Warwick Farm Central Pty Ltd v Valuer General

[2024] NSWLEC 25

Land and Environment Court

New South Wales

Medium Neutral Citation:

Warwick Farm Central Pty Ltd v Valuer General [2024] NSWLEC 25

Hearing dates:

23 to 27 October 2023

Date of orders:

27 March 2024

Decision date:

27 March 2024

Jurisdiction:

Class 3

Before:

Pritchard J

Decision:

In proceedings 2022/256791, 2022/256815 and 2022/256816:

(1) The appeal is upheld.

(2) The Valuer-General’s decision dated 30 June 2022 disallowing the appellant’s objection to the Valuer-General’s valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is revoked.

(3) The Valuer-General’s decision dated 30 June 2022 disallowing the appellant’s objection to the Valuer-General’s valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2020 is revoked.

(4) The Valuer-General’s decision dated 30 June 2022 disallowing the appellant’s objection to the Valuer-General’s valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive Warwick Farm, NSW for the valuing year 1 July 2021 is revoked.   

(5) The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is $18,312,500.

(6) The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2020 is $18,312,500.

(7) The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2021 is $22,890,625.

Catchwords:

VALUATION OF LAND – appeals against land valuations by Valuer-General – s 6A(1) of Valuation of Land Act 1916 (NSW) – limited relevant comparable sales

Legislation Cited:

Australian Jockey Club Act 1873 (NSW) (repealed)

Sydney Water Act 1994 (NSW) s 44

Valuation of Land Act 1916 (NSW) ss 4, 6A, 35C, 37, 40

Liverpool Development Control Plan 2008

Liverpool Local Environmental Plan 2008

Standard Instrument (Local Environmental Plans) Amendment (Land Use Zones) Order 2021

State Environmental Planning Policy (Housing) 2021

State Environmental Planning Policy (Infrastructure) 2007 (repealed)

Cases Cited:

Adams v Valuer General [2014] NSWLEC 1005

Almona Pty Ltd v Roads and Traffic Authority of New South Wales (2008) 160 LGERA 375; [2008] NSWLEC 112

Anastasios Prilis v Valuer-General [2022] NSWLEC 11

Benfer v Chief Executive, Department of Lands (Land Court of Qld, 29 Oct 1993, unrep)

Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1

Bosnakis v Valuer-General (2017) 228 LGERA 320 [2017] SASC 158

Brisbane City Council v The Valuer-General for the State of Queensland (1978) 140 CLR 41; [1978] HCA 40

Caltex Oil (Australia) Pty Ltd v Chief Executive, Department of Lands (1996-1997) 16 QLCR 435

CFS Managed Property Limited v Valuer-General (2016) 215 LGERA 226; [2016] NSWLEC 2

CommonwealthCustodial Services Ltd (as Trustee for Burwood Trust Fund) v Valuer-General (NSW); Trust Company of AustraliaLtdvValuer-General(NSW) (2006) 148 LGERA 38; [2006] NSWLEC 400

Gollan v Randwick Municipal Council [1961] AC 82; (1960) LGRA 275; (1960) 34 ALJR 253; [1960] 3 All ER 449

Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225

Kemp Investments (NSW) Pty Ltd and Flaherty v Valuer-General (2013) 195 LGERA 1; [2013] NSWLEC 18

Knapp v Valuer General [2004] NSWLEC 684

Kogarah Town Centre Pty Limited v Valuer General (No 3) [2014] NSWLEC 1124

Leichhardt Council v Roads and Traffic Authority of NSW (2006) 149 LGERA 439; [2006] NSWCA 353

Leppington Pastoral Company Pty Ltd v Valuer General [2010] NSWLEC 1023

Lewis Berger and Sons (Queensland) Pty Limited (1979) 6 QLCR 95

Marroun v Roads and Maritime Services [2012] NSWLEC 199

Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8

Norwest City Pty LtdATF Norwest City v Valuer General [2018] NSWLEC 50

Olefines Pty Ltd v Valuer-General of New South Wales (2018) 228 LGERA 407; [2018] NSWLEC 18

Perisher Blue Pty Ltd as Trustee for the Snow Trust v Valuer General [2023] NSWLEC 41

Port Macquarie West Bowling Club Ltd v The Minister (1972) 2 NSWLR 63; (1972) 28 LGRA 23

Raynbird v Valuer-General (1980) 7 QLCR 106

Richard Capuano v Roads and Maritime Services [2018] NSWLEC 59

Royal SydneyGolfClubvFederalCommissionerofTaxation (1955) 91 CLR 610; [1955] HCA 13

Scambiaterra v Valuer General [2003] NSWLEC 339

Shuang Wang v Valuer General [2021] NSWLEC 74

Smith v Eurobodalla Shire Council [2005] NSWCA 89

SNS Pty Ltd v Roads and Maritime Services (NSW) (2018) 232 LGERA 224; [2018] NSWLEC 7

Spencer v The Commonwealth of Australia (1907) 5 CLR 418; [1907] HCA 82

Tenstat v Valuer General; Woolworths Limited v Valuer General [2012] NSWLEC 1361

Toohey’s Ltdv The Valuer General (NSW) [1925] AC 439; (1924) 7 LGR (NSW) 48; (1924) 25 SR (NSW) 75

Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer General (No3) (2011) 182 LGERA 118; [2011] NSWLEC 85

Trust Co Ltdv Minister Administering the Crown Lands Act 1989 (2012) 211 LGERA 158; [2012] NSWLEC 73

Trust Company ofAustraliaLtdvValuer-General (2007) 154 LGERA 437; [2007] NSWCA 181

Valuer General v Marano (1978) 5 QLCR 194

Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1; [2016] NSWCA 48

Yaglan Investments Pty Ltd v Council of the Shire of Albert (1997) 17 QLCR 331

Texts Cited:

Fricke, Compulsory Acquisition of Land in Australia (2nd ed, Law Book Co, 1982)

Hyam, The Law Affecting Valuation of Land in Australia (6th ed, Federation Press, 2020)

Newton & Conolly, Land Acquisition (7th ed, LexisNexis Butterworths, 2017)

Category:

Principal judgment

Parties:

Warwick Farm Central Pty Ltd (Appellant)
Valuer General (Respondent)

Representation:

Counsel:
R White (Appellant)
R Seiden SC and A Pearman (Respondent)

Solicitors:
Mills Oakley (Appellant)
Crown Solicitor’s Office (Respondent)

File Number(s):

2022/256791; 2022/256815; 2022/256816

Publication restriction:

Nil

JUDGMENT

Introduction

The subject land

Characteristics of the subject land

Development consents

The easement and sewer pipe

Zoning

The statutory valuation task

The comparable sales methodology

Expert evidence

Issues arising from the evidence

Flood engineers

Town planners

Valuers: areas of agreement

Valuers: areas of disagreement

The most likely use of the subject land

The impact of the sewer pipe

Impact of flooding on development costs

Sales evidence and adjustments

The appellant’s closing submissions

AK 1 (19/20) – Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

AK 2 (19/20) – 28-34 Orange Grove Road, Warwick Farm

AK 3 (19/20) – 184 Fifth Avenue, Austral; AK 4 (19/20) - 402-412 Bringelly Road, Austral; AK 1 (2021) – 120-130 Fifth Avenue, Austral

CH 1 (19/20) – 42 Sargents Road, Minchinbury and CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

CH 2 (19/20) – 17 John Hines Avenue, Minchinbury

CH 3 (19/20) – 1 Woodville Road, Granville

CH 4 (19/20) – 5 Melito Court, Prestons

CH 5 (19/20) – 42-46 Alfred Road, Chipping Norton and CH 1 (2021) – 24-40 Alfred Road, Chipping Norton

AK 3 (2021) – 9 Gregory Hills Drive, Gledswood Hills

CH 2 (2021) – 1011-1027 Canley Vale Road, Wetherill Park

The impact of the sewer pipe

Valuer-General’s submissions

Unsafe sales

AK 1 (19/20) – Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

AK 2 (19/20) – 28-34 Orange Grove Road, Warwick Farm

AK 3 (19/20) – 184 Fifth Avenue, Austral and AK 4 (19/20) – 402-412 Bringelly Road, Austral

AK 1 (2021) – 120-130 Fifth Avenue, Austral

Englobo sales and emerging areas

Zoning

Location

Industrial neighbour premium

Data centre premium

Exposure and access to the M4 and M7 motorways

Distance to the CBDs

Configuration

Flooding

Size

Land improvements: benching

Easement

The Valuer-General’s submissions in conclusion

Consideration

Highest and best use

AK 1 (19/20) – Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

AK 2 (19/20) – 28-34 Orange Grove Road, Warwick Farm

AK 3 (19/20) – 184 Fifth Avenue, Austral

AK 4 (19/20) – 402-412 Bringelly Road, Austral

CH 1 (19/20) – 42 Sargents Road, Minchinbury

CH 2 (19/20) – 17 John Hines Avenue, Minchinbury

CH 3 (19/20) – 1 Woodville Road, Granville

CH 4 (19/20) – 5 Melito Court, Prestons

CH 5 (19/20) – 42-46 Alfred Road, Chipping Norton

AK 1 (2021) – 120-130 Fifth Avenue, Austral

AK 3 (2021) – 9 Gregory Hills Drive, Gledswood Hills

CH 1 (2021) – 24-40 Alfred Road, Chipping Norton

CH 2 (2021) – 1011-1027 Canley Vale Road, Canley Vale

Conclusions

Determined land values

Land value for valuation date 1 July 2019

Land value for valuation date 1 July 2020

Land value for valuation date 1 July 2021

Orders

JUDGMENT

Introduction

1. By amended Class 3 applications filed 24 May 2023, Warwick Farm Central Pty Ltd (the appellant), being a person dissatisfied with the Valuer-General’s determination, appeals pursuant to s 37(1) of the Valuation of Land Act (NSW) 1916 (VLA). The appellant challenges the determination by the Valuer-General of the value of land it owns at Lot 1 Governor Macquarie Drive, Warwick Farm, NSW (also known as 240 Governor Macquarie Drive, Warwick Farm, NSW), being Lot 1 in DP 1162276 (the subject land). The relevant valuation dates are 1 July 2019, 1 July 2020 and 1 July 2021 (the valuing years).

2. The appellant seeks that the Valuer-General’s notices of determination given pursuant to s 35C of the VLA decisions of 30 June 2022 disallowing its objections to the valuations of the subject land be revoked.

3. The matter was heard between 23 and 27 October 2023. I thank Acting Commissioner Kempthorne for his considerable assistance. This decision is, of course, my own, the Court acting as judicial valuer.

4. The land values and the land value rates per square metre (/m²) the subject of the Valuer-General’s determinations and the land values and the land value rates /m² contended for by the appellant are as follows:

Valuing year	Date valuation made	Valuer-General’s land value	Valuer-General’s land value rate $/m2	Appellant’s land valuation	Appellant’s land value rate $/m2
1 July 2019	11 August 2019	$19,800,000	676	$9,495,000	324
1 July 2020	10 August 2020	$19,800,000	675	$9,495,000	324
1 July 2021	20 August 2021	$25,100,000	857	$13,185,000	450

5. As appears from the table above, the issued land values under challenge for the 2019 and 2020 valuing years, and the 2021 valuing year are $19,800,000 and $25,100,000 respectively. The appellant contends for approximately half these values in the sum of $9,493,200 for the 2019 and 2020 valuing years and $13,185,000 for the 2021 valuing year. The valuations provided by the Valuer-General’s expert valuer for each of the valuation dates are higher than the issued land values at $24,000,000 for the 2019 and 2020 valuing years, and $30,300,000 for the 2021 valuing year.

6. On an appeal under s 37(1) of the VLA, the Court may pursuant to s 40(1):

1. confirm or revoke the decision to which the appeal relates,

2. make a decision in place of the decision to which the appeal relates,

3. remit the matter to the Valuer-General for determination in accordance with the Court’s finding or decision.

7. Pursuant to s 40(2), on an appeal, the appellant has the onus of proving the appellant’s case.

8. In summary, the appellant contends that the land values determined by the Valuer-General are too high, and that the Court should revoke the decisions of the Valuer-General for each of the valuing years and replace them with the land values contended for by the appellant.

9. Following finalisation of evidence from town planners and flood engineers, the contest between the parties has essentially reduced to a dispute between valuers as to the relevance of the competing sales for which each contends and the adjustments to be made to those sales for the purposes of direct comparison to the subject land. There are no common sales. The town planners and flood engineers were not required for cross-examination.

10. The Court has determined that the Valuer-General’s valuations of the subject land were too high.

The subject land

Characteristics of the subject land

11. The subject land is 29,300 m² (2.93 ha) of vacant, generally level land. It is of irregular shape, an island site with 4 street frontages. The 4 street frontages are Warwick Street (northern boundary), Manning Street (western boundary), Munday Street (southern boundary) and Governor Macquarie Drive (eastern boundary). A portion of the northern frontage is directly adjacent to the Hume Highway, with a signalised intersection left and right onto the Highway from Governor Macquarie Drive. It is adjacent to the Warwick Farm train station, and a distance of 1.5 kilometres (kms) to the Liverpool central business district (CBD).

12. The dimensions of the subject land (taken from DP 1162276) are as follows:

Northern boundary (Hume Highway and Warwick Street)

194.73m

irregular

Western boundary (Manning Street)

55.27m

Southern boundary (Munday Street)

287.66m

Splay corner (Munday Street and Governor Macquarie Drive)

13.91m arc

Eastern boundary (Governor Macquarie Drive)

183.34m

irregular

Splay corner (Governor Macquarie Drive and Hume Highway)

16.71m arc

13. Warwick Farm Racecourse is to the east of the subject land, and it is adjoined by residential zoned land to the west and south (together with horse stables to the south).

Development consents

14. On 28 February 2013, Liverpool City Council (Council) approved a development application for a Masters Home Improvement Centre (the 2013 development consent). The 2013 development consent was never taken up, and lapsed on 28 February 2018.

15. An aerial photograph of the subject land, showing its 4 street frontages, is extracted below:

16. The Valuer-General’s town planning and flooding experts refer to a development consent granted in relation to the subject land on 5 January 2023, and therefore some two years after the last of the 3 dates the valuations were made (the 2023 development consent). The relevant development application was lodged on 29 September 2021, again after the last of the dates the valuations were made. The Court is satisfied that the extent to which, if at all, the development consent adds value to the subject land is to be disregarded for the purposes of s 6A of the VLA. ^[1]

The easement and sewer pipe

1. Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1; [2016] NSWCA 48 at [20] (Basten JA).

17. The subject land is burdened by easement No J182313, for sewage purposes, dated 14 January 1963 (the easement), in favour of what was at the relevant time the Metropolitan Water Sewerage and Drainage Board (now Sydney Water).

18. The easement is 3.66m wide, approximately 146m in length, and is in the south-eastern portion of the land. It severs the land into two portions with the smaller portion of the severed land to the eastern side of the easement.

19. The easement is shown on DP 1162276 to run at an angle, roughly along the length of Governor Macquarie Drive from the Hume Highway to Munday Street. It traverses the subject land about 51.25m west from the corner of Munday Street and Governor Macquarie Drive to a point just south of the corner of Governor Macquarie Drive and Hume Highway. It provides Sydney Water with the right to construct and maintain works for sewerage purposes and prohibits the appellant from erecting, constructing or placing any building or structure over the easement.

20. The appellant contended that the subject land is traversed north to south by a large rising sewer main with a diameter of 375mm. Whilst pursuant to s 6A of the VLA the subject land is to be valued unencumbered, the authorities recognise that structures on the land which decrease the value of the land compared with its natural or virgin state are not to be disregarded. ^[2] Accordingly, the appellant submitted, the presence of the sewer main bisecting the subject land, and its impact on the development potential or costs of developing the subject land are to be taken into account in assessing the land values. ^[3] The appellant contended that a 10% adjustment from the comparable sales not affected by a rising sewer main was appropriate to reflect the risks and additional cost burden associated with relocating the rising sewer main.

    2. Trust Company of Australia v Valuer-General (2007) 154 LGERA 437; [2007] NSWCA 181 (Trust Company of Australia) (Beazley, Ipp and Campbell JJA).

    3. Being a “physical disability” on the land: Scambiaterra v Valuer General [2003] NSWLEC 339 (Scambiaterra) at [40] (Moore C). In any event, the appellant submitted, if the sewer were to be regarded as an improvement, it would be a “land improvement” as it is an “underground drain”, and thus could not be disregarded under s 6A(1) of the VLA.

21. The Valuer-General contended that whilst the easement is the site of a planned rising sewer main, the appellant bears the onus of proving that there is in fact such a sewer main, and that it should be taken into account in the valuations. Further, the Valuer-General contended that in the event that the appellant discharges its onus of proving that a rising sewer main has been installed, there are statutory covenants in favour of Sydney Water under s 44 of the Sydney Water Act 1994 (NSW) (Sydney Water Act).

Zoning

22. At each of the valuing years, the Liverpool Local Environmental Plan 2008 (LLEP) applied to the subject land which was zoned B5 Business Development. The objectives of the B5 zone and permissible uses as at the valuing years were as follows:

Zone B5 Business Development

Objectives of zone

To enable a mix of business and warehouse uses, and specialised retail premises that require a large floor area, in locations that are close to, and that support the viability of, centres.

To maintain the economic strength of centres by limiting the retailing of food and clothing.

To provide for a larger regionally significant business development centre in a location that is highly accessible to the region.

To ensure a reasonable concentration of business activity.

2. Permitted without consent

Nil

3. Permitted with consent

Building identification signs; Business identification signs; Car parks; Centre-based child care facilities; Community facilities; Environmental facilities; Environmental protection works; Flood mitigation works; Food and drink premises; Garden centres; Hardware and building supplies; Hotel or motel accommodation; Landscaping material supplies; Light industries; Liquid fuel depots; Office premises; Oyster aquaculture; Passenger transport facilities; Places of public worship; Plant nurseries; Public administration buildings; Pubs; Recreation areas; Recreation facilities (indoor); Recreation facilities (outdoor); Respite day care centres; Restaurants or cafes; Roads; Specialised retail premises; Storage premises; Tank-based aquaculture; Timber yards; Vehicle sales or hire premises; Warehouse or distribution centres

4. Prohibited

Pond-based aquaculture; Any other development not specified in item 2 or 3

23. Residential accommodation was prohibited in the B5 Business Development zone.

24. The key planning controls as at the valuing years were agreed between the parties’ town planners and are summarised in the table below:

1 July 2019	1 July 2020	1 July 2021
Zoning	B5	B5	B5
Height of building	Maximum permissible 15m	Maximum permissible 15m	Maximum permissible 15m
Floor space ratio	Maximum permissible 0.75:1	Maximum permissible 0.75:1	Maximum permissible 0.75:1
Lot size	Minimum permissible 2 ha	Minimum permissible 2 ha	Minimum permissible 2 ha
Flood prone	Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood.	Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood.	Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood.
Bushfire	n/a	n/a	n/a

25. Part 6 of the Liverpool Development Control Plan 2008 (LDCP) provided as follows in relation to B5 zones (emphasis added):

The Business Development zone is intended for use by bulky goods premises and other uses that require large floor plates which have limited opportunity to locate within commercial centres. B5 zones Business Development zones are located in areas of high accessibility to the arterial road network.

The statutory valuation task

26. In relation to land value, s 6A of the VLA provides as follows:

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

(2) Notwithstanding anything in subsection (1), in determining the land value of any land it shall be assumed that—

(a) the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates, and

(b) such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used,

but nothing in this subsection prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that the improvements, if any, other than land improvements, referred to in subsection (1) had not been made…

27. The valuer has to consider what the land would fetch as at the date of the valuation as if the improvements made had not been made. As Lord Dunedin said in Toohey’s Ltd v The Valuer General (NSW) ^[4] of the task of the valuer (at 443) (emphasis added):

Now, what he has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made. Words could scarcely be clearer to show that the improvements were to be left entirely out of view. They are to be taken, not only as non-existent, but as if they never had existed. It is, therefore, to approach the question from a completely wrong point of view to begin with a valuation which takes in the improvements and then proceed by means of subtraction of a sum arrived at by an independent valuation in order to find the required figure. What the Act requires is really quite simple. Here is a plot of land; assume that there is nothing on it in the way of improvement; what would it fetch in the market? It will be observed that the value is not what has been sometimes designated by the expression “prairie value.” The land must be taken as it exists at the date of the valuation.

4. [1925] AC 439; (1924) 7 LGR (NSW) 48; (1924) 25 SR (NSW) 75 at 76 (Lord Dunedin).

28. There are no relevant improvements to the subject land here, except for boundary fencing. It was not suggested by the Valuer-General that the rising sewer main (if it exists) is an improvement, in particular that it is an “underground drain” within the meaning of s 4 of the VLA.

29. Section 6A(1) of the VLA requires, at each valuing year, the postulation of a notional sale. This notional sale is one that is assumed to take place in a market, and the seller would conclude the sale for the highest price it could obtain in that market: Trust Company of Australia at [32] (Campbell JA) (Beazley and Ipp JJA agreeing). In this way, the concept of the highest and best use comes to apply through the notional sale that s 6A requires to occur. ^[5] The notional sale occurs between a hypothetical willing purchaser and a not unwilling vendor. As Griffith CJ said in Spencer v The Commonwealth of Australia (Spencer v The Commonwealth) at 432:^[6]

…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 not an unwilling vendor would come together…

5. Trust Company of Australia at [32]..

6. (1907) 5 CLR 418 at 432; [1907] HCA 82 (Griffith CJ).

30. It is the hypothetical, unencumbered fee simple that is to be valued, “the fee simple as the highest estate unencumbered and subject to no conditions” restructuring the use or enjoyment of the land: Royal Sydney Golf Club v Federal Commissioner of Taxation (Royal Sydney) at 623 (Dixon CJ, McTiernan, Webb, Fullagar, Kitto JJ). ^[7] The purpose behind the fee simple being taken as an unencumbered fee simple (insofar as the provision is found in a taxing statute) was identified in Royal Sydney at 623 as follows:

It seems evident that the fee simple mentioned must be taken as free from encumbrances which, if they impaired the value of the estate, nevertheless operated to confer upon some other person an estate or interest in land. Were it otherwise the taxable value of the land would be diminished but the correlative estate or interest would not come into tax unless by some chance it were an interest falling under some specific provision imposing liability.

See also Gollan v Randwick Municipal Council (Gollan) at 100, 101 on appeal from the Supreme Court of NSW. ^[8]

7. (1955) 91 CLR 610; [1955] HCA 13.

8. [1961] AC 82; (1960) LGRA 275; (1960) 34 ALJR 253; [1960] 3 All ER 449; confirmed in Broken Hill Pty Ltd v Valuer General (1969) 70 SR (NSW) 169; see also Perilya Broken Hill v Valuer General (2015) 10 ARLR 235 at 247, 254; [2015] NSWCA 400 (Leeming JA).

31. As noted previously, pursuant to s 40(2) of the VLA, the appellant has the onus of proving its case, relevantly, that the issued land values for each of the valuing years are too high. ^[9] If the appellant does not discharge its onus, the appeal must be dismissed and the issued statutory values confirmed. ^[10]

    9. Perisher Blue Pty Ltd as the Trustee for the Snow Trust v Valuer General (NSW) [2023] NSWLEC 41 (Perisher Blue) at [76] and [86] (Duggan J); Kogarah Town Centre Pty Limited v Valuer General (No 3) (Kogarah) [2014] NSWLEC 1124 at [77] (Moore SC and Brown C); Olefines Pty Ltd v Valuer-General of New South Wales (Olefines) (2018) 228 LGERA 407; [2018] NSWLEC 18 at [151]-[152] (Molesworth AJ).

    10. Kogarah at [86].

32. Accordingly, the value of the estate in fee simple is taken as involving the hypothesis of a “fee simple unencumbered and subject to no conditions” restricting the use or enjoyment of the land: Royal Sydney at 623. It is the hypothetical “absolute or pure title” that is to be valued: Gollan at 101.

33. The Valuer-General identified two “qualifiers” to the above proposition:

1. The first qualifier concerns the distinction between “a public law affecting the enjoyment of land and a restriction of title”: Royal Sydney at 624. Where there is an encumbrance or restriction to a specific parcel, or a law that affects an area (even a small area) chosen “independently of all questions of title or ownership” that control the use of the land, the restriction is ignored: Royal Sydney at 624. The Sydney Water Act is not such a public law as it applies specifically and peculiarly when there are assets of Sydney Water in situ, and thus is not a law of general application.

2. The second qualifier concerns the state of the land. The land is to be valued in its actual, rather than its notional state: Brisbane City Council v The Valuer-General for the State of Queensland (Brisbane City Council)^[11] at 50 and 57 (Gibbs J). Accordingly, as the Valuer-General submitted in opening, where there is a physical disability such as a body of water, this may be taken into account. ^[12] Where there is a man made disability (a worsement) this too might be taken into account. ^[13]

   11. (1978) 140 CLR 41; [1978] HCA 40.

   12. Brisbane City Council at 50 and 55 (Gibbs J) (Stephen, Mason, Murphy and Aickin JJ agreeing); Commonwealth Custodial Services Ltd (as Trustee for Burwood Trust Fund) v Valuer-General (NSW) (2006) 148 LGERA 38; [2006] NSWLEC 400 (Commonwealth Custodial Services) at [49] (Biscoe J); Trust Company at [28] (Campbell JA) (Beazley and Ipp JJA agreeing); Scambiaterra at [39]-[40] (Moore C).

   13. Commonwealth Custodial Services at [69]-[76] (Biscoe J); Trust Company of Australia at [17] and [68] (Campbell JA, Beazley and Ipp JJA agreeing).

34. In Brisbane City Council, Gibbs J held that it would be appropriate to have regard to disabilities affecting the land.

35. However, the Valuer-General submitted, even if there is a rising sewer main within the subject land, it does not here negatively affect the land in the requisite sense, requiring it to be taken into account.

36. The Valuer-General referred to Lewis Berger and Sons (Queensland) Pty Ltd[14] (Lewis Burger) where the Land Court (Mr Barry) at 101 found that “the easement as it attaches to the servient tenement [was] an encumbrance” and was to be “disregarded in ascertaining the unencumbered value of the subject land.”

    14. (1979) 6 QLCR 95.

37. In closing, the appellant submitted that the Court, exercising its Class 3 jurisdiction, is not obliged to act only on the basis of evidence adduced by expert valuers who appear as witnesses. As judicial valuer, the Court is entitled to reject the whole of the expert evidence and, drawing on the experience of the Court, do as best as it can to identify an appropriate level of discount or an appropriate quantum of adjustment to the comparable sales: Leichhardt Council v Roads and Traffic Authority of NSW. ^[15]

    15. (2006) 149 LGERA 439; [2006] NSWCA 353 at [83] (Spigelman CJ); Norwest City Pty Ltd ATF Norwest City v Valuer General [2018] NSWLEC 50 (Moore J).

The comparable sales methodology

38. Notwithstanding the absence of any common sales, the parties were in agreement that the appropriate valuation methodology was the direct comparison method based on an analysis of comparable land sales, the use of comparable sales being preferred as the primary method of valuation. It is long established that, ordinarily, the best evidence of the market value of land is that of comparables.

39. In Tenstat v Valuer General; Woolworths Limited v Valuer General ^[16] at [35]-[43], Parker AC referred to the direct comparison of sales evidence approach as the conventional method of valuation (emphasis in original), and identified the four steps in the process of undertaking a valuation using comparable sales evidence:

    16. [2012] NSWLEC 1361 (Parker AC); applied in SNS Pty Ltd v Roads and Maritime Services (NSW) (2018) 232 LGERA 224; [2018] NSWLEC 7 at [123] (Pain J). See also Adams v Valuer General [2014] NSWLEC 1005 (Parker AC).

35. It is well established that, if comparable sales are available, the direct comparison of sales evidence approach is the conventional method of valuation (Graham Trilby Pty Ltd v Valuer General [2009] NSW LEC 1087 at 41(Trilby); Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 at 156; Riverbank Pty Ltd v Commonwealth (1974) 48 AJLR 483 at 484; Marroun v Roads and Maritime Services [2012] NSWLEC 196 at 196 (Marroun)).

36. The process of undertaking a valuation using comparable evidence comprises several steps, including the:

a accumulation;

b analysis;

c adjustment; and

d application

of potentially genuinely comparable sales (Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73 (Trust Company); Marroun, 197).

37. A Court depends upon the established expertise of valuer witnesses called on both sides of the case (Marroun, 197).

38. As Sugerman J said in Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1, at 18-19:

“The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant.”

39. The accumulation of potentially genuinely comparable sales seeks to identify and establish a pool of relevant comparable sales from which information may be deduced concerning the value of the subject property (Trust Company, 110 and 111; Marroun, 198).

40. Generally the competing parties produce lists which the Court must sift to identify some which are “truly comparable”, or a “reasonably representative” sample and “relevant and sufficient in volume” (Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111, at 121).

41. Where the comparable sales differ in substantial ways from the subject property, a process of reasoning is required to establish their utility or otherwise (Leichhardt Municipal Council v Seatainer Terminals (1981) 48 LGRA 409, at 414).

42. In Brewarrana v Commissioner of Highways (No 2) 6 SASR (Brewarrana) at page 551, Wells J observed:

“there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not.”

43. Further, Wells J went on to observe that:

“The evidence in this case suggests strongly to my mind that, at the initial stages, a valuer will almost certainly look at all known sales in potentially relevant areas, if for no other reason than to discern patterns of prices and changes in price levels over important periods.”

40. In Richard Capuano v Roads and Maritime Services (Capuano),^[17] Robson J at [13]-[19] summarised the widely accepted methodology of the comparable sales approach. That methodology, using comparable sales evidence, is undertaken in four steps: accumulation, analysis, adjustment and application:

    17. [2018] NSWLEC 59; referred to in Shuang Wang v Valuer General [2021] NSWLEC 74 at [19] (Pain J).

13. It is generally accepted that, insofar as there are comparable properties available, being sales of properties sufficiently similar to the subject property as to allow a comparison to be made between them, the conventional valuation method is the comparable sales approach. The manner in which that method should be applied is now well-known: River Bank Pty Ltd v Commonwealth (1974) 4 ALR 651; (1974) 31 LGRA 244 at 652; Graham Trilby Pty Ltd v Valuer-General [2008] NSWLEC 217 at [27]; Graham Trilby Pty Ltd v Valuer-General [2011] NSWLEC 68 at [24]; Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]; New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 (‘Cremation Company’) at [84]-[88] and [97]-[104].

14. The accepted methodology for the comparable sales approach is that it be undertaken in four steps, being accumulation, analysis, adjustment, and application: Constantine v Blacktown City Council (No 2) [2016] NSWLEC 81 at [100] (Moore J); Hoy v Coffs Harbour City Council [2015] NSWLEC 128 at [83] (Pain J) (leave to appeal this judgment was refused in Hoy v Coffs Harbour City Council [2016] NSWCA 257; (2016) 281 LGERA 411 at [61] (Bathurst CJ, with Simpson and Payne JJA agreeing)); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (No 6) [2015] NSWLEC 18 at [344] (Pain J); Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [197] (Sheahan J and Parker AC) (‘Marroun’) (affirmed on appeal in Marroun v Roads and Maritime Services [2013] NSWCA 358; (2013) 211 LGERA 391 at [75] (Tobias AJA, with Basten and Gleeson JJA agreeing)); Cremation Company at [99].

15. First, the valuer (which includes the Court acting as valuer on appeal) is to accumulate comparable properties. In Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8, McHugh, Gummow, Kirby, Hayne and Callinan JJ commented at [18] that the “sales to be treated as comparable sales need to be truly comparable”, although they added that the Court should not be “unreasonably selective”.

16. Secondly, the valuer should analyse those comparable sales. This often involves converting the value of those sales into another measurement that can be easily compared: Marroun at [201] (Sheahan J and Parker AC).

17. Thirdly, the valuer (judicial or otherwise) should adjust those properties it considers comparable to create equivalence with the unimproved subject property. I note the comments of Biscoe J in Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]:

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

18. Fourthly, the valuer should apply the comparable sales approach to determine a value of the subject property based on the adjusted values of the comparable properties.

19. Although there has been some judicial debate, it is now accepted that the process of making explicit adjustments for differences in the valuation method allows the adjustment process to be logical and transparent as opposed to an implicit process comprising a single adjustment that risks rejection for want of transparency: Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73; (2012) 211 LGERA 158 at [115]; Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 at [45]; and Marroun at [203]-[207].

41. In Perisher Blue, Duggan J said at [19] that sales of land with “sufficiently similar characteristics” are to be identified and adjustments made “to render the sales suitably comparable to inform a determination of the unimproved value of the Subject Land.”

42. In Land Acquisition (7^th ed, LexisNexis Butterworths, 2017), Newton & Conolly said at 250:

The onus is upon the party submitting evidence of the value of the land to prove that the sales relied upon are in fact comparable. Having established that prima facie there are grounds for showing comparability, the onus moves to the other party to show that the sales referred to are not comparable. It may be contended that the sales were of an unusual nature, were too distant in time, had different features, were of a ‘forced’ nature, or for some other reason did not amount to a comparable sale or, if they were comparable, they were weak and unconvincing evidence of the resumed land’s market value.

43. In Bingham v Cumberland County Council,^[18] Sugerman J at 18-19 considered the absence of comparable sales evidence as follows:

In the absence of sufficient guidance to be had from sales, the valuer may find himself in a position resembling that to which Lord Romer referred Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer Vizapatam [1939] AC 302 at 312-313 in which he 'will have no market value to guide him, and he will have to ascertain as best he may from the materials before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land'. In these cases that would not be because the land, in terms of Lord Romer's judgment, had 'some unusual, and it may be unique, features as regards its position or its potentialities' but because it derived a certain uniqueness from the character of the provisions and restrictions affecting it and consequences of the affection, which would take a sale of it outside the ordinary run of transactions in otherwise comparable lands and thus preclude direct comparison ... The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in the other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant.

18. (1954) 20 LGR (NSW) 1.

44. In Port Macquarie West Bowling Club Ltd v The Minister,^[19] Else-Mitchell J said at 65-66 in relation to the absence of sales data of comparable lands similarly zoned:

… there were no sales data of comparable lands similarly zoned and each valuer did the best he could with the material available. The board recognized this and stated that it had been faced with an unusual problem, but it referred to the decision of Hardie J. in Park Beach Hotel Pty. Ltd. v. The Minister [(1970) 21 The Valuer 453 and 534] as affording it some guidance. In that case, which concerned the conversion of a lease of open space land under the same provisions of the Crown Lands Consolidation Act, the valuation of the land was reached by taking sales of business sites nearby and making a deduction therefrom to compensate for the zoning restrictions imposed on open space lands under the local Coffs Harbour Planning Scheme Ordinance. What the local land board did in the present matter was to adopt Mr. Walker’s figure of $106,000 as a value on a virtually unrestricted basis and, in reliance on Hardie J.’s decision in the Park Beach Hotel case, deduct 14 per cent therefrom to reduce the price to $91,160. It appears to me that the board was entitled to take this course in the circumstances of the case, because it was common ground that there were no sales of land similarly zoned and that left little option to the valuers but to use sales of land differently zoned, subject to a deduction for such difference as a basis for determining the value or price of the subject land.

19. (1972) 2 NSWLR 63; (1972) 28 LGRA 23.

45. In Smith v Eurobodalla Shire Council,^[20] McClellan AJA said at [121] (Mason P and Santow JA agreeing) of cases where there is no direct market evidence in relation to a particular property (emphasis added):

There is no doubt that the foundation for an expert's opinion must be adequately proved. This will include the evidence necessary to qualify the person as an expert in the relevant field and proof of the facts in respect of which the expert is requested to give an opinion. As Heydon JA acknowledges, this can give rise to difficulties in areas such as land valuation where, in many cases, the available market evidence is limited and the expert's judgment must be based upon accumulated experience. Sometimes when evidence of comparable sales is not available, alternative but less satisfactory methods of valuation may be utilised. (Various methods are discussed in Alan Hyam, The Law Affecting the Valuation of Land in Australia, 3rd ed, p 113ff). But there will be many cases, particularly in relation to sales of “unique” property, where this may not be possible and a valuer will be required to exercise his or her judgment having regard to the objective material which is available, however inadequate. If there is simply no direct market evidence in relation to a particular property, this does not mean that a valuer cannot express an opinion as to its value. As McClure J points out in the Full Court of the Supreme Court of Western Australia case in Western Australian Planning Commission v Arcus Shopfitters (2003) WASCA 295, Makita does not mean that an opinion will be excluded where the objective material is not complete “but the valuer must reveal as far as possible the reasoning process actually employed so as to enable the court to evaluate the evidence and the expert's conclusions.”

20. [2005] NSWCA 89.

46. And in Almona Pty Ltd v Roads and Traffic Authority of New South Wales, ^[21] Jagot J said at [27] of the difficulties which arise where there is a lack of comparable sales (emphasis added):

The site is unusual and the acquisition presents difficulties for the valuer attempting to assess the value of the land taken. I accept that both valuers have attempted to apply methods capable of providing assistance to the Court in all the circumstances. Given the lack of comparable sales, the caution of Wells J in Bronzel v State Planning Authority (1979) 21 SASR 513 at 516; 44 LGRA 34 at 38 is apt. Wells J observed that:

… this Court should be slow to reject any method that, in expert hands, is capable of yielding a result within bounds that are not unreasonable. The limitations of every method must, of course, always be kept clearly in mind. I am of the opinion that the approach likely to result in the most direct and reliable resolution of the outstanding differences between the valuations is to consider the particular features of each valuation that are capable of yielding to adverse criticism.

21. (2008)160 LGERA 375; [2008] NSWLEC 112 (Jagot J).

47. In Fricke, Compulsory Acquisition of Land in Australia (2^nd ed, Law Book Co, 1982), the learned author said at 344:

There are times when no comparable evidence or even near-comparable evidence is available. It is in such instances that the valuer must draw from his experience and knowledge and whilst he should never be an advocate in making his valuation, he may in these circumstances need to become one to sustain it.

48. And in Hyam, The Law Affecting Valuation of Land in Australia (6^th ed, Federation Press, 2020), the learned author said at 137:

…in the absence of directly comparable sales evidence, a valuer, or a court, should look to those sales of lesser comparability, analyse them and make the necessary adjustments in applying them for the purpose of assessing the task at hand. Failing any sales of remotely comparable properties other methods of valuation should be utilised.

Expert evidence

49. The following expert evidence was served:

1. For the appellant:

1. Individual Flood Engineering Report prepared by Mr Samer El Haddad, dated 7 July 2023.

2. Individual Town Planning Report prepared by Mr Robert Chambers, dated July 2023.

3. Individual Valuation Report prepared by Mr Angelo Konidaris, dated 27 September 2023.

2. For the Valuer-General:

1. Individual Flood Engineering Report prepared by Mr Daniel Dhiacou, dated 21 July 2023.

2. Individual Town Planning Report prepared by Mr Paul Grech, dated 21 July 2023.

3. Individual Valuation Report prepared by Mr Cameron Hubbard, dated 27 September 2023.

3. Joint reports:

1. Joint Report of flooding experts filed on 18 August 2023 (the flooding joint report).

2. Joint Report of town planners filed on 18 September 2023 (the joint report of town planners).

3. Joint Report of valuers filed on 16 October 2023 (the joint report of valuers).

4. Supplementary Joint Report of valuers filed on 26 October 2023 (the supplementary joint report of valuers).

Issues arising from the evidence

50. There were some disagreements which remained between the flood engineers and the town planners following joint conferencing. However, they need not be resolved by the Court. That is because the valuers agreed on some key assumptions which rendered those disagreements unnecessary to decide.

51. The principal issue in the case relates to the valuation evidence. Whilst each valuer adopted the comparable sales methodology, there were as previously noted no common sales between them.

52. The evidence is summarised as follows:

Flood engineers

53. Council’s eplanning website identified the subject land in the Medium Flood Risk category at each of the valuing years, as reproduced below. This means that it is land below the 1% Annual Exceedance Probability (AEP), but not subject to high hydraulic hazards:

54. The flood engineers agreed that for any development to take place on the subject land, compensatory earthworks would be required to ensure no loss of flood storage on site up to the 1% AEP flood level and to prevent cumulative offsite flood impacts. The town planners agreed that the amount of compensatory flood storage that would be required would vary depending on the design of any proposed development.

55. The LDCP contains flooding controls relevant to new commercial and industrial development on sites within the medium flood risk category. Those controls were agreed and summarised in the flooding joint report. In order to meet the flood planning controls, any proposed development on the subject land would need to:

1. be raised to the flood planning level which is equal to the 1% AEP + freeboard;

2. be designed in such a manner that all buildings and structures are flood compatible up to the 1% AEP + freeboard;

3. be structurally sound up to the 1% AEP + freeboard;

4. have nil or negligible effects on flooding elsewhere in the floodplain by providing flood compensatory storage on site in the form of an open area where the water could be stored, impacting on the ability to build across the full extent of the site. Alternatively, the builder would have to provide a flood void under the structure which would increase the costs of the development;

5. ensure that any basement car parking is protected from flooding up to the 1% AEP + freeboard; and

6. provide reliable pedestrian or vehicle access during a 1% AEP flood event to a publicly accessible location above the Probable Maximum Flood (PMF) event.

56. The flood experts also agreed that the necessity for earthworks and/or a suspended slab to permit commercial or industrial development in order to comply with the LDCP controls would likely result in the costs of development being higher than on a flood free site.

57. The appellant’s flood expert, Mr El Haddad, was of the opinion that any prospective developer of the subject land would need to reach an agreement with Sydney Water to relocate the rising main out of the footprint of a proposed development. The Valuer-General’s flood expert, Mr Dhiacou, accepted that he did not have sufficient expertise to express a view on that matter, but opined that if a development on the subject land could be designed without structures over the sewer, then there would be no need to relocate the sewer.

58. The appellant’s town planner, Mr Chambers, considered that because the LDCP controls identify the subject land as subject to a flood constraint, this would likely add to the cost, complexity and risk of having a development application approved.

Town planners

59. The town planners agreed on the potential opportunities for the development of the subject land and the relevant constraints. They also agreed on the key planning controls that applied at each of the valuing years. They agreed on three likely development scenarios:

1. A single end user complex, such as a Bunnings warehouse and associated car parking, that could occupy the whole of the subject land (similar to the Masters Home Improvement Centre with its associated parking which was approved in the 2013 development consent). This would be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (a)).

2. A mixed-use development comprising large format bulky goods retailing outlets and other specialty outlets similar to that approved in the 2023 development consent. This would also be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (b)).

3. A development with seniors living above a commercial use and/or medical centre/private hospital under the provisions of the State Environmental Planning Policy (Housing) 2021 and the State Environmental Planning Policy (Infrastructure) 2007 relating to seniors housing. This would also be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (c)). This option was dismissed by both valuers, and accordingly has been disregarded by the Court as judicial valuer.

60. The planners agreed that it could take in the order of 12 months for development applications for the proposals in options (a) and (b) to be determined by Council, and longer if there were an appeal. As noted above at [24], the planners also agreed on the key planning controls applying to the comparable sales relied upon by the valuers.

61. The planners disagreed in certain respects as to the potential for an uplift in zoning of the subject land to include residential at each of the valuing years. However, the Court has disregarded this disagreement because the valuers subsequently agreed that no residential premium would be attached to the subject land.

Valuers: areas of agreement

62. The valuers reached a number of agreements, including in relation to the following:

1. The sale of the subject land in 2017 is not relevant to the valuations of the subject land.

2. The land is located in a “flood planning zone” (referred to as a “flood planning area” in the LLEP (cl 5.21) and the joint report of town planners) that would require on site flood storage to facilitate development.

3. The “high level of uncertainty relating to any uplift for rezoning for residential purposes is such that there would be no resulting premium over and above the existing B5 Business Development zoned value rates applied by a hypothetical purchaser at any of the valuation dates.”

4. The highest and best use of the land for each of the valuing years would be a use permitted within the B5 Business Development zone.

5. A potential seniors living development does not represent the highest and best use of the land.

6. There was no market movement between 2019 and 2020, but a large increase from 2020 to 2021 of 27%.

7. The land is constrained by an easement for sewage purposes which bisects the land. The impact of the easement was not agreed.

63. The valuers agreed that development option (c) identified by the town planners is not a likely use, and was disregarded by both experts.

64. In relation to the methodology of valuation, the valuers agreed the direct comparison of sales approach analysed on a rate per square metre of site area.

Valuers: areas of disagreement

65. After joint conferencing, the valuers remained in disagreement in relation to the following issues:

1. the most likely use of the subject land;

2. the impact of the sewer pipe;

3. the impact of flooding on development costs; and

4. sales evidence and adjustments.

The most likely use of the subject land

66. The Valuer-General’s valuation expert, Mr Hubbard, considered that the most likely use of the subject land is for a warehouse and distribution centre use, being a use permitted in the B5 Business Development zone. Accordingly, Mr Hubbard chose sales of land purchased for warehouse use.

67. Mr Hubbard’s sales were located at Minchinbury, Granville, Prestons, Chipping Norton and Wetherill Park. The majority of these sales were within established industrial areas with the exception of Granville.

68. The appellant’s expert, Mr Konidaris, was of the opinion that whilst warehouse and distribution centre uses are permissible in the B5 zone, those uses tend to be grouped together in established industrial areas, with “excellent road transport links”. Mr Konidaris was of the opinion that the subject land is relatively isolated, not in an established industrial area, is surrounded by residential development and the Warwick Farm Racecourse, and does not have the benefit of complementarity with other warehouse and distribution centre users. He considered that the most likely use of the subject land is for bulky goods retailing and that a warehousing/distribution use is not a likely use of the subject land.

69. This difference between the valuers was fundamental to the choice of sales made by each of them. Mr Hubbard relied upon sales of sites which were purchased for warehouse use. Mr Konidaris’ sales were mainly of sites purchased for bulky goods retailing.

70. Mr Konidaris opined that Mr Hubbard’s chosen sales, being sites located in established industrial areas such as Minchinbury, Prestons, Chipping Norton industrial estate and Wetherill Park, were not similar to the location of the subject land, and were superior locations for warehouse and distribution centre users. Mr Konidaris considered that the prices paid in those established areas reflect the superior location in relation to Warwick Farm for bulky good users, but also the advantages of being located in a fully serviced industrial estate.

71. Mr Konidaris’ sales were located in Hoxton Park, Warwick Farm, Austral and Gledswood Hills.

72. The market evidence relied upon by the valuers demonstrated that sites sold to warehouse and distribution centre users attract a significant premium compared to sites purchased for bulky goods retailing uses. Accordingly, there was a very significant difference in values contended for by Mr Hubbard and by Mr Konidaris:

1. Mr Hubbard was of the opinion that his sales supported a land value of $820 /m².

2. Mr Konidaris’ analysis of his very different sales supported a land value of $360 /m².

The impact of the sewer pipe

73. Following joint conferencing, Mr Konidaris made a 10% adjustment to the land value of the subject land when compared to the sales selected by him, opining that such adjustment captures the time, cost and risk inherent in the potential relocation of the sewage infrastructure.

74. Notwithstanding his acknowledgement that the land is “constrained” by the easement, Mr Hubbard placed no detriment on the location of the sewage infrastructure.

Impact of flooding on development costs

75. In relation to the impact of flooding on development costs, both experts agreed that a discount is necessary to account for the additional costs associated with developing the subject land compared to the sales selected by each of them. Mr Hubbard suggested a discount of 5%, Mr Konidaris a discount of 10%.

Sales evidence and adjustments

76. The first and fundamental issue which arises in the proceedings is the accumulation of potentially relevant comparable sales “from which information may be deduced concerning the value of the subject property”: Trust Co Ltd v Minister Administering the Crown Lands Act 1989 ^[22] at 110, 111; Marroun v Roads and Maritime Services ^[23] at 198 (Sheahan J), that is, which of the sales relied upon by the valuers are the appropriate or more appropriate, comparable sales, or whether any of them are generally or truly comparable and provide a reasonably representative same of sales “relevant and sufficient in volume”: Maurici v Chief Commissioner of State Revenue ^[24] (Maurici) at 121. However, as McHugh, Gummow, Kirby, Hayne and Callinan JJ added in Maurici, the Court should not be “unreasonably selective”; also Capuano at [15] (Robson J).

    22. (2012) 211 LGERA 158; [2012] NSWLEC 73 (Pain J).

    23. [2012] NSWLEC 199.

    24. (2003) 212 CLR 111; [2003] HCA 8 (McHugh, Gummow, Kirby, Hayne and Callinan JJ).

77. The second issue concerns the adjustments that should be made to the properties it considers comparable to create equivalence with the subject land: Holcim (Australia) Pty Ltd v Valuer-General ^[25] (Holcim) at [31] (Biscoe J); Capuano at [17] (Robson J) to determine the land values of the subject land.

    25. [2009] NSWLEC 225 (Biscoe J).

78. Mr Konidaris relied upon 6 sales. Mr Hubbard relied upon 7 sales. There are different sales relating to the 2019 and 2020 valuation dates, and the 2021 valuation date.

79. The sales for the valuing years 1 July 2019 and 1 July 2020 relied upon by the appellant’s valuer, Mr Konidaris, were as follows:

Reference	Address
AK 1 (19/20)	Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park
AK 2 (19/20)	28-34 Orange Grove Road, Warwick Farm
AK 3 (19/20)	184 Fifth Avenue, Austral
AK 4 (19/20)	402-412 Bringelly Road, Austral

80. The sales for the valuing years 1 July 2019 and 1 July 2020 relied upon by the Valuer-General’s valuer, Mr Hubbard, were as follows:

Reference	Address
CH 1 (19/20)	42 Sargents Road, Minchinbury
CH 2 (19/20)	17 John Hines Avenue, Minchinbury
CH 3 (19/20)	1 Woodville Road, Granville
CH 4 (19/20)	3 Melito Court, Prestons
CH 5 (19/20)	42-46 Alfred Road, Chipping Norton

81. Mr Konidaris’ sales for the valuing year 1 July 2021 were as follows:

Reference	Address
AK 1 (2021)	120 – 130 Fifth Avenue, Bringelly
AK 3 (2021)	9 Gregory Hills Drive, Gledswood Hills

82. Mr Hubbard’s sales for the valuing year 1 July 2021 were as follows:

Reference	Address
CH 1 (2021)	24-40 Alfred Road, Chipping Norton
CH 2 (2021)	1011-1027 Canley Vale Road, Wetherill Park

83. Each of the sales, with commentary, was identified in tables attached to the joint report of valuers. The valuers also prepared two further tables, one for the 2019 and 2020 valuing years, and one for the 2021 valuing year, setting out their respective adjustments to each other’s sales.

84. The Court was taken to each of the sales on a site inspection conducted on the first day of the hearing. The map below shows the location of the 13 sales relied on by the parties.

85. The table below shows the adjustments made by the valuers to the sales selected by each of them for the valuing years 1 July 2019 and 1 July 2020.

86. The table below shows the adjustments made to the sales selected by each of the valuers for the valuing year 2021.

The appellant’s closing submissions

87. In closing submissions, the appellant referred to the explanation given by the Valuer-General’s expert, Mr Hubbard, for the 5% adjustment made by him for flooding in relation to the sales selected by Mr Konidaris, and submitted that Mr Hubbard appeared to have “taken the view that some of the sales might be 50% similarly affected and others [were] in a ‘low-risk planning area’ and therefore the sales are the ‘subject of flooding’”.

88. However, the appellant submitted, a closer examination demonstrates that the sales selected by Mr Konidaris are not the subject of flooding, or are not sites where works would need to be undertaken to raise the land above the 1% AEP flood level and provide compensatory flood storage. The LDCP, it was submitted, divides land into 4 areas in respect of flooding: High Flood Risk Category, Medium Flood Risk Category, Low Flood Risk Category and No Flood Risk Mapping. ^[26] The Low Flood Risk Category is “all other land within the floodplain (i.e. within the extent of the PMF) but not identified within either the High Flood Risk category or the Medium Flood Risk category.” The LDCP provides at 38 that:

The Low Flood Risk Category is where the risk of damages is low for most land uses. The Low Flood Risk Category is that area above the 1% AEP flood and most land uses would be permitted within this Category.

26. LDCP pages 37-38.

89. Therefore, the appellant submitted, where the sales are located in the Low Flood Risk Category, they are not sites where works would need to be undertaken to raise the land above the 1% AEP flood level as would be necessary in relation to the subject land. Those sales were submitted to include:

1. AK 1 (19/20) – Low Flood Risk Category.

2. AK 2 (19/20) – Low Flood Risk Category.

3. AK 3 (19/20) – Low Flood Risk Category in the B5 Business Development zoned part of the property – high flood velocities in the C2 Environmental Conservation zoned part of the property which is not developable (formerly the E2 Environmental Conservation zone until the LLEP was amended by the Standard Instrument (Local Environmental Plans) Amendment (Land Use Zones) Order 2021 on 3 November 2021, which commenced on 1 December 2022).

4. AK 4 (19/20) – as for AK 3 (19/20).

5. CH 1 (19/20) – Blacktown local government area – Flood free.

6. CH 2 (19/20) – Blacktown local government area – Low Flood Risk – no planning restrictions.

7. CH 3 (19/20) – Parramatta local government area – Flood free.

8. CH 4 (19/20) – 42% of the land is within the Medium Flood Risk Category, but filling has mitigated flood risk resulting in no flood storage being required and the land no longer being flood affected.

9. CH 5 (19/20) – front part of the property is above the 1% AEP; southern part with flood depths of less than one metre. Development in the south would have undercroft areas, and no compensatory earthworks would be required.

10. AK 1 (2021) – only 10% of the land is in the Medium Flood Risk Category, and this would not be considered to be an impediment to development.

11. AK 3 (2021) – Camden local government area – Flood free.

12. CH 1 (2021) – Low Flood Risk Category.

13. CH 2 (2021) – Low Flood Risk Category.

90. Accordingly, the appellant submitted, all of the comparable sales are Low Flood Risk, flood free, in locations where the higher flood risk parts of the sites are in the undevelopable C2 Environmental Conservation zone (Austral sales AK 3 (19/20) and AK 4 (19/20)), or where the Medium Flood Risk Category areas are on much smaller parts of the site compared to the subject land which is located in the Medium Flood Risk Category.

91. The appellant submitted that Mr Hubbard had been too conservative in his 5% adjustment, and that the 10% adjustments for flooding made by Mr Konidaris better reflect the added development costs and risks associated with developing the subject land.

92. In relation to the sales evidence and adjustments relied upon by each of the valuers, the appellant submitted as follows.

AK 1 (19/20) – Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

93. In relation to this sale, the appellant submitted that the land when purchased was occupied by a Bunnings Warehouse, and as such it is one of the agreed development scenarios applicable to the subject land with similar zoning to the subject land. The appellant submitted that in rejecting this sale because it was not an “open market transaction”, the Valuer-General’s expert Mr Hubbard had misunderstood the sale that was relied upon by Mr Konidaris, being a sale from Home Consortium to Charter Hall. The earlier sale was a sale from Woolworths to Home Consortium of all of the Masters properties around Australia. The appellant submitted that Home Consortium leased several of the Masters properties to Bunnings Warehouse, and that in 2017 Charter Hall acquired from Home Consortium 6 of the sites that were leased to Bunnings Warehouse. The appellant submitted that “there is no reason to suspect that the latter sale was not a market transaction”.

94. Mr Konidaris’ opinion was that this was a market transaction, and referred to “evidence that properties such as this are typically marketed on an Expressions of Interest basis to institutional investors”. Further, the appellant submitted in relation to this sale that “[n]othing turns on the fact that it was one of 6 sites acquired by Charter Hall around the country – there [was] no reason to believe that this infected the market value. Whilst the property exchanged and sold on the same day, this did not suggest an anxious purchaser or anxious vendor and thus undermine the test of market value”: citing Spencer v The Commonwealth at 441 (Isaacs J).

95. Mr Konidaris’ adjustments for location were submitted by the appellant to be appropriate given the “proximity of the sale to the M7 (and right on the exit for Cowpasture Road)”, and a “location with surrounding industrial neighbours, thus de-risking the site for a purchaser looking to develop it” for a B5 Business Development purpose. The appellant submitted that “[l]ocation next to industrial neighbours” is “an important attribute for the purpose of an industrial development and on a par with access to roads”.

AK 2 (19/20) – 28-34 Orange Grove Road, Warwick Farm

96. In relation to AK 2 (19/20), the appellant submitted that Mr Hubbard was mistaken in not considering this sale to be a market transaction. Mr Hubbard conceded that the property was marketed, the marketing document was in evidence, and that if sold at auction, that would be an indicator of an open market transaction. The evidence was that the land sold for $22m on 2 September 2019, after the auction held on 6 June 2019. The whole property was put to market, and the half share was acquired for $11m, the equivalent value being $22m as market value. The appellant also submitted in relation to this sale that the sale of half of the land satisfies the test in Spencer v The Commonwealth, citing CFS Managed Property Limited v Valuer General at [141] (Pain J). ^[27]

    27. (2016) 215 LGERA 226; [2016] NSWLEC 2.

97. The appellant noted the agreement of both valuers that the sale is located in close proximity to the subject land, and that the subject land is better located than AK 2 (19/20). Mr Konidaris made an adjustment of 10% because the subject land has better exposure and access than AK 2 (19/20). (Mr Hubbard opined that an adjustment of 10-15% is warranted for the same reasons).

98. The appellant submitted that it was unclear from the oral evidence why Mr Hubbard made an additional adjustment of +15% for “zoning” when the sale and the subject land are both located in the B5 Business Development zone.

AK 3 (19/20) – 184 Fifth Avenue, Austral; AK 4 (19/20) - 402-412 Bringelly Road, Austral; AK 1 (2021) – 120-130 Fifth Avenue, Austral

99. The appellant submitted that all of AK 3 (19/20) – 184 Fifth Avenue, Austral, AK 4 (19/20) – 402-412 Bringelly Road, Austral, and AK 1 (2021) – 120-130 Fifth Avenue, Austral (the Austral sales) can be treated as englobo sales which mean that they have an advantage over the sales which comprised building improvements.

100. In oral evidence, Mr Hubbard said that an englobo sale “means that the site’s … underdeveloped and there may not be any services in there to develop”. Mr Hubbard agreed with counsel for the appellant that “it’s easier to make adjustments [for englobo sales] because you don’t have to make a lot of assumptions about removing the value of improvements”.

101. In relation to the Austral sales, both valuers made an adjustment for location. Mr Konidaris made an adjustment of +10% because the subject land has “better exposure and access”. The appellant submitted that in other respects the Austral sales have “some similarities” with the location of the subject land, the subject land being “relatively undeveloped other than residential and horseracing uses”.

102. In relation to Mr Hubbard’s adjustment of +30% for location based on the subject land “lacking ‘exposure’ to a main road”, being “located further away” from the Sydney CBD and Austral being “inferior to Warwick Farm”, the appellant submitted that, Mr Hubbard had made a further adjustment for configuration which also includes “street exposure”. This was submitted by the Valuer-General to be a case of double counting, and that Mr Hubbard’s adjustments should be reduced accordingly. Unlike Mr Hubbard, Mr Konidaris’ adjustment for street frontages (configuration) was submitted to be captured in the overall location adjustment.

103. Mr Konidaris opined that that there should be “no adjustment for proximity to the Sydney CBD” as a “bulky goods user, the most likely user of the Austral sites”, would be looking to “support a local market and not the wider Sydney market”.

104. The appellant referred to the agreement of the valuers that the Austral sales were market sales, notwithstanding that they may have sold through options. The transfer dates were 2019, as relied upon by Mr Konidaris. The documents relied upon by the Valuer-General did not provide evidence that the Austral sales were the subject of options. Nonetheless, the appellant submitted, “options do not reflect a market price at the date when the option is entered into” (in this case in 2017) “because generally when properties are purchased on option there is a premium for the time value of money”.

105. In any event, the appellant submitted, no adjustment was necessary because there was no market movement between 2017 and 2019 in the Austral region. As Mr Hubbard said in evidence, the Austral area was unserviced in 2017 and was unserviced as at the date of hearing.

CH 1 (19/20) – 42 Sargents Road, Minchinbury and CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

106. In relation to the sales CH 1 (19/20) – 42 Sargents Road, Minchinbury and CH 2 (19/20) – 17 John Hines Avenue, Minchinbury (the Minchinbury sales) relied upon by Mr Hubbard, the appellant submitted that Minchinbury is a superior location to Warwick Farm for warehouse/distribution uses. It is located some 27 kms from the subject land in the Blacktown local government area, and the B5 Business Development zone in Blacktown was submitted to be “much more of an industrial focused zone; the majority of the zone being warehouses and distribution centres”. It is located close to the M4 and M7 motorways with “excellent access, ideal for warehouse/distribution centre users who require easy access to the principal road network”. The appellant submitted that Mr Hubbard’s Minchinbury sales show analysed rates of $707/m² and $825 /m².

107. Mr Konidaris gave evidence orally that CH 1 (19/20) was acquired by Telstra for a data centre, and that land suitable for data centres attracted a premium over regular industrial land. Mr Konidaris compared CH 1 (19/20) with other vacant similarly zoned land in Minchinbury which sold at about half the rate of CH 1 (19/20), together with other sales at Erskine Park and Horsley Park for data centres also demonstrating that large premiums were paid.

CH 2 (19/20) – 17 John Hines Avenue, Minchinbury

108. In relation to CH 2 (19/20) relied upon by Mr Hubbard, the appellant submitted that other than location, the principal difference between this sale and the subject land related to site preparation; the sale land having already been through the process of site preparation prior to the sale, whereas the subject land was not yet prepared. The sale land had been levelled and was “ready to go” for development. The appellant submitted that this reflected Mr Konidaris’ adjustment of -5%.

CH 3 (19/20) – 1 Woodville Road, Granville

109. The appellant acknowledged that the adjustments in relation to CH 3 (19/20) were relatively similar between the valuers, except for location. The valuers agreed that the sale was superior because it was closer to the Parramatta CBD and to the M4 motorway. Mr Konidaris was of the opinion that a greater adjustment for location needed to be made because it is a premium location for bulky goods uses, including for motor vehicle sale yards, and because “Parramatta is generally a more expensive location than the Liverpool LGA”. He opined that the sale shows an analysed rate of $1,366/sqm, highlighting the “superior location” of a “Parramatta location”.

CH 4 (19/20) – 5 Melito Court, Prestons

110. This was the first of Mr Hubbard’s industrial land sales, being land zoned in part IN2 Light Industrial and, in part, IN3 Heavy Industrial. The appellant noted that in his individual report, Mr Hubbard had made adjustments totalling +55% which the appellant submitted “would suggest that this was not a very comparable sale” to the subject land. The most significant difference, the appellant submitted, was in adjustments in relation to location, Mr Konidaris opining that CH 4 (19/20) “has multiple superior attributes compared to the Subject Land”. Further, the appellant submitted that the adjustment of both valuers for location was “so great that each must logically accept that it is not a comparable location” to the subject land. However, each had “different reasons for doing so”. The sale, the appellant submitted, is “located within an A-grade industrial park, on the M7 [motorway], close to the junction with the M5 [motorway], and the M31 [Hume motorway] going south” which, it was agreed, “makes it an ideal location for either the warehouse/distribution user and the heavy industrial user”. In oral evidence, Mr Hubbard agreed the Prestons location has “not just the warehouse and distribution uses”, but also “the heavy industrial uses”.

111. The appellant submitted that Mr Hubbard made an adjustment for zoning in favour of the subject land because bulky goods retailing is not permissible at Prestons. However, any such adjustment, the appellant submitted, “has to be weighed against the fact that most IN3 [Heavy Industrial] uses are not permissible” on the subject land, and it is “irrelevant that the sales that were zoned heavy industrial were acquired for warehouse/distribution use because they were competing in the market against the heavy industrial user”.

112. The appellant also referred to the acceptance by Mr Hubbard in answer to a question by the Acting Commissioner that the adjustment for zoning in relation to this sale was not based on any analysis but was just an opinion:

ACTING COMMISSIONER: …Mr Hubbard, you made a plus 10 adjustment for 5 Melito Court, Prestons, because of zoning. What analysis did you undertake to arrive at that 10% between the zones.

WITNESS HUBBARD: I just made the opinion that ours was a superior zoning because it had the availability of the bulky goods retailing.

ACTING COMMISSIONER: But you haven't analysed any--

WITNESS HUBBARD: I haven't analysed anything, it's just an opinion.

113. The appellant also noted that the Valuer-General had made a large adjustment for configuration on the basis that the units would lack exposure to the street (in comparison to the subject land). But Mr Hubbard had not explained why warehouse/distribution users need or value exposure to the street when compared to, say, a McDonalds or a bulky good retailer. Mr Konidaris’ opinion was that exposure is a far smaller factor for warehouse/distribution users who value industrial grade roads, exposure to principal transport routes and locations within established industrial parks.

CH 5 (19/20) – 42-46 Alfred Road, Chipping Norton and CH 1 (2021) – 24-40 Alfred Road, Chipping Norton

114. The CH 5 (19/20) – 42-46 Alfred Road, Chipping Norton and CH 1 (2021) – 24-40 Alfred Road, Chipping Norton (the Chipping Norton industrial estate sales) relied on by Mr Hubbard were also zoned IN 3 Heavy Industrial. The appellant submitted, again, that the significant difference between the two valuers related to the adjustments for location, Mr Konidaris opining that Chipping Norton is an established industrial precinct for which purchasers pay a premium. As in relation to Prestons, Mr Hubbard had made the same adjustment for zoning which, the appellant submitted, was wrong for the reasons given in relation to CH 4 (19/20).

AK 3 (2021) – 9 Gregory Hills Drive, Gledswood Hills

115. In relation to this sale, the appellant submitted that the land has prominent access to Gregory Hills Drive, a busy local thoroughfare, but has inferior exposure compared to the subject land. According to Mr Konidaris, it is fully serviced and surrounded by modern industrial development.

CH 2 (2021) – 1011-1027 Canley Vale Road, Wetherill Park

116. The appellant submitted that this sale, relied upon by the Valuer-General, was a sale to the anxious adjoining owner of the Greenway Shopping Centre which subsequently submitted a development application for staff car parking for 161 car spaces, thus freeing up additional customer car parking for the shopping centre.

117. In addition, the appellant submitted, the acquisition of the land permitted the owner of the shopping centre to perform a boundary adjustment to ensure that the entirety of the shopping centre and associated car parking are located on one lot. Further, the appellant submitted, the property is located in the Fairfield local government area, 14 kms from the subject land and in the established Wetherill Park Industrial Area. The location of CH 2 (2021), the appellant submitted, is “superior” to that of the subject land.

The impact of the sewer pipe

118. In relation to the sewer pipe, the appellant submitted that it had proved that a rising sewer main exists on the subject land. To the extent that the Valuer-General relies upon earlier documents, the best evidence is contained in the positive confirmation in a letter dated 9 November 2021 from Sydney Water that a “critical Sydney Water 375mm wastewater pressure main traverses the site”. That being the case, any potential development over or adjacent to the main is subject to the approval of Sydney Water. The technical guidelines published by Sydney Water suggest that its concurrence may not be forthcoming.

187. Both expert valuers considered this property to be inferior to the subject land, the subject land having better exposure and access. In particular, Mr Konidaris made an overall negative adjustment. Even though Mr Hubbard made an overall positive adjustment to this sale, his resulting adjusted rate was $500 / m² which is significantly lower than the Valuer-General’s rate of $676 / m². The Court does not accept the appellant’s submission that this site was relevantly similar to the subject land, or that the subject land is in a “relatively underdeveloped location”. The three sites in Austral are, as the Valuer-General submitted, in an entirely different market. They are, as the Valuer-General submitted, in emerging areas, the subject land having already “emerged”, being in a built up area, with a deal of industry, including large car yards opposite. As submitted by the Valuer-General above at [139], an englobo parcel of land is not comparable with the subject land.

188. The Court has disregarded AK 3 (19/20) as a truly or genuinely comparable sale as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020. The sales differ in substantial ways, and the property AK 3 (19/20) is insufficiently similar to the subject land in terms of its dissimilar location, inferior exposure / visibility from a major arterial road and inferior ease of access.

AK 4 (19/20) – 402-412 Bringelly Road, Austral

AK 4 (19/20) Address:        Distance from subject land: Sale Price:       Sale Date:        Area:         Type of Sale: Zoning:    Planning Scheme: Analysed Rate:    Adjusted Rate: Adjusted Rate:     402 – 412 Bringelly Road, Austral Approximately 16 kms $17,263,000 September 2019 42,800 m² Some minor improvements Majority B5 with part C2 Environmental Conservation LLEP $403 / m² $423 / m² by Mr Konidaris $544 / m² by Mr Hubbard

190. This property at Austral (one of the three Austral sales) has a wide frontage to a major divided road, has minor improvements, is located in a non-urban precinct, and has a larger land area. These characteristics are dissimilar to the characteristics of the subject land in terms of its dissimilar location, inferior exposure / visibility from a major arterial road and inferior ease of access.

191. Again, the Court has declined to make adjustments that are too large for the purposes of direct comparison.

192. Accordingly, the Court has disregarded AK 4 (19/20) as a comparable sale as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

CH 1 (19/20) – 42 Sargents Road, Minchinbury

CH 1 (19/20) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale: Zoning:    Planning Scheme: Analysed Rate:    Adjusted Rate:    Adjusted Rate: 42 Sargents Road, Minchinbury Approximately 27 kms $14,292,500 December 2018 20,230 m² Some minor improvements B5 Blacktown LEP $707 / m² $813 / m² by Mr Hubbard $354 / m² by Mr Konidaris

193. This property, one of the two properties at Minchinbury, located in the Blacktown local government area, relied upon by the Valuer-General, has some minor improvements, a wide frontage to a main road with secondary road access at the rear, a smaller area than that of the subject land, and is located in an established precinct. It is located approximately 27 kms from the subject land.

194. The evidence was that the property was purchased in December 2018 by Telstra with a development application being lodged for a data centre prior to the exchange of the sale.

195. As at the date of sale, December 2018, a decision on the development application had not been made.

196. Mr Konidaris was of the opinion that this sale should be disregarded because sales of properties suitable for data centres attract a premium over regular industrial land and are more valuable than sales of properties where data centres are not capable of obtaining development consent. The appellant submitted that Minchinbury is a superior location to Warwick Farm for warehouse/distribution uses, in “much more of an industrial focused zone”.

197. The Court finds that this sale does not represent a sale with development approval for a data centre at the date of exchange. It does not accept the appellant’s submission in relation to a data centre premium that would be applied to this property.

198. The Court has determined that this sale, notwithstanding its distance from the subject land, is capable of being considered a truly or genuinely comparable sale in terms of its same zoning, and lack of improvements.

199. The Court has made an overall negative adjustment of 15%, taking into account both the positive and negative differences in the characteristics of the two properties, namely, the property’s dissimilar location, inferior exposure / visibility from a major arterial road, inferior ease of access, smaller land area, lack of improvements, and the same zoning and lack of improvements directly compared to the subject land.

200. Accordingly, the Court adjusted rate for 42 Sargents Road, Minchinbury is $615/m².

CH 2 (19/20) – 17 John Hines Avenue, Minchinbury

CH 2 (19/20) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale:     Zoning:    Planning Scheme: Analysed Rate:    Adjusted Rate: Adjusted Rate:     17 John Hines Avenue, Minchinbury Approximately 27 kms $15,183,300 August 2019 18,400 m² Vacant B5 Blacktown LEP $825 / m² $825 / m² by Mr Hubbard $454 / m² by Mr Konidaris

201. This property, relied upon by the Valuer-General, has three street frontages, an irregular shape, an area smaller than the area of the subject land, and is located in an established precinct.

202. Mr Konidaris considered this sale not to be a suitable comparable as a development application was lodged for the construction of a warehouse and distribution centre post the settlement of the sale in early 2020.

203. The Court finds that the subsequent development application for a warehouse and distribution centre lodged in relation to this sale property confirms that its B5 Business Development zoning is capable of securing a range of permissible uses, including “a mixed use development comprising large format bulky goods and specialty outlets…consistent with the most recent development consent”, as contended by the appellant, and “a bulky goods type use or a mix of bulky goods and industrial” as contended by the Valuer General. The zoning is similar to that of the relevant B5 Business Development zoning of the subject land.

204. The Court has determined that this sale is capable of being considered a truly or genuinely comparable sale property for the valuing years 1 July 2019 and 1 July 2020 because of the same zoning, the lack of improvements, and the similar sale date to the valuing year 2019.

205. The Court has made an overall negative adjustment of 25%, taking into account both the positive and negative differences in the characteristics of the two properties, namely the property’s dissimilar location, inferior exposure / visibility from a major arterial road, inferior ease of access, smaller land area, lack of improvements, the date of sale similar to the valuing year 2019, and the same zoning directly compared to the subject land.

206. Accordingly, the Court adjusted rate for 17 John Hines Avenue, Minchinbury is $660/m².

CH 3 (19/20) – 1 Woodville Road, Granville

CH 3 (19/20) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale: Zoning:    Planning Scheme: Analysed Rate:    Adjusted Rate:     Adjusted Rate:    1 Woodville Road, Granville Approximately 14 kms $12,100,000 August 2020 8,788 m² Vacant         B5 Parramatta LEP $1,366 / m² $820 / m² by Mr Hubbard $342 / m² by Mr Konidaris

207. This property is located adjacent to the intersection of Parramatta Road and Woodville Road, is an irregular shape, is of a considerably smaller area than that of the subject land and has superior exposure / visibility to that of the subject land.

208. Further, this property has a superior floor space ratio (namely, 1.0:1) and a significantly superior location to that of the subject land.

209. Because of these significant different characteristics, being a much smaller land area, a superior location, superior exposure / visibility, and superior floor space ratio and without being “unreasonably selective”, the Court has determined that this property requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020, and accordingly has disregarded it.

CH 4 (19/20) – 5 Melito Court, Prestons

CH 4 (19/20) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale:     Zoning:    Planning Scheme: Analysed Rate:    Adjusted Rate:     Adjusted Rate:     5 Melito Court, Prestons Approximately 10 kms $14,740,000 July 2020 28,330 m² Vacant Part IN2 Light Industrial and Part IN3 Heavy Industrial LLEP $520 / m² $806 / m² by Mr Hubbard $312 / m² by Mr Konidaris

210. This property, relied upon by the Valuer-General, has a long triangular shape, is zoned in part IN2 Light Industrial and in party IN3 Heavy Industrial, and is within a flood prone precinct. It is located at a distance of approximately 10 kms from the subject land. The Court accepts the submission of the appellant that the adjustments made by Mr Hubbard of + 55% suggest that this is not “a very comparable sale” to the subject land. As the appellant submitted, most IN3 Heavy Industrial uses are not permitted on the subject land. Further, the Court does not accept Mr Konidaris’ opinion that the subject land is isolated in terms of a warehouse and distribution centre, and any other retail use. The subject land is within proximity to a very large Peter Warren caryard.

211. The Court, without being unduly selective, does not consider in the circumstances here that a property with a different zoning to that of the subject land can be the subject of direct comparison.

212. Accordingly, the Court has disregarded CH 4 (19/20) as a truly or genuinely comparable sale property for the valuing years 1 July 2019 and 1 July 2020, as it requires too many adjustments in relation to its inferior location, inferior visibility / exposure from a major arterial road and dissimilar zoning.

CH 5 (19/20) – 42-46 Alfred Road, Chipping Norton

CH 5 (19/20) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale:     Zoning:    Planning Scheme:    Analysed Rate: Adjusted Rate:     Adjusted Rate: 42 – 46 Alfred Road, Chipping Norton Approximately 5 kms $7,750,000 August 2021 9,149 m² Improved IN3 Heavy Industrial LLEP $778 / m² $817 / m² by Mr Hubbard $505 / m² by Mr Konidaris

213. This property at Chipping Norton relied upon by the Valuer-General has a regular shape, is improved, zoned IN3 Heavy Industrial and has an area which is significantly smaller than that of the subject land. The Valuer-General submitted, and the Court accepts, it was an open market sale following a marketing campaign.

214. The Court does not consider that a property with a different zoning to that of the subject land can be the subject of direct comparison. Also, there are significant differences in relation to its land area, visibility / exposure from a major arterial road, zoning, and the existence of improvements.

215. Accordingly, because of the dissimilar land areas, zoning, visibility / exposure from a major arterial road and the existence of improvements, the Court has disregarded this sale as it requires too many adjustments in order to be considered a truly or genuinely comparable sale when directly compared to the subject land.

AK 1 (2021) – 120-130 Fifth Avenue, Austral

AK 1 (2021) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale:     Zoning:       Planning Scheme: Analysed Rate:     Adjusted Rate: Adjusted Rate:     120 – 130 Fifth Avenue, Austral Approximately 16 kms $14,000,000 April 2022 24,200 m² Partially improved B5 LLEP $578 / m² $549 / m² by Mr Konidaris $780 / m² by Mr Hubbard

216. This property, also one of the three Austral properties relied upon by the appellant, for the valuing year 1 July 2021, has a regular shape, is partially improved, and is located on a local road without kerbing and guttering in a non-urban area.

217. The Court finds that the characteristics of this property are dissimilar to those of the subject land in relation to its inferior location, exposure / visibility from a major arterial road and the date of sale when compared to the valuing year 2021. The Court does not consider it appropriate to make adjustments that are too large for the purpose of direct comparison where the characteristics of the two properties are insufficiently similar.

218. Accordingly, the Court, without being unduly selective, has disregarded this sale as truly or genuinely comparable as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing year 1 July 2021.

AK 3 (2021) – 9 Gregory Hills Drive, Gledswood Hills

AK 3 (2021) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:            Type of Sale:        Zoning:    Planning Scheme: Analysed Rate:     Adjusted Rate:     Adjusted Rate:     9 Gregory Hills Drive, Gledswood Hills Approximately 26 kms $25,835,755 May 2022 41,600 m² Vacant         B5 Camden LEP $621 / m² $527 / m² by Mr Konidaris $869 / m² by Mr Hubbard

219. This property at Gledswood Hills, relied upon by the appellant, has an irregular shape with a wide frontage to a main road, and is located in an emerging urban area, with vacant land directly opposite and nearby, and is approximately 26 kms from the subject land.

220. The Court finds that the characteristics of this property are dissimilar to those of the subject land in relation to its land area, lack of exposure / visibility from a major arterial road and its inferior location. It is, as submitted by the Valuer-General also in an emerging area.

221. Without being unduly selective, the Court considers it inappropriate to make adjustments that are too large for the purpose of direct comparison.

222. Consequently, the Court has disregarded this sale as truly or genuinely comparable for the valuing year 1 July 2021 as it requires too many adjustments.

CH 1 (2021) – 24-40 Alfred Road, Chipping Norton

CH 1 (2021) Address:          Distance from subject land    Sale Price:         Sale Date:          Area:            Type of Sale:     Zoning:    Planning Scheme:    Analysed Rate:     Adjusted Rate:     Adjusted Rate: 24 – 40 Alfred Road, Chipping Norton Approximately 5 kms $60,514,000 December 2021 49,900 m² Obsolete improvements IN3 Heavy Industrial LLEP $1,000 / m² $1,250 / m² by Mr Hubbard $650 / m² by Mr Konidaris

223. This property, the second of the Chipping Norton sales relied upon by the Valuer-General, has an “L” shape, obsolete improvements, a wide frontage to a main road, an area which is much larger than the area of the subject land, and is zoned IN3 Industrial Heavy Industrial.

224. As in relation to CH 4 (19/20), and without being unduly selective, the Court does not consider that a property with a different zoning to that of the subject land can be the subject of direct comparison.

225. Accordingly, the Court has disregarded this property as requiring too many adjustments to be a truly or genuinely comparable sale property for the valuing year 1 July 2021 for the purpose of direct comparison to the subject land.

CH 2 (2021) – 1011-1027 Canley Vale Road, Canley Vale

CH 2 (2021) Address:          Distance from subject land:    Sale Price:         Sale Date:          Area:         Type of Sale:     Zoning:    Planning Scheme: Analysed Rate:    Adjusted Rate:     Adjusted Rate: 1011 – 1027 Canley Vale Road, Canley Vale Approximately 14 kms $17,985,000 May 2021 13,917 m² Vacant land B5 Fairfield LEP $1,292 / m² $1,163 / m² by Mr Hubbard $581 / m² by Mr Konidaris

226. This property, relied on by the Valuer-General, is two adjoining parcels of vacant land adjacent to the Greenway Shopping Centre. The property was sold in May 2021 to the adjacent Greenway Shopping Centre. The analysed rate is significantly higher than the analysed rates of the other comparable sales relied on by the Valuer-General.

227. The Court finds that this sale represents a sale to an adjoining owner, and does not meet the test in Spencer v The Commonwealth at 441 which requires a valuer to consider the “value of the land … not by means of a forced sale, but by voluntary bargaining between the [seller and purchaser who are] willing to trade, but neither of them so anxious to do so that [they] would overlook any ordinary business consideration.” Accordingly, the Court has disregarded this sale for the purpose of direct comparison to the subject land for the valuing year 1 July 2021.

Conclusions

228. It follows that the Court has concluded as follows (doing the best it can with the evidence before it) in relation to the comparable sales sought to be relied on by the parties and their valuers for the valuing years 1 July 2019 and 1 July 2020:

AK 1 (19/20)	Disregarded
AK 2 (19/20)	Disregarded
AK 3 (19/20)	Disregarded
AK 4 (19/20)	Disregarded
CH 1 (19/20)	Court adjusted rate $615 / m2
CH 2 (19/20)	Court adjusted rate $660 / m2
CH 3 (19/20)	Disregarded
CH 4 (19/20)	Disregarded
CH 5 (19/20)	Disregarded

229. The Court has concluded as follows in relation to the comparable sales sought to be relied on by the parties for the valuing year 1 July 2021:

AK 1 (2021)	Disregarded
AK 3 (2021)	Disregarded
CH 1 (2021)	Disregarded
CH 2 (2021)	Disregarded

230. This leaves the Court, as judicial valuer, with a very limited pool of relevant comparable sales from which information may be derived concerning the subject land. The majority of the sales relied upon by the parties differ from the subject land in substantial ways, and cannot be said to be genuinely or truly comparable. Nor do they provide a reasonably representative sample of relevant sales, sufficient in volume, capable of being adjusted to create equivalence with the unimproved subject land. As Biscoe J cautioned in Holcim at [31], too many adjustments potentially render the comparable sale unsafe to rely upon.

231. However, doing the best I can, and having regard to the two sales I consider relevant for the valuing years 1 July 2019 and 1 July 2020, those sales being sales relied upon by the Valuer-General’s valuer Mr Hubbard, the Court has adopted an adjusted land value rate of the comparable properties in the range of between $615 / m² and $660 / m². Bearing in mind the principles set down in Spencer v The Commonwealth, the Court considers a rate towards the lower end of this range to be fair and reasonable in the circumstances of the subject land if it were to be sold on the market. Accordingly, the Court has adopted a land value rate of $625 /m² for the subject land for the valuing years 1 July 2019 and 1 July 2020.

232. For the valuing year 1 July 2021, I have determined that there is no sale relied upon by either party which is truly or genuinely comparable for the purpose of direct comparison to the subject land. Having decided that no suitable comparable sales have been provided for the valuing year 1 July 2021, it arises to adopt an alternative method to determine the land value for that valuing year.

233. The parties and the expert valuers, Mr Hubbard and Mr Konidaris, agreed that the same comparable sales could be analysed for the purpose of assessing the land values for the valuing years 1 July 2019 and 1 July 2020 as there was no market movement between those years. The parties also agreed that there was a general uplift in the order of 25% in land values in the vicinity of the subject land between the valuing years 1 July 2020 and 1 July 2021.

230. This general uplift in land values is demonstrated by the assessed land values for the valuing years 1 July 2020 and 1 July 2021 for the subject land as set out below.

Valuer	Land value for valuation dates 1 July 2019, 1 July 2020	Land value for valuation dates 1 July 2021	Percentage increase
AK	$9,495,000	$13,185,000	38.9%
Valuer-General	$19,800,000	$25,100,000	26.8%
CH	$24,000,000	$30,000,000	25.0%

235. As the only reliable comparable sales capable of being analysed and adjusted were those for the valuing years 1 July 2019 and 1 July 2020 and the general uplift in land values for property with similar characteristics to those of the subject land ranged between, say 25% and 39%, it is not unreasonable to positively adjust the determined land value rate for the valuing years 1 July 2019 and 1 July 2020 to derive a land value for the valuing year 1 July 2021.

236. Based on the evidence, the Court has determined that the uplift in the land value for the subject property for the valuing years 1 July 2019 and 1 July 2020 to the valuing year 1 July 2021 is 25%.

237. The determined land value rate of $625 / m² for the valuing years 1 July 2019 and 1 July 2020 increased by 25% is a land value rate of $781.25 / m² for the valuing year 1 July 2021.

Determined land values

238. The Court determines the land values for the subject land as follows:

Land value for valuation date 1 July 2019

239. Area of 29,300 m² x determined land value rate of $625 / m² = $18,312,500.

Land value for valuation date 1 July 2020

240. Area of 29,300 m² x determined land value rate of $625 / m² = $18,312,500.

Land value for valuation date 1 July 2021

241. Area of 29,300 m² x determined land value rate of $781.25 / m² = $22,890,625.

Orders

242. The Court has determined land values for each of the valuing years to be below the values ascertained by the Valuer-General. Accordingly, the appeal is upheld, and the Court revokes the decisions of the Valuer-General and decides in place of the decisions of the Valuer-General as follows.

243. In proceedings 2022/256791, 2022/256815 and 2022/256816:

1. The appeal is upheld.

2. The Valuer-General’s decision dated 30 June 2022 disallowing the appellant’s objection to the Valuer-General’s valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is revoked.

3. The Valuer-General’s decision dated 30 June 2022 disallowing the appellant’s objection to the Valuer-General’s valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year as at 1 July 2020 is revoked.

4. The Valuer-General’s decision dated 30 June 2022 disallowing the appellant’s objection to the Valuer-General’s valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive Warwick Farm, NSW for the valuing year 1 July 2021 is revoked.

5. The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is $18,312,500.

6. The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2020 is $18,312,500.

7. The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2021 is $22,890,625.

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Endnotes

Decision last updated: 27 March 2024