NG Woden Pty Limited ACN 620 839 834 v Commissioner for Act Revenue (Administrative Review) - [2020] ACAT 77

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

NG WODEN PTY LIMITED ACN 620 839 834 v COMMISSIONER FOR ACT REVENUE (Administrative Review) [2020] ACAT 77

AT 99/2019
Catchwords: ADMINISTRATIVE REVIEW – lease variation charge – what was the before value of the property on the date of development approval – what was the after value on the date of the notice of decision – in working out the before value should the tribunal treat the highest and best use as being a hotel as an interpretation of the lease or a combination of a club and hotel – whether as a matter of valuation technique the valuer should take into account the cost of providing parking which is mandated by the Territory Plan or other source which lawfully mandates a parking obligation – whether a valuer needs to allow for the revenue, if any, which might be derived from that parking

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 68

Planning and Development Act 2007 ss 276B, 276C, 276D, 277, 277A, 408A

Cases cited:Giusida Pty Ltd v Commissioner for ACT Revenue (No 2) [2018] ACTSC 178
Jessica Investment Pty Limited v VG [2008] NSWLEC 1375
Jones v Dunkel [1959] HCA 8
Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409
3 Property Group 5 Pty Ltd V Commissioner for ACT Revenue [2019] ACAT 67
Re Section 11a of the City Area Leases Act 1936 [1991] ACTSC 86
Tomago Aluminium Co Pty Limited v Valuer General [2010] NSWLEC 4

Tribunal: Senior Member G Turner (Presiding)
Senior Member G Trickett

Date of Orders:           30 September 2020
Date of Reasons for Decision:            30 September 2020
Date Orders and Reasons Amended:         25 March 2021

AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL AT 99/2019
BETWEEN:
NG WODEN PTY LIMITED ACN 620 839 834
Applicant

AND:

COMMISSIONER FOR ACT REVENUE

Respondent

TRIBUNAL: Senior Member G Turner (Presiding)
Senior Member G Trickett

DATE:30 September 2020
(orders set aside and substituted on 25 March 2021)

ORDER

The Tribunal orders:
1.Pursuant to Section 56 of the ACT Civil and Administrative Act 2008 the Tribunal sets aside the orders made 30 September 2020 and in lieu makes the following orders:
2.The reconsideration decision deemed to have been made on 26 September 2019 is set aside.
3.The matter is remitted to the Commissioner for further determination of the lease variation charge with the following directions:
(i)      The V2 Before Value of Block 17, Section 3, of the Property as at 28 September 2018 is $6,656,500.
(ii)     For the purpose of determining the V1 After Value of the Property as at 28 September 2018, the Commissioner is to assume 800 residential apartments can be built on the Property.
(iii)   The sale price of Block 2 Section 200 Belconnen in June 2015 of $20,989,593 is to be used by the Commissioner in determining the V1 After Value of the Property but adjusted by the Commissioner for movements in property values in the ACT property market from the date of sale of 2/200 Belconnen being June 2015 to 28 September 2018 being the date of the Notice of Decision dated 28 September 2018.
(iv)   The After Value is then to be discounted by 10% to allow for Condition 2(c) of the Notice of Decision dated 28 September 2018.

………………………………..
Senior Member G Turner
For and on behalf of the Tribunal

REASONS FOR DECISION

Introduction

By an Application for Review dated 23 October 2019 (Application), the applicant NG Woden Pty Limited (Woden), seeks a review of the deemed refusal dated 26 September 2019 of the respondent, the Commissioner for ACT Revenue (Commissioner), of Woden’s application for reconsideration of the lease variation charge (LVC) levied by the Commissioner over Woden’s leased property at Block 17 Section 3 Phillip in the ACT (Property).
Section 408A of the Planning and Development Act 2007 (Planning Act) gives a right to Woden to apply to this Tribunal for review of the refusal of the Commissioner.
Section 68(2) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) specifies that this Tribunal on such an application may exercise any function given to the Commissioner under the Planning Act.
Section 68(3) of the ACAT Act states that this Tribunal must by order:
(a)     Confirm the decision: or
(b)     Vary the decision; or
(c)     Set aside the decision and –
(i)Make a substitute decision; or
(ii)Remit the matter that is the subject for reconsideration by the decision maker in accordance with any direction or recommendation of the Tribunal.
The LVC which is the subject of the application is the worked out ‘Before and After Values’ (being respectively “V2” and “V1” in section 277) for the property pursuant to Division 9.6.3 of the Planning Act (sections 277 and 277A)

Passing observations about valuation cases in the Tribunal in light of this Application

The Tribunal considers that its experience in conducting this application should be recorded for the assistance of future parties before the Tribunal. It notes the following matters:
(a)The estimate of required hearing time when this application was fixed for hearing was three days presumably inclusive of oral submissions. The actual hearing time was five very full hearing days, two of which were conducted on Cisco WebEx, the last day being concluded at 5.29pm. However, that did not include any submissions on the evidence. Because of the application’s complexity, the Tribunal required written submissions being submissions in chief from both parties, submissions in reply from both parties and a joint schedule from the parties which summarised the evidence and a party’s submissions in relation to each of the comparable sales which had been the subject of evidence in deriving the Before Value and After Value. Subsequently further submissions were required in writing from the parties on various legal issues relating to the construction of the Planning Act.
(b)Legal representatives, when assisting the Tribunal in setting matters down for hearing, must give considered estimates of the time required to conclude the hearing including all submissions.
(c)This did not occur in this application causing the need for a lengthy adjournment for a couple of months and ultimately in the need to use electronic means to conclude the hearing. It is clear that the assessment of time given to complete this application was woefully inadequate.
(d)The parties qualified three expert valuers to provide evidence to the Tribunal on the Before Values and the After Values (Woden provided two and the Commissioner provided the other). The written evidence of Mr Heaton for Woden consisted of two reports.[1] He gave oral evidence which covered approximately 138 pages. In its written submissions in chief, Woden abandoned reliance on Mr Heaton as an expert when it based its case solely on the evidence of its other expert Ms Byrne.[2]
[1] Exhibit A13 which was 32 pages plus lengthy annexures and Exhibit A14 which was 32 pages plus lengthy annexures. Exhibit A14 superseded Exhibit A13 but by the time the hearing started Exhibit A13 had already been read by the Tribunal members
[2] See submissions in chief filed 21 May 2020 paragraph 3
(e)By that date the Commissioner had prepared and filed its submissions in chief which extensively considered the evidence of Mr Heaton. Also, the Tribunal by 21 May 2020 had carefully re-read all of Mr Heaton’s evidence at a cost to the taxpayers of the Australian Capital Territory.
(f)This could have all been avoided if the Tribunal and the Commissioner had been notified at an earlier stage that the witness would not be relied upon.
(g)Better still, each party should be limited to one expert witness in each field of expertise before the Tribunal which would limit the matters in dispute, the time taken and other problems which can arise with multiple experts.
(h)Next, in this application the matter was fixed for hearing without Woden’s experts and the Commissioner’s expert having isolated the matters in dispute between them. It only became clear late in the oral evidence when a remark was made by Senior Counsel for the Commissioner that a critical issue in dispute was whether an allowance for the cost of parking facilities should be allowed in working out the comparable sales.
(i)If this had been highlighted by the parties in their openings, the Tribunal might have itself asked precise questions on this issue during each of the expert witnesses’ evidence. This leads to the next point.
(j)The Tribunal asked for written submissions on the legal issue of whether parking was to be included in the Before and After Values.[3] The Tribunal had expected that the submissions would cover the issue as a matter of principle. The initial written submissions of the parties, which the Tribunal ordered at the close of the evidence did not deal with the concerns of the Tribunal and the Tribunal made further orders for submissions on this issue which have since been provided. These further submissions were filed with the Tribunal on 14 July 2020.
(k)The next issue is the content of the expert evidence and the ability of the Tribunal to reach a decision based on it. The purpose of expert valuation evidence in this application should be to assist the Tribunal to sit in the shoes of the Commissioner (the decision maker) and make the more correct decision as to the Before and After Values. The Tribunal in this situation sits as a “judicial valuer”.[4] The evidence in this application does not do that because it does not provide the Tribunal with any tools to make any adjustment to the values derived by the competing expert valuers.[5] We are conscious of the views of other judges who have recognised that a court or tribunal when faced with a task such as ours may have to in the end, make such adjustments as it considers appropriate on the evidence which may ultimately be no more than a “guess”.[6] We point out transparency is important.[7]
(l)The evidence of each witness just provides a list of comparable sales, comments as to why the sale was more or less comparable to the subject site and ultimately their opinions as to Before and After Values of the Property.
(m)While commenting on the various distinguishing features in each case no explanations were provided as to the percentage discounts or additions that were made by each valuer in deriving their figures.
(n)Ultimately, the Tribunal has not been given the tools to make its own analysis and adjustments to the comparable sales and to derive the Before and After Values of the Property. The Tribunal has been left with a task which seems to involve ignoring the evidence of Mr Heaton except perhaps where it corroborates the evidence of one or other of the other expert valuers and making a determination based on the credit of one of the other experts and such adjustments as the Tribunal feels it should reasonably make to derive the Before and After Values. The adjustments could be said to be a guess. That is not an appropriate result from the evidence of expert witnesses who gave evidence over several days and were extensively cross examined.
(o)In our opinion experts should be required to meet in advance of a hearing and to consult and discuss between themselves the matters of dispute between them without any of the parties or their legal representatives present with a view to reaching agreement as to those matters in dispute between them and isolating, if there are matter still in dispute, the nature of that dispute between them.
(p)They should produce at the end of their discussion an agreed document to be filed by them with the Tribunal and once filed made available to the parties which reflects matters now agreed and matters still in dispute and for the matters in dispute the reasons for the dispute. This document should not have any input from the parties or their legal representatives.
(q)The Tribunal also requested that the parties confer and inform the Tribunal whether they can agree upon any of the following issues and if so the terms of their agreement in respect of the sale of Block 1 Section 22 Phillip.
(r)The parties provided submissions in response which provided no indication that they had conferred or let alone sought to agree on any of the issues that the Tribunal sought the parties’ assistance.[8] When a court or tribunal requests participants in contested disputes to confer and attempt to agree about issues which are in issue, it is because it is in the interests of justice that they do so, not only in their own interests but in the interests of the community as a whole. If this did not occur it is very disappointing particularly having regard to the nature of the disputants in this case, one being an experienced developer in reality which presumably has had much litigation experience and the other being part of the government, which should be a model litigant to the community.
(s)Another matter deserves comment. This was an application where because the complexity of the evidence of the valuers the Tribunal decided not to receive oral submissions but rather ordered detailed and complete written submissions including a joint schedule of the evidence of each of the valuers in relation to each of the comparable sales relied on together with the parties summary submissions on that evidence. These submissions were of a very high quality. The joint schedule was particularly helpful. We compliment the parties and their legal advisers.
[3] Transcript of proceedings 30 April 2020 at page 465
[4] Giusida Pty Ltd v Commissioner for ACT Revenue (No 2) [2018] ACTSC 178 at [22]-[23]
[5] Tomago Aluminium Co Pty Limited v Valuer General [2010] NSWLEC 4 at [45], per Pepper J
[6] See observations of Hope JA in Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409 at 435-8
[7] Jessica Investment Pty Limited v VG [2008] NSWLEC 1375 at [6], per Bly C
[8] Applicant’s further submissions filed 14 July 2020 paragraphs 83-96 and respondent’s further submissions filed 14 July 2020 paragraphs 40-47
The Tribunal now deals with the legislative scheme.

The legislative scheme

Relevantly the legislative scheme is set out in the Planning Act as follows:
Subdivision 9.6.3.2        Chargeable variations
276B       Chargeable variation of nominal rent lease—lease variation charge
(1)      The planning and land authority must not execute a chargeable variation of a nominal rent lease unless—
(a)the lease variation charge for the variation, less any remission under section 278, plus any increase under section 279 (the total charge) has been paid to the Territory; or
(b)a deferral arrangement in relation to the total charge has been entered into.
Note If the planning and land authority has executed a variation of a nominal rent lease, the authority must lodge a copy of the variation with the registrar‑general for registration. A lease variation takes effect on registration (see Land Titles Act 1925, s 72A).
(2)     A lease variation charge is taken to be paid to the Territory if—
(a)the amount of the charge is waived by the Treasurer under the Financial Management Act 1996, section 131 (Waiver of debts etc); or
(b)part of the amount is waived and the rest of the amount is paid.
(3)     Payment of the lease variation charge, or entering into a deferral arrangement in relation to the lease variation charge, does not affect any right a person may have to apply for reconsideration under section 277C (Lease variation charge under s 277—application for reconsideration).
276C       Lease variation charges—amount payable
(1)     The lease variation charge for a chargeable variation of a nominal rent lease is—
(a)for a s 276E chargeable variation—the determined charge for the variation; or
(b)for a s 277 chargeable variation—the charge (if any) worked out under section 277 for the variation.
(2)     If a development approval of a development application relates to more than 1 chargeable variation of a nominal rent lease, the lease variation charge is worked out as follows:
(a)if all the chargeable variations are s 276E chargeable variations for which a charge is determined in an LVC determination—in accordance with the LVC determination;
(b)if all the chargeable variations are s 277 chargeable variations—in accordance with section 277;
(c)if 1 or more are a kind of variation mentioned in paragraph (a) and 1 or more are a kind of variation mentioned in paragraph (b)—as prescribed by regulation.
276D       Lease variation charges—notice of assessment
(1)     On approval of a development application for a chargeable variation, the commissioner for revenue must give—
(a)a notice of assessment of the lease variation charge to the lessee; and
(b)if the development application in relation to the chargeable variation is made by someone other than the lessee—a copy of the notice to the applicant.
Note 1The notice of assessment is an assessment under the Taxation Administration Act 1999 as if the lease variation charge were a tax payable by the lessee under that Act (see this Act, s 279B (1)). However, no actual liability to pay the lease variation charge arises on the giving of the notice (see s 279B (2)). The planning and land authority must not execute a variation of the lease unless the lessee has paid the assessed lease variation charge (see s 276B (1)).
Note 2The commissioner for revenue must give a notice of assessment as soon as possible after the development application for the chargeable variation has been approved (see Legislation Act, s 151B).
(2)     A lease variation charge is taken to be worked out—
(a)on the day the development approval of the chargeable variation is approved; or
(b)if another day is prescribed by regulation—on that day.
(3)     A notice of assessment lapses on the earlier of—
(a)   the day the lease variation charge is paid; or
(b)the day the development approval of the chargeable variation lapses.
….
277   Lease variation charges—s 277 chargeable variations
(1)     The commissioner for revenue works out the lease variation charge for a s 277 chargeable variation of a nominal rent lease as follows:
(2)     In this section:
LVC means the lease variation charge payable for the s 277 chargeable variation of the lease.
V1—
(a)for a variation other than a consolidation or subdivision, means the capital sum that the lease might be expected to realise if—
(i)the lease were varied as proposed; and
(ii)the lease were genuinely offered for sale immediately after the variation on the reasonable terms and conditions that a genuine seller would require; and
(iii)the rent payable throughout the term of the lease or, for a variation that involves the surrender of a lease and issue of a new lease, the new lease, were a nominal rent; or
(b)for a variation that is a consolidation or subdivision, means the capital sum that the new lease or leases to be granted under the consolidation or subdivision might be expected to realise if—
(i)the consolidation or subdivision were to take place as proposed; and
(ii)the new lease or leases were genuinely offered for sale immediately after the variation on the reasonable terms and conditions that a genuine seller would require; and
(iii)the rent payable throughout the term of the new lease or leases were a nominal rent.
V2—
(a)for a variation other than a consolidation or subdivision, means the capital sum that the lease might be expected to realise if—
(i)the lease were not varied during the remainder of its term; and
(ii)the lease were genuinely offered for sale immediately before the variation on the reasonable terms and conditions that a genuine seller would require; and
(iii)the rent payable throughout the term of the lease, or lease to be surrendered, were a nominal rent; or
(b)for a variation that is a consolidation or subdivision, means the capital sum that the lease or leases to be surrendered under the consolidation or subdivision might be expected to realise if—
(i)no consolidation or subdivision were to take place during the remainder of the term of the surrendered lease or leases; and
(ii)the lease or leases were genuinely offered for sale immediately before the consolidation or subdivision on the reasonable terms and conditions that a genuine seller would require; and
(iii)the rent payable throughout the term of the lease or leases to be surrendered were a nominal rent.
(3)     If the amount worked out as V1 is equal to or less than the amount worked out as V2, no lease variation charge is payable.
(4)     If the development approval for the relevant development application relates to 2 or more s 277 chargeable variations, V1 and LVC are worked out as if the s 277 chargeable variations were a single s 277 chargeable variation of the lease.

Sections 277A provides:
277A       Lease variation charge under s 277—improvements
(1)     In working out V1 and V2 under section 277, an improvement in relation to the land comprised in the lease must not be taken into account.
Note Power to make a regulation in relation to a matter includes power to make provision in relation to a class of a matter (see Legislation Act, s 48 (2)).
(2)     However, an existing improvement by way of clearing, filling, grading, draining, levelling or excavating the land may be taken into account.
(3)     In this section:
improvement, in relation to land, means an existing or proposed improvement and includes any of the following:
(a)a building or structure on or under the land;
(b)an alteration or demolition of an existing building or structure on or under the land;
(c)the remediation of the land;
(d)earthworks, planting or other work that affects the landscape of the and;
(e)anything mentioned in paragraphs (a) to (d) that is required—
(i)as a condition of a development approval; or
(ii)by a statutory approval obtained or required for a development proposal; or
(iii)under an agreement between the Territory or a territory entity and—
(A)the lessee; or
(B)if the lessee is not the applicant for the development approval—the applicant.
(f)anything mentioned in paragraphs (a) to (d) proposed in a development application in relation to a chargeable variation of a nominal rent lease to be carried out on land outside of the land under the lease.
remediation—see the Environment Protection Act 1997, dictionary.

The Property

By a Crown Lease dated 13 June 2017 and entered in the register of the ACT Registrar General on 28 November 2017 (Lease) between the Planning and Land Authority on behalf of the Commonwealth of Australia and Woden Tradesmen’s Union Club Limited (Club), the Property was leased to the Club for a term of 87 years subject to the covenants and other terms in the Lease.[9]
[9] See Exhibit R32 pages 245 - 254
The Lease contained the following covenants and other terms:
“club” means “the use of land as a meeting place for persons associated, or for a body incorporated, or a social, sporting, athletic, political or other like purpose, and which is licensed premises under the Liquor Act 2010” (Clause 1(c))
“commercial accommodation use” means “commercial accommodation unit, guest house, hotel, motel , serviced apartment, tourist resort….”(Clause 1(d))
“hotel” means “the use of land for one or more commercial accommodation units and where the premise is licensed….it may include associated facilities such as a restaurant, bar or function room, which may be used by the occupants of the premises but, which may are also available for use by non-occupant members of the public” (Clause 1(f))
Covenants by the Club included:
To use the premises only for the purpose of a club and commercial accommodation use LIMITED TO a hotel of not more than 120 rooms; (Clause 3(a))
That the combined gross floor area of all buildings erected on the land shall not exceed 10850 square metres PROVIDED THAT the maximum gross floor area used for club purposes does not exceed 7690 square metres; (Clause 3(e))
That the Lessee shall provide and maintain an approved drained and sealed carparking area on the land…; (Clause 3(f))
That the Lessee shall use the basement area for carparking and storage only; (Clause 3(g)).
It is not disputed that the Property is situated in the Woden Town Centre and zoned CZ2 Business.[10] It is bounded by roads on three sides being Melrose Drive to the west, Launceston Street to the north and Furzer Street to the east. Melrose Drive and Furzer provide access to the Property. The land is 10,193 square metres. It was previously the site of the Woden Tradesman’s Union Club and was purchased by Woden in August 2017 for $16,000,000 with club improvements including a hotel, basement and on grade car park in place. Woden lodged a development application on 30 April 2018, which was approved on 28 September 2018 (Approval). The Approval permits variation of the Lease by:[11]
[10] Paragraphs 4 to 10 applicant’s outline of opening submissions and paragraph 6 and 7 of respondent’s outline of submissions
[11] Exhibit A11 page 121 and following
a)      Adding multi-unit residential housing as a permitted purpose (Clause 3(a))
b)      Deleting the GFA restriction (Clause 3(e) of the Lease)
c)       Deleting the requirement to use the basement only for carparking and storage Clause 3(g)).
d)      Providing that the variation of the Lease does not take effect, and the execution and registration of the new leases resulting from the subdivision of the Property must not be completed, until:
“all built works up to and including level 5 are complete to allow a survey of the subdivided blocks; and…”

Issues for determination by this Tribunal

In the opening of the application on the first day of the hearing the parties submitted that the following were the issues to be decided by the Tribunal:
(a)What was the Before Value (V2 calculations) of the Property on the day of the development approval of the chargeable variation as approved pursuant to section 276D(2)(d) (the Notice of Decision)? (We note that in this Application the date of the Notice of Decision was 28 September 2018).[12]
(b)In working out the Before Value should the Tribunal treat the highest and best use of the Property as being a hotel as a matter of interpretation of the Lease or should it treat the highest and best use as being a combination of a club and hotel as a matter of interpretation of the Lease in the ‘Before Value’ situation? It was further submitted that if the Tribunal found that the Lease required that there be combination of club and hotel then notwithstanding the Tribunal should also find what would be the ‘Before Value’ if as a matter of interpretation the Lease did not require a club.
(c)What was the After Value (V1 calculations) of the Property on the day of the Notice of Decision?
(d)What was the percentage remission that NG Woden was entitled to for the purposes of section 278 of the Planning Act?
[12] See Exhibit A 14 page immediately after page 33
Issue (d) was resolved by the parties and there is now no need for the Tribunal to make any finding.[13]

Interpretation of Clause 3.(a) of the Lease - the Purpose Clause

[13] Applicant’s submissions in chief filed 21 May 2020 paragraph 2 and respondent’s outline of submissions paragraph 2

The issues identified by the parties at the outset of the hearing included an issue as to whether clause 3.(a) of the Lease permitted in working out the ‘Before Value’ to take account of the usage of the Property as a hotel only as the “highest and best use” or whether the true interpretation required that the Before Value to be worked out by reference to the Property as a club and hotel.
Clause 3.(a) of the Lease states that the Purpose is:
To use the premises only for the purpose of a club and commercial accommodation use LIMITED TO a hotel of not more than 120 rooms; (bold for our emphasis).
In its submissions Woden argues[14] that that clause should be read as restricting the ranges of uses to which the Property can be put, not as mandating that all uses within that range need to be built. It suggests testing the interpretation by assuming the Lease stated five or ten uses as opposed to two and asks would it still be mandated that all those uses be built to comply with the Lease. It says it would be an absurd result and therefore if only two uses are specified then it should not be mandated that both need to be built.
[14] Paragraphs 11 to 13 submissions in chief filed 21 May 2020
It cites the decision of In Re Section 11a of the City Area Leases Act 1936, where Higgins J stated at [2]:[15]
I have to say, at the outset, that the submissions of the respondent, insofar as they contend that the purposes clause be amended so as to permit only the present development proposal, fail to reflect correctly the role and function of a lease purposes clause. It is fundamentally to limit the range of uses to which the land may be put. That limitation, in the interests of flexibility of land use, should not be more restrictive than is required by the application of proper town planning principles.
[15] Re Section 11a of the City Area Leases Act 1936 [1991] ACTSC 86, per Higgins J at [2]
With all due respect to his Honour, we consider that his Honour’s remarks are not apposite to the Lease because his Honour was not dealing with a lease where the word ‘and’ had been included before the last use.
In Re 11a of the City Area Lease Act 1936 his Honour was dealing with a lease which contained a clause which provided at [3]:
To use the premises only for the purposes of:
(i)Retail (excluding supermarkets and the sale of food and drink;
(ii)Storage processing packaging and wholesale distribution of goods;
(iii)Service trades;
(iv)Any manufacturing process;
(v)Sale of goods manufactured repaired or assembled on the premises;
(vi)Small scale service offices limited in total to not more than 500 square metres of gross floorspace.
Notwithstanding the comments of his Honour about the purpose of a lease purpose clause, we consider that a lease is an agreement which is to be construed according to the usual rules of construction of commercial documents. The legal principle is that the words in it should be given their plain and ordinary meaning, which in our view requires where the word ‘and’ is used, to mandate all uses be carried on by a lessee according to the terms of the lease.
In the Tribunal’s opinion the words in the clause “only for the purpose of a club and commercial accommodation use LIMITED TO a hotel….” highlight that the intentions of the parties to the Lease intended that there would be not only a hotel but also a club as defined in the definition of ‘club’ in Clause 1.(c) of the Lease, bearing in mind the addition of the word ‘and’ as highlighted for emphasis above.
If the parties to the Lease intended that the ‘Purpose’ was to be in the alternative (as is contended by Woden and as analysed by Ms Byrne in her first report) then they would have as a matter of expression used the word ‘or’ or ‘alternatively’ or ‘in the alternative’ in some fashion within the clause.
We have also taken into account Woden’s argument that such an interpretation exposes a lessee to a finding of a breach of the Planning and Development Act 2007 by failing to comply with the Lease. In our opinion, the mere fact that there are serious consequences arising from a breach, including a fine, is no answer to the true construction of a matter of the contract between the parties to it.
We find that as a matter of interpretation the Property is to be valued on the Before Value basis as at the date of the Notice of Decision as a “club” and “commercial accommodation” which commercial accommodation is to be limited to a hotel only of not more than 120 rooms.
Further we find that the areas of the club and the hotel are matters of judgement by a valuer in working out the respective areas subject to:
(a)Clause 3(e) of the Lease relating the gross floor area of all buildings erected shall not exceed 10,850 m² and the maximum gross floor area used for club purposes shall not exceed 7,690 m².
(b)The lessee providing carparking on the land in accordance with some approved plans which had previously been approved by the Authority (Clause 3(f)).
(c)The prohibition on using the basement area for anything other than for carparking and storage (Clause 3(g)).
(d)The limit on the hotel rooms of 120 rooms.
However, as requested by the parties, we will also make a determination of the ‘Before Value’ at the date of the Notice of Decision on the basis that the scenario of a hotel only is permitted by the Lease.

Valuation evidence before the Tribunal

The evidence has been given by way of witness statement and/or expert report as well as oral testimony, which was tested by extensive cross examination. A view by the Tribunal of the Property and of some of the properties which one or other of the parties contends are to be treated as comparable in some way or other to the Property also took place during the course of the hearing.[16] We note that all of the valuers adopted the “comparable sale approach” which involves identifying sales of properties which are said to have similarities with the Property and making such adjustments as are necessary to make the sales of the comparable equivalent to the Property before determining the value of the Property. The Commissioner also pressed upon us the “deduced valuation approach” used by Mr Pilat, which was to take the purchase price of the Property, add the demolition costs to remove the existing structures and then make an allowance for the LVC for the change of purpose in the Lease to review the reasonableness of the After Value. Using that approach he criticise the After Value valuations of Woden’s valuers as being far too low. We do not accept that the deduced valuation approach is appropriate because it assumes that Woden bought the Property at market value when in the circumstances it may have bought it above market value.
[16] Exhibit R26 and Transcript of proceedings 29 April 2020, page 295, line 1
The expert written evidence on the values of the Property was to the following effect:
(a)Mr Heaton per report dated 16 December 2019[17]
[17] Exhibit A13
After Value $18,000,000
Before Value $10,650,000
Added Value $7,350,000
(b)Mr Heaton per report dated 8 February 2020[18]
[18] Exhibit A14
After Value $18,000,000
Before Value $7,860,000
(c)Added Value $10,140,000 M/s Byrne per report 16 December 2019[19]
[19] Exhibit A23
After Value $16,800,000
Before Value $8,000,000 (assumed that the Property was to be valued with a hotel only to be constructed)
Added Value $8,800,000
(d)Ms Byrne per report 13 February 2020[20]
After Value $16,800,000
Before Value $7,975,000 (assumed that the land was to be valued with both a club and hotel to be constructed)
Added Value $7,975,000
(e)Mr Pilat per report which is annexure B to his statement dated 12 February 2020[21]
After Value $22,400,00
Before Value $5,400,000
Added Value $17, 500,000
[20] Exhibit A24
[21] Exhibit R32
In addition, part of the evidence that was before the Tribunal included the material that was before the Commissioner at the date of the Notice of Assessment being the T documents. This included:
(a)A Lease Variation Charge valuation by a Mr Cummins dated 11 April 2018 (part of the application for variation of the Lease).[22]
(b)A Lease Variation Charge Assessment prepared Mr Heaton dated 18 July 2019 (part of the Application for Reconsideration of Lease Variation Charge dated 30 July 2019 lodged by Woden pursuant to Section 277C of the Planning Act).[23]
[22] Exhibit A11, page 21
[23] Exhibit A11, page 87
The Tribunal has determined to treat these valuations contained in the T documents[24] as of historical interest only as representing the apparent opinion of their creators as at the date of their creation which have not been tested by sworn evidence in chief or by cross examination (although Mr Heaton was cross examined he was not cross examined on the Lease Variation Charge Assessment dated 18 July 2019).
Mr Heaton’s evidence
[24] Exhibit A11
In his report dated 8 February 2020,[25] Mr Heaton stated that this report supersedes his report of 16 December 2019.[26] We propose to treat it so.
[25] Exhibit A14
[26] Exhibit A13
Because the applicant has abandoned reliance on all his evidence then there is no need to consider his evidence unless it is to be used in consideration of the evidence of Ms Byrne and Mr Pilat.
Ms Byrne’s evidence
Ms Byrne’s first report[27] provides valuations as at 8 April 2019 being the date of the Notice of Assessment and not at the date of the Notice of Decision. We point out that in 3 Property Group Pty Ltd, the Tribunal held that the date the valuation is to be performed is the date the variation is approved which is the date of the Notice of Decision.[28] No point was taken by the Commissioner that there was any difference in the values between the dates so we will assume that there is no difference. Although Ms Byrne quotes from the Purpose clause (clause 3(a) of the Lease), when she undertook her valuation to determine the Before Value, she took the view that the clause permitted a hotel only and did not require a club and a hotel. However, in her later short report[29] she valued the Before Value on the basis that a club and hotel was required.
[27] Exhibit A23
[28] 3 Property Group 5 Pty Ltd v Commissioner for ACT Revenue [2019] ACAT 67 at [61]-[71]
[29] Exhibit A24
As to market evidence for hotels for the Before Value she identified the following as relevant sales:
(a)13 London Circuit City.
(b)70 Bunda Street City.
(c)39 Braybrooke Street Bruce.
(d)14 Kennedy Street Kingston.
(e)23 Dominion Circuit Forrest.
and concluded that the ‘Before Value’ of the Property is $8,100,00. She adopted a rate of $750 per m² of gross floor area as reflective of the land content of the Property.
As to the After Value she identified the following as being comparable:
(a)Block 1 Section 199 Belconnen.
(b)Block 8 Section 47 Belconnen.
(c)Block 1 Section 22 Phillip.
(d)Block 1 Section 76 Greenway.
(e)Block 2 Section 200 Belconnen.
(f)Block 34 and 37 Section 52 Belconnen.
(g)Block 1 Section 78 Greenway.
(h)Block 1 Section 70 Lyons.
and concluded that the After Value of the Property was $16,800,000 based on a range of $20,120 to $22,745 per unit.
In her second short report,[30] Ms Byrne analysed the Before Value on the basis that the Purpose clause (clause 3(a) of the Lease) requires a both a club and a hotel. She gave the opinion that the gross floor area of the club as presently configured is not appropriate and suggests the club should occupy 500 m² as gross floor area and the hotel should occupy 10,350 m² as gross floor area. She identifies the Block 1 Section 227 at Gungahlin and Block 5 Section 30 at Braddon as being comparable sales. She concludes that the club component should be $200,000 based on $400 per m² and that the hotel component should be $7,762,500 based on $750 per m² giving a Before Value for the Property of $7,962,000 which she rounds to $7,975,000.
[30] Exhibit A24
She also provided a third report[31] which provides reasons why 1/70 Lyons (relied on by Mr Pilat for his After Value of the Property) is not a comparable to the Property and should not be used in deriving the After Value.
[31] Exhibit A28
In Ms Byrne’s oral examination in chief she made a number of amendments[32] to her report[33] having reviewed Mr Pilat’s witness statement.[34] Her investigations indicated that there is no minimum size requirement for a club in the ACT, but she has allowed for a small club.[35] Her investigations revealed there is a substantial demand for accommodation in Canberra for domestic overnight and Government department visitors.[36] There is a real demand for it in the Woden area.[37] She considered that an all-suite hotel with restaurants and bars, conference rooms and meeting rooms with the hotel rooms having a separate bedroom, a small kitchenette, a laundry facility and a separate desk area would be suitable in the before situation.[38] In the After Value situation she had regard to Belconnen (Block 2 Section 200) which she regards as the most important comparable.[39] It is 745 residential units in a commercial zone in a town centre. However, it needed adjustment because there are nearly 18,000 m² of commercial space.[40] As to Lyons (Block 1 Section 70) she did not consider it a reliable sale for After Value valuation.[41] She addressed what she said were the most important considerations in determining whether a sale was comparable.[42] As to Lyons she pointed out that the zoning was different for the Property, the sizes were different, and the number of units permitted was lower (only 500 as against 800 at the Property). She pointed out that Lyons had a significantly lower density to the Property which suggested that it could be developed as a hybrid site with townhouse and units which are far more valuable to a developer. Further, the sale price for Lyons was out of kilter with the district averages for sales. She did not rely on it.[43] She disagreed with adding on the cost of parking to the Property if she was using 2/200 Belconnen as a comparable as she considered that it distorted the values (In any event if it was to be taken into account then any revenue stream from the public car park should be taken into account and offset.[44]
[32] Transcript of proceedings 13 February 2020 page 267 and following
[33] Exhibit A23
[34] Exhibit R32
[35] Transcript of proceedings 13 February 2020 page 268
[36] Transcript of proceedings 13 February 2020 page 273
[37] Transcript of proceedings 13 February 2020 pages 273-4
[38] Transcript of proceedings 13 February 2020 page 274
[39] Transcript of proceedings 13 February 2020 page 272, line 5
[40] Transcript of proceedings 13 February 2020 page 272, line 10
[41] Transcript of proceedings 13 February 2020 page 274, line 40
[42] Transcript of proceedings 13 February 2020 pages 274-275
[43] Transcript of proceedings 13 February 2020 page 275, lines 25-45
[44] Transcript of proceedings 13 February 2020 pages 276-277

Ms Byrne’s cross examination revealed the following:
(a)Before Value: In deriving the sales price for a property which she regards as a useful comparable for the Before Value she adds to the documented sales price the cost to change the lease to permit hotel usage and the cost of installing parking, if she considers it necessary.[45] She adds on a parking cost in the Before Value as it is necessary to have parking before the lessee can operate a hotel. This is because car parking for a hotel is critical and by adding the estimated or incurred car parking costs of a comparable in the Before Value she is capturing the critical components of a hotel use because the hotel depends on vehicular access and meeting car parking requirements for access.[46]
(b)When she is speaking of parking requirements, she is speaking of the Territory Plan[47] which applies across the ACT depending on a site’s location.[48] In working out the sales price for the comparable she looked only at the Development Application and any approval and she did not actually consider the Territory Plan[49] she acknowledged that the Parking Code[50] in the Territory Plan is not absolute because it also provides for various concessions.[51]
(c)She stated she had only taken into account the carparking that was actually required for the comparable. In cross examination it was put to her that if she included carparking in the Before Value she was not deriving an unimproved value as required by the Act[52] but her explanation was that what she was doing was deriving a rate that was reflective of a sale which had been offered to the market as unimproved vacant land with the right to operate a hotel attached to the land and that necessitated allowing for the cost of parking facilities that were required at the site.[53] As she saw it the parking cost is a cost that needs to be added to achieve the right to operate a hotel.[54]
(d)She went on to say where a developer is required as a condition of consent to the change of usage to do something referrable to the site which adds to the cost then she will add it to the recorded purchase price of the comparable in deriving a rate . This is because she seeks to “capture” the additional cost to have the right to have the changed use.[55] The rate she ultimately derived for the hotel/club use in the Before Value included an allowance of $30,000 per bay for basement car parking. She did not agree that her assessment of $30,000 per car space was excessive for basement parking nor did she agree that the cost should be reduced for the benefit of the Property having sufficient space for on ground parking.[56] If allowance had to be made for on grade parking then she felt the range was $3,000 to $5,000 per car space and not the $5,000 that Mr Heaton had suggested.[57] However, she did acknowledge that if the developer had elected to have on grade parking rather than basement parking then she would have adopted a different rate.[58] She also acknowledged that what the developer decides to construct would affect her assessment.[59] She conceded that previously her reports in other matters had not expressly highlighted the parking issue but as a result of discussions with the ACTVO her firm had decided to expressly refer to parking issues in future reports.[60]
(e)In relation to the inclusion of a club in deriving the Before Value she agreed that she could not identify a club as small as about 500 m² except for the Canberra Services Club which is 570 m². However, she had looked for other premises with a commercial kitchen and restaurant in doing her analysis.[61] On the assumption that a small club was permitted she allowed for a room size of 86 m² for the hotel component.[62]
(f)After Value: Ms Byrne in cross examination confirmed her view that the best comparable for determining the After Value was the site at 2/200 Belconnen but it needed adjustment for the 18,000 m² of commercial space whereas the Property had only ancillary commercial space in the approved development for the 800 residential units.[63] She had relied on the Development Approval for 2/200 Belconnen for the 18,000 m², [64] which was prepared some 21 months after the sale. 2/200 Belconnen was particularly important because it had approval for 745 residential units close to the Property’s 800 units.[65] She had looked for other sales of a similar number of residential units but had not found any.[66] She noted that the developer of 2/200 Belconnen had had to provide 300 publicly available car spaces but they did not need to be added to the After Value because in her opinion the spaces could generate a commercial return to the developer and would not be a burden on the site. However, she had not carried out any analysis of that return.[67]
(g)She was aware that the 300 car spaces at 2/200 Belconnen were the subject of a Right of First Refusal to the Labor Club which had received two offers from the Developer but had rejected them.[68] She accepted that based on those offers the developer would not be making a profit from the car park but she highlighted that the developer had built more than the required number of car spaces so that indicated to her that the developer anticipated making a profit from the car spaces otherwise he or she would not have built extra spaces.[69]
(h)Her cross examination also dealt with the reasons[70] why she considered 1/70 Lyons as not being a comparable sale to the Property despite being near to the Property. She highlighted her opinion that she thought that that site was a hybrid site and the developer could build not only units but also single dwelling town houses.[71] She highlighted it was a very large site although she had not taken into account any setbacks required for that site.[72] She acknowledged that 1/70 Lyons had site access difficulty issues and was required to meet affordable housing requirements.[73] She also explained that 1/70 Lyons had a real advantage over the Property because it was the subject of a 10 year holding lease which meant it could be subdivided[74] and that it had a different zoning to the Property.[75]
(i)She pointed out that the sales she had used in the After Value were all at a time of built up demand whereas at the time of the valuation of the Property there had been a considerable increase in supply of residential units.[76]
Mr Pilat’s evidence
[45] Transcript of proceedings 29 April 2020 page 316, line 20
[46] Transcript of proceedings 29 April 2020 pages 320- 320, line 45
[47] Transcript of proceedings 29 April 2020 page 327-page, line 5
[48] Transcript proceedings of 29 April 2020 page 329, line 5
[49] Transcript of proceedings 29 April 2020 page 329, lines 5-45
[50] Exhibit R12
[51] Transcript of proceedings 29 April 2020 page 328, line 10
[52] Transcript of proceedings 29 April 2020 pages 335 -336
[53] Transcript of proceedings 29 April 2020 page 336, line 5
[54] Transcript of proceedings 29 April 2020 page 336
[55] Transcript of proceedings 29 April 2020 page 348, lines 15-30
[56]Transcript of proceedings 29 April 2020 page 348, lines 15-30
[57] Transcript of proceedings 29 April 2020 page 318, line 20
[58] Transcript of proceedings 29 April 2020 page 334, line 10
[59] Transcript of proceedings 29 April 2020 page 336
[60] Transcript of proceedings 29 April 2020 pages 337-338
[61] Transcript of proceedings 29 April 2020 page 334
[62] Transcript of proceedings 30 April 2020 page 405
[63] Transcript of proceedings 29 April 2020 pages 353-356
[64] Transcript of proceedings 29 April 2020 page 357, line 30
[65] Transcript of proceedings 29 April 2020 pages 358-359
[66] Transcript of proceedings 29 April 2020 page 358, line 30
[67] Transcript of proceedings 29 April 2020 page 361
[68] Transcript of proceedings 29 April 2020 pages 362-364
[69] Transcript of proceedings 29 April 2020 page 366
[70] Exhibit A28
[71] Transcript of proceedings 29 April 2020 pages 373 -376, line 5
[72] Transcript of proceedings 29 April 2020 pages 381-382
[73] Transcript of proceedings 29 April 2020 pages 384 and 386
[74] Transcript of proceedings 29 April 2020 page 382, line 45
[75] Transcript of proceedings 29 April 2020 page 383, line 10
[76] Transcript of proceedings 29 April 2020 page 368, line 40
Mr Pilat provided a witness statement to the Tribunal dated 12 February 2020.[77] It contains two annexures, Annexure A providing supplementary evidence to a witness statement also of the same date and Annexure B being a consolidation of his evidence in written form after including the supplementary evidence from Annexure A.
[77] Exhibit R32
His written evidence included the following:
(a)Before Value: He highlighted the importance of the terms of the lease in valuing the Property in the Before Value scenario. He confirmed he was the ACTVO valuer who carried out the preliminary valuation of the ACTVO which led to the LVC being levied by the Commissioner. For the purposes of his witness statement he carried out a review of the Before Value. At paragraphs 9 to 17 he deals with the Club component and derives a rate $225/m² of GFA and a Before Value for the club of $672,750 based on 2,990 m² of GFA. The area of 2990 m² is the area of the old club which occupied the site when Woden purchased the Property. The figure of $225/m² of GFA is derived from the sale of vacant land at 1/227 Gungahlin, which sale he discounted because the purchaser had obtained an approval to transfer 100 gaming licences from another site to the Gungahlin site as a condition of the sale.[78] He considered it appropriate to discount the sale price of Gungahlin because the Property did not have any gaming licences whereas according to him, the developer had been able to transfer the gambling licences from another site to Gungahlin as part of the rights under the purchase contract for Gungahlin from another club.
(b)He stated gaming licences are now difficult to obtain in the ACT and they assist with viability of clubs. He also noted that the club that had operated at the Property prior to the purchase of by Woden had a history of loss making and this also should be taken into account in assessing the Before Value of the Property.
(c)As to the hotel component (see paragraphs 18 to 22 of Exhibit R32) in the Before Value he assumed that the club would be the 2990 m² of GFA as mentioned and subtracted that from the total GFA of 7860 m² available for the hotel, which if he assumed a maximum of 120 rooms as provided by the Lease results in an average hotel room size of 65.5 m² of GFA gross. He considered that there is a financial risk in opening a new hotel with 120 rooms in this location because of competition from the Abode hotel in this location and the opening of other hotels in more preferable locations. Thus, he discounted the room rate which he derived from comparable sales to only $600 per m² of GFA which was slightly lower than the lower end of the range of some sales of sites for hotels in the City. This results in a hotel room rate of $39,000 per hotel room.[79] The comparable hotel site sales he refers to are generally the sites picked by Ms Byrne being 4/5 City, 5/47 City, 11/85 Bruce, 1/20 Kingston and 9/19 Forrest. He also identified 15/3 Phillip as another relevant comparable.
(d)After Value: In deriving the After Value he took into account 1/70 Lyons, 24/39 Griffith, 1/78 Greenway, 34 and 37/52 Belconnen, 2/200 Belconnen, 1/76 Greenway, 8/24 Phillip and 1/199 Belconnen as relevant comparable sales. He considered 1/70 Lyons to be the most relevant sale. Based on his calculations that site had a rate of $41,633 per residential unit but he noted that it only had approval for 492 residential units.[80] He also analysed 2/200 Belconnen and pointed out it had large carparking cost requirement which was imposed on the developer which was in the order of $9,000,000. Taking into account the car parking imposition, he derived a rate per unit of $45,329 per residential unit (page 22 Ex R32) for 2/200 Belconnen. Taking these matters into account he derived a rate of $30,000 to $33,000 per residential unit for the Property but discounted it for the Development Approval conditions to $27,000 to $29,000 per unit and ultimately used $28,000 per residential unit in calculating the After Value of $ 22,400,000 for the proposed 800 units.
[78] Exhibit R32 paragraph 16
[79] Exhibit R32 paragraphs 21- 22
[80] Exhibit R32 page 22
The following emerged from his evidence in chief:
(a)Before Value: He believed that the inclusion of an allowance for parking is wrong as it is including a development cost in the Before Value. He disagrees with Mr Heaton and Ms Byrne on this.[81] In his calculation of the value of the hotel at the Property he assumed it would have undercover parking in a basement or garage facility. He assumed it would be an average standard hotel for Canberra.[82]
(b)After Value: Mr Pilat commented on Ms Byrne’s evidence that she did not analyse the sale of 8/24 Phillip and thus include it as a comparable sale in her reports because it had been subdivided subsequent to its sale and that also the number of units for the site had been varied. He expressed the opinion that that was not a legitimate reason to exclude it. He also pointed out that it is common valuation practice for valuers to add to the purchase price the lease variation charge arising from a lease variation to derive the amount in fact paid for the site.[83]
[81] Transcript of proceedings 30 April 2020 page 416, line 10.
[82] Transcript of proceedings 30 April 2020 page 417
[83] Transcript of proceedings 30 April 2020 pages 418-419
In Mr Pilat’s cross examination the following emerged:
(a)Before Value: Mr Pilat admitted that his $600 m² for GFA for a hotel is primarily based on the City hotel sales (being 4/5 City and 5/47 City). When cross examined about 4/5 City he said he did not add to his analysis any amount for the LVC.[84] At the time of the sale, a hotel was not a permitted use under the lease[85] but he agreed that there had subsequently been a lease variation which permitted hotel usage and that the LVC needed to be added to the purchase price to make it comparable.[86]
(b)He was asked similar questions about 5/47 City and again agreed he had not included the LVC which was payable when the lease was varied to permit hotel usage.[87] Notwithstanding when the LVC was added to these sales and it substantially increased the rate per m² for GFA to between $900 per m² and $1080 per m², he did not consider that he needed to adjust his rate of $600 per m²because he had taken into account not only these City sales but also the sales at Bruce and Forrest.[88] He however conceded his argument about Bruce and Forrest was hidden within his report. The Tribunal takes his answer to mean that an argument which would support not increasing the rate is not in his report.[89]
(c)He adhered to his view that the cost of parking facilities should not be included in the Before Value[90] even after it was demonstrated that Mr McInerny, his superior at the ACTVO, included it in his valuations LVC parking costs.[91]
(d)As to a club at the Property he again asserted that the Gungahlin site had gaming rights attached to it due to the terms of the purchase by the developer which made it more valuable than the Property which was unlikely to obtain such rights.[92] However, cross examination in relation to the purchase contract reveals no reference to the gaming rights. He conceded that if there never was a term of the contract that allowed for the transfer of gaming rights to Gungahlin then his opinion that that that site was superior to the Property must change and he would need to reconsider his opinion that a rate of $225/m² for a club at the Property was appropriate. He ultimately agreed that there needed to be an adjustment, but he was not able to say by how much.[93]
(e)As to the split between the hotel and the club he adopted the existing size of the club because he assumed it would be appropriate but agreed that that was not the only way that the Property could be configured and that the size of the club could be reduced there by increasing the room size of hotel rooms from 65.5m² to 75m².[94] This all suggests a significant degree of flexibility is available to a developer who was building a club and hotel at the Property. He conceded that his approach as reflected in his evidence was not the only way and such an analysis was not in his statement of evidence.[95]
(f)After Value: He was cross examined about his reliance on 1/70 Lyons which was a sale six months after the date of the Notice of Decision and conceded that the market at that time was “different” although he said he took that into account and didn’t need to make any adjustment to his opinion. Importantly he did not specify the nature of the “different” market. He conceded however, that there are differences between 1/70 Lyons and the Property including Lyons being a larger site with fewer units, a different density, less restrictive building requirement including that the Property has a requirement to build up to the fifth level before subdivision can occur, that 1/70 Lyons is held under a holding lease which permits considerable flexibility and that 1/70 Lyons does not have the same zoning.[96] He conceded that there are considerable differences between the Property and 1/70 Lyons. although he said he had taken the differences into account.
(g)As to 2/200 Belconnen he had added $9,000,000 to the purchase price for the public car park obligation which had been imposed on the developer.[97] He was challenged as to why it is appropriate to include it and he said that the developer would have discounted the price he had paid for the site because of that obligation.[98] His view was that the return from the carpark would be small and it could not provide a return until it was built.[99] He also conceded that he had not assessed the value of the income of the car park against its cost. He also agreed he had not assessed the commercial component of 2/200 Belconnen (unlike Ms Byrne) but he stated he had spoken to other valuers about it and they told him the commercial component was not significant at the time of the sale. He conceded he had not seen any valuers’ reports on this nor had he spoken to the actual developer.[100] He admitted he had made no deduction for the commercial component of that site but declined to agree that the failure to make any adjustment did not mean that that 2/200 was not comparable with the Property. However, he then went on to say it was not a comparable sale. We note he had earlier said that he found 2/200 Belconnen a really difficult sale to analyse.[101] He also agreed that he needed to make adjustments to 2/200 Belconnen to make it comparable which he failed to do because he found it impossible. He sought to explain this by saying he did not have the necessary information, yet he included it in his witness statement. Further, he agreed that its inclusion in his evidence caused a distortion of the price per residential unit but sought to explain this by saying it was not the primary comparable sale he relied on.[102]
(h)He was also asked about his reliance on 34 and 37/52 Belconnen which was a site with 474 units less than the Property and which had mountain views and was a much smaller development, but he declined to concede that it was in a different market.[103] He also conceded he made no mention of his consideration of the planning issues of setbacks and landscaping in his witness statement and that his calculation of site density made no allowance for these issues.[104]
[84] Transcript of proceedings 30 April 2020 pages 434-435
[85] Transcript of proceedings 30 April 2020 page 437
[86] Transcript of proceedings 30 April 2020 pages 440-441
[87] Transcript of proceedings 30 April 2020 pages 445- 450
[88] Transcript of proceedings 30 April 2020 page 450, line15, page 462, line 30 and page 464, lines 5-10
[89] Transcript of 30 proceedings April 2020 pages 450-451
[90] Transcript of proceedings 30 April 2020 page 453, line 15, page 464, line 20
[91] Transcript of proceedings 30 April 2020 pages 454-456, page 464, line 30 and page464, lines 45-65
[92] Transcript of proceedings 30 April 2020 page 469, line 5
[93] Transcript of proceedings 30 April 2020 pages 469-471
[94] Transcript of 30 proceedings April 2020 page 474, lines 5-10
[95] Exhibit R32
[96] Transcript of proceedings 30 April 2020 pages 494-495
[97] Transcript of proceedings 30 April 2020 page 496, line 15
[98] Transcript of proceedings 30 April 2020 pages 496-497
[99] Transcript of proceedings 30 April 2020 pages 497, line 20 and page 499, line 15
[100] Transcript of proceedings 30 April 2020 page 500
[101] Transcript of proceedings 30 April 2020 pages 502-504
[102] Transcript of proceedings 30 April 2020 pages 504- 505
[103] Transcript of proceedings 30 April 2020 pages 505-506
[104]Transcript of proceedings 30 April 2020 page 514, line 40

We will remit the decision back to the respondent to determine an amount, if any, for this period of time to be applied to the revised sale amount of $20,989,593.
Downwards adjustments of After Value of the Property
For the reasons expressed earlier the lease variation clause 2 (c) is to be taken into account and therefore a reduction to the unit rate is to be made for these conditions to the After Value.[157] The Commissioner says that Mr Pilat’s discount of 10% most accurately reflects any burden imposed by the condition. We note Mr Heaton also adopts 10%. The adjusted sale price after the ACTVO has applied an amount for time is to be discounted by 10% to provide the assessed value that the rate per unit is to be calculated from for the After Value of the Property.
[157] Exhibit A11 page 126

Tribunal Orders

The Tribunal Orders:
1.The Notice of Assessment of the Commissioner dated 8 April 2019 and to the extent necessary the Refusal of the Commissioner (being the deemed refusal pursuant to section 277E and section 277 of the Planning Act) is set aside and substituted with a decision that:
(a) Remits the determination of the After Value of the Property for reconsideration by the Commissioner upon the following conditions:
(i)The Before Value of the Property is $6,656,500.
(ii)The Commissioner is to assume 800 residential apartments will be built on the Property in determining the After Value as at 28 September 2018.
(iii)The sale price of the property 2/200 Belconnen of $20,989,593 is to be used by the Commissioner in determining the After Value but adjusted by the Commissioner for movements in property values in the ACT property market from the date of sale of 2/200 Belconnen being June 2015 to the date of the Notice of Decision being 28 September 2018.
(iv)The After Value is then to be discounted by 10% to allow for Condition 2(c).
2.Subject to the above, the Commissioner is to issue a new Notice of Assessment pursuant to section 276D(i) of the Planning and Development Act 2007.
………………………………..
Senior Member G Turner
For and on behalf of the Tribunal

**************
Amendments

The orders have been set aside and substituted as of 25 March 2021. Please refer to annexure A for the reasons for these amendments:

Annexure A

On 30 September 2020 the Tribunal made orders based on its reasons for its orders[158] which set aside not only the deemed refusal of the Commissioner for ACT Revenue (Commissioner) (respondent) pursuant to Section 277E and Section 277 of the Planning and Development Act 2007, but also the Notice of Assessment of the respondent dated 8 April 2019, whereby the respondent had determined the Before and After Value of the applicant’s property.
[158] See NG Woden Pty Limited CAN 620839834 v Commissioner for ACT Revenue [2020] ACAT 77
By letter dated 27 January 2021 from the respondent’s solicitor, which was forwarded to the Tribunal with the consent of the applicant’s solicitor, the respondent raised an issue as to the jurisdiction of the Tribunal to set aside the Notice of Assessment on the basis that the Tribunal only had power to set aside the decision under review, being the deemed refusal.
The respondent’s solicitor asked the Tribunal to exercise its power under sections 63 (on the basis that there was a clerical or accidental slip or omission by the Tribunal) and/or 56(c)(iii) (on the basis that there were extraordinary circumstances which made it appropriate to amend or set aside the order of the Tribunal) of the ACT Civil and Administrative Tribunal Act 2008.
The form of the order made on 30 September 2020 was based on the reasons for decision and orders of this Tribunal in HTI Watson Pty Limited v Commissioner for ACT Revenue,[159] and upon the relief sought by the applicant in its Application for Review of a Decision, filed 23 October 2019.
[159] [2020] ACAT 30
Having considered the submissions of the respondent, which were made with the consent of the applicant, the Tribunal now has sufficient doubt about the extent of its jurisdiction and it has determined that it is appropriate to set aside the orders made 30 September 2020 and make alternative orders.
A draft order was prepared by the Tribunal and forwarded to the parties and both parties have now indicated their consent to the Tribunal making such an order in light of the Tribunal’s reasons dated 30 September 2020.
In light of that consent, the Tribunal makes the following orders:
1.Pursuant to Section 56 of the ACT Civil and Administrative Act 2008 the Tribunal sets aside the orders made 30 September 2020 and in lieu makes the following orders:
2.The reconsideration decision deemed to have been made on 26 September 2019 is set aside.
3.The matter is remitted to the Commissioner for further determination of the lease variation charge with the following directions:
(i)      The V2 Before Value of Block 17, Section 3, of the Property as at 28 September 2018 is $6,656,500.
(ii)     For the purpose of determining the V1 After Value of the Property as at 28 September 2018, the Commissioner is to assume 800 residential apartments can be built on the Property.
(iii)   The sale price of Block 2 Section 200 Belconnen in June 2015 of $20,989,593 is to be used by the Commissioner in determining the V1 After Value of the Property but adjusted by the Commissioner for movements in property values in the ACT property market from the date of sale of 2/200 Belconnen being June 2015 to 28 September 2018 being the date of the Notice of Decision dated 28 September 2018.
(iv)   The After Value is then to be discounted by 10% to allow for Condition 2(c) of the Notice of Decision dated 28 September 2018.

HEARING DETAILS

FILE NUMBER:	AT 99/2019
PARTIES, APPLICANT:	NG Woden Pty Ltd ACN 620 839 834
PARTIES, RESPONDENT:	Commissioner for ACT Revenue
COUNSEL APPEARING, APPLICANT	Mr B Buckland
COUNSEL APPEARING, RESPONDENT	Mr P Walker SC
SOLICITORS FOR APPLICANT	Mark Flint
SOLICITORS FOR RESPONDENT	ACT Government Solicitor
TRIBUNAL MEMBERS:	Senior Member G Turner (Presiding) Senior Member G Trickett
DATES OF HEARING:	11-13 February 2020 29-30 April 2020