration the question “In the alternative, did the limited number of sites suitable for generating the required demand for student accommodation sites, combined with the increased demand created by the existence of the concessions, drive developers of student accommodation to pay more for the sites than would a commercial or residential developer to whom the reduced development costs were unavailable, thus creating a market for student accommodation sites as a separate and distinct part of the general Brisbane CBD market at the time the concessions were in existence?” [231] I have, in effect, already answered this alternative question. In order to fully understand my reasoning, it is necessary to read my answer in conjunction with what I have to say relating to the merged market point discussed later in these reasons. [232] I have no doubt that, during the time of the concessions (at least), there was a separate market in the Brisbane CBD for sites suitable for development for student accommodation. The answer to the alternative question must therefore be yes. What, then, is the impact of such a conclusion? [233] The subject properties have a highest and best use, as agreed by the parties, which does not include student accommodation. Applying authorities such as Brewarrana, it is clear that it is not appropriate to compare sales occurring in the market of CBD student accommodation with the subject properties which do not support such use, unless there is an assessment undertaken of those sales in order to undertake a proper comparison to the subject properties. Of course, it may be the case that the market -- 78 of 104 -- 79 for student accommodation was so different at the relevant time compared to the commercial market so as to create so many difficulties in comparing one with the other for valuation purposes as to make the student accommodation sales unhelpful to a valuation process for commercial sites. [234] It is on this point that I now have a difficulty with the analyses that Mr Jackson has made for Sales 1 and 2 to take into account the concession for comparability purposes with the subjects. [235] I accept the evidence that the purchasers of the student accommodation, in making their offers to purchase properties suitable for such development, took into account, as part of their “bottom line”, the fact that they would benefit because of the reduced infrastructure charges payable in light of the concession. What I have not found in the evidence, however, is any fact to support Mr Jackson’s opinion that the total amount of each concession was, in effect, added to the price that the purchasers were prepared to pay for the respective sale properties in order to secure the sales. The absence of such evidence is critical. Experts have the rare ability to give opinion evidence to a Court, but the authorities clearly show that such opinion evidence must have a factual backing. [236] The evidence for Sales 1 and 2 does support the fact of the purchasers of those sale properties paying more than they would otherwise have done because of the favourable change to their bottom line resulting from the concessions. As I have already stressed, that simply makes the sales indicative of the student accommodation market at the time that the concessions were in operation. What the evidence does not support, is Mr Jackson’s opinion that the purchasers added the entirety of each concession to the amount that they were prepared to pay. What they in fact paid was the amount that they believed was required by the market to secure the purchases at that time. [237] In this regard, I note, in particular, the evidence given by Mr Weston: “Are you in a position to say whether or not the existence of the concessions made a difference to Student One and other investors, like El Camino, in the Brisbane CBD student accommodation market? Yes. And did it make a difference? Yes, it did make a difference. -- 79 of 104 -- 80 And why did it make a difference? Because it reduced the overall cost of – going back to my original point, the – the fixed costs that you actually have, whether it’s building, infrastructure charges, cost of money – all of those things – you know, they are all things that we have to consider and how much we’re available to pay purchase price. All right. And is the proliferation of high rise student accommodation in the Brisbane CBD coincident with the introduction of the concessions? I – I would have to say it would be, yes. On occasions, could the existence of a concession or not make a difference as to whether or not to invest at all? Yes, it would. Yes. So that in your view, taking that into account, in broad sense – let’s put aside the actual purchase price paid. Is the existence of the concession something of value to the purchasers and developers of high rise student accommodation? Yes. All right. It then becomes a question of how much value in these particular cases, correct? I mean, it’s --- ? --- Yes. All right. But what we can say, can I suggest, is this much – that the purchase price for the land, which is the last entry into the – what should we call it? The model. Into the model. The last entry in the model is the purchase price – the maximum purchase price that can be paid ---? That would be my understanding, yes. -----dictated ultimately by the hurdle rate and by the cost structure otherwise? All the other [indistinct] yes.”140 [238] Just as one would expect, the evidence of Mr Weston simply explains that purchasers of land for student accommodation during the time that the concession was available took into account the value to them of the concession, as well as other economic factors, in arriving at prices that they were prepared to pay to secure the land. [239] As I have indicated, I do not find the evidence to support a conclusion that the entirety of the value of the concession was included by the purchasers in the purchase prices of Sales 1 and 2. Likewise, the evidence clearly supports a conclusion that some of the value of the concession was included by the purchasers in the purchase prices of Sales 1 and 2. It follows that, in determining the value of the subject properties with highest and best uses of commercial and residential development by use of the direct comparison methodology, it is necessary for comparability purposes to make adjustments to student accommodation sales during the period of the concession. 140 T 8-12, lines l7 to 40 (Restricted transcript extracted from appellants’ written submissions, [73]). -- 80 of 104 -- 81 [240] I accept the evidence of Mr Jackson that the total value of the concessions was $1.674 million in the case of 38 Wharf Street (Sale 1) and $3.158 million in the case of 97 Elizabeth Street (Sale 2). Mr Jackson supplied factual material which were made exhibits in the hearing to back up his calculations of those amounts. There has not been any serious challenge made to Mr Jackson’s calculations of the total amount of the concessions applicable to Sales 1 and 2. [241] The appellants rely upon the approach taken by then Member Jones in GPT Re Limited (as responsible entity) & Anor v Department of Natural Resources and Water141 where his Honour held that the appropriate starting point for determining the value of infrastructure credits (in that case, paid for by the vendor) was the sum that might be saved by the purchaser in developing the land. The appellants then contend that, in this case, the appropriate starting point is to adjust the sale by the value of the concessions in the absence of evidence suggesting some lesser adjustment should be made. [242] I agree with the approach taken by then Member Jones in GPT. It follows that the total amount of the concession is as good a starting point as any to ensure that those sales are properly compared with the subject lands. I stress, however, that it is only a starting point. Just as Member Cochrane did in ISPT 2018, it is then necessary to consider the facts of the particular sale to determine the extent of any adjustment that needs to be made when undertaking the comparison. In ISPT 2018, Member Cochrane found that there were insufficient facts to support any adjustment. [243] I accept Mr Weston’s evidence that the confidential models were used to derive the purchase price, that the infrastructure concessions were brought to account in determining the price to be paid for the land, and that the infrastructure concessions were of value to the purchasers. The evidence shows that that is clearly how the market for student accommodation sites was operating at that time. [244] Taking all of the evidence into account, including the confidential evidence, and doing the best that I can with such evidence, it is clear to me that Sales 1 and 2 contain a market value attributable to the existence of the concessions in the student accommodation market not available to purchasers of commercial development. In 141 See [2009] QLC 78, [122]. -- 81 of 104 -- 82 order to take only the concession element of those student accommodation sales into account, it is necessary, for comparability purposes, to take the concession into account to arrive at a value for the subjects. As indicated, there is no evidence to support a conclusion that the full amount of the concession should be taken into account. There is, however, evidence that for comparison purposes with the subjects, some of the concession should be taken into account. [245] I consider that the existence of the concessions make Sales 1 and 2, already in a different market to the subjects, superior to the subjects for that reason alone. For comparability purposes, I consider that approximately $1 million of the concession should be taken into account as a superior quantitative factor over that of the subjects. [246] I must stress that such a superior aspect of Sales 1 and 2 relates to the concession only. I do not consider the impact of the concession alone to be such as to make those sales not comparable to the subjects. However, what must also be considered is whether sales such as Sale 1 and Sale 2 in the student accommodation Brisbane CBD market of itself (that is, absent the concession) is such a different market so as to make student accommodation sales unreliable for the purposes of comparison with commercial sites in the Brisbane CBD. I will consider that aspect when I look at aspects of the general comparability of all of the sales to the subjects. Analysis of sales to subject properties [247] As a consequence of my determinations above with respect to the various points and questions examined, only Sales 1, 2, 6, 7, and 8 need to be compared to the subjects. Sales 3, 4, and 5 have been excluded. Further, I have arrived at an analysed value for Sales 1 and 2. The valuers were in agreement as to the analysed value of Sales 6, 7, and 8. [248] I will consider the comparability of each sale in turn for 310 Ann Street, and then do the same exercise for 300 Ann Street. However, before doing so, there are some opening observations which need to be made in light of the parties submissions. [249] There is a contest between the parties over the manner in which Mr Jackson referred to percentage adjustments. The respondent contends that Mr Jackson’s analysis is dependent on percentage adjustments. The appellants, on the other hand, contend that the percentage adjustments were merely an aide to understanding Mr Jackson’s -- 82 of 104 -- 83 professional evaluative opinion. The appellants also referred to what they called the limited use and utility of the percentages found in Exhibits 42 and 43. [250] Exhibits 42 and 43 do, in my opinion, aide in understanding the basis for Mr Jackson’s professional evaluative opinion. To save the task of repeating the tables contained in those exhibits in my consideration of each Sale, Exhibits 42 and 43 are set out below: [251] During the concurrent oral valuation evidence, Mr Jackson explained his reasoning for using percentages. I will let the transcript speak for itself: “Can I ask you first this general question, the approach that Mr Jackson has adopted of doing what would appear, at least on first reading, to be a – a mathematical calculation of adjustments, is that a – an approach which you regard as being orthodox or conventional? MR HART: I don’t regard it as orthodox or conventional, but MR FYNES-CLINTON: Right. Are you aware MR HART: I MR FYNES-CLINTON: of any evaluation text where an approach of this kind, of using what appear to be mathematical percentage deductions and additions is recommended or recognised? -- 83 of 104 -- 84 MR HART: No, I – I don’t have any knowledge of that. MR FYNES-CLINTON: All right. Mr Jackson, still on that same general topic, can I suggest to you that the percentages which you’ve applied for your adjustments are – are – are nothing more than a way of representing your professional but ultimately evaluative opinion about the differences between the properties and that there is no mathematical formula which produces those figures? MR JACKSON: Yeah, I – I think that’s largely right. There’s no – it’s not a mathematical approach. What it – what it was endeavouring to do was to assist the court and the parties in understanding the thought process that I went through in comparing each of the sales to the subject property. I made it clear that, ultimately, it’s – it’s the total adjustment which one should focus on as the important thing, but if I simply said, there’s a 10 per cent adjustment to apply that – to that property, the obvious question arises, well, why 10 per cent? Why – what – what did you consider? What thought process did you go through? So trying to be as – as – as descriptive and as helpful as possible, set out the sort of parameters that I think are relevant in comparing each sale, and then carefully considering each of those, and then looking at what – what does that then leave the overall adjustment and why that’s important is because it – those sales which ultimately require a lower level of adjustment, in my opinion, tend to be more reliable. And if you’ve got a sale which requires a lot of adjustment, then it starts saying to you – and sometimes that’s just the way it is, of – of course. You’ve got to do the best you can with the evidence. But that tends to suggest that the sale might be less comparable and not as reliable. So that’s the process. But it was really a process of complete disclosure, almost to be able to say, “I don’t even need to give evidence. You can just read it and understand my thought process all the way through.” MR FYNES-CLINTON: That’s understood, thank you, and I think that’s clear. So there’s no spreadsheet that supports the 10 per cent/five per cent. They are simply ways of expressing your view about the relative comparability based on particular features. MR JACKSON: Yeah. And – and make it the subject of scrutiny, yes. MR FYNES-CLINTON: Well, one could’ve used one to five stars or various ways but you consider this to be something which assists in understanding your thought process; correct? MR JACKSON: It – that’s fair, yes. And it was also a way to – to put it from a point of view for the court or anyone else to look at it and say, well, if you’ve got a positive adjustment in comparing the two, you think it’s a – you think that the sale or subject property is a bit better on that particular issue. So it gives a clear indication as to the thinking, and then someone can look at that and particular his Honour can look at that and say “does that make sense or do I disagree with that?”.”142 142 T 8-134, line 38 to T 8-136, line 4. -- 84 of 104 -- 85 [252] When Mr Jackson’s evidence, whether in Exhibit 3, 4, 42, 43, or other relevant exhibit, together with his oral evidence, is viewed, with the understanding conveyed above, I have no difficulty in ascertaining from the percentages used by Mr Jackson when he is referring to a sale as being slightly superior or inferior to the subject, significantly superior or inferior, or whatever the case may be. It actually gives more clarity to his evaluative process. [253] A further attack by the respondent on Mr Jackson’s evidence relates to an allegation that Mr Jackson’s percentage tables make no allowance for differences between the sales and the subjects with respect to shape and dimension. The respondent gives the example of Sale 2, 97 Elizabeth Street. The respondent notes that 97 Elizabeth Street is a very long narrow block with 20 m street frontages and 90 m depth. The respondent goes on to note that both subject properties have a much more regular shape and have accommodated development of a size and shape which simply could not be carried out on 97 Elizabeth Street. The respondent contends that Mr Jackson’s failure to consider that aspect when doing his comparison is a material flaw.143 [254] I do agree with the criticism that Mr Jackson has failed, on the face of the evidence, to take into account the shape of the sales when compared to the subjects. I agree that this is particularly the case with respect to Sale 2. I do not, however, accept the proposition that Mr Jackson has failed to take into account the relative size of the sales to the subjects. That would be the case if all that Mr Jackson had done was a simple mathematical percentage analysis. I have accepted his evidence that that is not what he did. Further, when a reading is had of the exhibits (in particular Exhibits 3 and 4) it is clear that Mr Jackson, either of his own account or in agreement with Mr Hart, made specific reference to dimensions of the sales compared to the subjects. I accept that he took differences in size into account in reaching his overall conclusions as to comparability of the sales. [255] There is a mass of material relating to the comparability of a number of the sales. My analyses which follow is in summary form only in order to help inform my reasons for my decision. I have taken all of the evidence and all of the submissions into account when comparing each sale to each subject. 143 Respondents submissions, [162]. -- 85 of 104 -- 86 [256] I now turn to analyse each sale compared to the subject, 310 Ann Street. Sale 1, 38 Wharf Street [257] I accept that the property sold for $14,000,000 to a Singaporean developer El Camino Priority 1 Pty Ltd (Valpariaso Capital) for the development of student accommodation. As part of the marketing campaign of the property, the agents appointed to sell the property, CBRE, obtained an independent valuation of the property to assist in establishing the asking price during the sales campaign. That independent valuation was at an amount of $9,500,000. The vendor set a reserve for the sale of $10,000,000 and received a total of nine expressions of interest for the property. The majority of interest was closer to the vendors expectation around $10,000,000 with one local developer submitting an expression of interest at $12,000,000. [258] I note that the LVA site value for the property was reduced in accordance with the Land Court Order dated 14 November 2016 and determined in the amount of $12,000,000 ($13,172/m²) as at the date of valuation, 1 October 2015. [259] Mr Jackson in Exhibit 3 summarised his comparison of Sale 1 to the subject property as follows: “144. In my opinion the motivation of the purchaser to develop a specific use for the site lead to a premium being paid and therefore I believe it is prudent to take account of that premium in analysing and applying the sale as comparable evidence. The highest and best use of the subject property is agreed being commercial office development which does not receive any infrastructure concessions. 145. Overall, I believe adjustments to this sale for comparison purposes are required to be made for; • Location • Infrastructure concessions • Development Potential • Corner Location” [260] In Exhibit 42, Mr Jackson arrived at a total adjustment of -30%, which translates in his methodology to a significant downward adjustment. He arrived at an adjusted analysis for Sale 1 of $9,409/m² for comparison purposes with the subject. Of course, his adjusted figure was based on his analysis of the concession, which I have increased in my determination. Accordingly, Mr Jackson’s rate per m² needs to be adjusted upwards to take into account my findings. -- 86 of 104 -- 87 [261] Mr Hart, in his application of the sales in Exhibit 3, notes the size shape and dimensions of Sale 1. He also notes that, in comparison with Sale 1, the subject has achieved a greater amount of GFA (21,207 m² compared to 18,240 m²). Mr Hart considers the land size, shape, and dimensions of Sale 1 to be inferior in comparison with the subject. [262] As regards street frontage and topography, Mr Hart considers Sale 1 to be inferior in comparison with the subject. [263] With respect to topography, Mr Hart notes that Sale 1 has a cross fall of approximately 4 m and is considered to be similar in comparison to the subject. [264] On the topic of easements and rail corridor, Mr Hart notes that Sale 1 has neither of those disabilities and accordingly he considers the sale in that respect to be superior to the subject. [265] While I appreciate the comparisons that Mr Hart has made between Sale 1 and the subject, in my view, Mr Hart, when considering Sale 1, has fallen into error by applying a form of merged market analysis and not taking proper account of the fact that Sale 1 has a superior highest and best use to that of the subject [266] In my view, taking all factors and submissions into account, Sale 1 is superior to the subject. [267] Further, because Sale 1 is in a different market, it is of only limited utility to the comparison process. The allowance for the concession only takes the comparison of Sale 1 to the subject back to where it would be but for the concession being in existence. Further analysis is required to make the sale and the subject truly comparable, resulting in the sale being of little utility. Sale 2, 97 Elizabeth Street [268] As already set out, the evidence, such as it is, supports a conclusion that Sale 2 was not a bona fide sale for the purposes of s 18 of the LVA. Assuming that conclusion to be correct, it is not necessary to consider Sale 2 further. -- 87 of 104 -- 88 [269] Despite the preceding paragraph, for completeness, my overall conclusions with respect to Sale 1 apply equally to Sale 2. I do note of course the different attributes of Sale 2 to Sale 1. [270] Just as I found for Sale 1, while I appreciate the comparisons that Mr Hart has made between Sale 2 and the subject, in my view, Mr Hart, when considering Sale 2, has fallen into error by applying a form of merged market analysis and not taking proper account of the fact that Sale 2 has a superior highest and best use to that of the subject. [271] In my view, taking all factors and submissions into account, Sale 2 is superior to the subject. [272] Further, because Sale 2 is in a different market, it is of only limited utility to the comparison process. The allowance for the concession only takes the comparison of Sale 2 to the subject back to where it would be but for the concession being in existence. Further analysis is required to make the sale and the subject truly comparable, resulting in the sale being of little utility. Sale 6, 62 Ann Street [273] Sale 6 sold for $63,000,000 to Wee Hur (Ann Street) Pty Ltd (Wee Hur) for the development, in part, of student accommodation to the Turbot Street frontage, with plans at the time not defined for the Ann Street frontage. [274] The sale is situated in the heart of the legal precinct being across Turbot Street from the Magistrates Court and Supreme Court. [275] Sale 6 is the site of the former Brisbane Fruit & Produce Market/Exchange. The four lots fronting Turbot Street are listed as a local heritage place and contain several buildings that span the width of the Turbot Street frontage. The sale agreement included a Heritage Deed between the Brisbane City Council and the vendor. The deed had required the vendor to dismantle part of the heritage buildings known as the “Old Market Shed”, store the heritage components, and re-use or reference them in any future redevelopment. Mr Hart notes in this respect that these works were done by the vendor and the retained heritage components are kept in new storage sheds on the site. Accordingly, in Mr Hart’s view, although the analysis of Sale 6 is agreed, the -- 88 of 104 -- 89 ability to make suitable comparisons and allowances with the subject is compromised by this heritage impact. [276] Sale 6 has a land area of 5,478 m2, which is over 2.4 times greater in size than the subject. [277] Mr Jackson considers Sale 6 to be the most comparable to the subject. Therefore, it is necessary to closely consider his comparison of the sale to the subject. In Exhibit 3, Mr Jackson made the following observations regarding the comparability of Sale 6 with the subject: “103. The sale in my opinion requires adjustment for size as it is a larger site. Whilst the land area of 5,478m² is larger than the subject property of 2,257m², the property comprises five (5) separate lots with two separate street frontages. Both the Ann and Turbot Street frontages have their own existing lot or lots and could readily be sold individually. The allowance for size is therefore less than it otherwise would normally be. 104. The Turbot Street frontage also has the former heritage Brisbane Produce Market structures which must be retained and incorporated into any new development. The retention of these structures does not take away from developing this component of the site with a substantial development, as evidenced by the development approval received for a large student accommodation tower to the Turbot Street frontage. Nevertheless, it is a further complexity to be addressed in the development of the land not present at the subject property and an appropriate adjustment is required to be made. 105. The sale property is free of the complexities associated with developing the subject property over and adjacent to the railway line. 106. The development potential of the sale property is significantly more substantial than the highest and best use agreed for the subject property. The subject property is a relatively low rise commercial development (20 storeys) which in the context of development in the Brisbane CBD is a low-rise development. 107. In comparison the sale property has achieved development approval for the Turbot Street frontage for a 36 storey development. A subsequent approval for a 32 storey office tower has been achieved fronting Ann Street. This highlights the superior development potential and yield from the site in comparison to the subject property. 108. Overall, I believe adjustments to this sale for comparison purposes are required to be made for; • Heritage retention • Size • Location • Development Potential • Two street frontages 109. I have not made an allowance to this sale for student accommodation development. Whilst the purchaser is an -- 89 of 104 -- 90 experienced student accommodation developer, there were no specific plans as at the time of sale to develop student accommodation. Therefore, I have not reflected any benefit the purchased may receive in respect of infrastructure concessions.” [278] In Exhibit 42, Mr Jackson arrived at a total adjustment of -10%, which translates in his methodology to a relevantly minor downward adjustment. He arrived at an adjusted analysis for Sale 6 of $8,988/m² for comparison purposes with the subject. [279] Mr Hart observes in Exhibit 3 that Sale 6 could support a development of more than one tower with a larger amount of GFA and greater building height in comparison to the subject. Currently there is proposal for a single 32-storey commercial office tower with GFA of 76,437 m² with basement parking for 120 vehicles. [280] In his opinion, given the large difference in land size and development potential and the availability of sales evidence in closer proximity to the subject of similar size and development potential, Sale 6 is of limited assistance to assess the site value of the subject. [281] As already indicated, the sales that Mr Hart predominantly relies upon in preference to Sale 6 are Sales 1, 2, 3, 4, and 5. In my analysis above, I have removed Sales 3, 4, and 5 from consideration. Further, I have found Sales 1 and 2 to be of little utility for comparison purposes with the subject. It must follow that I reject Mr Hart’s opinion that his other sales are to be preferred to Sale 6. I also reject his opinion that Sale 6 is of limited assistance to assess the site value of the subject. That, however, does not mean that I reject all of the conclusions that Mr Hart has made regarding Sale 6. [282] This is one of the occasions when, subject of course to what I have said in the preceding paragraphs, I prefer specific aspects of the evidence of Mr Hart to that of Mr Jackson. [283] The primary area where I agree with Mr Hart relates to what Mr Hart opined with respect to the significantly larger size of Sale 6 compared to the subject. Mr Jackson’s adjustment for size of +5%, on the facts before me and which were clearly available to Mr Jackson, makes nowhere near a sufficient enough allowance for this attribute. [284] The question of an allowance for size in a CBD context is certainly one which has been considered in previous cases by this Court. One such case was GPT RE Limited -- 90 of 104 -- 91 v Valuer-General (No 2).144 In that case, I was considering a bundle of sales to compare to the subject. All but one of the sales I had regard to were of significantly smaller properties when compared to the size of the subject. Although both Mr Hart and Mr Jackson were also the valuers in GPT, I am not relying on their evidence as to sales in that case; my reference is to the legal principles involved. Relevantly, I had this to say in GPT: “[276] Mr Jackson gave strong evidence that the Brisbane CBD market is impacted by the size of properties for sale, just as other capital cities CBD’s are. There is certainly judicial authority which goes some way to support what Mr Jackson says. In the case which considered an earlier valuation for 123 Eagle Street, Member Jones had this to say: ‘[61] The size and location of the 123 Eagle Street site might make it available to a much smaller pool of purchasers than for any of the sale sites and, for that matter, perhaps even the 10 Eagle Street site. That said, the location of this site, including its river frontage would go a long way to offsetting any disadvantage that might result because of its size. This is effectively acknowledged by the valuers when regard is had to the respective rates per square metre they apply to 10 Eagle Street in comparison to that applied to the 123 Eagle Street site.’” (citations omitted) [285] Returning to the case at hand, on the question of comparability of location, in my view, the evidence does not support Mr Jackson’s allowance of -5% for the location of Sale 6. I prefer the evidence of Mr Hart as to the comparable attributes of the location of Sale 6 compared to the subject. [286] I also prefer the evidence of Mr Hart regarding heritage impacts for Sale 6, although, I do take Mr Jackson’s point that some of the heritage impact for the Turbot Street frontage can be creatively factored into the design of new improvements on Sale 6. [287] Neither Mr Hart’s evidence in Exhibit 3, nor the submissions of the respondent, favour me with guidance as to how to compare Sale 6 in an overall sense with the subject. This, of course, is hardly surprising given Mr Hart’s primary reliance on Sales 1 to 5. 144 [2018] QLC 9. -- 91 of 104 -- 92 [288] Doing the best that I can with the evidence before me, I consider Mr Jackson’s adjusted analysis for sale 6 of $8,988/m² for comparison purposes with the subject to be overly light. In my view, the comparison amount for Sale 6 must be greater than $8,988/m². By this, I mean, using Mr Jackson’s mathematical way of expressing things, that the rate per square metre for Sale 6 must be increased for comparability purposes with the subject; that is, the rate per square metre of the subject must be greater than Mr Jackson’s assessment of $8,988/m² for Sale 6. [289] Put in a more conventional way, acting on Mr Hart’s evidence predominantly, I find Sale 6 to be overall inferior to the subject. The level of inferiority is significant due, in most part, to the substantially larger size of Sale 6, and, in part, due to the heritage constraints on Sale 6. Sale 7, 466 Ann Street [290] Sale 7 sold in July 2015 for $3,700,000 with an existing DA. It has an agreed analysed sale price of $3,684,297 which equates to $7,581/m². Sale 7 is in an inferior location for commercial office development in comparison with the subject. It is located outside the established commercial office area, further away from the Brisbane Central Station, the Brisbane GPO, and the Queen Street Mall. [291] Sale 7 has a land area of 486 m². This is more than 4.6 times smaller than the subject land. It sold in 2013 with approval for a 17-storey hotel with a total GFA of 4,164 m². A post-sale DA was lodged in April 2016 and approved in December 2016 for a 38- storey residential tower which has not been constructed. The site dimensions and the position of adjoining buildings means that only a small tower floorplate of around 27 m² can be developed and basement car parking cannot be achieved. [292] The sale site does not have the difficulties of the subject associated with developing over and adjacent to a railway. However, both valuers agree that it is not a desirable sale for comparable purposes to the subject, primarily because of its small size and differing development potential. They both view it as of limited assistance. I agree. [293] Although comparing Sale 6 to the subject is not without its own difficulties, it is a far easier task to compare that sale to the subject than Sale 7. -- 92 of 104 -- 93 Sale 8, 55 Elizabeth Street [294] Sale 8 sold for $24 million to Grocon (55 Elizabeth St) Pty Ltd for the development of a commercial office building. Although the contract date was listed as 28 February 2011, the sale price was determined when the parties entered into a Put and Call Option Deed on 29 November 2010. It is important to note that this is almost 5 years before the date of valuation. It has an agreed analysed sale price of $22,335,075 which equates to $11,179/m². [295] Sale 8 has been developed into a 15-storey commercial office tower with an approximate net lettable area of 19,000 m², appropriate gross floor area (GFA) of 21,000 m², and approximate floor plates of 1,430 m². The subject has similar amount of GFA, greater building height but slightly smaller average floorplate size. [296] Although Sale 8 has a slightly smaller size of 1998 m², it has a more regular shape in comparison to the subject. The sale has a single street frontage of 44m. [297] Mr Hart considers Sale 8 to be located in an inferior commercial office location in comparison to the subject. He relies upon the proximity of the subject to Central Station and other commercial office buildings in its vicinity. Mr Jackson, on the other hand, considers Sale 8 to be in a superior location to the subject given that it is closer to the Queen Street Mall. [298] The points that Mr Hart and Mr Jackson make are both sound and factually based. In my view, the opposing opinions effectively cancel themselves out. Accordingly, I find that the location of Sale 8 is equally comparable to that of the subject. [299] A major point of difference between the valuers regarding Sale 8 was centred on the age of the sale, as my detailing of the submissions of the parties earlier in these reasons shows. In short, Mr Jackson says that the commercial office market in the Brisbane CBD was flat from late 2010/early 2011 to the date of valuation of 1 October 2015. Because of the lack of market movement and also because there were no other CBD sales for commercial office purposes, Mr Jackson says that Sale 8 may be relied upon. Mr Hart, on the other hand, is of the opinion that, not only is the sale dated, in his opinion in the years following the sale, leading up to the valuation date, there was strong growth in the Brisbane CBD market principally caused by overseas investors. -- 93 of 104 -- 94 [300] As regards Mr Hart’s opinion, I have already rejected his reliance on the merged market theory. As at the valuation date, the Brisbane CBD market was made up of many component parts depending upon the use to which a site could be put. As I have found, there was a strong student accommodation market. After 2010, the evidence also shows that there was a rise in the residential apartment market. Accordingly, I reject Mr Hart’s opinion where he sought to compare Sale 8 to a rising apartment market. [301] Due to the market being made up of a number of different component parts operating quite distinctly, thus rendering the merged market theory not applicable for 1 October 2015 site valuations in the CBD, the question must be asked as to whether or not the commercial office market had moved between November 2010 and October 2015. [302] Mr Jackson was subject to quite an amount of questioning as regards his opinion of a flat commercial office market over the five year period. Taking a broad overview of the evidence he provided, I am satisfied that his opinion stood up well. I generally accept his opinion, derived from a number of sources. Mr Jackson’s factual evidence included tables from the Property Council of Australia (PCA) for both the total market and A Grade space in the Brisbane CBD which detailed the vacancy factor in the CBD market over the five year period; the take up of supply of office accommodation during that timespan; and supply additions at both points in time. [303] The appellants and the respondent, in their submissions, had a very different view as to what I should make of Mr Jackson’s evidence and the resulting conclusions he drew from that evidence. I have briefly touched on those submissions earlier in these reasons and, in an endeavour not to make this decision so long as to be unreadable, I will not repeat those submissions here. Something, however, needs to be said as to the conclusions I draw from those submissions. [304] The respondent has warned that the Court should exercise great caution before embarking upon an exercise which seeks to ascertain market movement without the benefit of relevant market sales. I certainly agree. However, in circumstances where there is an absence of sales, it may be acceptable for the Court to take just such an approach. The appellants refer to the approach in such circumstances to be “orthodox”. -- 94 of 104 -- 95 [305] It is important to note the case of Australian Executor Trustees Ltd v Propell National Valuers (WA) Pty Ltd.145 In that case, Justice Barker stated at paragraph 126: “Where, however, very comparable sales evidence is not available, as the valuers agree is the case here, it is necessary to look further afield for sales evidence and describe the different attributes those different broadly but relevant properties have in order to measure the value of the subject property against those sales. There can be a preliminary debate about what properties are broadly comparable for this purpose. Some other properties may, in the particular land and property context, be in such different locations, or be so much larger in size or have been so improved, or have such other attributes or detriments, that a recent sale of those other properties may provide no reasonable guidance to the value of the subject property and a ‘weighting’ of their value by comparison to the subject property may be difficult in the extreme. The sales evidence may also be sufficiently old in a volatile market as not to be reliable and so should not be used to this end.” (citations omitted) [306] I also note that during his oral evidence, Mr Hart accepted that it was reasonable to consider secondary evidence in order to reach conclusions about the state of markets over time. [307] I accept the caution that the respondent’s submissions call for. I also accept that, as the respondent strongly puts it, a prospective purchaser of land suitable for commercial development in the CBD in 2015 would, as part of their risk assessment, make an evaluation as to what was happening in the commercial office market at that time and, in particular, take into account any actual construction of commercial developments that were either underway or committed to. [308] The facts of this case clearly show what information was available to a prospective purchaser of a site for commercial development in 2015: “(a) 180 Ann Street (52% committed with major tenants included the Commonwealth Bank and Tatts Group); (b) 480 Queen Street (85% committed with major tenants including Herbert Smith Freehills, PwC, BHP Billiton, The Executive Centre, HWL Ebsworth, DLA Piper, and Allens); (c) 1 William Street (100% committed by the Queensland State Government); (d) 36 Wickham Terrace (0% committed); and (e) 300 George Street (0% committed).”146 [309] I do not accept the respondent’s conclusion that the paragraph above demonstrates a strong demand for commercial development sites in the CBD in 2015. Quite to the contrary, I accept the opinion of Mr Jackson that the introduction of that amount of 145 [2011] FCA 522. 146 Summary from tables in Ex 3 [184]. -- 95 of 104 -- 96 new commercial development over the coming years would act as a disincentive to any prospective purchaser of same in 2015.147 [310] I need also consider the criticism made of Mr Jackson for not treating Sale 6 as a commercial sale as part of his analysis of the commercial market from 2010 to 2015. To begin with, Sale 6 speaks for itself as being, at the time of purchase, for student accommodation, at least, insofar as the Turbot Street part of the site is concerned, with no definitive plans for the Ann Street part of the sale at that time. Clearly, Sale 6 was considered, at the time of purchase, suitable for a mixed development. However, even if Sale 6 were to be classified as purely commercial, the appellants in their reply submissions noted, on the basis of the respondent’s proposition that Sale 6 be used for market evaluation purposes as a commercial sale, that “the evidence suggests that in February 2011 a purchaser for a commercial use paid $10,578/m2 (55 Elizabeth Street) whereas in December 2015, shortly after the date of valuation, a purchaser of a site suitable for commercial development paid only $9,987/m2 (62 Ann Street). Thus, the analysis that the Respondent suggests would tend to show that the market for commercial development was stagnant between February 2011 and the date of valuation.”148 Although the appellants have not taken into account for their exercise comparability points of similarity and difference between Sale 6 and Sale 8, as a broad example considering general commercial market movement, I accept the force of the appellants’ contention. [311] I am satisfied that the PCA statistics and market evidence regarding rental and incentive levels demonstrates that the office market conditions leading up to and at 1 October 2015 were at least stagnant if not inferior to November 2010. I agree that there was limited, if any, demand for commercial office development sites leading up to October 2015, which is a compelling reason why there were no sites purchased for commercial development. [312] Accordingly, I find that the commercial office market overall had little movement between 29 November 2010 and 1 October 2015, which means that Sale 8 may be relied upon for comparison purposes with the subject, despite the passage of almost five years. 147 See, for instance, the first two lines of Ex 3 [184]. 148 Appellants’ reply submissions, [147]. -- 96 of 104 -- 97 [313] There is one remaining aspect of Sale 8 to deal with. That relates to the discount that Mr Jackson says should be made for comparison purposes to the subject for Sale 8 on the basis of the purchaser having a high level of certainty relating to both a DA and a whole of building tenant. The allowance that Mr Jackson makes is 5%, which is relatively minor. [314] Although Mr Jackson certainly produced some evidence as to the state of comfort that the purchaser had in November 2010, questioning during the concurrent evidence also raised in my mind some doubts in this regard. As the adjustment that Mr Jackson seeks is only minor, and given the state of the evidence, I am not prepared to find, in this specific respect, that Sale 8 is superior to the subject. [315] Overall, I find that Sale 8 is comparable to the subject. However, I also accept that, due to the age of the sale, care must be taken when comparing it to the subject. Conclusions regarding 310 Ann Street [316] My analysis above has effectively found as unreliable for the purposes of comparison with the subject Sales 1, 2, 3, 4, 5, and 7. That only leaves Sales 6 and 8. [317] As regards Sale 6, which has an agreed analysed sale price of $9,987/m², I have found such sale to be inferior, not in a minor way, to the subject. I have found Sale 8, which has an agreed analysed price of $11,179/m², to be comparable to the subject, but that the sale must be considered with caution as it is quite dated. [318] It is unfortunate that I have found it necessary to not rely upon 6 of the sales for comparison purposes with 310 Ann Street. There is, however, some other evidence before me which, while certainly not as good as sales evidence, does give some guidance as to value as both valuers have pointed out. The LVA site value of Sale 6 as at 1 October 2015 was $9,127/m². I note that such site value resulted from Land Court orders made with the consent of the parties to a particular appeal relating to that year’s valuation of that block. [319] I also note that the LVA site value of Sale 8 as at 1 October 2015 was $14,014/m². [320] I must also mention that there was agreement between the valuers that the site cost penalty (railway line) should result in a reduction for the subject of $1,371,000. I thank the valuers for their agreement in this regard. -- 97 of 104 -- 98 [321] A final point is that, in the manner in which I have reached my conclusions, I have not properly taken into account to a point included in the valuation evidence of Mr Hart in Exhibit 3. Before doing his final calculations, Mr Hart stated as follows at paragraph 332: “A further 10% adjustment has been applied to rate the impact of the rail corridor on the building height and GFA of the HBU development.” [322] I agree with Mr Hart that it is correct and proper for the 10% adjustment to be made. It is also consistent with the factual evidence pertaining to 310 Ann Street and, by comparison, Sales 6 and 8. I commend Mr Hart for his approach in this regard. Determination for 310 Ann Street [323] Having considered the evidence and the submissions of the parties, my first task for 310 Ann Street is to determine whether or not the evidence in its totality supports the case put by the appellants that the issued valuation is in error, on the balance of probabilities, so that the onus of proof is discharged. [324] In my view, the appellants have, on the balance of probabilities, established that the issued valuation for 310 Ann Street is in error. It is unnecessary for me to repeat the body of evidence that leads me to this conclusion. Without derogating from any of the conclusions that I have made in this decision, in short, the appellants have demonstrated that the site values contended for by the Valuer-General are excessive and erroneous. The errors include the reliance upon the merged market theory and placing emphasis on sales which are not properly comparable to the subject. [325] Having found that the onus of proof has been satisfied, I am of course required, on the evidence before me, to arrive at a site value for both appeals for 310 Ann Street. My task has not been made any easier by some of the difficulties that I have with aspects of the evidence and opinions of both valuers. [326] I specifically find, for the reasons already stated, Sale 6 to be of the greatest use in determining a site value for 310 Ann Street, even though part of the reason for the purchase was student accommodation for part of the site. Sale 8 is used as a guide for the bottom end for LVA site valuation purposes, given the caution with which I use that sale. This means that the valuation for the unburdened part of the subject cannot be below $10,061/m² (after allowing Mr Hart’s 10% discount for the subject to rate -- 98 of 104 -- 99 the impact of the rail corridor on the building height and GFA of the highest and best use (HBU) development as compared to the agreed analysed rate for Sale 8 of $11,179/m²). [327] Turning my attention to Sale 6, the starting point is the analysed rate of $9,987/m². I have found such rate to be inferior, not in a minor way, to the subject. I consider an allowance of 20% appropriate to make Sale 6 properly comparable for site valuation purposes to the unburdened part of the subject. This results in an unburdened rate for the subject of $11,984/m². From that amount must be deducted the 10% of Mr Hart’s to rate the impact of the rail corridor on the building height and GFA of the HBU development. This results in an unburdened rate for the subject of $10,786/m². [328] Doing the best that I can, I determine the site value of 310 Ann Street as at 1 October 2015 to be as follows: Site Value Assessment – Freehold Lot Freehold Land – Unburdened 1,580m2 @ $10,786/m2 $17,041,880 Easement – Railway Tunnel (25%) 677m2 @ $8,090/m2 $5,476,930 Less Site Cost Penalty (Railway Line) $1,371,000 Site Value $21,147,810 Rounded to $21,150,000 Site Value Assessment - Leasehold Lot Leasehold Area (15%): 520m2 @ $1,678/m2 $872,560 Rounded to $873,000 [329] It follows that for appeal file LVA073-17, 310 Ann Street (freehold plus leasehold), I determine the site value as at 1 October 2015 to be $22,023,000. [330] It follows that for appeal file LVA074-17, 310 Ann Street (freehold only), I determine the site value as at 1 October 2015 to be $21,150,000. Conclusions regarding 300 Ann Street [331] The parties are in general agreement, but for one aspect, that the findings for 310 Ann Street apply to 300 Ann Street. There are of course differences to the attributes of 300 -- 99 of 104 -- 100 Ann Street compared to 310 Ann Street. However, given the manner in which I have determined the comparability of each of the sales to 310 Ann Street, resulting in the only sales that are of use being Sales 6 and 8, and taking into account the only minor differences for comparability purposes of those sales to the subject, 300 Ann Street, I consider it unnecessary to give further consideration to those sales. [332] The one aspect on which there is a difference between the valuers for 300 Ann Street is, in the scheme of things (as acknowledged by both parties), very minor from a valuation perspective. This relates to the adjustment to the unburdened rate which needs to be made for the railway easement land. Although the valuers are far apart (Mr Jackson’s 77% compared to Mr Hart’s 25%), the area of land for the easement is only 21 m². [333] Mr Hart’s rationale in applying a 25% deduction for the burdened area was that the same percentage discount was agreed for the burdened area of 310 Ann Street.149 Mr Jackson noted that the easements above 310 Ann Street permit development above those easements, meaning that that space can be used for a commercial purpose and has value. In contrast, Mr Jackson notes that the easements on 300 Ann Street are for supporting columns, such that no commercial use can be made of that space.150 Mr Jackson therefore applied a 77% discount in respect of the burdened area on 300 Ann Street. [334] The respondent considers Mr Jackson’s opinion excessive. The appellants say that Mr Hart’s opinion is not appropriate given the factual differences between 300 Ann Street and 310 Ann Street in this regard. [335] I am satisfied that there are differences in the easements impacting 300 Ann Street compared to 310 Ann Street. I am not, however, satisfied that Mr Jackson has established any satisfactory reason for arriving at 77%. Given the small amount of area involved, and the resultant minor impact on the site valuation for 300 Ann Street, I have decided to effectively split the difference of opinion between Mr Hart and Mr Jackson as neither opinion has been well made out. I accordingly set the rate at 50%. 149 T 9-86, line 4 to 7. 150 T 9-86, line 15 to 33. -- 100 of 104 -- 101 [336] I must also again mention that there was agreement between the valuers that the site cost penalty (railway line) should result in a reduction for the subject of $527,000 (rounded, but for a difference of $1,000). I thank the valuers for their agreement in this regard. [337] A final point is that, in the manner in which I have reached my conclusions, I have not properly taken into account this point included in the valuation evidence of Mr Hart in Exhibit 4. Before doing his final calculations, Mr Hart stated as follows at paragraph 338: “A 10% adjustment has been applied to rate for the adjoining rail corridor and its impact on the development potential of the site.” [338] I agree with Mr Hart that it is correct and proper for the 10% adjustment to be made. It is also consistent with the factual evidence pertaining to 300 Ann Street and Sales 6 and 8. I commend Mr Hart for his approach in this regard. Determination for 300 Ann Street [339] Having considered the evidence and the submissions of the parties, my first task for 300 Ann Street is to determine whether or not the evidence in its totality supports the case put by the appellants that the issued valuation is in error, on the balance of probabilities, so that the onus of proof is discharged. [340] In my view, the appellants have, on the balance of probabilities, established that the issued valuation for 300 Ann Street is in error. It is unnecessary for me to repeat the body of evidence that leads me to this conclusion. Without derogating from any of the conclusions that I have made in this decision, in short, the appellants have demonstrated that the site values contended for by the Valuer-General are excessive and erroneous. The errors include the reliance upon the merged market theory, and placing emphasis on sales which are not properly comparable to the subject. [341] Having found that the onus of proof has been satisfied, I am of course required to arrive at a site value for 300 Ann Street, doing the best that I can on the evidence before me. My task has not been made any easier by some of the difficulties that I have with aspects of the evidence and opinions of both valuers. [342] I specifically find, for the reasons already stated, Sale 6 to be of the greatest use in determining a site value for 300 Ann Street, even though part of the reason for the -- 101 of 104 -- 102 purchase was student accommodation for part of the site. Sale 8 is used as a guide for the bottom end for LVA site valuation purposes, given the caution with which I use that sale. This means that the valuation for the unburdened part of the subject cannot be below $10,061/m² (after allowing Mr Hart’s 10% discount for the subject adjoining rail corridor and its impact on the development potential of the site as compared to the agreed analysed rate for Sale 8 of $11,179/m²). [343] Turning my attention to Sale 6, the starting point is the analysed rate of $9,987/m². I have found such rate to be inferior, not in a minor way, to the subject. I consider an allowance of 20% appropriate to make Sale 6 properly comparable for site valuation purposes to the unburdened part of the subject. This results in an unburdened rate for the subject of $11,984/m². From that amount must be deducted the 10% of Mr Hart’s to account for the adjoining rail corridor and its impact on the development potential of the site. This results in an unburdened rate for the subject of $10,786/m². [344] Doing the best that I can, I determine the site value of 300 Ann Street as at 1 October 2015 to be as follows: Site Value Assessment – Freehold Lot Freehold Land – Unburdened 1,029m2 @ $10,786/m2 $11,098,794 Easement – Railway Tunnel (50%) 21m2 @ $5,393/m2 $113,253 Less Site Cost Penalty (Railway Line) $527,000 Site Value $10,685,047 Rounded to $10,685,000 [345] It follows that for appeal file LVA075-17, 300 Ann Street, I determine the site value as that 1 October 2015 to be $10,685,000. Costs [346] I make the following observations regarding costs. Subject to anything the parties may wish to submit on the issue of costs, having regard to all of the evidence before me in these matters, and also having regard to the conduct of the parties, I am of the strong view that there has been nothing in the cases or submissions as put by either side apt to enliven the costs provisions of the LVA. -- 102 of 104 -- 103 [347] I appreciate, of course, that I am yet to hear from the parties as to any submissions they may wish to make with respect to costs. As this decision is being delivered at 12.30pm on 31 May 2019, which importantly for me is my retirement day, I will allow the parties until 2.30pm today to formally advise the Court, in writing, if either of them seeks any order as to costs. [348] If any party intends to seek an order for costs, if possible, I will hear from the parties by way of oral submissions later in the afternoon of 31 May 2019 and thereafter deliver ex tempore reasons. However, if the parties are able to convince me that they require additional time to make their submissions, I will give the matter further consideration. Orders As regards LVA075-17, 300 Ann Street, Brisbane: 1. The appeal is allowed. 2. The site value of 300 Ann Street, Brisbane as at 1 October 2015, is determined in the sum of Ten Million, Six Hundred and Eighty-Five Thousand Dollars ($10,685,000). 3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court. 4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019. As regards LVA073-17, 310 Ann Street, Brisbane (freehold plus leasehold): 1. The appeal is allowed. 2. The site value of 310 Ann Street, Brisbane (freehold plus leasehold) as at 1 October 2015, is determined in the sum of Twenty-Two Million, and Twenty-Three Thousand Dollars ($22,023,000). 3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court. 4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019. -- 103 of 104 -- 104 As regards LVA074-17, 310 Ann Street, Brisbane (freehold only): 1. The appeal is allowed. 2. The site value of 310 Ann Street, Brisbane (freehold only) as at 1 October 2015, is determined in the sum of Twenty-One Million, One Hundred and Fifty Thousand Dollars ($21,150,000). 3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court. 4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019. PA SMITH MEMBER OF THE LAND COURT -- 104 of 104 --