Holcim (Australia) Pty Ltd v Valuer-General

[2009] NSWLEC 225

Land and Environment Court

of New South Wales

CITATION:	Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225
PARTIES:	APPLICANT: Holcim (Australia) Pty Ltd RESPONDENT: Valuer-General
FILE NUMBER(S):	31205 of 2008; 31206 of 2008
CORAM:	Biscoe J
KEY ISSUES:	VALUATION OF LAND :- appeal from Valuer General's land value assessments - industrial land
LEGISLATION CITED:	Blacktown Local Environment Plan 1988 Environmental Planning and Assessment Act 1979, s 75J, Part 3A Valuation of Land Act 1916, ss 6A(1), 37(1), 40
CASES CITED:	McKee v Valuer-General [1971] NZLR 436
DATES OF HEARING:	2 - 4 November 2009
DATE OF JUDGMENT:	24 December 2009
LEGAL REPRESENTATIVES:	APPLICANT: Mr G. Colman SOLICITORS: DibbsBarker RESPONDENT: Mr J. Maston SOLICITORS: Crown Solicitor's Office (NSW)

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

24 December 2009

31205 and 31206 of 2008

HOLCIM (AUSTRALIA) PTY LTD v VALUER-GENERAL

JUDGMENT

1 HIS HONOUR: These are two appeals by Holcim (Australia) Pty Ltd against the Valuer-General’s assessments of the land value of its vacant industrial land at 21 Kellogg Road, Rooty Hill, being Lot 5 in DP 255515 (Land). The statutory assessments were $17,500,000 (representing $190/m² x 91,944 m² of developable land) and $18,800,000 ($204/m² x 91,944 m²) at the respective base dates of 1 July 2006 and 1 July 2007.

2 The applicant submits, based on its valuation evidence, that:

(a) the 2006 land value should be assessed at $12,800,900 ($175/m ² x 73,148m ² ) for the northern portion of the Land plus a nominal sum of $40,000 for the southern portion;
(b) the 2007 land value should be assessed at $14,629,600 ($200/m ² x 73,148m ² ) for the northern portion of the Land plus a nominal sum of $50,000 for the southern portion;

3 The Valuer-General submits, based on valuation evidence, that the land values were, respectively, $20,225,000 ($220/m² x 91,944m²) and $21,235,000 ($231/m² x 91,944m²). Although they are higher than the statutory assessments, the Valuer-General does not submit that the statutory assessments should be increased.

4 The appeals are brought under s 37(1) of the Valuation of Land Act 1916, which provides that:

“Any person entitled under Part 3 to object to a valuation may appeal to the Land and Environment Court if the person is dissatisfied with the Valuer-General’s determination of any such objection to the valuation concerned (whether or not the person was the objector).”

5 Section 40 states the power of the Court on appeal and places the onus of proof on the appellant:

“(1) On an appeal, the Land and Environment Court may do any one or more of the following:
(a) confirm or revoke the decision to which the appeal relates,
(b) make a decision in place of the decision to which the appeal relates,
(c) remit the matter to the Valuer-General for determination in accordance with the Court’s finding or decision.
(2) On an appeal, the appellant has the onus of proving the appellant’s case.”

6 “Land value” is defined in s 6A(1) as follows:

“The land value of land is the capital sum which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona-fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner’s predecessor in title had not been made.”

7 I acknowledge the assistance of Acting Commissioner Parker.

Location

8 The Land is located within the established Rooty Hill industrial area, which is approximately 5 km due west of Blacktown Central Business District and about 2.5 km east of Mt Druitt on the main western railway line. Rooty Hill/ Glendenning is an established industrial area which has undergone rapid development in recent years due mainly to it having direct access to the M7 motorway and the associated motorway networks serving Sydney and providing access to intrastate and interstate road links.

9 To the west, the Land adjoins a steel mill on Kellogg Road owned by a third party, OneSteel Ltd. To the east the Land adjoins a large open space known as Nurragingy Reserve, which is owned by Blacktown City Council. To the north lies the Humes Concrete Products site, whose ownership is associated with that of the Land.

The Land

10 The Land is an irregularly shaped vacant block with an area of 15.07 hectares. Road access to the Land is limited to the north-western corner from Kellogg Road, a cul de sac. As the Land’s frontage to the Kellogg Road cul de sac is only about 30 metres, there is no significant exposure to passing road traffic. The southern boundary provides exposure and frontage to passing trains.

11 The Land falls from its highest point near Kellogg Road to the south. There are a number of undulations as a result of placement of fill over time.

12 The Land comprises a creek valley. The creek diagonally bisects the land from east to west. To use the southern portion, access by a creek crossing and road would be required from the northern portion.

13 The developable areas on the northern and southern portions of the Land are limited by flood considerations.

14 The Land has, and had at the base dates, convenient and immediate access through existing industrial areas to the M7 motorway which, in turn, provides access to the M4 motorway. The most important factor relating to development of industrial land in western Sydney in 2006 and 2007 was the ability to find large sites near on and off ramps to the M7 motorway, which opened in December 2005.

15 In addition, the Land has, and had at the base dates, potential for direct rail access. Its southern boundary adjoins the main western railway line, with an area available for a suitable, long railway siding. It is separated from the railway line only by North Parade, a little used public road.

16 The Land appears to be unique in having almost immediate access to the motorway system as well as potential direct mainline railway access. The evidence of the Valuer General’s valuer, Mr Carroll, which I accept, was that there are many industries that could exploit the unique characteristics of the Land. A connecting road to the northern portion of the Land is necessary for the Land to enjoy the rail access potentiality.

17 Within the Land and also running roughly parallel to the southern boundary is an easement for transmission lines, upon which are situated several electricity poles with transmission lines.

Planning

18 The Land is zoned 4(a) (General Industrial Zone) under the provisions of the Blacktown Local Environment Plan 1988. The highest and best use of the Land was agreed by the parties to be for industrial purposes.

19 The Land’s potential for direct rail access was proved and enhanced when, on 26 April 2006, the Minister for Planning granted approval under s 75J in Part 3A of the Environmental Planning and Assessment Act 1979 for development of a major project, a regional distribution centre for construction materials, on the Land and on parts of adjoining properties owned by others. On 25 November 2006 this Court made orders amending the conditions of approval.

20 The three volume Environmental Assessment Report prepared for the applicant in 2005 in support of the major project approval application contains significant publicly available information which would inform hypothetical buyers and sellers at the subject base dates.

21 The relevance of a planning approval such as the Minister’s approval of the regional distribution centre project is to show what might be done: McKee v Valuer-General [1971] NZLR 436. In that case the New Zealand Court of Appeal considered the meaning of “unimproved value” in a valuation of land statute and held, at 444 - 445:

“It may of course possibly happen that the valuation is made at a stage where consent to conditional use has been obtained, but the buildings have not actually been commenced. In such a case, depending possibly on the terms of the consent, it may be that the owner is in a position virtually to assign the benefit of the consent with a transfer of the land. If this is possible, no doubt the price which he receives will reflect the value to the purchaser of the consent. But this still does not mean that the value of the consent is to be ascertained and included in the unimproved value. Nor on the other hand does it mean that the consent is an ‘improvement’. The consent already obtained is something not to be included at all in assessing the unimproved value. The valuer must put the consent on one side, as if it had not been obtained; and assess the value of the land without it, but with the chance of obtaining another similar one. ”

22 I accept that at the base dates there was no real risk of obtaining a development approval similar to the one actually obtained. The approved development has yet to commence.

23 The approved development was for the construction and operation of a regional distribution centre for construction materials such as sand and aggregate. Such materials are typically used for manufacturing concrete and asphalt. The capacity of the regional distribution centre would be four million tonnes per annum. The centre would allow the receipt of quarry materials by rail using three parallel sidings to be constructed on the southern side of the Land adjacent to the main western railway; sorting and blending of the materials on site as required by customers; and the distribution of the processed materials by trucks using the nearby M7 Motorway. A vehicular bridge across the creek to link the northern and southern portions as well as a conveyor for transferring materials from the rail siding to the northern portion would also be constructed.

24 The overall rail siding would be approximately 1,500 metres in length. The three parallel sidings would be constructed to optimise the maximum length available for trains within the site constraints. The sidings can accept and operate up to two trains of approximately 805 metres in length at any one time, arriving from either the east or the west. Trains would carry between 3,150 and 3,750 tonnes of material. An automated unloading system is designed to unload a train in approximately two to three hours.

25 Because of the length of the trains, relatively small vacant parts of the adjacent properties to the south-west and south-east owned by, respectively, OneSteel Ltd and the State government would have to be utilised as part of the sidings. So too will the adjacent existing North Road owned by the local council. The adjacent property owners supported the regional distribution centre approval application. RailCorp also informed the Minister that it supported the proposed use of rail for the regional distribution centre project.

26 The key criteria for the selection of the land for the regional distribution centre included availability of land of a suitable size; location within an established industrial area with appropriate zoning; a central location for efficient distribution to the current and future Sydney market; direct access to a main railway line; direct access to the main transportation network in the Sydney region, particularly with direct links to the Sydney Motorway network; and road links between the regional distribution centre and the close by M7 Motorway to avoid residential areas. This was the only available site in the Sydney region which met the selection criteria. The Land is positioned close to growth areas where there is increased demand for concrete.

27 A benefit cost analysis of the regional distribution centre produced a very positive outcome. The reduction in truck kilometres resulting from the use of rail instead of road only was estimated at approximately 31.5 million truck kilometres. It is unlikely to impact on threatened species, population or ecological communities and a species impact statement is not required. Modelling for the regional distribution centre indicates only minor changes to flood levels as a result of the proposed development and that it would not have a major adverse impact in an extreme flood event.

Valuation

28 The statutory valuations and the parties’ competing valuations have been summarised at [1] – [3] above.

29 The developable areas, as calculated by a surveyor, for which major project approval was obtained under Part 3A of the Environmental Planning and Assessment Act 1979 prior to the base dates, are as follows:

Northern portion	73,148m2
Southern portion	18,796m2
Whole Land	91,944m2

30 The Valuer-General’s valuer, Mr Tony Carroll, agreed that these were the developable areas. The applicant’s valuer, Mr Mark Hurst, thought that they should be reduced a little but, given the weight of the evidence, I propose to accept them.

31 The basis for the valuers’ valuation assessments is the sales comparison method. Accepted valuation practice permits adjustments for differences, such as in location, area and time to enable valuers to have comparable values which, following adjustment, account for the various differences with the subject property. Such adjustments are generally based on a reasoning process drawing on the skill and experience of the valuer and are undertaken to derive an opinion of value through a deductive process. Because properties are rarely identical, adjustments for differences are obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property. Too many adjustments potentially render the comparable sale unsafe to rely upon. Caution is therefore required where large adjustments are to be made. Reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable.

32 The valuers had common regard to four comparable sales:

(a) 512 Mamre Road, Erskine Park
(b) 183 Reservoir Road, Blacktown
(c) Lots 2 and 5 Reen Road, Eastern Creek
(d) 605 Woodstock Avenue, Glendenning (corner of Glendenning Road)

33 Mr Hurst also had regard to a fifth sale, Lot 2 Templar Road, Erskine Park, which Mr Carroll did not consider was reasonably comparable.

34 I had the benefit of a view of the Land and the comparable sale properties.

35 512 Mamre Road, Erskine Park was sold in April 2005. Relative to the Land, the site benefits from being generally flat with limited or no requirement for fill and from having a long frontage. Conversely, with a developable area of 16 – 19.23 hectares, it is much larger than the Land and suffers from limited proximity to motorways. It is significantly inferior to the Land, in my view, in that it is necessary for trucks to drive by or through residential neighbourhoods to reach the motorway.

36 183 Reservoir Road, Blacktown was sold between July and December 2006. Relative to the Land, the site is in a comparable location with proximity to motorways, being of a comparable site area and of undulating topography. However, the site benefits from having a low requirement for fill and from a long frontage.

37 Lots 2 and 5 Reen Road, Eastern Creek was sold in March 2005. Relative to the subject Land, the site is in a comparable location with proximity to motorways and is of undulating topography. However, the site benefits from only requiring moderate fill and from having a long frontage offering exposure to the highway. Conversely, with a site area of 25.6 hectares, it is considerably larger than the Land. A similarity with the Land is that it is divided into two parts by the tributary of a creek and the two parts were to be connected by a creek crossing and road.

38 605 Woodstock Avenue, Glendenning was sold in June 2007. Relative to the Land, it is in a comparable location and of a comparable site area. However, the site benefits from being relatively flat on two levels, having a low requirement for fill and from extensive frontages to two roads. It was sold with improvements and there are consequential difficulties in adjusting the sale by deducting the value of improvements.

39 Lot 2 Templar Road, Erskine Park, submitted by Mr Hurst, was sold in November 2006. Relative to the Land, at 7.6 hectares this site benefits from a considerably smaller size and flat topography, no requirement for fill and an extensive double frontage. Conversely, the site suffers from limited proximity to motorways.

40 Having regard to the date of sale, site area, topography, extent of fill required, length and nature of frontage and location, none of the five selected comparable sales are directly relevant to the Land. They are indirectly relevant except for Templar Road which is of limited relevance.

41 Mr Carroll ranked the most comparable sales in order as Reen Road, Reservoir Road, Mamre Road and Woodstock Avenue. Mr Hurst ranked Glendenning Road first and the others equally. I agree with Mr Carroll that Reen Road is the most helpful, in part because of its division into two portions requiring a creek crossing and road to connect the portions, similar to the situation with the Land.

42 The valuers agreed that market values were increasing in the period 2005 to 2007.

43 Mr Hurst and Mr Carroll differed considerably, not only on the identification of features of the comparable sales evidence for adjustment but also on the basis, quantum and direction of adjustments. Their differences were based on their experience of the market and opinions of the relativity of the comparable sale features to the Land. Mr Hurst made adjustments for “exposure” and length of road frontage, but I prefer Mr Carroll’s view that they are generally unimportant to industrial production and storage activities; and it may be observed that the Land has exposure to the mainline railway. Generally, the valuers’ differences are irreconcilable and no useful purpose is served by comparing them in detail. Only the resulting respective rates per square metre for application to the Land are capable of useful comparison.

44 Mr Hurst analysed the comparable sales by making explicit dollar per square metre adjustments relative to the Land for a wide range of features which varied according to the particular comparable sale. For the 2006 base date, such adjustments ranged from minus $40/m² to plus $50/m² per feature and for the 2007 base date from minus $40/m² to plus $30/m². Mr Hurst made no adjustment to comparable sales evidence for the potential of rail access to the Land.

45 Mr Carroll analysed the comparable sales by making explicit percentage per square metre adjustments relative to the Land for time, size, location and rail access. For both the 2006 and 2007 base dates, such adjustments ranged from minus 10 per cent to plus 70 per cent per feature. The exceptionally high plus 70 per cent adjustment was for the location of Mamre Road. In each case he adjusted by plus 10 per cent for the Land’s potential rail access.

46 Mr Hurst arrived at a range of adjusted comparable sale rates per square metre within an unusually narrow range, while the large explicit adjustment of 70 per cent made by Mr Carroll is beyond the upper bounds of reasonableness in this case.

47 None of the comparable sales had potential for rail access. In accordance with an approval similar to the one actually obtained under the EPA Act Part 3A (discussed earlier), there is rare potential to construct a railway siding approximately 1,500 in length with entry and exit at both ends on the Land. That would be expected to increase the value of the developable areas on both the southern and northern portions of the Land. Little comparable sales evidence is available. Mr Carroll analysed comparable sales at 220-236 Miller Road, Villawood and 1 Ben Lomond Road, Minto with the benefit of actual rail access. Their sidings are inferior to the Land’s potential siding because they are much shorter, one only has a single track, and they do not have ingress as well as egress for trains to enter and exit in the forward direction. The sale of the Villawood property indicated a premium for existing rail access in the order of 13.6 per cent. It is not possible to derive numerical assistance from the other sale. Mr Carroll deduced a positive adjustment of 10 per cent for potential rail access to be appropriate for the Land.

48 Mr Hurst agreed that the Land had potential rail access but disagreed that value should be attributed to it.

49 The evidence indicated that the provision of rail access to the Land would require the relocation of North Parade, acquisition of land from the adjoining owners who had supported the Part 3A application, possible relocation of electricity transmission poles and lines, and the construction of the rail siding. Neither an estimate of costs nor a hypothetical development valuation was provided in evidence. There is no analysis of whether the costs of providing rail access were such that they would, at least, be offset by the consequential increase in value of the Land.

50 Each valuer selected a rate per square metre from the range of values deduced from comparable sales analysis, based on skill and experience.

51 For the 2006 base date, Mr Hurst, having derived a range of $165/m² - $180/m² from the analysis of comparable sales, applied $175/m² to the northern portion of the Land. For the 2007 base date, Mr Hurst, having derived a range of $197.50/m² - $203/m² from his analysis of comparable sales, applied $200/m² to the northern portion of the Land. Mr Hurst then attributed a sum described as “nominal” to the southern portion of the Land. For the 2006 base date this was $40,000 and for the 2007 base date $50,000.

52 For the 2006 base date, Mr Carroll, having derived a range of $218.01/m² - $242.28/m² from his analysis of comparable sales, then applied $220/m² to both the northern portion and the southern portion of the Land. For the 2007 base date, Mr Carroll, having derived a range of $223.08/m² - $253.65/m² from the analysis of comparable sales, then applied $231/m² to both the northern portion and the southern portion of the Land.

53 The valuers’ adjusted rates for the comparable sales, the rates they then applied to the Land and the rates reflected in the statutory assessments may be tabulated as follows:

2006 base date	Mr Hurst $	Mr Carroll including 10% rail access adjustment $	Mr Carroll less 10 % rail access adjustment $	Statutory assessment $
512 Mamre Rd Erskine Park	172	218.01	207.87
183 Reservoir Rd Blacktown	172.50	242.28	219.53
Lots 2 and 5 Reen Rd Eastern Creek	180.00	240.00	225.14
605 Woodstock Ave Glendenning (cnr of Glendenning Rd)	165	230.93	210.13
Lot 2 Templar Rd, Erskine Park	173
Applied to Land northern portion	175	220	190
Applied to Land southern portion	nominal ($40,000)	220	190
2007 base date	Mr Hurst $	Mr Carroll including 10% rail access adjustment $	Mr Carroll less 10 % rail access adjustment $	Statutory assessment $
512 Mamre Rd Erskine Park	223.08	212.94
183 Reservoir Rd Blacktown	197.50	253.65	230.90
Lots 2 and 5 Reen Rd Eastern Creek	247.58	232.72
605 Woodstock Ave Glendenning (cnr of Glendenning Rd)	200.00	249.56	227.08
Lot 2 Templar Rd, Erskine Park	203.00
Applied to Land northern portion	200	231	204
Applied to Land southern portion	nominal ($50,000)	231	204

54 The consequential competing valuations (with rates per square metre applied to the developable areas) may be tabulated as follows:

2006 base date	Statutory assessments $	Mr Hurst $	Mr Carroll $
Northern portion 73,148 m2	14,300,000 (190/m 2 )	12,800,900 (175/m 2 )		16,092,560 (220/m2)
Southern portion 18,796 m2	3,200,000 (190/m 2 )	40,000 (nominal)		4,135,120 (220/m2)
Whole Land 91,944 m2	17,500,000 (190/m 2 )	12,840,900		20,225,000 (rounded) (220/m2)

2007 base date	Statutory assessments $	Mr Hurst $	Mr Carroll $
Northern portion 73,148 m2	14,922,192 (204/m2)	14,629,000 (200/m2)	16,897,188 (231/m2)
Southern portion 18,796 m2	(204/m 2 )	50,000 (nominal)	4,341,876 (231/m2)
Whole Land 91,944 m2	18,800,000 (204/m2)	14,679,600	21,235,000 (rounded) (231/m 2 )

55 It can be seen that two major differences between the valuers were that:

(a) Mr Hurst gave no value to the southern portion of the Land other than nominal value whereas Mr Carroll applied the same rate as for the northern portion; and
(b) Mr Hurst did not accept that there should be any premium for potential rail access from the main western railway line whereas Mr Carroll considered that it would command a 10 per cent premium.

56 If the value of the southern portion is not nominal but equal in rate to the northern portion, then (a) an increase of even nine per cent on Mr Hurst’s 2006 rate of $175/m² would exceed the 2006 statutory valuation and require the 2006 appeal to be dismissed; and (b) an increase of even three per cent on Mr Hurst’s 2007 rate of $200/m² would exceed the 2007 statutory valuation and require the 2007 appeal to be dismissed.

57 In my opinion, a premium of at least nine per cent should be added to Mr Hurst’s rates for the Land’s potential for direct mainline rail access. Having regard to evidence of government policy demanding a shift to freight on rail and economic advantages accruing to lands with access to rail facilities, in Mr Carroll’s opinion, which I accept, it is logical that large sites with realisable potential for access to rail would attract a premium in the marketplace. There is a paucity of well-placed large sites with rail access in Sydney. The Land appears to be unique in having not only immediate access to the motorway system but also potential direct and extensive rail access. Taking account of these matters and the available evidence of sales of properties with rail access, I accept that the Land would command a premium for potential rail access of at least nine per cent above properties, including the comparable sale properties, which had no potential rail access.

58 If the rail access premium is put to one side, another approach is to look at the comparable sales and the large differences in the valuers’ other respective adjustments and make a judgment as to whether the rates in the statutory assessment are too high.

59 Following consideration of the comparable sales evidence, I consider (a) the range of $175 - $200/m² adopted by Mr Hurst to be at the lower end of the supportable range for the developable area of the northern portion of the Land; (b) leaving aside Mr Carroll’s 10 per cent allowance for potential rail access, the consequential range of about $200 to $210 per square metre adopted by Mr Carroll to be towards the upper end of the supportable range for the developable area of the northern portion of the Land; (c) the rates adopted in the statutory valuations to be well within the supportable range so far as they concern the developable area of the northern portion. To that extent, based on the comparable sales evidence and disregarding any rail access premium, the rates adopted in the statutory valuations have not been shown to be too high.

60 Concerning the southern portion of the Land, Mr Hurst adopted nominal values of $40,000 and $50,000 at the respective base dates. Mr Carroll adopted $220/m² and $231/m² for the developable area of 18,796m² at the respective base dates, equating to $4,135,120 million and $4,341,876 million. If Mr Hurst’s nominal values were accepted in lieu of Mr Carroll’s assessments, the land values for the Land for the two base years would be less than, but a lot closer to, the statutory valuations than Mr Hurst’s valuations for the Land. However, I do not think that Mr Hurst’s nominal value should be accepted.

61 Mr Hurst assumed that the costs of providing access to the southern portion were so great as to offset the value of the developable land created and so to justify the attribution of only a nominal amount to the southern portion. On the evidence, I am not satisfied that that has been established. In the first place, the creation of internal roads is an ordinary incident of the development of industrial properties, including the comparable sale properties. The creation of creek crossings may also be an incident of the development of industrial properties. An example in point is the comparable Reen Road property where a creek crossing and road were required to provide access between two separate portions. When analysing comparable sales, the valuers made no adjustments for internal roads nor for the creek crossing on the Reen Road property. Secondly, no estimate of costs nor a hypothetical development valuation were provided to the Court, other than an unsatisfactorily fleeting reference by Mr Hurst to a budget estimate of $1.5 million for costs associated with a bridge in a document which was not tendered of an unidentified third party who did not give evidence. The applicant related that $1.5 million bridge to the servicing of the rail link for the approved development of a regional distribution centre. Development of the southern portion of the Land is not necessarily dependent upon the rail link. There is no evidence as to the cost of a creek crossing which did not have to service the rail link. The cost might be substantially less and might be comparable with the Reen Road creek crossing. Thirdly, that amount of $1.5 million might be a very small price to pay for the enhanced value of the Land arising from a rail access connection, having regard to the benefit cost analysis in the environmental assessment report. Finally, if the sum of $1.5 million for the bridge on the Land were to be deducted from Mr Carroll’s valuations, the resultant figure would still be higher than the statutory valuations.

62 In my opinion, the applicant has not discharged its onus of proof. Accordingly, the appeals should be dismissed.

63 The orders of the Court are as follows:

1. In matter No 31205 of 2008 the application is dismissed.
2. In matter No 31206 of 2008 the application is dismissed.
3. The exhibits may be returned.