Australian Postal Corporation v Department of Natural Resources and Mines [2003] QLC 11

LAND COURT OF QUEENSLAND CITATION: Australian Postal Corporation v Department of Natural Resources and Mines [2003] QLC 11 PARTIES: Australian Postal Corporation (applicant) v Department of Natural Resources and Mines (respondent) FILE NO/S: AV2002/0438 and AV2002/0439 DIVISION: Land Court of Queensland PROCEEDING: Appeals against annual valuations under the Valuation of Land Act 1944 DELIVERED ON: 26 February 2003 DELIVERED AT: Brisbane HEARD AT: Coolangatta MEMBER: Dr NG Divett ORDER: 1. In respect of the appeal at 2 Griffith Street, Coolangatta (AV2002/0438) the determination of the Chief Executive is set aside, and the unimproved value of Lot 1 on RP 129713 is determined at Nine Hundred and Thirty Thousand Dollars ($930,000). 2. In the matter of 1128 Gold Coast Highway, Palm Beach (AV2002/0439) the appeal is dismissed, and the unimproved value of Lot 84 on RP 868646 as determined by the Chief Executive in the sum of Five Hundred and Fifty Thousand Dollars ($550,000) is affirmed. CATCHWORDS: Valuation – sales – sales analysis – allowance for existing tenancies approach where commercial advantage [68] to [71]. Valuation – sales – sale analysis – use of professional judgment [55] to [59]. -- 1 of 27 -- 2 Evidence – expert evidence – errors in technical reports – forensic attack not appropriate in valuation evidence [60 to 62]. Valuation – sales – sales analysis – method of analysis – use of improved sales rejected [64] to [67], [87]. APPEARANCES: Mr A Crawford for the applicant. Mr W Isdale for the respondent. Background: [1] These two matters were heard concurrently and relate to lands at 2 Griffith Street Coolangatta (AV2002/0438), and at 1128 Gold Coast Highway, Palm Beach (AV2002/0439). The subject lands are both used as commercial postal enterprises and have areas of 860 m² (Coolangatta) and 825 m² (Palm Beach). The Coolangatta site is located about 25 kilometres south-east, and the Palm Beach site is located about 16 kilometres south-east of Surfers Paradise. The Coolangatta site is about 200 metres, and the Palm Beach site is about 150 metres, from the Pacific Ocean. Both sites are level, with good access and drainage. [2] The Coolangatta site is a corner site fronting Griffith Street, McLean Street and Chalk Street, all of which are bitumen sealed with concrete kerbing and channelling. All normal utility services are available. On-street parking is available in Griffith and Chalk Streets, with a public car park nearby to the site in Chalk Street. Griffith Street has a divided centre medium strip restricting access to the site other than for west bound traffic. [3] The Palm Beach site fronts the divided four lane bitumen sealed Gold Coast Highway, which has concrete kerbing and channelling. Access to the site is restricted to north bound traffic by a median strip. The Highway carries high traffic volumes at all times. [4] Both subject lands are zoned Comprehensive Development under the Town Plan of the Gold Coast City Council of 24 February 1994, effective at the date of valuations of 1 October 2001. The Coolangatta site is in “Precinct 1 – Central” of the Development Control Plan No. 8 – Coolangatta area; while the Palm Beach site is within “Precinct 1 – Central” of the Development Control Plan No. 3 – Palm Beach Central area. The Coolangatta site is used for commercial use/post office; while the Palm Beach site is used for commercial use/multi-tenancy. The key issues are comparison of sales, relativity, changes in the valuations and the use of improved sales. [5] On 25 February 2002 the Chief Executive issued valuations of the subject lands at $1,150,000 (Coolangatta) and $550,000 (Palm Beach). Following objections the Chief Executive confirmed those unimproved values on 25 June 2002. The appellant has now -- 2 of 27 -- 3 appealed claiming the unimproved values should more properly be $850,000 (Coolangatta) and $450,000 (Palm Beach). At the hearing Mr Crowley led evidence to values of $1,150,000 (Coolangatta) and $550,000 (Palm Beach). Mr Crawford led evidence to $860,000 (Coolangatta) and $475,000 (Palm Beach). [6] Allen J Crawford, a registered valuer appeared and gave evidence for the appellant. Mr W Isdale, Counsel of Crown Law appeared for the respondent, calling evidence from Gregory Patrick Crowley the departmental registered senior valuer responsible for determining the valuations. The Evidence: The Location of the Lands – [7] Mr Crawford argues that the Coolangatta site as a post office facility is a destination type commercial operation, not relying upon passing traffic. He argues further that as the subject land is virtually at the extreme northern end of Griffith Street, any benefit of pedestrian movements at that location is less than what might be available further to the south along Griffith Street. Mr Crowley rejects that conclusion arguing that relativities along Griffith Street suggest that commercial activities are reasonably consistent. However he concedes that the subject land is virtually at the end of commercial developments, with little activity to the west of McLean Street. It is agreed that the subject land has good exposure to traffic turning into Griffith Street, and there is parking nearby in adjoining Chalk Street. Comparison of Sales – [8] Both valuers have relied upon comparisons with sales of lands in the area. However there is some difference between the type of sales adopted by each valuer. There were three common sales used.  Coolangatta site - [9] To support his valuation Mr Crawford relies upon the following sales:  Sale 1 – (457 Golden Four Drive, Tugun). This is a 450 m² parcel developed as a commercial site (chemist) with a flat above, located in a busy retail precinct. The sale contains building improvements of 604 m² which are analysed to have an added value of $225,000 ($373 per square metre). The sale sold in February 2001 for $515,000. The unimproved value of that site was initially determined at the relevant date at $320,000 (($711 per square metre), and subsequently reduced on objection to $290,000 ($644 per square metre), reflecting an increase of 36% from the previous valuation at 1 October 2000 ($212,500 - $472 per square metre). -- 3 of 27 -- 4 [10] Mr Crawford argues that if that sale was used by the respondent to assist in determining the unimproved value of the subject land and the sale itself was later reduced in value on objection, then by logic there should also flow a comparable reduction in the determined unimproved value of the subject land. Mr Crawford also notes that the respondent’s unimproved value of that sale includes an amount of $46,000 for the added value of a tenancy, which is a matter relating to the existing buildings upon the land and not to the value of the land itself He advises that the market place now differentiates the value it places upon vacant building sales, where there is no existing tenancy to guarantee ongoing viability. He argues that virtually results in a reduction in the purchase price of vacant investment properties. Mr Crawford supplies his Sale 1 merely to demonstrate that the respondent has not correctly analysed that sale, which he argues is not of much use due to the highly improved nature of the sale. However he agrees that there is less tourist activities near his Sale 1 than near the Coolangatta subject land. [11]  Sale 2 – (459 Golden Four Drive, Tugun). This is a 503 m² parcel developed as a butcher shop with a flat above, which was purchased by an adjoining owner for expansion of that business. The sale contains a building area of 360 m², which was analysed to have an added value of $75,000 ($208 per square metre). The sale sold in August 2001 for $365,000. The sale was initially valued at 1 October 2001 at $355,000, but later reduced on objection to $295,000 ($586 per square metre), reflecting a 24% increase since the previous valuation at 1 October 2000. Mr Crawford believes the application of that sale is reasonable, but cautions its use in view of the adjoining owner influence which could indicate a high sale. He further notes that the added value of the improvements ($208 per square metre) reflected a total refurbished ground floor shop. He sees the Tugun sale as useful for the Palm Beach land, but of little use for the Coolangatta subject land. [12]  Sale 3 – (23 Griffith Street, Coolangatta). This is a 349 m² parcel developed with two retail tenancies (café and film processing), of total area 482 m². While the older style improvements are substantial, they may be seen as close to slightly improved due to the paucity of sales in Coolangatta. There were no leases in place at the date of sale, and therefore the price included no added value of tenancies. The sale sold in December 2001 for $465,000, which was analysed and applied at $400,000, showing a 40% increase from the previous valuation of $285,000 at 1 October 2000. [13] Mr Crawford however argues that in determining that unimproved value, the respondent has made insufficient allowance for the added value of improvements. Mr Crawford analyses those improvements at $160,000, concluding an unimproved value of $305,000 ($874 per square metre) for that property, rather than the $400,000 ($1,146 per square metre) determined by the respondent, after allowing only $65,000 ($134 per square metre) for the improvements. Mr Crawford notes that Sale 3 is towards the centre of -- 4 of 27 -- 5 Coolangatta precinct, and on the beach side of Griffith Street. Mr Crawford was unable to determine much information from either the vendor or purchaser (Hilmer) but he did speak to one of the tenants on their personal experiences. He was aware that the property resold again in June 2002, but that later sale has no impact upon the current matter. The December 2001 sale was an arm’s length sale. [14]  Sale 4 – (64 Griffith Street, Coolangatta). This is a 164 m² parcel developed as a modern three-level air-conditioned commercial/retail building in the central area of Griffith Street. The sale was renovated in 1995, and was fully tenanted at sale. Mr Crawford inspected the property, finding the top floor property was locked, but he believes that was not unusual for a single purpose operation. Mr Crawford analyses the improved value of that property at $515,000. He values the improvements at $608 per square metre for 460 m² or $279,680. He notes that the respondent has, in his opinion, used quite arbitrary depreciation rates in analyzing that highly improved sale, rather than determining the added value of the improvements to the purchaser who occupies the building. He advises that the ground floor lease was renewed in October 1998 at an annual rental of $34,402.50, which supports his view that the added value of the improvements are greater than allowed for by the respondent. Because of those uncertainties associated with such a highly improved sale, he argues it is not really suitable to use when determining an unimproved value, and it has the same problems as adopting a notional development approach. [15]  Property 5 – (8 McLean Street, Coolangatta). This is a 1,067 m² parcel which is compared for relativity purposes. The property has an unimproved value at 1 October 2001 of $1,250,000 ($1,171 per square metre), and is far superior to the subject land. The property is at the corner of Griffith Street and McLean Street, and adjoins restaurants at the corner of McLean Street and Marine Parade, and is subject to passing pedestrian traffic. It is also on the beach side of Griffith Street, which is a superior location. [16] To support his valuation of the Coolangatta site Mr Crowley supplies the following sales:  Sale 1 – (64 Griffith Street, Coolangatta – Lot 31 on RP 100298). This is a common sale with Mr Crawford’s Sale 4. The sale is seen as inferior to the subject land on a pro rata basis due to the restrictive size of the sale for development purposes, its inferior access and inside exposure. The sale sold in March 2001 for $585,000, and was analysed at $250,000 ($1,524 per square metre) after allowing for improvements of $335,000, and was applied at $235,000 ($1,430 per square metre). The sale has double access to both Griffith Street and Chalk Street at its rear. In his analysis of that sale Mr Crowley adopts a notional development approach, allowing for an added value of improvements ($393,600), professional fees ($31,488), rates and land tax ($3,769), development interest ($6,432), depreciation of 25% ($108,822), and holding charges ($8,441) reflecting time to arrange the appropriate approvals. [17]  Sale 2 – (23 McLean, Coolangatta – Lot 4 on RP 83729). This is a narrow 405 m² comprehensive development parcel containing a two-storey former bank building, -- 5 of 27 -- 6 now a night club. The sale is seen as inferior on a pro rata basis due to its inferior location, access and shape. The sale was an after date sale which sold in February 2002 for $420,000, and after allowing for improvements ($100,000) was analysed at $320,000 and applied at $280,000 ($691 per square metre). Mr Crowley had adopted an agreed added value of improvements at $100,00 based upon an agreement with the other owners. He confirms that he had not fully analysed those improvements in detail, and that analysis had been used for comparisons of other properties in the area. He argues that adopting that basis the relativity of those parcels is correct. The after date nature of the sale in a rising market is allowed for by its conservative application of only 87%. [18] Mr Crawford agrees that sale is close to the subject land, and would have a higher rate per square metre due to its smaller size. However he notes that comparisons would be difficult due to the difference in size between the sale and the subject land. The subject land is also seen as a destination site in a fringe area. Mr Crawford sees the application of the subject land at $1,337 per square metre at nearly twice the rate of Sale 2 at $691 per square metre, which is not, in his opinion, a reasonable comparison. [19]  Sale 3 – (16 – 20 Seventh Avenue, Palm Beach - Lot 73 to 75 on RP 32000). This is a 1,215 m² comprehensive development parcel which is common with Mr Crawford’s Sale 3, although Mr Crawford sees its application only to the Palm Beach subject land. Mr Crowley argues that the existing 50 year old fibro cement buildings do not reflect the best use of the land, and he has seen those buildings as representing only a negative added value of $6,050 being their removal costs. The sale sold in March and May 2001 for $687,500, and was analysed at $693,550, and applied as a notional unimproved value of $640,000 ($528 per square metre). The current applied value of that site is valued under s.17 of the Act as residential properties. The notional value would be its value for its fully developed use. Overall the sale is inferior to the subject land at Coolangatta, due to its inferior location, exposure and development potential, and to its lesser height and plot ratio potential. The land was purchased for a commercial development with no immediate intention of the owners. [20] Mr Crowley agrees that his Sale 3 (16-20 Seventh Avenue) which was notionally applied at $528 per square metre, is vastly different to the subject land, but argues that it is the nearest vacant land to the subject land, and supports the overall increase of 35% for the commercial values in the area. He concedes that the old improvements on that sale may still be in use well after the date of sale. (Exhibit 4, photograph 12). [21] Mr Crawford confirms that his Sale 3 (23 Griffith Street) is his most useful sale, while his Sales 1 and 2 are merely to demonstrate errors in the respondent’s approach, if the respondent relies upon those sales. Sales 1 and 2 also show final increases after objections applied to those properties, which are not consistent with the increase applied -- 6 of 27 -- 7 to the subject land. Mr Isdale confirms that the respondent has not relied upon those sales, and Mr Crawford agrees that he did not rely upon his Sales 1 and 2 to determine his valuation of the subject land. [22] Mr Crowley sees his Sale 1 (64 Griffith Street) as his key sale, although he accepts that it is a highly improved property, and is not lightly improved. He has maintained the existing relativity, and the sale has similar rear access, same development control restrictions, and location as the subject land. [23] In respect of Mr Crawford’s Sale 1 (457 Golden Four Drive) he sees that sale only as a far inferior property in an inferior location, not in a CBD area. He notes that Mr Crawford’s Sale 2 (459 Golden Four Drive) has similar comparisons to his Sale 1, and its only assistance is to demonstrate that the inferior Tugun area experienced a 35% increase in the relevant period. He has compared those sales on a per metre frontage basis which shows a similar comparison between the subject and those sales. [24] In respect of Mr Crawford’s Sale 3 (23 Griffith Street) Mr Crowley has not analysed that, but he feels that the later resale of that property in June 2002 at a much higher price supports his view that Sale 3 was a low sale. Mr Crowley did not personally inspect the common sale at 64 Griffith Street, but he understands that at the time of sale the two upper floors were vacant. Mr Crowley had adopted the analysis of that sale by another valuer (Mr Whitelegge). [25] Mr Crowley does not believe that Mr Crawford’s property 5 (8 McLean Street), the Coolangatta Sands Hotel, is in fact a superior location to the subject land. He argues that parking in Chalk Street is superior, the frontage to depth ratio is superior at the subject land, reflecting a higher rate per square metre, and the pedestrian traffic is stronger on the southern side of Griffith Street. He notes that land uses on the western side of McLean Street reflect a smaller pedestrian flow. He feels that the large car park in Chalk Street is the main parking destination for that area, as few sites have on-site parking facilities. [26] In respect of his analysis of his Sale 1 (64 Griffith Street) Mr Crowley confirms that he made no allowance for the tenancy, as those improvements are the property of the tenants. Mr Crawford argues that at the end of a lease, if the improvements add value, the improvements are left extant as it advantages the landlord and does not cause extra cost to the tenant who might otherwise have to pay to remove the fixtures. There is therefore some residual value in the tenants’ fixtures. Mr Crowley argues that it is hypothetical whether the fixtures add any value, and he feels his valuation is correct in not allowing anything in his added value of improvements, but he concedes there may be some residual value. -- 7 of 27 -- 8 [27] In respect of the depreciation rate of 25% on Mr Crowley’s Sale 1 (64 Griffith Street), Mr Crawford argues that is a heavy rate. Mr Crowley rejects that, noting part of the building was built in 1960s, and in his opinion the second and third floors add little to the value. Mr Crowley argues that most of the parcels are too small to justify development much above the first floor level. However Mr Crowley did not speak to either vendor or purchaser, as another valuer undertook those analyses. That valuer has subsequently ceased employment with the respondent. However Mr Crowley feels his examination of that valuer’s opinion suggest that an error has not occurred. [28] In respect of his Sale 1 (64 Griffith Street) Mr Crowley concedes that the cost of improvements may have been assessed at $1,000 per square metre in line with the rate applied at Sale 3 (1716 Gold Coast Highway). He notes also that the awning at Coolangatta could also add to the added value of the improvements on that site. On that basis Mr Crawford argues that the added value of the improvements on Coolangatta could be higher than currently adopted by the former valuer (Mr Whitelegge). He argues that challenges the reliability of the analysis of Sale 1 (64 Griffith Street).  Palm Beach site [29] To support his valuation of this site, Mr Crawford provides the following sales:  Sale 1 – (457 Golden Four Drive, Tugun). As noted previously by Mr Crawford he rejects the use of this sale as a highly improved sale, relying only upon his Sale 1 to demonstrate errors in Mr Crowley’s analyses.  Sale 2 – (459 Golden Four Drive, Tugun). This has common understanding as applied for the Coolangatta site, and is seen as not relevant. [30]  Sale 3 – (16 – 20 Seventh Avenue, Palm Beach – Lots 73 to 75 on RP 32000). This is a 1,215 m² comprehensive development parcel, containing two houses which are currently providing a holding rental income until the land is ripe for redevelopment. From advice from an apparent third party family member, Mr Crawford forms the view that the purchaser was a long-term speculative buyer. The houses are assessed at an added value of improvements equivalent to a total of $475 per week for three years, discounted at 8%. Mr Crawford advises that rental levels in that area are static, and there is no short-term potential to develop the sale land for commercial purposes. The sale sold in March and May 2001 for $687,500, from which he analysed the land value at $624,000 ($513 per square metre). This is a common sale with Mr Crowley, but Mr Crawford disputes Mr Crowley’s opinion that the existing houses reflect a negative value demonstrating only removal value. The sale is nearby to a public car park, and adjoins office and retail developments. [31]  Sale 4 – (7 Palm Beach Avenue, Palm Beach). This is a 741 m² comprehensive development parcel containing a two level building occupying 262 m² on ground level, and 87 m² on the upper level. This is a highly improved fully leased property -- 8 of 27 -- 9 at $59,000 per annum, and is really unsuitable for comparison purposes to determine unimproved value. The sale is provided to further demonstrate that the applied unimproved value is too high. After allowing for the existing leases, the analysed improved value was seen as reflecting only $575,000, with added value of improvements at $230,000, reflecting an unimproved value of the land at $345,000 ($465 per square metre), compared to the applied value of $460,000 ($620 per square metre). The sale sold in May 2001 for $625,000. The current application of $460,000 reflects an increase of 35% from the previous valuation. The sale is seen as slightly inferior to the subject land. Mr Crowley agrees that sale was only 349 m² (or about 50%) developed of the total area of 750 m² of that site. [32]  Sale 5 – (1057 Gold Coast Highway, Palm Beach). This is a 410 m² comprehensive development parcel containing a two level older style building of area 160 m² plus paving of 80 m², which was renovated internally. The total added value of improvements reflects $54,000, and the sale sold in July 2001 for $295,000, reflecting an unimproved value for the land of $240,500 ($600 per square metre). The sale was applied by the respondent at $265,000 ($646 per square metre) reflecting an increase of 40%. The sale is seen as superior due to its location on the beach side of the highway. Mr Crawford argues that because of its smaller size than the subject land it should reflect a lower rate per square metre. The sale is opposite the subject land, and purchased by an owner occupier, and therefore not tenanted. He feels that sale can be seen as a slightly improved sale. [33] Mr Crowley concedes that Mr Crawford’s Sale 5 (1057 Gold Coast Highway) represents only a 160 m² of development on a 410 m² site, or 39% of its full development potential. Mr Crawford argues that all of the sales referred to by Mr Crowley do not reflect their highest and best use as provided for in the Town Plan, a matter on reflection agreed by Mr Crowley. [34]  Sale 6 – (1059 Gold Coast Highway, Palm Beach). This is a 857 m² comprehensive development parcel with an older style fibro house used for retailing purposes. It is located opposite the subject land on the superior (beach) side of the highway, and is superior. The sale sold in March 2001 for $410,000, and is seen as a low sale, demonstrating the weaker demand for vacant non-income earning properties in that area, where immediate redevelopment potential is seen as not strong. The sale was a third party sale, which by law must be exposed to the market place. The property resold on 23 March 2002 for $740,000. Although a late sale, the second sale is closer to 1 October 2001, than the first sale. He believes the low nature of the first sale was because of the third party nature of that sale. [35] To support his valuation of the Palm Beach site, Mr Crowley provides the following sales:  Sale 1 – (16 – 20 Seventh Avenue, Palm Beach – Lot 73 – 75 on RP 32000). This is the common sale with Mr Crawford’s Sale 3, and Mr Crowley’s Sale 3 for the Coolangatta site. Overall the sale is inferior to the Palm Beach subject land for the reasons outlined in paragraph [19]. -- 9 of 27 -- 10 [36]  Sale 2– (20 Palm Beach Avenue, Palm Beach – Lot 9 on RP 901396). This is a 1,214 m² comprehensive development parcel containing a low set brick building of area 412 m² leased as a medical centre. The sale is separated from the subject land by the car park of the Palm Beach Hotel, and is agreed to be a highly improved parcel. While the improvements add value to the land they are not seen as to its theoretical highest and best use. The sale is inferior to the subject land due to inferior exposure and absence of complementary development potential. The sale sold in January 2001 for $1,350,000, was analysed at $840,000 ($692 per square metre) after allowing for improvements at $510,000, and applied at $670,000 ($552 per square metre). In assessing his added value of improvements Mr Crowley relies upon measurements from leased documents. [37] Mr Crowley notes that a 400 m² building on the 1,200 m² land at Sale 2 (20 Palm Beach Avenue) does not fully represent its best development. While Mr Crowley argues that his Sale 2 (20 Palm Beach Avenue) is under developed, he concedes that the subject land at Palm Beach is also not fully used. [38] Mr Crawford challenges Mr Crowley’s opinion that the upper levels of commercial development in Griffith Street, Coolangatta have no added value to those sites, while some allowance for upper levels has been allowed for in the sale analyses for the Palm Beach comparisons. Mr Crowley’s only point in the analysis of his Sale 3 (20 Palm Beach Avenue) is that, while the existing medical centre development is an economic use of that property, he feels a higher use could have been undertaken on that land. [39] Mr Crawford rejects that property as a lightly improved property, which is leased as a medical centre to two lessees for a total rental in the first lease year of $115,770.50 per annum (Exhibit 6). Because of that level of added value associated with the tenancies in place, Mr Crawford argues that it is very difficult to conclude the unimproved value of the land. [40] Mr Crowley has assessed the added value of improvements on a notional development approach at $522,000, professional fees $52,200, rates and land tax ($11,138), development interests ($16,828), depreciation at 20% ($120,443), and holding charges ($28,956), concluding an analysed unimproved value of $839,311 ($691 per square metre). [41]  Sale 3 – (1716 Gold Coast Highway, Burleigh Heads – Lot 1 on RP 98198). This is a 278 m² comprehensive development narrow parcel with a single storey brick and steel roof shops in place. The sale is seen as considerably superior to the subject land due to its highway location, relatively small size and rear access to a single direction narrow lane and pathway. The sale sold in March 2001 for $462,000, was analysed at $314,350 ($1,131 per square metre), after allowing for improvements of $147,650, and was applied at $250,000 ($900 per square metre). Mr Crowley analyses that sale using a notional development approach for an added value of -- 10 of 27 -- 11 improvements ($183,000), professional fees (10%), rates and land tax ($3,150), development interests ($2,044), depreciation of 33% ($68,143), and holding charges $6,377), giving an unimproved value of $317,272 ($1,141 per square metre). [42] Mr Crawford agrees that Burleigh Heads is a superior area to the Palm Beach area. Mr Crawford also notes that if Sale 3 was applied at a 20% increase over its former value, why is its application now leading to a 38.5% in the value of the subject land at Palm Beach. Mr Crowley argues that initially another valuer (Mr Montgomery) had proposed an increase greater than 20%, but that was reduced to 20% in the final Chief Executive’s decision. [43]  Sale 4 – (457 Golden Four Drive, Tugun – Lot 6 on RP 74501). This is a common sale with Mr Crawford’s Sale 1 for the Coolangatta site. Mr Crowley sees the Tugun sale as inferior to the subject land due to its inferior location, zoning and exposure in a side street. The sale sold in February 2001 for $515,000, was analysed at $330,000 after allowing improvements at $185,000, and applied at $286,875 ($638 per square metre). The improvements included some outbuildings ($10,000) more correctly defined as a lock-up garage. (Exhibit 8, page 20). [44] In respect of Mr Crawford’s Sale 4 (7 Palm Beach Avenue), Mr Crowley understands the concrete hardstand ($20,000) on that site refers to concrete car parking areas. Mr Crowley argues that the applied rate of $600 per square metre for the building on Sale 4 (7 Palm Beach Avenue) supports his estimate of the added value of the building that he has applied on the Coolangatta Sale 1 (64 Griffith Street) at $680 per square metre. Mr Crowley also notes that in respect of Mr Crawford’s Sales 1 and 2 (457 and 459 Golden Four Drive) he sees those sales are in reasonable relationship to the Palm Beach area. He argues further that the applied values of both properties are consistent, and his analysis of Sale 1 (457 Golden Four Drive) must therefore be appropriate. [45] In respect of Mr Crawford’s Sale 4 (7 Palm Beach Avenue) Mr Crowley agrees that an analysis of that sale indicates that the applied rate of the subject land was about 10% above the level indicated by Sale 4. He could not explain that discrepancy, but feels that it could relate to the impact of an easement over that property. [46] In applying his Sale 3 (1716 Gold Coast Highway) to the Palm Beach subject land, Mr Crowley advises that he had allowed $1,000 per square metre for the replacement cost of the improvements (Exhibit 8, page 17). Mr Crowley could not explain why a cost of $800 per square metre was applied to his Sale 4 (457 Golden Four Drive – Exhibit 2, page 20), rather than adopting $1,000 per square metre. Mr Crawford notes that such a variation would result in a reduction in the cost of improvements of about $67,400, resulting in a reduction of the unimproved value of about $37,000 after depreciation. Mr -- 11 of 27 -- 12 Crowley confirms that he has not allowed anything for developer’s profit, in line with precedents of this Court. However he agrees that under normal commercial practice such profits would be allowable. [47] In respect of the variations adopted in the different approach to the periods allowed for development interest and for holding charges, Mr Crowley agrees that the periods allowed on each of his Sales 2, 3 and 4 vary, and therefore reflect an inconsistent approach to each sales analysis. He advises that has occurred because the actual analyses were undertaken by different valuers, but which he sees as fair and reasonable. [48] Mr Crawford notes that there are numerous typing errors in Mr Crowley’s reports, suggesting, in his opinion, insufficient care has been taken in undertaking the valuations. Mr Crowley concedes those typing errors, but argues they do not affect the reliability of the valuation determined. [49] Mr Crawford also draws differences with Mr Crowley’s analysis of his Sale 2 (20 Palm Beach Avenue), where he allows improvements of the car parking area of $30 per square metre (Exhibit 8, page 14). Mr Crawford provides evidence of an estimated cost rate of $50 per square metre (Rawlinsons Guide, Item 10.2). Mr Crowley had also adopted $30 per square metre for his Sale 4 (457 Golden Court Drive), which was partly basically unsealed, and also for the car park at the rear of his Sale 2 (20 Palm Beach Avenue), which is a bitumen sealed car park, Mr Crowley concedes some variability. [50] Mr Crowley explains that in adopting his approach to the valuation he has followed guidance by s.3(4) of the Act as it modifies the valuation process. However Mr Crawford argues that the correct approach to adopt in s.3(4) under the Act, is to establish the correct value in the ordinary sense of valuation, assessing that the existing improvements may continue to be used, but that unimproved value should not be less than the improved value less the cost of effecting the improvements. Mr Crawford argues that the modifications required under the Act, should be applied (under s.3(4)), after the value has been determined. Mr Crowley does not agree with that approach, noting that direct comparisons with vacant sales may be used to assess the unimproved value of the subject lands. [51] In respect of Mr Crowley’s Sale 2 (20 Palm Beach Avenue) he confirms that he also did not interview either the purchaser or vendor of that sale or any tenants. He also had made no allowance for fitouts as he saw that sale only as a supporting sale to his Sale 1, and the fitout was tenant property, although he had allowed $1,200 per square metre for the medical centre improvements. Mr Crowley also advises that he had made no allowance for the added value of the existing leases on his Sale 4 (457 Golden Four Drive) in line -- 12 of 27 -- 13 with guidance provided in the decision of AMP Pacific v Valuer-General, that the leases run with the land. Mr Crawford challenges that understanding of Pacific Fair, which he argues had special features which related to that matter. Mr Crowley agrees that the nature of the Act is to make it difficult to analyse his sales. Mr Crawford argues that the Act does not prescribe the valuation methodology, but relies upon normal valuation processes. [52] Mr Crawford also notes differences in the relative increases applied by Mr Crowley in his analyses of his Sale 3, (1716 Gold Coast Highway) at 50%, (Exhibit 8, page 6), compared to the difference to the resale of that property as reflected in the market place. Mr Crawford provides records of the sale of that property in October 1997 at $375,000, and its resale at March 2001 at $462,000 (Exhibit 11), reflecting an overall increase of only 23% in the value of the sale price of that property. He argues that it is inconsistent to seek to apply a 50% increase to the unimproved value of the land, when the overall value of the land and improvements has only increased by only 23% during that period. Mr Crawford argues that an increase of $105,000 in the unimproved value of the land is inconsistent with an overall increase in the total sale value of the land and improvements of only $87,000. Mr Crowley argues that the unimproved value of that parcel was previously $210,000, while the determined unimproved value of $314,000 reflects his analysed increase of 50%. Mr Crowley confirms that he has made no allowance for existing tenancies in his analysis of that sale. [53] Mr Crawford also challenges Mr Crowley’s inferred comparisons overall with the Coolangatta area compared to Burleigh area, and demonstrated by the rates analysed in his sales comparisons. Mr Crowley cautions such overall comparisons noting the respective dimensions, shape and location of each sale adopted. Mr Crawford argues that sales of those narrow sites in Coolangatta and Burleigh have been analysed relatively consistently. Mr Crowley rejects those overall assumptions, noting the particular properties of the sales analysed. [54] Mr Crowley also advises that the allowance of 10% allowed in his analyses of the Australian Postal land follows directions by the Chief Executive. He later provides copies of that direction to support his analyses. The outcome of that direction to apply a 10% deduction for the unimproved value of such lands is to reflect the need to seek rezoning approval on the sale of such Commonwealth lands, which by virtue of their historical use as Commonwealth property, was formally excluded from normal zoning limitations. While Australia Post is now a Commonwealth commercial entity, and -- 13 of 27 -- 14 therefore now subject to normal commercial competition, it continues to retain the land use benefit of the former government ownership. Decision: [55] I turn first to Mr Crawford’s concern that it is inappropriate for Mr Crowley to merely adopt the analyses of sales by another valuer without personally examining those analyses. I note also Mr Isdale’s advice that the unimproved values adopted by the Chief Executive are deemed to be correct under s.33 of the Act, and that Mr Crowley is merely an agent of the Chief Executive in this matter. I would agree with Mr Isdale that, as the Chief Executive is empowered under the Act to operate through his various people (or agents) from time to time, as circumstances demand, then it is not necessary for a particular valuer who initially analysed the sales to establish any unimproved value, to be personally available in this matter. Those delegations are exercised under s.12 of the Act, and include a registered valuer under the Valuers Registration Act 1992, or a person with an appropriate classification level in the Department. [56] However Mr Crawford’s concerns are more specific in their purpose, in that he raises questions about Mr Crowley’s professional analyses of some sales evidence. In this matter, Mr Crowley’s evidence to assist the Court, as a technical expert in his professional field, assumes a certain level of reliability. Where there is no directly comparable market evidence of similar vacant lands, the analyses of sales of improved lands then assumes a more commanding perspective. In such comparisons the opinions as expressed by experienced valuers provides some persuasion to the Court. In such matters the personal analyses of those improved sales are matters of importance in ensuring that a correct determination of the unimproved value of the land is obtained. [57] The relevance of a valuer’s opinion was considered in Hazeldell Limited v The Commonwealth (1924) 34 CLR 442, where Isaacs ACJ said at p.452: “The value of land where there is no market price, is always a matter of opinion. Opinion is largely dependent on the personal equation.” That was also followed by the Full Court of Queensland in CH and BD Henricks v The Valuer-General (1983) 9 QLCR 59 per Shepherdson J at page 69. [58] Now while Mr Crowley is entitled to rely upon his professional opinion in these sales analyses, in my opinion, it is his own personal opinion of the sales analyses which provides the most comfort to the Court. His reliance upon an analysis by another registered valuer may well be sound, but the level of personal opinion by that other valuer may not necessarily accord with Mr Crowley’s personal view of the quantum of the added -- 14 of 27 -- 15 values allowed. As a matter of principle, I would prefer that Mr Crowley had formed his own opinions on the analyses of his sales. [59] The impact of a professional judgment was addressed in D and M Nutting v Chief Executive, Department of Natural Resources (AV98-576), 4 March 1999 unreported at page 9, where the text “Land Valuation and Compensation in Australia” by Rost and Collins, 3rd edition (1984) was noted as saying at page 22: “A registered or licensed valuer is regarded as a person who possesses special training. He is entitled to express opinions as to value or other matters appertaining to his vocation, but these cannot be more valid than the information and reasoning upon which they are founded. In general, opinion evidence is not admissible unless it is given by a witness called as an expert. Court judgments have emphasised that the weight of an expert’s opinion concerning the value of land depends upon the foundation upon which it rests.” [60] I turn then to Mr Isdale’s concerns that Mr Crawford has inappropriately sought to discredit Mr Crowley’s technical reports as demonstrating a certain lack of textual completeness. Mr Isdale argues that such forensic attacks of a semantic nature are inconsistent with guidance provided by the courts in such matters. He directs me to the findings of the judicial committee of the Privy Council in A Hudson Pty Ltd v Legal and General Life of Australia Limited (1986) 61 ALJR 280, where Lord Goff of Chieveley said at p.281: “In general their Lordships consider that it would be a disservice to the law and to litigants to encourage forensic attacks on valuations by experts where those attacks are based on textual criticisms more appropriate to the measured analysis of fiscal legislation.” That decision of the Privy Council affirmed the decision of the New South Wales Court of Appeal in Legal and General Life of Australia Limited v A Hudson Pty Ltd (1985) 1 NSWLR 314. [61] In that Court of Appeal decision McHugh JA expressed that principle where he said at p.335: “But a valuation which is the result of the mistaken application of the principles of valuation may still be made in accordance with the terms of the agreement. In each case the critical question must always be: Was the valuation made in accordance with the terms of the contract? If it is, it is nothing to the point that the valuation may have proceeded on the basis of error or that it constitutes a gross over or under value. Nor is it relevant that the valuer has taken into consideration matters which he should not have taken into account or has failed to take into account matters which he should have taken into account. The question is not whether there is an error in the discretionary judgment of the valuer. It is whether the valuation complies with the terms of the contract.” -- 15 of 27 -- 16 [62] That principle of not discrediting a valuer’s determination merely because of a mistake, was later upheld in the Supreme Court of Queensland in Covecorp Constructions Pty Ltd v Indigo Projects Pty Ltd [2002] QSC 322, 11 October 2002, where Muir J said at p.10: “These decisions are also authority for the proposition that the determination of such a valuer will not be set aside for mistake unless the mistake is such that the valuation fails to comply with the contract.” [63] The question then to be addressed is whether Mr Crowley has failed to complete his valuations in accordance with the directions of the Chief Executive in this matter. There is no evidence to support that conclusion. The only inference that might be reached is whether, in relying upon the analyses of another registered valuer, he has concluded an inappropriate value of those sales for comparison purposes. The Use of Improved Sales – [64] It is agreed by both parties that there is a paucity of sales of comparable vacant lands in the area of either subject land. In seeking reliance upon comparisons with sales of heavily improved lands, in the absence of vacant sales, Mr Crowley relies upon guidance in LJ and V Nock v Minister for the Capital Territory in the Federal Court of Australia, 20 May 1981, 43 ALR 527. In that matter the valuer had relied upon sales of improved lands, but had not personally made internal inspections of the houses upon those lands. [65] In upholding the decision of the Administrative Appeals Tribunal, Morling J noted that in ordinary circumstances the process of valuation is a matter of determining facts, not law. In that matter the valuer (Gowing) conceded that he had not personally inspected the houses, but advised that he had used other materials and advice to assess their added values. Morling J also noted that the use of improved sales in such circumstances was a method commonly adopted, and approved by reputed texts. [66] I am also referred by Mr Crawford to the decision in Thomas Nominees Pty Ltd v Valuer- General (1986-87) 11 QLCR 283, where the President said at p.285: “Where no sales of unimproved land are available, sales of lightly improved land are the next best evidence. Seldom will the ideal be achieved of being able to refer to the sale of a parcel comparable in all respects with the subject so that it becomes a matter of using sales of lands more or less comparable and making appropriate allowances for relevant differentiating factors. The efficient execution of such an exercise is the essence of the art of valuation – a task for which a registered valuer is professionally qualified by expertise and training.” -- 16 of 27 -- 17 [67] I am reminded further of the difficulties encountered in analyzing by other than comparable sales approach. That was clearly expressed by the Land Appeal Court in Merivale Motel Investment Pty Ltd v The Brisbane Exposition and South Bank Redevelopment Authority (1984-85) 10 QLCR 268, at 281: “Residual value (notional development) exercises of the type undertaken by the valuers in this case are well recognised as being fraught with difficulty. The end result (land value) is subject to wide variation depending upon the accuracy of the statistics provided.” [68] Another matter of concern to Mr Crawford is the lack of any allowances made by Mr Crowley for the existing tenancies in his analysis of certain sales. In that matter Mr Crowley seeks support in the decision of AMP Society v Chief Executive, Department of Lands (1994-95) 15 QLCR 344, which he argues directs that the value of existing tenancies is a matter running with the land, and should therefore not be a matter for deductions associated with the added value of improvements. Mr Crawford argues that such interpretation is a misunderstanding of the particular circumstances of that matter, and, in his opinion, it is appropriate to allow for the added value of the existing tenancies in analyzing those specific sales. To support his view Mr Crawford seeks guidance in ANZ Holdings Ltd v Chief Executive, Department of Lands (1994-95) 15 QLCR 223, where the learned Member (now President) said at p.233: “Similarly, if in the present case the sale price of the Westpac site is enhanced by the value of the tenant, this could only be in connection with the building, and yet the Act requires that it must be assumed that no building exists. Therefore, any such enhancement in the sale price cannot be attributed to the land or reflected in the unimproved value.” [69] In ANZ Holdings Limited, the learned Member (now President) sought guidance in the findings of AG Robertson Limited v Valuer-General (1952) 18 LGR 261, noting that Sugerman J concluded that an existing tenancy is not in all circumstances necessarily a depreciative value in a sale. Depending upon the circumstances of a sale, he noted at p.263: “That premises are let to a tenant is not in all circumstances necessarily depreciatory of value. Under appropriate circumstances, premises occupied by a tenant upon terms as to rent, duration, and covenants which are not disadvantageous to the lessor might be expected to bring as much as they would if vacant. … There may thus be two different prices to be obtained for the same property, which I shall call for convenience the investor’s price and the vacant possession price, according to whether it is sold without, or with vacant possession. How far they will diverge in any case will depend, as I have said, upon a complex set of considerations.” -- 17 of 27 -- 18 [70] In the circumstances of the current matter Mr Crawford gives evidence that, where the current market for the sale of certain commercial properties is not yet right for development of the highest and best potential, then the presence of ongoing tenancies is seen as an advantage in the market place. (see paragraph [10]). On that basis he argues that any sale where ongoing tenancies exist, would be at a higher level than where vacant possession is provided. On that basis he seeks to allow in the sale price for the added value of the tenancies. [71] Any consideration of the current market situation for such commercial properties, should be considered in the light of guidance by Sugerman J in AG Robertson Ltd, where he said at p.265: “What I have said does not mean that the analysis of sales of improved land is altogether without use. It may happen that its result will represent the unimproved value. But since that would be fortuitous, it may of no assistance unless it is possible to show that it has occurred in the particular case. However, as an hypothesis which seems likely to be correct in many cases, it may be suggested that analysis of sales with vacant possession and analysis of sales without vacant possession respectively ought to provide at least the upper and lower limits of the range within which the unimproved value lies.” On the evidence before me I believe it would be appropriate to make some allowance for the existing ongoing tenancies, where they are of a commercial advantage in the market place. In such a market situation where the sales are “ripe” for development, then the impact of the AMP Society decision would determine otherwise. The evidence of the sales provided suggest that some sales are currently premature for full development. [72] Mr Crawford argues further that undertaking valuations under the Valuation of Land Act, does not of itself establish a different code for determining unimproved value. He notes that the Land Appeal Court in Caltex Oil (Australia) Pty Ltd v Chief Executive, Department of Lands (1996-97) 16 QLCR 435, found in the majority decision at p.458: “The Valuation of Land Act is not a code of valuation methodology. It assumes the existence of the valuation process and requires its application in the cases and with the modifications prescribed by the Act. The starting point of that process is the determination of the highest and best use of the land being valued. (Adelaide Clinic Holdings Pty Ltd v Minister for Public Resources (1988) 65 LGRA 410, at p.415 per Jacobs J.) Only when that is done can it be seen whether the land is to be valued as improved or unimproved land. If, but only if, it is to be valued as improved land, the statutory assumption must be made. The highest and best use of the land is not to be determined on the assumption that the structures do not exist because whether the Act requires that assumption to be made ultimately depends on what is the highest and best use of the land. The Act does not refer to highest and best use and does not require the separate determination of such a use for land as unimproved land. The -- 18 of 27 -- 19 fact that land is being valued having regard to the ‘special provisions’ of the Valuation of Land Act does not justify departure from the basic principles of Spencer v The Commonwealth which are as applicable to valuations under the Act as to any other valuations. (Stubberfield v Valuer-General [1991] QdR 278 at pp. 283, 291 (1989) QLCR 328 at pp. 330, 340, per Carter J.” [73] On that basis Mr Crawford argues that normal valuation methodologies dictate that in assessing the unimproved value of any comparable sales, the highest and best use of those sales is the starting point of any analysis. In the context of their highest and best use the existing nature of the improvements are to be determined, and their relevance to the site. That process then directs whether the land is to be valued as improved or unimproved land within the context of the Act. He argues Mr Crowley has not followed that procedure. [74] Mr Isdale also refers me to the decision of the High Court of Australia in Brisbane City Council v The Valuer-General (1977-78) 140 CLR 41, where Gibbs J in respect of the need for an appellant to demonstrate that an error has been made by the Chief Executive, said at page 56: “In my opinion once it is shown that in making the valuation the Valuer- General acted upon a wrong principle or made a serious error of fact, the presumption created by section 13(7) is rebutted.” … In my opinion once it is shown that a valuation was made by a method fundamentally erroneous the presumption is rebutted.” On that basis I am directed that unless Mr Crowley has followed a wrong principle or made a serious error of fact, then his valuation should remain. There is no demonstrated error of principle in adopting sales of improved lands, where vacant or lightly improved lands do not exist. The only question to be addressed is whether he has made an error of fact in his assessments. [75] Mr Crawford also reminds me that where there is any doubt in respect of the relevance, or analysis of, the sales evidence available, then any doubt in the current process should be resolved in the appellant’s favour. (Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Limited & Ors (1946-47) 74 CLR 358, per Dixon J at p.373). -- 19 of 27 -- 20 Comparison of Sales –  The Coolangatta site [76] In considering the analyses provided I find the following comparisons: Sale Area Applied rate per m² Comparison Mr Crawford Comparison Mr Crowley 457 Golden Four Drive 450 m² $711 (initially) $644 (reduced) Not comparable Not relied upon – far inferior 459 Golden Four Drive 503 m² $705 (initially) $586 (reduced) Little use (adjoining owner) Not relied upon – far inferior 23 Griffith Street 349 m² $874 Slightly improved – most useful Seen as low sale 64 Griffith Street (common sale) 164 m² $1,435 (Crawford) $1,430 (Crowley) Unsuitable – highly improved Inferior – highly improved (key sale) 8 McLean Street 1,067 m² $1,171 Far superior Seen as similar location 23 McLean Street 405 m² $691 Difficult to compare due to size Inferior 16 – 20 Seventh Avenue 1,215 m² $528 (notional) Not applicable to Coolangatta Inferior Subject land 860 m² $1,337 applied $1,100 per square metre $1,337 per square metre [77] I turn first to the sale of 23 McLean Street, and note that it was an after-date sale in a rising market, and reflecting on analysis a 73% increase from the previous valuation of that property. The sale is clearly in an inferior location to the west of McLean Street, and has an inferior long narrow shape and is encumbered by an access easement along its southern side. However the sale is much smaller in size than the subject land. I note further that Mr Crowley concedes that he has not fully analyzed the improvements on that parcel, relying only upon a figure of $100,000, agreed with the owners of that land on another matter. However he concludes that figure must be reasonable as it aligns with the unimproved values in that area. [78] In summarising these comparisons I find that Mr Crawford’s Sale 1 (457 Golden Four Drive) and Sale 2 (459 Golden Four Drive) provides little assistance, and I will consider -- 20 of 27 -- 21 them no further. In respect of Mr Crowley’s Sale 2 (23 McLean Street) I note that is a much smaller parcel compared to the subject land (860 m²), and both valuers see that as an inferior sale. I note the significant difference in Sale 3 (16 – 20 Seventh Avenue) for the Coolangatta comparison, and I agree with Mr Crawford that it provides little assistance in determining the Coolangatta valuation. On that basis the three comparisons which provide the most assistance are 23 Griffith Street and 64 Griffith Street, and the relativity with 8 McLean Street. [79] In analyzing 23 Griffith Street it is agreed that there is no allowance applicable for any tenancies extant at the date of sale. The major difference between the valuers lies in their respective allowances for the aged building improvements of $160,000 (Mr Crawford) and $65,000 (Mr Crowley). Mr Crawford has relied mainly upon the advice of one of the existing tenants, while Mr Crowley did not personally inspect that sale, but relies upon a later resale of that property to indicate that Mr Crawford’s Sale 3 (23 Griffith Street) was a low sale. While he agrees that the difference in size of that sale and the subject land provides some difficulty in making direct comparisons, Mr Crawford sees 23 Griffith Street as his most useful sale due to the more lightly developed nature of the improvements. [80] Mr Crawford has inspected that sale and concluded the following improvements:  Ground level – 242 m² at $400 per square metre = $96,800  Upper level – 200 m² at $300 per square metre = $60,000  Rear sheds – 40 m² = $5,000 Total = $161,800 Adopt $160,000 Now while I do not have any indication of the resale price of that property in June 2002, only some 7 months after the sale in December 2001, I have Mr Crowley’s opinion that the resale price supports that the December 2001 sale was a low price. I also have the photographic evidence of the rear of 23 Griffith Street (Exhibit 4, photograph 24), showing the rather old nature of those improvements. The evidence also does not disclose whether the first level improvements were occupied, or whether, as Mr Crowley argues, the upper levels provide no extra value to the commercial ones on the ground level. -- 21 of 27 -- 22 [81] The evidence further provides that the purchaser (Hilmer) of the December 2001 sale was less than informative to Mr Crawford in his attempt to ascertain specific details of that sale, when Mr Crawford approached him by telephone about September 2002. The level of uncertainty surrounding the details of that sale, and the subsequent resale price of that property, raises caution as to whether to place much reliance upon the quantum difference between the valuers in respect of their conclusion of the added value of the old improvements. I note also that Mr Crowley has in fact not analysed the value of $60,000, but has maintained the old relativities in the area, and the $60,000 is merely the result of the sale price less the unimproved value applied to that parcel. On that basis I believe there is some doubt about the full details of that sale, and I will therefore reject it in this comparison. [82] I turn then to the common sale at 64 Griffith Street, and note that both valuers concede the highly developed nature of that property, and the inherent difficulties in analyzing the added value of improvements. It is also a much smaller size than the subject land. While Mr Crawford has not analysed that sale personally, nor in fact has Mr Crowley, there is dispute about certain factors used in Mr Crowley’s notional development approach. Mr Crowley concedes that the cost of the development may be more closely aligned to the costs applied in his Sale 3 (1716 Gold Coast Highway) at $1,000 per square metre, and I will allow for that adjustment. That higher figure is also likely to allow for the awning on the Griffith Street frontage (Exhibit 4, photo 25). [83] In respect of Mr Crawford’s concern that Mr Crowley has applied too much depreciation at 25% in that analysis, I note that is not inconsistent with the 23% adopted for depreciation by Mr Crawford in his 23 Griffith Street comparison. However the photographic evidence (Exhibit 4, photos 23 to 26), would suggest that 64 Griffith Street is a newer structure than 23 Griffith Street, and there may be some support for Mr Crawford’s assertion that 25% is too high. The renewal of the lease of that building would support that the structure has significant commercial value to the tenants. While Mr Crawford provides no alternative depreciation rate, I will adopt 20%, reflecting its renovated nature since 1995. -- 22 of 27 -- 23 [84] If I then consider the impact of any existing tenancy advantage in the market place for 64 Griffith Street, I note it is possible that in the current market in Coolangatta there could be some premium paid where joint ongoing tenancies are guaranteed. However Mr Crawford does not fully explain how he concludes residual values of $70,000 for the existing tenancy improvements. While Mr Crowley concedes that there may be some residual value for that purpose, for the purposes only of checking Mr Crowley’s analysis, I will allow $35,000 in that circumstance. [85] If I then recalculate Mr Crowley’s notional value approach, but adopting a cost rate of $1,000 per square metre, a depreciation rate of 20%, and an adjusted analysed sale price of $550,000 (allowing for some existing tenancy), I could conclude an unimproved value of about $120,000, which is far less than the unimproved value at 1 October 2000 of $167,500. Clearly there are no grounds to allow for any premium for the existing tenancies. [86] Even if I was to analyse the full sale price of $585,000, and allow the higher unit cost price per square metre, and a 20% depreciation allowance, I would still conclude an unimproved value of about $145,000, which is obviously inconsistent with the rising property market compared to the previous valuation. While such highly variable outcomes provide no conclusive evidence of the true unimproved value, in my opinion, they demonstrate the problems inherent in adopting such an appraisal for determining unimproved value from such highly improved sales. [87] Further if I accept Mr Crawford’s assessment of the added value of the 460 m² of improvements at $608 per square metre, then I could conclude a value of $279,680 for improvements, leaving an unimproved value of the land at $305,320. That allows for adopting his estimate of the improved values at $515,000 and allowing for the existing tenancies. On that basis the two analysed values of 64 Griffith Street are $305,320 (Mr Crawford) and $250,000 (Mr Crowley). But that is inconsistent with Mr Crawford’s argument that inadequate allowance has been made for the highly developed improvements. I note also that comparisons with only one highly improved sale does not normally provide a safe basis for determining the value of comparable land (PN and KJ Fitzgerald v Department of Lands (1965) 32 CLLR 260, at 261). In relying also on the use of comparable sales, the experienced valuer needs to ensure that he does not rely entirely upon only limited sales, where an error of judgment in applying the comparable sales could lead to an error in the final valuation. I note for example in Waalt Homes v Road Construction Authority (1987) 64 LGRA 346, where Gobbo J said at page 354: “It is well-established that the use of comparable sales is to be preferred as the primary method of valuation, and it is obvious that the hypothetical -- 23 of 27 -- 24 development analysis method offers many opportunities for error in its various assumptions and calculations. But this argument can be given too much weight, for one error of judgment in applying a comparable sale can readily lead to a significant error in the final valuation. Particularly is this so if there are few sales and no obviously discernible trend.” In the end I find the comparisons with 64 Griffith Street are inconclusive, and I turn to the relativity with 8 McLean Street (property 5). Both parcels have similar planning constraints, being in Precinct 1 of the Development Control Plan No. 8, with similar height and plot ratio applications. Precinct 1 is seen as the core of the Coolangatta regional centre. [88] I note that property has an applied unimproved value of $1,250,000 ($1,171 per square metre), and has a similar location to the subject land. I agree that parking in Chalk Street to the rear of the subject land is closer to the subject land and I also accept that in a tourist location such as Coolangatta, the passing pedestrian traffic is an important feature for commercial activities. The southern side of Griffith Street would appear to have the heavier pedestrian traffic flows. However, because of its closer proximity to the beach, I accept Mr Crawford’s opinion that 8 McLean Street is a superior location which adjoins the restaurants. On balance I believe 8 McLean Street and the subject land would be comparable, but 8 McLean Street is larger than the subject land. On a pro rata basis I believe that both properties would have comparable pro rata values, and I will adopt $1,200 for the subject land on a direct comparable basis. From that figure must be deducted the additional costs of seeking rezoning to formalize the advantage of the previous Commonwealth status of the subject land. [89] I then calculate the unimproved value as follows: 860 m² at $1,200 = $1,032,000 Less 10% for future rezoning = $103,200 Unimproved value = $928,800 Say $930,000 -- 24 of 27 -- 25  The Palm Beach site – [90] In respect of this property I note the following comparisons: Sale Area Applied rate per square metre Comparison Mr Crawford Comparison Mr Crowley 16 – 20 Seventh Avenue (common sale) 1,215 m² $513 (Mr Crawford) $528 (Mr Crowley) Inferior Inferior 7 Palm Beach Avenue 741 m² $465 Slightly inferior - 1057 Gold Coast Highway 410 m² $600 Superior (adjoining owner) - 1059 Gold Coast Highway 857 m² $478 (sale March 2001) $863 (sale March 2002) Low sale (but superior) - 20 Palm Beach Avenue 1,214 m² $552 Rejected as heavily improved Inferior 1716 Gold Coast Highway 278 m² $900 - Considerably superior 457 Golden Four Drive 450 m² $638 Rejected Inferior Subject land 825 m² $667 (applied) $575 per square metre $667 per square metre [91] In respect of the common sale at 16 – 20 Seventh Avenue, I note the only difference lies in Mr Crawford’s allowance of short-term rental premiums, while Mr Crowley has allowed for the removal of the existing old residential dwellings in order to achieve the highest and best use as commercial lands. I believe Mr Crowley has made the most appropriate allowance, as I feel the residential rentals could be seen merely as holding arrangements. On that basis I accept Mr Crowley’s application of $528 per square metre as an inferior property. -- 25 of 27 -- 26 [92] In allowing for the demolition of those old buildings, I note guidance in The Valuer- General v Fenton Nominees Pty Ltd (1982) 56 ALJR 778, where the High Court said at p.780: “In these circumstances the price which the respondent paid was one element, indeed the largest element, in the cost of acquiring a site consisting of vacant land suitable for development. The other elements were the costs of demolition and of earthworks. It is only by adding these costs that one can establish the price that the developers were prepared to pay for a suitable site with no improvements upon it. It follows that the approach adopted by Mr. Quintrell was correct and that the primary judge was right in accepting his approach.” [93] On the basis of the later resale of 1059 Gold Coast Highway in March 2001, I accept that the earlier sale of that property in March 2000 was a low sale, and I reject it on that basis. I also treat the sale at 1057 Gold Coast Highway with some caution due to its adjoining owner status. For the reasons mentioned I get some assistance from the 457 Golden Four Avenue sale as outlined in paragraph [44]. I also note that the 1716 Gold Coast Highway sale at $900 per square metre is far superior to the subject land. The most useful sales are therefore 16 – 20 Seventh Avenue, 7 Palm Beach Avenue, 20 Palm Beach Avenue and 457 Golden Four Drive. [94] I turn then to the 7 Palm Beach Avenue sale and note that Mr Crawford has again sought to allow $59,000 for the existing leases as a premium in the sale price of $625,000. He also sees that property as slightly inferior to the subject land, which he values at $575 per square metre. I note that if the existing leases were not applied as a premium, but seen to run with the value of the land, then Mr Crawford’s applied rate for 7 Palm Beach Avenue would be $533 per square metre, not inconsistent with his own estimate of the comparison as slightly inferior to the subject land at $575 per square metre. [95] If I turn then to the 20 Palm Beach Avenue sale I note that it is a highly improved sale with similar difficulties and analysis as the 64 Griffith Street sale for the Coolangatta site. However I note that while Mr Crowley has analysed that sale at $692 per square metre, he has sought only to compare that property at a very conservative applied rate of $552 per square metre (80%). I believe such application was likely to be made to acknowledge the possible variabilities of the notional development approach, and I accept its comparison at $552 per square metre. I note also that such a conservative application made a further allowance for any inconsistencies in his allowance for car parking as noted in paragraph [49]. It is agreed that while the improvements upon 20 Palm Beach Avenue may not theoretically represent the highest and best use under planning control, they represent comparable levels of development to the other sales. -- 26 of 27 -- 27 [96] In the matter of 457 Golden Four Drive I note from the photographs that property also has very close proximity to another Australia Post agency at Tugun, and would benefit from similar community patronage as the Palm Beach subject land. [97] In summarising this matter I find that the key comparisons disclose that the Palm Beach subject land has an unimproved value in the market range as follows:  16 – 20 Seventh Avenue ($528 per square metre) - inferior  7 Palm Beach Avenue ($533 per square metre) – slightly inferior  20 Palm Beach Avenue ($552 per square metre) – inferior  457 Golden Four Drive ($638 per square metre) – inferior  1716 Gold Coast Highway ($900 per square metre) – substantially superior While Mr Crawford has sought to reject the 457 Golden Four Drive sale, I believe it has some application for the Palm Beach site. On that evidence I do not believe that Mr Crowley has made any error in those comparisons, and an unimproved value on a direct comparable basis would reflect approximately $733 per square metre, or $610,500, less the 10% town planning allowance, or $550,000. Conclusion: [98] Having considered the whole of the evidence I am partly persuaded that the appellant has proved his case. In respect of the appeal at 2 Griffith Street, Coolangatta (AV2002/0438) the determination of the Chief Executive is set aside, and the unimproved value of Lot 1 on RP 129713 is determined at Nine Hundred and Thirty Thousand Dollars ($930,000). In the matter of 1128 Gold Coast Highway, Palm Beach (AV2002/0439) the appeal is dismissed, and the unimproved value of Lot 84 on RP 868646 as determined by the Chief Executive in the sum of Five Hundred and Fifty Thousand Dollars ($550,000) is affirmed. NG DIVETT MEMBER OF THE LAND COURT -- 27 of 27 --