GPT RE Limited v Valuer-General

STATUTES - ACTS OF PARLIAMENT - INTERPRETATION - whether use can be made of extrinsic material - whether interstate legislation and case law is of assistance

PROCEDURE - CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS - GROUNDS OF APPEAL - whether grounds of appeal are sufficient to support appellant's contentions

EVIDENCE - GENERAL PRINCIPLES -RULING AND FINDINGS - whether expert evidence should be dismissed on the grounds of impartiality - whether expert evidence from valuation experts can be relied upon

Land valuation Act 2010, s16, s 17, s 18, s 19, s 22, s 23, s 169

101 Collins Street P/L v City of Melbourne; Dinias P/L v City of Melbourne (Unreported, Supreme Court of Victoria, Batt J, 2 April 1996) 85, applied

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, followed

Body Corporate for "147-153 Mary Street Gympie" CTS v Valuer-General (2013) 34 QLCR 298, considered

Brisbane Square Pty Ltd v Valuer-General [2016] QLC 69,

Fairfax v Department of Natural Resources and Mines [2005] QLC 11, applied

Buckler v Department of Natural Resources and Water [2011] QLC 7, applied

Certain Lloyd's Underwriters v Cross [2012] HCA 56; (2012) 248 CLR 378, followed

GPT RE Limited (as responsible entity) & Anor v Department of Natural Resources and Water (2009) 30 QLCR 100, considered

Hughes Aircraft Systems Internation v Airservices Australia [1997] FCA 558; (1997) 76 FCR 151, considered

Macarthur Central Shopping Centre Pty Ltd as TTE v Valuer-General (No.2) [2016] QLC 80, considered

Meiers v Valuer-General [2012] QLC 19, applied

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, followed

Spencer v The Commonwealth of Australia (1907) 5 CLR 418, followed

Steers v Valuer-General [2012] QLC 12, applied

The Melbourne Steamship Co Ltd v Moorehead [1912] HCA 69; (1912) 15 CLR 333, followed

Trust Co Limited (ATF Opera House Car Park Infrastructure Trust No 1) v Valuer-General (No 3) [2011] NSWLEC 85, considered

RN Traves QC with ND Loos of Counsel (instructed by Clayton Utz) for the appellant

DB Fraser QC with SP Fynes-Clinton of Counsel (instructed by In-house Legal, Department of Natural Resources and Mines) for the respondent

[1] The appellant, GPT, has appealed against the respondent, Valuer-General's, valuation of GPT's land situated at 123 Eagle Street, Brisbane as at 1 October 2012. The Valuer-General's valuation of the subject land as at that date is $87,000,000 and GPT contends in its Notice of Appeal[1] for a valuation of $68,900,000. The final position adopted by GPT is a valuation of $62,000,000.[2]

[2] The subject land has a rather complex make-up. The details that follow are taken from the valuers joint expert report (JER)[3] and their individual reports.[4]

[3] The subject land is situated on the eastern side of Eagle Street with extensive frontage to Eagle Street and the Brisbane River. The land slopes gently from Eagle Street down to the river.

[4] A premium grade building, known as the Riverside Centre, is constructed on the subject land. The Riverside Centre contains 43 levels of office accommodation; a ground level retail plaza with restaurants, dining facilities and retail tenancies; and two basement levels of car parking.

[5] The Riverside Centre forms part of what is known as the "Golden Triangle" which is, broadly speaking, that part of the CBD bordered by the Brisbane River, Queen Street, Edward Street and Margaret Street between Edward Street and the river.

[6] It is necessary to understand the tenure make-up of the subject land as there are encumbrances on Lot 123 on SP 208982. These encumbrances have the effect of reducing the land area subject to the valuation from the total area of Lot 123 of 10,700 m2 to an unburdened site area of 6,601 m2 and a burdened site area of 2,082 m2.

[7] Firstly, there is an office tower known as "One One One Eagle Street" located within its own volumetric lot (Lot 111 on SP 208982) in Lot 123. The volumetric lot has three parts. Part A has a footprint of 1,465 m2, extending from RL -150.0 to RL 1.525 and contains the basement car park of that building. Part B has a footprint of 2,017 m2, extends from RL 1.525 to RL 18.5 and contains the ground floor foyer of that building. Part C has a footprint area of 1,897 m2, extends from RL 18.5 to RL 300 and contains the building tower. The general ground surface level is RL 5.0.

[8] The valuers agree that by deducting the footprint area of Part B of Lot 111 (2,017 m2) from the total land area of Lot 123 (10,700 m2), the effective site area for the subject land is 8,683 m2. Consideration must then be given to Easement K.

[9] Easement K has a total area of 2,184 m2 as stated in SP 121079. It is an easement for light and air purposes. It restricts development on the subject land above RL 20. The easement affected portion of the subject land has been calculated by the valuers at 2,082 m2.

[10] Accordingly, taking in to account Part B of Lot 111 and the restrictions associated with Easement K, both valuers agreed that there is an unburdened site area of 6,601 m2 and a burdened site area of 2,082 m2 as regards the subject land.

[11] Survey Plan 208982, clearly showing Lot 123, volumetric Lot 111, and Easement K, is set out in Exhibit 6B and is reproduced below. It should be noted that Easement K is a triangular wedge shape and runs along the boundary with the Brisbane River.

[12] The hearing of this matter was rather tortured. It commenced on 22 February 2016 and, by 23 February 2016, it became obvious to all involved that the parties were not in a position to continue with the hearing. Following the taking of further evidentiary steps by the parties, the hearing resumed on 23 January 2017 and continued for 9 days.

[13] At the conclusion of the evidence on 3 February 2017, both parties sought orders requiring written submissions and oral submissions. Due to the complexity of the matter, the parties' requests were agreed to. Written submissions were subsequently produced and oral submissions heard on 24 and 25 May 2017.

[14] The subsequent delay in providing these reasons is regretted, but was, at least to some extent, beyond my control. At my request, the parties were advised in writing subsequent to the hearing that I suffered an injury requiring surgery and an extended leave of absence to recover to the point where I could return to duties. This unfortunately delayed this decision. My overall recovery continues.

[15] GPT was represented by Mr Traves QC and Mr Loos of Counsel instructed by Clayton Utz. The Valuer-General was represented by Mr Fraser QC and Mr Fynes-Clinton of Counsel, instructed by In-house legal, Department of Natural Resources and Mines.

[16] A total of six expert witnesses gave oral evidence at the hearing. All experts provided JER's and individual reports. Expert engineering evidence was given by Mr Ainsworth, called by GPT, and Mr Gould, called by the Valuer-General. Expert quantity surveying evidence was given by Mr McHardy, called by GPT, and Mr Davidson, called by the Valuer-General. The expert valuers were Mr Jackson, called by GPT, and Mr Hart, called by the Valuer-General.

[17] An inspection of the subject land and various sales properties was conducted by the Court in the presence of the legal representatives of the parties on 22 February 2016. A bundle of material referred to during the site inspection is Exhibit 5.

[18] It is the responsibility of the Valuer-General, pursuant to the provisions of the Land Valuation Act 2010 (LVA) to undertake valuations of all properties throughout Queensland. Those valuations are the basis for rating and land tax and related purposes.

[19] I note with approval what his Honour Isdale said in Steers v Valuer-General:

"[8] The use of sales to provide comparisons of value is well established. In NR and PG Tow v Valuer-General (1978) 5 QLCR 378, the Land Appeal Court constituted by Stable SPJ, Mr Smith and Mr Carter said at page 381:

'Courts of the highest authority have laid down that the best test of value is to be found in the sales of comparable properties, preferably unimproved, on the open market round about the relevant date of valuation and between prudent and willing, but not over-anxious parties.'

[9] This Court is required to follow the decisions of the Land Appeal Court and accordingly must prefer the evidence of comparable sales to the method contended for by the appellant, simply increasing a previous value by a factor of 10. Mr Steers did not explain why this particular multiplier and not some other one should be applied." [5]

[20] Market value is also a relevant feature to consider under the LVA.[6] As then President Trickett said in Fairfax v Department of Natural Resources and Mines:

"[11] The principles for determination of the "market value" of land were established by the High Court in Spencer v The Commonwealth (1907) 5 CLR 418. In that case, the High Court found that the value of land is determined by the price that a willing but not over-anxious buyer would pay to a willing but not over-anxious seller, both of whom are aware of all the circumstances which might affect the value of the land, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding facilities, the then present demand for land and the likelihood of a rise or fall in the value of a property.

[12] It has been well established that the unimproved value of land is ascertained by reference to prices that have been paid for similar parcels of land. In Waterhouse v The Valuer-General (1927) 8 LGR (NSW) 137 at 139, Pike J said that:

'Land in my opinion differs in no way from any other commodity. It certainly is more difficult to ascertain the market value of it but - as with other commodities - the best way to ascertain the market value is by finding what lands comparable to the subject land were bringing in the market on the relevant date - and that is evidenced by sales.'" [7]

[21] The concept of a bona fide sale in the Spencer test[8] has, in essence, been codified in s 18 of the LVA. As the question of what is, or is not, a bona fide sale has been raised as an issue in this appeal, it is essential to consider closely the specific provisions of the LVA.

[22] Section 16 of the LVA provides that, for deciding the value of land, all land is taken to be granted in fee simple; that is, freehold. Section 17 then goes on to provide as follows:

17 What is the land's expected realisation

(1) The expected realisation of land under a bona fide sale is the capital sum that its unencumbered estate in fee simple might be expected to realise if that estate were negotiated for sale as a bona fide sale.

unencumbered means unencumbered by any lease, agreement for lease, mortgage or other charge.

[23] Bona fide sale is then described in s 18 of the LVA:

(1) A bona fide sale, for land, is its sale on reasonable terms and conditions that a bona fide seller and buyer would require assuming the following (the bona fide sale tests) -

(b) a reasonable period within which to negotiate the sale;

(c) that the property was reasonably exposed to the market.

(2) For subsection (1), in considering whether terms and conditions are reasonable, regard must be had to -

(b) the state of the market for land of the same type.

(3) To remove any doubt, it is declared that if -

land in question means land whose value is being decided.

[24] The subject land in this matter has received a site value under the LVA. An important aspect of site value, depending on the circumstances of the particular matter, is the question of what are site improvements. In the case at hand, it is hotly disputed between the parties whether or not certain works on the subject land are properly classified as site improvements or not under the LVA.

[25] Section 19 of the LVA provide as follows:

(1) If land is improved, its site value is its expected realisation under a bona fide sale assuming all non-site improvements for the land had not been made.

(2) However, the land's site value is affected by any other relevant provisions of this chapter.

[26] Various statutory assumptions for existing uses are set out in s 22:

(1) This section does not apply for a Land Act rental valuation.

(2) In deciding land's site value, the following must be assumed (the existing use assumptions) -

(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, (each an existing use) on the valuation day;

(b) improvements may be continued or made to the land to allow it to continue to be used for any existing use.

(3) To remove any doubt, the following are declared for the existing use assumptions -

(a) they do not prevent regard being had under section 17 to any other purpose for which the land might be used;

(b) in deciding the site value, new non-site improvements may be hypothesised instead of non-site improvements actually used for an existing use.

[27] The provisions of s 23 are of paramount importance in determining certain aspects of this appeal. The section provides as follows:

(1) Site improvements, to land, means any of the following done to the land -

(c) improving soil fertility or soil structure;

(d) if the land was contaminated land as defined under the Environmental Protection Act 1994 -works to manage or remedy the contamination;

(e) restoring, rehabilitating or improving its surface by filling, grading or levelling, not being irrigation or conservation works;

(f) reclamation by draining or filling, including retaining walls and other works for the reclamation;

(h) any other works done to the land necessary to improve or prepare it for development.

(2) However, a thing done as mentioned in subsection (1) -

(a) is a site improvement only to the extent it increases the land's value; and

(b) ceases to be a site improvement if the benefit was exhausted on the valuation day.

(3) Also, excavating the land for any of the following is not a site improvement -

(a) means removing, cutting down, ringbarking, pushing over, poisoning or destroying in any way, including by burning, flooding or draining; but

(b) does not include destroying standing vegetation by stock or lopping a tree.

[28] The primary question concerning s 23 is whether or not works done below ground level on the subject land, in the vicinity of the Brisbane River, are site works of the type referred to in s 23(1)(e)-(h), or are excavations, footings, foundations and/or underground building levels and therefore not site improvements as stated by s 23(3). The relevant evidence on this point; the submissions of the parties; and my conclusions; will be set out later in these reasons.

[29] Other sections of the LVA are also relevant. Section 169(1) provides that appeals are by way of rehearing. Further, s 169(3) places the onus of proof for each of the grounds of appeal on the appellant, GPT. Importantly, it should be noted that appeals under the LVA are to be determined on what is essentially the balance of probabilities.[9]

[30] Both parties have provided extensive written and oral submissions to support their contentions. The following paragraphs are adapted from GPT's executive summary of its submissions.[10]

[31] GPT contends that there are disagreements between the valuers as to the proper analysis of some of the comparable sales. Of the comparable sales it is common ground that the sale of 304 George Street is the most useful sale. GPT says that the proper analysis of that sale, and its application to the subject, are important issues in the appeal. In GPT's opinion, the Valuer-General has made a number of critical errors with respect to the analysis of that sale.

[32] As GPT puts it, the proper analysis of the 304 George Street sale is as follows:

[33] GPT goes on to argue that their analysis of 304 George Street should be adopted because:

(a) That is the better view, taking into account the evidence of the valuers in this case;

(b) It accords with the position arrived at by the Court in Brisbane Square Pty Ltd v Valuer-General,[11] wherein the President determined an analysed rate of $7,793/m2;

(c) It accords with the position conceded by the Valuer-General in Brisbane Square, which was to accept that $7,793/m2 was a sound assessment.

[34] In GPT's view, the valuers agreed that the other comparable sales are of lesser relevance as they are, variously, of smaller size, different uses and difficult to analyse.

[35] GPT focuses on the site conditions of the subject, arguing that they are relevant because those site conditions affect value by making development of the site more expensive or reducing development flexibility, or both. Site conditions are relevant to the process of comparison, as are other features including (for example) location, size and accessibility.

[36] GPT goes on to contend that, in the context of site conditions, there are a number of sub-issues. GPT outlines those as:

(a) what are the features of the site conditions on the subject and the other sites;

(b) whether the site conditions on the subject are inferior, or more difficult, than those on the comparable sale sites, particularly 304 George Street;

(c) whether certain components on the subject are "site improvements" for the purpose of the Act, such that they should be assumed to exist on the subject on the valuation date; and

(d) what, if any allowance should be made for the site conditions.

[37] The evidence shows, as GPT puts it, that the site conditions on the subject are plainly more difficult than the conditions on the comparable sale sites, particularly 304 George Street, and that the evidence demonstrates that for a development of the nature of that on 304 George Street, the subject would be four times more expensive to develop. GPT notes that that is not to say that the highest and best use of the subject would require a development of the same form as 304 George Street, but does demonstrate the difficulties and extra costs generated by the site conditions increasing the cost of development of the site to its highest and best use or decreasing development flexibility, or both.

[38] GPT says that it is therefore appropriate to make an allowance for the adverse site conditions in the process of comparison with the comparable sales, noting that the valuer, Mr Jackson, made a deduction of 10% to the total value to take account of the extraordinary site penalties on the subject site. GPT is critical of the valuer called by the Valuer-General, Mr Hart, for making no allowance for the site conditions/penalties.

[39] GPT also submits that the Valuer-General is incorrect when it contends that certain parts of the Riverside Centre basement, including the river wall, basement slab, and the piles supporting those items, are "site improvements" for the purposes of the LVA. However, even if the Valuer-General is correct, GPT says that it would be appropriate to make an allowance in any event because:

(a) It is more likely than not that the "site improvements" would not be retained in any development of the subject for its highest and best use; and

(b) Even if they were retained, the development potential of the site would remain constrained by the site conditions, for example, reduced flexibility in development options.

[40] GPT concludes its summary this way. It submits that the starting point for the analysis of value of the subject is the rate of $7,767/m2 applied to the analysis of 304 George Street. In order to reflect the superior location of the subject as against 304 George Street, Mr Jackson applied a premium of 10% to his original analysis of $8,189/m2 or 15% to his revised analysed rate of $7,767/m2, resulting in a rate for the unburdened area of the subject at $9,000/m2. It was common ground between the valuers that the unburdened rate should be reduced by 30% in respect of the area of Easement K. The valuers made a negative adjustment of 5% for flooding (which also was common ground). Mr Jackson made a further negative adjustment of 10% to take account of the site conditions constraining the subject site.

[41] As a consequence of the above, GPT contends that the correct analysis for the subject site is as follows:

Less indicative estimate of site penalty costs (10%) $6,890,000

[42] Just as I did with GPT's executive summary, the following paragraphs are adapted from the Valuer-General's executive summary of its submissions.[12]

[43] The Valuer-General contends that GPT's case is fatally flawed for two reasons:

(a) Its valuer, Mr Jackson, did not value the subject land with the site improvements, but rather valued the subject land on the basis that no site improvements were present; and

(b) Its case about site improvements is flawed because the hydrostatic slab (or basement slab) and river wall are site improvements which were required to be included in the valuation of the Subject Property, and there is no contention from the engineers that in order to reclaim land a barrier needs to be built against inundation under flood conditions.

[44] The Valuer-General goes on to allege that Mr Jackson made a major change to his valuation approach after the JER in contrast to the Valuer-General's valuer, Mr Hart, who did not alter his approach. The Valuer-General explains the change this way. The trial valuation by Mr Jackson referred to his analysis of a number of sales and while regarding the smaller sales as being of "limited comparability" he "primarily relied upon the two larger sales" which were the sale of 304 George Street and the "Vision" sale. Notwithstanding the valuation of Mr Jackson, GPT's submissions effectively proceed on the premise that his valuation was a "one sale" valuation. The Valuer-General says that GPT has been driven to do so because the Vision sale was a forced sale which could not be safely relied upon by Mr Jackson. The contention that Mr Jackson placed little weight on the Vision sale is not borne out by the evidence. That contention is presumably advanced because, if Mr Jackson did place weight on it, as appeared in his sworn testimony, then that was brought to account in a negative way in his assessment of the relative premium to be applied to the subject.

[45] Further, the Valuer-General says that GPT is driven to ignore another comparable sale relied upon by Mr Jackson, the sale at 55 Elizabeth Street, because his analysis of it was also flawed as he had not properly investigated it and was not aware of the put and call option which preceded the sale, notwithstanding it was a controversial sale referred to in Mr Jackson's valuation, Exhibit 2B at paragraphs 102, 106 and 107, and as part of his "check". The premium which Mr Jackson assessed based upon his analysis of the Vision sale and his other primary sale, the sale of 304 George Street (and inter alia the 55 Elizabeth Street sale) is 10% as set out at paragraphs 101-121 of Exhibit 2B especially at paragraphs 103, 106, and 108-110.

[46] The Valuer-General's attack on Mr Jackson continues, alleging that what it calls Mr Jackson's subjective comparison of the subject property to the sale of 304 George Street as attracting a premium of 10% was further flawed involving a mistaken appreciation of the quality of the office accommodation there offered and a failure to analyse that sale properly, including the circumstances that three separate uses for its development were proposed. The sale must be taken for what it shows if it is a sale for development of a particular use which is not the use that Mr Jackson identifies for the subject property, then it may have to be disregarded or otherwise allowed for. While Mr Jackson accepted that principle in an answer about the sale at 140 Alice Street, he was not, the Valuer-General says, prepared to apply the principle in his comparison between the subject property and the other comparable sales including 304 George Street or the Vision sale. That was a premium he arrived at, notwithstanding that there is no issue that a single use, comprising premium office accommodation, was identified as the highest and best use for the subject in a two tower configuration with the flexibility of being able to stage construction, in contrast to the use proposed for the sale at 304 George Street involving three separate uses in a precinct which had not been established for any of those uses.

[47] The Valuer-General goes on to criticise Mr Jackson for not referring to any sales or other market evidence to set a ceiling and that his 10% premium rests solely on his subjective judgment flawed in the manner identified and on any objective assessment, fails to give effect to the circumstances that the subject property is in the long established premium office accommodation precinct of the Brisbane CBD and has superior views and amenity. He then proceeded to subtract 10% for the penalty of site conditions based on the premise that the subject property will be more difficult to develop being alongside the river but without doing any hypothetical development exercise to arrive at any impact on his residual land value of any such additional expenses. The Valuer-General says that the premium assessed by Mr Jackson also ignores the requirement to value the subject with the site improvements in place and his 10% deduction also includes addressing matters which the site improvements have already, in part at least, provided for, and for which the 5% flood allowance is provided.

[48] Additionally, the Valuer-General says that Mr Jackson failed to investigate matters referable to the highest and best use of the subject property in terms of the car parking being able to be constructed over two full levels because of the presence of the site improvements or deeper into the rock in the same fashion as at 304 George Street, if deemed necessary by the developer. In contrast, the high-level exercise carried out by Mr Davidson involving locating a second tower appropriately in the area presently occupied by the Pig and Whistle, corroborated Mr Hart's approach that the development which is carried out will be one which is suitable for the site in realising its agreed highest and best use. The number of car parking places which are actually constructed would depend upon the developer's choice as precisely occurred when the adjoining property, 111 Eagle Street, was developed. It provided far fewer car parking spaces than the maximum allowable for the same use that both valuers contemplated for the subject property. The Valuer-General says that the exercise, although criticised by GPT, is a far more logical one to carry out than the exercise promoted by GPT of constructing a sale property development on the subject when that would never occur in reality.

[49] The Valuer-General's attacks on Mr Jackson then get even stronger, submitting that Mr Jackson was not independent or impartial, and his evidence should not be relied upon, because his approach was designed to reduce the valuation of the subject property, rather than to be objective and measured. Further, the Valuer-General says Mr Jackson's approach and subjective assessments were found wanting when contrasted to extrinsic material and standards of valuation practice and that, because GPT's case rests squarely on his evidence, it must fail.

[50] The Valuer-General says that GPT's attack on the Valuer-General based upon the requirements of the "model litigant" is baseless because the model litigant is not required to adopt the same position in litigation regardless of what contentions the model litigant faces. Further, the model litigant, like this Court, is bound by the LVA and is also limited by the evidence of appropriately qualified experts, who must be true to their oaths.

[51] In the Valuer-General's view, the attack by GPT based on Mr Hart adopting an unburdened rate in his analysis of the sale of 304 George Street mistakes the requirements both of the valuation practice and of the Land Court's previous decision as to a valuation of this kind. Similarly, the attack on Mr Hart for not having made a proper enquiry of the purchaser of that property is hollow, given the terms of the contract of sale and Mr Jackson's omissions of greater moment, including not having made any enquiry of the purchaser as to excavation or demolition costs. Mr Jackson's attempt to attribute blame to Mr Hart for the need to change his own allowance for demolition, in the Valuer-General's view, does him no credit.

[52] The Valuer-General submits that GPT's contention that a 10% deduction should be made for site penalties proceeds upon:

(a) A flawed premise that there are no site improvements present at the subject property;

(b) A failure to understand the proper process of valuation which already had an agreed deduction of 5% for flooding;

(c) The replacement of the fundamentally flawed exercise of deducting the costs estimated to replace the site improvements at the subject property;

(d) A failure to allow for the feature that much of the "bad ground" at the subject property was not able to be developed above podium level because of the presence of Easement K; and

(e) A failure to allow for the feature that the "good ground" at the subject property could be developed for a second tower and to provide additional car parking, if required, without the need to remove the hydrostatic slab and river wall.

[53] The Valuer-General says that a major issue in dispute concerns the extent of superiority of the subject property over the 304 George Street sale, noting that the subject property was previously involved in extensive consideration by this Court in GPT RE Limited (as responsible entity) & Anor v Department of Natural Resources and Water[13] and that, consistent with that case, it should be accepted that the Golden Triangle and, in particular, the subject property which is pre-eminent in that triangle, will command a premium rate in comparison with other parts of the CBD in Brisbane.

[54] The Valuer-General submits that the approach of direct comparison with supporting sales and market evidence as to the extent of the premium, 23%, will be preferred over the approach of GPT's valuer, which involved using a forced sale (the Vison Sale at 111 Mary Street) and making unwarranted adjustments to another sale (55 Elizabeth Street). The Valuer-General further submits that Mr Hart, in contrast to the approach of Mr Jackson, has exposed his reasoning process, including making allowance for the inefficiencies associated with larger parcels of land. Contrary to the contentions of GPT, Mr Hart brought to account the various different features of the sales evidence in comparison with the subject property, including size. The Valuer-General contends that Mr Hart's view that the market evidence does not demonstrate any discount for size per se is supported by the purchase resulting in the amalgamation sale concerning 111 and 105 Margaret Street, as well as the need for a property to be of a sufficient size to accommodate premium quality office accommodation.

[55] Unsurprisingly, GPT in its reply submissions rejects the factual and legal positions adopted by the Valuer-General. GPT's position is well summarised on pages 2-7 of its reply submissions. I have, of course, fully taken those submissions into account. However, to save making this decision any longer than it has to be, I will not include a synopsis of the reply executive summary of GPT in this general analysis as the material set out above clearly identifies the issues before the Court, which is sufficient for present purposes.

[56] All the evidence and submissions as relevant will be, of course, considered in further detail as I examine the various issues in this matter.

[57] I now turn to consider in detail the evidence in this matter, starting with the engineering evidence.

[58] This Court has had the privilege of hearing evidence from two very accomplished and skilful expert engineers, Mr Ian Ainsworth and Mr Mike Gould.[14] Together, Mr Ainsworth and Mr Gould produced a JER marked as Exhibit 3A. Their supplementary JER is Exhibit 3B. Mr Ainsworth's Statements of Evidence are Exhibits 3C and 3E and Mr Gould's Statements of Evidence are Exhibits 3D and 3F.

[59] Mr Ainsworth is the engineering expert called by GPT. With 31 years of engineering experience, a Bachelor of Engineering (First Class Honours) and various professional qualifications, Mr Ainsworth has an impressive understanding of engineering complexities. Mr Ainsworth is currently a Principal of Arup, Brisbane.

[60] Mr Ainsworth impressed me as an expert witness. He clearly has a deep knowledge and understanding of the relevant material and has, to a significant degree, been able to apply theoretical, technical knowledge to evidence relating to this specific site. The evidence advanced by Mr Ainsworth was very clear, particularly during cross-examination where his evidence comprised of short, simple answers to complex scenarios.

[61] Mr Gould is a director of Gould Development Solutions Pty Ltd, with vast experience as a civil and structural engineer. He was called by the Valuer-General. Mr Gould completed his Bachelor of Engineering with Honours and also holds a Graduate Diploma of Environmental and Municipal Engineering. Over 30 years' experience as an engineer, and considerable experience as an expert witness of this Court is demonstrated through the professional evidence put forward by Mr Gould.

[62] Although quietly spoken, Mr Gould patently knows the material extremely well and was confident in his opinions. I was impressed by Mr Gould's evidence, in that, in my view, he always gave what appeared to be his professional expert opinion, even when that opinion was somewhat at odds with the Valuer-General's preferred position. This was particularly evident during cross-examination by Mr Traves QC. Mr Gould is of course to be commended for this.

[63] Where there are areas of disagreement, I am tasked with a difficult assessment of having to compare the evidence of two, exceptionally helpful and knowledgeable experts; Mr Ainsworth and Mr Gould.

[64] Mr Gould, however, damaged his evidence somewhat by his reference, both during cross-examination and at paragraph 5.3.2 in the supplementary JER, to the river wall existing at the date of valuation.

Mr Gould's evidence during cross-examination is as follows:

"And, of course, you're not aware and there hasn't been a decision which describes the wall or the river wall or the Broadwater wall, as it might be called there, as a site improvement. There has never been such a determination? --- No. No. It's an engineering consideration..."[15]

"It follows, does it not, that your opinions necessarily reflect your understanding of what the Act means? --- No, I think it follows that I was trying to interpret what those words are saying as it relates to an engineering process of site improvements, and - and there's various descriptions given, but - so when looked at each of those descriptions, did any of those fit with the works that were undertaken on the site or --- ...

Inevitably, in your process of reasoning, it requires you to form a view about what the legislation means? --- From an engineering perspective, yes."[16]

"5.3.2 S23(1)(f) defines "site improvements" to include "reclamation by draining or filling, including retaining walls and other works for the reclamation". Mr Gould states that the river front wall complies with this definition and therefore is considered "site improvements".

5.3.3 Mr Gould states that the effect is that the riverfront wall is assumed to pre-exist, and cannot be considered in the "nature and scope of different or additional work.

5.3.4 Mr Gould notes that the river wall also acts as part of the support structure for the basement. However the Instructions stipulate that it not be included in the different or additional work.

5.3.5 Mr Gould also notes that the qualification in paragraph 3(d) of the Instructions requires "excavation for footings or foundations and for basements" - not the footings, foundations or basement structures, to be excluded from already existing."[17]

[65] During cross-examination, Mr Gould denies interpreting the LVA.[18] However, he later concedes his interpretation was from an engineering perspective.[19] In any event, it is evident to me, that Mr Gould has adopted the exact wording of the legislation, rather than coming to some interpretation as he suggests.

[66] This, of course, is a key legal issue to be resolved in this Court, pursuant to s 23 of the LVA. What Mr Gould needed to, and indeed should, have focused on was the factual engineering position in the way in which Mr Ainsworth did:

"5.3.6 Mr Ainsworth states that the 123 Eagle St "riverfront wall" to which Mr Gould refers in paragraphs 5.31 to 5.33 above is actually an integral part of the basement carpark of the Riverside development, and thus is clearly not a "site improvement" - refer to S23(3)(b) that an "underground car park" is an example of an underground building level and "is not a site improvement". Any small riverwalls that existing [sic] prior to the circa 1986 development of the 123 Eagle St site would not have been suitable to act as the river wall of the development of the site that was carried out circa 1984, or any similar development in the time since then. I believe that there is different and additional work required to develop the 123 Eagle St site arising from the presence of a river boundary, as confirmed by both experts in the JER Engineering Issues and Expert Responses Letter Reference 2(a) (i)."[20]

[68] Whether or not the river wall is an integral part of the Riverside Centre building was also a consideration for Mr Gould during cross-examination:

"And the basement car park is an integral part of the development as a whole? --- That's correct.

And the river wall, as it's been called, is an integral part of the basement car park? --- It is, yes.

It depends upon the basement car park slab and the upper basement slab and the plaza slab for its structural integrity? --- To perform its role to keep the flood out to that level.

For its structural integrity, it depends upon those other slabs? --- For its role in keeping the flood out to that level...

Thanks, Mr Gould. And then it also, can I suggest, through the piles below it, supports those structures: the upper basement slab and the plaza slab? It supports them physically? --- It does, yes.

It's integral to their structural integrity? --- It is.

And it's integral to the structural integrity of all of the development which appears above the slab: the restaurants and Friday's and all those sort of things. Correct? The river wall's taking all that - is taking weight from those structures? --- It is taking weight from those structures.

All right. So in every sense of the word, the river wall is an integral part of the development of the Riverside Centre? --- It is, yes." [21]

[69] It is clear from the cross-examination of Mr Gould, and Mr Ainsworth's aforementioned position, that both experts are of the opinion that the river wall is, in fact, an integral part of the Riverside Centre. Despite this, there is a discrepancy in each expert's ultimate conclusion. Mr Gould is of the opinion that the river wall is a site improvement in accordance with s 23 of the LVA and Mr Ainsworth is minded that it is not.

[70] There are vast complexities in the engineering evidence relating to the site due to the interactions of the Brisbane River. Where there is a conflict in the expert evidence, for the reasons set out above, I prefer the more concise evidence of Mr Ainsworth than that of Mr Gould.

[71] Helpfully, Mr Ainsworth and Mr Gould set out their areas of agreement in the JER as follows:

1. The nature of the walls and supporting foundations along the river edge of properties with a river boundary are different to that of a corresponding site without a river boundary.

2. The construction of piled foundations along a river boundary do not typically require different construction techniques compared to a boundary not on a river edge.

3. Barge-mounted piling rigs are not the only solution for installing river boundary foundations to enable construction:

(a) Temporary platforms may be constructed to allow conventional piling rigs to access the river edge without use of barges (depending on ground conditions and water levels at the boundary).

(b) The riverside area at Lot 123 would likely require construction of a barge mounted plant, due to presence of the river.

4. Where there are boardwalks adjacent to the river edge of a riverfront site, such presence will affect construction on the riverfront site.

(a) In this case the boardwalk is not within the site (123 Eagle Street), but is linked to structures on the site (Lot 123).

5. Structures on non-riverfront properties are not exposed to the structural design risks and risks associated with river vessel and flood borne debris impacts.

6. Risks relating to flooding are largely related to site level. Risks are typically comparable for riverfront and non-riverfront sites that share similar ground levels.

(a) 123 Eagle Street is relatively low thus, subject to flood risks and the associated need for protection and mitigation measures.

7. Approximately half of the plan area of the 123 Eagle Street site has soft soils requiring piled and suspended basement slabs:

(a) The soft soils exist typically in the 2 and 3 level parking basement areas.

(b) The main building structure is founded on medium strong schist utilising a high level raft slab foundation technique.

(c) The Riverside Tower has foundation conditions which differ from the deep layers of soft soil over sloping bedrock and this portion is not in its nature unusually complex or expensive.

8. Acid Sulphate soils are present at 123 Eagle Street.

(a) Acid Sulphate soils are usually present in low ground levels, where soft soils are present irrespective of being on the riverfront.

(b) Excavating and removing acid sulphate soils, depending on hardness will incur additional development time and costs.

9. Where ground conditions include high water table and high permeability layers and lenses, basements do typically need to be designed as 'tanked' structures.

(a) High water table levels and sand and gravel layers exist at 123 Eagle Street.

(b) Approximately half of the basement constructed on the 123 Eagle Street property is a tanked structure.

(c) High ground water levels and pervious soils are not restricted to riverfront sites. Thus, may be found in low-lying, non-riverfront sites.

10. Risks associated with flooding depend on the site level. Risks for riverfront and non-riverfront sites are comparable when similar ground levels are shared.

(a) 123 Eagle Street has relatively low ground levels and thus subject to flood risks.

11. Development costs are increased and development potential is limited by areas present on the 123 Eagle Street site (i.e., a shared loading dock, requirements for vehicular and pedestrian access or carparks), which restrict the positioning of building structures and usage when compared to a site without such restrictions.

(a) The precise nature of the restrictions and benefits for 123 Eagle Street and adjoining sites due to the areas present are not identified.[22]

[72] In Mr Ainsworth's and Mr Gould's first JER,[23] dated 31 July 2015 there were no areas of disagreement between them; the experts were as one.

[73] Following the quantity survey evidence,[24] discrepancies arose between the expert engineer opinions. A request was made for a further JER by GPT and the Valuer-General. The instructions were to the effect that the experts:

1. Identify the nature and scope of different or additional work required to be carried out on Lot 123 after purchase in order to construct a development similar to that actually constructed on the Comparable Sales Sites in relation to:

(a) The location of Lot 123, including adjacent developments and proximity to the Brisbane River;

(c) Construction of a tower building and other structures generally similar to what has been constructed, would be a more difficult or complex, and therefore more expensive for a purchaser/developer of Lot 123 than would be the case for commercial or residential construction on some or all of the comparable sites. [25]

[74] The experts sought clarification which confirmed that the task required consideration of Lot 123 compared to the comparable sales sites on the assumption that works existing on 123 Eagle Street as at 1 October 2012 are 'site improvements' in accordance with s 23 of the LVA and continue to exist in the same form.[26]

[75] In the further JER,[27] dated 8 October 2015, Mr Ainsworth and Mr Gould set out their areas of agreement and disagreement propounded through their assessment of the quantity survey evidence and instruction.

[76] Mr Ainsworth and Mr Gould were in agreement that the comparable sales sites are:

(f) Combined 111 Mary Street and 222 Margaret Street

[77] The Comparable Sites Sales Summary[28] prepared by Mr Ainsworth and Mr Gould demonstrates an assessment of each property, having regard to:

• Ground levels;
• Residential flood levels (RFL);
• Whether the ground level of a site is above or below the RFL;
• The presence of acid sulphate soil (ASS);
• Soil types;
• Whether riverfronts are present at a site;
• Whether a site is affected or likely to be affected by groundwater within 2 basement levels of ground;
• The existence of adjoining sites, unconventional underpinnings and sensitive adjoining structures; and
• The existing or proposed development on a site.

[78] Helpfully, Mr Ainsworth proposes that the site-specific characteristics of the 123 Eagle Street site, as advised by his previous analysis on 13 January 2009,[29] can be simplified into two propositions. In my words, these are:

(a) The presence of the river boundary impacts the site in several ways, including river boundary construction, boardwalks, and flood risks and mitigation; and

(b) Deep layers of soft soils at 123 Eagle Street impacts the site in several ways including the need for piled and suspended basement slabs, the need to treat acid sulphate soils and the need to design basements to be tanked to exclude water arising from high groundwater levels.

[79] Works undertaken to address item (a) are summarised by Mr Ainsworth as follows:

"Sheet piling and river wall: [a]pprox 220m plan length average 12m pile length of sheet piling along the river edge was required to secure the site from the river during construction... Permanent river wall along similar length 300mm thick RC...

Boardwalk: [r]efer to the drawings that you have for the extent and details of the precast piles and planks that make up the extensive boardwalk area to the east of the riverwall."[30]

[80] In regard to item (b), Mr Ainsworth summed up the works undertaken:

"Excavation: [t]he site levels before excavation varied approx from RL 0m along the east (river edge) to RL 4.5m (SW corner Eagle St elevation) to RL 8.0m (NW corner Eagle St elevation). The site was excavated to approx RL 0m across the site... It would be reasonable to assume that at least half of the material excavated from the area under the 400mm thick slabs...would bee [sic] acid sulphate soils requiring special handling and disposal.

Base Slabs: [a]long the southern and eastern edges of the site the presence of soft, wet clays required construction of heavy 400mm thick slabs with permanent ground anchors and piles. Over the rest of the site the presence of reasonable rock allowed conventional on ground and pad footing construction...

Shoring: [r]equired along the southern boundary (Dalgety House - approx 40m plan length x approx 6m depth, 300mm thick concrete panels installed with temporary anchors), the western boundary (approx 130m along Eagle St, soldier piles and concrete infill with temporary anchors...) and the northern boundary (Australia House, 50m plan length, 300mm RC shoring panels with temporary anchors..)..." [31]

[81] Mr Gould was of the opinion that Mr Ainsworth's aforementioned analysis of the scope of works and reliance on his opinion in January 2009, compared the subject site to a theoretical standard site whereas the instructions provided for the second JER required comparisons to be made to certain defined other sites. Mr Gould's opinion was that considerations of sheet piling, river wall and boardwalks to be excluded from consideration in the further JER.

[82] In response to Mr Ainsworth's analysis of the deep soft soils, Mr Gould pointed out that the presence of such soil only existed on part of the site, namely, the part under the carpark structures. The tower building was located on rock and constructed with a pad footing.

[83] In my view, Mr Gould is essentially correct in this statement. However, the soft soils are also clearly evident under Easement K, and a full, lay reading of all of Mr Ainsworth's evidence clearly shows his acceptance of solid rock on parts of the subject land.

Comparison between 123 Eagle Street and the comparable sales sites

• None of the comparable sites as requiring river boundary Construction or boardwalks;
• Parts of sites d (103 Mary Street), f (111 Mary Street & 222 Margaret Street), g (127 Charlotte Street) and h (16 Albert Street & 140 Alice Street) as being located under the defined RFL, thus subject to risk of inundation and require flood risks and mitigation; and
• Both sites d and f as having deep soft soils requiring piled and suspended basement slabs, are likely to have ASS requiring treatment and removal during development, and will likely require a tanked base slab to resist full hydrostatic pressure.[32]

[85] Mr Gould disagreed with the inclusion of 'river boundary construction' and 'boardwalks' in the consideration of site specific works on the comparable sites as his opinion was that the later instructions required a change to the method adopted in the earlier report.[33]

[86] Mr Gould further qualified that 'piled and suspended basement slabs' in relation to the subject site had piles only under the carpark structure and the tower building was supported by high level hard rock.[34]

[87] Mr Gould further elaborated on the nature and scope of the different or additional works required on the subject site compared to the comparable sites, which differed from Mr Ainsworth's opinion in respect of the access for façade construction and access for site construction management.

[89] Whether the river front wall is or is not a site improvement within the confines of s 23 of the LVA is a question of law. Thus, Mr Gould's opinion that the riverfront wall falls within the definition of site improvements is of no assistance as outlined at [65].

[90] The preferred evidence of Mr Ainsworth demonstrates that the riverfront wall is an integral part of the basement carpark and the Riverside Centre as a whole. Mr Ainsworth is of the opinion that there is different and additional work required to develop the 123 Eagle Street site arising from the presence of a river boundary as was confirmed by both experts in their JER as shown at [69].

[91] Mr Gould did not consider boardwalks to be relevant to the further JER on the basis that the instructions required consideration of the nature and scope of different or additional work and that the boardwalks are 'external' to the site.[36]

[92] Mr Ainsworth is of the opinion that the presence of boardwalks and other structures adjacent to the 123 Eagle Street site provide substantial obstruction to construction. His opinion is premised on the need for different construction techniques when compared to non-riverfront sites (as was agreed by the experts at [71]).[37]

[93] Mr Gould summarises additional site construction issues as follows:

• 123 Eagle Street - Space available for loading and gantry. Scaffold and external access is straightforward as the tower is set back from the site footprint boundary. Construction of the tower would not affect pedestrian traffic to the ferry terminal and boardwalk. As the river wall pre-existed, construction of the carpark would be on the other side of this wall and would not interfere with boardwalk traffic. The adjacent building to the northeast (145 Eagle Street) is positioned on the boundary and affected the interface to the low level restaurant building on the subject site. At the reference date of 2012, 111 Eagle Street on the adjoining southwest boundary was partly constructed and a similar interface is to be considered.
• (a) 273-318 George Street - Space available for loading and gantry. Scaffold and external access is straightforward as the tower is set back from the site footprint boundary.
• (b) 111 Margaret Street & (c) 105 Margaret Street - No proposal for building footprint. However, adjacent buildings only 1 and 2 level and needle support scaffold probable. Site access only through the front of Margaret Street with some traffic restrictions likely. Gantry possible but narrow. Considered a restricted site in terms of materials management.
• (d) 103 Mary Street - Narrow site. Limited street access. Abutting facades on two sides for part height of tower requiring management of façade interfaces. Considered a restricted site in terms of materials management.
• (e) 55 Elizabeth Street - Needle support scaffold probable. Site access only through the front at Elizabeth Street with some traffic restrictions likely. Gantry possible but narrow. Considered a restricted site in terms of material management.
• (f) Combined 111 Mary Street & 222 Margaret Street - Adjacent buildings only 1 and 2 level and needle support scaffold probable. Site access from two streets with some traffic restrictions likely. Gantry possible but narrow (and Qld Globe view during construction shows gantry along left hand boundary).
• (g) 127 Charlotte Street - Site access only through the front at Charlotte Street with some traffic restrictions likely. Gantry possible but narrow. Considered a restricted site in terms of materials management.
• (h) 16 Albert Street & 140 Alice Street - Corner site, two street frontage, access restricted in Alice Street. Façade construction management straightforward. Considered less restricted site in terms of materials management.

[94] Mr Ainsworth did not consider the site access and potential scaffolding arrangements to be relevant based on the instructions for this further JER. Below is Mr Ainsworth's expert view in response to Mr Gould's assessment:

• 123 Eagle Street - the Construction Access and Site Construction Management issues presented by the location and characteristics of this site are at least as challenging, if not more challenging, than any of the comparable sites. 123 Eagle Street has single street access, a river boundary which is blocked by a boardwalk, and is bounded to north and south by large developments built to boundary. The site lies in an extremely busy vehicle and pedestrian precinct which in the case of post 2012 development would require provision of numerous temporary pedestrian and vehicular routes to be maintained through the site for access to the ferry terminal, shared loading dock, shared carpark entries and the like.
• (a) - agrees with Mr Gould that the site is relatively unrestricted. Construction Access and Site Construction Management is less onerous than 123 Eagle Street.
• (b) & (c) - challenges are substantially less onerous than the 123 Eagle Street site. The 105 and 111 Margaret Street sites have unobstructed frontage to Margaret Street, with the majority of the site boundaries clear of existing structures.
• (d) - in agreement with Mr Gould that 103 Mary Street is a narrow site with single street frontage. Challenges to Construction Access and Site Construction Management are similar to or slightly less onerous than the 123 Eagle Street site.
• (e) - agrees that 55 Elizabeth Street has single street frontage. Is of the opinion that challenges are similar to or slightly less onerous than the 123 Eagle Street site.
• (f) - in agreement with Mr Gould. Challenges are slightly less onerous than the 123 Eagle Street site.
• (g) - Agrees with Mr Gould's assessment. Considers the challenges to Construction Access and Site Management to be substantially less onerous than the 123 Eagle Street site.
• (h) - full agreement with Mr Gould. The challenges are substantially less onerous than the 123 Eagle Street site.

[95] What this analysis shows is that, when comparing the various sale properties to the subject 123 Eagle Street, the expert engineers are substantially in agreement. For the reasons clearly stated, but in particular due to his detailed knowledge of 123 Eagle Street, I prefer the evidence of Mr Ainsworth as regards his comments relating to other site construction access for 123 Eagle Street.

[96] The quantity surveying evidence was provided to the Court by two expert witnesses, Mr Craig McHardy, called by GPT, and Mr Malcolm Davidson, called by the Valuer-General. Exhibit 4A is their JER. Statements of Evidence by Mr McHardy are Exhibit's 4B, 4D and 4F, while Mr Davidson's Statements are Exhibit's 4C and 4E.

[97] Mr McHardy has 35 years of professional experience. He has worked in at least eight countries. Mr McHardy obtained his Bachelor of Science (Quantity Surveying) in Scotland, and joined WT Partnership in 1984. He has remained with WT Partnership, where he is now an Executive Director of WTP Australia Pty Ltd. Mr McHardy relocated from Scotland to Australia in 1987 and has extensive experience in projects in the Austral/Asia region

[98] Mr McHardy is a Professional Member of the Royal Institution of Chartered Surveyors and an Associate of the Australian Institute of Quantity Surveyors.

[99] I was highly impressed by Mr McHardy as an expert witness. He displayed not only a thorough knowledge of his area of expertise, but also a detailed application of that knowledge to 123 Eagle Street, with which he is very familiar. From my observations and assessment, he sought at all times to assist the Court with his honest opinion, while remaining very careful not to stray from his area of expertise.

[100] Despite the complexity of parts of his evidence and the detailed cross-examination has was subject to, his evidence did not falter. An example of this is when, during cross-examination by Mr Fynes-Clinton, Mr McHardy conceded that some of Mr Davidson's adjustments to his figures were mathematically correct. However, he was still able to successfully explain that his overall conclusions remained correct. I will let the transcript speak for itself.

"MR FYNES-CLINTON: And - and I certainly won't labour this, and I'm not going to disregard the answers you've just given, but just to be clear, in terms of the actual areas to which this work would relate, for a purchaser on 1 October 2012, Mr Davidson's adjustments are mathematically correct, because the area is smaller? --- Yes.

That part, as far as it goes, is correct? --- Correct.

Your proposition, of course, is, "But there's other issues to deal with at the interface," and --- ? --- Correct.

--- you've just told the court that you have a view that the costs of doing that would at least balance out --- ? --- Correct.

--- the reductions. Where in --- ? --- I do say that in my - sorry; I do say that in my reports.

Indeed. Where in your reports do I see your calculation of those additional costs, to enable me to understand and test the proposition that those costs would equal or exceed the reductions that Mr Davidson's approach has adopted? Where are the quantities and calculations? --- They're not in my report.

Thank you? --- I do have, in - I'm just looking at my text - explained that, and said I would be happy to do so. In my opinion, there would be a lot of time, a lot of engineering advice required, and estimating advice required, and in my opinion, the end result would be very similar to the estimated allowances for that southwest area that are already included. And that comes from a discussion with Mr Ainsworth, several discussions with Mr Ainsworth. And rather than go down the path of, "Right, Ian, please sketch out - describe the process," and I will then measure and price and come to an estimate, those - that was not done. That was not done. If it had been done, then the quantities and rates would be spelt out in the - in this appendix.

And, Mr McHardy, I appreciate that you did (a) what you thought was appropriate professionally, and (b) what you were instructed to do. So I'm not being critical; I'm just trying --- ? --- No; I just ---

--- to find out what's been done, and what hasn't? --- I'm hoping it's clear why those specific quantities and rates are not contained in the ---

You've given evidence about your conclusion, and your conclusion is also in your report. And you'll also confirm that there are no quantities and rates available to, as it were, mathematically support that conclusion? --- Correct."[38]

[101] Mr Davidson has over 35 years' experience in the construction industry. He is a Director - Cost Management of Turner Townsend Pty Ltd and is the Gold Coast Manager of that firm. Mr Davidson has experience in the UK/Middle East/Australia/USA and India, and is a recipient of the RICS Medal 1982 from NAPIER University.

[102] Like Mr McHardy, Mr Davidson is also a Professional Member of the Royal Institution of Chartered Surveyors and an Associate of the Australia Institute of Quantity Surveyors.

[103] Mr Davidson was an impressive expert witness. He has a high level of expertise and experience.

[104] Mr Davidson clearly sought to assist the Court with his evidence. He understood the role of an expert to assist the Court and not to promote the position of his client, particularly in circumstances where his professional opinion and the position of his client vary. It was also abundantly clear to me that Mr Davidson was very careful to follow his specific instructions.

[105] Overall, I found Mr Davidson to be a reliable expert witness. He clearly did not seek to deceive or confuse the Court, although in my view some of his answers could have been better explained and of more assistance to the Court, such as when he was being cross-examined about the size of the basement levels. In this regard, Mr McHardy takes into account a wall thickness of 2.17 metres to arrive at a total area of approximately 7988 m2, while cross-examination made it clear that Mr Davidson did not remove any allowance for wall thickness when making his assessment of the size of the basement levels.[39]

[106] Mr Davidson gave interesting evidence regarding his suggestions for a carpark layout for a hypothetical development on 123 Eagle Street.[40]

[107] Mr Davidson acknowledged that he completed his carpark proposal over the weekend.[41] This was of course very late in the proceedings. Mr Davidson also conceded that his carpark concept would require architectural and engineering advice.[42]

[108] I note, in particular, the evidence that Mr Davidson gave regarding his carpark proposal:

"Why does your proposal not propose building basements 1 and 2 as they currently are and basements 3 and 4 the same size? Why aren't you doing the same size for 3 and 4?Because to do that you would have to demolish the improvements that are already there."[43]

[109] I am in no doubt that the improvements that Mr Davidson says would have to be demolished are the river wall etc, which are of course part of the central legal question to be resolved in this matter as to whether or not such improvements are site improvements under s 23 of the LVA and retained or foundations etc of the existing building which are to be notionally removed for the LVA valuation exercise.

[110] Mr Davidson explained his views regarding his carpark proposal this way:

"Well, you have created a scenario for the court. And you told the court earlier that it works just as well for the site with or without the site improvements?It does.

So I'm asking you, without the site improvements, why you created and produced all these documents to support a scenario where there's two large basements, and then the basements become abbreviated. And the prob - look, let me make it really clear to you: the proposition is the reason you did that is because it's expensive and difficult to build in the river. And you didn't want to build your basements 3, 4 and 5 out into what you call the "bad ground" because it's expensive and difficult?Absolutely.

And that sets this site apart from the George Street site?Well, I don't - it does in as far the external wall to floor ratio on the bad - on the good ground car park for basements 3, 4, 5, 6 and 7.

But you've got to agree that on George Street, they're not thinking about abbreviating their car parks to stay away from something you call "bad ground", are they?When you say "abbreviating" - you've said that word quite a lot. Five thousand five hundred is not a small area for a car park.

But it's not the same size as your car parks 1 and 2?No, it's not."[44]

[111] In a great number of respects, the evidence of Mr Davidson is not in conflict with that of Mr McHardy. In all those instances, I accept the evidence of Mr Davidson. Further, as I indicated when assessing Mr McHardy's evidence, there are circumstances where Mr McHardy agrees with Mr Davidson's revised estimate of Mr McHardy's costings, although not necessarily agreeing with the conclusions reached. In so far as it may be necessary, I am comfortable with the evidence of Mr Davidson as to differences in estimates compared to Mr McHardy. However, for reasons which I will develop below, I prefer the overall conclusions of Mr McHardy to those of Mr Davidson.

Analysis of the quantity surveying expert evidence

[112] The short statements that I have made regarding Mr McHardy's and Mr Davidson's evidence does not do justice to the detail of their reports and the depth of their evidence. In this regard, I note the submissions made by the Valuer-General at paragraphs 222 and 223 of its written submissions as follows:

"222. The disagreements between Mr Davidson on the one hand, and Messrs Ainsworth and McHardy on the other, about how many additional levels of parking would be required and what it might cost was are not matters which can be resolved one way or the other on such skeletal evidence. The real point is that Mr Davidson identified the type of exercise which would need to be done before there could be any meaningful consideration by valuers about "site penalties" as might be perceived by a purchaser of the Subject Property for its highest and best use. The unresolved and unresolvable disagreements about what is freely acknowledged to be an exercise done at a high level highlights the logical deficiencies in the Appellant's approach of seeking to assert "site penalties" based on historic works and an exercise of building on the Subject Property a 3 tower mixed use development involving construction of 943 car spaces, neither of which are shown on the evidence to have any demonstrable relationship to the construction works which would be carried out to achieve the agreed highest and best use.

223. Ultimately, however, neither valuer made any direct or express use of the evidence from either QS. The outcome does not turn on any aspect of that evidence."

[113] To be absolutely clear, I should stress that the above quote from the Valuer-General's submissions relate to the Valuer-General's assessment of Mr Davidson's car parking exercise. However, importantly in my view, the quoted paragraphs do give a summary view of the Valuer-Generals analysis of this litigation from a quantity surveying exercise.

[114] When the respective instructions of the quantity surveying experts are viewed, it becomes clear that Mr McHardy was tasked with the exercise of producing a rather comprehensive quantity surveying analysis of the subject site and certain sales sites. As I have already mentioned, it is clear that Mr McHardy has a great depth of knowledge of the subject site of 123 Eagle Street, which greatly assisted the Court in this matter. On the other hand, Mr Davidson was instructed to, in effect, provide a critic of the work of Mr McHardy. I offer absolutely no criticism of the Valuer-General in providing those instructions and taking that approach. That is entirely a matter for the Valuer-General as to how it chooses to run its case. Indeed, as I have pointed out in other valuation cases before the Court, there is no duty or obligation on the Valuer-General to produce any expert evidence to assist the Court; the duty of course lies on the appellant to prove its appeal. However, when it comes to an assessment of the evidence between one expert and another, the nature of the evidence that those experts give to the Court is relevant, and such evidence is of course framed by the instructions provided to experts.

[115] Mr McHardy provided a fulsome quantity surveying analysis, and that is apparent from a reading of his reports. On the other hand, Mr Davidson, though of course detailed in the areas of his critic, did not do his own independent quantity surveying assessment. I agree with the submissions of GPT in reply[45] that the JER process is compromised by one expert providing a detailed assessment and the other only a critic of that work. This is but one reason to prefer the evidence of Mr McHardy to that of Mr Davidson.

[116] I do agree with the Valuer-General that an exact costing from either a quantity surveying, or indeed an engineering, perspective is not warranted in a valuation case under the LVA. We are, after all, dealing with hypothetical, statutory based assumptions to arise at the applicable site valuation. So much was indeed conceded by GPT throughout the hearing. What is important is not so much the exact cost per square meter of a certain material, but the impact of the cost of hypothetical building works on the subject and sale sites in the mind of a hypothetical prudent purchaser and how such hypothetical prudent purchaser would take that knowledge into account in arriving at a dollar value for the land in a purchase/sale. I agree with the reply submissions of GPT that there is clear evidence before the Court in this case that a prospective purchaser would do due diligence, the results of which would affect the amount that person would pay for a site improved but otherwise undeveloped 123 Eagle Street.[46]

[117] I note the submissions of the Valuer-General at paragraphs 215 and 216 in so far as the Valuer-General is critical of GPT's evidence as not being applicable in "a comparable sales context". Importantly, the Valuer-General in paragraph 216 contends that GPT made no attempt to demonstrate that a hypothetical prudent purchaser of the subject at the valuation date would carry out any thought process involving the transposition of the existing riverside development to the 304 George Street site nor the 304 George Street development to the notionally site improved but otherwise vacant subject. GPT, on the other hand, argues that such criticism is misdirected because the exercise GPT undertook in its engineering and quantity survey evidence was separate from the analysis of the comparable sales, and that Mr Jackson analysed sales first and then, in a separate exercise, reasoned that a prospective purchaser would carry out a due diligence process that would lead to 10% less being offered for the subject site because of its peculiar difficulties.

[118] I will leave resolution as to whether or not Mr Jackson is correct to make a 10% reduction because of the particular site difficulties of the subject to my consideration of the expert valuation evidence. However, from an engineering and quantity surveying perspective, I am satisfied that GPT, through the evidence of Mr McHardy and Mr Gould, has demonstrated that the subject site of 123 Eagle Street does present building difficulties particular to it, not to be found at the comparable sale sites referred to generally in this proceeding and, in particular, the sale of 304 George Street.

[119] Expert valuation evidence was given by Mr Grant Jackson for GPT and Mr Benjamin Hart for the Valuer-General. Both are experienced valuers. In this case, strong submissions have been made by the opposing sides that key elements of the others' expert valuation evidence are fundamentally flawed.

[120] Mr Jackson has an impressive CV. He obtained his qualifications as a valuer in 1989 with an Associate Diploma in Valuations from RMIT. He is a Fellow of the Australian Property Institute (API), a past Councillor of the Victorian Divisional Council of the API, a member of the Divisional Professional Board of the API, is a registered valuer in Queensland, a practicing Real Estate valuer in New South Wales, a licensed valuer in Western Australia, and a certified practising valuer.

[121] Mr Jackson is the Chief Executive Officer of m3property. He lists his experience as involving all property types including central business district office accommodation, major shopping centres, industrial estates, residential subdivisions, residential properties and numerous specialised properties. He has appeared in courts and tribunals throughout Australia.

[122] Mr Hart was registered as a valuer in Queensland in 2005. He holds the position of Principal Valuer in the Brisbane office of the State Valuation Service.

[123] Mr Hart holds a Bachelor of Business Management - Real Estate and Development from the University of Queensland and was placed on the Dean's Honours Roll in July 2004 for outstanding academic achievement. He is a certified practising valuer and an associate member of the API.

[124] Mr Hart supervises, manages and coordinates a team in the State Valuation Service responsible for all statutory land valuation assessments in the Brisbane CBD and fringe areas, which equates to approximately 15,000 valuation records. Mr Hart has provided expert evidence before the Land Court of Queensland in court proceedings and has also participated in preliminary conferences and mediations convened by the Court.

[125] Mr Jackson and Mr Hart produced a JER which is Exhibit 2A. Mr Jackson's Statements of Evidence is Exhibit 2B and his Reply Statement is Exhibit 2D. Mr Hart's Statement of Evidence is Exhibit 2C.

[126] Attachment 1 to Exhibit 2A gives a summary of the position of the two valuers arrived at in their JER as follows:

[127] What is immediately apparent is that Sales 3, 4, 6 and 7 are agreed. It is also agreed that these sales are of little or no assistance in valuing the subject due to their small land areas relative to the subject.

[128] Given that the valuers agree the highest and best use of the subject land is for high rise office development with ground level retail development consistent with the existing use of the subject,[47] and given that both valuers have adopted the direct comparison approach,[48] it would appear that the main task at hand is to simply do an assessment of what each expert valuer has to say as regards sales 1, 2 and 5. Unfortunately, it is not that simple.

[129] As can be seen by the engineering and quantity surveying expert evidence, as well as the individual expert valuation evidence, there is some debate as to the potential for intensity of development of the subject land at 123 Eagle Street. There is of course also the legal question as to what constitutes a 'site improvement' at the subject. Further, there is the question of the resolution of the differences between the valuers in the application of the sales (and in particular sale 1 - 304 George Street) to 123 Eagle Street. Mr Jackson's standing as an expert witness is seriously challenged by the Valuer-General on the ground of impartiality.[49] Other aspects of Mr Jackson's sales evidence is also attacked.

[130] An attack is made on the Valuer-General by GPT for, it is submitted, making different approaches to the analysis of the sale of 304 George Street in different appeals. GPT says that this is contrary to case authority; contrary to the principals of relativity; contrary to farness; and likely offends the model litigant principles.[50] GPT places Mr Hart squarely at the centre of its criticism. Mr Hart is also attacked by GPT with respect to his analysis of the 304 George Street, 111 Mary Street and 55 Elizabeth Street sales and their comparability to 123 Eagle Street, as is Mr Jackson by the Valuer-General.

[131] I have read the written submissions of GPT and the Valuer-General many times and also considered the oral submissions of both in an endeavour to resolve these issues. There is of course some question of overlap, and perhaps issue could be taken with which topic to consider first. I simply state that I have considered in detail all of the submissions, exhibits, and oral evidence and reached my conclusions taking all of these fully into account. I have decided to formulate my written reasons into the following key parts, but each must be read together. General criticisms/topics are dealt with separately, while criticisms relating to the three sales in dispute are dealt with in my consideration of those sales.

[132] It follows that the valuation topics that I will deal with, in order, are as follows:

• Mr Jackson's impartiality challenged;
• Valuer-Genreal's adoption of different approaches in different cases for the same sale challenged - Model Litigant Principles;
• Potential intensity of development of the subject land;
• 304 George Street sale;
• 111 Mary Street sale;
• 55 Elizabeth Street sale;
• Site improvements on 123 Eagle Street;
• Whether a site penalty for 123 Eagle Street is appropriate;
• What premium should be allowed for 123 Eagle Street as a superior property to 304 George Street; and
• Discount for size.

[133] I have already set out a summary of this challenge to Mr Jackson at [49] of these reasons. It is of course necessary to consider this further.

[134] The first place to go is the transcript.[51] This reveals that the question of impartiality was specifically put to Mr Jackson by Mr Fraser QC. Mr Fraser also took Mr Jackson to extracts from certain cases that Mr Jackson had been an expert witness in. Despite Mr Fraser's detailed cross-examination in this regard, Mr Fraser stated:

"--- We won't be asking you to come to any conclusions based upon those decisions. That is not the process that we would say that you are to come to. Your Honour is to form your own conclusions ---"[52]

[135] In similar vein, under the heading "impartiality", after referring to earlier cases where it is said "the same conclusion has been reached" regarding Mr Jackson's expert evidence, the Valuer-General goes on to say that "it is important to stress that in this case his evidence must be assessed in the first instance without reliance upon those earlier findings."[53]

[136] GPT in its reply submissions[54] contends that the respondent's submissions in [261] is "an unnecessary, gratuitous submission" because this Court "must assess Mr Jackson's evidence without reliance on other findings by other Courts." That is clearly correct.

[137] The Valuer-General in its submissions continues the attack on Mr Jackson this way:

"The concerns with the independence of Mr Jackson's evidence commence with his position of having advised and represented the Appellant for over 10 years in relation to its site valuation issues concerning the Subject Property. He has made the objections on its behalf for both the Subject Property and 111 Eagle St. That places him somewhat removed from the position of a valuer who comes to Court retained only to assist by way of expert evidence. It is the refusal of Mr Jackson's objection which gives rise to the appeal..."[55] (citations omitted)

[138] GPT says in its reply that the above should have been put to Mr Jackson in cross-examination but that the Valuer-Genral failed to do so. While that may be strictly correct, there is no doubt that Mr Jackson was clearly put on notice by the Valuer-General that his honesty and impartiality was under serious attack.

[139] Should Mr Jackson be disregarded as an expert witness because he has 'advised and represented the appellant for over 10 years in relation to its site valuation issues' concerning 123 Eagle Street? I think not.

[140] I note in particular the comments made in this regard by Justice Batt in the case of 101 Collins Street P/L v City of Melbourne; Dinias P/L v City of Melbourne[56] as quoted by Justice Croft in Challenger Property Asset Management Pty Ltd & Anor v Stonnington City Council & Anor.[57] Justice Batt had this to say:

"I recognise from a practical point of view there are real difficulties for a ratepayer. No doubt on receiving an assessment and valuation about which it has doubt it consults the person whom it considers to be the best valuer for advice. If, having objected on advice and having had its valuer discuss the valuation with the municipal valuer as contemplated by s.39(1) of the VLA, it finds that the objection is not resolved, it would be impractical to expect that it would abandon that valuer as witness in its appeal."

[141] I am in complete agreement with Bratt J. In my view, the ramifications of the Valuer-General's submissions in this regard have not been thought through. Specifically, I note the experience of Mr Hart as not only an employee of the Valuer-General, but as a person who, for some time, has been responsible for undertaking or overseeing, as team manager, the Valuer-General's valuations in the Brisbane CBD, including 123 Eagle Street.

[142] No allegation has been made by GPT that Mr Hart should not be accepted as an expert because of the above paragraph. If, however, the Valuer-General's submissions against Mr Jackson on this point were correct, by logical extension Mr Hart would find himself in exactly the same position. Such an outcome would make untenable not only the position of appellants before the Court in LVA matters, but also that of the Valuer-General.

[143] Such an outcome is clearly not in the interest of justice. I accept the expert status of both Mr Jackson and Mr Hart, despite their relationship with GPT and the Valuer-General respectively. That, however, does not conclude my analysis of partiality.

[144] The Valuer-General goes on to further point out what it says establishes partiality by Mr Jackson by reference to his evidence relating to 123 Eagle Street and his sales, including the smaller sales.

[145] As will be seen in my reasons that follow, there are aspects of Mr Jackson's expert evidence that I do not accept. However, I also do not accept some of the expert evidence of Mr Hart. That does not mean to say that I do not accept their status as experts or, more particularly, their impartiality.

Valuer-General's adoption of different approaches in different cases for the same sale challenged - Model Litigant Principles

[146] The background to this issue needs to be pointed out. The sale of 304 George Street was considered in a decision of President Kingham, that case being Brisbane Square Pty Ltd v Valuer-General.[58] What occurred in Brisbane Square relevant to the issue at hand is conveniently set out at paragraphs [99] to [102] and [104] of that decision:

"[99] Returning to the sale of 304 George Street, after adjusting the sale price for certain items, Mr Gasiewski arrived at a value for that site of $7,793/ ($61,500,000 for the site as a whole). That is the figure he used as his starting point for assessing the site value for Brisbane Square.

[100] Mr Hart did not agree with Mr Gasiewski's adjustments to the sale price for 304 George Street. He also made a further adjustment for site holding costs, arriving at a rate of $8,174/ ($64,508,959 for the site).

[101] After the sale, the Valuer-General assessed the site value of 304 George Street at $61,500,000. During evidence Mr Hart agreed that was a sound assessment. Given that evidence, the Valuer-General conceded that the assessed site value should be used in valuing Brisbane Square. Incidentally, the assessed site value and Mr Gasiewski's adjusted sale price are the same: $61,500,000.

[102] The remaining valuation issue is if and how to apply the site value of 304 George Street to Brisbane Square so as to account for the planning risk related to a public open space requirement.

[104] Giving effect to the Valuer-General's concession that $61,500,000 should be the starting point, the rate per should be $7,793..."

[147] Brisbane Square was decided prior to the valuation evidence being given in this case.

[148] I must stress at this juncture that the submissions I am here considering are bringing the actions of the Valuer-General into question, not those of Mr Hart.[59]

[149] GPT submits that the Valuer-General has adopted a different position for the sale of 304 George Street in the current case, to what it did in Brisbane Square.

[150] GPT submits that the effect of the Valuer-General's conduct in the present case is to assess the site value of 304 George Street as at 1 October 2013 at $61,500,000, but analysing a sale of the same site which occurred in May 2013 at $64,720,001 in circumstances where there is no suggestion of a shift in market values in the five months between May and October 2013. As GPT puts it, it is highly undesirable and unfair for the Valuer-General to urge the Court to adopt the sale value as analysed by one of its employees in circumstances where the Valuer-General applied a different rate to the land and the valuer witness agreed that the applied value is reasonable.

[151] GPT notes that the position taken by the Valuer-General is, in its words, "inexplicably" different from the position taken by the Valuer-General in Brisbane Square. GPT notes that in Brisbane Square, the analysis of the sale by Mr Hart was abandoned in favour of the issued valuation figure of $61,500,000.

[152] It is contended by GPT that to treat citizens differently in like litigation is not only contrary to authorities, but also conflicts with the Model Litigant Principles, noting that the first principle is "acting consistently in the handling of claims and litigation".[60]

"167. One might reasonably surmise that the purpose of the principle is to treat all citizens in litigation consistently particularly where, as here, identical issues arise. In the context of effective and fair public administration, it is difficult to imagine a more fundamental or important principle.

1. The Court should be reluctant to countenance the Respondent, a model litigant, contending different analyses for one sale, in different cases, as it suits their argument..."[61]

[154] The Valuer-General responds to GPT's contentions firstly at [10] of its submissions, where it submits that the attack based upon model litigant considerations is baseless. In the Valuer-General's view, the model litigant is not required to adopt the same position in litigation regardless of what contentions the model litigant faces and further, that the model litigant, like this Court, is bound by the LVA and is also limited by the evidence of appropriately qualified experts who must be true to their oaths.

[155] The Valuer-General expands upon its contentions at [88]-[96] of its submissions. The Valuer-General submits that it has acted in accordance with the principles of fairness, noting that whatever concessions are made in one case by counsel there engaged for whatever reasons do not bind counsel in another case. The Valuer-General argues that GPT is, in effect, contending that the Valuer-General should not be able to respond to GPT's case in the usual manner of adducing evidence from an expert as to what he conscientiously believes to be the position. This, the Valuer-General contends, is effectively an attempt by GPT to hobble the response by the Valuer-General to its case.

[156] The Valuer-General begins by making six specific observations to the criticisms made of it by GPT. The observations are as follows:

"(a) The effect of the Appellant's complaint is that, notwithstanding that the Appellant does not contend for the same rate of $7,793 per m2, it is wrong if inconsistent for the Valuer-General to advance any evidence other than in support of that rate.

(b) The Appellant effectively contends that an expert called by the Valuer-General, Mr Hart, should have been precluded from giving, as part of his sworn evidence, evidence of any analysed rate concerning the sale, other than the rate agreed between the parties' representatives in that case, in the evidence led in response to the Appellant's contention that the rate should be a lower amount, viz $7,767.

(c) The rate of $7,793 per m2 was not a rate which was adopted in the "Brisbane Square Case" on an "unburdened" basis approach, being the valuation approach which Mr Hart considered should be adopted in this case which is consistent with the reasons of the President in that case;

(d) That agreed rate was a rate derived as at a different valuation date, namely 1 October 2013, between different parties;

(e) A sale of a property in May 2013 does not ipso facto set its statutory value on either 1 October 2012 or 1 October 2013.

(f) Mr Hart made changes to his analysis of the sale to accord with the approach he took in the Brisbane Square Case. His overall rate of $8,174 is, as a matter of calculation, closer to the rate derived from the site value applied to 304 George St in 2012, than the rate presently contended for by Mr Jackson of $7,767."[62] (citations omitted)

[157] The Valuer-General goes on to contend that GPT's propositions only have to be stated to be understood as flawed. This, the Valuer-General says, is because GPT's case "does not contend that the applied rate to be deduced from the site value adopted by the Valuer-General for 304 George Street in either 2012 or 2013 is correct. Thus it fails at the first hurdle in seeking to establish its "relativity case"."[63]

[158] The Valuer-General then submits as follows:

"93. Nor does the Appellant contend that the analysis of the sale agreed in that case should be applied. Rather it says the analysis should be a different figure and not the figure which was adopted by both parties before the President in the Brisbane Square Case. It is trite that in litigation various compromises are made by the parties in the interests of expedition and getting to the real issues in the case. The real issues in the Brisbane Square Case decided by the President were not concerned with the analysis of the sale of 304 George Street in terms of the sale which occurred in May 2013. The issue there concerned the role that the public space would play in the market in the context of an answer by Mr Hart that the issued site valuation for the property at 304 George St as at 1 October 2013 was "reasonable"." [64]

[159] GPT's reply submissions on this point are concise and are set out below:

"32. A few propositions merit specific comment and evidence a clear misunderstanding of the relevant principles:

(a) It is incorrect, as a matter of principle, for the Respondent to say (paragraph 10) that the Valuer General is "limited by the evidence of appropriately qualified experts, who must be true to their oath". Plainly enough, the Valuer General may instruct its lawyers to adopt a consistent position in cases where the same matter is in issue.

(b) notably at paragraph 89, the Respondent submits that "...[w]hatever concessions are made in one case by counsel there engaged for whatever reasons do not bind counsel in another case". With respect, that misstates what the focus ought to be - it is not a question of whether counsel are bound. Counsel make admissions on instructions and on behalf of the litigant, the Valuer General. It is the Valuer General which, here, ought to have adopted the same position, irrespective of Mr Hart's new and different evidence;

(c) at paragraph 89, the Respondent submits that this questions is an attempt to "hobble" the Valuer General. That is nonsense, and ignores the Model Litigant Principles, which call for consistency. It is in respect of the application of the Model Litigant Principles that the Respondent runs into difficulty with adopting different approaches in different cases;

(d) at paragraph 93, the Respondent submits that "[t]he real issues in the Brisbane Square Case decided by the President were not concerned with the analysis of the sale of 304 George Street in terms of the sale which occurred in May 2013". With respect, that is wrong. The Court will see from reading the President's reasons that the analysis of that sale was fundamental to the decision in that case."

[160] As set out above, GPT has based its submissions, to some extent, on the 2010 Model Litigant Principles of the State Government. The opening paragraph of those principles contain the following:

"These principles have been issued at the direction of Cabinet. The power of the State is to be used for the public good and in the public interest, and not as a means of oppression, even in litigation. However, the community also expects the State to properly use taxpayers' money and, in particular, not to spend it without due cause and due process..."

[161] The third paragraph on the opening page of the principles then goes on to state:

"It should also be noted that the principles are not intended to be applied rigidly and do not override any legislative requirement or authority concerning an agency's functions."

[162] What then follows are three principles relating to fairness, firmness and alternative dispute resolution (ADR). The ADR principle is not relevant to the current proceedings. GPT has specifically referred to the first dot point of the first principle, that of fairness. However, when a careful reading is had of all of GPT's submissions, including their reply submissions and the first principle, it is apparent that many of the dot points contained under the principle of fairness are encapsulated in GPT's argument. Accordingly, for completeness, the first principle, that of fairness, is set out in full as follows:

"1. The State and all agencies must conduct themselves as model litigants in the conduct of all litigation by adhering to the following principles of fairness:

• acting consistently in the handling of claims and litigation
• dealing with claims promptly and not causing unnecessary delay in the handling of claims and litigation
• endeavouring to avoid, prevent and limit the scope of legal proceedings wherever possible, including by giving consideration in all cases to alternative dispute resolution before initiating legal proceedings and by participating in alternative dispute resolution processes where appropriate
• where it is not possible to avoid litigation, keeping the costs of litigation to a minimum
• paying legitimate claims without litigation, including making partial settlements of claims, or interim payments, where liability has been established and it is clear that the State's liability is at least as much as the amount to be paid
• not seeking to take advantage of an impecunious opponent
• not contesting matters which it accepts as correct, in particular by:
  • - not requiring a party to prove a matter which the State knows to be true
  • - not relying on purely technical defences where the State will suffer no prejudice by not doing so
  • - not contesting liability if the State knows that the dispute is really about quantum
• not instituting and pursuing appeals unless the State believes that it has reasonable prospects for success, or the appeal is otherwise justified in the public interest."

[163] As well as the first dot point above, GPT's contentions properly read include the third, fourth, and seventh dot points.

[164] The Model Litigant Principles cannot be properly understood by reference to only the principle of fairness; clearly principle 2 must also be taken into account. It sets out as follows:

"2. The State must behave as a model litigant in the conduct of all litigation, including significant litigation, by adhering to the following principles of firmness:

• appropriately testing all claims
• contesting all spurious or vexatious claims
• claiming legal professional privilege where appropriate
• claiming public interest immunity to protect confidential information such as Cabinet papers in appropriate cases
• seeking security for costs where appropriate and pursuing costs when it is successful in litigation, which will assist in deterring vexatious proceedings from being instituted against it
• not seeking to take advantage of an impecunious opponent
• relying on available statutes of limitation, which have been enacted to protect a defendant from unfair prejudice
• acting properly to protect the State's interests."

[165] The concept of the Crown as a model litigant is not a new one. It has been part of the common law for centuries. For instance, in the case of The Melbourne Steamship Co Ltd v Moorehead[65] Chief Justice Griffith had this to say:

"I am sometimes inclined to think that in some parts - not all - of the Commonwealth, the old-fashioned traditional, and almost instinctive, standard of fair play to be observed by the Crown in dealing with subjects, which I learned a very long time ago to regard as elementary, is either not known or thought out of date. I should be glad to think that I am mistaken."[66]

[166] Griffith CJ's comments in Moorehead were quoted by Justice Finn in Hughes Aircraft Systems Internation v Airservices Australia,[67] following which, he went on to observe:

"This proposition has received significant, recent judicial endorsement in this country most notably in the Full Court of this Court in SCI Operations Pty Ltd v Commonwealth of Australia, (unreported, FC FCA, per Beaumont and Einfeld JJ, 28 August 1996); see also Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125. I note in this particularly the observations of Mahoney J in his dissenting judgment (on grounds not presently relevant) in Logue v Shoalhaven Shire Council [1979] 1 NSWLR 537 at 558-559 in applying the proposition to a local authority - to "a corporation constituted by statute, and discharging public functions":

"It is well settled that there is expected of the Crown the highest standards in dealing with its subjects: see Melbourne Steamship Co Ltd v Moorehead ..., per Griffith C.J. What might be accepted from others would not be seen as in full accord with the principles of equity and good conscience to be expected in the case of the Crown: see P. & C. Cantarella Pty. Ltd. v. Egg Marketing Board (N.S.W.) [[1973] 2 NSWLR 366 at 383-384]. In my opinion, a standard of conduct not significantly different should be expected of a statutory corporation of the present kind ..."

This fair play principle has its most common manifestation in the "model litigant" standards exacted from the Crown in legal proceedings: see eg Director of Public Prosecutions for the Commonwealth v Saxon (1992) 28 NSWLR 263."[68]

[167] The actions of the Valuer-General in adopting a different analysed value for 304 George Street in the current case to that adopted in the Brisbane Square case trouble me. I find it even more troubling when the position adopted by the Valuer-General in Brisbane Square as at 304 George Street was for a sum identical to the issued valuation for 304 George Street for 1 October 2013. I am not persuaded by the submissions of the Valuer-General in this regard. Leaving to one side entirely the question of relativity as between valuations, the actions of the Valuer-General do not meet the lofty standards of fairness set by Chief Justice Griffith in Moorehead. In my view, the Crown has an overriding responsibility to act fairly in issuing and defending valuations, which extends to the Crown analysing the same sale in different cases for valuation purposes under the same legislation (being the LVA) in the same way. This is a duty that the Crown should exercise, even where its own expert arrives at two different analysed figures for the same sale, at almost an identical date (as was the case with Mr Hart's analyses of 304 George Street in Brisbane Square and in this case, those analyses being made within days of each other by Mr Hart in February 2016).[69]

[168] GPT of course seeks that this Court hold the Valuer-General to what was conceded with respect to the analysis of the 304 George Street sale in Brisbane Square.[70] In effect, GPT is contending for a form of issue estoppel against the Valuer-General. I do not believe that to be an appropriate response. I am, however, satisfied that there was, in effect, a finding by President Kingham as to the analysed value of the 304 George Street sale in the sum of $61,500,000. While of course I am not bound by the President's decision, I am informed by it and may take it into account.

[169] I also note the site valuation made by the Valuer-General for 304 George Street as at 1 October 2013 is in the sum of $61,500,000, and am informed by that statutory site valuation.

[170] In such circumstances, and taking account of the model litigant common law principles described by the courts over the centuries, in my view, it would take compelling evidence for the Valuer-General to show that the 2010 Model Litigant Principles of firmness require me to arrive at a different analysed figure for the 304 George Street sale in the case at hand compared to the findings in Brisbane Square and the statutory valuation of that sale property.

[171] I will leave further discussion of the 304 George Street sale to the separate heading for that sale in these reasons.

Potential intensity of development of subject land

[172] Both valuers agreed in their JER that the highest and best use of 123 Eagle Street is high rise office development with ground level retail development consistent with the existing use of the land.[71] There is, however, an interesting dispute between the parties as to the potential intensity of development of 123 Eagle Street.

[173] The Valuer-General submits that there is agreement between the valuers as to intensity of development.[72]

[174] Mr Jackson, in Exhibit 2B, adopted the theoretical potential GFA agreed to by a JER of town planners relating to a valuation date of 1 October 2010 of 154,904 m2. [73] The current GFA of 123 Eagle Street is 55,370 m2.

[175] Mr Hart's evidence during cross-examination clearly shows that his opinion has consistently been, when he did the JER, his report, and his sales evidence, that the potential for development was as suggested by the town planners referred to by Mr Jackson; that is, somewhere in the vicinity of a GFA of 100,000 m2 to 150,000 m2.[74]

[176] This point would appear to be a non-issue in light Mr Hart's evidence. However, as GPT points out,[75] Mr Gould was given instructions for the preparation of Exhibit 3F that are quite different. Mr Gould has this to say:

"My instruction assumption (g) requires me to assume that the highest and best use is generally the development as actually developed whereas Ian Ainsworth considers the 300 George St development, in addition." [76]

[177] GPT contends that the Valuer-General made a deliberate decision not to disclose the level of development contemplated for 123 Eagle Street and that the lack of transparency does not reflect well on Mr Hart's evidence.[77] I do not agree. Mr Hart's oral evidence is consistent with the JER and explains why he made no further reference to the issue in Exhibit 2C. Even given Mr Jackson's evidence in Exhibit 2B, I accept that Mr Hart believed that the potential development of 123 Eagle Street was a point of agreement with Mr Jackson.

[178] What is not explained is who gave the contrary instructions on behalf of the Valuer-General to Mr Gould. Those instructions are consistent with what occurred at the opening when Mr Traves QC sought advice as to the Valuer-General's position on the potential development of 123 Eagle Street from opposing counsel but none was forthcoming.[78] That is regrettable and only caused doubt to be placed on the evidence of Mr Hart by GPT.

[179] If anything, the failure to make a clear statement to the Court when the position of the valuers was agreed, and the contrary and inconsistent instructions given to Mr Gould, are perhaps further questions as to the model litigant status of the Valuer-General. Or perhaps the simple answer is that an error was made by the unknown author of the instructions to Mr Gould. It is, of course, not a matter for this Court to speculate.

[180] At the end of the day, I accept Mr Jackson's evidence of a potential for development of 123 Eagle Street of 154,904 m2 and I make no adverse findings in any way in this regard as to Mr Hart.

[181] Further, I have said enough in the preceding topic on model litigant issues, and I will not add to that by any further finding here.

[182] There is a critical aspect of this sale to consider at the outset. In Brisbane Square, President Kingham used a site value of $61,500,000 for 304 George Street which equates to $7,793 m2. The President then applied that site value to the unburdened site area of Brisbane Square and then to the burdened site area of Brisbane Square to arrive at an overall value for Brisbane Square of $50,724,362[79] (which was rounded in the orders to $50,700,000).

[183] The Valuer-General has correctly pointed out that,[80] in Brisbane Square, the President was critical of the appellant's valuer in that case for not applying "the same distinction between burdened and unburdened land on 304 George Street in devising the rate he used as the unburdened rate for Brisbane Square".[81]

[184] The Valuer-General's point in this regard is strengthened by the reference it makes to paragraph 122 of Brisbane Square, where the President said:

"Adopting that rate as an unburdened rate has the effect of distorting both the burdened and unburdened rates applied to Brisbane Square and results in a greater discount to the value of Brisbane Square."[82]

[185] The Valuer-General's reliance on Brisbane Square stops there. However, the President's decision in Brisbane Square relevantly does not. From paragraph 123 to 125, the President uses the 304 George Street rate of $7,793 m2 in her calculations. What her Honour has adjusted is the percentage to be applied to the burdened and unburdened area of Brisbane Square to take into account the deficiencies in the analysis of 304 George Street; not the site value rate for 304 George Street.

[186] Further, it must be noted that President Kingham observed that "the overall site rate for 304 George Street reflects the utility of the site as a whole, including those public open space areas."[83]

[187] As GPT most strenuously points out,[84] Mr Hart in Brisbane Square also did not make any distinction in his comparative valuation of 304 George Street for the unburdened or burdened areas. Most curiously, however, he does for the current appeal, even though his analyses for JER purposes of the two cases were undertaken just days apart.[85]

[188] The adjustments Mr Hart made in the JER for the current case, but not made in Brisbane Square, are twofold. He makes an allowance of 5% of the total value of 304 George Street for a caveat and a covenant, and applies a discount for a busway tunnel of 70% which he refers to as the burdened area.

[189] Exhibit 46 sets out how Mr Hart arrives at his burdened and unburdened rates for 304 George Street. It should be noted that those rates are a revision of what he set out in his valuation report, Exhibit 2C.

[190] Mr Hart starts with an overall site value for 304 George Street of $64,508,959. The following sets out how he then accounts for his two extra adjustments:

"Considering these constraints to the site and impacts on the development, I have calculated the unburdened rate of $9,221/m2.This calculation follows a standard mathematical exercise that is common to valuation experts. The rate is calculated by applying the 30% to the area affected by the road widening i.e. 780m2 * 30% = 234m2. This area is added to the area not affected by the road widening i.e. 7112 m2 + 234m2 = 7,346m2. This area is divided into the total amount to derive an unburdened rate i.e. $67,734,407 / 7,346m2 = $9,221/m2 (rounded). Then the rate applied to the burdened area is calculated i.e. $9,221/m2 * 30% = $2,766/m2 (rounded). See table below.

[191] I am in substantive agreement with GPT's submissions on this point.[87] To save time and space, I will not repeat those submissions here but I will highlight some key points.

[192] During cross-examination by Mr Traves QC, Mr Hart explained his rationale for his different approaches to the analysis of the sale of 304 George Street in the following way:

"There should only, from your perspective, can I put to you, Mr Hart, only ever be one analysis of 304 George Street?---There is only one analysis of 304 George Street---

No, no, Mr Hart?---but it can be expressed in an unburdened rate or an overall rate. That's---

Mr Hart for comparison purposes for the subject land, your analysis, as you've agreed with me, originally moved from the figure of $9274 per square metre; correct?---Nine-thousand-two-hundred---

And 74, I think it was, or $9250 per square metre. You'd agree with me about that?---Yeah, I've made a slight adjustment because of---

And for comparison purposes, your valuation for Brisbane Square moved from $8201 per square metre?---Yes.

You have adopted two different methodologies in respect of the 304 George Street sale in respect of the two different appeals?---I've adopted a chequered approach to the overall comparison and---

You have---?---by - by adopting the unburdened rate approach.

You have adopted two different methodologies in respect of the analysis of 304 George Street in respect of the two different matters?---I think in respect to the two matters, I - I - I said they were consistently analysed. One was only expressed as an overall rate, and this matter expressed as an overall rate and an unburdened rate, and because - because---

And that was advantageous for the respondent's case in Brisbane Square because it did not identify the discount for the bus area?---I didn't do that exercise in the Brisbane Square matter."[88]

[193] Mr Hart's evidence alone becomes quite concerning when Exhibit 55 is considered. Exhibit 55 is as follows:

HART METHODOLOGY: APPLY COMPARISON RATE OF $8201 /M2

APPLY $7793.00/M2 TO 5217 M2; APPLY 25% OF $7793/M2 TO 2117 M2

ASSUME IN BRISBANE SQUARE THE APPLICATION OF THE HART 123 EAGLE STREET ANALYSIS OF 304 GEORGE STREET SALE, THEREFORE ASSUME:

1. THE COURT CONCLUDED THE UNBURDENED RATE FOR COMPARISON PURPOSES ANALYSED FROM 304 GEORGE STREET WAS $9,250,000 / M2, AS HART ADVOCATES IN 123 EAGLE STREET; AND

1. THAT THE VALUE OF REDDACLIFF PLACE SHOULD BE ASSESSED AT 30% OF $9,250 / M2, AS HART SAYS SHOULD OCCUR FOR THE BUSWAY

ASSUME IN BRISBANE SQUARE THE APPLICATION OF THE HART 123 EAGLE STREET ANALYSIS OF 304 GEORGE STREET SALE, BUT ASSUME INSTEAD OF 2. THAT MR GASIEWSKl'S CONTENTION THAT REDDACLIFF PLACE SHOULD BE ASSESSED AT 25% OF THE ANALYSED RATE FOR 304 GEORGE STREET.

[194] Put simply, the issued valuation for Brisbane Square was $58,900,000[89] and Mr Hart contended for a valuation of $60,000,000. Had Mr Hart adopted the same methodology for Brisbane Square as he did for this case (5% for the covenant and using his unburdened and burdened rates for 304 George Street) Mr Hart's valuation for Brisbane Square would have had to be in the order of $53,000,000 to $54,000,000. Such a valuation would not have sat at all comfortably with the Valuer-General's contentions as to value in the Brisbane Square matter.

[195] This is of course a very serious issue. It was put squarely to Mr Hart by Mr Traves QC during cross-examination:

"I'll start again - if you'd adopted your analysis in the 123 Eagle Street case in this case, that you have here in respect of 304 George Street---?---Yes.

---making evident your thinking about the busway, you would've exposed yourself and the department to an argument, which would've resulted, logically, in the valuation of Brisbane Square at something in the order of $53 or $54 million instead of the issued valuation at $59 million and your valuation at $60 million?---Well, the percentage - the percentage discounts are a matter - are purely a matter of subjectivity, and, as I said, it's very rare to get two valuers agree to the same percentage reduction, as evident, as, your Honour, in that case, so it's - it is about what, you know, a balance on what the evidence is and - and how each valuer, sort of, views that evidence and, obviously, the percentages and the effect of whether it's an easement, whether it's a road widening. It's - it becomes a very subjective task when trying to discount for the particular issues."[90]

[196] I am far from satisfied with this response by Mr Hart.

[197] GPT submits that Mr Hart's evidence regarding the 304 George Street sale is such that I should reject his evidence because "it lacks cogency and is unsound and that Mr Hart is in material respects an unreliable witness".[91] I would not take it that far. However, save for the calculation method which I have mentioned earlier and which I explain further below, I reject Mr Hart's evidence with respect to his analysis of the sale of 304 George Street.

[198] The exception relates to the calculation methodology Mr Hart used to arrive at his unburdened and burdened rates for 304 George Street. I stress that I accept his methodology but not the figures he used.

[199] Unlike Brisbane Square, I am, in this matter, dealing with a precise area of burdened land at 123 Eagle Street which has been agreed to by the valuers. As such, it would be inappropriate for me to adjust the burdened area of 123 Eagle Street (as the President did for Brisbane Square) to arrive at a suitable rate per m2 to take into account the fact that the analysed value for 304 George Street as used in Brisbane Square and as arrived at in a quite similar rate per m2 by Mr Jackson in this matter.

[200] For 304 George Street, Mr Jackson relies on $7,767 m2,[92] while President Kingham in Brisbane Square relied on $7,793 m2, which equated to the evidence before her, including the concession by the Valuer-General in that case, and the issued valuation for 304 George Street of $61,500,000. Given the small amount of difference, the doubts placed on Mr Jackson's evidence, and for consistency from a relativity perspective I am prepared to adopt $7,793 m2 as the overall site valuation of 304 George Street for comparison purposes in this matter. Adopting the concept used by President Kingham that this overall site valuation would lead to inconsistences if applied to the unburdened area of the subject property, I propose to adjust the figure of $7,793 m2 to reflect an unburdened and burdened approach.

[201] I have already rejected Mr Hart's burdened percentage of 30% for 304 George Street. Mr Jackson of course simply relies on the overall site valuation. I reject that as well, consistent with Brisbane Square. Unlike President Kingham, in this matter I have the benefit of significant evidence from engineering and quantity assurance experts. Taking into account public space, planning and engineering requirements for 304 George Street, I am satisfied that the busway has somewhat a limited impact on the site. Doing the best that I can with the evidence, I am prepared to adopt a burdened rate of 60% for 304 George Street. Using Mr Hart's unburdened/burdened rate methodology and the figures I have determined, the analysis is as follows, adopting Mr Hart's wording:

The rate is calculated by applying the 60% to the area affected by the road widening i.e. 780m2 * 60% = 468m2. This area is added to the area not affected by the road widening i.e. 7,112m2 + 468m2 = 7,580m2. This area is divided into the total amount to derive an unburdened rate i.e. $61,500,000 / 7,580m2 = $8,113/m2 (rounded). Then the rate applied to the burdened area is calculated i.e. $8,113/m2 * 60% = $4,868/m2 (rounded). See table below. [93]

[202] The 111 Mary Street sale took place in July 2010. It has a site area of 5,478 m2 and the sale price was $41,800,000 (including GST)[94] (or $38,000,000 excluding GST).[95] Mr Jackson views this sale as of secondary importance to 304 George Street and he placed limited weight on it. He arrived at an analysed rate of $5,090 m2. Mr Hart placed no weight on the sale at all and did not rely upon it.

[203] There are two key issues to consider with respect to this sale: whether it is a "forced sale" which cannot be relied on; and how any added value of the basement excavation should be accounted for, given the state of knowledge of serious issues with respect to the basement as at the sale date.

[204] It is common ground that the 111 Mary Street sale was a "forced sale" as the owner/developer of that site had gone into administration and, as a result, the site was sold by the administrators, Deloitte. Mr Hart says that this fact, combined with his enquiries, is enough for him to disregard the sale.

[205] Mr Jackson, on the other hand, says that his enquiries show that the sale was properly marketed and can be relied on.

[206] There is of course ample authority to guide the Court as to how to approach a forced sale. In Macarthur Central Shopping Centre Pty Ltd as TTE v Valuer-General (No.2)[96] President Kingham observed:

"Sales by liquidators, like those by mortgagees, demand close scrutiny before being accepted as evidence of market value. There is insufficient evidence about the circumstances of the sale to overcome the usual caution exercised in relation to sales of this nature. On the evidence, the Court could not rely on this sale, with any confidence, in valuing the subject lot."[97] (citations omitted)

[207] The Land Appeal Court, in like manner, looked at the factors relevant for consideration in a forced sale (there involving a mortgagee-in-possession) in Mayne Property Development Pty Ltd v Chief Executive, Department of Natural Resources.[98] The Land Appeal Court, constituted by Justice Helman and Members Neate and Forgie has this to say:

"Mr Cox acknowledged that it was a sale by a mortgagee-in-possession but submitted that the mortgagees were aware of their obligations under s.85 of the Property Law Act 1974 ("the Property Law Act") and would do everything to preserve the rights of the mortgagor. Those rights were considered in Emerson v Custom Credit Corporation Limited [1994] 1 Qd.R. 516.

As the learned President said, not every sale by a mortgagee must be disregarded. This is clear from the cases of Waterhouse v Valuer-General (1927) 8 LGR 137 and Re Murray (1934) 13 LVR 25 to which he referred. It is also clear from the fundamental concepts expressed in Spencer v The Commonwealth of Australia (1907) 5 CLR 418, that it is essential that a sale be free of any suspicion of compulsion on either party if it is to be taken into account. As Isaacs J said:

"To arrive at the value of the land at that date, we have ... to suppose it sold then, not by means of a forced sale, but by voluntary bargaining between the plaintiff and a purchaser, willing to trade, but neither of them so anxious to do so that he would overlook any ordinary business consideration. We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property." (page 441)

In the Waterhouse case, Pike J observed that the mortgagor, as well as the mortgagee's agent, had both been active in introducing possible purchasers and it was not unknown that the site was for sale.

Certainly, as Mr Cox submitted, s.85 of the Property Law Act provides that

"(1) It is the duty of a mortgagee, in the exercise after the commencement of this Act of a power of sale conferred by the instrument of mortgage or by this or any other Act, to take reasonable care to ensure that the property is sold at the market value....

It must be noted that the obligation is not to sell a mortgaged property for the market value but to take reasonable steps to ensure that the market value is secured. The two concepts are different and a mortgagee-in-possession may fulfil his, her or its statutory obligation without actually securing the market value.

The outcome of the cases and of a consideration of s.85 is that the circumstances of a mortgagee sale would need to be considered carefully before it could be taken into account in assessing a value. In this case, there is no direct evidence of the events surrounding the sale of Nariel Street, Albion. Both Mr Houghton and Mr Cox had "understandings" of what had occurred but their evidence can be put no higher than that. In the absence of any direct evidence as to what occurred, we agree with the learned President that the sale must be disregarded in this case. We cannot be assured that, even assuming the mortgagee met its statutory obligation, the sale was made without coercion or was not influenced by factors peculiar to the particular mortgagee and purchaser."[99]

[208] I agree with the Valuer-General that it is only when it can be established that the sale was consistent with the market price for such properties that the value derived from the sale can give comfort to the Court in relation to meeting the requirements for the Spencer test and s 18 of the LVA.[100]

[209] That of itself is enough given the known facts of the sales to disregard Mr Jackson's evidence and accept Mr Hart's evidence and disregard the 111 Mary Street sale. For completeness, however, I will also consider briefly the excavation.

[210] To begin with, it is clear from the evidence that there were major concerns for the safety of the excavation at the time of sale, as the initial rock anchors had reached their lifespan and the remainder would expire over the following 10 months.[101]

[211] Further, the report to creditors made by the administrators is compelling.[102] The administrators traced the detail of their administration including the expert opinions they had received as to the options available to deal with the concerns that arose in relation to the excavation.[103]

[212] As the Valuer-General correctly points out,[104] the administrators report also identified that the 3 parties with the highest expression of interest for the property were bypassed by the administrators in the sale process (by then they were liquidators) because of concerns that they would not be able to fund the purchase inferentially because they would not secure finance for the purchase. Instead, under bidders,[105] with construction experience, were engaged in negotiations. The administrator could not insure the site adequately and stated that "given the deteriorating property position" it had to be sold "as soon as practical".

[213] The Valuer-General contends that this clearly shows that the sale was forced and not able to be relied upon. I agree. In my view, it also demonstrates the difficulties and concerns that potential purchasers have as regards the excavation in general and the state of the rock anchors in particular.

[214] For completeness, I also agree that there is insufficient evidence in the material before me, even if the 111 Mary Street sale could be considered, to convince me of Mr Jackson's calculation of $10,000,000 in added value as a result of the excavations.

[215] The property at 55 Elizabeth Street has an area of 1,998 m2. It sold in February 2011 for $24,000,000.

[216] Mr Jackson initially arrived at an analysed rate of $9,980 m2 for this site. His analysis was heavily criticised, quite rightly, by the Valuer-General for failing to take into account a 'put and call' option.

[217] After the 'put and call' option was placed before Mr Jackson during the hearing, he made enquiries that night and subsequently reduced an allowance of 10% in his assessment to 5%, resulting in a changed analysed value of $10,578 per m2.[106]

[218] Mr Hart analysed 55 Elizabeth Street at $11,392m2, a figure from which he did not depart.

[219] The Valuer-General is particularly critical of Mr Jackson for not properly investigating the sale of 55 Elizabeth Street. This is clearly evidenced by the fact that in making his initial assessment, Mr Jackson did not take into account the 'put and call' option even though this information was clearly available by way of a simple title search.[107] That criticism is justified. As Mr Jackson's CV shows, he is a highly experienced valuer with the resources of a sophisticated business at his disposal. It should have been a very simple matter for him to search the title deed.

[220] There is no serious challenge to Mr Hart's analysis of 55 Elizabeth Street, save for his comparison of the sale being inferior to the subject in light of the small size of the sale. I note that the sale was at first part of Mr Jackson's check method and subsequently, following the criticism of Mr Jackson's evidence, effectively disregarded by GPT in its submissions.

[221] Mr Hart of course clearly stated in Exhibit 2C that the "most comparable sale in terms of land size is sale No.1 - 304 George Street".[108] His Report clearly has as its focus the 304 George Street sale. I agree.

[222] Accordingly, I find the analysed rate per m2 of the 55 Elizabeth Street sale at $11,392 m2 but I place little reliance on this sale due to its small size.

[223] I have of course already dealt with the facts as to the site at 123 Eagle Street. What remains is to apply those facts to the LVA, and, in particular, to s 23.

[224] As I pointed out in Body Corporate for "147-153 Mary Street Gympie" CTS v Valuer-General,[109] what the LVA requires is an analysis of the site improvements to determine whether or not those site improvements increase the value of the land and, if they do, to determine the extent of that increase. Unfortunately, that is the only reference in Queensland case law which directly relates to s 23 of the LVA relevant to the factual situation in this matter.

[225] Section 23 is divided into 3 parts. The first sets out a number of things done to land which are site improvements. Importantly for this case, s 23(1)(e) provides for "restoring, rehabilitating or improving its surface by filling, grading or levelling, not being irrigation or conservation works."

[226] Next, s 23(f) refers to "reclamation by draining or filling, including retaining walls and other works for the reclamation", while s 23(g) refers to "underground drainage".

[227] Before turning to the next two limbs of s 23, I will consider whether the work in question in this matter (which I will refer to generally as the "river wall") falls within any of the definitions in s 23(1). GPT of course contends that they do not, while the Valuer-General contends that they do. Some well-known principles of statutory construction need to be examined as part of this task. I will also consider the circumstances surrounding the coming into effect of the LVA.

[228] The context in which the LVA was enacted is that it was brought in to introduce a new notion of site value instead of unimproved value for valuations of land in Queensland (save for valuations of rural land where the concept of unimproved value was retained).

[229] It is informative to consider the Explanatory Notes to the then Land Valuation Bill 2010. Reference to the Explanatory Notes is of course permitted by s 14B of the Acts Interpretation Act 1954.

[230] Page 5 of the Explanatory Notes refers to the site value methodology used in other States and relevantly says as follows:

"In most other jurisdictions, Victoria, South Australia, New South Wales and

Western Australia, the unimproved valuation method has been largely replaced with the concept of site value. While there are slight definitional differences between the various states, the site value approach again presumes all the existing surrounding development, infrastructure, services etc. around the subject land at the date of valuation, but now also including, as part of the assessed value, the ground improvements which have been undertaken to the land (clearing, levelling, drainage, filling, reclamation, retaining works, stone picking etc) and which, now, in effect, merge with that land. In some jurisdictions an allowance is made to exclude the site works undertaken by the current owner for a period of years so that the approach could not be viewed as a disincentive to development.

The site value approach is more relevant to today's property market and is

easier to comprehend than the unimproved value approach and avoids the need for sometimes protracted and hypothetical legal debates attempting to establish what the original natural state of the land may have been. This methodology has been called for by the Local Government Association of

Queensland (LGAQ) for many years. Site value is also used by the

Commonwealth Grants Commission for distribution of GST funds back to the States." (emphasis added)

[231] The concept of site value is discussed at page 9 of the Explanatory Notes:

"The Land Valuation Bill 2010 will implement the site value methodology for non-rural land in Queensland in conjunction with the continuation of an amended definition of unimproved value for rural land. Unimproved value will continue to be used for rural land, as announced by Government. The change to using site value methodology for non-rural land brings

Queensland's valuation approach, consistent with the approaches used in other jurisdictions.

Site value is closer to the current market value of land, as it includes the site improvements in the value of the land. This value is more reflective of the development situation in Queensland's urban areas and as such will provide benefits of a more transparent, less contentious, simpler system.

The proposed definition of site value in the Bill is closely aligned to other states, in particular NSW. The definition will clearly state that site improvements 'to' the land will form part of the valuation. Those improvements that do not improve the land or are associated with the construction of a building, for example, an excavation that merges with the building, will not form part of the site valuation." (emphasis added)

[232] It is appropriate to now turn to the oft quoted case of Project Blue Sky Inc v Australian Broadcasting Authority[110] where Justices McHugh, Gummow, Kirby and Hayne have this to say at pages 381 and 382:

"The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined

"by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.

A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.

Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent"." (citations omitted)

[233] The High Court Justices above referred to continue on at page 384 of Project Blue Sky as follows:

"...the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning. In Statutory Interpretation, Mr Francis Bennion points out:

"The distinction between literal and legal meaning lies at the heart of the problem of statutory interpretation. An enactment consists of a verbal formula. Unless defectively worded, this has a grammatical meaning in itself. The unwary reader of this formula (particularly if not a lawyer) may mistakenly conclude that the grammatical meaning is all that is of concern. If that were right, there would be little need for books on statutory interpretation. Indeed, so far as concerns law embodied in statute, there would scarcely be a need for law books of any kind. Unhappily this state of being able to rely on grammatical meaning does not prevail in the realm of statute law; nor is it likely to. In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context (using that term in its widest sense). Consideration of the enactment in its context may raise factors that pull in different ways. For example the desirability of applying the clear literal meaning may conflict with the fact that this does not remedy the mischief that Parliament intended to deal with."" (citations omitted)

[234] It is also relevant to examine the High Court's considerations in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue.[111] Justices Hayne, Heydon, Crennan and Kiefel had this to say:

"This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself.

Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy." [112] (citations omitted)

[235] Next, the comments made by Chief Justice French and Justice Hayne in Certain Lloyd's Underwriters v Cross[113] are important. They stated as follows:

"Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials. The purpose of a statute resides in its text and structure. Determination of a statutory purpose neither permits nor requires some search for what those who promoted or passed the legislation may have had in mind when it was enacted. It is important in this respect, as in others, to recognise that to speak of legislative "intention" is to use a metaphor. Use of that metaphor must not mislead. "[T]he duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have (emphasis added)"."[114] (citations omitted)

[236] French CJ and Hayne J then went on to quote from Project Blue Sky and Lacey v Attorney-General (Qld).[115] They then continued as follows:

"The search for legal meaning involves application of the processes of statutory construction. The identification of statutory purpose and legislative intention is the product of those processes, not the discovery of some subjective purpose or intention.

A second and not unrelated danger that must be avoided in identifying a statute's purpose is the making of some a priori assumption about its purpose. The purpose of legislation must be derived from what the legislation says, and not from any assumption about the desired or desirable reach or operation of the relevant provisions. As Spigelman CJ, writing extra-curially, correctly said:

"Real issues of judicial legitimacy can be raised by judges determining the purpose or purposes of Parliamentary legislation_. It is all too easy for the identification of purpose to be driven by what the particular judge regards as the desirable result in a specific case._" (emphasis added)

And as the plurality said in Australian Education Union v Department of Education and Children's Services:

"In construing a statute it is not for a court to construct its own idea of a desirable policy, impute it to the legislature, and then characterise it as a statutory purpose."" [116] (citations omitted)

[237] I have already referred to the use which s 14B of the Acts Interpretation Act allows of extrinsic material capable of assisting in the interpretation of a statute. For completeness, I should of course also point out s 14A of the Acts Interpretation Act which requires a construction that will best achieve the purpose of an act to be preferred to any other interpretation.

[238] The Valuer-General has submitted that statutory interpretation is an art to be undertaken by choosing a path between competing considerations.[117] I do not agree. As GPT puts it at paragraph 48 of their submissions, the proper test is a matter of determining legislative intention, which is to be ascertained through "compliance with the rules of construction, common law and statutory, which have been applied to reach the preferred results and which are known to parliamentary drafters and the Courts.".[118]

[239] It is also appropriate to consider briefly the assistance that common law syntactical presumptions give. I refer in particular to "noscitur a sociis" which essentially means that the meaning of a word or phrase is to be derived from the company it keeps.

[240] The Valuer-General contends that assistance in statutory interpretation as regards the LVA, and specifically as to site improvements, is to be had by reference to legislation in other states and, in particular New South Wales and Victoria. The Valuer-General contends that the most appropriate legislation is the New South Wales valuation legislation which it says "is an analogue to the LVA... that it is likely to be of assistance to consider the approach to construction of the concept of 'site value' used in that Act".[119] However, as the Valuer-General has correctly pointed out, there are differences which might be considered as significant between the New South Wales and Queensland legislation. Helpfully, the Valuer-General set out the differences in the legislation in a very comprehensive way in its submissions, which I repeat as follows:

"It may be noted that the Qld definition is more expansive in some respects than the NSW definition, which can be demonstrated by highlighting various differences in the Qld definition as follows:

Land Valuation Act 2010 (Qld)

(1) Site improvements, to land, means any of the following done to the land -

(d) if the land was contaminated land as defined under the Environmental Protection Act 1994 - works to manage or remedy the contamination;

(e) restoring, rehabilitating or improving its surface by filling, grading or levelling, not being irrigation or conservation works;

(f) reclamation by draining or filling, including retaining walls and other works for the reclamation;

(h) any other works done to the land necessary to improve or prepare it for development.

(2) _However, a thing done as mentioned in subsection (1) - _

(a) is a site improvement only to the extent it increases the land's value;and

(b) ceases to be a site improvement if the benefit was exhausted on the valuation day.

(3) Also, excavating the land for any of the following is not a site improvement -

Example of an underground building level - an underground car park

(a) means removing, cutting down, ringbarking, pushing over, poisoning or destroying in any way, including by burning, flooding or draining; but

(b) does not include destroying standing vegetation by stock or lopping a tree.

Valuation of Land Act 1916 (NSW)

(a) the clearing of land by the removal or thinning out of timber, scrub or other vegetable growths,

(c) the improvement of soil fertility or the structure of soil,

(d) the restoration or improvement of land surface by excavation, filling, grading or levelling, not being works of irrigation or conservation,

(d1) without limiting paragraph (d), any excavation, filling, grading or levelling of land (otherwise than for the purpose of irrigation or conservation) that is associated with:

(i) the erection of any building or structure, or

(iii) the operations of any mine or extractive industry,

(e) the reclamation of land by draining or filling together with any retaining walls or other works appurtenant to the reclamation, and

In the above compilations, words which are found in the Qld definition but, not in the NSW definition, are in italics and words which are found in the NSW definition, but not in the Qld definition, are in bold.

(a) "excavation", which is treated differently in NSW; and

(b) The inclusion in the Qld Act of "any other works... necessary to improve or prepare it for development", which is not present in the NSW Act.

There are some other differences between the Acts. For example, the approach to easements is different." [120] (citations omitted)

[241] The Valuer-General has referred me in its submissions to a number of interstate authorities, particularly relating to the New South Wales legislation. The Valuer-General contends that those authorities lend weight to its contention that the river wall is a site improvement for the purposes of the LVA.[121] GPT's primary contention is that little, if no, assistance is to be gained from the interstate cases and that, in its view, if anything the cases referred to by the Valuer-General tend to a conclusion which is more favourable to the position adopted by GPT than to that of the Valuer-General.[122]

[242] In my view, the interstate cases relating to valuations is of limited, if any, assistance in this matter. Although those cases do make interesting reading, they are relevant to the specific statutory confines to which they relate.

[243] In particular, it should be noted that the Queensland legislation relating to site valuations, although modelled after parts of the New South Wales legislation as confirmed by the Explanatory Notes, is also quite specifically different to New South Wales legislation in a number of important areas. As the Queensland Parliament was using the New South Wales legislation as a model, it must have intended a different meaning where the words differ; otherwise, it would have been a simple matter for it to have simply copied and pasted the entirety of the New South Wales legislation relating to site value.

[244] I agree with GPT that the significant focus of my decision must rest squarely on the words, content and context of the Queensland LVA and not on interstate cases on different legislation.

[245] So what is to be made of s 23(1) of the LVA? GPT contends that s 23(1) relates to a number of things "done to the land" which are "site improvements" and says that, on its face, this contemplates things done to the land rather than development upon the land. They draw support for that contention by reference to s 23(3) to which I will refer later.

[246] The Valuer-General submits that in Queensland, as well as in New South Wales, all site improvements must be allowed for before non-site improvements are considered. The Valuer-General further notes the Victorian position and, correctly in my view, points out that the Queensland definition of site improvement is more extensive as it relevantly includes the concept of "reclamation by draining or filling" as well as "any other works done to the land necessary to improve or prepare it for development". Neither of those expressions are used in the Victorian provision. The Valuer-General goes on to submit that, naturally, in many cases where site improvements are made, development comprising the subsequent erection of a structure may have some impact on the site improvements. Where a house site is cleared and levelled, the excavation of the site for footings or a basement will disturb the previous work and fill may be removed or retaining walls may be added to or changed.[123]

[247] The Valuer-General also submits that the works undertaken can be characterised as "other works done to the land necessary to improve or prepare it for development", as absent the works the task of constructing the first part of the car park structures (the wearing slab and membrane) above the resumed land could not proceed.[124] This of course is true to an extent but it does not however answer the fundamental question as to whether or not the river wall is an integral part of the non-site improvements.

[248] The Valuer-General also submits that, on the facts, there has been a clear case of reclamation at 123 Eagle Street to prepare it for development and that such reclamation must be a site improvement.

[249] It is necessary at this juncture to return to the facts found in this matter.

[250] The reclamation of the land was achieved by the coffer dam, which was a temporary structure external to the land that existed only during the construction of the Riverside centre.

[251] It is of course the position of Mr Ainsworth that it was the construction off site of the coffer dam which allowed the reclamation to take place. I have already accepted his evidence, but it is insightful to note that Mr Gould also agreed with this position, as the following transcript reference shows:

"Now, the development on 123 Eagle Street includes the basement car park and includes the river wall?---Yes, it does.

And the site was prepared for that development, I put to you, at the time that the cofferdam was put up, the site drained and it was otherwise ready for the laying of the basement slab?---That's correct."[125]

[252] I am in no doubt that the works associated with the draining and reclamation of the land, made possible by the construction off site of the coffer dam, resulted in site improvements to the land.

[253] It is at this point however that difficulty arises for the Valuer-General. As the engineering evidence clearly shows, this is not a case where site improvements to the land to prepare it for development can stand on their own. I have no doubt that all works done to the land in such a case would clearly fall within s 23(1) but that is not the case with respect to 123 Eagle Street. It is Mr Ainsworth's evidence that the river wall is an integral part of the foundations of the development. Likewise, the same was also conceded by Mr Gould.[126] The river wall cannot stand on its own without the other footings and foundations, and neither can the other footings and foundations stand without the river wall. Remove the river wall and it would not simply be a case of the lower parts of the building flooding from the Brisbane River; the Riverside Centre would collapse.

[254] The difficulties for the Valuer-General do not end there, as s 23(3) of the LVA is conclusive on the facts of this matter. Section 23(3) provides as follows:

(3) Also, excavating the land for any of the following is not a site improvement -

[255] Before proceeding further with my findings of how the facts interrelate with s 23(3) I should make a further clarification with my views regarding s 23(1). I certainly find the position put by the Valuer-General arguable as a proposition of law but not supported by the facts of this case. However, had I preferred the Valuer-General's argument, that is, that the site improvements referred to in s 23(1) include the river wall, the views which I express below as to the impact which s 23(3) has on s 23(1) would not change.

[256] As I have just stressed regarding s 23(1), there is absolutely no doubt on the facts as found in this matter that the river wall was constructed as part of the building project for the 123 Eagle Street tower. It forms an integral part of the building. The building would be unable to stand but for the existence of the river wall as part of its footings and foundations and underground building levels.

[257] It is nonsensical to contemplate even a hypothetical situation where the non-site improvements are removed in circumstances where that is only part of the developed building and where the river wall is an essential element of that development.

[258] Each case must be decided on its own facts. In this case, the facts in my view are absolutely clear. The coffer dam was the integral part of the reclamation done to the land. The river wall is an integral part of the building developed on the land. It follows that the river wall, as I have defined, it must not be included as a site improvement in the valuation of 123 Eagle Street.

[259] Before closing this part of the decision, it is insightful to refer to paragraph 146 of the Valuer-General's submissions where the Valuer-General refers to the decision of Justice Pain in Trust Co Limited (ATF Opera House Car Park Infrastructure Trust No 1) v Valuer-General (No 3).[127]

[260] The reference provided by the Valuer-General was to paragraph 35 of the Opera House Car Park case which says as follows (Valuer-General's emphasis):

"The Valuer-General is correct in light of the agreed evidence that the construction process for the car park was that excavation of most of the cavity occurred only after the rock bolts and anchors had been inserted. Contrary to the Applicant's submission, these were indispensable to and inseparable from the excavation. That the anchors and bolts once inserted have an ongoing role in ensuring stability of the sandstone surface of the ceiling while the car park is in operation does not undermine this finding. The insertion of the rock bolts and anchors was inseparable from the excavation process, applying the reasoning of the Court of Appeal in Maurici at [12]-[13]. This part of the judgment was not overturned in the High Court. These should be considered as land improvements for the purpose of this valuation exercise."

[261] I completely understand what Justice Pain held in the Opera House matter. However, it must be stressed that his Honour's comments relate to the particular facts in that case. In this decision, applying the clear facts of this matter, I could write the same paragraph with one crucial amendment to one sentence. That is, amending the sentence "[t]he insertion of the rock bolts and anchors was inseparable from the excavation process" so that it reads "[t]he insertion of the river wall was inseparable from the building process".

What premium should be applied for 123 Eagle Street as a superior property to the 304 George Street sale

[262] It takes something of a voyage of discovery through the evidence and the submissions to ascertain what the position of each party is with respect to the question of the percentage to be applied to the 304 George Street sale to account for the superior location of 123 Eagle Street in the "Golden Triangle" with commanding views of the Brisbane River etc.

[263] I will start with Mr Jackson's evidence. He originally thought a 10% increase was appropriate. This was when he originally analysed the rate for the 304 George Street sale at $8,189 m2. However, for reasons that I do not believe are ever properly explained, when Mr Jackson changed his analysed rate to $7,767 m2, his rate of increase changed to 15%. As if by magic, this resulted in Mr Jackson's unburdened rate for 123 Eagle Street being $9,000 m2 in either case. This situation was conceded by GPT in its submissions at paragraph 14.

[264] My clear finding with respect to this aspect of Mr Jackson's evidence is that he was prepared to make whatever percentage allowance for 304 George Street as was necessary to result in his conclusion of $9,000 m2 as the unburdened rate of 123 Eagle Street. I reject his percentage increase of 10% and/or 15%.

[265] Unfortunately for the Valuer-General, its valuation evidence in this regard is also jumbled and somewhat confusing. In its submissions at paragraph 13, the Valuer-General contends for a premium of 23% to be applied to 304 George Street to bring that sale into line with the value for the superior 123 Eagle Street subject. Unfortunately for the Valuer-General, I can find no reference to 23% in these circumstances in any of Mr Hart's evidence. There is, however, in paragraph 10 of Mr Hart's Report[128] a reference to 26%. Different figures are again found at paragraph 95 of Mr Hart's Report, where he refers to an adjustment to the 304 George Street sale of "between 25%-40%" to reflect what he refers to as the superior attributes of 123 Eagle Street over 304 George Street.

[266] I do take it as common ground between the valuers that the subject receives a premium due to its location in the "Golden Triangle" when compared to the location of 304 George Street.

[267] Mr Hart goes on at paragraphs 97-100 of his report to consider some of what he says are the superior attributes of 123 Eagle Street over 304 George Street. He says that river frontage of 123 Eagle Street is clearly superior to 304 George Street. I agree. 304 George Street is not on the river and, unlike the subject with its adjoining river walk, there is a street and then the freeway before you can reach the river from 304 George Street.

[268] Mr Hart considers the street frontage of 123 Eagle Street to be superior to 304 George Street. I cannot agree, and am with Mr Jackson on this point. 304 George Street occupies the totality of a city block, fronted on four sides by significant streets, although the wester frontage does present difficulties due to the existence of a freeway on-ramp.

[269] Mr Hart also considers that pedestrian and vehicular access is superior at 123 Eagle Street.

[270] I agree with Mr Hart as to the superior pedestrian access to 123 Eagle Street over that of 304 George Street. Part of this is of course the superior location of 123 Eagle Street in the "Golden Triangle", but in my view the existence of the Riverwalk at the subject also cannot be over emphasised. The superior pedestrian access of 123 Eagle Street was not seriously challenged by Mr Jackson. I accept Mr Hart's evidence in this regard.

[271] There is a contest however between Mr Hart and Mr Jackson as regards the question of vehicular access to 123 Eagle Street compared to 304 George Street. Mr Hart considers the vehicular access to 123 Eagle Street superior "as it had benefiting easements over adjoining properties for access" and that this "affectively protects the subjects Eagle Street frontage boundary from vehicle crossovers".[129] On the other hand, Mr Jackson's evidence is that purchasers tend to prefer their own access over which they have control, rather than have to deal with adjoining property easements.[130] I am inclined to agree. Further, although Mr Hart says that no vehicular access is permitted to 304 George Street off either George Street or Ann Street, that still leaves access to 304 George Street from North Quay and Adelaide Street.

I find on the evidence the vehicular access to 304 George Street to be superior to that of 123 Eagle Street.

[272] Mr Hart has at least produced some good evidence to support his contentions regarding the comparison between the subject and 304 George Street (including the Savills research)[131] even though I have rejected some of his analysis.

[273] Due to the highly unsatisfactory state of the evidence, from both sides, in this regard, it is left to me to do the best that I can on the evidence such as it is. Taking all factors into account I do not believe that Mr Jackson's 15% allowance is high enough. Likewise, I find Mr Hart's 26% or 23% has taken into account some wrong points of analysis between 304 George Street and 123 Eagle Street.

[274] In this most unhappy state of affairs, I set the percentage increase to be applied to the unburdened rate of the 304 George Street sale at 20%.

[275] As I have often said in these reasons, both valuers agree that the most appropriate comparable sale is 304 George Street. Leaving to one side the 111 May Street sale which I have decided regard cannot be had to, all other sales are of significantly smaller properties when compared to the size of the subject.

[276] Mr Jackson gave strong evidence that the Brisbane CBD market is impacted by the size of properties for sale, just as other capital cities CBD's are. There is certainly judicial authority which goes some way to support what Mr Jackson says. In the case which considered an earlier valuation for 123 Eagle Street,[132] Member Jones had this to say:

"[61] The size and location of the 123 Eagle Street site might make it available to a much smaller pool of purchasers than for any of the sale sites and, for that matter, perhaps even the 10 Eagle Street site. That said, the location of this site, including its river frontage would go a long way to offsetting any disadvantage that might result because of its size. This is effectively acknowledged by the valuers when regard is had to the respective rates per square metre they apply to 10 Eagle Street in comparison to that applied to the 123 Eagle Street site." [133]

[277] I note that in the 2009 GPT case, 10 Eagle Street was also considered to be in the "Golden Triangle",[134] and that 10 Eagle Street had an area of 3,477 m2.[135] As Exhibit 48 in the current case clearly shows, the sales in the case at hand that could be relied on other than 304 George Street are of much smaller size (ranging from 911 m2 to 2,067 m2, although I note of course that sales 3 and 4 have a combined area of 2,871 m2).

[278] Taking the complexities of the adjustments in the sales evidence into account, together with the smaller size of the sales; the age of the sales; and the fact that the 304 George Street sale is of a comparable size; is recent in time to the valuation date; and has at best some evidence which has allowed me to arrive at an adjustment of 20% for the superiority of the 123 Eagle Street subject site; I place great reliance on the 304 George Street sale (consistent with the positon adopted by both valuers). The other sales are of very limited or no assistance.

[279] The next point to consider is whether or not there should be any deduction to the site value of 123 Eagle Street because conditions on the subject mean that it is more expensive to develop than other blocks.

[280] Mr Jackson proposes a site penalty of 10%. GPT submits that the site conditions on the subject site are plainly more difficult than the conditions on the comparable sites, particularly 304 George Street. GPT suggests, relying on Mr Jackson's four-scenario comparison, that a development as currently underway on 304 George Street on the subject would be 4 times more expensive to develop.[136]

[281] GPT submits that it is appropriate for a site penalty to be included in the valuation process due to the adverse site conditions demonstrated through the process of comparison with the comparable sales sites, arguing that Mr Jackson's deduction of 10% ($6,890,000) from his total site value of $68,900,000 is correct in light of the extraordinary site penalties on the subject and that Mr Hart was in error by not making any allowance for the site penalties.[137]

[282] It was common ground between Mr Jackson and Mr Hart that a negative adjustment of 5% should be included for flooding.[138]

[283] GPT outlines in its written submissions that the Valuer-General's engineer, Mr Gould, confirmed during cross-examination that both experts agree in their JER[139] that the factors described in Appendix D to their JER would cause increased costs of development compared to development on the comparable sales.[140]

[284] GPT points out that Mr Gould does not directly comment on the site specific penalties at the subject site compared to the comparable sales in his individual Reports.[141] Instead, GPT says that he directed his attention to the issue of what are and what are not site improvements.

[285] GPT says that Mr Ainsworth's comparison of 123 Eagle Street and 304 George Street indicates the Eagle Street subject to be more expensive to develop because:

(a) The 304 George Street site has hard rock below 2 basement levels. For a two basement on that site (such as exists at the Riverside Centre now), the rock causes no penalty because the excavation would stop before hitting the hard rock. For anything deeper, it is an added cost.

(b) The subject site has hard rock near the frontage with Eagle Street. That area of hard rock is not as great as at 304 George Street, but it presents a difficulty nonetheless. Critically though, the subject is also impacted by the Brisbane River. The difficulty of excavating into soft ground adjoining, or abutting, the river is significant. Certainly, it is more difficult than any challenge found at 304 George Street. The subject also has challenges of dealing with the 111 Eagle Street development (to the south of the subject) as it currently exists, and the Australia House boundary (at the north of the subject). Those are not challenges which are confronted at 304 George Street, which does not abut or adjoin any other development.[142]

[286] GPT submits that the quantity surveying evidence put forward by Mr McHardy also supports immense costs associated with building 7 basement levels, as is being built on 304 George Street, on the 123 Eagle Street site.[143] The complexities are set out by Mr Ainsworth in his Report as follows:

"3.1.3 ... Scenario 3 has not previously been considered - i.e. if one were to develop the 123 Eagle Street site with a development similar to the 300 George Street development that is recently approved and currently under construction, what unusual construction measures and works would be necessary as a result of the site-specific characteristics of the 123 Eagle Street site? The main engineering consideration for this scenario would be construction of a deep basement immediately adjacent to the river. This would be challenging engineering and construction undertaking. There would be several ways of constructing a seven level basement on the 123 Eagle St site, but in my view (and with my personal experience of recently engineering the construction of a seven level basement for the nearby One One One Eagle Street development) the sequence and approach illustrated on my sketch SK102 (refer Appendix D) would be representative of a practical and cost-efficient solution.

I note that lack of existing developments along low-lying sections of the Brisbane riverfront that have basements deeper than two levels is a reflection and recognition of the difficulties and costs involved in constructing deep basements on low-lying riverfront sites, and evidence that the presence of the river boundary and the associated soil conditions and ground water levels does present a limit on the extent to which these sites can be developed in terms of basements. I not [sic] that the one example in Brisbane of a deep basement in close proximity to the river is the One One One Eagle Street project, where the very small site footprint required that a deep basement be formed to accommodate a modest number of car spaces and plant. The costs per car space involved the construction of the One One One Eagle Street basement were much higher than is normally considered viable for developments on larger sites..."[144]

[287] Mr Ainsworth then goes on to illustrate the construction approach, and GPT says this information is what Mr McHardy acted upon.[145]

[288] GPT follows by emphasising the constraints on Mr Gould's evidence due to his instructions and not engaging in the four-scenario comparison exercise. GPT then indicates that, despite Mr Gould not undertaking the comparative exercise, during cross-examination he agrees upon a reading of Exhibit 3B as a whole that it demonstrates the engineers joint opinion that "the sale at 304 George Street bears none of the site disabilities or problems... that are identified by the joint experts" in respect of being present at the subject site.[146]

[289] Mr Gould's agreeance is further identified during cross-examination:

"On the subject land, that which is regarded as the more favourable land for building car parks and cores of buildings, is, in fact, site conditions regarded as a site penalty on 304 George Street. In other words, that's the better of the conditions on 123 Eagle Street?on - on 123 it is. Yes.

Correct. And it follows from what you've said that the river area, that area which runs along the river and then the L-shape up through and - not through, but past 111 Eagle Street is inferior to the hard rock ground?That's correct.

So that if one looks at the two sites side by side, the more difficult ground to build on - looking at the site as a whole, the more difficult, the more problematic site is 123 Eagle Street?Yes.

Now, do you ever say that in your reports? Can you point that out in your reports ?No. I don't say that.

where you've ever said that?I don't say that."[147]

[290] GPT submits that because Mr Gould did not undergo an assessment of the 304 George Street development on the subject site, nor did he assess the 123 Eagle Street development on the 304 George Street site, that the only evidence before the Court is that of Mr Ainsworth.[148]

[291] Later in its submissions, GPT acknowledges that a development design will ultimately be a decision for the developer, but in the absence of any better comparator, that the development on 304 George Street is a very useful starting point and an adequate exposition of the point GPT seeks to make. GPT says that it must be acknowledged by the Valuer-General that at or about the valuation date, in respect of similar sized land and similar development density, there was an appetite in the market for a deep basement carpark.[149]

[292] Mr McHardy, the quantity surveyor called on behalf of GPT, utilised an earlier JER prepared by him in 2009 concerning the subject site as a starting point. GPT is critical of the fact that Mr Davidson, called by the Valuer-General, only undertook to criticise the analysis of Mr McHardy as per his instructions, rather than doing his own calculations.[150] GPT submits that the difference in the approaches of the quantity surveyors immediately improves Mr McHardy's evidence and that, minor quibbles aside, his evidence is of the most assistance to the Court.[151]

[293] Elaborating on the above position, GPT says that whatever the reasons behind the instructions given to Mr Davidson, the consequence is that only one of the two quantity surveyors has in fact costed the 4 scenarios, or indeed, any scenario. GPT says this is of importance because where 2 quantity surveyors independently cost the same proposal there will inevitably be 'overs and unders', a process by which one quantity surveyor estimates a particular item below the cost of the other, but in respect of another item the opposite occurs.[152]

[294] GPT criticises the figures arrived at by Mr Davidson due to the process adopted by the Valuer-General. GPT says the figures arrived at are much less reliable because Mr Davidson takes issue only with items he believes are over costed, and that his analysis inevitably leads to a figure which is not the one he would have reached by undergoing an independent analysis.[153]

[295] Mr McHardy's four-scenario comparison resulted in the following figures:

(a) 123 Development on 123 Eagle Street $11,887,000

(c) 304 Development on 123 Eagle Street $42,038,178

(d) 304 Development on 304 George Street $9,280,458[154]

[296] Mr McHardy's rational is explained during examination in chief at T 4-81, lines 36 to T 4-83, line 27.

[297] GPT submits that Mr Davidson's figures in response are as follows:

(a) 123 Development on 123 Eagle Street $7,486,014 (Ex 4A)

(b) 123 Development on 304 George Street agrees with Mr

(d) 304 Development on 304 George Street $7,545,233(Ex

[298] GPT says that because Mr Davidson could not offer his own figure for scenario 3, that the Court only has the unchallenged evidence for that scenario, of Mr McHardy's figure of $42,038,178.[155]

[299] GPT submits that the car park proposal suggested by Mr Davidson is unreliable due to Mr Davidson's concession during his oral evidence:

"...And any advice that would be given would be given with a caveat that obviously it should be checked out with an architect and/or engineer."[156]

[300] To give context to Mr Davidson's statement, Mr Fynes-Clinton asked him:

"...to what extent is it a part of your practice as a quantity surveyor to provide clients with advice about at whatever level is appropriate... provide clients with advice about the options for or technical viability of particular developments on particular sites?"[157]

[301] GPT says the Valuer-General has not provided any such engineering input to Mr Davidson's analysis.

[302] GPT further criticises Mr Davidson's proposal in the following way:

(a) Mr Davidson's error was the belief (it must be said hastily formed) that avoiding the soft river ground would be straightforward and cheap. It is not so simple as to say that a deep, small footprint, basement will solve the site specific issues.

(b) Both Mr Ainsworth and Mr McHardy were critical of the proposal.[158]

[303] During Mr Ainsworth's criticisms of Mr Davidson's proposal, he suggested that there was no way of circumventing the difficulty and expense associated with the soft ground on the subject site.[159] Mr McHardy's evidence was to the effect that Mr Davidson's proposal would not remove the impacts from the river and would still involve site penalty costs.[160]

[304] GPT submits that the proposal put forward by Mr Davidson has the effect of reinforcing the value of the methodical exercise carried out by Mr Ainsworth and Mr McHardy of comparing the 4 scenarios and that it corroborates GPT's contention that the subject is a difficult site and that the site difficulties do, when compared with other sites, cause greater development costs or reduced flexibility of design, or both.[161]

[305] Moving to the valuation evidence put forward by the Valuer-General, GPT submits that Mr Hart has been resistant to the notion that the site conditions for the subject ought to be taken into account in the process of comparison.[162]

[306] In Mr Hart's Report he outlines the following reasons for not applying a site penalty of 10%, as was taken into account by Mr Jackson:

"105... a. Mr Jackson's approach is separate from the direct comparison approach. It is a selective and subjective approach involving a comparatively minor aspect of a hypothetical development on the subject property.

b. There is no evidence that demonstrates that a prudent purchaser would pay less because of these site issues in a hypothetical development on the subject property.

c. There is no evidence that demonstrates that these site issues prevent or restrict or prohibit development on the subject property or impact the HBU of the subject property.

d. Mr Jackson does not support his opinion in the context of a complete hypothetical development approach. This exercise would demonstrate how these costs impact on the entire hypothetical development and the resultant residual land value calculation.

e. Mr Jackson's approach assumes all the comparable sales represent normal or standard CBD sites. The evidence indicates all the comparable sales are unique and have different site issues.

f. Mr Jackson has not adjusted the comparable sales evidence for their site specific issues.

g. Mr Jackson's approach which assumes the subject property is different and needs to be adjusted to recognise some abnormality is not supported by the evidence.

106. As stated at GJ-ER paragraph 125, the estimates undertaken by the expert quantity surveyors in relation to cost penalty difference between 304 George Street and the subject property are misguided. In my opinion, a prudent fully informed purchaser of the subject would not contemplate constructing the kind of development that is taking place on 304 George Street."[163]

[307] GPT says that the last sentence of Mr Hart's evidence is easily made, but less easily explained, further providing that the proposition implicitly accepts that the site conditions constrain development flexibility. GPT contends that it sits uneasily with the Valuer-General's belated position that the highest and best use for the subject was for somewhere between 100,000 and 150,000 of office space, in 2 towers. GPT says it is one thing for Mr Hart to assert that a developer would not construct the same form of development on 304 George Street, but another to demonstrate how the development density could be similar without having to confront the site conditions and the higher costs or the development limitations involved.[164]

[308] GPT notes that, during cross-examination Mr Hart gave a contradictory position:

"---...when comparing the sale and the subject, it would be appropriate to make an adjustment downwards in terms of value for the subject?---I accept - I accept that."[165]

[309] GPT also notes that Mr Hart's evidence during cross-examination specifically indicates his agreeance to site difficulties being present at the subject:

"...I want you to put aside the site improvement issue for the moment, but we can, can't we, on the weight of the evidence now, look at the quantity surveying and the engineering evidence in respect of 123 Eagle Street and the quantity surveying evidence in respect of 304 George Street and say that there are more site difficulties on 123 Eagle Street than there are on 304 George Street?---I accept that."[166]

"...So, all other things being equal...an allowance needs to be made in respect of the more difficult site conditions on the subject---?---Well...yes..."[167]

[310] GPT submits that the Court may proceed from the position that Mr Hart did not in his analysis make any allowance for the site conditions but if the Court is satisfied that the site conditions on 123 Eagle Street affect value it would be reasonable to make an allowance. GPT says Mr Hart's valuation is in error because, despite acknowledging that to do so rests on sound principle, he refused to take account of the extraordinary site penalties of the subject site.[168]

[311] GPT recognises that Mr Jackson's original approach at the outset was to account for the site penalties by deducting specific figures calculated by Mr McHardy and Mr Davidson which resulted in penalties of 17% and 8.5%, respectively.[169]

[312] GPT says that Mr Jackson then simplified and improved his approach as the process developed and the four-scenario comparison was adopted by GPT's engineer and quantity surveyor. This resulted in a more general deduction of 10%. GPT says, with respect, that is a more principled and conservative way of accounting for extraordinary site specific penalties, rather than simply deducting Mr McHardy's costs.[170]

[313] The discount adopted by Mr Jackson is as follows:

"128. In adopting a discount of 10% I have considered the various site issues unique to the development of the subject land not present at all the comparable sale properties in whole or part including:

• The utility of the existing improvements, if deemed to be site improvements and how they assist or hinder the development of the land;
• The nature of the soil conditions of the subject land;
• The presence of acid sulphate soil;
• The presence of flooding;
• The groundwater table;
• The need to excavate rock;
• The requirement of retention systems in developing the land adjacent to the river; and
• The easements burdening the land and the impact on construction."[171]

[314] GPT goes on to argue that if it is correct, and components identified by the Valuer-General as being site improvements are non-site improvements, and are assumed not to exist, that the subject is a considerably more difficult site than the comparable sales sites, and in particular, a more difficult site than 304 George Street.[172]

[315] GPT concludes in its written submissions that given the weight of the engineering and quantity surveying evidence before the Court, the discount applied by Mr Jackson is entirely justified and reflects the uncertainty that a potential purchaser would face. GPT also submits that the complications associated with the river would plainly be a negative for the subject, particularly in contrast to 304 George Street.[173]

[316] It is the Valuer-General's submission that Mr Jackson has subtracted 10% for the penalty of site conditions based on the premise that the subject will be more difficult to develop being alongside the river but without doing any hypothetical development exercise to arrive at any impact on his residual land value of any such additional expenses. The Valuer-General further submits that Mr Jackson ignored the requirement to value the subject with site improvements and that his 10% deduction includes addressing matters which, at least, in part, the 5% flood allowance has provided for.[174]

[317] The Valuer-General says GPT's contention for a 10% penalty proceeds upon:

(a) A flawed premise that there are no site improvements present at the subject property;

(b) A failure to understand the proper process of valuation which already had an agreed deduction of 5% for flooding;

(c) The replacement of the fundamentally flawed exercise of deducting the costs estimated to replace the site improvements at the subject property;

(d) A failure to allow for the feature that much of the "bad ground" at the subject was not able to be developed above podium level because of the presence of Easement K; and

(e) A failure to allow for the feature that the "good ground" at the subject could be developed for a second tower and to provide additional car parking, if required, without the need to remove the hydrostatic slab and river wall.[175]

[318] The Valuer-General also contends that the flood allowance already made is sufficient and the acid sulphate soils are addressed by the site improvements including the hydrostatic slab.[176]

[319] The Valuer-General criticises Mr Jackson's approach, saying that the 2009 JER relied upon concerned a case where:

(a) The question for the Court in that case was one as to unimproved value under the Valuation of Land Act 1944 (VLA), not site value; and

(b) The premise of the 2009 report involved comparing costs to prepare an unimproved parcel for the development which was actually carried out on the site (in 1986) with costs to prepare a (mythical) "normal site" for development.

"How a cost comparison with a mythical or notional site, not being a comparable sale relied upon by either party in the earlier case, was supposed to assist the Court in applying relevant (and non-mythical) sales to the Subject Property was and remains a mystery. This Court does not need to attempt to solve it."[177]

[321] The Valuer-General submits that GPT did not carry out a quantity surveying assessment relevant to site penalties as an original exercise and that Mr McHardy was instructed to assume the works for the subject referred to in the 2009 report were the works which give rise to penalties for the purposes of the present appeal and merely asked to update those costs to the date of valuation.[178]

[322] During cross-examination Mr McHardy stated that the task was not undertaken anew:

"...So in summary, which - where the instructions are summarised...we are directed to update the costs that were presented in the joint QS report from 2009..."[179]

"...But this is after a whole exercise, having been undertaken afresh? ---...The 2009 report, in terms of the engineering, as applied to 123 Eagle Street 2009, is the same as applied in this report, in 2016. Sites A, C and F and new material."[180]

[323] The Valuer-General says that Mr Davidson was asked, in effect, to do the same thing as Mr McHardy in order to identify any disagreements about the correct dollar amounts produced by GPT's updating exercise and therefore submits that the criticism by GPT of the Valuer-General adopting a flawed approach in instructing Mr Davidson is not logically made out.[181]

[324] The Valuer-General identifies that the 2009 report relied upon by GPT's quantity surveyor were costs incurred to develop the subject as an office tower containing about 50,000 of lettable area in circumstances where GPT asserts the highest and best use of the subject would be commercial development containing up to 150,000 of lettable area. The Valuer-General says such a development logically would require a higher development cost than that which was incurred to develop the subject, as is, but would also involve a far greater return. The Valuer-General considers something to be a 'penalty', in the relevant sense, only if it reduces the return because it narrows the gap between the value of the completed development and the costs incurred to construct it as compared to a similar development on similar land (a comparable sale) with different site conditions.[182]

[325] During cross-examination Mr McHardy gave the following evidence:

"...the hypothetical normal site requires excavation down to the levels where you were going to establish the base of your core, and/or the base of your car parking, does it not?Correct.

So excavation from ground level down to the level where you're going to start those works is not an unusual or extraordinary cost. It's an ordinary cost of development, is it not?Excavation is a normal cost of development, yes.

All right. In this case, if we hypothesise the subject site, and leaving aside the debate between the parties bout [sic] the river wall and the hydrostatic slab, in the state in which you and Mr Callaghan considered it in 2009 - we'll go back there for ease of reference - it sloped down from Eagle Street to the river, did it not?Correct.

In terms of excavating now, the items 13 to 15 relate to excavating the site down to a level to commence works that - and I may have this wrong - but it was about a zero AHD or something close to that?Something close to that.

Right. If the subject site had been the hypothetical normal site, the excavation down to about 0 AHD would have been a rectangular block of excavation from surface level down to that level; correct?Correct.

But the subject site, of course, because mother nature has given us the slope, the excavation to get down to the same level, involves a lesser volume of material than would be involved for our hypothetical normal site?Yes.

a part of it away by the wedge - or the slope, rather. In other words, the excavation is a wedge shape rather than a rectangle shape, agreed?Correct.

So is that not, in respect of this specific item, a construction advantage for the subject site, rather than a cost or construction penalty?It is an advantage to the - to the - to the site, having that

And even if one were to step back from the language of advantage, the excavation to get down from a ground level to the level where you're going to start building your cores and your basements, is an ordinary construction requirement for the normal site anyway; correct?Correct.

It's the same for both sites. The quantities will differ but it's the same exercise for both site?Correct.

Thank you. Now, in respect item 14, specifically. You were dealing there with the additional cost to treat acid sulfate soil, and there's no dispute that the subject site in the state we're conditioning - we're considering has acid sulfate soil issues, but as a matter of logic, should that figure not merely be for the extra over normal excavation costs as compared to if the soil was not acid sulfate-affected?Correct.

All right. And as for item 15, whether we're dealing with the subject site or our utopian normal site, if one is going to excavate down to a level where one can start constructing the base of the core and the basements, one needs to have a ramp to provide access for the plan to get down to that level and start working - to excavate and then start working?Yes.

Can I suggest to you simply that items 13, 14 and 15, apart from the particular issue of acid sulfate soil, properly treated, works required for the normal site and, indeed, any construction site?Yes, I - I must say in the evolution of this - these three items, in particular, I would prefer to research how I have come to that conclusion, but as you've described, yes."[183]

[326] The Valuer-General considers that the above-outlined evidence of Mr McHardy demonstrates that a number of the penalties included were not, in fact, unique to the subject and, in the case of excavation down to the basement level to commence basement construction, that this actually reflected an advantage for the subject (because its natural slope down to the river reduced the total volume of excavation required).[184]

[327] The Valuer-General submits that if Mr Jackson's approach is correct, the differences between his and Mr Davidson's evidence in relation to various 'line items' is not material and does not affect the outcome of this appeal. In contrast, providing, if Mr Jackson's approach is otherwise incorrect, the entirity of the quantity surveyor evidence, in so far as it is sourced from the 2009 report, is irrelevant.[185]

[328] The Valuer-General contends that the works included as penalties by Mr McHardy are site improvements. The Valuer-General submits, if the Valuer-General's position is correct, the works and their attributed costs are plainly irrelevant, as a purchaser does not need to consider the 'penalty' cost of constructing works that are already in existence.[186]

[329] The Valuer-General says that GPT's quantity surveying evidence and the case it wishes to run do not align because the works Mr McHardy refers to are works carried out to develop the subject yielding a lettable floor area of 50,000 which the Valuer-General says has no demonstrated relationship to a development giving effect to the highest and best use of up to 150,000.[187]

[330] The Valuer-General is critical of Mr McHardy for assessing the site penalties in comparison to a hypothetical 'normal site', providing that the 'penalty' comparisons between the subject and 304 George Street have nothing to do with any sales evidence.[188]

[331] Mr McHardy conceded this point under cross-examination:

"I'll ask you the question, so it's 5.2A for the 123 on 123, the $11,887,000, that's a figure of costs for development which are more than what; what's it being compared to? ---Yes, okay. Yes. Yes, it is being compared to an easier construction site. So normal is the word you used. Yes. That is---

It's not being compared to any of the sales upon which the appellant relies in its valuation evidence, is it? Not ---?---Nothing to do with the sales, no.

No. Nothing to do with the sales at all?---No."[189]

[332] Continuing its criticisms, the Valuer-General argues that the exercise carried out by Mr McHardy of attempting to transpose:

(a) The existing Riverside development (which does not reflect the highest and best use of the notionally site improved but otherwise vacant subject) to the 304 George Street site (which does not have a highest and best use comparable to the existing Riverside development);

(b) The approved 304 George Street development to the notionally site improved but otherwise vacant subject (where it is not a form or configuration of development which anyone suggests would be carried out on the subject)

is an entirely arid one. The Valuer-General says there was no attempt made to demonstrate that a hypothetical prudent purchaser of the subject as at the date of valuation would carry out any thought process involving that kind of transposition. In the words of the Valuer-General, the exercise undertaken has no evidentiary value and was pointless.[190]

[333] The Valuer-General submits that the point of the proposal by Mr Davidson was to identify the type of exercise which would need to be done before there could be any meaningful consideration by the valuers about 'site penalties' as might be perceived by a purchaser of the subject for its highest and best use. The Valuer-General submits that the unresolved and unresolvable disagreements about what is freely acknowledged to be an exercise done at high level highlights the logical deficiencies in GPT's approach of seeking to assert penalties based on historic works and an exercise of building on the subject a 3 tower, mixed use development involving the construction of 943 car spaces, neither of which are shown on the evidence to have any demonstrable relationship to the construction works which would be carried out to achieve the agreed highest and best use.[191]

[334] The Valuer-General goes on to criticise Mr Jackson for coming to a deduction of 10%, stating, "...it was simply a way of applying another discount in his subjective comparison with the sales evidence".[192]

[335] In response to the Valuer-General's criticisms of Mr Jackson, GPT says that the proposition that in order to assert a 10% reduction in site value it would be necessary for Mr Jackson to carry out a hypothetical development exercise is, with respect, unsound. GPT points out that this Court has long discouraged the use of hypothetical developments to arrive at values of unimproved (and, by analogy, site improved) land. GPT submits that the exercise carried out was useful and indicative of costs and site difficulties that a likely form of development would need to confront and respond to.[193]

[336] In response to the Valuer-General's assertion that Mr Jackson's 10% deduction includes an allowance already made for floods, GPT says this assertion is incorrect and without proper evidentiary basis.[194]

[337] During cross-examination the following discussion occurred between Mr Fraser QC and Mr Jackson:

"All right. So - but you and Mr Hart have agreed on a five per cent reduction of the analysed value for the - for flooding, haven't you?That's right. The - it was

So what's that for?It was a matter of - well, the - the Valuer-General, following the flood event, for all those properties along the CBD - it was sort of a matter of policy - allowed a five per cent allowance for those properties which were the subject of - of flooding as a result of that event, and what - what that was for - it's actually explained in the Valuer-General documents - to say the perception of any diminution in market value of those properties as a result of this - what was a major event at the time - and there was a certain obvi - obvious level of concern around that flood event and the - the impact it had on the market at that time.

All right. But to the extent that you've allowed for the flooding issues in your deduction of 10 per cent, aren't you doubling up with agreed amount of five per cent deduction?No. I - I think you're probably misunderstanding the two concepts. You - if you need to, for instance - you need to - if you need to build a retaining feature of some nature in whatever new form of development you do on the land, you've got to deal with the - the reality of flooding, not - not a flood event. You've got to deal with the site being on the river full stop, and, you know, listening carefully to the engineering evidence, you know, you've got to dewater the site when you pump out the sludge out of the land and the - the high water table. They're just issues associated with it being adjacent to the river."[195]

[338] As to the criticisms regarding the four-scenario exercise, GPT has this to say:

"Paragraph 12(c) [of the Respondent's submissions] presumably refers to the further exercise by Mr Jackson as a consequence of the four scenario exercise developed by the engineer and quantity surveyor. Mr Jackson has consistently brought to account a deduction for site conditions and the exercise of doing so is entirely sound if the Court is satisfied that the site conditions are a matter which would influence a hypothetical purchaser (just as might any other physical or locational feature of the site)."[196]

[339] GPT goes on to criticise the Valuer-General for not engaging with Mr Ainsworth's evidence about the subject site involving greater engineering challenges than other sites, particularly the 304 George Street site. GPT says the fact is, the Valuer-General refuses to acknowledge or properly deal with the site specific penalties of the subject site, as raised by GPT and as subject to so much scrutiny of GPT's experts.[197]

[340] Addressing Mr Davidson's evidence, GPT submits the Valuer-General misunderstood GPT's submissions. GPT says the point it wishes to make is, Mr McHardy was the only one to quantify the relevant site penalties; Mr Davidson's exercise either ignored some of the evidentiary issues (e.g. costing a like development to 304 George Street on 123 Eagle Street); or was limited to commenting on aspects of Mr McHardy's evidence. GPT says, where Mr Davidson has not engaged in the exercise at all, then Mr McHardy's evidence (with qualifications, as far as they are established), is the only reliable evidence. GPT submits that this is so because only Mr McHardy has actually undertaken the whole of the relevant exercises.[198]

[341] GPT submits Mr Jackson analysed sales first, then separately reasoned that a prospective purchaser would carry out a due diligence process that would lead to 10% less being offered for the subject because of its peculiar difficulties, which is a transparent and evidence based approach.[199]

[342] Even a brief reading of the above as to the parties' positions with respect to site penalty considerations involves an amount of doubling up of facts and circumstances referred to in other parts of this decision. This helps highlight both the difficulties with this topic and the dangers of doubling up on considerations already taken into account in applying the comparable sales methodology.

[343] I will start with flooding. I am not at all satisfied with Mr Jackson's oral evidence as to his distinction between the 5% allowance agreed to with Mr Hart and his inclusion of "the presence of flooding" as one of his dot point contentions[200] in support of his 10% site penalty. This represents a classic case of doubling up and that part of Mr Jackson's site penalty allowance must be rejected.

[344] Mr Jackson also relies on the need to excavate rock at 123 Eagle Street as support for his site penalty. Of course, for the reasons already stated, I am relying on the sale of 304 George Street. The engineering and quantity surveying evidence clearly establishes that exaction of rock was a major consideration for development on 304 George Street. Logically, therefore, it forms part of the comparable sale analysis already undertaken and to consider it again under this heading would be a doubling up.

[345] In my view, the issue of easements burdening the land and their impact on construction has also, implicitly, been taken into account in the comparative sale approach between 304 George Street and the subject. I have applied burdened/unburdened rates to the 304 George Street sale. To apply the issue of easements again as a site penalty for 123 Eagle Street would also be a doubling up.

[346] Although not listed in Mr Jackson's list in [128] of his Exhibit 2B Report, it is clear from the evidence given by the experts called by GPT that difficulties with site access during construction is also a factor supporting a site penalty for 123 Eagle Street. Just like the issue of easements, access to both 304 George Street and 123 Eagle Street have already been taken into account in the comparative approach.

[347] The other points raised by Mr Jackson have received support, not only from Mr Ainsworth, but also from Mr Gould (called by the Valuer-General). I accept that evidence; that is, that 123 Eagle Street involves greater engineering challenges than 304 George Street.

[348] As already pointed out, some of those challenges have already been taken into account. However, when the evidence is viewed in its entirety, others have not.

[349] As a matter of legal principle, it is my view that the better approach is to include all such issues as part of a comparable sales approach wherever possible. This avoids the dangers of doubling up. I also accept, however, that there may be cases where that is either difficult or not appropriate. Due to the conflicting positions of the parties going into the hearing, I accept that this is a case where an additional allowance for site penalty is arguable, but noting of course the great care which must be exercised to ensure that there is no doubling up.

[350] Doing the best that I can on the evidence before me, and being careful not to cause any doubling up, and having regard to all of my findings, I consider it appropriate to allow a site penalty of 5%.

[351] GPT in its reply submissions expresses a concern that the Valuer-General alleges against it that the hearing proceeded on a false premise due to the nature and scope of GPT's grounds of objection.

[352] GPT has seven grounds of appeal. Those grounds have been particularised. As GPT has pointed out,[201] the situation at hand is analogous with the comments by this Court in Buckler v Department of Natural Resources and Water[202] where I had this to say:

"[23] It is common ground between the parties that the appellant is unable to rely on grounds of appeal outside of those listed in each appeal in light of s.56 as then enacted. The operation of s.56 of the VLA, then numbered as s.21(3) of the VLA, was considered by the Land Appeal Court in the case of Franklin v Valuer-General. The Court made the following observations:

"The provisions of the Valuation of Land Act as to the appeal procedure are restrictive in their operation, more especially to an appellant who has made his appeal on narrow and particular grounds rather than on a broad general ground such as 'the valuation is excessive and contrary to law'. The language used by the Legislature is mandatory and binding not only on the parties but also on this Court and the Land Court."

[24] One of the quirky features of appeals under the VLA has been that those appellants who go to the detail of explaining exactly what their nature of objection is often make their grounds of appeal so restrictive that they are unable to lead evidence as to matters of significant concern to them regarding the valuation complained about simply because such evidence does not properly fall under the heads of one of their specific grounds of appeal. On the other hand, those experienced in filing grounds of appeal in the Land Court often file grounds of appeal worded in the most general way possible and thus tend to capture each and every possible aspect of appeal that could be raised in evidence at the hearing of the appeal. I call this situation "quirky" as those appellants who attempt to specify their grounds of appeal in a meaningful way are often caught short at a hearing, whilst those who file grounds of appeal which, in real terms, reveal nothing to either the respondent or to the Court of what the actual grounds of appeal are, have free rein to admit whatever evidence they choose on appeal.

[26] In my view, the question is not so much whether the 2006 grounds of appeal are limited by their failure to include the specific ground of objection relating to the golf course policy as contained in the 2007 grounds of appeal, but rather whether, if the specific ground had not been included in the 2007 appeal, all of the evidence adduced by the appellant could have been sustained by the general grounds of appeal set out in both notices of appeal. In my view, the answer must be a resounding yes.

[27] In my view, whilst the appellants are limited to the grounds of appeal as set out in their notices of appeal, the broad nature of those notices of appeal is sufficient to encompass all of the evidence presented by the appellants at the appeal hearing of both valuation appeals." (citations omitted)

[353] Although Buckler was a case under the VLA and not the LVA, in my view the principle remains intact. His Honour, Member Cochrane, expressed like views in Bunnings Properties Pty Ltd v Valuer-General[203] where he analysed various case law and came to the same conclusion with respect to the VLA.[204]

[354] I agree with GPT that I have grounds of appeal before me that permit me to consider and make findings on all of the issues in dispute in this matter.

[355] All that remains to be done is to apply a mathematical calculation to the various findings that I have made to ascertain the site value for 123 Eagle Street pursuant to the LVA as at 1 October 2012.

[356] The relevant findings are that the comparative sale, 304 George Street, has an unburdened rate of $8,031 m2. As the subject is 20% superior, that needs to be added to arrive at an unburdened rate for 123 Eagle Street. $8,113 m2 plus 20% equates to an unburdened rate for 123 Eagle Street of $9,736 (rounded).

[357] Having ascertained the unburdened rate for 123 Eagle Street, it is now necessary to adjust that amount to arrive at the burdened rate using the agreed rate of 30% as a reduction. The calculation is therefore $9,736 * 70% which equals $6,815 (rounded).

[358] Using the unburdened rate of $9,736 m2 and $6,815 m2 as the burdened rate as the starting point, the calculation for 123 Eagle Street is as follows:

[359] On the whole of the evidence, I find that the appeal must be allowed and the valuation of 123 Eagle Street Brisbane as at 1 October 2012 set at $70,800,000.

2. The site valuation of 123 Eagle Street, Brisbane City (PID 40906821) as at 1 October 2012 is determined in the sum of Seventy Million, Eight Hundred Thousand Dollars ($70,800,000).

[2] Appellant's Submissions, page 7, para 2.

[5] [2012] QLC 12.

[6] Land Valuation Act 2010, s 18(2)(b).

[7] [2005] QLC 11.

[8] Spencer v The Commonwealth of Australia (1907) 5 CLR 418.

[9] Meiers v Valuer-General [2012] QLC 19, [27].

[10] Appellant's Submissions, pages 3-6.

[11] [2016] QLC 69.

[12] Respondent's Submissions, pages 3-8.

[13] (2009) 30 QLCR 100.

[16] T 9-8, lines 23 to 28; lines 37 to 39.

[19] T 9-8, lines 11 to 14; T 9-34, lines 28 to 33.

[38] T 5-40, line 13 to T 5-41, line 12.

[40] Ex's 42 and 43.

[45] Appellant's Reply Submissions, para 82.

[49] Respondent's Submissions, paras 260-9.

[50] Appellant's Submissions, para 234.

[51] See T 7-57, lines l17 to T 7-63, line 4.

[53] Respondent's Submissions, para 261.

[54] Appellant's Reply Submissions, para 20.

[55] Respondent's Submissions, para 262.

[56] (Unreported, Supreme Court of Victoria, Batt J, 2 April 1996) 85.

[57] [2011] VSC 184; (2011) 34 VR 445, 513.

[58] [2016] QLC 69.

[59] There are challenges to Mr Hart specifically relating to his evident on the 304 George Street sale which I will discuss, as necessary, later in these reasons.

[60] Department of Justice and Attorney-General, Model Litigant Principles (revised as at 4 October 2010).

[61] Appellant's Submissions, paras 167-8.

[62] Respondent's Submissions, para 91.

[65] [1912] HCA 69; (1912) 15 CLR 333.

[67] [1997] FCA 558; (1997) 76 FCR 151.

[69] Mr Hart signed a JER in this matter on 16 February 2016 and he signed a JER in the Brisbane Square matter on 12 February 2016.

[70] See Appellant's Submissions, para 168.

[72] Respondent's Submissions, para 103.

[74] See T 10-36, lines 35 to T 10-37, line 13 and in particular T 10-37, lines 11 to 13.

[75] Appellant's Reply Submissions, para 39.

[77] Appellant's Reply Submissions, para 40.

[78] T 3-26, lines 14 to T 3-29, line 32.

[79] [2016] QLC 69, [124].

[80] Respondent's Submissions, para 278.

[81] [2016] QLC 69, [121].

[84] Appellant's Submissions, para 171-190.

[85] Mr Hart signed a JER for this matter on 16 February 2016 and for Brisbane Square on 12 February 2016 - see Ex 2A and Ex 13.

[87] Appellant's Submissions, para 170-189, 190 (first two sentences).

[89] See Brisbane Square Pty Ltd v Valuer-General [2016] QLC 69, [2].

[90] T 11-77, line 37 to T 11-78, line 3. Note this evidence immediately precedes the evidence as to 'one valuation' set out in previous transcript reference.

[91] Appellant's Submissions, para 190.

[96] [2016] QLC 80.

[98] (1996-97) 16 QLCR 709.

[100] Respondent's Submissions, para 229.

[101] From Mr Jackson's enquiries about the site recorded in Ex 2B, page 25.

[104] Respondent's Submissions, para 235.

[106] See T 8-12, line 14 to T 8-13, line 38.

[108] Ex 2C, para 95 (my emphasis added).

[109] (2013) 34 QLCR 298, [37].

[110] [1998] HCA 28; (1998) 194 CLR 355.

[111] [2009] HCA 41; (2009) 239 CLR 27.

[113] [2012] HCA 56; (2012) 248 CLR 378.

[115] [2011] HCA 10; (2011) 242 CLR 573, 592.

[116] [2012] HCA 56; (2012) 248 CLR 378, 390.

[117] Respondent's Submissions, para 43.

[118] [2011] HCA 10; (2011) 242 CLR 573, 592.

[119] Respondent's Submissions, para 44.

[120] Respondent's Submissions, paras 46-9.

[122] Appellant's Reply Submissions, para 52.

[123] Respondent's Submissions, para 163-5.

[126] T 9-25, lines 10 to 21; 34 to 46.

[127] [2011] NSWLEC 85, [35].

[132] GPT RE Limited (as responsible entity) & Anor v Department of Natural Resources and Water (2009) 30 QLCR 100.

[136] Appellant's Submissions, para 10.

[140] Appellant's Submissions, para 43; T 8-66, lines 45 to 47.

[141] Appellant's Submissions, para 45; Ex's 3D and 3F.

[142] Appellant's Submissions, para 49.

[145] Appellant's Submissions, para 51.

[146] Appellant's Submissions, para 52; T 8-73, lines 1 to 3.

[148] Appellant's Submissions, para 54.

[152] Appellant's Submissions, para 111.

[155] Appellant's Submissions, para 116.

[158] Appellant's Submissions, para 130-1.

[159] T 9-103, line 30 to T 9-104, line 12.

[161] Appellant's Submissions, para 137-9.

[164] Appellant's Submissions, para 283.

[168] Appellant's Submissions, para 290-1.

[172] Appellant's Submissions, para 342.

[174] Respondent's Submissions, para 7.

[175] Respondent's Submissions, para 12.

[181] Respondent's Submissions, para 202.

[183] T 5-35, lines 19 to T 5-36, lines 29.

[184] Respondent's Submissions, para 209.

[190] Respondent's Submissions, para 216.

[193] Appellant's Reply Submissions, para 4(e)(vi).

[196] Appellant's Reply Submissions, para 4(j)(iii).

[201] Appellant's Reply Submissions, para 96.

[202] [2011] QLC 7.

[203] [2016] QLC 63.