Mio Art Pty Ltd & Ors v Brisbane City Council - [2009] QLC 177

LAND COURT OF QUEENSLAND

CITATION: Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177

PARTIES: Mio Art Pty Ltd as trustee of the Ecomonitors Unit Trust
(applicant)

v.

Brisbane City Council
(respondent)

Greener Investments Pty Ltd
(applicant)

v

Brisbane City Council
(respondent)

Brisbane City Council
(applicant)

v.

Neovest Ltd (in liquidation)
(respondent)

FILE NOS:
AQL1084-08 (Mio Art Pty Ltd)
AQL006-08 (Greener Investments Pty Ltd)
AQL851-07 (Neovest Ltd)

DIVISION: General Division

PROCEEDING: Land Court of Queensland

DELIVERED ON: 24 November 2009

DELIVERED AT: Brisbane

HEARD AT: Brisbane

PRESIDENT: Mrs CAC MacDonald

ORDER:
1.   Compensation is determined in the sum of Sixteen Million, Six Hundred Thousand Dollars ($16,600,000).

2.   Publication of the adjusted sales rates for 98 Montague Road in paragraph [214] and the whole of paragraphs [221], [222], [224], [225] and [235] be restricted until further ordered by the Court.

3.   The respondent file and serve submissions as to the maintenance of those restrictions by 4.00 p.m. on 27 November 2009.

4. The Brisbane City Council file and serve submissions in relation to the payment of interest and any application for costs by 4.00 p.m. on 11 December 2009.

5. Mio Art Pty Ltd and Greener Investments Pty Ltd file and serve any response submissions by 4.00 p.m. on 18 December 2009.

CATCHWORDS:
Practice and Procedure – resumption – owner and several mortgagees possible claimants – non-appearance by one mortgagee – power to hear in claimant's absence – determination to bind all parties.

Town Planning – Local Plan – Draft Kurilpa Plan – binding nature – influence on prudent purchaser – GFA and Plot Ratios.

Resumption – valuation methodology – Before and After approach – takes into account all elements of severance, injurious affection and enhancement.

Resumption – potential development of parent parcel before resumption – what would prudent purchaser consider as highest and best use – distinguish from goals of client.

Evidence – expert witness – evidence by developer/investor but not a registered valuer – interested party – not impartial – evidence given less weight than expert.

Valuation – methodology – competing approaches – rate m² of land against rate m² GFA – no development application in place and dispute as to potential development – rate/m² land preferred.

Valuation – use of sales – After date sale – confidentiality clause – subject to conditions – sale rescinded – but still considered by Court.

Valuation – use of sales – sale of balance land to strike rate/m² of parent parcel – need to factor in injurious affection and enhancement to balance land – no firm evidence of these factors – sale of doubtful value for such purpose.

Valuation – use of sales – need to make adjustments for demolition costs, Council headworks, contamination, piling costs and GST.

Evidence – expert witness – reports of experts produced but experts not called – authors could have been subpoenaed – no weight given to evidence.

APPEARANCES: Dr D Smith for the claimant Mio Art Pty Ltd
Mr J Horsburgh in person for the claimant Greener Investments Pty Ltd
Mr M Hinson SC with Mr D O'Brien for the respondent

SOLICITORS: Delta Law for Mio Art Pty Ltd
DLA Phillips Fox for the respondent

These proceedings arise out of the resumption of land situated at 85 Montague Road, South Brisbane, by the Brisbane City Council (the respondent) under the provisions of the Acquisition of Land Act 1967 (the Act). As at the date of resumption, 31 August 2007, the land was owned by Mio Art Pty Ltd and subject to mortgages held by Perpetual Nominees Ltd, Grenfell Securities Ltd, Greener Investments Pty Ltd and Neovest Ltd. Proceedings against these parties were commenced by the Brisbane City Council on 29 November 2007 under s.25 of the Act (Reference to Land Court by constructing authority). Pursuant to orders of this Court, Grenfell Securities, Greener Investments and, ultimately, Mio Art entered appearances by filing claims for compensation in this Court. The action against Perpetual Nominees Ltd was discontinued by Notice dated 29 April 2008. Grenfell Securities withdrew its claim by Notice dated 24 November 2008.

The Court also ordered Neovest Ltd to enter an appearance by filing a claim for compensation on or before 14 January 2008. Neovest failed to comply with that order, has not filed a claim for compensation and did not appear at the hearing. The Court has been advised that Neovest is in liquidation and, by order of the Supreme Court of Queensland dated 16 May 2008, the Brisbane City Council was granted leave to proceed with its originating application filed in this Court against Neovest. Section 25(4) of the Act provides that where a claimant fails to enter an appearance on or before the date fixed by the Court, the Land Court may hear and determine the matter of the amount of compensation in the absence of the claimant. Pursuant to Orders of the Court made on 20 May 2008, all of the proceedings were heard together. The determination in this matter will, therefore, bind all the parties to all the matters before the Court, including Neovest Ltd.

Prior to the resumption, the land owned by Mio Art was described as Lot 1 on RP 903012 (745 m²) and Lot 2 on RP 903012 (8,080 m²), a total area of 8,825 m². By Taking of Land Notice (No. 31) 2007 published in the Queensland Government on 31 August 2007, the respondent took the whole of Lot 1 and part of Lot 2, described as Lot 21 on SP 183609, having a total area of 5,643 m², for road purposes. The residual land, described as Lot 22 on SP 183609 has an area of 3,182 m².

Mio Art and Greener Investments are seeking determinations of compensation under the Act in respect of the resumption of the land. The primary question to be determined is the value of the land taken. The parties are agreed that the appropriate methodology to be applied is the before and after method of valuation. Such an approach has the advantage that it takes into account all elements of severance, injurious affection and enhancement.

It is common ground between the parties that the highest and best use of the land as at the date of resumption was for commercial office development, and that remained the highest and best use of the residual land after the resumption. The residual land was sold by contract dated 27 November 2007, for $8,964,685.68. There was no dispute between the parties that this sale reflected the market value of the residual land as at the date of resumption and accordingly that the value of the residual land was $9,000,000 ($2,828/m² of land). The critical issue is the value of the subject land in the before case.

The parties proposed different development schemes for that land leading to different valuations for the land in the before case –

(i)     Mio Art proposed a development of 12 storeys with a GFA of 66,579 m² and a plot ratio of 7.54:1. Consequently, Mio Art valued the land in the before case at $44,950,000.
(ii)    Greener proposed a single building of 10 – 12 storeys with a GFA of 71,750 m² and a plot ratio of 8.1:1. Greener therefore valued the land at $48,537,500 in the before case.
(iii)   The respondent proposed three buildings of 6 – 10 storeys with a GFA of 34,175 m² and a plot ratio of 3.87:1. The respondent contended that the before value of the subject land was $22,062,500.

By an amended claim for compensation filed by leave on 27 February 2009, Mio Art claimed the monies due to them as follows –

(a) Claim as owner: Balance due estimated to be $25,400,012 including interest and presently calculated as follows:
Value of whole parcel as at 30 August 2007  $44,950,000
Less value of residual land    $9,000,000
  $35,950,000
Less initial compensation paid on 5 October 2007               $9,500,000
Less payment to Grenfell Securities Ltd on
   8 December 2008   $4,000,000

$22,450,000
Interest up to 8 December 2008 @ 8.5% $2,950,012

Interest from 8 December to judgment @ 8.5% pa
yet to be calculated
Claim $25,400,012
(b) disturbance items including legal and other consultancy fees incurred in preparing this claim and costs associated with the acquisition of the land by BCC as may not otherwise be recoverable under (a) above.
(c) Total claim: $25,400,012 together with interest at the court rate until judgment plus the value of disturbance items and costs.

By an amended claim for compensation filed by leave on 27 February 2009, Greener claimed $39,500,000 calculated as follows -

(a) Value of land before resumption $48,537,500
Less value of residual land $9,000,000

Balance $39,537,500
Claim $39,500,000

(b) Disturbance items including legal and the fees incurred in preparing this claim and costs associated with the acquisition of the land by BCC as may not otherwise be recoverable under (a) above.
(c) Interest at the court rate until judgment plus the value of disturbance items and costs.

The respondent contended that the value of the land prior to resumption was $22,062,500 and that, after deducting $9,000,000 for the value of the residual land, compensation should be determined to be $13,100.000 (rounded).

Legal principles

Section 20 of the Act provides in part that –
"(1) In assessing the compensation to be paid, regard shall in every case be had not only to the value of land taken but also –
(a)   to the damage, if any, caused by any of the following –
(i)    the severing of the land taken from other land of the claimant;
(ii)   the exercise of any statutory powers by the constructing authority otherwise injuriously affecting the claimant's other land mentioned in subparagraph (i); and
(b)to the claimant's costs attributable to disturbance.
(2) Compensation shall be assessed according to the value of the estate or interest of the claimant in the land taken on the date when it was taken.
…
(3) In assessing the compensation to be paid, there shall be taken into consideration, by way of set-off or abatement, any enhancement of the value of the interest of the claimant in any land adjoining the land taken or severed therefrom by the carrying out of the works or purpose for which the land is taken."
It is well recognized that in assessing the value of the estate or interest of the claimant in the land taken it is the market value of the land that is to be ascertained. In Spencer v The Commonwealth of Australia[1], Griffith CJ said:

"… In my judgment the test of value of land is to be determined, not by inquiring what price a man desiring to sell could actually have obtained for it on a given day, i.e., whether there was in fact on that day a willing buyer, but by inquiring ‘What would a man desiring to buy the land have had to pay for it on that day to a vendor willing to sell it for a fair price but not desirous to sell?’ It is, no doubt, very difficult to answer such a question, and any answer must be to some extent conjectural. 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."
Isaacs J said:[2]
"The plaintiff is to be compensated; therefore he is to receive the money equivalent to the loss he has sustained by deprivation of his land, and that loss, apart from special damage not here claimed, cannot exceed what such a prudent purchaser would be prepared to give him. To arrive at the value of the land at that date, we have, as I conceive, to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property."
[1] (1907) 5 CLR 418 at 432.
[2] At 440-441.

As can be seen from the brief summary of each parties' position set out above, there is a significant difference between them as to the potential gross floor area (GFA) of the site in the before case. It is not the function of this Court to decide whether the planning authority would approve a particular proposal. Rather it is the function of the Court to determine, having heard the relevant evidence, how the hypothetical prudent purchaser referred to in the judgments in Spencer would have viewed the potential financial return if a proposal were considered that included one or other of the proposed plans.[3]
[3] De Ieso v Commissioner of Highways (1981) 47 LGRA 412 at 417.

The subject site before resumption and the area in which it is located

The land was resumed for the purpose of construction of the Hale Street Bridge. At the date of resumption there were remnants of previous improvements on the site. Prior to the resumption, the subject site was irregular in shape and was bounded by Bouquet Street, Montague Road, Boundary and Lanfear Streets, and Riverside Drive. A heritage building referred to as the Foggitt and Jones factory adjoins the site to the north-east. Mr David Lane (an architect of Thomson Adsett Architects, who gave evidence on behalf of Greener) described the site as a unique island site bounded by four roads, which was the locus of the flow of the Kurilpa Peninsula, from Boundary, Cordelia and Merivale Streets and Montague Road. The Kurilpa Bridge, the cultural precinct and the bus interchange at the Melbourne-Grey Streets intersection radiated in or out of the site. Mr Lane thought that there was the capacity for the site to become a focal point for the redevelopment of the district.

The size and proximity of the site to the river caused intense debate between the expert witnesses as to the nature of an appropriate and permissible development as at the date of resumption. Further, the area in which the site was located was an urban renewal development area close to the Brisbane CBD with the construction of a pedestrian link bridge to the CBD underway as at the relevant date. The implications of those features for the proposed development were also in issue.

Evidence

Expert evidence in this matter was provided on behalf of Mio Art by architect Ian McNaughton, town planner, John Panaretos and valuer John Robertson. Greener Investments called architect David Lane and town planner Chris Buckley and valuation evidence was provided by Jamie Horsburgh, a director of the company. Brisbane City Council called architect Greg O'Brien, town planner Greg Ovenden, traffic engineer Colin Beard and valuer Lionel Johnston. A report by Adam Pekol, traffic engineer, was also tendered by the Brisbane City Council but Mr Pekol was not called. Reports by quantity surveyors were filed on behalf of Greener and the Brisbane City Council and a joint report signed by quantity surveyors representing all parties was also filed. No quantity surveyors were called to give evidence and the costs of the construction of the proposed developments was not in issue.

Town Planning

Relevant planning instruments

Town planners, Mr Panaretos, Mr Buckley and Mr Ovenden had met prior to the hearing and prepared a joint report setting out the matters on which they agreed and disagreed. It was common ground that it would have been necessary for a developer to obtain a development approval to realise the highest and best use of the subject land and that the prudent purchaser would have proceeded on the basis of making a code assessable rather than an impact assessable application.

The town planners agreed that the most important town planning instruments regulating the development of the site were:

(i)     the West End Woolloongabba District Local Plan (the WEWDLP), part of City Plan;
(ii)    the West End Woolloongabba District Local Plan Code (the WEWDLP Code), part of City Plan;
(iii)   the Centre Design Code, part of Brisbane City Plan 2000; and
(iv)   the draft Kurilpa Structure Plan which proposed amendments to the WEWDLP. There was disagreement as to which version of the draft Plan was relevant.
Mio Art and Greener also relied on a document prepared by the Queensland Government entitled "Smart Cities; rethinking the City Centre" dated May 2007.

The town planners also prepared a table setting out the relevant development parameters for the site, sourced from the July 2007 Brisbane City Plan 2000. Mr Ovenden and Mr Buckley agreed that the parameters identified in that table were generally a comprehensive list of the relevant provisions. Mr Panaretos considered that the table was only partially relevant.

Relevant provisions in the planning instruments

The town planners agreed that the July 2007 version of the Brisbane City Plan 2000 was the relevant statutory planning instrument at the date of resumption. The land is included in the Special Purposes Centre SP13-(Office Parks) area classification. This classification denotes a use of premises for an office development that provides integration with surrounding office, special purpose and residential activities.

The subject site is in Precinct 3 – Riverside North in the WEWDLP. The WEWDLP contains a number of development principles that set the framework for the delineation of precincts, establish the level of assessment for development and provide the rationale for the Local Plan code provisions.

Relevant development principles in the WEWDLP include –
2.5Development is to contribute to the establishment of a boulevard along Montague Road through building setbacks, materials and landscaping.
Developments fronting the Riverside Park are to complement the existing parkland setting.
2.8New development will enhance these parks and this riverside setting through improving access to these parks, the use of appropriate building setbacks, materials and design, and landscaping.
At 3.3, the development principles specific to Precinct 3 – Riverside North include –
The ground level of buildings will provide for public right of access to the river and active plaza spaces.
Orderly development of this precinct is to be guided by a precinct structure plan. Where redeveloping or extending, major land holdings will be required to provide specific structure plans to give an indication of building bulk, scale and space between buildings and public access to the river.
Paragraph 5.3 of the WEWDLP Code identifies two performance criteria and acceptable solutions which are particularly relevant to the areas of disagreement between the town planners:

Performance Criteria Acceptable Solutions

P1
(Development maintains views to Mt Coot-tha and the Taylor Ranges when viewed from the Riverside Expressway and views of the CBD when viewed from Coronation Drive) A1
(Building height does not exceed 10 storeys)

P2
(Development on major sites occurs in an orderly sequence and in accordance with a precinct structure plan) A2
(A structure plan is prepared for sites of more than 1500 m² providing an indication of building bulk, scale and space between buildings and public access to the riverside)

A draft Kurilpa Structure Plan (Kurilpa 1) was published in April 2007. Mr Ovenden identified the following provisions in Kurilpa 1 as relevant to the site -

·Built Form: an important determinant of maximum building height is the desire to retain glimpsed views of Mt Coot-tha and the ranges from Victoria Bridge. Analysis indicates that by limiting building heights along the riverfront to 9 storeys, these views can be preserved. Taller buildings within the core of the study area would have little impact as these views are already blocked by the Queensland Art Gallery and State Library. The maintenance of City views from Coronation Drive is also an important consideration.

·Movement: mid-block connections where these can be created will improve the permeability of the area for pedestrians and cyclists and provide an alternative route to the main streets.

·Public Accessible Open Space: development of the riverside area needs to provide good permeability to allow a high level of physical and visible connection to the river.

A second draft of the Kurilpa Structure Plan (Kurilpa 2) was published in December 2007. Kurilpa 2 provides, under the heading Views -

·           Currently, the low scale building height of Kurilpa allows for views toward Mt Coot-tha and the Taylor Range from the Captain Cook Bridge, Riverside Expressway and Victoria Bridge. As the area continues to redevelop these views will be affected; however the intention is to maintain glimpsed views through the Kurilpa precinct.
Under the heading Building Heights, Kurilpa 2 provides that -
·           Until a review of the West End-Woolloongabba District Local Plan takes place, the existing height limits set by the Local Plan will continue to apply within the study area. Proposals for additional height will be considered on a case by case basis subject to the indicative maximum building heights shown on the structure plan map. … A maximum height of 10 storeys will apply to any site of less than 1,500 m².
The map attached to Kurilpa 2 shows the indicative building height in the area of the subject land as 12 storeys.

The town planners agreed that the subject was a major development site and that there was more than one design outcome possible on the site. They also agreed that offices were an appropriate use for the site whereas residential development would be problematic because of nearby industrial activities. However Mr Buckley and Mr Panaretos did not rule out some residential uses because the coexistence of residential and non-residential uses is a feature of this part of inner Brisbane and is contemplated by the Local Plan.

The town planners agreed that there is no plot ratio nominated for the site under the relevant Local Plan.

The town planners identified the issues that remained in dispute after their meeting as follows –

1.What constitutes an appropriate response to the site's relationship to the Brisbane River, particularly with regard to the stepping down of buildings toward the river.
2.Whether a structure plan prepared for the site would result in reduced building height and bulk.
3.Whether a through link is required, and if so, what constitutes an appropriate through link.
4.The extent to which stepping of any building on the site is required to the Foggitt and Jones Factory, as viewed from the riverside and Coronation Drive.
5.The before and after sites' highest and best use, particularly their maximum development potential.

Mr Panaretos added to the list "whether an increased building height is appropriate in the context of the boulevarding of Montague Road".

As the evidence unfolded, it became apparent that issue 4, the way in which the proposed development on the subject addressed the Foggitt and Jones building was not of major concern to the parties. Consequently, there is no discussion of this issue in this decision.

Draft Kurilpa Structure Plans

The subject site is in the area covered by Kurilpa 1. Although the Plan was in circulation as at the date of resumption, Kurilpa 1 had no statutory force as at that date. Mr Ovenden and Mr Panaretos considered that the prudent purchaser would take the plan into account as reflecting Council's intentions for the area. Mr Buckley said that draft documents should be given weight when they have been publicly advertised or have some sort of formal acknowledgment. As the adoption date approaches, they receive more and more weight. He accepted, however, that town planners would advise a prudent purchaser of the existence of a draft plan such as Kurilpa 1 as it gave a guide to Council's intentions as to planning initiatives in the area.

As Kurilpa 1 had been in circulation for some months prior to the date of resumption, I consider that the prudent purchaser as at that date would have been aware of its content and its potential impact on the subject site. The weight to be attached to this draft Plan is, however, in issue. I will defer discussion of that issue until I have considered the evidence as to the draft Plan's potential impact on the development of the subject site.

Kurilpa 2 was published some 3 or 4 months after the date of resumption. That Plan indicated a building height of 12 storeys in the vicinity of the subject. Both Dr Smith (for Mio Art) and Mr Horsburgh (for Greener) suggested to witnesses that this Plan could be taken into account in determining the development potential of the subject site as at the date of resumption, because the purchaser, having acquired the site as at 31 August 2007, would not have finalised development plans by December 2007, when Kurilpa 2 was published.

While it may be correct that such a purchaser would not have obtained development approval by December 2007, I do not accept that that of itself leads to the conclusion that its content can be taken into account. Section 20(2) of the Act provides that compensation is to be assessed according to the value of the estate or interest of the claimant in the land taken as at the date of resumption. This means that the prudent purchaser, as described in the quotes from Spencer set out above, must be assumed to know the relevant facts about the land as at that date. Evidence of events occurring after that date is not generally relevant to the assessment of compensation unless it is evidence which confirms a foresight held by the prudent purchaser as at the date of resumption.[4]
[4] Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547 at 558.

Mr Panaretos did not rely on Kurilpa 2 but referred to it in his evidence. I will consider his evidence when discussing the evidence concerning the height of the proposed development.

Mr Buckley took a different approach. Although he acknowledged that Kurilpa 2 was not available as at the date of resumption, he said that his experience was that Kurilpa 1 would have generated discussion leading to potential revision. He said that a prudent purchaser would discuss development prospects with the Council and it would have been indicated to the purchaser that Kurilpa 1 was under review. This was ultimately confirmed when Kurilpa 2 was published with a height of 12 storeys. In his view the broad intent and the broad direction of development pressure as at the date of resumption was likely to increase.

I accept that it is likely that the prudent purchaser would have been informed in August 2007 that Kurilpa 1 was under review. However, there is no evidence as to the content of any review at that time and in particular as to whether the proposal to raise the relevant height limit to 12 storeys was in circulation. In those circumstances I do not consider that Mr Buckley's evidence on this point was sufficient to enable me to say that this was information that was available to the prudent purchaser as at the date of resumption.

Smart Cities Report

"Smart Cities: rethinking the city centre" is a report prepared by the Smart State Council on the initiative of the Queensland Government and published in May 2007. The report calls for the identification of a holistic vision and structure for the city centre and, relevantly to the subject land, recommends that the planning approach to the City Centre be redefined by regarding its urban growth potential as belonging to four super-precincts. Precinct 3 is identified as South Brisbane/Southbank and comprises Southbank, Kurilpa and the West End Riverside Precincts.[5] The subject land is situated in the West End Riverside Precinct.
[5] Recommendation 2, "Smart Cities: rethinking the City Centre".

A reproduction in the Smart Cities report of the Brisbane City Council Brisbane City Master Plan study for high density Brisbane CBD shows a connection via the new Kurilpa Bridge to Southbank and, ultimately, the West End Riverside Precinct.[6] The report states that the CBD Peninsula is being challenged in its role as the core primary activity generator of the City by commercial development occurring in Fortitude Valley and South Brisbane. Consequently Council was considering permitting heights up to 20 levels in these adjoining precincts. The need to expand the CBD domain had been caused by the fact that much of the existing CBD had been built out by residential towers and by increasing demand for large floor plate offices conducive to new workplace offices for which sites are too expensive or unavailable in the CBD.[7] The report contemplates residential renewal of redundant industrial land with the emphasis currently shifting into the West End Riverside Precinct as well as internal sites in South Brisbane.[8]
[6]        At page 10.
[7]        At page 11.
[8]        At page 19.

Mr Horsburgh submitted that the Smart Cities report gave an indication as to the infrastructure that was being considered for the subject area. This would provide information as to the commercial feasibility of the site with regard to amenity for end users and potential investors, separately from any consideration of development capacity. This was particularly important for the subject land because of its unusually large size.

None of the town planners referred to the Smart Cities report in preparing their reports for these proceedings and the report was not discussed by them at their joint meetings. Mr Buckley said that the report had no weight within the statutory framework because the proposed development on the subject site was a code assessable development. The evidence indicates that the document is a high level document although it may be, as Mr Panaretos said, that long term investors and developers may be interested in it because it indicated the type of changes that might feed into the planning scheme. Given the long term nature of the report, its authors' acknowledgment that it presents "a vision of Brisbane as a centre piece for the Smart State" and the lack of weight attached to it by the town planners, it seems at best that the prudent purchaser could only regard it as indicating possible long term development initiatives. Such a person would not in my opinion consider that it was directly relevant to ascertaining the highest and best use of the subject land as at the date of resumption.

The Capulet approval

Mr Ovenden's assessment of the town planning issues affecting the subject site and Mr O'Brien's design were influenced by the development approval for the subject site which was current as at the date of resumption (the Capulet approval).

The Capulet approval is dated 7 July 2005 and approves a development for office purposes which was obtained when the site was included in the SP12 (Mixed Industry and Business) Area. The approval had required an application for impact assessment (generally inappropriate) development. The approved GFA was 17,560 m² with a nett lettable area of 15,658 m². The approved development consisted of 3 x 6 storey buildings and one 7 storey building. A subsequent development application made in late 2005 for a mixed office and residential development with a maximum height of 12 storeys and a gross floor area of 33,295 m² was not properly made and did not proceed.

The application was initially made on 17 February 2003. Mr O'Brien said that that plan showed three buildings, 6 storeys high, an almost continuous built form along the river frontage, relatively narrow pedestrian spaces on site, vehicular access entirely from Bouquet Street with no road widening and a total GFA of 23,427 m² with a plot ratio of 2.65:1. That design was not approved.

An internal Council memorandum identified the following issues:

·    the bulk of the buildings to Montague Road which obscured views to the river and park vegetation - breaking the building form along this elevation and the river elevation would preserve those views and provide improved visual amenity to the street;
·    the overall length of the river elevation (over 103 metres) raised similar concerns;
·    the proposed building would partially obscure views to the heritage building.

An Information Request issued in May 2003 said that the proposal did not meet Performance Criteria P3 having regard to the view through to the Brisbane River. The proposed plot ratio of approximately 2.66 exceeded the acceptable solution plot ratio of .35 and was assessed to result in excessive building scale and bulk and was not supported. An Urban Design Analysis was required which satisfactorily addressed the integration of the proposal with the adjoining industrial uses and the riverside interface to the north and north-west of the site. As part of this assessment a 3 dimensional model which addressed the bulk scale and height of the amended proposal was required. Setbacks of 6 metres to the riverside alignment and 3 metres to Montague Road were required. The proposal should demonstrate an acceptable solution in the provision of pedestrian access/linkage from Montague Road to and along the riverside drive parkland and the river. This should include landscaped buildings setbacks to assist in the integration of new development with the public open space.

The matter was appealed to the Planning and Environment Court and was settled, with a consent order approving -

·Four buildings with two of the buildings linked at the uppermost five levels

·Three buildings with 6 storeys and one with 6 storeys above the ground storey void

·Setbacks: to Riverside Drive - 6 metres to building A extending to 12 metres at that uppermost floor; 6 metres to building B extending to 10 metres and 13 metres at the uppermost floor; nil to Montague Road, 3 metres to building B and nil to building A in Lanfear Street.

·Spaces between buildings – at the river frontage 22 metres at ground floor, and 24 metres at uppermost floor and becoming wider further into the site; at Montague Road - 22 metres and decreasing to 12 metres before gradually widening; at Lanfear Street 25 metres.

·GFA/plot ratio: 17,560 m²; 1.99:1

·Carparking: 1 basement level providing 127 car spaces (1 car/138m²GFA approximately)[9]

[9] Exhibit 5, p.34.

Mr Ovenden said that the approved development broke down the form to the river because the Council was very clear that it did not want to see a 103 metre face of the building to the river in that location. The development approved had a plot ratio of 1.99 made in the context of the scale of development that was happening in the area at that time. The constraints applied by the Council were not prescribed in the planning scheme, but he considered that, as the local authority, the Council was indicating what it wanted to achieve in the relationship of built form to the river and to the parkland, and pedestrian access through the site. In Mr Ovenden's view, both Greener and Mio Art's proposals created a massive wall to the river rather than responding in a sympathetic way to the parkland and to the riverfront. He said that the planning philosophy was about unlocking not blocking the river.

In Mr Ovenden's opinion the development approval would be very relevant to a prudent purchaser of the subject site. Even though the Council had moved on with the GFA, he considered that the urban design issues applied in arriving at this approval would be highly relevant to a prudent purchaser seeking to develop the site as at the date of resumption.

Mr O'Brien had regard to the Capulet development approval in his design proposal. He acknowledged that, although the WEWDLP had changed after that particular time, he did not think that the attitudes of the Council officers would have changed significantly from those expressed in the Capulet application.

Mr O'Brien said that the substantial spaces shown between the buildings on his plan allowed for good views between the Montague Road/Boundary Street intersection through to and across the river; views were available at ground level through the site to Lanfear Street, and from Lanfear Street and down Merivale Street to the heritage place; building B was able to achieve some views to the river through the substantial space between buildings A and D. A substantial pedestrian plaza was provided at the junction of the pedestrian space link and at the end of Lanfear Street. There was substantial pedestrian access to the river through the spaces between the buildings. The height of the building adjacent to the riverside parkland was 2 to 3 storeys above the trees. The building frontages ran for 48 metres, then a 22 metre gap, then an 18 metre wide building. The buildings terraced back from the river.

Mr McNaughton did not regard the site history as terribly relevant because Kurilpa was an urban renewal area. He thought that the Capulet approval had only a limited and tenuous relevance to the district Local Plan current as at the date of resumption. He was aware that the Council had a concern about height, which had been responded to by the developer reducing the height of the building, and he was also aware that Kurilpa 1 referred to 9 storeys, whereas the Local Plan spoke about 10. The Council's concern about height on the subject site was in 2003, he emphasised. He had drawn on the Capulet building footprints, forms and open spaces in deriving his design. Capulet had been supported by the Planning and Environment Court's consent order in July 2005 and gave him some level of comfort about what was likely to be approved.

Mr Lane did not consider that it was necessary to refer back to the 2005 approval because the scheme was several years old, was developed under a different planning instrument and he was not privy to the brief of the developers who made the application or what they were trying to achieve.

Four of the issues identified as remaining in dispute after the town planners' joint meeting were also issues in the Capulet approval process, viz the appropriate response to the site's relationship to the Brisbane River, whether a site structure plan would result in reduced building height and bulk, whether and what type of through link was required and the necessity of stepping the building to the heritage site. The relevance of the Capulet approval is discussed further, below, in relation to each of those issues.

Site Structure Plan

Mr Ovenden said that it was a necessary requirement that a structure planning exercise be carried out on the subject site to arrive at a reasonable outcome for the development. He said that this was a unique situation as the Local Plan did not stipulate height and setbacks adjacent to the river but instead required a developer to prepare a structure plan and submit it to the Council. He considered that the function of the structure plan was to guide building scale and mass, the space between buildings and the achievement of access to the riverside. He also said that the 2005 Capulet development approval was relevant to the preparation of the structure plan and the detailed design of a development.

Mr Ovenden appended a structure plan prepared by LVO Architecture to his report which, he said, expressed the principles and provisions of the WEWDLP, applicable planning scheme codes and provisions of Kurilpa 1. It also incorporated the design principles established with the Capulet development approval on the subject site. The structure plan was supplemented with images of bulk and mass prepared for the precinct and for each of the parties' proposal.

Mr Ovenden identified the key elements shown on the LVO structure plan as –

·       integration with the riverfront
·       a building bulk setback line to the riverfront parkland
·       major view windows identified in the WEWDLP
·       an open space corridor through the site to the river - with opportunity to achieve an active plaza space as well as breaking up the building form
·       acknowledgment of the importance placed on protecting views to the heritage place.

In accordance with those general features, LVO Architecture's development concept for the site prior to resumption showed four separate buildings on the site linked with a ground level open space and plaza areas at the end of Lanfear Street. The development has a maximum of 10 storeys scaling down to 6 storeys towards the riverfront. Vehicular access was limited to Bouquet Street consistent with the Capulet development approval and the advice from Mr Colin Beard, Council's consultant traffic engineer. By limiting access to Bouquet Street, a comfortable public pedestrian environment was created in the central plaza area.

When compared with the Capulet approval, Mr Ovenden said, the design had increased the podium and tower envelopes and building height to the greatest extent possible without compromising the objectives of complementing the riverfront park setting (in terms of breaking down and scaling back building mass) and creating high quality public access to the river side and through the site.

Mr O'Brien said that the purpose of the structure plan was to describe the scale and massing of the proposed buildings, and the spaces between them and the access to the river. The structure plan also set out the constraints on the site – setbacks, heights, etc - and established the building envelope and footprint. Mr O'Brien concluded that a prudent purchaser whose only information was the WEWDLP, the centre design code and Kurilpa 1 would recognise that without the benefit of the structure plan referred to in P2/A2 for Precinct 3, there was a very high level of risk in applying a height of 10 storeys to a development with a high site cover over the subject land.

Mr Panaretos acknowledged that because the subject site exceeded 1,500 m² the preparation of a structure plan was required and he had prepared a one dimensional plan. In his opinion, the acceptable solution indicated the intended contents of the structure plan but not the objectives for development on the site which could be gleaned from the preamble to the code. He disagreed that the purpose of the structure plan was to show how the proposed building would fit into the precinct. The Local Plan Code's requirement for a site structure plan opened possibilities for building designers to explore and respond to the urban context of development sites, whilst striving to achieve the Local Plan's intent. Mr Panaretos said that his structure plan demonstrated how the proposal responded to and integrated with its context. Mr Panaretos said that his plan addressed bulk along the Montague Road boulevard because the boulevard was created through buildings with a continuous façade bulked up against the street, which would be enhanced by street planting, full width footpaths and street furniture etc.

Mr Panaretos said that it was not necessary to prepare a structure plan of the type prepared by LVO Architecture which showed in graphic form the site relationship to the river and riverside park, the walkway areas and the proposed building. In Mr Panaretos' opinion, the LVO structure plan failed to address the requirements for the integration of art and cultural activity uses within the precinct. It also missed the opportunity to exploit a great public space in front of the building.

Mr Panaretos did not accept that a structure plan could be used to reduce the 10 storey height of a proposed building because -

·There was nothing in the plan to suggest that a site over 1,500 m², for which a structure plan was required, should be penalised in favour of smaller sites which have a code assessable expectation of 10 storeys.

·The requirement for a site structure plan gave an opportunity for architects to respond to immediate site contexts through subtlety and innovation in their design over and above the broad statements of intent in the plan. Hence a greater height of 10 storeys may be warranted in appropriate situations.

·Conversely, lower heights may also be warranted on parts of key sites such as at the interface with established low rise residential areas or to give richness or form on very large sites.

·Codes are not intended to be open-ended documents with uncertain outcomes.

Mr McNaughton accepted that the Local Plan called for a structure plan to address building bulk and scale. He agreed that the purpose of the structure plan was to give effect to the development principles in the Local Plan and to give effect to the intent of the precinct in which the land is located. He had prepared a structure plan for the site which differed from Mr O'Brien's. Mr McNaughton said that Mr O'Brien had chosen to prepare a structure plan based upon a large part of a precinct. Mr McNaughton's plan focussed on the site and properties adjoining the site.

Mr McNaughton's structure plan established a design solution with three building footprints similar to the Capulet site. His plan showed concourses between the three buildings for 2 storeys and thereafter the buildings are connected from Level 3 up. The effect would be that a person would walk from the open sky at one end through the concourse which opens up to the sky again in the central courtyard, then into a 2 storey concourse and then out to the river. The spaces between buildings are both the existing road corridors and the concourses and central courtyard within his design.

Mr Buckley agreed that as a town planner he would advise a purchaser that a structure plan would have to be prepared which should address the matters set out in A2. He had not prepared a structure plan because he considered that to be the role of the architects. Moreover it was not necessary to prepare a structure plan and then design a building in that order. Rather it was an iterative process with one informing the other.

Mr Buckley said that the requirement that a structure plan be prepared meant nothing more than that regard must be had to the site context, opportunities identified and design outcomes sought. Because the Integrated Planning Act envisaged that developments which comply with codes be approved, the code itself must give some guidance as to the issues that may require some design performance. Mr Buckley saw the structure plan as a contextual document that indicated how a proposed building would fit on to the site and how it would fit into the overall area. Mr Buckley did not consider that, had a structure plan been prepared, the GFA reflected in the LVO plans would be the result. Nor could such a plan affect the bulk or scale of the building on the site.

Mr Lane accepted that the Council could retain some control over the development in relation to height, bulk and separation between buildings through the structure plan process. He acknowledged that a structure plan would be necessary before making a development application, but he did not consider that it was necessary to prepare one before the building was designed. Mr Lane had not prepared a structure plan. He relied instead on significant urban planning work he had carried out in 2000 and the following years which he regarded as more comprehensive than the structure plans prepared by the other parties. His background experience in undertaking that study and in understanding how the WEWDLP might be interpreted meant that he did not need to overlay initially with a structure plan specifically in relation to the site.

Conclusions about a structure plan

I consider that Development Principle 3.3 for Precinct 3 – Riverside North and Acceptable Solution A2 in paragraph 5.3 of the WEWDLP Code would clearly indicate to the prudent purchaser that a structure plan is to be prepared for sites of more than 1,500 m² and that the structure plan is to provide an indication of building bulk, scale and space between buildings and public access to the riverside. That conclusion is confirmed by the evidence. All the witnesses whose evidence is discussed above accepted that a structure plan was necessary for this site.

The real issue is the role of the structure plan and, in particular, whether it could be used by the Council to control the bulk and scale of the proposed development and to require visual and physical permeability through the site. I consider that the prudent purchaser would conclude that that was likely, for a number of reasons.

While I consider that such a purchaser would expect a development proposal that complied with specific town planning requirements to be approved, there are no express provisions in the instruments applicable to the subject site dealing with the bulk and scale of the proposed development or visual and physical permeability through the site. Mr Ovenden said that the function of the structure plan was to guide those aspects of the development. Mr Lane also accepted that the Council would retain some control over the development in relation to those issues with a structure plan. I consider that a prudent purchaser would accept Mr Ovenden's opinion in preference to the other town planners because it is evident from Acceptable Solution A2 that those issues were of concern for sites over 1,500 m². While A2 is not prescriptive as to those issues, it nevertheless has the effect that they are matters which are raised for scrutiny by Council. There would seem to be little point in A2 if it were not used by Council to guide those aspects of the developments.

Further, the experience of the Capulet approval process indicates that issues such as the height and bulk of the proposed development, the integration of the development with the riverside parkland, through links and the preservation of views to the heritage building were of concern to the Council at that time and the original development proposal was modified to address Council's concerns. The planning regime has changed since the Capulet approval. Nevertheless Acceptable Solution 2 clearly indicates that the function of the structure plan is to give an indication of building bulk, scale and space between buildings and public access to the riverside.

Height, views and relationship to the riverside parkland

Development principle 2.5 in the WEWDLP Code provides that developments fronting the Riverside Park are to complement the existing parkland setting. Performance Criterion P1 in paragraph 5.3 of the WEWDLP is that "Development maintains views to Mt Coot-tha and the Taylor Ranges when viewed from the Riverside Expressway and views of the CBD when viewed from Coronation Drive". Acceptable Solution A1 is that "Building height does not exceed 10 storeys".

Paragraph 2.8 provides that new development will enhance the park and the riverside setting through improving access to these parks, the use of appropriate building setbacks, materials and design, and landscaping.

The respondent proposed a development of 4 buildings with buildings 3 and 4 joined at levels 2 to 6 inclusive. The buildings within 45 metres of the river frontage to the site were 6 storeys and those for the remainder of the site were 10 storeys. Mio Art proposed a footprint of three buildings of 12 storeys which are joined from levels 3 to 12. Greener proposed a development of 1 building of 10 storeys along the riverfront and 12 storeys to the Montague Road, Boundary Street and part of the Bouquet Street frontage.

Although the WEWDLP code indicated a building height of 10 storeys for the subject site, Mr Ovenden said that Kurilpa 1 envisaged a scaling back of development. Consistently with Kurilpa 1, Mr Ovenden considered that the Council would have applied a 9 storey limit along the whole area fronting the river, including the subject site.

Mr Panaretos accepted that the effect of Kurilpa 1 was that the proposed height applicable to the subject site as at the date of resumption was 9 storeys. In terms of maintenance of views as required by the Local Plan, Mr Panaretos had not done a view analysis but he considered that the City Council had done so when it indicated in Kurilpa 2 that buildings of 12 storeys would be an acceptable solution. Mr Panaretos did not rely on Kurilpa 2 but used it to illustrate that if the height analyses had been done, they would have established that 12 storeys was acceptable to maintain the view lines as required in the Local Plan. This would have formed a basis for providing the Council with an alternative solution to a 10 storey development.

I do not consider that a prudent purchaser would accept Mr Panaretos' reasoning that the fact that Kurilpa 2 has an indicative building height of 12 storeys for land in the vicinity of the subject was evidence that, if a view analysis were undertaken, the site could be developed to at least 12 storeys and comply with the requirements for the preservation of views. Kurilpa 2 acknowledges that, as the Kurilpa area continues to redevelop, the views to the CBD and the Range will be affected and, accordingly, Kurilpa 2 states that the intention is to maintain glimpsed views through the Kurilpa precinct. Thus it is clear that by the time Kurilpa 2 was published (in December 2007) the Council had abandoned the intention of preserving those views.

Mr Panaretos said that in his opinion there was nothing arising out of the structure plan required by Acceptable Solution A2 that would result in a reduced height of a building on the subject site. In fact he thought it more likely to result in a higher building because there is generous public space at that point in Montague Road. Moreover, as long as the building was not going to offend the performance criteria then it should in fact be higher than its surroundings. Lower heights may be warranted on parts of key sites such as at the interface with established low rise residential areas, or to give richness or form on very large sites. However he did not accept that that reasoning would apply to the subject site in connection with its relationship with the river as there was nothing in the site context that suggested that. There was no requirement in the Local Plan or in the planning scheme generally for a lower rise interface with the Brisbane River.

Mr McNaughton had chosen a code assessable design which generally exceeded the acceptable solutions but proposed an alternative solution to satisfy the performance criteria. He considered that to be a low risk course of action which he would recommend to a purchaser seeking to buy the site on an unconditional contract. While developers put pressure on their architects to seek maximum development potential, which he regarded as something greater than highest and best use, he believed that his design reflected the highest and best use. He did not consider that Mr O'Brien's design represented an appropriate attempt to identify the highest and best use of the site.

Mr McNaughton said that there were clear precedents (listed in Mr Panaretos' report) in the Kurilpa area where the Council's urban renewal planners were encouraging developers to seek additional height. He acknowledged, however, that some of the applications referred to by Mr Panaretos were not made until after the date of resumption and some were not in Precinct 3.

In accordance with the development principles at 2.5 that developments fronting the riverside park are to complement the existing parkland setting, and 2.8 that the river's edge will remain as a dominant feature of the Local Plan area, Mr McNaughton conceded that a 6 storey building next to the river's edge would, to a degree, be more likely to complement the parkland and feature the river's edge rather than a 10 or 12 storey building. In Mr McNaughton's opinion, the impact of a taller building behind the jacaranda trees would not be huge because there would probably be a glazed building façade on the building. In his view Kurilpa 2 confirmed that a 12 storey building would be an appropriate solution although he accepted that it was not an acceptable solution under the definition of that term in the city plan.

Mr Buckley said that the effect of a code assessable application was that approval must be given if an application complies with the criteria in the code. In this particular case there was no GFA limit. He accepted that the height limit on the subject would have been 9 storeys had Kurilpa 1 gone to fruition. In his view, however, the WEWDLP Code was the statutory document at the time of resumption and it indicated that 10 storeys was the height limit and that document was the instrument with the greatest weight. A prudent purchaser could take the view that he was entitled to a development of 10 storeys.

Mr Buckley said that the whole context of Kurilpa 1 was that it was an acknowledgment that the area was changing dramatically from large industry and other mixed uses to becoming an area similar to the CBD in terms of land uses and intensity of development. Although there was nothing in either the Local Plan or Kurilpa 1 indicating that a development of 12 storeys might be supported, Mr Buckley's opinion was that an increase from 10 to 12 storeys would certainly be within the realms of reasonable expectations. The addition of an extra 2 storeys would not affect the views referred to in Performance Criteria 1. Such a change would not have the effect of making the application impact assessable. The planning principles applicable to the subject site were different from those in neighbouring precincts where there were clear requirements for site links and controls on applicable GFA.

Although Mr Buckley had agreed in the joint town planners report that the development parameters set out in Table 1 of that report were a comprehensive summary, he said that that height was conditioned by a range of other interpretations. It was not his understanding that there was an agreement between the planners that the maximum height was 10 storeys. Indeed, Mr O'Brien did not accept that a building of 10 storeys was appropriate.

Mr Buckley thought that Greener's proposal sufficiently addressed the relationship required for the site in respect of the river. While a smaller building would not be as obvious as a larger one, the vegetation in front of the site and the mature trees would provide a screening effect which would limit the visual dominance of the building.

Mr Lane said that he had a different opinion about the view lines across the river and from Coronation Drive from some others. The practicality of preserving the views in perpetuity was questionable. While he acknowledged that mass and bulk might be relevant, he queried their importance and how controllable that outcome would be over time with the other development proposals going on behind the subject. He also considered that the view to the building should be considered – it would be an important building and if it became a landmark building, a reference point for the City, it was equally important that it be clearly visible. The fact that the drafters of the code may not have envisaged a building of the type proposed by Mr Lane did not necessarily negate it as a solution.

Mr Lane said that his idea that the building be a landmark or an icon arose from his understanding of the whole context of the area. He agreed there was nothing in the WEWDLP that referred to the principle that the site warranted a landmark building nor anything to indicate that a building on this site should be visible from the other side of the river, but he said, there was nothing to suggest that it should not. This was his interpretation from his professional experience as an architect and from discussions with the Council and others. On the advice of the town planner he had taken the view that both the draft Kurilpa Structure Plans would carry less weight because they had no legal basis.

Mr Lane did not accept that his building dominated the park land but believed that it could be seen to complement and provide a backdrop of reflection of the park land. However Mr Lane respected Mr O'Brien's concerns about the relationship of a 10 storey building to the parkland. In an endeavour to meet those concerns, Mr Lane had prepared an alternative design, 1C, in which the building was stepped from 8 storeys to 12 storeys. Mr Lane said that if the Council wished to have the building envelope stepped away from the river, that issue could be resolved within the negotiation process and, in his opinion, such a negotiated position would not necessarily trigger an impact assessable application. In his view such an outcome should only be achieved if it had little or no effect on the GFA. The general agreement was that some flexibility existed within the planning instrument to allow greater heights towards Montague Road without triggering impact assessment although Mr Ovenden and Mr O'Brien had reservations about that. Although it was agreed that an increase in height would not trigger impact assessment there was no agreement that there should therefore be an increase in height. Mr Lane's advice was that he was entitled to put in a proposal above the 10 storey height limit and that the P1 test was one of the things to be taken into account. He said that a similar issue had arisen in relation to the new millennium Art Centre, the height of which was very similar to Mr O'Brien's scheme whereas his and Mr McNaughton's were higher.

Photographs, Table of Heights, Photo Montages

Mr O'Brien included in his report a number of photographs of the subject site as it exists and also with the design proposals of Mr O'Brien, Mr McNaughton and Mr Lane superimposed upon it. The photographs were taken from Coronation Drive, Victoria Bridge, Cordelia and Peel Streets. The photo points (that is the point from which the photos were taken) were selected because they were locations which were identified in the WEWDLP as points from which views should be maintained. As no specific points had been identified along Coronation Drive or from Victoria Bridge in the Local Plan, the photos were from a range of different points.

The effect of this evidence can be summarised fairly briefly. Perhaps not surprisingly, the evidence demonstrated that Mr O'Brien's design of 6 storeys for the riverside buildings obscured less of the CBD buildings when viewed from the specified points on Coronation Drive as compared with the buildings of 10 and 12 storeys in the other proposals. When viewed from North Quay, there was less difference between the three schemes in the degree of interference with the views of the Taylor Ranges.

Mr Hinson SC tendered a table of comparative heights and structures within the WEWDLP.[10] The table showed the heights of the LVO scheme, the Mio Art scheme and the Greener scheme at both the riverfront and Montague Road ends and the heights of trees in the riverside parkland in the vicinity of the subject site. The heights are RLs (restricted or relative levels). A condition of the Capulet approval restricted the height of buildings in that development to RL 26.6.
[10] Exhibit 22.

Of the existing buildings it appears that the highest point is the chimney stack on the ACI glass factory site which has an RL of 49.49. The Jacarandas in the vicinity are at RL 23. The LVO proposal has the highest point of its riverfront building at RL 28.2. Mr McNaughton's proposal is RL 49.8. Mr O'Brien said subsequently that he could not contest Dr Smith's information that the height of the Mio Art scheme was 48.5 metres not 49.8. The eaves on the GOMA building are at a height of RL 28.3 which is approximately the same height as the riverfront section of the LVO proposal. By way of comparison, the Hanson concrete batch and plant buildings, (a large scale industrial development within the general vicinity of the subject site), are at RL 29.07 and RL 29.02. They are about 1.5 to 2 metres above the riverfront part of the LVO proposal but between 13 to 20 metres below Mr McNaughton's and Mr Lane's proposal.

The photo montages imposing Mr O'Brien's proposed development into the existing scene showed, he said, how his scheme complied with the requirement that the riverside development was to be complementary to the riverside parkland. This had been achieved by stepping the building down to 6 storeys which also helped preserve the views of the CBD.

Kurilpa 1 allows 16 storey buildings in Hope Street. Mr Horsburgh suggested that if those buildings were constructed, any views from Victoria Bridge to the subject site would be obscured and, therefore, that was no reason to limit the height of the subject to 9 storeys. Similarly, if a higher building were constructed on the site, he did not consider that it would obscure CBD views from Coronation Drive. Mr Ovenden's response in both cases was that the intention in Kurilpa 1 was fairly strong, namely that the Council wanted to keep a lower profile to retain views of the City from Coronation Drive and views of Mt Coot-tha from the Expressway.

Mr Horsburgh submitted that the photo montages that Mr O'Brien had prepared showed the proposals in relation to the subject site within the context of the current development in the locality. What they failed to show was how the parties' proposals would look in the future when other sites in the area had been redeveloped. The effect was to over-emphasise the impact of the proposed developments according to Mr Horsburgh. Mr O'Brien said that his structure plan showed 10 storeys along Montague Road which currently did not exist. He acknowledged that those buildings had not been translated through to the photo montages. Nor had Mr O'Brien shown other development proposals in the vicinity of the subject. The proposals related to buildings which are set much further back from the river, he said, and the context of his drawings was to show a site relationship to the river and the riverside park, not something which was a couple of hundred metres behind.

In Mr Lane's opinion, it was important to show the building in its future context, not just as surrounded by the low industrial buildings which were likely to be redeveloped over time. While the building he proposed might look largely out of context in the immediate future, it was clear that the intent of the various town planning documents was to increase scale and density in that part of the peninsula. On balance it was quite clear that the sites either side of the subject were under constant review and likely development pressure.

Conclusions re Height, Views and Relationship with the river parkland

The WEWDLP Code provided, at the date of resumption, for a building height of 10 storeys for the subject land. The respondent submitted that Mr O'Brien's proposal for a development with a lower height limit of 6 storeys along the riverfront end of the subject site was an appropriate development for the site.

·Performance Criterion P1 in the WEWDLP Code that the development maintain views to Mt Coot-tha and the Taylor Ranges when viewed from the Riverside Expressway and views of the CBD when viewed from the Riverside Expressway and views of the CBD when viewed from Coronation Drive;

·the provision in Kurilpa 1 that says that an important determinant of maximum building height is the desire to retain glimpsed views of Mt Coot-tha and the ranges from Victoria Bridge. Analysis indicates that by limiting building heights along the river front to 9 storeys these views can be preserved. The maintenance of cityviews from Coronation Drive is also an important consideration;

·the Council's requirements as demonstrated in the Capulet development approval process and the ultimate outcome in that case of an approval of 3 x 6 storey buildings and one 7 storeys;

·the evidence from the photographs, together with the parties' design proposals superimposed on them, of the effect of those proposals on the specified views;

·the evidence of the comparative heights of the design proposals and the trees in the river parkland and other buildings in the vicinity.

Both Mr Panaretos and Mr Buckley gave evidence that the purchaser of the subject would be entitled to obtain approval for a 10 storey development on the site. Mr Ovenden acknowledged that a building height of 10 storeys was an acceptable solution but because Kurilpa 1 which proposed 9 storeys, was in circulation as at the date of resumption, Mr Ovenden said that it was unlikely that a development above 10 storeys would be approved.

I do not consider that the prudent purchaser would consider that the Capulet process and approval could be used to limit the height of the development to 6 storeys along the river front. Capulet was assessed under a different planning regime from that in place as at the date of resumption. The subject site was then in the Western Riverside Precinct within the South Brisbane Local Plan. The relevant Local Plan Code provision specified a maximum building height of 12 metres (approximately 3 to 4 storeys) above ground level with the associated performance criteria seeking to protect views and vistas. No plot ratio was prescribed. Even within that regime, buildings of 6 storeys were approved in Capulet for the riverside frontage of the subject site.

The WEWDLP, introduced after the consent order, provided that the Acceptable Solution for the preservation of the requisite views was that the building height not exceed 10 storeys. This was a significant change. Further, the evidence showed that the Kurilpa area was, at the date of resumption, recognized as an urban renewal area. Consistently with the town planning evidence, I consider therefore that the prudent purchaser could reasonably anticipate a different response from the Council in relation to height issues from that which prevailed during the Capulet process, because of the increased height allowed in the Acceptable Solution.

There are other relevant considerations. One of those is the provision in Kurilpa 1 that riverside development in the subject's vicinity would be limited to 9 storeys. The evidence as to the applicability of that draft Plan was that it was not a binding instrument although it did reflect Council's thinking at the relevant time. Thus the prudent purchaser may anticipate that Council would require that the development along the riverside be stepped down to address any concerns about height in the riverside area.

Allied with Kurilpa 1 were the respondent's photographs, photo montages and comparative height table – evidence which showed the potential impact of the parties' proposed developments on the viewlines and riverside parkland. In my opinion this evidence established no more than that the smaller development proposed by Mr O'Brien would have less impact on the views and parkland than the larger developments of the other parties. I consider that Mr Horsburgh's point was well made that the impact of the proposed development should not be considered simply against the existing neighbourhood, but it should be remembered that Kurilpa is an urban renewal area where approvals for higher and more intensive developments, particularly in the core area, had been granted and were likely to continue to be granted.

The weight of the town planning evidence was that the provisions of the WEWDLP Code entitled a developer to approval for a development of 10 storeys. Kurilpa 1 and the photographic and other evidence must be weighed against that provision. In my opinion, since the Code allowed a development of 10 storeys the prudent purchaser was entitled to expect a development of that height on the subject site. There may be issues with the preservation of the viewlines if this proposal were pursued. If the preservation of views and the relationship of the development to the parkland remained a concern of Council during negotiations, an alternative scheme modelled on Mr Lane's design 1C could reasonably be expected to result – that is, that the building be stepped down to say 8/9 storeys at the riverside frontage, moving up to 11/12 storeys at the Montague Road end of the site. Such a response would also contribute to the creation of a boulevard along Montague Road as explained by Mr Panaretos. While the Code provides that the acceptable solution is 10 storeys, I have accepted the evidence of Mr Buckley and Mr Panaretos that a height increase would not attract impact assessment to the application. In my opinion, the matter is one for negotiation but the ultimate outcome would be that the prudent purchaser would be entitled to expect that a development with an overall average height of 10 storeys would be approved. Such a development may in fact be 8 or 9 storeys along the riverside parkland, stepped up to 11 or 12 storeys at the Montague Road end of the site.

I do not consider that the prudent purchaser would consider it to be likely that Council would approve a development of 12 storeys, as proposed by Mio Art or one with 10 storeys along the riverfront and 12 storeys along Montague Road as proposed by Greener. My conclusions on this point are in part dictated by my conclusions concerning the bulk, scale and density of development, discussed below. However, with respect to the riverside development, the experience of the Capulet approval indicates that the Council was concerned about the height of any development along the riverside. That experience plus the provision in Kurilpa 1 pointing to a 9 storey limit do not provide any encouragement to the prudent purchaser that a height of more than 10 storeys would be approved, other than as part of a negotiation to lower the height of the development along the parkland.

Permeability of site, setbacks, bulk/scale of development

Paragraph 2.8 of the development principles in the WEWDLP provides that new development is to enhance the riverside parks and setting through improving access to these parks, the use of appropriate building setbacks, materials and design and landscaping.

Paragraph 3.3 of the development principles specific to Precinct 3 – Riverside North provides that -

·    The ground level of buildings will provide for a public right of access to the river and active plaza spaces.
·    Orderly development of this precinct is to be guided by a precinct structure plan. Where redeveloping or extending, major land buildings will be required to provide specific structure plans to give an indication of building bulk, scale and space between buildings and public access to the riverside.
·    Performance Criteria P2 provides that "Development on major sites occurs in an orderly sequence and in accordance with a precinct structure plan". Acceptable Solution A2 provides that "A structure plan is prepared for sites of more than 1,500 m² providing an indication of building bulk scale and space between buildings and public access to the riverside".

Kurilpa 1 provides that -

· Movement – mid-block connections, where these can be created, will improve the permeability of the area for pedestrians and cyclists and provide an alternative route to main streets.
· Public Accessible Open Space: development of the riverside area needs to provide good permeability to allow a high level of physical and visible connection to the river.

Architects' designs

Mr O'Brien for the respondent

As set out above, Mr O'Brien's development concept showed four separate buildings, with a maximum of 10 storeys scaling down to 6 storeys towards the river. His design incorporates an open space between the buildings from Montague Road to the riverside parkland of 12 metres, 16 to 12 metres between the buildings at the other end of the site and 18 to 20 metres at the Montague Road frontage. This forecourt is open to the sky. There is also a plaza (12 x 14 metres) at the intersection of Boundary, Lanfear and Merivale Streets and a 9 metre plus space between the heritage building and the closest building on the subject land. There are setbacks to the riverside drive of 6 metres increasing to 12 metres at one corner, 3 metres to all other streets at ground level, zero for levels 3 and 4 and 3 metres for levels 5 to 10.

At Level 2 of his design, buildings 3 and 4 are connected to accommodate those tenants who would require a larger foot plate. At Levels 7, 8, 9 and 10, the development goes from 6 storeys to 10 storeys across two of the buildings, that is approximately the back third of the site. Mr O'Brien agreed that the design could be altered to perhaps increase the floor space but, he said, that would not be a process that would be undertaken at this stage. Rather the developer would need the site under his control before starting to push the envelope a little.

Mr O'Brien said that there was no definition in the Local Plan specifying the size of spaces between buildings. What would be suitable, he said, would depend upon the context and the development of the structure plan. The Local Plan referred to the need for plazas and open spaces within the site and he considered that these would be useful for people as a quick and convenient recreational space. The Local Plan did not refer to central atrium spaces but he did not consider that any internal atrium space could be substituted for an active plaza space. He agreed that his development could be described as an office park development.

Mr O'Brien said that he had taken into account the requirements of the West End Local Plan relating to opening up views to the river, open space plazas, pedestrian access to the river, the relationship of the buildings to the riverside parkland and the fact that the riverside parkland and the river edge are to dominate the built form. In addition, the centre design code required a 3 metre setback at ground floor level and the local area plan required the heritage property next door to be shown off. Taking all those matters into consideration, he considered that his plan represented the highest and best use of the subject site.

Mr Horsburgh pointed out that the floor plate of the four buildings from levels 1 to 6 approximates 50% of the site cover and the floor plate size from levels 6 to 10 is approximately 25% of the site cover. Mr O'Brien said that was purely coincidental and not something that he had realized until pointed out by Mr Horsburgh. Similarly the fact that the bulk represented 40% of the site was also a coincidence. By contrast, Mr Horsburgh pointed out that in the after-design, the gross building area represents almost 60% of the site area. Mr O'Brien reiterated that that was complete coincidence as he had not considered the figures previously and it was not an objective of his design. I have accepted Mr O'Brien's evidence on these issues.

Mr Ovenden considered that the LVO building design proposed on behalf of the respondent Council created an appropriate planning outcome by achieving visible and physical permeability through the site to the greatest extent possible, with an open space corridor through the site. Importantly, the proposal respected the riverside parkland, unlike Mr Panaretos' assessment which seemed to make no mention of the riverside setting and focussed on Montague Road and the boulevarding along Montague Road. Mr Ovenden rejected the suggestion that the location of the driveways and service areas between the building and the riverside parks on the LVO plan was contrary to the intention of Kurilpa 1 to provide pedestrian access to the parklands. In Mr Ovenden's opinion the LVO plans provided a reasonable balance between achieving a lower profile of development towards the river, complementing the riverside parkland setting and achieving an intensity of development at 10 storeys towards the rear of the site, a balance which he was confident the Council would support based on the range of planning documents available and the historical context of the site.

Mr Robertson's calculations may be reworked, to remove the 10% allowance for the distressed sale and, for the reasons set out above, to apply a rate per square metre of land, rather than a rate per square metre of GFA. His allowance for enhancement also requires consideration. Mr Robertson allowed $25 per m² of GFA which, on his figures, represented approximately 3.5%. I will apply that percentage to the rate per square metre of land. The resulting calculations are -

Rate per square metre of land shown by sale         = $2,828
30% allowance for injurious affection                    = $3,676
3.5% reduction for enhancement               = $3,547 m²/land

There is no other sales evidence which supports a price of $3,547/m² of land for the subject in the before case, leading to the conclusion that this value is high. This may be because the allowances for injurious affection and enhancement are inaccurate. While I consider that the sale is relevant, I do not consider that too much weight should be placed on the sale applied in this way.

35 Boundary Street, South Brisbane: This property is Mr Robertson's sale 5. The property is 1,567 m² in area and sold in September 2006 for $2,750,000. Mr Robertson analysed the sale to $1,755 per m² of land and $516 per m² of GFA. At the date of sale a development approval was in place for a 5 floor commercial building with 5,430 m² of GFA.

Mr Robertson said that the sale should be adjusted for the date and the fact that there was a development approval in place. It was also a small site. However, because it was a sale in close proximity to the subject, it was not a sale which should be ignored.

Mr Johnston had not used this sale in his valuation but he was aware of it. He agreed with Mr Robertson that the sale was, overall, inferior to the subject.

Mr Horsburgh's evidence

Mr Horsburgh approached the valuation by selecting sales in his area of comparison which were the urban renewal areas stretching from Highgate Hill and West End, through the CBD to Fortitude Valley and to Newstead. To that end he identified sales of development sites located in the urban renewal area within a 3 km radius of the Brisbane CBD.

The features of the subject land emphasized by Mr Horsburgh in his oral evidence were that it was river front land (although there was a buffer between the land and the river) and it was an "island site". He saw a commonality with large development sites where developers were seeking to put together a large island of space that then relaxed the town planning environment because neighbours were not involved.

Mr Horsburgh chose as his sales, properties which have characteristics similar to the subject site. The best sales, he said, were large sites in traditional industrial use areas with multi-staged high density commercial office development proposals. His selection of comparable sales was dictated by the size of the land and the development capacity and he also had regard to construction costs and market rents. In Mr Horsburgh's opinion, the productive capacity (plot ratio) of a particular site was the primary consideration which a purchaser would have in mind at the time of purchase.

Mr Horsburgh had therefore chosen plot ratio as the crucial feature in his sales reconciliation. He thought that, rather than looking at smaller adjustments such as for contamination and piling infrastructure charges, the most significant point of difference was the productive capacity or the plot ratio differential.

Relying on the reports by Thomson Adsett Architects and Buckley Vann Planning Consultants, Mr Horsburgh had determined that the maximum code assessable plot ratio for the subject site was 8.1:1. However, for the purpose of his valuation report, he adopted a plot ratio of 7. This was in recognition of the unique characteristics of the land - a very large undeveloped site in a high density planning precinct. He was also aware that in moving from the CBD towards either West End or Newstead there was a general town planning approach of reducing the plot ratio as the size of the sites increases in the industrial areas. Rather than reducing the dollars per GFA down to account for that, he considered that the more realistic approach was that a developer would adopt a smaller plot ratio of, in this case 7.1. All his discussions with development managers of the comparable sales properties showed that development capacity was the crucial issue.

Mr Horsburgh said that an analysis of his sales showed that the rate per square metre of land ranged from approximately $4,000/m² to $6,000/m² up to approximately $6,000/m² to $11,000/ m², depending on land area, productive capacity and ripeness for development. The more comparable sites indicated a narrower range of approximately $4,500/m² to $8,000/m². A large amount of the variation was explained by the different productive capacity differential applied. For a plot ratio of 7, his analyses showed a range from $4,500/m² to $8,000/m². His analyses also showed that as land size increases the rate per square metre of land decreased. Similarly, as the land size increased, the potential development intensity dropped reflecting different planning attitudes in the traditionally industrial areas where large sites were available. Accordingly, the dollar value per square metre of GFA decreased.

Based on the features of comparison mentioned above, Mr Horsburgh adopted a rate per square metre of land of $5,500. On that basis the value of the subject land before resumption was $48,537,500.

Mr Horsburgh also analysed his comparable sales on a rate per square metre of GFA. The GFA used for each sale was that which investigation showed was reasonably expected to be achieved at the time of sale. Where available, Mr Horsburgh relied on the plot ratios used by development managers in their feasibility studies during the purchase. Mr Horsburgh's sales analysis revealed an analysed rate per GFA ranging from $600 to $1,200 depending on condition of sale, pedigree of development application and plot ratio. He said that the more comparable sites indicated a narrower range of approximately $800 to $900. Mr Horsburgh adopted a unit value per GFA of $850. On this basis he calculated the value of the subject land before resumption at $52,508,750 (61,775 m² GFA at $850 per m² of GFA).

Mr Horsburgh has not applied the results of his sales analyses directly to the subject land. Rather, he adjusted the analysed sales figures to show what would have been paid for each sale property if a plot ratio of 7:1 (being his adopted plot ratio, as explained above) were applied. I do not consider that the prudent purchaser would accept that this valuation methodology can be used to value the subject land. Mr Horsburgh's approach is not a recognized valuation methodology and it involves averaging which, it is well recognized, is not a valid methodology. Such a purchaser is unlikely, therefore, to consider that Mr Horsburgh's methodology demonstrates a market value for the subject land. However the prudent purchaser may consider that Mr Horsburgh's principal sales, analysed in an orthodox way, may be relevant to the subject valuation.

Mr Horsburgh identified three sales as particularly relevant to this valuation because they were larger than the subject site in size, they were in an urban renewal area and they were master planned, multi-staged commercial office developments with development capacities ranging from 40,000 to 59,000 m² of GFA. His graph shows two GFA figures for each of his main sales. He relied on the higher figure in each case which represented what was actually achieved by the developer following an impact assessment approval after the developer had acquired the site. The difference between the two figures represents the owner's profit. He did not consider that it was necessary to draw a distinction between a code assessable and an impact assessable application.

Mr Horsburgh's sale 1 is a property at 150 – 180 Breakfast Creek Road, Newstead which sold on 24 November 2006 for $40,000,000. The site has an area of 19,863 m². The property has an extended frontage to Breakfast Creek Road and frontages to four other streets. Breakfast Creek Road is an arterial road which provides good vehicular access. The property is contaminated with copper lead and zinc, acid sulphate and radioactive sands. The purchaser proposed to develop an office park on the site of 7 buildings. Mr Horsburgh had been advised by the purchaser's development manager that the plot ratio used in their feasibility study was 2.5:1. An application lodged in April 2008 was ultimately approved at a plot ratio of 2.30:1. Mr Horsburgh adopted a plot ratio of 2.1 as the maximum plot ratio a prudent purchaser would have considered to be potentially achievable. He analysed the sale of the whole site to $2,014 per m² of land and $1,007 per m² of GFA.

Part of the site (approximately 3,882 m²) was the subject of a contract of sale with the ABC in late 2007 which showed a rate of $3,977/m² land. The contract was subsequently cancelled by the ABC because of concerns about radiation contamination. It was understood that legal action followed.

Mr Johnston said that he would treat the sale with a great deal of caution because there were a number of issues that arose. One was the location of the property on a main arterial road with an extended frontage and four street boundaries. The site is a gateway into and out of the City. In his view it was a superior property in terms of location but to be weighed against that were the contamination and the low water table which exists in the area. There was potential for the contamination to extend off the site onto surrounding properties.

Mr Horsburgh's sale 2, Waterloo Junction, is located at 4-12 Commercial Road, Newstead. The property has an area of 14,112 m² and is made up of a number of individual lots which were sold between July 2006 and April 2007. The total price was $44,544,899. Mr Horsburgh analysed the amalgamated site to $3,157 per m² of land. He was advised by the development manager of the purchaser that the plot ratio used in their feasibility study was between 3 and 3.5:1. The development application represented an overall plot ratio of 2.5. Mr Horsburgh concluded that a prudent purchaser would have considered a plot ratio of 2.5 to be potentially achievable and on that basis he analysed the sale price to $1,283 per m² of GFA.

The property is bounded by Commercial Road, Stratton and Ann Streets with a large frontage to Ann Street. The Waterloo Hotel which was on one of the sites, was included in the sale. The hotel is heritage listed and the sale also included the hotel licence.

In Mr Johnston's opinion the property was superior to the subject property for a number of reasons. The sale property included the heritage hotel and the licence. The site was opposite a prime location in the Emporium precinct, there is good traffic flow, good access and good public transport.

Mr Horsburgh did not accept that an adjustment should have been made because the price paid for the site represented not only the land which was available for redevelopment but also the hotel with the liquor licence. He said that he did not look at it that way because the hotel being heritage listed would have to remain and it would be difficult to build around.

Mr Horsburgh withdrew his sale 4, and his sale 5 was 144 Montague Road, discussed above.

Mr Horsburgh's sale 6 is 395 St Paul's Terrace, Fortitude Valley which has an area of 1,695 m². The contract of sale was executed on 13 September 2007 and settled in January 2008. Mr Horsburgh analysed the sale to $5,646 per m² and, adopting a plot ratio of 6.4:1, the maximum plot ratio that in his opinion a prudent purchaser would have considered as achievable, to $941 per m² of GFA. The property is located in Fortitude Valley, opposite the Brunswick Street railway station. It has two street access. At the date of sale, the site was improved with a 3 storey commercial building which was tenanted.

Mr Johnston said that the sale was in a far superior location as compared with the subject and the sale was a far smaller site. He would not rely on it as a comparable sale because of its location.

Mr Horsburgh's sale 7 is a property at 949 Ann Street, Fortitude Valley of 1,525 m². The property was sold in December 2006 with settlement in July 2008. Mr Horsburgh analysed the sale to $6,492 per m² of land and to 1,042 m² of GFA having adopted a plot ratio of 6.2:1 on the same bases as the other sales.

The site is located in Fortitude Valley opposite the Emporium development and is a corner site bounded by Ann and Chester Streets. The frontage to Ann Street provides good exposure to traffic and good vehicular access. The site was improved with buildings and awnings and used as a car sales yard.

Mr Johnston said that the sale is located in the hub of the Valley on the back of the very popular James Street precinct. The sale had resale potential. Mr Johnston had no knowledge of the contract or the reason for the length of time between contract and date of settlement. In Mr Johnston's view the sale was superior to the subject.

Mr Horsburgh acknowledged that he had not placed a lot of reliance on his sales 8 and 9 because they were residential developments. He had included them because he was looking for sales of large site areas.

Of his other sales, he said that he had tried not to place too much relevance on one sale over the other. They had varying factors of comparability. Ausenco was nice because it is a fairly large site close to the subject. Newstead Circle was not ideal because it is much further away but it has the commonality of being an island and the consequent planning flexibility. Generally, Mr Horsburgh said, he would place less reliance on the smaller site sales.

Other valuations

Mr Hinson SC tendered a copy of an email report, apparently commissioned by Greener Investments, from a Mr Horrigan, a valuer, who determined the before value in the order of $22,000,000 and the after value at around $9,000,000.[18] Mr Horsburgh pointed out that the valuation was clearly premised on the sale of the Parmalat site and its treatment as a valid sale. He said that at that time Mr Horrigan had not been informed that the Parmalat contract was not on foot. Mr Horsburgh saw the email as being the result of pressure that he had put on Mr Horrigan for an answer, because of his (Mr Horsburgh's) financial situation.
[18] Exhibit 45.

Mr Hinson SC also tendered copies of two reports by Mr Greg Clarke, valuer. In the first report Mr Clarke assessed compensation at $15,800,000. In his second report, which is in draft form, he assessed compensation at $21,500,000. The direct comparison was carried out on a gross floor area basis.

Mr Horsburgh said that because of the time pressures Mr Clarke had produced an initial draft and had told Mr Horsburgh subsequently in a meeting that there was a mistake at p.38 in his residual land calculation in that he had not applied the GFA rates that he had reconciled from his sales evidence through to his assessment of value. Mr Horsburgh believed that that was due to the haste with which Mr Clarke had done the calculation. Mr Clarke then corrected the draft.

Mrs Amanda Horsburgh gave evidence about the pressures that she and her husband were under because of their financial difficulties and the time constraints imposed by the Court. She said that they had been let down by Mr Horrigan, their original valuer who had pulled out and had, in his email, given advice contrary to what he had said verbally to themselves and to Mr Clarke. Mr Horrigan's verbal advice was that they were talking about rates of $800 odd per square metre of GFA, whereas, in his email, his opinion is a rate of around $270 per m² of GFA based on a plot ratio of about 8. She said that the Horsburghs had no idea that they could have subpoenaed Mr Clarke and Mr Horrigan to give evidence.

I do not consider that I can attach any weight to the evidence of Mr Horrigan's and Mr Clarke's opinions as to the value of the subject land as neither valuer was called to give evidence in support of the valuations.[19]
[19]Chief Executive, Department of Natural Resources and Department of Mines v QNI Metals Pty Ltd (2002) 23 QLCR 261 at 267.

Residual land/hypothetical development valuations

All the witnesses who gave valuation evidence undertook a residual land exercise as a check method of valuation, although both Mr Robertson and Mr Horsburgh emphasized the variations that would result from changing the inputs. It is well recognized that such a valuation methodology is not ideal because of those issues. In this case, I have decided that the prudent purchaser could reasonably expect that Council would approve a development with a GFA approximately 10,000 m² larger than the proposal put forward by the respondent. There is no evidence of the costings for such a development. In those circumstances I consider that any residual land calculation would be fruitless and I have not undertaken that exercise.

Conclusions about sales evidence

The weight of the evidence indicates that the common sales, 144 Montague Road (first sale), and 512 Wickham Street are very relevant to the valuations. 56 Edmonstone Street is less so because of its location. Montague Road shows a rate of $2,137/m² land and 512 Wickham Street shows $2,924/m² land. 56 Edmonstone Street shows $1,236/m² land.

For the reasons discussed previously, I consider that the Parmalat Multiplex contract should be taken into account. It shows $1,978/m² land. The site is much larger than the subject.

Mr Horsburgh's sale 1, Newstead Circle, is also relevant although there are contamination issues. That site is also much larger than the subject and has a much lower achievable GFA than the subject. The sale analyses to $2,014/m² land. I do not consider that Mr Horsburgh's Sale 5, Waterloo Junction, can be used in the absence of any analysis as to the value of the hotel and liquor licence included in the sale.

The remaining sales of the valuers and Mr Horsburgh are of less relevance.

The respondent's valuer has applied a rate of $2,500/m² land to the subject land on the basis of a development with a plot ratio of 3.87:1. As indicated above I consider that the reasonable purchaser would anticipate a plot ratio of 4.98:1. On that basis I consider that such a purchaser would expect to pay more than $2,500/m² for the subject land in the before case. The sale with the most comparable GFA is 512 Wickham Street which showed $2,781/m² land or $2,924/m² land after making Mr Johnston's adjustments. There are differences between the sale and the subject particularly the retail potential of the sale and the different planning regime applicable. To be weighed against that is the riverside location of the subject. The property at 144 Montague Road is much smaller than the subject and the Parmalat Multiplex site is much larger. Both are in inferior locations, as compared with the subject, because they have no river frontage. Taking all those circumstances into account, I consider that the subject should be valued at $2,900/m² land which gives a value of $25,592,500 which may be rounded to $25,600,000. This represents $582/m² of GFA on a proposed GFA of 44,000/m².

The value of the land in the before case is determined at $25,600,000. The value of the residual land is agreed at $9,000,000. The total compensation payable is, therefore, $16,600,000. The Court has been advised that advances totalling $13,500,000 have been paid. The balance payable is, therefore, $3,100,000. I will hear the parties as to any orders to be made in respect of the payment of that sum and interest.

As indicated at paragraphs [218] and [219] of my reasons for judgment, there is information in these reasons concerning the content of the Parmalat Multiplex contract of sale. That contract is the subject of orders made on 18 November 2008 limiting publication of the details of the contract. Consistently with those orders, I propose making orders restricting publication of those parts of my decision which deal with the contents of the Parmalat Multiplex contract. I will hear the parties as to that proposal and any orders.

I will also hear the parties as to any orders for costs.

ORDER

Compensation is determined in the sum of Sixteen Million, Six Hundred Thousand Dollars ($16,600,000).

CAC MacDONALD
PRESIDENT OF THE LAND COURT

Performance Criteria	Acceptable Solutions
P1 (Development maintains views to Mt Coot-tha and the Taylor Ranges when viewed from the Riverside Expressway and views of the CBD when viewed from Coronation Drive)	A1 (Building height does not exceed 10 storeys)
P2 (Development on major sites occurs in an orderly sequence and in accordance with a precinct structure plan)	A2 (A structure plan is prepared for sites of more than 1500 m² providing an indication of building bulk, scale and space between buildings and public access to the riverside)

CITATION:	Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177
PARTIES:	Mio Art Pty Ltd as trustee of the Ecomonitors Unit Trust (applicant)
v.
Brisbane City Council (respondent)
Greener Investments Pty Ltd (applicant)
v
Brisbane City Council (respondent)
Brisbane City Council (applicant)
v.
Neovest Ltd (in liquidation) (respondent)
FILE NOS:	AQL1084-08 (Mio Art Pty Ltd) AQL006-08 (Greener Investments Pty Ltd) AQL851-07 (Neovest Ltd)
DIVISION:	General Division
PROCEEDING:	Land Court of Queensland
DELIVERED ON:	24 November 2009
DELIVERED AT:	Brisbane
HEARD AT:	Brisbane
PRESIDENT:	Mrs CAC MacDonald
ORDER:	1. Compensation is determined in the sum of Sixteen Million, Six Hundred Thousand Dollars ($16,600,000). 2. Publication of the adjusted sales rates for 98 Montague Road in paragraph [214] and the whole of paragraphs [221], [222], [224], [225] and [235] be restricted until further ordered by the Court. 3. The respondent file and serve submissions as to the maintenance of those restrictions by 4.00 p.m. on 27 November 2009. 4. The Brisbane City Council file and serve submissions in relation to the payment of interest and any application for costs by 4.00 p.m. on 11 December 2009. 5. Mio Art Pty Ltd and Greener Investments Pty Ltd file and serve any response submissions by 4.00 p.m. on 18 December 2009.
CATCHWORDS:	Practice and Procedure – resumption – owner and several mortgagees possible claimants – non-appearance by one mortgagee – power to hear in claimant's absence – determination to bind all parties. Town Planning – Local Plan – Draft Kurilpa Plan – binding nature – influence on prudent purchaser – GFA and Plot Ratios. Resumption – valuation methodology – Before and After approach – takes into account all elements of severance, injurious affection and enhancement. Resumption – potential development of parent parcel before resumption – what would prudent purchaser consider as highest and best use – distinguish from goals of client. Evidence – expert witness – evidence by developer/investor but not a registered valuer – interested party – not impartial – evidence given less weight than expert. Valuation – methodology – competing approaches – rate m² of land against rate m² GFA – no development application in place and dispute as to potential development – rate/m² land preferred. Valuation – use of sales – After date sale – confidentiality clause – subject to conditions – sale rescinded – but still considered by Court. Valuation – use of sales – sale of balance land to strike rate/m² of parent parcel – need to factor in injurious affection and enhancement to balance land – no firm evidence of these factors – sale of doubtful value for such purpose. Valuation – use of sales – need to make adjustments for demolition costs, Council headworks, contamination, piling costs and GST. Evidence – expert witness – reports of experts produced but experts not called – authors could have been subpoenaed – no weight given to evidence.
APPEARANCES:	Dr D Smith for the claimant Mio Art Pty Ltd Mr J Horsburgh in person for the claimant Greener Investments Pty Ltd Mr M Hinson SC with Mr D O'Brien for the respondent
SOLICITORS:	Delta Law for Mio Art Pty Ltd DLA Phillips Fox for the respondent