BHP Coal Pty Ltd v Chief Executive, Department of Natural Resources [2000] QLC 12

LAND COURT BRISBANE 29 FEBRUARY 2000 Re: Appeals against Annual Valuations Valuation of Land Act 1944 Valuation Roll Nos.: 1958; 1547; 3080; 1606. Local Government: Belyando (AV99-968, 894, 1017, and 1068) BHP Coal Pty Ltd v. Chief Executive, Department of Natural Resources D E C I S I O N Background: These appeals are located at 18 Belshore Street (AV99-968); 11 Clements Street (AV99-1017); 17 Arkana Terrace (AV99-1068); and 21Bacon Street, Moranbah (AV99-894). The respective lands are described as:  18 Belshore Street – Lot 15 on M97319 (923 m²);  11 Clements Street – Lot 22 on M973122 (921 m²);  17 Arkana Terrace – Lot 17 on M97332 (2,575 m²);  21 Bacon Street – Lot 15 on M97346 (1,619 m²). The four appeals against annual valuations at 1 October 1998 under the Valuation of Land Act 1944, have been selected by the parties as representative appeals of a total of 422 separate appeals by appellants in Moranbah. The appeals at 18 Belshore Street and 11 Clements Street represent examples of standard sized residential parcels; the appeal at 17 Arkana Terrace is representative of larger residential parcels; and the appeal at 21 Bacon Street is representative of commercial parcels. It is hoped that a satisfactory resolution of the above four test cases may then lead to a further satisfactory resolution of the remaining outstanding matters at Moranbah. The key issues are the method of valuation, comparison of sales, and changes in the property market. On 22 February 1999 the Chief Executive issued valuations of the subject lands at:  18 Belshore Street ($23,500);  11 Clements Street ($25,000);  17 Arkana Terrace ($44,500); [2000] QLC 12 -- 1 of 26 -- 2  21 Bacon Street ($65,00). Following objections, the Chief Executive confirmed those valuations on 1 July 1999. The appellant has now appealed those figures, claiming the unimproved values should more properly represent the previous values of:  18 Belshore Street ($10,200);  11 Clements Street ($10,800);  17 Arkana Terrace ($19,400);  21 Bacon Street ($24,000). Mr J Haydon of Counsel, instructed by McKays, Solicitors, appeared for the appellant, calling evidence from Paul James Oliver Turner, a registered valuer. Mr J O’Rourke, Principal Legal Officer, Department of Natural Resources, appeared for the respondent, calling evidence from Annette Dominique Donohoe, the departmental registered valuer responsible for determining the valuations. The Evidence: (1) The Nature of the Lands – The parcel at 18 Belshore Street is located about 1 km south of the town’s central business area and the Post Office in Griffin Street, is above street level, is generally level, with a gentle fall to the south and west. The land at 11 Clements Street is located 1.6 km east of the Post Office and has similar elevation and topography. The land at 17 Arkana Terrace is also above street level, is generally level, and is well drained, and is only 0.6 km east of the Post Office. All normal utility services are available to each residential parcel, and the properties have good access to dual bitumen sealed roads with concrete kerbing and channelling. Each of the three parcels are used for residential purposes, and all are zoned "Residential" under the Belyando Shire Town Planning Scheme effective at the date of valuation of 1 October 1998. The land at 21 Bacon Street is located 0.6 km west of the Post Office, is generally level, and is above street level. All normal utility services are available, and the subject land has frontage to Bacon Street to the west, and Bacon Lane to the east. However, there is only legal access to Bacon Street, as access to Bacon Lane is restricted by an access restriction strip (Lot 33 on M973106) in favour of the Shire Council. Both Bacon Street and Bacon Lane are bitumen sealed with concrete kerbing and channelling. The land at 21 Bacon Street is used for commercial purposes, and is zoned as "Commercial" under the Belyando Shire Town Plan current at the relevant -- 2 of 26 -- 3 date. Physical access to Bacon Lane is restricted by a colorbond fence along the boundary, although physical access can be negotiated by consent from the Council. The Arkana Terrace land is superior in location, being surrounded by parkland (Lot 1 on AP 3696 and Lot 1 on AP 3697), which in turn adjoins the town reserve (Lot 9 on GV 128). The Arkana Terrace locality is designed for the houses of the mine managers, and provides an enhanced level of amenity due to its closer proximity and access to the town centre, and the larger size of the lots. The land at 18 Belshore Street adjoins a drainage reserve at the rear. Shops and schools are within close proximity to all residential parcels. (2) The Use of the Lands – The main town square is east of Griffin Street, while the Coles Supermarket and Car Park is located in St Francis Drive to the west of Griffin Street. St Francis Drive is a clockwise one-way loop road off Griffin Street, joining Bacon Lane, and connecting to Mills Avenue to the south, and Belyando Avenue to the north. The primary traffic flow around the Coles Supermarket is via St Francis Drive to Mills Avenue, while the secondary traffic flow joins St Francis Drive to Belyando Avenue. Bacon Street to the west of the main shopping/commercial complex is agreed by the parties as a minor traffic flow area. The Post Office is located in Griffin Street adjoining the cinema complex, which is one of the respondent’s sales evidence. Mr Turner argues that Bacon Street is an area mainly used for warehousing- type activities, although there is a hardware store, union office, laundromat, and the BHP town office. Other uses, such as the Telecom and Energy Depots, a Transport Depot, auto-electrical and carpet warehouse and Council hall, support the general appearance of other than a main commercial retail centre. Miss Donohoe argues that the "Commercial" zoning of Bacon Street, and its closer proximity to the actual town centre, makes it a more attractive location for comparison purposes than "Industrial" zoned lands further to the west along Belyando Avenue. However, she concedes that Bacon Street is a lesser commercial area than Mills Avenue, Griffin Street, Town Square and St Francis Drive. Mr Turner notes that Bacon Street was originally the industrial area for Moranbah, and its zoning was changed to "Commercial" in the 1995 Town Plan, in an effort to improve the aesthetic nature of the area. However, industrial uses continue in the street. Miss Donohoe agrees that the Bacon Street locality is for mixed uses, however, she argues that the external warehouse appearance of some buildings does -- 3 of 26 -- 4 not reflect the internal retail nature of the business enterprises. Miss Donohoe has taken that mixed-use nature into consideration in her comparisons with sales in the town centre, but has tended to balance that with her interpretation of the highest and best use of 21 Bacon Street land, in line with its "Commercial" zoning. Miss Donohoe notes that the Moranbah Town Square includes shops and offices, but is also just zoned as "Commercial". There is agreement that the uses of the other three residential properties are for single residence purposes in accordance with their zoning as "Residential". (3) The Methods of Valuation - A key difference between the parties lies in the approach of the valuers to the use of the sales evidence. Miss Donohoe has relied principally upon sales of vacant lands, while Mr Turner has rejected the limited number of sales of vacant lands, in the relevant period, in view of, in his opinion, certain inconsistencies, which he claims results in those few sales being out of line with the market. Mr Turner then develops a research paper which he contends supports that there had been a sudden downward change in the market. Another difference between the parties is the use of the site value principle when valuing the larger residential parcel at 17 Arkana Terrace. Initially Miss Donohoe had determined the unimproved value of 17 Arkana Terrace at $44,500. Following the Court's direction that a settlement conference be convened, the respondent decided to reduce its valuation to $30,000, in order to better reflect the site value evidence supplied by the appellant. Miss Donohoe advises that it is now intended to apply a proportionate reduction to all properties in Arkana Terrace in accordance with the proposed reduction for 17 Arkana Terrace. While Mr Turner does not complain about the delayed concession towards the site value principle, he notes that a s.68 offer has not issued at this time, and the respondent, in his opinion, continues for the moment to defend the higher valuation. Mr O'Rourke rejects such approach, arguing that the respondent now argues for $30,000. Mr Turner agrees with the process to reduce the value, but not with the quantum offered. Mr Haydon contends that the offer to reduce the valuation further supports his client's case. There is also a significant difference between the parties in respect of the timing of the sales evidence adopted. Miss Donohoe has relied mainly upon two sales of vacant lands up to the date of valuation at 1 October 1998. Miss Donohoe -- 4 of 26 -- 5 had considered 28 sales of vacant lands in 1997, but relied upon the two lower valued sales at $26,000, in order to take a conservative approach. She concedes that it is appropriate to consider sales up to the date of issue of the valuation (22 February 1999), but notes that no further sales of vacant lands occurred in that extended period. Miss Donohoe argues that any sales occurring after the date of issue, are more appropriately reflected in the succeeding valuation for 1 October 1999. It is noted that the previous valuation of Moranbah occurred on 1 January 1996, and there had been no annual valuations of the area for nearly three years to 1 October 1998. Apparently the valuations for Moranbah in 1996 were based upon sales evidence in other mining towns outside Moranbah, due to a lack of vacant land sales in Moranbah. The pattern of available sales of vacant lands is discussed later. Mr Turner agrees with the principle that adopting sales of vacant land is the most direct method of determining unimproved value, where sufficient sales are available. However he argues that, in view of the changing market forces in Moranbah, at or about the date of valuation in October 1998, and the paucity of sales of vacant lands at that time, then, in his opinion, reliance upon such a limited number of sales of vacant lands may be misleading. Mr Turner therefore sought evidence of other factors over an extended period subsequent to 1 October 1998, in order to demonstrate that the sales adopted by the respondent, represented a peak in the property market in 1997/98, and were out of line with the general thrust of values for the town. Miss Donohoe concedes that the Courts have agreed that if there are no sales of vacant lands, then it is appropriate to consider other factors. However, she was unable to comment on conditions in Moranbah after 1 October 1998, as she has subsequently been transferred to another area of Queensland. Miss Donohoe was aware of movements in the coal industry, the uncertainties over redundancies with BHP Coal Pty Ltd, and the initial pent-up demand that occurred in 1997 with initial sales of vacant lands, when she adopted a conservative approach in determining her valuations. However, she did not include any particular reference to the level of uncertainty in the market in her valuation reports to the Court. Miss Donohoe advises that the wider market conditions had been noted as part of the overall "basis document" prepared for the valuation of Belyando Shire at that time. That "basis document" looked at the economic climate, and other factors in the town, and is supplied to the Belyando Shire Council, and the respondent, for rating and -- 5 of 26 -- 6 rental purposes. Unfortunately, that "basis document" was not made available to the Court. (4) Comparison of Sales - (4.1) The Residential Lands – Miss Donohoe has relied upon the following two most comparable sales of vacant lands for each of the three residential sites:  Sale 1 – (2 Freeman Street – Lot 14 on SP 100789 – Bitcom to Robson). This is located 1 km south of the Post Office, has an area of 953 m², and is located in a new residential estate, which was developed by the Belyando Shire Council. The sale is smaller in size than 17 Arkana Terrace, but is slightly larger in size than 11 Clements Street and 18 Belshore Street. The sale is located in a cul-de-sac. Overall the sale is seen as inferior to 17 Arkana Terrace, and slightly inferior to both 11 Clements Street and 18 Belshore Street. The sale sold on 21 August 1998 for $26,000, and after allowing for improvements was analysed at $25,500, and applied at $23,000. The sale had previously sold on 26 November 1997 for $26,000 (Belyando Shire Council to Bitcom). The sale had formerly been in the name of Mark James Bitcom, and had been sold to David Victor Robson by Tina Marie Bitcom, who had obtained authority to dispose of the parcel as part of a matrimonial settlement arrangement. Miss Donohoe was unable to interview Mr Robson during her valuation. Mr Turner challenges Sale 1 as a prudent sale, noting that Mr Robson had made only cursory inquiries about the state of the market at that time. Miss Donohoe rejects that Mr Robson was not a prudent buyer, noting that he made inquiries of the Council about prices being achieved, he was aware of the downturn in the coal industry, and he paid what the Bitcoms had previously paid for 22 Freeman Street. David Victor Robson gave evidence that he had little experience in property matters, and had sought some guidance on the asking prices for lots from the Belyando Shire Council. Mr Robson commenced searching for a parcel upon which to build in May or June 1998. His requirements closely aligned with the features of 2 Freeman Street, which he had noticed was for sale. By personal negotiations with the owner, Mr Robson purchased 2 Freeman Street in August 1998 at the asking price of $26,000. Mr Robson borrowed some of the purchase price for the land from a bank, which obtained a mortgage over the land. To his knowledge, the bank did not value the vacant land as any check against its security. Mr Turner advises that for loans of that nature, it is the bank's practice (from his knowledge as a member of that bank's panel of valuers), to not seek a -- 6 of 26 -- 7 valuation, and to rely upon a site inspection by a bank officer. Mr Turner advises that it is the borrower's capacity to repay the loan, rather than any assessment of the value of the asset, which is paramount in approving the loan. Mr Robson had intended to build a home on 2 Freeman Street, partly as an owner/builder, but he has not proceeded to do so, as he could not raise the necessary funds. His decision to invest in land was triggered by a small windfall payment from his insurers.  Sale 2 - 18 Mills Avenue - Lot 4 on SP 100789 - Belyando Shire Council to Reyes). This sale is located 1 km south-west of the Post Office, in a new residential estate, on the busy Mills Avenue, and has an area of 903 m². The sale is smaller in size than all three subject lands, and is seen as slightly inferior to 11 Clements Street and 18 Belshore Street, and inferior to 17 Arkana Terrace. The sale sold on 5 January 1998 for $26,000, which after allowing for improvements was analysed at $25,500, and applied at $23,000. While she considered a wider range of 28 sales of vacant lands in the relevant period (21/3/97 to 21/8/98) Miss Donohoe decided to only apply the above two sales, as they represented the bottom of the range of values achieved for the 28 sales (ie $35,500 (Lot 43) to $26,000 (18 properties)). On analysis of those 28 sale prices it is noted that the mean price of those sales represented $27,800, so that in applying her conservative estimate for the comparisons, Miss Donohoe virtually allowed a 6.5% reduction in view of market uncertainties. Mr Turner supplies no sales of vacant lands to support his conclusion, that there has been no overall shift in the market since 1 January 1996. Mr Turner argues that it is correct to ignore the short-term jump in values during 1997, and he argues the market has now returned to the former level. Those factors are discussed later. (4.2) The Commercial Lands - Miss Donohoe has relied upon the following sales of vacant lands for the commercial site at 21 Bacon Street:  Sale 1 - (St Francis Drive - Lot 2 on CP 904231 - State of Queensland to Goulevitch & Ors). This is a 1,262 m² Central Business parcel located in the main shopping area, about 0.5 km south-west of the Post Office. The sale is in a new commercial area opposite the Coles Supermarket car-parking area. The sale is smaller in area than 21 Bacon Street, but is located in a superior location, and the sale is seen overall as superior to the subject land. -- 7 of 26 -- 8 The sale sold on 2 March 1998 for $85,000 ($67.35 per m²), and after allowing for improvements was analysed at $84,500 ($66.95 per m²), and applied at $75,000 ($59.42 per m²).  Sale 2 - (Belyando Avenue - Lot 30 on M973118 - State of Queensland to Bray & Ors). This sale has an area of 736 m², is zoned "Commercial", and is located 0.5 km west of the Post Office. The sale is located in an established business area, is smaller than 21 Bacon Street, but has a frontage to Belyando Avenue, which is a major traffic route. The sale is superior in location to the subject land, and is overall superior to 21 Bacon Street. The sale sold on 8 December 1997 for $40,500 ($55.02 per m²), which after allowing for improvements was analysed at $39,500 ($53.66 per m²), and applied at $35,000 ($47.55 per m²).  Sale 3 - (St Francis Drive - Lot 33 on CP 895321 - State of Queensland to Moranbah Cinema Pty Ltd). This sale is located 0.4 km south-west of the Post Office, and opposite the Coles Supermarket car-parking area. The sale is larger in size than 21 Bacon Street, it has a superior location, and is overall superior. The sale is zoned "Special Purpose - Cinema", and has an area of 2,745 m². The sale sold on 23 October 1997 for $110,000 ($40.07 per m²), and after allowing for improvements was analysed at $109,000 ($39.70 per m²), and applied at $98,000 ($35.70 per m²). Miss Donohoe considered nine commercial sales during the relevant period (20/6/97 to 2/3/98). Those sales, including the most comparable, varied in price from $67.35 per m² (Sale 1) to $40 per m² (Sale 3). All of the other six sales were agreed to be in a superior location to 21 Bacon Street. Five sales in Mills Avenue (Sales 4 to 7 and 9), were sold for $57.85 per m² (1,208 m²) to $50 per m² (859 m²). A further sale in St Francis Drive (301 m²) sold for $66.44 per m², and has been applied at $63.12 per m². Generally speaking, all of those commercial properties have had their unimproved values increased by about 100% since the 1 January 1996 valuation. Miss Donohoe agrees that the sales are all superior to 21 Bacon Street, and has applied an unimproved value to 21 Bacon Street at $65,000 ($40.15 per m²), to reflect that level of superiority. Miss Donohoe argues that it is more appropriate to seek some relativity between the town centre sales and 21 Bacon Street, than to adopt Mr Turner's comparisons with sales of vacant industrial lands in Belyando Avenue (Acacia Street). She relies in that conclusion on the highest and best use of 21 Bacon Street as commercially zoned land. -- 8 of 26 -- 9 Mr Turner queries whether Sales 4 and 5 (Mills Avenue) reflected normal sales in line with general market expectations. Mr Turner notes that both of those sales were purchased by owners anxious to amalgamate the parcels, although all were purchased at public auction. It is his opinion that the value to those anxious owners who wished to expand their business, and upgrade their site exposures, was likely to have resulted in a higher than otherwise price. Miss Donohoe rejects that assertion, claiming that the public nature of the auction mitigated against rejecting the sales as out of line, in view of the adjoining owner implications. Mr Turner notes that there had been a separate offer of $70,000 for Sale 1 by another party, prior to the Goulevitchs paying $85,000 for Sale 1. Mr Turner also notes that both the owners of Sales 4 and 5 and the owner of Sales 6 and 7, also bid for the adjoining parcel (Sale 9), in order for either to expand their businesses. The owner of Sales 4 and 5 has now built a restaurant and a motel, while the then owner of Sales 6 and 7 has since relocated his car dealership out of town. Miss Donohoe argues that the relatively constant prices paid for Sales 4, 5, 6, 7 and 9 all support normal transactions. (5) Movements in the Market - A key difference between the parties lies in their interpretation of forces within the property market, which were likely to impact the level of unimproved value of all lands in Moranbah. In support of his argument that property values did rise very quickly in 1997, but have since declined dramatically in 1998/99, Mr Turner looked at a range of wider economic indicators. Mr Turner considered the following:  changes in the coal industry;  sales of vacant residential lands;  availability of vacant residential land;  building activities;  established dwellings;  resales of established dwellings;  impact on vacant land;  building approvals;  changes in the population; and  business index. (5.1) Changes in the Coal Industry - The history of Moranbah has been inextricably linked with the development of the coal industry in Central Queensland. Since its establishment in 1972 to provide accommodation for mine workers and their families, the growth of Moranbah, and -- 9 of 26 -- 10 other towns in the region such as Dysart, Middlemount and other mining towns; and to a lesser extent the larger centres of Emerald and Clermont, all have fluctuated with the economic strength of overseas exports of coal from Queensland. Because of its isolation from major centres, and its almost total dependence upon coal extraction, Moranbah lives and dies with the coal industry. Initially opened for the extraction of coal by open-cut methods at Goonyella, Peak Downs and Siraji Mines, the later mine at Moranbah North has since developed the new technology and underground procedures of tunnelling, which is less demanding upon staff resources. The results of those industry changes is that less mine workers are now required in the area, and workers have left the town in significant numbers. BHP Coal Pty Ltd is currently developing an underground project at Goonyella, which will further reduce the demand for staff, with possible further worker reductions. Evidence was given by Ian Clifford Kilgour, General Manager of the Goonyella/Riverside Mine, operated by the appellant outside of Moranbah, that detailed the events and changes in the industry in recent years. Until January 1999 Mr Kilgour had responsibility for the Town of Moranbah, including budget, policy and relations with the Belyando Shire Council. That role has since shifted to Emerald. Mr Kilgour provides evidence from the records of the appellant from 1972 to January 1996, when he commenced as General Manager, and since 1996 from his personal knowledge. Mr Kilgour outlined how the first major impact of overseas price cutting for coking coal occurred in November 1997. He explained how the proliferation of new coal mines elsewhere in the world, coupled with pressures in the Asian markets, focused BHP Coal Pty Ltd's attention upon methods of reducing costs of production. Key to those reductions was a rethink of the staffing strategies of BHP Coal. It was widely publicised throughout Australia at that time, that the parent company BHP Australia, was also seeking major rationalisation in its operations, particularly staffing, which represented 40% of total cost. It is also interesting to speculate that the broad thrust of economic rationalism was taking effect at the same time throughout the Australian community. Because of the nature and size of the Moranbah community, those trends were widely known in the town. However, from late 1997 to March 1998 there was likely to have been a level of uncertainty about whether Moranbah would actually be targeted for staff reductions. That was clarified in March 1998. Similar cutbacks -- 10 of 26 -- 11 also occurred at Emerald. As an outcome of those forces, BHP Coal Pty Ltd issued a series of policy statements between late 1997 and March 1998. Major equipment was stood down, operations curtailed, and on 31 March 1998 a voluntary redundancy program was announced. The voluntary redundancy program operated from March to June 1998, during which time staffing at the Goonyella/Riverside and Peak Downs Mines dropped from 1,866 to 1,543. Between July and August 1998 the numbers further reduced to 1,348. Just prior to these dramatic changes in work practices, Moranbah had experienced a short burst to the local economy in 1997. This had been precipitated by the initiation of the Shell Moranbah North Coal Underground Project, and an injection of an extra workforce to develop the infrastructure of the new mine, and to build 180 new houses for its workforce of 200 staff. Shell Coal spent about $40,000,000 on residential development in the town, under agreements to develop infrastructure according to the then staff numbers employed in the respective miens. (1,880 BHP Coal and 200 Shell Coal). Those numbers have since changed to 1,130 BHP Coal and Shell Coal 200. Further reductions in staff are planned by BHP Coal at Goonyella. Mr Kilgour notes that to produce 5,000,000 tonnes of coking coal Shell Coal can do it with 200 people; while the current open-cut operations of BHP require 500 people. The Shell Mine was ready for operation in June 1998. The burst of infrastructure development as a result of Shell Coal making a commitment to their new mine ($460,000,000), tended to raise community expectations and confidence. As a result of those moves the respondent, and the Belyando Shire Council, moved to develop further new residential parcels in the town. During 1997 BHP Coal also looked at developing 100 additional sites, and commenced negotiations with contractors. However, with the downturn in the coal price that project was deferred. Since the downturn in the mining economy, the Belyando Shire Council developed six industrial lots in August 1999, as part of the Shell Coal Infrastructure Agreement. The Council has so far been unsuccessful in selling any of them, in spite of them being offered to the market at half the development cost. (5.2) Sales of Vacant Residential Lands - The recent history of sales of vacant residential lands in Moranbah commenced in 1997. Prior to that time the supply of vacant lands had been predominantly controlled by the appellant. In the period 1997 there were 29 sales, and -- 11 of 26 -- 12 in 1998 there were two sales. There have been no sales of vacant residential lots since August 1998 to the present. The development of the 180 residential lots for Shell Coal occurred between March 1996 and March 1997. During the burst of building activity in 1996 and 1997, there was a demand for 1,200 to 1,500 construction phase workers to be accommodated in the area. Those numbers have now decreased to 189 staff of Shell Coal, plus 90 contractors. In March 1997 the respondent released six lots for sale, which sold at prices from $29,500 to $35,500. In October 1997 the Belyando Shire Council released 19 lots for sale, 18 of which sold at a set price of $26,000. The remaining lot at 18 Mills Avenue (Sale 2) sold in January 1998 for $26,000. In October 1997 Deguara Holdings released a further 23 lots, five of which sold for prices between $27,000 and $33,000. The remaining 18 lots remain unsold. Attempts to resell several of the formerly purchased lots at $26,000, have been unsuccessful, and are currently being offered at prices from $18,000 to $22,000. One of those lots (13 Freeman Street) is a mortgagee-in-possession sale. Of the six lots sold by the respondent in 1997, only one remains vacant; while 15 of the 18 lots sold by the Belyando Shire Council remain vacant, and 21 of the original 23 lots developed by Deguara Holdings remain vacant. A summary of the 48 lots offered for sale in 1997 shows 10 (21%) have been improved, and 38 (79%) remain vacant, either sold or unsold. (5.3) Sales of Established Dwellings - Mr Turner supplies analyses of sales and resales of established dwellings. His conclusions may be summarised as follows:  Sales (1991-1995) average 12 to 15 per year;  Sales (1996) 28;  Sales (1997) 47;  Sales (1998) 20;  Sales (to October 1999) 7. Mr Turner notes that the construction of 10 new dwellings in 1997 does not correlate with the reduction in sales of existing dwellings in 1998, and he concludes that the reduced sales volume reflects the outward movement of people from the town. He also concludes that there is no direct correlation between supply of vacant lands and sales of existing dwellings. Mr Turner makes a detailed examination of resales of established dwellings during 1996 and 1997, which were formerly sold after 1991. He differentiates those -- 12 of 26 -- 13 into four highset and five lowset categories, and concludes a schedule of representative comparable property type sales to those representative sales (Annexure D), for the period 1991-1999. The purpose of that schedule is to demonstrate, in his opinion, that there was a decline in the market between 1997 and 1999. The resale history of the representative sales supports that between 1991 and 1997 those properties resold (some several times) at increased prices between 30% (8 Bernborough Street) and 100% (14 Archer Street). There was a general pattern of increases in sale prices depending upon the length of time between the resales, but all sales to 1997 were upward movements. It is noted that a property at 29 Bradman Street increased by 37% from September 1993 to June 1996, but had subsequently declined in value by 8% at a later resale in February 1998. In all of those comparisons there was no indication as to the nature or changes to improvements within the dwellings, so that the result can only be observed as indicative of a changing market. However, the apparent downward shift in the resale price for 29 Bradman Street in February 1998 would appear to be one of the early indicators of a change in the market. Miss Donohoe also notes that there were two other resales in that period of 1996-1997, which were not reported by Mr Turner. The property at 80 Mills Street had formerly sold in January 1996 for $72,000, and resold in October 1996 for $91,300 (27% increase); and 16 Hannah Street was sold in early April 1997 for $82,500, and then resold later in April 1997 for $117,000 (42% increase). Both of those additional sales tended to support Mr Turner's conclusion of an increasing market to 1997, but not his conclusion of a fall in 1996 and 1997. The large increase in less than one month in the 16 Hannah Street sale, casts some uncertainty about the nature of the early sale of that property in April 1997. Miss Donohoe argues that the general pattern of increases in sale price between 1996 through to 1997 does not support Mr Turner's conclusion that values have declined to the level reported for the 1 January 1996 valuation. In analysing the resales of existing dwellings, Mr Turner concludes that the market values changed for highset homes between February and May 1998, and for lowset homes between February and April 1998. Those declines correlate with the period of reductions in BHP Coal workforce. However, Mr Turner's refinement of that reduction date to March 1998 would appear to be partly influenced by the issue of BHP Coal's voluntary redundancy policy on 31 March 1998. -- 13 of 26 -- 14 The actual largest decline in the workforce occurred about May to July 1998, possibly reflecting the normal lag in time one might expect from people being asked to make a very significant whole-of-life change in work and living arrangements. Some longer-term residents may have found it more difficult to relocate from the town. There was also the impact of the potential taxation incentives to continue employment beyond June 1998. Mr Turner then goes on to analyse sales of existing dwellings for the period 1998 to October 1999, concluding that values have tended to remain constant from March 1998 until the present. Mr Turner notes only one sale over $80,000 between April 1998 and August 1999 (Table 4). In seeking to ascertain the level of decline in the value of existing dwellings on or about his postulated date of March 1998, Mr Turner seeks to provide estimated current values of those nine selected representative sales on Annexure D. From those figures he concludes an estimated drop of about 30% to 40% occurred about March 1998 (Item 7.19). However, Mr Turner's estimated current values are not supported by a full appraisal of the improvements, and again are only indicative of some level of change. (5.4) Business Index Movements - Mr Turner also analyses changes in dwelling building approvals, although that provides little further information beyond that already covered elsewhere. Likewise his analysis of the total population trends, and school enrolments, merely support evidence from Mr Kilgour. Of some assistance is the analysis of gross sales of business activity in the town from 1992 to 1999. Mr Turner focuses on hardware and electrical contracting, a newsagent, toy shop, service station, furniture and electrical and a tyre outlet. As a general pattern all businesses displayed a general slow decline in sales from 1992, while the tyre outlet and the hardware and electrical contracting displayed a peak about 1996 to 1997, declining to 1998/99. Collectively, the mean expenditure patterns did not appear to vary greatly from 1992 to 1999. Although there is insufficient detail to confirm the actual results of the survey, it is difficult to conclude that economic activity in those industries is worse than 1993 to 1995. Bearing in mind the nature of those industries, one could conclude that the everyday needs of living in Moranbah, for those remaining there, tend to continue unabated. During the period of economic confidence in 1996-97, the increased activity in tyre sales may -- 14 of 26 -- 15 have reflected the optimism of the miners to commute more regularly to coastal venues for relaxation. Decision: I turn first to the nature of the land, and the actual comparisons made with the sales evidence supplied. There is no real difference between the valuers in respect of the statistical evidence supplied, but the interpretation of those statistics, the timing of the sales, and the impact of subsequent changes in the market, are all key issues of disagreement. If the sales supplied by Miss Donohoe were to be taken to truly reflect a fair market value for purposes of the Valuation of Land Act, then I believe there would be little difference between Miss Donohoe or Mr Turner's conclusion about unimproved values. (i) The Impact of Zoning - There is difference between the parties in respect of the highest and best use of the commercial land at 21 Bacon Street; but mainly in respect of the most comparable sales with which to compare the subject land. Miss Donohoe relies upon the locality of 21 Bacon Street nearby to St Francis Drive and the town centre, and the subject land's zoning for commercial purposes. Mr Turner sees closer comparability with the industrial lands on Belyando Avenue. In seeking to ascertain the most appropriate comparisons, I note that the zoning of land has been taken to always affect the highest and best use of the land, although it does not create the highest and best use, which remains constant, although changes in zoning may facilitate or inhibit its realisation to the owner. That principle was followed by the Land Appeal Court in AK and SS Gallagher v. Brisbane City Council (1975) 2 QLCR 368, at 381. The impact of zoning upon land was also discussed in The Minister of Environment v. Petroccia [1982] 30 SASR 333, where Wells J said at p.344: " When zoning has been imposed, all that has happened is that, when identifying the area of demand, the valuer (and the court) must consider, not only the intrinsic appeal of the land, but also such limitations as have, by the zoning, been placed upon the naturally occurring demand. A permitted use or a prohibited use of a given parcel within a given zone may be accommodated, readily enough, by the valuation process. A consent use, however, requires more careful appraisal. …. The valuer (and the court) must, in such a case, determine what effect the probability or improbability that consent will be granted would be likely to have upon the potential purchaser who would not be interested in the land if the consent use were a prohibited use." -- 15 of 26 -- 16 The principle of valuing the land for its current zoning, and then making some allowance for its highest and best use as a consequence of any relaxation or consent use by the Council, was discussed in Royal Sydney Golf Club v. Federal Commissioner of Taxation [1954-55] 91 CLR 610. In that matter the High Court of Australia, in considering whether the subject land should be valued as land zoned for parks and recreation purposes, found at p.625: " The first question in the case stated should therefore be answered that in arriving at the unimproved value under the Land Tax Assessment Act of the land the subject of the appeal the land should not be valued without regard to the provisions and effect of the County of Cumberland Planning Scheme." That principle was also followed by this Court in Capri Commercial Centre Pty Ltd v. Chief Executive, Department of Natural Resources (AV97-244), 16 April 1999, unreported; and again in Ardentallen Pty Ltd v. Chief Executive, Department of Natural Resources (AV98-722), 19 October 1999, unreported. In Ardentallen the findings of the High Court were followed in the judgment of the further hearing of Royal Sydney Golf Club v. Federal Commissioner of Taxation [1956-57] 97 CLR 379, where Kitto J addressed the correct method of considering any likelihood of any relaxation of the zoning of the land, and said at p.391: " I think the proper course is to inquire first what was the value of the land on the footing that there was no possibility of its ever being turned to other than recreational purposes, and then how much extra should be allowed for such chance as there was of securing permission for residential use at some further time." The thrust of those decisions tends to support Miss Donohoe's decision to compare 21 Bacon Street on the basis of its current zoning, and then to make some allowance for its lesser locality and amenity than the sales in the town retail centre. That would appear the most appropriate method of comparison, rather than to compare 21 Bacon Street with sales of other lands differently zoned for industrial purposes. The varying actual uses of the 21 Bacon Street locality, would then be accommodated in Miss Donohoe's adjustments for locality and amenity. (ii) The Moranbah Economy - In any Australian community, under the prevailing economic climate of competitive capitalism, there are varying degrees of economic forces which drive what is collectively referred to as "the marketplace". An important subset of the general economy is the property market, which is a key issue in these current matters. -- 16 of 26 -- 17 As noted by Samuelson in his text "Economics, an Introductory Analysis", Third Edition, McGraw Hill Book Company Inc., at p.38: "All economic life is a blend of competitive and monopoly elements. Imperfect, or monopolistic, competition is the prevailing mode, not perfect competition." The effective operation of a normal supply-and-demand interface in any competitive property market, requires impacting factors to have a degree of economic elasticity in order for the normal market outcomes to occur. Where some monopoly body gains control of those forces, that body may be seen to control the supply of the product in the society, and thus to take advantage of any inelasticity of demand in the community, to increase the price of the product. Alternatively, where such a body has monopolistic control of the demand for a product, the price for the product will fall, due to any inelasticity of supply. The small mining towns of Central Queensland, due to their virtual total dependence upon a single industry, and often a single employer, are classic examples when normal market forces tend to deviate from the norm. Moranbah is typical of that scenario, as it is noted that, of a population of about 6,500 residents, workers in the mines represent, at its peak, 1,880 (or 28.9%). Based on the average Queensland household of 2.74 workers per family (Queensland Year Book 1997 pages 34 and 234), the population directly impacted by employment to the mines represents 79% of the total community. If the additional community support infrastructure population is then added to those numbers, it is clear that most of the economic activity of Moranbah is directly affected by mining activities. Mr Turner confirms that private non-mine ownership of residences is less than 10%, and some of that is by private owners who, were employed at the mine, and were able to purchase their homes from BHP Coal Pty Ltd at a significant discount from the normal market value. However, even those private owners secured those homes under a BHP Coal ownership scheme, which maintained a caveat for seven years for BHP Coal to repurchase the property, and subject to the employer continuing to reside in the property. Clearly, normal supply and demand forces do not exist in Moranbah, to an extent comparable to the wider community. If I consider then the effective home ownership of the approximate 2,000 homes in Moranbah, I find that represents:  BHP Coal Pty Ltd = 1,620 dwellings (81%);  Shell Coal = 180 dwelling (9%);  Private = 200 (10%). -- 17 of 26 -- 18 Of those 1,620 homes owned by BHP Coal, a total of 115 (7%) are currently vacant due to reductions in staffing numbers. Such home ownership proportions are typical of monopolistic control of the market. (iii) The Method of Valuation - It is agreed by both parties that, under normal market conditions, the most direct method of determining unimproved value is by comparison with sales of vacant lands, if they are available. That principle has been upheld by courts at all levels, and is well documented in the decisions of the Land Appeal Court in PH Clough v. The Valuer-General (1981-82) 8 QLCR 70, at 76; NR & PG Tow v. The Valuer-General (1978) 5 QLCR 378, at 381; and R & MM Barnwell v. The Valuer-General (1990-91) 13 QLCR 13, at 17. In respect of Miss Donohoe's argument that there are separate markets for improved lands and vacant lands, I accept that it is normally true in any competitive economy. While there may have been the seeds of such separation during the burst of optimism in Moranbah during 1996 and 1997 that was short lived. In view of the dynamics of Moranbah, which has now returned to what is virtually at best described as a duopoly, I believe it would be unwise to treat the vacant land sales of residential properties as unrelated to the sales of existing dwellings without some caution. Because of the slightly less dependency upon BHP Coal and Shell Coal by the commercial operators in the town, I can accept that vacant land sales for both commercial and industrial purposes, have a greater level of independence. I therefore treat the residential land sales with some caution, but accept the commercial and industrial land sales as reliable evidence of those markets. However, in accepting those commercial and industrial sales for comparison purposes, one must be careful to ensure that a comparison is made between like matters. (Nutting v. Chief Executive, Department of Natural Resources) (AV98-576) 4 March 1999 (to be reported). As discussed further in that matter, there are no hard and fast rules in making comparisons, and it is really a matter of degree of comparability, which really depends, for its reliability, upon the skills of the expert valuer. The process of judgment whether a restricted market may play a role in achieving inflated or depressed prices, was also considered in Nutting at p.37, where the judgment of the High Court in Brewarrana Pty Ltd v. Commissioner of Highways (No. 1), SA (1973) 32 LGRA 170, was considered, and in particular the findings of Wells J at pp.179-180. The need for reliance upon normal sales was emphasised by -- 18 of 26 -- 19 the President of this Court in Appeals by Land Owners against Valuer-General Determinations - Shire of Millmerran (1971) 38 CLLR 95, at 98. The importance of determining the market norm, particularly in terms of an erratic market, which is seen to be a factor in this current matter, was addressed in Determination of Rents and Unimproved Values for Conversion Purposes - Perpetual Lease Selections and Grazing Selections - Goondiwindi District (1974) 1 QLCR 45, where the President said at pp.48-49: " I think I should say at this juncture that whilst a sale of a subject property around about the relevant date in normal circumstances is cogent evidence of its value, it is always necessary to check the analysed value against the standard reflected by other sales of comparable properties to ensure that it conforms to the 'norm' of the market. If the sale does not so conform caution must be used in its application and it may be even proper to reject it if it is shown to be a sale out of line with the market 'norm'. This check becomes vital, in my opinion, in times of a varying market be it rising or falling or in times of an erratic market. One cannot assume, ipso facto, that the analysed sale figure equates fair market value for the subject purposes." The need for careful analysis of market movements in times of erratic fluctuations was further noted in that matter at p.53, where the President noted a decision of 25 July 1973 of the Land Appeal Court on appeals against rents and values for conversion purposes in the Taroom District (Perpetual Lease Selection 1359 (Clift & Stobo); 1535 (Harper) and 1603 (Cormack) , and where the Land Appeal Court found: "Seasonal conditions and prices received for primary products in the normal expectancy of rural industry fluctuate from time to time and with varying degrees of intensity. Property values do not necessarily react immediately to seasonal and economic influences. The hypothetical prudent vendor who is not under any form of compulsion may well decide to delay selling to ensure his price will not be unduly influenced by adverse seasonal or economic considerations which may prove to be of a temporary or short-term nature. The state of the property market may only be gauged in the light of sales conforming to the above tests that occur around about the relevant date of valuation. It is usual to wait for sales to establish a trend or new level before prevailing levels of value are altered." The need to consider matters beyond just the date of valuation was also discussed in Determination of Rents and Unimproved Value for Conversion Purposes - Perpetual Lease Selections - in the Taroom District (1974) 1 QLCR 300, where the learned Member said at p.304: -- 19 of 26 -- 20 "If at the date of application the market is depressed the applicant cannot be denied the advantage this gives him any more than the Crown can be refused the advantage of a buoyant or higher than usual market at the relevant date. But I am aware that when determining rent of a leasehold tenure other matters have to be taken into consideration, which take the Court beyond the basic valuation date." The learned Member later went on to consider the cyclic nature of the cattle industry, and internal and export considerations which might affect the price of cattle over time (pp.305-306). In the Goondiwindi District decision of the President (1 QLCR 45, at 48) the depressed economic conditions of the wool industry were also considered. The principle of considering wider economic factors was also noted in GE Conimos & Co Pty Ltd v. Chief Executive, Department of Lands (1996-97) 16 QLCR 311, at 316, where the Land Appeal Court considered the impact of a national airline strike upon the tourist-oriented economy of Cairns in North Queensland. In that matter the Land Appeal Court noted that the locality of the subject land, in what is referred to as the "Golden Block", had experienced a boom during 1987 and early 1988. Subsequently in 1989, due mainly to the external forces of the airline strike, the property market had severely declined, and continued to be depressed at the date of valuation. The analogy of the Conimos decision to the current matter is obvious. It is further argued by Mr Haydon that consideration of wider economic factors is consistent with guidance found in the words of Griffith CJ in Spencer v. The Commonwealth of Australia (1907) 5 CLR 418, where the Chief Justice referring to a buyer and a seller, said at p.432: "The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together." That definition relies upon a prudent buyer and seller, both of whom should be equated with market forces at the time. Another matter for consideration is the method of comparing residential properties on a site value basis, rather than a per m² basis. That principle was considered in respect of a rural residential property near Dalby in DF and M Ward v. The Valuer-General (1983) 9 QLCR 48, where the Land Appeal Court said at p.50: -- 20 of 26 -- 21 "Sites are valued overall and not on a rate per hectare basis. The experience of the market place reflects the former not the latter practice. This Court made a similar finding in ACF & Shirleys Limited v. The Valuer-General (1978) 5 QLCR 370 at p.375." Miss Donohoe had originally valued 17 Arkana Terrace on a direct proportional area basis, but has since revised her valuation to $30,000, in order to better reflect the site value principle. Such a strategy is in line with the principle that larger areas generally command a lesser overall unit rate than smaller areas. That was followed in Burns Philp & Co Ltd v. The Valuer-General (1974) 1 QLCR 161, where the Land Appeal Court said at p.166: "As we understand the practice this is an acknowledgement that larger areas generally command a lesser overall unit value than smaller areas. We see no reason as presently advised to disallow this practice but the quantum therefore is one calling for discretion according to the circumstances of individual cases." And finally in considering differences between the practices in the current matter, I note the reliance placed upon the relevant period for comparison of sales. Miss Donohoe seeks to limit her comparisons to sales up to the date of issue of the valuation. Mr Turner seeks to consider matters of the economy subsequent to that date. In that regard I am directed to the findings in Nutting v. Chief Executive, Department of Natural Resources (supra) at pp.10-12. It is clear that precedents dictate that the relevant period for consideration of evidence is up to the date of issue of the valuation, after which subsequent sales are normally more appropriately related to a subsequent valuation. However, for whatever reason, Moranbah has not been revalued for nearly three years, and there was no assurance when the next valuation might occur. While future valuations are not a matter for consideration in this matter, it does emphasise the need for some understanding as to whether the burst of enthusiasm for vacant land sales might represent some erratic change in the normal market pattern. (iv) Comparison of Sales - (a) The Vacant Residential Lands - The two key sales of Miss Donohoe occurred in August 1998 (Sale 1), and January 1998 (Sale 2). The remaining 28 sales of vacant land occurred in: 11 March 1997 (4); April 1997 (2); October 1997 (14); November 1997 (7); and -- 21 of 26 -- 22 December 1997 (1). It is correct therefore to consider that 27 of the available sales occurred at least nine months prior to the date of valuation at 1 October 1998, and one sale, Sale 1, occurred more than one month prior to the relevant date. The lack of any vacant land sales subsequent to 1 October 1998 supports the conclusion that the market had dried up. If I consider the timing of the available sales I note that it was found that sales evidence, which is insufficient and too far distant in time from the date of valuation, may not constitute reliable evidence of the value. In the matter of JC and BA Todd v. The Valuer-General (1970) 37 CLLR 112, Mr J Trickett, the departmental valuer, sought, in the absence of suitable timely sales, to apply the sale of the subject land some 3½ years prior to the relevant date; while the appellants sought to use sales 1½ years after the relevant date. The learned Member (later President), mindful of the seasonal and economic conditions of the wool industry at that time, said at p.116: "Mr Trickett's sale precedes the subject relevant date by 3½ years and Mr Taylor's sale is almost 1½ years after the relevant date. In neither case am I satisfied the sales could be fairly said to reflect market conditions similar to those applying at the relevant date." In the current matter all of the available sales, except the Robson sale, would have been relevant for a valuation at 1 October 1997, had that occurred. However, the administrative decision was made by the Chief Executive to not revalue Moranbah in 1997. It is noted that the Chief Executive may fix a date for an annual valuation under s.37(3), or decide not to do so if directed by the Minister under s.37(4). The annual valuation process was established in 1985 to ensure that unimproved values under the Act more closely follow market trends. Prior to that time general valuations had occurred generally at intervals of five years, and significant variations had tended to develop between revaluations. The purpose of the closer time interval was to improve fairness to both the individual and the Crown in respect of liability for revenue purposes. While not enshrined in the Act, which specifies the purpose of the Valuation of Land Act as "to make better provision for determining the valuation of land", there are examples of the Government's intentions for the Act. In the Review of Valuations Act 1952, s.3 sets out the duty of the Board of Review. Those directions specify that the Board is to inquire whether the valuations -- 22 of 26 -- 23 then extant, were "fair and equitable". The conclusion of that direction is that the Government seeks a valuation system, which is fair and equitable to all parties. The move to enshrine annual valuations in 1985 strengthens that resolve in my opinion. If I then consider why the Chief Executive chose not to conduct an annual valuation in Moranbah on 1 October 1997, I have no evidence of those reasons. However, it is possible that the Chief Executive, on advice, saw no major reason for identifying changes in the unimproved values of Moranbah. Now while the sales now supplied might indicate a sudden rise in valuations at that time, the wisdom of caution may have influenced the decision not to proceed. In hindsight, such a decision appears sound at that time, as the market has apparently declined since some time in 1998. That then leaves the matter of Sale 1 (Bitcom to Robson), which is relatively close to 1 October 1998. However, there is evidence from Mr Robson that his inquiries, prior to purchasing the land at 2 Freeman Street, were relatively unsophisticated, and perhaps lacking something of the prudence of a fully informed buyer. I accept that he made inquiries of the Council, and that the bank advanced a significant part of the money to purchase the land. However, Mr Robson's failure to consider other sites on offer for sale in August 1998, indicates a level of naivety in land matters. I will treat Sale 1 therefore with some caution, and in the end I believe the sales of vacant lands at that period of erratic change in the Moranbah market would not represent a stable market at Moranbah, which would provide fair and equitable unimproved values for the purposes of the 1998 valuation. In considering relativity between the smaller residential sites at 11 Clements Street and 18 Belshore Street to the larger parcel at 17 Arkana Terrace, I find that Mr Turner's sales at Emerald do no more than demonstrate the site value principle, and should not be transferred to Moranbah as evidence of the correct relativity. I agree with Miss Donohoe that comparisons ignoring the availability of sewerage, and kerb and channelling on the larger Emerald lots, do not provide a reliable percentage factor for the increased size of 17 Arkana Terrace. However, Miss Donohoe, in her revision of the value of 17 Arkana Terrace, has adopted figures of 1.2 to 1.3 times the value of the smaller residential parcels. I will adopt a factor of 1.25 for 17 Arkana Terrace. (b) Sales of Established Dwellings - In the absence then of reliable vacant land sales, I look to the general pattern of sales of existing dwellings. From the evidence (Annexure D), I can conclude the -- 23 of 26 -- 24 following variations between representative resales relevant at the former valuation at 1 January 1996, and sales relevant at the current valuations as follows: 14 Archer Street - increase 18%; 8 Bernborough Street - increase 30%; 5 Gordon Street - increase 27%; 55 Clements Street - increase 24%; 1 Bernborough Street - no sales since last valuation; 25 Renier Street - increase 63%; 80 Mills Street - increase 27%; 16 Hannah Street - only sales post last valuation; and 29 Bradman Street - increase 28%. On the basis of those conclusions I will adopt an increase in value between valuations of 30%, in spite of the lack of any evidence in respect of any structural alterations to the dwellings. On that basis the value of 18 Belshore Street would be $10,200 plus 30%, or $13,260 (say $13,500); 11 Clements Street would be $10,800 plus 30% or $14,040 (say $14,000); and 17 Arkana Terrace would be $19,400 plus 30% or $25,220 (say $25,500). (c) The Commercial Lands - The comparisons of commercial sales supplied by Miss Donohoe are, in my opinion, more comparable than the sales of industrial lands supplied by Mr Turner. Miss Donohoe provides the following comparisons: Sale Date Area UCV per m² Comparison to 21 Bacon Street 1 02/03/98 1,262 m² $59.42 Superior 2 08/12/97 736 m² $47.55 Superior 3 23/10/97 2,745 m² $35.70 Superior Mr Turner draws relativity with the following industrial properties along Belyando Avenue in the Acacia Street industrial area: Property Area Applied UCV 1 906 m² $21 per m² 2 808 m² $20 per m² 3 808 m² $20 per m² 4 1644 m² $15 per m² Mr Turner concludes that 21 Bacon Street at $40 per m² is out of line with those properties. However, as noted, Mr Turner would appear to have underestimated the impact of the current "Commercial" zoning of 21 Bacon Street in its highest and best use. On guidance from Royal Sydney Golf Club(supra), the most appropriate -- 24 of 26 -- 25 comparison would be with the commercial sales of Miss Donohoe, and then to adjust those comparisons to allow for the lesser locality, the difference in shape, depth and frontage for 21 Bacon Street, and its lesser traffic exposure to Bacon Street compared to St Francis Drive, Belyando Avenue and Mills Avenue. If I then consider the additional commercial sales of Miss Donohoe as follows: Sale Date Area UCV per m² Comparison 4 30/07/97 1,235 m² $44.53 Superior 5 30/07/97 1,306 m² $43.65 Superior 6 30/07/97 831 m² $48.74 Superior 7 30/07/97 859 m² $47.73 Superior 9 30/07/97 1,208 m² $43.87 Superior In the matter of Sales 4 and 5 to a single owner (Huynh & Tran), and sales 6, 7 and 9 to a single owner (Baxter and Delta Investments), I note that those occurred at public auctions. While there was obviously some additional competition between the respective parties at the auction, the resulting prices paid indicate that either party paid market price. In the matter of Sale 1, I note the purchase was by an adjoining owner, and that the purchaser paid $85,000 ($67.35 per m²), while there had been another unsuccessful offer at $70,000 ($55.46 per m²). However, I am also aware that an adjoining owner sale is not to be automatically rejected for that purpose. That was determined in Barber & Others v. The Valuer-General (1969) 17 LGRA 409, where Else-Mitchell J said at p.421: "…I question the propriety of excluding from consideration entirely a sale made to a neighbouring owner, at any rate in the absence of evidence showing that such an owner bought under some sort of strong economic pressure." The problem of whether the sale to an adjoining owner reflects some special value to that owner was addressed in Hurdis v. The Minister (1957) 2 LGRA 132, at 140-141; and also whether the adjoining owner could be identified as an anxious purchaser in Fenton Nominees Pty Ltd v. The Valuer-General (1981) 47 LGRA 71, per Wells J at 81. The argument that two adjoining parcels being purchased by a single owner, does not represent a true reflection of the market value, was also rejected in Fenton Nominees at p.81. In her final comparisons in the current matter, Miss Donohoe has only applied her Sale 1 at a conservative rate of $59.42 per m². -- 25 of 26 -- 26 While the commercial Sales 1, 2 and 3 are all lacking in direct comparability with 21 Bacon Street in some respects, I note that it is not a reason for not adopting those sales. That was found by the Full Court of Queensland in Henricks & Anor v. The Valuer-General (1983) 52 LGRA 56 (and also 9 QLCR 59, at 66), where Macrossan J (CJ) said at p.66: "To describe sales as somewhat lacking in comparability is not to condemn them entirely as a basis …" On balance I believe that a unit rate for 21 Bacon Street at $40 per m² is a fair and equitable rate for its location and its features. On that basis the unimproved value for 21 Bacon Street would be 1,619 m² at $40 per m² or $64,760, supporting Miss Donohoe's determination of $65,000. Conclusion Having considered the whole of the evidence I determine the following:  (AV99-968) - The appellant has partly proved his case, the determination of the Chief Executive is set aside, and the unimproved value of Lot 15 on MP 97319 is determined at Thirteen Thousand Five Hundred Dollars ($13,500).  (AV99-1017) - The appellant has partly proved his case, the determination of the Chief Executive is set aside, and the unimproved value of Lot 22 on M 973122 is determined at Fourteen Thousand Dollars ($14,000).  (AV99-1068) - The appellant has partly proved his case, the determination of the Chief Executive is set aside, and the unimproved value of Lot 17 on M 97331 is determined at Twenty- five Thousand Five Hundred Dollars ($25,500)  (AV99-894) - The appellant has failed to prove his case. The appeal is dismissed, and the unimproved value as determined by the Chief Executive in the sum of Sixty-five Thousand Dollars ($65,000) is affirmed. NG DIVETT MEMBER OF THE LAND COURT -- 26 of 26 --