Queensland Judgments
Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment

F A Pidgeon & Son Pty Ltd v Valuer-General[2019] QLC 26

F A Pidgeon & Son Pty Ltd v Valuer-General[2019] QLC 26

LAND COURT OF QUEENSLAND

CITATION:

F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26

PARTIES:

F A Pidgeon & Son Pty Ltd

ACN 009 710 810

(appellant)

v

Valuer-General

(respondent)

FILE NO:

LVA072-17

DIVISION:

General Division

PROCEEDING:

Appeal against valuation under the Land Valuation Act 2010

DELIVERED ON:

31 May 2019

DELIVERED AT:

Brisbane

HEARD ON:

4, 5, 6, 10, 11 & 12 July 2018; 5, 6 & 7 September 2018; and 18 February 2019.

HEARD AT:

Brisbane

MEMBER:

PA Smith

ORDERS:

As regards LVA072-17, 375 Turbot Street, Brisbane:

  1. The appeal is allowed.
  2. The site value of 375 Turbot Street, Brisbane as at 1 October 2015 is determined in the sum of Twenty-Eight Million and Ninety-Four Thousand Dollars ($28,094,000).
  3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court.
  4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019.

CATCHWORDS:

REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – where appellant objects to valuation – where the site value is the basis of valuation – where sales have a different highest and best use to the subject – where sales are described as not directly comparable – where expert opinion comparison is required – where expert opinion of one expert significantly changed during oral evidence – what was the result of the valuer’s concession

REAL PROPERTY – VALUATION OF LAND – OBJECTIONS AND APPEALS – QUEENSLAND – NOTICE OF APPEAL – evidence – burden of proof – whether the appellant has met the onus of proof

EVIDENCE – ADDUCING EVIDENCE – WITNESSES – COMPETENCE AND COMPELLABILITY – where expert provides inconsistent evidence

Land Valuation Act 2010, ch 4

F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General [2019] QLC 25, cited

GPT RE Limited v Valuer-General (No 3) [2019] QLC 8, cited

John Bridge Ltd (in liq) v Commonwealth (1951) 11 The Valuer 375, cited

Kelly v Western Australian Planning Commission [2006] WASC 208, cited

APPEARANCES:

R Traves QC with S McCarthy (instructed by Otto Martiens) for the appellant

S Fynes-Clinton (instructed by In-house Legal, Department of Natural Resources, Mines and Energy) for the respondent

Background

  1. [1]
    This file relates to Lot 50 on Survey Plan 134928 or 375 Turbot Street, Spring Hill.
  1. [2]
    As per the orders of Member Stilgoe on 21 June 2018, this appeal was heard with appeals LVA073-17; LVA074-17; and LVA075-17.
  1. [3]
    Immediately prior to handing down my decision in this appeal, I delivered my decision in F A Pidgeon & Son Pty Ltd v Valuer-General; 310 Ann Street Nominees Pty Ltd v Valuer-General (No 2).[1] That decision relates to the other three appeals heard together with the current matter. For the purposes of the decision at hand, I have used F A Pidgeon (No 2) as my primary decision for the four matters heard together. 
  1. [4]
    The 375 Turbot Street appeal has been separated due to separate and distinct issues that arise, especially regarding Sale 9 in the current appeal, which was not a sale used in the other appeals. One sale used in the other appeals, Sale 8, is not relied on by either valuer for this appeal. That sale receives no further consideration in this appeal. The other seven sales from F A Pidgeon (No 2) all have relevance to some extent in the current appeal.
  1. [5]
    In F A Pidgeon (No 2) there were a number of issues which I specifically addressed arising from the seven sales common to this appeal. I incorporate into this decision all of my decision in F A Pidgeon (No 2). Where the facts and circumstances of the subject parcel of land in the case at hand require a different outcome or conclusion from that as set out in F A Pidgeon (No 2), I will specifically make reference to same in these reasons. It follows that I have drafted this decision in a much more succinct way than my decision for the other three files linked to this matter.
  1. [6]
    The appeal for 375 Turbot Street relates to the decision on objection dated 25 January 2017 which decided that the site value of $35 million as at 1 October 2015 would remain unaltered.[2] The appellant contends by its Notice of Appeal for a site value of $18,700,000 as at 1 October 2015.[3] The appellant ultimately contended that the applicable rate per square metre is in the order of $6,500/F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26 leading to a site value as at 1 October 2015 of $24,510,000 rounded from $24,511,500.[4]

The subject property

  1. [7]
    The property description of the subject land is Lot 50 on SP 134928. It has a total area of 3,771 F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26. It is as appears below:

F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26

  1. [8]
    The valuers engaged in this matter agreed that the shape of the subject is mostly rectangular with three street frontages.[5] The street frontage on Turbot Street is 92.95 metres; Boundary Street is 35.56 metres; and Perry Lane is 105.51 metres. Only Turbot Street and Perry Lane provide access to the subject land, both vehicular and pedestrian.
  1. [9]
    The subject land is situated on the north west periphery of the Brisbane CBD. A 22-storey residential apartment development (Republic Apartments) adjoins the property along its western boundary. To the rear of the property, fronting Ann Street, are the Manhattan, Metropolis, and New Yorker residential developments.
  1. [10]
    The subject is situated within 600 radial metres of the Brisbane GPO, within 900 radial metres of the Queen Street Mall, and within 530 radial metres from the Brisbane Central train station.
  1. [11]
    The topography of the subject is such that a cross fall of approximately 2.5 metres exists across the site from Turbot Street to Perry Lane. The subject has not been assigned flood level information for development purposes by the Brisbane City Council.
  1. [12]
    The subject is improved with a low rise retail and commercial complex, known as Spring Hill Marketplace. It includes a 2,600 m² supermarket, 800 m² of speciality shops, 900 m² of first floor office space, and parking for 149 vehicles in two basement levels and at ground level.
  1. [13]
    The highest and best use of the land is for residential apartment development with retail uses at ground level. This is due to its location and surrounding development, its size, shape and dimensions, its street frontage, and its vehicular and pedestrian access.
  1. [14]
    Lot 50 on SP 134928 is also burdened by one easement (Easement A) for drainage purposes and another (Easement B) for the purposes of right of way. Easement A is underground and has a total area of 56 F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26. Easement B is a total of 77 F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26.
  1. [15]
    The valuers have agreed that the development potential of the subject is not impacted by the existence of the easements, so it is unnecessary to take them into account further.

The witnesses

  1. [16]
    In addition to the witnesses listed in my other decision linked with these matters, this appeal also had the benefit of town planning expert evidence.
  1. [17]
    The expert town planning evidence presented to the Court was given by Mr Greg Ovenden called by the Valuer-General, and Mr David Perkins, called by the appellant. Mr Ovenden and Mr Perkins gave relatively short evidence compared to the totality of the hearing, amounting to approximately two hours in total. Their evidence was given concurrently.
  1. [18]
    Mr Ovenden and Mr Perkins also prepared a joint expert report (JER) which was their evidence-in-chief in these proceedings. Their JER is Exhibit 7. Both experts also prepared short individual reports which arose out of instructions received by them on 1 June 2018, requesting they compare the highest and best use of the subject land, 375 Turbot Street, and Sale 9, 44–100 Barry Parade.
  1. [19]
    Mr Ovenden’s individual report became Exhibit 8 and Mr Perkins’ became Exhibit 9. I note, these reports were filed very close to the first day of hearing, being 27 June 2018 and 2 July 2018, respectively.
  1. [20]
    I would normally go into some detail in making findings with respect to expert evidence such as expert town planning evidence. For reasons which will become obvious later in this decision, it is unnecessary for me to do so given the particular circumstances which unfolded during the oral evidence of the valuers.
  1. [21]
    Although there is no doubt that there are some differences between Mr Ovenden and Mr Perkins in elements of their opinions, it is also clear, from both their JER and their oral evidence, that there is much upon which they agree. Given the manner in which a concession by Mr Hart has impacted my determination in this matter, those areas of difference of opinion between the town planning experts melt away to being insignificant in the overall disposition of this matter.
  1. [22]
    Mr Ovenden and Mr Perkins are both highly experienced town planners and experienced experts before courts. I have absolutely no hesitation in accepting all of the evidence in which they agree, which is sufficient for me to reach my decision in this appeal.
  1. [23]
    In addition to the town planning evidence, there was a supplementary expert valuation report of Mr Jackson (Exhibit 17), dated 6 July 2018, which related specifically to the subject.

A different approach to this decision compared to the linked decisions

  1. [24]
    As will quickly become apparent, save for short comments on the bundle of sales in tabular form and a little extra to say over what appears in the linked decision for the merged market theory, the bulk of this decision is set out, and reads, entirely differently to the linked decision. That was not always the case.
  1. [25]
    An earlier draft of this decision followed the same format as the linked decision. The draft had already reached 40 pages and was rapidly rising. On review of my reasoning, however, and taking a helicopter overview of this particular decision, I became strongly of the view that this matter should be dealt with quite differently to the linked matters.
  1. [26]
    A major heading which appears below is “The concession”. This point became the crux of the case. However, despite the subsequent brevity, in relative terms, compared to the linked decision, I must stress and reiterate, firstly, that all of my reasoning where relevant from the linked decision is incorporated into this decision. In addition, I confirm that I have had regard to, and considered, all of the evidence and all of the submissions placed before me.
  1. [27]
    Given the manner in which the evidence unfolded for the subject appeal, what had all the appearances of being as complex as the linked case, dissolved into an exercise of comparing one sale which the valuers ultimately agreed was by far the most comparable sale to the subject. For a myriad of reasons, all other sales simply melted away.

The sales

  1. [28]
    The below table outlines the valuers positions with respect to the sales, as well as identifies the way in which the sales are referred to in this judgment. I note, this table differs to the one in my other decision only in relation to Sale 8, 55 Elizabeth Street, not being considered and the addition of Sale 9. The analysis of Sale 9 from page 590A of Exhibit 1 are depicted in the second table below.

F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26

F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26

Merged market theory

  1. [29]
    In addition to my analysis of this topic in the linked cases, I note that there is also evidence from Mr Cross regarding his determination on objection for the subject.
  1. [30]
    During his evidence, Mr Cross acknowledged that no particular highest and best use was designated to the property. He said: “…we just see it again as principal centre zone land…”.[6] Mr Cross said he was unware of the sale of 44–100 Barry Parade and no regard was had to it in the decision on objection in respect of 375 Turbot Street.[7]
  1. [31]
    Nothing in Mr Cross’ evidence derogates from the conclusions that I reached in the linked matters on this topic. More to the point, his specific evidence regarding the subject reinforces my conclusions that the respondent and Mr Hart proceeded on the basis that, as at the valuation date, properties in the Brisbane CBD were part of a merged market. For the reasons set out in the linked matter, I find that different markets were in operation within the Brisbane CBD at the time, particularly as regards student accommodation, commercial development, retail, and residential accommodation.

The concession

  1. [32]
    It sometimes occurs during the course of a hearing that there will be a moment, or perhaps a string of moments, during the course of the evidence which brings even the more complicated cases down to simple terms. This is one of those occurrences. In order to understand the importance of what occurred, it is necessary to read quite a deal of transcript; I could simply extract abbreviated versions in the appellant’s words, but that would only be showing what Counsel for the appellant abbreviated as having been said, rather than the actual words for themselves.
  1. [33]
    Although the transcript is lengthy, it does, in the most part, resolve this appeal.
  1. [34]
    To begin with, it must be remembered that Mr Jackson and Mr Hart gave their oral evidence concurrently. On day eight of the hearing, Mr Traves QC was taking the valuers through parts of Mr Jackson’s supplementary report, Exhibit 17. He asked Mr Jackson and Mr Hart particular questions regarding paragraphs 48 to 51 of Exhibit 17. Those paragraphs relate to the 300 and 310 Ann Street appeals, with Mr Traves’ questioning of Mr Hart referring to a number of other sales that related to those appeals. Mr Hart agreed with Mr Traves’ proposition that an adjustment of 10% for the difference between the potential for those unrestrained sites and the actual level of development on the Ann Street sites was appropriate.[8]
  1. [35]
    Mr Traves QC then turned his questioning of Mr Hart to Barry Parade (Sale 9) and its relationship with 375 Turbot Street. I will let the transcript speak for itself:

“MR TRAVES:   And Mr Jackson’s point at paragraph 51, and can I suggest to you it’s logical, is that in respect of the different development potentials for Barry Parade and for 357 Turbot Street, it’s appropriate to make the same allowance.  Do you agree with that, Mr Hart?

MR HART:   Yes, there’s to be allowance to be made, yep.

MR TRAVES:   And do you agree that 10 per cent is appropriate?

MR HART:   I think that’s somewhat appropriate, yep.

MR TRAVES:   It is    

MR HART:   Yes, yes, it’s    

MR TRAVES:      appropriate – thank you.

MR HART:      appropriate.”[9] 

  1. [36]
    Mr Traves QC revisited the issue of the 10% allowance for the development potential of the subject on the next day of the hearing:

“MR TRAVES:   All right.  Now, can I come to 60 – sorry – can I come to Barry Parade for a moment and ask you this:  last – yesterday, you agreed with me that in respect of – let me come back.  The biggest difference on the reports, between you and Mr Jackson about Barry Parade and its comparison with 375 Turbot Street, was the development potential of 375 Turbot Street, which was the product of the different planning scheme provisions.  That was the biggest difference between you two?

MR HART: Yes, that – there – that is a big difference, yes. 

MR TRAVES:   And then there were some differences which, can I suggest, were relatively – in relative terms – relatively minor.  For example, there was the issue about the impact of the rail easement on the north western corner.  And there was one or two – that’s one of them, wasn’t it?

MR HART:   That’s one of them, yes. 

MR TRAVES:   And you’d agree with me, in fairness, relatively of much lesser importance than the development potential issue?

MR HART:   Yes, yep, yes. 

MR TRAVES:   And then there were a couple of others.  Can you remind me what they were – the other little adjustments you thought necessary.

MR HART:   The – the shape, I think      

MR TRAVES:   The shape.  Thank you.  So the shape.  

MR HART:         the orientation, the size and location I think was another. 

MR TRAVES:   Okay.  All right.  Now, having – yesterday you agreed with the question that I asked you, that the relevant adjustment for development potential was 10 per cent.  Do you remember that?

MR HART:   Yes.

MR TRAVES:   Now, the rest of the adjustments, can I suggest, are the sort of adjustments that a valuer of your experience, and in your role, would comfortably make every day of the week – shape, size, an easement over a corner – all things, Mr Hart      

MR HART:   Yes.

MR TRAVES:         as one of the senior valuers in the Valuer-General’s engagement, you would make every day of the week. 

MR HART:   Yes. 

MR TRAVES:   Correct?  So, really, I suggest to you that there’s nothing left as to why you wouldn’t sensibly compare Barry Parade to 375 Turbot Street.  Having been able to make those adjustments, then there’s – nothing stands in the way of a sensible comparison being made between the two properties.  Do you agree with that?

MR HART:   Yes, I believe – and I believe I’ve done that.

MR TRAVES:   All right.  So if nothing stands in the way of there being a sensible comparison between the two properties, this property being located across the road from 375 Turbot Street, and being of an almost identical size, or a very close size, surely is the best sale.

MR HART:   Well, I – there – yeah, they’re obviously – if you were just to look at that issue of location and size, it would – it would be the best site.  But there are      

MR TRAVES:   All right.  Well      

MR HART:         those other factors that [indistinct]

MR TRAVES:   Yes, but we’ve dealt with them, haven’t we?  We’ve dealt with them.  By way of the adjustment, you’ve agreed that the development potential is by far the most important adjustment;  and that’s at 10 per cent.  And the rest, you’ve agreed, you do every day of the week and can sensibly be made. 

MR HART:   Yes, you can.

MR TRAVES:   Now, given those things, I put to you that, plainly, now that we’ve been informed of all of those things – it might not have been the view you originally took, but plainly, Barry Parade is the best and most useful sale.  Plainly.

MR HART:   Yes, if you can do those adjustments appropriately.  Yes.”[10] 

  1. [37]
    Mr Hart was again taken to the issue of a 10% allowance for the development potential of the subject a short time later during responsive questioning by Mr Fynes-Clinton as part of the concurrent evidence process. The relevant transcript references run from T 9 page 105 at line 45 through to T 9 page 111 line 31. That part of the transcript involved a number of objections and submissions by Counsel which, while it certainly puts the questioning of Mr Hart even more into context, is overly long to quote in this decision. I reproduce relevant extracts from that part of the transcript:

“MR FYNES-CLINTON:   Just a couple of matters for clarification hopefully.  Mr Hart, some questions were put to you about the proposition that comparing Barry Parade to 375 Turbot Street an allowance of 10 per cent for development potential difference might be appropriate.  Do you recall those?

MR HART:   Yes.

MR FYNES-CLINTON:   And I think your answer to my learned friend was in the affirmative.

MR HART:   Yes.  It’s      

MR FYNES-CLINTON:   All right.  Now, your valuation for 375 Turbot Street is nine – equates to $9000 per square metre.  Correct?

MR HART:   Yes.

MR FYNES-CLINTON:   I – all right.  Mr Hart, do you see any inconsistency between the answers you gave to my learned friend about a 10 per cent differential in development potential between Barry Parade and 375 Turbot and the difference that remains between you and Mr Jackson about the appropriate rate to apply [indistinct] MR HART:   No, I don’t believe so.

MR FYNES-CLINTON:   All right.  Well, now that may require some explanation.  Can you tell the court why you don’t believe so?

MR HART:   Well, I think it’s just about those adjustments up from that $6500 a square metre, and if you were to – we put the figure on the 10 per cent for the development potential.  But I think – so that’s an addon to the six and a half.  I think it’s – the subject property is in a superior location.  It’s got that CBD address.  Again, when you’re marketing your site      

MR FYNES-CLINTON:   Your valuation report and your evidence remains $9000 per square metre.

MR HART:   Yes.

MR FYNES-CLINTON:   Mr Jackson’s remains – is $6500 per square metre.

MR HART:   Yes.

MR FYNES-CLINTON:   Agreed?  And you were asked some questions to which you gave some answers which included a statement by you that is on the record      

MR HART:   Yes.

MR FYNES-CLINTON:         that you consider an adjustment between the two properties of 10 per cent for development potential to be appropriate.

MR HART:   Yes.

MR FYNES-CLINTON:   So [indistinct] all that.

MR HART:   Yes.

MR FYNES-CLINTON:   And my question to you is to clarify for both the parties and the court whether you regard there being any inconsistency between, on the one hand, your value of 9000 and Mr Jackson’s value of 6500;  and what you’ve said to the court about a 10 per cent differential for development potential.

MR HART:   I don’t think there is any inconsistency.  I maintain      

MR FYNES-CLINTON:   I’m at somewhat of a dilemma because I’ve asked the question – and I don’t mean to be glib or disrespectful, but, Mr Hart, I’m going to ask my question again and then I will ask a couple more.  You’ve got my question three times now.

MR HART:   The only inconsistency I can see is the adoption of a – the 10 per cent amount, but I have – I have maintained that the development potential on the subject  property is better than the sale property.  So it’s not inconsistent in that – in that regard.

Mr Hart, can you give a one-sentence summary – and we will see if this gets through the net or not – of your response to my question about inconsistent between the 10 per cent and the answers you gave to my learned friend and the differential between your two valuations?

MR HART:    I don’t believe there’s any inconsistency.”

  1. [38]
    The appellant correctly points out that the only reference to the question of the inconsistencies in Mr Hart’s evidence outlined above in the respondent’s written submissions is contained in footnote 121 which states as follows:

And to the extent it becomes relevant, neither can Mr Hart  - if he made a "concession" in that regard, he did so towards the end of a gruelling trial and, on the objective facts, he was wrong.”

  1. [39]
    The appellant contends at paragraph 113 of its reply that the relevance of 44–100 Barry Parade to the 375 Turbot Street appeal is beyond doubt. I agree. I also agree that, at the conclusion of the oral evidence of the valuers, the relevance of the sale was common ground between them. Mr Hart agreed that nothing stood in the way of sensible comparison between 44–100 Barry Parade and the subject property and that it was plainly the best and most useful sale, having agreed to an adjustment of 10% necessary for development potential, and to other adjustments which could be made as a matter of routine.
  1. [40]
    I also agree with paragraph 114 of the appellant’s reply. It is incorrect to submit, as the respondent does, that Mr Hart rejects the sale as providing reliable evidence of value for the appeal site.[11] Indeed, in view of the evidence, the submission is troubling; it ignores the evidence of Mr Hart. I strongly agree that, in light of the joint position of the valuers, the only question is what level of adjustment (if any) ought to be made in comparing the most useful sale to the subject.
  1. [41]
    The appellant goes on in its reply at paragraphs 118 and 119 to specifically respond to the allegations made by the respondent in footnote 121. I agree that Mr Hart’s concession was frank, logical, and objectively supported by the evidence. I strongly commend Mr Hart for the evidence that he gave in this regard.
  1. [42]
    It would be possible to take the approach that Mr Hart gave inconsistent evidence to such an extent that his evidence as an expert in these proceedings should be disregarded. The appellant does not submit that and that is certainly not the conclusion that I formed having carefully listened to Mr Hart’s evidence.
  1. [43]
    Mr Hart of course gave his evidence to the Court as an expert witness. I have absolutely no doubt that Mr Hart understands his obligations to provide his honest opinion to the Court and not to adopt the position of any particular party. That is the classic role of expert opinion evidence before the Court. Valuers such as Mr Hart, though, are in a difficult position. They give their evidence as independent experts, but they are employed by the respondent who is contending for a particular valuation in a matter which may or may not accord with the valuer’s personal opinion. This is a problem that has been faced by valuers employed by Valuer-General’s across the various jurisdictions in Australia over at least the last century.
  1. [44]
    I have no intention of being critical of Mr Hart or other valuers employed by the respondent. I simply note the practical difficulties with which they are faced. It is certainly true that this was a lengthy case and that the valuers gave a substantial amount of evidence. It is, however, also true that the evidence was split into hearing parts.
  1. [45]
    I have absolutely no doubt that Mr Hart clearly understood the questions that he was being asked regarding the 10% concession and the fact that it was the most important aspect of Sale 9 and that, when it was taken into account, together with other more minor aspects of comparability between Sale 9 and the subject, Sale 9 became by far the most comparable sale to the subject, even taking into account that, despite its close proximity to the subject, the Barry Parade sale is not in the CBD, and thus, does not enjoy the same planning codes that CBD properties have. The evidence from both planners in that regard was clear.
  1. [46]
    The error that Mr Hart has made with respect to the subject is to have disregarded the Barry Parade sale at the outset. In that regard, the JER process for this matter failed somewhat. Joint expert reports are meant to bring two valuers together so that they can properly understand the opinion of the other and the facts upon which that opinion is based. Referring specifically to the respondent’s position on the merged market theory as extensively discussed in the linked decision, when compiling his parts of the JER, Mr Hart had been, I find on the totality of the evidence before me, blind to the fact that the subject could be compared to any sales other than CBD sales in a merged market in accordance with the merged market theory.
  1. [47]
    Of course, the folly with this approach is, as I have pointed out in the linked decision, that the merged market can only arise as a consequence of the facts of the market during a particular valuation period. Accordingly, it is something which needs to be reviewed from valuation period to valuation period to keep up-to-date with what is actually occurring in the market. Perhaps in any particular valuation timespan the factual evidence will be such that the CBD in Brisbane has a merged market resulting in sales across the board being comparable to various sites. I have very specifically found in the linked case, and I also, to remove any doubt, so find for the current case, that there was not a merged market in the Brisbane CBD in 2014 and 2015. The merged market had probably disappeared some years, if not many years before.
  1. [48]
    Had Mr Hart looked beyond his; Mr Cross’; and the respondent’s understanding of the merged market theory to the actual state of the CBD market in Brisbane at the time of the site valuation (including comparable sales before and after the valuation date - such as Barry Parade - which the case authorities show clearly may be considered),[12] he would have seen the difficulties with so many of his sales. If he had broadened his mind from an overall valuation perspective just a little more than the merged market theory with which the respondent appears to have been entrenched, he would, no doubt, have had proper regard at a much earlier stage to the Barry Parade sale.
  1. [49]
    I, again, stress that it is to Mr Hart’s high credit that, when the true position of the Barry Parade sale was understood by him, that he gave full, fearless, frank, and honest testimony as to his opinion.
  1. [50]
    I have no doubt that Mr Hart honestly believes that the subject is superior to Barry Parade, Sale 9. As will be seen at the conclusion of these reasons, I agree with him. I also have no doubt that Mr Hart was being truthful when he indicated that the most important comparability consideration to take into account was the 10% allowance for the development potential of the subject and that other aspects of comparability which Mr Hart considered should also be factored in because of superior aspects of the subject to Sale 9 were, by comparison, minor.
  1. [51]
    I will not be critical of Mr Hart, when he no doubt realised the impact that his evidence had on his site valuation for the subject, for attempting to stretch the issues of superiority of the subject over Barry Parade to reach his site value figure. I view that as the inconsistency in Mr Hart’s evidence, and not the evidence he gave regarding the 10% allowance for the development potential of the subject.
  1. [52]
    Returning to the appellant’s reply submissions, I agree with the proposition expressed at paragraph 118(a) that the basis for the respondent’s attack on the objective correctness of the concession seems to be that “…it is impossible, as a matter of logic to regard the subject as having an inferior development potential to the sale – fact and logic suggest the opposite” because of the size and range of assessable uses within the Brisbane CBD City Centre Neighbourhood Plan as compared to the Fortitude Valley Neighbourhood Plan.[13]
  1. [53]
    I also agree with the appellant’s submissions at paragraph 118(b) of its reply, which states as follows:

“We have elsewhere dealt with the relative similarity between the intensity of the development between the sale and the subject. It is clear that it is the market, and not the merely permissive planning scheme, which most influences development potential. Indeed, in paragraph 113 of the Respondent’s Submissions, it is accepted that the density or impact of the development on the sale property is comparable to what might reasonably be anticipated on the subject property, albeit in a different configuration. That follows from the evidence of the planners and the valuers who agreed that a development in the order of 40 storeys on the subject site was in the order of likely development (T8-115 L 10-26).”

  1. [54]
    It is fortunate that, for the purposes of comparing Sale 9 to the subject, both Mr Hart and Mr Jackson start with an agreed analysed figure for Sale 9 of $6,494/F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26. Throughout their oral evidence, including that extracted above, the agreed amount moved ever so slightly to $6,500/F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26. I will put that minor movement down to simple rounding. As I have clearly indicated, Mr Hart and Mr Jackson agree with a 10% factor taking into account the superior development potential of the subject. That brings the agreed site value for the subject under the Land Valuation Act 2010 (LVA) up to $7,150/F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26.
  1. [55]
    As it is agreed by the valuers that Barry Parade is clearly the most appropriate sale to compare to the subject, it is now necessary for me to consider the other features that the valuers say should be brought to account.
  1. [56]
    In Exhibit 44, Mr Jackson makes an allowance of 5% for what he says is the superior location of Sale 9. Mr Hart considers the location of the subject to be superior. In this regard, the appellant had the following to say in its reply at paragraph 126:

“At paragraph 116 of the Respondent’s Submissions, the Respondent criticises Mr Jackson’s description of Barry Parade as a ‘quiet residential street’, but does so out of context. The truncated quote on the Respondent’s Submissions obscures that Mr Jackson was describing the relative attributes of Barry Parade and Turbot Street. Mr Jackson said at paragraph 53 of Exhibit 17 (our emphasis): ‘The Barry Parade site has the obvious advantage of being located in a quiet residential street with superior amenity compared to a busy main road location on Turbot Street.’ There can be little doubt that Turbot Street is a major road carrying significant traffic through the CBD and that Barry Parade is relatively quieter. Moreover, it is not correct, as the Respondent submits, that the sale property’s southern boundary is ‘exposed’ to traffic noise from Turbot Street because there is existing development in the form of St James’ school and a residential development on the corner of School Street and Turbot Street shielding the sale from direct exposure to Turbot Street. The subject has no such advantage.”

  1. [57]
    I only partly agree with the appellant’s submission. On the basis of all of the evidence before me, including the town planning evidence, I find it almost incomprehensible, as it seems does the respondent, that Mr Jackson could refer to Barry Parade as a quiet residential street. It may indeed be factually correct that Barry Parade is quieter than Turbot Street but nowhere in the evidence, apart from Mr Jackson’s opinion, do I find any facts to support it being referred to as a quiet suburban street. Mr Jackson has been overzealous in his categorisation of Barry Parade in this way. Rather than making out his argument, it detracts from it.
  1. [58]
    The town planning evidence has indicated clear advantages of a CBD location over one in Fortitude Valley. Those advantages are not just taken up in the 10% allowance for the superior development potential of the subject. Taking all of the evidence into account, including, in particular, the evidence of the town planners and Mr Hart, I find that there exists in the market location benefit in having a CBD address compared to that of somewhere outside of the CBD, even if only slightly.
  1. [59]
    While not wishing to put words into Mr Jackson’s mouth, the simple line on a map which separates Sale 9 from the CBD is more than something of insignificance. Certainly, there is more traffic in Turbot Street than Barry Parade; but such an occurrence can equally be seen as much more superior prominence of a CBD site.
  1. [60]
    Overall, in this regard, I find that there should be a minor adjustment for superiority of location of the subject in the CBD over that of Sale 9 outside of the CBD.
  1. [61]
    I also have some difficulty with Mr Jackson’s conclusion of superiority for Sale 9 over the subject because of the existence of the development approval (DA).[14] I certainly accept the general proposition that, when comparing two sales, one with a DA and one without a DA, that, all other things being equal, there will be a superiority for the sale with a DA over the one without. That is a rather standard conclusion in valuation cases. However, in the case at hand, all other things are certainly not equal. The subject enjoys the development privileges of being part of the CBD/City Centre Neighbourhood Plan (CCNP). Mr Jackson has clearly taken a DA to be something different to development potential for the purpose of arriving at his 10% superiority for the subject, otherwise it should logically have been taken into account as part of the development potential comparison. If he is correct in that regard, then equally, the benefits of the CBD/CCNP to the subject also need to be taken into account. I find that the DA for Sale 9, if not part of the development potential consideration, is cancelled out by the fact of the approval benefits of being in the CCNP.
  1. [62]
    I could go on for many pages examining in minutia the minor comparability differences between the subject and Sale 9. At the end of the day however, having considered all of the evidence and all of the submissions made, there is little point. Leaving to one side those aspects of the comparability of the subject and Sale 9 for which I have already drawn conclusions, being the superiority of the subject having regard to its development potential over that of Barry Parade, as well as the superiority, to a lesser degree, of the subject over Barry Parade because of location, I consider the other aspects of comparability to involve very minor issues of give-and-take each way which effectively counter each other out.
  1. [63]
    As regards the other sales that the valuers have had regard to, in my linked decision, I indicated major difficulties which those sales had when they were compared with the 300 and 310 Ann Street subjects, save for Sales 6 and 8. Sale 8 is not under consideration in the case at hand. Sale 6 has come under attack, for justifiable reasons, namely, for difficulties in comparing that sale to the current subject. That position was accepted, in my view, correctly, by both valuers, at least to some extent, during their extensive oral evidence. It is true of course that the difficulties in the linked case related specifically in part to the comparability of those sales to the Ann Street subjects. However, even taking into account the different attributes of the current subject compared to the linked Ann Street subjects, I am firmly of the view that many of the difficulties that I have already addressed in my linked decision remain valid for the current subject.
  1. [64]
    Furthermore, each side has drawn attention to what they say the evidence says in support of their contention of difficulties with their opponents sales. I find myself in the rather interesting position of agreeing with most of the criticisms made by each side in that regard. All that does, is emphasise the point which was ultimately reached by Mr Jackson and Mr Hart; that is, that Sale 9 is by far the most comparable sale to the subject. My difficulties with the other sales, and the strength of the evidence of both valuers in their support for Sale 9, leads me to the inevitable conclusion that this is an appropriate case where I should overwhelmingly only use Sale 9 as a comparator to the subject.

Determination for 375 Turbot Street

  1. [65]
    Having considered the evidence and the submissions of the parties, my first task for 375 Turbot Street is to determine whether or not the evidence in its totality supports the case put by the appellant that the issued valuation is in error, on the balance of probabilities, so that the onus of proof is discharged.
  1. [66]
    In my view the appellant has, on the balance of probabilities, established that the issued valuation for 375 Turbot Street is in error. It is unnecessary for me to repeat the body of evidence that leads me to this conclusion. Without derogating from any of the conclusions that I have made in this decision, in short, the appellant has demonstrated that the site values contended for by the Valuer-General are excessive and erroneous. Just as was the case in the linked decisions, the errors include the reliance upon the merged market theory, and placing emphasis on sales which are not properly comparable to the subject. To that of course can be added the failure to take into account and properly consider and compare the Barry Parade sale, a point which Mr Hart, to his credit, conceded during the oral evidence as discussed.
  1. [67]
    Having found that the onus of proof has been satisfied, my next task is to determine, on the evidence before me, the appropriate site value for the subject. I specifically find, for the reasons listed above, and consistent with the evidence of the valuers, that Sale 9 (Barry Parade) is far and away the most comparable sale to the subject. Given various difficulties with all of the other sales, I consider it appropriate to base the site valuation of 375 Turbot Street only on a comparison with Sale 9.
  1. [68]
    As I have already indicated, the agreed 10% factor taking into account the superior development potential of the subject brings the agreed site value for the subject under the LVA up to $7,150/F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26. To that rate must be added an extra amount to take into account the superior location that I have found to exist for the subject over Sale 9, noting of course that such superiority is well less than the 10% factor for the superior development potential of the subject. Doing the best that I can with the rather imprecise evidence in regard, and on the understanding that valuation opinion is far from an exact science, I am prepared to increase the site value for the subject under the LVA up to $7,450/F A Pidgeon & Son Pty Ltd v Valuer-General [2019] QLC 26.
  1. [69]
    The LVA Site Value of 375 Turbot Street as at 1 October 2015 is calculated as follows:

Site Value Assessment

Land Area: 3771m2

@ $7,450/m2

$28,093,950

Rounded to:

$28,094,000

  1. [70]
    It follows that for appeal file LVA072-17, 375 Turbot Street, I determine the site value as at 1 October 2015 to be $28,094,000.

Costs

  1. [71]
    I make the following observations regarding costs. Subject to anything the parties may wish to submit on the issue of costs, it is my strong view that, having regard to all of the evidence before me in all of the linked matters, and also having regard to the conduct of the parties, I am of the strong view that there has been nothing in the cases or submissions as put by either side apt to enliven the costs provisions of the LVA.
  1. [72]
    I make my observation in the preceding paragraph fully cognisant of both the evidence of Mr Hart and the submissions of the respondent. Those factors do not lessen my preliminary strong view as to costs in any way. In many respects, the evidence of Mr Hart enhances my view. Not only must Mr Hart be commended for the honesty of the concession that he made during his oral evidence, I consider it important that all expert valuers, including, but not limited to, expert valuers in the employ of the respondent, should, in all respects, feel unconstrained in giving their honest opinion in answer to questions, even when, given the way evidence unfolds in a case, such honest opinion is at odds with a previously held view of the expert.
  1. [73]
    This case is nothing like other matters that I have had where costs have been awarded against the respondent, in particular, that in which I was critical of the Valuer-General for failing to uphold model litigant principles.[15]
  1. [74]
    I appreciate, of course, that I am yet to hear from the parties as to any submissions they may wish to make with respect to costs. As this decision is being delivered at 12.30pm on 31 May 2019, which importantly for me is my retirement day, I will allow the parties until 2.30pm on 31 May 2019 to formally advise the Court, and the other party, in writing, if either of them seeks any order as to costs.
  1. [75]
    If any party intends to seek an order for costs, if possible, I will hear from the parties by way of oral submissions later in the afternoon of 31 May 2019 and thereafter deliver ex tempore reasons. However, if the parties are able to convince me that they require additional time to make their submissions, I will give the matter further consideration.

Orders

As regards LVA072-17, 375 Turbot Street, Brisbane:

  1. The appeal is allowed.
  2. The site value of 375 Turbot Street, Brisbane, as at 1 October 2015, is determined in the sum of Twenty-Eight Million and Ninety-Four Thousand Dollars ($28,094,000).
  3. Should either party seek any order as to costs, that party must provide written notice of its intention to do so by 2.30pm on Friday, 31 May 2019, to the other party and to the Court.
  4. In the event that either or both parties seek costs, the parties are to make oral submissions as to costs at a time to be arranged after 2.30pm on Friday, 31 May 2019.

PA SMITH

MEMBER OF THE LAND COURT

Footnotes

[1]  [2019] QLC 25.

[2]  Ex 1 page 36.

[3]  Ibid page 20.

[4]  Appellant’s written submissions, [280]; [325]. 

[5]  Ex 2, [12].

[6]  T 8-10, lines 25 to 26.

[7]  T 8-10, lines 35 to 37.

[8]  T 8-117, line 30 to T 8-118, line 8.

[9]  T 8-118, lines 10 to 27.

[10]  T 9-96, line 34 to T 9-98, line 19.

[11]  See respondent’s written submissions [108] and, in particular, the submissions which follow it.

[12]  See, for example, John Bridge Ltd (in liq) v Commonwealth (1951) 11 The Valuer 375, 377, cited with approval in Kelly v Western Australian Planning Commission [2006] WASC 208.

[13]  See Ex 17, [79].

[14]  See Ex 44.

[15]  GPT RE Limited v Valuer-General (No 3) [2019] QLC 8.

Close

Editorial Notes

  • Published Case Name:

    F A Pidgeon & Son Pty Ltd v Valuer-General

  • Shortened Case Name:

    F A Pidgeon & Son Pty Ltd v Valuer-General

  • MNC:

    [2019] QLC 26

  • Court:

    QLC

  • Judge(s):

    Member Smith

  • Date:

    31 May 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.