Hatzivasiliou v Roads and Maritime Services

1. The RMS contends for $3,400,000 for market value and disputes some of the disturbance claim, namely the financial costs of relocation, stamp duty and the costs of execution of a new mortgage.
2. The Court is acting as the judicial valuer in this case, see Sydney Water Corporation v Caruso (2009) 170 LGERA 298; [2009] NSWCA 391 at [3], [35], [146] and [150] and Yates Property Corporation Pty Ltd (in liq) v Darling Harbour Authority (1991) 24 NSWLR 156. As a general principle in determining compensation doubts should be resolved in favour of a more liberal estimate, see Commissioner of Succession Duties (South Australia) v Executor Trustee and Agency Company of South Australia Ltd (1947) 74 CLR 358; [1947] HCA 10 at 374.

Evidence

1. The Applicants tendered the Court Book as Exhibit A containing the separate and joint town planning and valuation experts' reports and the lay evidence of the First Applicant.

Affidavits of the First Applicant

1. The First Applicant Mr Hatzivasiliou swore two affidavits in these proceedings. In the first sworn 3 August 2016 Mr Hatzivasiliou attested to his training as a mechanic and his involvement in the service station and tyre repair business since about 1980. In 1998 Mr and Mrs Hatzivasiliou came across the Prestige Tyres business which was operating on the subject land. They considered that it was ideal for their tyre business as it had good access from Parramatta Road for customers and delivery trucks. Mr Hatzivasiliou stated that that sort of access and exposure to a main road was rare. Mr and Mrs Hatzivasiliou bought the land and the business shortly afterwards which was successful and profitable.
2. Mr Hatzivasiliou negotiated the sale of the business and lease of the subject land to Jax Tyres in 2005. The lease was for five years with two five-year options. Under the terms of the lease, Jax Tyres were responsible for all outgoings on the subject land. These payments were managed and paid for by Mrs Hatzivasiliou who would then issue Jax Tyres with a tax invoice for these amounts. Mr Hatzivasiliou stated that the outgoings were usually around $50,000 p.a. Jax Tyres exercised their option to renew the lease on a further five-year term in 2010. In mid-2015, Jax Tyres contacted Mr and Mrs Hatzivasiliou through their property manager to request a longer lease. Mr Hatzivasiliou stated that they would have liked to offer a longer lease to Jax Tyres but thought there was no point in doing so since there was a chance their land would be acquired for the WestConnex project. On 10 June 2015, Mr and Mrs Hatzivasiliou received two letters from Jax Tyres. The first sought to exercise the lessee's final option under the lease. The second requested a fresh lease with the provision of two further five-year options. Mr Hatzivasiliou stated that they would have negotiated for the new lease with Jax Tyres had their land not been acquired.
3. Mr and Mrs Hatzivasiliou have been searching for a replacement property of similar characteristics and redevelopment potential. Mr Hatzivasiliou stated he would prefer to purchase a property that could be used for an automotive service business given their long and continuing family connection to the industry. They have not been able to find such a property in the local area and have begun looking for properties outside of Sydney.
4. Mr Hatzivasiliou's second affidavit sworn 21 November 2016 attested to his and his wife's retirement in 2005, after which time they have made their living as professional investors. They own a number of commercial properties which are currently leased. Mr Hatzivasiliou prefers to buy investment properties that are connected with the automotive industry because of his experience in the industry. Mr and Mrs Hatzivasiliou have always managed their investment properties themselves and do not employ property agents. Depending on the terms of the lease, Mr Hatzivasiliou described their role as involving: 1. managing rental payments including issuing reminders and following up with tenants; 2. managing and paying outgoings including land tax, council rates, water rates, insurance and repairs; 3. managing reimbursement of outgoings from the tenant(s) including issuing tax invoices and following up payment; 4. managing and negotiating terms of leases including renewal options; 5. being the point of contact for tenant complaints, queries and issues relating to the properties; 6. visiting the properties to discuss any issues and inspect any damage or work that is proposed by the tenant; and 7. arranging repair and maintenance of the properties.
5. Mr Hatzivasiliou stated that these tasks are ongoing throughout the year and throughout the lease period for each property.

Documentary evidence

1. A bundle of documents was tendered by the Applicants as Exhibit B. It contained the lease between Mr and Mrs Hatzivasiliou (lessors) and the lessee Jax Tyres commencing 1 October 2010 and terminating 30 September 2015 with an option to renew for a period of five years. The sublease to MCG Pty Limited commencing 1 October 2010 and terminating 29 September 2015 with an option to renew for a period of five years less one day was also included in Exhibit B. A large bundle of documents was tendered by the Applicants as Exhibit D. It contained the title searches, deposited plans and leases for the comparable properties relied on by both the Applicants' and the Respondent's valuers including the lease of the Amber Tiles site at 1-3 Parramatta Road Five Dock and the lease of the car wash and café at 315 Parramatta Road Haberfield. The zoning map from the Canada Bay Local Environmental Plan 2013 was tendered as Exhibit E.
2. An aerial photograph of the Amber Tiles site was tendered as Exhibit 1 in the proceedings. The Respondent tendered a bundle of documents as Exhibit 2, which contained contracts for sale of comparable properties, being the Snowmaster site at 167 Parramatta Road Haberfield, the Tideswell site at 124-126 Parramatta Road Ashfield and the Sonar site at 502-506 Parramatta Road and 164 Frederick Street Ashfield. The 5 May 1992 and 8 April 2002 leases of 43A Parramatta Road Haberfield to Bob Jane T-Marts Pty Limited (Bob Jane) each for a term of 10 years with options to renew were included in the bundle. The lease of a car yard at 32-34 Parramatta Road Croydon dated 1 September 2014 was also included.
3. Mr Sanidas, the Applicants' valuer referred to an extract from the Australian Property Institute (API) valuation standards in the joint report which was included in Exhibit A: Market approach A valuation approach which provides an indication of value by comparing the subject asset with identical or similar assets for which price information is available. Market rent The estimated amount for which an interest in real property should be leased on the valuation date between a willing lessor and a willing lessee on appropriate lease terms in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion. Market value The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.

Town planning evidence

1. There was little difference of opinion between the planners. The planners agreed in their joint report that a wide range of uses are permitted in the B6 Enterprise Corridor zone. They agreed that the maximum floor space ratio (FSR) permitted on the subject land was 1.5:1 and that redevelopment of the property as a standalone development would be feasible.

Leases of subject land by Jax Tyres (franchisor) and franchisee

1. At the date of acquisition the land was occupied by a Jax Tyres franchisee. The head lease was between the Applicants and Jax Quickfit Properties Pty Limited (the franchisor). The basic rental payable was $140,000 p.a. The lease provided for an option to renew for a period of five years as set out in Schedule Four. Item 9 of Schedule Two provided for usage as "retail sale of tyres and associated activities". Jax Quickfit Properties Pty Limited entered into a sublease with MCG Pty Limited (the franchisee) on 1 October 2010 for a term of five years less one day. The terms of the option to renew in the sublease were set out in Schedule Four to the head lease as follows: SCHEDULE FOUR If the Lessee shall be desirous of renewing this Lease for the further term of Five (5) years from the date of expiry of the term of this Lease and of such desire shall give to the lessor during the last year of this Lease not less than three (3) months previous written notice and if at the time of such notice and at the time of the expiration of this Lease there shall be no subsisting breach by the Lessee of the terms of this Lease then the Lessor shall grant to the Lessee a further Lease for such further period commencing on the date after the date of the expiration of the term of this Lease at a commencing rental to be agreed upon between the parties or failing agreement such amount as shall be determined as a proper rent for the premises having regard to its current market value by a valuer nominated by the President for the time being of the Australian Property Institute Inc, NSW Division: (a) any such determination when made shall be deemed to have been made by such valuer as an expert and not as an arbitrator; (b) the cost of any such determination shall be borne by the Lessor and the Lessee in equal shares; (c) any increase in the Basic Rent resulting therefrom shall take effect on and from the relevant Review Date. In determining such current market value the Valuer shall take into consideration the following matters:- (a) The best annual rental that can be reasonably obtained for the demised premises; (b) On the basis that the Premises are available for leasing with vacant possession by a willing Lessor to a willing Lessee for the term of the Lease; (c) On the terms and conditions contained in this Lease; (d) Without taking into account any improvements or fixtures erected or installed at the Lessee's expense which the Lessee is permitted or required to remove at the termination of the Lease except for permanent structural improvements to the leased Premises installed at the Lessee's expenses which the Lessee is not permitted to remove at the termination of the Lease, which shall be taken in into account; (e) Having regard to the rental values of comparable premises. The terms of conditions of such renewed Lease shall be identical to the terms and conditions of this current Lease with the exception that this Schedule Four shall be deleted.
2. The franchisee exercised the option under the sublease for a further five-year term on 1 October 2015 shortly before the date of acquisition on 15 December 2015. The amount of rent to be paid for that term was not agreed before the date of acquisition and consequently falls to be determined in these proceedings.

Other leases in evidence

1. The lease of the Amber Tiles site at 1-3 Parramatta Road Five Dock has a term of three years with an option to renew for a further three years with rent reviews applying the consumer price index (CPI) except for 2016 when the current market rent is to apply. Clause 5.12 in Annexure B of the lease specifies how current market rent is calculated, identifying that rent can be higher or lower than the rent payable at the rent review date, taking into account matters specified in cll 5.12.1 - 5.12.5. Clause 12.14 in Annexure A of the lease specified that in the event of the building of which the property forms part being wholly condemned or being resumed or acquired by an authority the lease shall end.
2. The lease at 315 Parramatta Road Haberfield provides for a five year term with an option to renew for a further five years, as provided for in cl 4 of Sch 2. The use specified is a car wash and café. The rent review clause if the option to renew is exercised (cl 4.2(a)) refers to the current market rent that would be reasonably expected to be paid for the premises if unoccupied and offered for the use to which the premises may be put in accordance with the lease and having regard to the rental value of comparable premises in the vicinity of the demised premises.
3. The 1992 lease for the Bob Jane site specified an initial lease term of 10 years with two options to renew of five years each. Clause 1.1(b) stated that the rent for the first year of the term will be the greater of the fair market rent and the rent payable for the previous 12 months.
4. Under the 2002 lease for the Bob Jane site, the term was 10 years commencing May 2002 with an initial rent of $200,000 p.a. Under cl 13.5, the CPI rent review provision, the rent may not be decreased by the application of the formula notwithstanding anything in the lease. During the term of the lease the rent cannot be reduced. The market review provisions on commencement of the option term specify in cl 14.4 that notwithstanding cl 14 the annual rent payable by the lessee as and from each market review date shall not be decreased by the application of the clause.

Expert valuers' evidence

1. Mr Sanidas prepared a report for these proceedings dated 28 October 2016 for the Applicants. Mr Lunney the RMS' valuer prepared a report dated November 2016. Mr Sanidas and Mr Lunney participated in joint conferencing and prepared a joint report dated 24 November 2016. A supplementary joint report was also prepared dated 30 November 2016 and tendered separately as Exhibit C.
2. The principal method relied on by Mr Sanidas is the capitalisation of net income/rent approach. Mr Lunney considered that the "term and reversion" method is most appropriate. As that method requires inputs which must be calculated in the capitalisation of rent approach I will first consider Mr Sanidas' primary method. Both valuers also undertook a direct comparison of comparable sales approach as a check method. I will consider two methods in this judgment. As I identify in par 140 below, at the Applicants' request during the hearing I do not determine in this judgment whether the term and reversion method is to be applied.

Capitalisation of market rent

1. The capitalisation of rent method requires calculation of firstly the market rent of the subject land and secondly the appropriate capitalisation rate. Once these amounts are calculated the market value can be calculated by dividing the market rent per annum by the capitalisation rate.

Market rent

1. The passing rent paid by the franchisee at the date of acquisition was $116/m2 net improved value ($154,845 p.a. divided by land area of 1,333.6 m2) under the 2010 option renewal. The valuers agreed this was less than market rent. The subject land has six work bays, retail showroom, customer waiting area, tyre storage area, two driveways and parking for 15 cars.
2. Under the lease held by Jax Tyres the five-year rental option was exercised by 1 October 2015 some two months before the date of acquisition. No agreement was reached on the new rent for the option period by the date of acquisition. Mr Sanidas contends for a rent of $173/m2 net. Following the joint reporting process Mr Lunney contends for a rent of $130/m2 having adopted $125/m2 in his original report. Mr Sanidas' approach results in a rent 49% higher than the rent paid at the date of acquisition. Mr Lunney's rent is 12% higher.
3. The parties' valuers have different approaches to selecting comparable leases to calculate the value of the market rent for the subject land.

Mr Sanidas' lease evidence

1. Mr Sanidas selected several rentals by identifying land said to have similar features to the subject land, particularly use as a car tyre retail outlet as at the acquisition date, ascertaining the rent paid and making adjustments to create equivalence in his view between the selected property and the subject land on the basis of its use.
2. This approach assumes that the highest and best use of the subject land is as a car retail outlet, its use up to the date of acquisition. While Mr Sanidas disavowed in oral evidence that his approach assumed that existing use to be the highest and best use his approach to the selection and analysis of comparable leases reflects that view and it was the submission made by the Applicants' counsel in closing. The exercise of the lease option for a five further years by the lessee shortly before the acquisition date means that it can be assumed that the tenant remains in occupation and the improvements suit that purpose.
3. The following table from his original report summarises the properties relied on by Mr Sanidas by location, date of rental transaction (to be compared with 1 October 2015 the date of exercise of the option under the lease), the net annual rent and site area to derive an improved rate per square metre (fifth column). Premises Lease Date Net Annual Rent Site Area m2 Site Area (Improved) $/m2 GLA GLA m2 $/m2
4. 163-165 Parramatta Rd, Haberfield Service Station Work Shop Current $288,000 1,144 251 600 480 (Metro petrol station)
5. 43A Parramatta Rd, Haberfield Tyre Outlet 5-May-12 $220,800 1,167 171 (2012) 750 294 (Bob Jane) 189 (2015)
6. 940-944 Victoria Rd, West Ryde Tyre Outlet 12-Oct-09 $183,000 1,068.60 171 (2009) 400 458 205 (2015)
7. 32-34 Parramatta Rd, Croydon Car Yard 20-Aug-14 $120,000 846 142 230 522

1. Numerous adjustments were made by Mr Sanidas in order to compare the leased properties with the subject land. The Metro petrol station (163-165 Parramatta Road Haberfield) lease of $251/m2 was adjusted down by 30% because it had two uses, one as a petrol station (superior to the subject land) and another as a workshop with two work stations, smaller site area, dual street access, on a less trafficked part of Parramatta Road and smaller building area.
2. Mr Sanidas selected the Bob Jane site (43A Parramatta Road Haberfield) because it had an identical use to the subject land on the date of acquisition, was close by and is a flagship site like the subject land. Car tyres are not impulse buys and customers are well aware of this business due to its signage and location on busy Parramatta Road. Mr Sanidas spoke to a local real estate agent who confirmed that rents have strengthened along Parramatta Road since the lease was entered into in May 2012. The 2012 rent for the site was $171/m2. The 2015 rent of $189/m2 was adjusted down conservatively to $173/m2 for the subject land. According to Mr Sanidas' report, factors he considered were that the Bob Jane site had a smaller site area, occupied a slightly inferior part of Parramatta Road with no direct access to Parramatta Road and double yellow lines in Sloane Street preventing immediate site access to traffic heading north, had an inferior two-storey building configuration and had similar business identification signage.
3. The West Ryde (940-946 Victoria Road West Ryde) discount tyre outlet has the same use as the subject land with five working bays (the subject land has six) and is located on busy Victoria Road. Mr Sanidas did not adjust the 2009 rate of $171/m2 much to apply a rate of $173/m2 net to the subject land. The 2015 rent was $205/m2 net.
4. The car yard at Croydon (32-34 Parramatta Road Croydon) at $141/m2 shows what an inferior site can command. The site could not accommodate a head office style car tyre retail outlet, has significantly inferior improvements to the subject land, is substantially smaller and has no vehicle or pedestrian access to Parramatta Road.
5. Mr Sanidas looked for other car tyre retail outlet businesses in this area of Sydney but could not find any which had comparable infrastructure to the subject land such as six working bays. The number of working bays is directly proportionate to the ability to generate further income from a site according to Mr Sanidas.

Cross-examination of Mr Sanidas

1. Mr Sanidas was cross-examined about his comparable rental properties. Concerning the Metro petrol station he was asked whether service stations have a particular style of rent calculation based on a number of different things including throughput of sales. He considered however that the question for every sale was how much rent someone would pay for a site that produces so much in sales or revenue. That observation applies to all of Mr Lunney's sales. The rent paid is a function of the improvements, the land area and the permission to use those improvements.
2. Mr Sanidas agreed the Metro petrol station site use was not identical to the subject land and that it was permissible to consider leases for non-identical uses to Jax Tyres. He stated that the degree of specialisation of premises is the critical question. The service station has a specialised use for its improvements, and that level of specialisation is comparable to the subject land. He agreed that he had made a global adjustment for several matters which he had not discreetly analysed and adjusted. Mr Sanidas agreed that he considered five or six factors for which he made a single adjustment for the site. A further (seventh) adjustment he made downwards not reflected in his report was for a site which would potentially turn over a lot more sales than the subject land.
3. In relation to the West Ryde premises, Mr Sanidas agreed these were in a different local government area some 13 km from the subject land. He considered its use as a comparable lease was consistent with the API guideline which he interpreted as requiring consideration of identical uses. He did not consider this lease was inconsistent with his approach of looking for leases in the same local council area, subject to the same planning controls, in the same general vicinity of the subject land. He has primarily based his enquiries on permissible uses under a lease.
4. Mr Sanidas did not specifically consider other car tyre retail outlets within a 13 km radius of the subject land as he could not find any others that transacted close to the date of December 2015. When challenged about why he chose the West Ryde premises which transacted in 2009 no explanation was provided other than his evidence in his report. He stated that he did look for other car tyre retail outlets but could not find another one with similar improvements such as six working bays apart from the West Ryde premises which had similar substantial improvements.
5. Mr Sanidas agreed that the rent on the subject land was adjusted in 2010 and the owners are sophisticated landlords. He did not agree that the 2010 rent review on the subject land was more relevant than the 2009 West Ryde transaction because the rents achieved in 2009 and 2010 were commensurate with the economy at the time. The market has grown since then. Mr Sanidas' opinion, expressed only in cross-examination, was that the 2010 lease transaction for the subject land was under the market at that time. No basis for this view was provided.
6. Mr Sanidas considered the Croydon car yard location was inferior to the subject land because of the lack of amenities. Adjustment upwards of 22% was made for the smaller site, inferior accommodation, no vehicle or pedestrian access to the site from Parramatta Road and because Croydon is inferior (less valuable) to Haberfield.
7. All of these adjustments of various properties resulted in $173/m2 for the subject land. He did not agree that he made the appropriate adjustments to support the number that he had selected.
8. Mr Sanidas did not adjust for location at West Ryde but did adjust at Croydon. He could not provide any explanation for why he did not do the same at both locations.
9. Mr Sanidas did not consider Mr Lunney's lease transactions because those premises did not have the same degree of specialisation (improvements) compared to the subject land. He was challenged about why he considered the Croydon site lease which lacked specialised infrastructure. He used it to derive a "floor" rate. He could not explain why he did not apply the same approach to Mr Lunney's lease transactions of much closer premises along Parramatta Road.

Mr Lunney's criticism of Mr Sanidas' leases

1. Mr Lunney criticised the selection of leases by Mr Sanidas. Petrol station businesses operate entirely differently to car tyre outlets and the calculation of rent is based on throughput for petrol sales. The Metro petrol station lease is not comparable. The historical leases for the Bob Jane site show a ratcheting up of rent provisions, so that the option renewal in May 2012 was not a true reflection of the market. The Bob Jane site is located in a superior location on a corner at a traffic controlled intersection. The West Ryde tyre outlet is in a different location and the lease date in 2009 is remote in time. The car yard at Croydon is in a different location and is not a similar business to the subject land.

Mr Lunney's lease evidence

1. Mr Lunney looked at three leases in close proximity to the property on Parramatta Road and did not try to identify land with a similar use (and therefore similar improvements) to the subject land. He did not consider that the market evidence as identified in his report at pars 58 and 59 demonstrated that car tyre retail businesses commanded a higher rent in this area of Parramatta Road. He compared the subject land, 315 Parramatta Road Haberfield (car wash) and 5-9 Parramatta Road Five Dock (panel beating). This comparison led him to conclude that rental values on Parramatta Road did not significantly vary on a $/m2 basis for properties which have a differing size and standard of structural improvements.
2. Mr Lunney considered that recent leases of premises close to the subject land on Parramatta Road provided a reliable guide for the market rental value of the land as follows: Address Date Site Area Building Area Annual Rental $ rate/m2 Land Area 315 Parramatta Rd, Cnr Dobroyd Pde Haberfield 1 November 2014 1,107m2 280m2 $130,000 net $117/m2 p.a. net (Car wash) 1-3 Parramatta Rd Five Dock 1 May 2016 950m2 314.9m2 $113,357 net 141/m2 p.a. net (AmberTiles) 5-9 Parramatta Rd, Cnr Arlington Street Five Dock 1 March 2015 1,013.3m2 836m2 $126,717 net $125/m2 p.a. net (Car smash repairs)

1. In the joint report Mr Lunney considered these sales when applied to the subject land yielded $130/m2, up from $125/m2 in his original report. The market rental evidence did not indicate that the rent under the lease was likely to significantly change when the rent was reviewed in the market in accordance with the lease. The properties are similar in land area, located close to the subject land ranging from 130 m to 270 m from it. All front Parramatta Road and are in the B6 zone. They require little adjustment as a result.

Cross-examination of Mr Lunney

1. Mr Lunney conceded the following matters in cross-examination in relation to the Bob Jane site: 1. the business on the subject land and the Bob Jane site are principally destination businesses and not ones that rely principally upon passing trade; 2. the benefits of the Parramatta Road frontage on both sites is the erection of business identification signage so people are aware of the sites when the need arises for the goods and services those sites offer; 3. there is an advantage in having traffic stopping and going very slowly past your door, as with the subject land compared to the Bob Jane site; 4. that there was a bottleneck of cars outside the subject land such that the traffic is effectively stopped, as with a set of traffic lights; and 5. that there were greater traffic movements past the subject land than the Bob Jane site. That is, that the subject land was superior to the Bob Jane site in terms of traffic numbers.
2. Mr Lunney was asked whether he was aware of any evidence that rental values have decreased since the time of Mr Sanidas' rental transactions. He agreed that the only example he could offer was one instance contained in his original report where the previous rent for the car wash site (315 Parramatta Road Haberfield) was much greater than the rent which was subsequently achieved for that property four or five years later. Mr Lunney also agreed that it would be unreliable to have regard to one example to say rental values have decreased, stating that he "wouldn't look at that one transaction and conclude from that that there has been a general decline in rental values".
3. Mr Lunney accepted that a car tyre retail and service business would necessitate enclosed, specially constructed improvements. He was asked whether the working bays, workshops and retail areas of a car tyre retail business are specially adapted for that use, and replied that "it's a building that suits that use more than other uses". Mr Lunney was asked whether a mechanical tyre-fitting retail business could be carried out on the car wash site at 315 Parramatta Road Haberfield. He replied "not of the same scale". Mr Lunney was asked whether a mechanical tyre workshop requires specialised improvements and replied that "yes, there would be a building of a different configuration to suit that purpose". He accepted that it would have to be specially configured to carry out that use, and stated that it would be different from a warehouse of a general description.
4. Mr Lunney agreed that a prospective lessee looking for purpose-built facilities to conduct a tyre-fitting business would look for other land, if there were no specialised tyre fitting businesses for lease. He agreed that if the hypothetical site did not suit the lessee's requirements, and if they did not want to build or make alterations, they would look elsewhere. Mr Lunney agreed that reliance on specialised infrastructure is a question of degree. He agreed that mechanical tyre works require specialised infrastructure in the same way a service station does.
5. Mr Lunney agreed that the only evidence of his assertion that rental rates in the locality are consistent is informed by a maximum of five sites. He stated that before this valuation task his general experience was that that is how rents on Parramatta Road transact. There is a general consistency in rates per square metre that is borne out by his five examples.
6. In relation to 315 Parramatta Road Haberfield (car wash) Mr Lunney had not undertaken any assessment of the ability for that site to be used as a car retail tyre outlet. The extent of his planning analysis was his review of the parties' expert planners' reports and their joint report. Mr Lunney agreed that he was not familiar with planning controls beyond those discussed in the planners' reports. He had not done any sort of feasibility study to determine the retrofitting of the buildings to enable them to be used as a car tyre centre. Mr Lunney was asked whether the car wash at 315 Parramatta Road Haberfield had any form of specialised infrastructure. He replied that it does not and that "it would be generally described as an under-developed site".
7. Mr Lunney accepted that both the Bob Jane site and the subject land had exposure to a busy arterial road. He was asked whether he had identified a point of difference between the two sites beyond his statement in the joint report that the Bob Jane site is physically quite different from the subject land because of the traffic controlled intersection. Mr Lunney replied that that was all he said but that he thinks it is a better building as well. He accepted that Bob Jane and Jax Tyres are both well-known and recognised national franchises. Mr Lunney agreed that he had made no enquiries of Bob Jane as to whether or not they thought that the arrangement they had entered into with their landlord was problematic for them from a business perspective.

Mr Sanidas' criticism of Mr Lunney's leases

1. Mr Sanidas criticised consideration of 315 Parramatta Road Haberfield (car wash) by Mr Lunney on the basis that it cannot be used for a car tyre retail outlet as it has a small built area of 280 m2. No assessment was made by Mr Lunney of whether the site could be adjusted to accommodate a change of use to car tyre retail outlet physically or under the planning scheme. The same comments were made in relation to the Amber Tiles site at 1-3 Parramatta Road Five Dock. It has a different use and cannot be used for a car tyre retail outlet as presently developed. The Amber Tiles site is affected by a road reservation at the front along Parramatta Road which means this area of the site cannot be developed in a permanent way. The lease covenants required the landlord to do work. Nor did Mr Lunney determine if a car tyre retail outlet could operate on the car smash repair site (5-9 Parramatta Road Five Dock).

Additional submissions of Applicants criticising Mr Lunney

1. In relation to 1-3 Parramatta Road Five Dock (Amber Tiles), the site is used for the retail sale of tiles which is not comparable with the use of the subject land and does not provide the special infrastructure required for a tyre outlet and workshop. Further the site adjoins land with a smash repair outlet at the rear giving rise to potential parking and traffic disputes and is affected by an RMS road widening proposal which could disrupt the business and reduce the visibility and exposure to Parramatta Road. The lease provides that the tenant is responsible to the landlord for capital repairs and maintenance costs which means that the landlord was in less of a bargaining position to command greater rent. The site cannot be used as an indicator of market rent for the subject land. Regarding the future acquisition of the front of the site Mr Lunney incorrectly stated that the terms of the lease deal with this eventuality leading to termination of the lease. This provision only applies in the event of "building of which the property forms part" being wholly condemned or being resumed or acquired, which would not be enlivened by the current proposed acquisition. The proposed acquisition represents a real risk and potential detriment to the lessee for the reasons identified by Mr Sanidas. It must be recognised that the rental rate for this site incorporates an allowance for this eventuality.
2. Regarding 5-9 Parramatta Road Five Dock (car smash repairs), Mr Lunney has not carried out any assessment to determine whether it could host the minimum 18 car spaces required by the planning controls if the site has six working bays. Mr Lunney has not undertaken any analysis or sought advice in relation to his rental sites' capacity to ensure commercial vehicle manoeuvring separately to passenger vehicle parking which is critical for a tyre workshop. Without such information or advice Mr Lunney's rental sites cannot be relied on as evidence of the market rent payable for a site which contained specialised purpose-built improvements. Mr Lunney agreed in cross-examination that the subject land's improvements including the working bays were the lessor's improvements. Regard must be had to their existence for the purposes of determining market rent. The reference in the subject lease to "comparable premises" rather than "comparable land" is relevant - the lease is directing the valuer to value the land as a retail car tyre outlet and associated mechanical workshops which have specialised infrastructure and are regulated by particular planning controls.
3. The Applicants submitted that the Bob Jane, car wash and Amber Tiles leases all contained rent review provisions focused on the use of the premises which supports Mr Sanidas' approach of relying on rentals of sites on which a car tyre retail outlet and mechanical workshop are carried out. None of Mr Lunney's rental sites reflect the rent that would be paid by a hypothetical party seeking to carry out the same use as that which was being carried out on the subject land at the date of acquisition. Therefore none of Mr Lunney's rental sites are comparable.

RMS' submissions criticising Mr Sanidas

1. The question for the Court is what rent would the purchaser of the freehold have been confident that the rent would have been adjusted to under the market rent review. The position put by Mr Sanidas that a purchaser would pay a price for the land based on them being comfortably confident of a 49% increase in net rent on review is realistic. Mr Lunney's increase of 12% is a reasonably optimistic rate.
2. Schedule Four of the lease of the subject land is the key document. The legally binding contractual term between the landholder and tenant determines the rent payable under the option. The fundamental error of Mr Sanidas was his reading of matter (c) in the second part of Schedule Four as requiring a tyre retail outlet use only so that he only looks at comparable sites that can be used as a car tyre retail outlet. By doing so Mr Sanidas erroneously conflated matter (c) with the other four matters listed. He assumed that the use restriction in (c) applies to the other considerations in the schedule when there is no reasonable reading of the clause that would require or permit this to be done.

Finding on market rent

1. Mr Sanidas approached the selection of comparable leases on the basis of what a hypothetical lessee would pay for a car tyre retail outlet on the assumption that is the highest and best use of the premises. The RMS submits that is the wrong approach. Rather the question is what rent would the purchaser of the freehold have been confident the rent would be adjusted to under the option to renew in calculating his or her offer price. A prudent purchaser would not calculate the purchase price based on the best possible outcome of the rent review. Their approach would be more conservative based on a level of rent that was certain. The approach of the RMS is correct methodologically and will inform my overall approach below in par 83.
2. The parties' differences are driven in part by different constructions of the Jax Tyres' lease option renewal provisions in Schedule Four which in turn guides their different approaches to the selection of comparable sales. Schedule Four is set out in full in par 17 above. Schedule Four governs the rent payable for the new lease term for the subject land as the legally binding contract in force. The terms of the schedule provide that in determining the current market value of rent the valuer must consider (a) the best annual rent that can be reasonably obtained for the demised premises, (b) that the premises are available for leasing with vacant possession by a willing lessor to a willing lessee for the term of the lease, (c) on the terms and conditions contained in the lease, (d) not taking into account improvements which the lessee is permitted to remove and (e) having regard to the rental values of comparable premises. Separately to these provisions, the end of the schedule states that the terms and conditions of the renewed lease shall be identical to the terms and conditions of the current lease except that "Schedule Four" is deleted. I do not read these words as falling within subparagraph (e) as Mr Sanidas does.
3. The two valuers were cross-examined on their approach to the lease terms particularly Schedule Four. Mr Sanidas' understanding was that any rent review will be on identical terms to the conditions of the current lease, which requires that comparable properties must have an identical use, although not expressly so stated in (a). He did not agree that the words at the end of the schedule "[t]he terms and conditions of such renewed Lease shall be identical to the terms and conditions of this current lease, with the exception that this Schedule Four shall be deleted" meant that the next lease would not include an option. Mr Sanidas did not consider the lease should be "read down" to include consideration of the rent paid for premises with other uses. He considered such a construction of the lease would be unfair to the hypothetical landlord as he or she would be disadvantaged by allowing a valuer to look at other leases for premises with different uses. Item 9 of Schedule Two of the lease specified "Retail sales of tyres and associated activities". In determining current market value, the valuer should take into account the best annual rental, not the worst.
4. Mr Lunney did not agree that the option terms restricted a valuer to look only at rents of car tyre retail outlets. As stated in (e) of Schedule Four, the valuer shall have regard to the rental values of comparable premises. He was satisfied after considering three sales as identified in pars 58 and 59 of his report that car tyre retail outlets had equivalent values to other uses in this area of Parramatta Road. It is common practice for valuers to have regard to properties with different uses which have similarities in some respects. Properties offered for lease have different uses within a market and compete against each other and typically the going market rate for properties is paid. Subparagraph (d) directs the valuer that if the tenant had made certain improvements the valuer cannot assign a rent referable to those improvements.
5. The parties made conflicting submissions on how the Schedule Four provisions operated based in large part on their respective valuer's approach. The Applicants maintained that (c) required the rental of identically used premises to be considered as the only permissible use under the lease was a car tyre retail outlet.
6. I agree with Mr Lunney and therefore the RMS that the terms of Schedule Four do not require that the only use which can be considered for comparable rental purposes are properties with an identical use to the subject land. Subparagraph (c) requires consideration being given to the terms of the lease. Subparagraphs (a) and (e) do not. There is no requirement in Schedule Four that comparable lease transactions must concern only premises which have an identical use to the subject land.
7. The API guideline set out in par 15 above relied on by Mr Sanidas as requiring only identical properties to be considered also refers to similar uses, suggesting there is scope for considering properties with other uses.
8. These two matters (Schedule Four and the API guideline) lead me to conclude that comparable rentals need not necessarily be car tyre retail outlets but nor are these precluded if relevant transactions can be found.
9. Separately to the construction of Schedule Four, and as already identified in the summary of his evidence Mr Sanidas considered that car tyre retail outlets were the most appropriate comparables because that use was the highest and best use of the site.
10. Mr Sanidas' principal lease was the Bob Jane tyre retail site. This is relatively close to the subject land on Parramatta Road. It has a similar land use and is broadly similar to the subject land in terms of area and frontage to Parramatta Road. Mr Lunney's criticism of this sale concerned the historic lease terms. Unfortunately this criticism came out in the course of oral evidence for the first time and was not the subject of considered discussion between the experts, an unsatisfactory circumstance on such a fundamental matter given the importance of this sale for Mr Sanidas.
11. The terms of three leases in addition to the subject land referred to in evidence are summarised above in pars 19-22, being the Amber Tiles site relied on by Mr Lunney, the car wash and café at 315 Parramatta Road also relied on by Mr Lunney, and two Bob Jane leases. The Amber Tiles and car wash and café leases are broadly similar to the subject land in terms of renewal provisions. As is clear from the summary on pars 21 and 22 above the renewal terms of the Bob Jane site are favourable to the landlord specifying that there can be no reduction in rent on exercise of the option for renewal, as Mr Lunney identified. Mr Lunney's opinion was not based on any enquiries made of the franchisee tenant under the lease and was based solely on consideration of the lease terms.
12. Mr Lunney otherwise considered for appropriate reasons that the Bob Jane site was superior to the subject land given its corner location near an intersection with traffic lights. These factors together suggest that the rent paid for the Bob Jane site is markedly higher than the subject land, as borne out by the rents being paid.
13. Given the relative similarity between the Bob Jane site and the subject land I do not understand why Mr Sanidas considered this lease supported $173/m2 rather than a higher amount. The 2015 lease renewal of that site resulted in $189/m2.
14. The West Ryde car tyre retail outlet has the same use as the subject land but is in a different local government area. Mr Sanidas made no adjustment for the location difference some 13 km away, whereas such an adjustment was made for the Croydon car yard site. I cannot understand why the West Ryde sale was not similarly adjusted in the absence of an explanation from Mr Sanidas. Inexplicably also, not much adjustment for time of $171/m2 was made. The property transacted in 2009. Further, why Mr Sanidas adopted only $173/m2 for the subject land from this lease was not clear given that it transacted at $205/m2 in 2015. I find it difficult to compare this lease to the subject land in these circumstances.
15. Further, Mr Sanidas stated in oral evidence that the West Ryde lease transaction in 2009 had more relevance than the 2010 lease renewal of the subject land (at $116/m2) because the latter was below market in his view. No evidence supporting this conclusion was provided however so all the Court has is an assertion to that effect.
16. The reasoning process for Mr Sanidas' adjustment of leases to derive the precise amount of $173/m2 for the subject land was not clear. He made a single adjustment to reflect several different factors in order to apply a particular sale to the subject land. His reasoning was not transparent and could not therefore provide the Court with much guidance as to how comparable his selected leases actually were.
17. The reasons for the selection of the two other properties relied on by Mr Sanidas were also unclear given his expressed basis of selection was sites generally close to the subject land within the same local government area to ensure uniformity of planning controls with the same use. For the reasons given by Mr Lunney, I consider the Metro petrol station is a business of an entirely different nature to the subject land. The Applicants' counsel submitted that the method of calculation of the rent is immaterial as the rent reflects the bargain struck between the landlord and tenant and is evidence of market value. However I consider that calculation of rent on a throughput basis particular to such a business provides no useful comparison for the subject land. That there are two workshops on the petrol station site does not enhance that comparison. The rental for this site is high. Mr Sanidas adjusted the sale down by 30%, a large adjustment, which related to six or seven factors according to his written and oral evidence. The basis for doing so was not made clear in his report or oral evidence. I gain no assistance from that lease.
18. As I understand it, the car yard in Croydon showing $141/m2 was not relied on by Mr Sanidas as a direct comparison given its different use. Its selection is otherwise inconsistent with Mr Sanidas' selection of comparables on the basis of sites with identical uses close to the subject land. It was relied on to show a "floor" value suggesting the value of the subject land must be markedly greater given its location and greater level of improvements and to show that Mr Lunney's figure of $130/m2 was too low. Why this business was selected rather than say Mr Lunney's three rental premises located very close to the subject land on Parramatta Road was not clear to me. This lease provides no assistance.
19. The principal criticisms of Mr Lunney's three leases, that they were not for an identical use and there was no evidence that any of the three sites could support the car tyre retail business conducted on the subject land are not relevant in light of my construction of Schedule Four. Mr Lunney's approach to the selection of sales is consistent with the correct construction of Schedule Four. Nor does the API guideline suggest the approach is wrong. Mr Lunney's analysis of sales in the vicinity of the subject land along Parramatta Road did not support a conclusion that the highest and best use of the subject land was as a car tyre retail outlet. Consequently consideration of other sales in the vicinity is valid.
20. The advantage of Mr Lunney's sales is that they require little adjustment in order to compare them to the subject land, as set out above in the summary table in par 48 and the discussion in par 49. Much of the cross-examination of Mr Lunney was immaterial in the sense it was premised on an approach to the selection of comparable leases which I do not accept is relevant. Mr Lunney's analysis of these sales given their relative comparability to the subject land supports his conclusion of $130/m2.
21. As identified already in par 63 above, at issue is what the prudent incoming purchaser would consider as the likely rent payable under the lease option. According to Mr Sanidas, a 49% increase in rent is only nine percent a year growth from the date of commencement of the lease for a five-year term. Mr Sanidas agreed there was a CPI increase as part of the lease terms and the 49% increase over five years was on top of that. He did not agree that an investor would be doubtful that such a return could be achieved as he considered 10% growth per annum feasible. That is an ambitious growth rate in my view. I have already accepted as identified by the RMS that the prudent hypothetical purchaser would not be presuming that a top dollar amount would be paid by the tenant under the lease option.
22. The only other lease which can otherwise be considered is the Bob Jane lease, the analysis of which by Mr Sanidas is problematic in that I am unclear how that lease supports the precise figure of $173/m2 for the subject land. While greater joint consideration of the lease terms by both valuers informed by inquiries of the franchisee tenant would have been preferable, it does appear that the landlord has particularly favourable terms under the renewal provisions, certainly compared to the lease for the subject land. That suggests this lease should be reduced substantially in order to apply it to the subject land. Doing the best I can on imprecise evidence in relation to this lease and Mr Lunney's derivation of $130/m2 based on his leases I will allow a slightly greater amount of $140/m2 as the market rent.

Capitalisation rate

1. The second step in the market rent method of valuation is the derivation of a capitalisation rate. Mr Sanidas says that it is necessary to: 1. identify comparable market sales which were at the time of sale subject to a lease involving the payment of rent; 2. for each sale, divide the rental amount per annum by the sale price (thus showing the relevant capitalisation rate for each sale); 3. ascertain the range of capitalisation rates disclosed by those sales; and 4. use professional judgment to select an appropriate capitalisation rate to apply to the subject land based on the range disclosed by the sales.

Mr Sanidas' leases to derive capitalisation rate

1. Mr Sanidas contends for a capitalisation rate of five percent relying on five leases summarised in his report as follows: Property Date Price Yield Net Rent 1 57-61 Parramatta Rd Haberfield 27-Nov-15 $2,220,000 3.83% $85,000 Car yard 2 502-506 Parramatta Rd & 164 Frederick Street Ashfield 9-Feb-16 $4,030,000 4.05% $163,280 Vacant lot 3 163-165 Parramatta Rd Haberfield 25-Oct-16 $4,800,000 6.00% $288,000 Metro petrol station 4 97-99 Majors Bay Rd, Concord 19-May-15 $5,310,000 4.59% $243,687 BWS multinational tenant 5 198 Parramatta Rd, Camperdown Aug-14 $3,650,000 4.72% $172,412 7-Eleven Service station investment sale

1. Mr Sanidas stated that after considering the above transactions he adopted a capitalisation rate of five percent, as reflective of the high profile site in the locality and the long term reputational use of the site as a tyre outlet centre. His report lists 11 key market determinants such as distance from a central business district, size and location of the site, certainty of cash flow, and location within a well-established automotive precinct.

Mr Sanidas' cross-examination on capitalisation rate

1. Mr Sanidas agreed in cross-examination that one of the factors influencing the capitalisation rate is the identity of the lessee. Others are the land area, physical improvements and guarantees under the lease. An investor with large blue chip company tenants will accept a lower capitalisation rate. Mr Sanidas agreed that BWS and Woolworths leases do not have a personal guarantee, unlike the Jax Tyres site. He did not agree that meant that Jax Tyres as a lessee was less secure than tenants with no such provision in a lease.
2. When challenged on how vacant lots can inform the capitalisation rate because at the date of purchase no rent was being paid, Mr Sanidas considered these sales demonstrate the risk the purchaser was prepared to accept. Subsequent rents can be relied on to apply to vacant possession properties to ultimately determine a capitalisation rate applicable for that land.

Mr Lunney's criticism of Mr Sanidas' selection of sales

1. Mr Sanidas' selection of leases except for the Metro petrol station is criticised by Mr Lunney in the joint report as irrelevant. Number 57-61 Parramatta Road Haberfield was purchased with vacant possession so the purchase price cannot be used to derive yield. The analysis of 502-506 Parramatta Road and 164 Frederick Street Ashfield to reflect an investment yield is incorrect and misleading as it was vacant and acquired for redevelopment. Mr Lunney disputed that the BWS liquor outlet at 97 Majors Bay Road Concord was comparable to the subject land. It does not justify Mr Sanidas' five percent capitalisation rate. Regarding the 7-Eleven at 198 Parramatta Road Camperdown, Mr Lunney's opinion is, if it is relevant, it does not justify a five percent capitalisation rate. Mr Lunney agreed that the Metro petrol station was relevant however his opinion is that it does not justify Mr Sanidas' five percent capitalisation rate for the subject land.

Mr Lunney's leases to derive capitalisation rate

1. Mr Lunney relies on eight 7-Eleven leases in the Sydney Metropolitan region showing a capitalisation rate with a range of 3.85% to 5.04% and the Metro petrol station lease (in common with Mr Sanidas) at six percent. Address Sale Date Sale Price Lease commencement date Net Rent (pa) at Sale Date Capitalisation Rate 157 Mona Vale Rd St Ives 5/8/2014 $4,600,000 3/11/2011 $217,564 4.73% 404 Lane Cove Rd North Ryde 5/8/2014 $6,010,000 12/11/2010 $288,073 4.79% 940 Pittwater Road Dee Why 5/8/2014 $5,050,000 29/6/2011 $194,665 3.85% 24 Barrenjoey Road Mona Vale 5/8/2014 $4,325,000 5/8/2011 $217,802 5.04% 132 Liverpool Road Ashfield 5/8/2014 $4,900,000 21/5/2011 $204,265 4.17% 198 Parramatta Road Camperdown 5/8/2014 $3,650,000 30/3/2012 $174,012 4.77% 476 Rocky Point Road Sans Souci 5/8/2014 $4,550,000 3/6/2011 $224,042 4.92% 124 Hoxton Park Road Lurnea August '15 $6,450,000 23/10/2014 $286,460 4.44%

1. Mr Lunney considered the 7-Eleven sales were relatively low risk investments given the strength of the covenants in these leases, the lease terms of 15 years and the favourable lease terms, being fixed four percent rent reviews and that the lessee takes responsibility for certain things rather than the lessor. Given the range of rates exhibited by the 7-Eleven franchise sites in metropolitan Sydney of 3.85% up to 5.04%, Mr Lunney considered that the subject land should have a higher capitalisation rate given its greater risk profile when compared to these. While considering the Metro petrol station site at six percent was of a similar risk profile to the subject land, for investment purposes he was prepared to compromise at 5.5%.

Cross examination of Mr Lunney on capitalisation rate

1. Mr Lunney was cross-examined about his opinion that a 7-Eleven franchisee is a stronger tenant than a Jax Tyres franchisee, and whether he had provided any evidence for this opinion in his written material. Mr Lunney replied that he had not and that he could not think of what evidence other than his own experience he could put forward to assist the Court. Regarding the 7-Eleven leases, not only the strength of the covenant but also the favourable lease terms are important. Mr Lunney stated that his professional experience and the favourable terms of 7-Eleven leases including the four percent reviews support his opinion. Mr Lunney accepted that there is no evidence to suggest that there was any risk that the subject land would not be tenanted, and agreed that there was no reason to suspect that there would be difficulty finding a suitable tenant in the future.
2. Mr Lunney was asked whether, in order to determine appropriate capitalisation rates, the best thing to do would be to identify market sales that were subject to a lease in proximity to the subject land at the relevant date. He replied that the best thing to do would be to try to find a transaction of an investment that had similar characteristics and a similar investment profile to what is being valued. He accepted that the only sale that he relied on in relation to the capitalisation rate that is physically proximate to the subject land is the Metro petrol station. Mr Lunney stated that it is appropriate and permissible to have regard to investment sales evidence in a broader area. Mr Lunney accepted that different parts of Sydney involve different market participants.

Parties' submissions

1. Mr Lunney's selection of 7-Eleven sales was criticised by the Applicants because they were not near the subject land. The Applicants submitted that Mr Sanidas' sales which are more proximate are therefore more reliable indicators of the range of capitalisation rates. Since those businesses share characteristics with Jax Tyres they support five percent. There is no evidence that the 7-Eleven franchise is superior to the Jax Tyres franchise, which Mr Lunney conceded in cross-examination. Mr Lunney otherwise only relied on one site to justify his capitalisation rate, the Metro petrol site. Not only is it necessary to refer to a range of market evidence rather than just one site, but the petrol station site is unreliable for market comparison purposes and therefore is not comparable to the subject land and its use.
2. A capitalisation rate of five percent was too low in Mr Lunney's view and the RMS submitted that it was not supported by any relevant market evidence. Mr Lunney did not agree with Mr Sanidas that Jax Tyres is equivalent in terms of strength of covenant to BWS (Woolworths), 7-Eleven and other major national blue-chip tenants. The RMS submitted that Mr Lunney's opinion is supported by the fact that the Jax Tyres' lease had a personal guarantee to back up the corporate entity, when that is never the case for a genuine blue chip tenant.

Finding on capitalisation rate

1. The valuers have selected a number of market sales they consider will assist in identifying an appropriate capitalisation rate. One transaction common to both valuers was the Metro petrol station sale. Mr Sanidas included one 7-Eleven franchise in a service station at 198 Parramatta Road Camperdown (capitalisation rate 4.77%). Mr Lunney selected a number of 7-Eleven franchises in metropolitan Sydney, including 198 Parramatta Road Camperdown, which showed a range of 3.85% to 5.04%.
2. Mr Lunney's evidence and analysis was compelling in relation to the capitalisation rate. I agree with his view that a Jax Tyres franchise is not likely to be viewed in the market as of similar low risk as an investment compared to BWS (Woolworths) or 7-Eleven franchises. Both are very well established national franchises. That greater element of risk is reflected in the requirement in the lease of the subject land that a personal guarantee be provided, suggesting a greater element of risk than large national franchises such as BWS which have no such requirement.
3. Mr Lunney's consideration of a number of metropolitan Sydney 7-Eleven franchises provides a useful point of comparison with a riskier, smaller business such as the Metro petrol station site which was analysed by both valuers at six percent. The subject land is closer in risk profile to the Metro petrol station site than the 7-Eleven franchises suggesting that the capitalisation rate should be closer to six percent than five percent.
4. Further, Mr Sanidas provided no analysis in his report for how the rates of the sales he selected informed a capitalisation rate of five percent for the subject land. The car yard at 57-61 Parramatta Road Haberfield shows a rate of 3.83%. As Mr Lunney identified, one sale was for vacant lots purchased specifically for redevelopment, being 502-506 Parramatta Road and 164 Frederick Street Ashfield. Such a sale is not appropriate for deriving a capitalisation rate. The Metro petrol station shows a capitalisation rate of six percent and is arguably the closest in risk profile to the subject land of all Mr Sanidas' sales. As already identified a BWS franchise is likely to be viewed in the market as less risky, so that a capitalisation rate of 4.59% does not support a rate of five percent for the subject land. How the 7-Eleven franchise at 198 Parramatta Road Camperdown rate of 4.72% supported a rate of five percent for the subject land was not made clear.
5. For the reasons outlined above, I consider a capitalisation rate of 5.5% is appropriate.

Conclusion on method 1

1. I have determined market rent of $140/m2 and a capitalisation rate of 5.5%.

Method 2 Direct comparable sales method

1. The valuers also applied the direct comparable sales method as a check method, albeit their approaches varied.

Mr Sanidas' comparable sales

1. Mr Sanidas identified three properties he considered relevant comparables for the direct comparison approach. No Property Date Price Site Area m2 Site Area (Improved) GLA GLA $/m2 Description 1 167 Parramatta Rd Haberfield 27-Feb-15 $3,900,000 1,638 $2,381 1,300 $3,000 basic warehouse (Snowmaster) 2 163-165 Parramatta Rd Haberfield (Metro petrol) 25-Oct-16 $4,800,000 1,144 $4,196 400 $12,000 service station 3 502-506 Parramatta Rd Haberfield 9-Feb-16 $4,030,000 1,441 $3,347 0 0 vacant lot

1. The properties were selected according to Mr Sanidas because they were close to the subject land, sold relatively close to the acquisition date and as commercial premises enjoyed exposure to busy roads and were of sufficiently similar site area and improvements to the subject land. They also have similar zoning. Mr Sanidas made various adjustments to the properties to apply them to the subject land. The Snowmaster sale was adjusted upwards by 19.5% (up 14.5% for time, 20% for improvements and downwards by 15% for site area) and the vacant lot upwards by 17.24% (up 20% for improvements to 2.76% for time) no adjustment for site area or location) because he considered the subject land superior. Mr Sanidas adopted a rate of $3,300/m2 as the land value rate for the subject land on a site area improved basis.
2. Additional sales analysed on a floor space area (FSA) basis identified by Mr Sanidas in the table below were considered in the supplementary joint report although Mr Sanidas did not support this approach as the most appropriate. Mr Sanidas considered these sales showed a rate of $2,300/m2 for the subject land. Property Sale Date Site Area Rate Maximum FSR Potential FSA FSR Parramatta Road Frontage m2 $/m2 $/m2 1 57-61 Parramatta Rd Haberfield $2,220,000 27/11/15 740 $3,000 1.5 1,110 $2,000 46 m (Car yard) Upward adjustment of 15% to reflect dual access and car parking off Parramatta Road 2 163-165 Parramatta Rd Haberfield (Sold 4,900,000) (Metro petrol) $4,062,000 25/10/16 1,144 $3,551 1.5 1,716 $2,367 35-40 m No adjustment due to vehicular access and frontage 3 113 Dobroyd Pde Haberfield (Sold 5,000,000) $4,196,000 8/11/16 1,324 $3,169 1.5 1,986 $2,113 Nil Upward adjustment of 10% for exposure to Parramatta Road Total $6,480 Average FSA rate $2,160 RMS Sale Sale Date Site Area Rate Maximum FSR Potential FSA FSR Parramatta Road Frontage m2 $/m2 $/m2 253-255 Parramatta Rd Haberfield $4,000,000 16/12/15 1,258.3 $3,140 1.5 1,887 $2,120 27 m (Ken Carrolls site) upward adjustment for dual access from Parramatta Road

Mr Sanidas' cross-examination on direct comparison sales

1. When challenged that his adjustment of two sales (Snowmaster and 502-506 Parramatta Road Haberfield) by 20% for improvements and approvals was irrelevant, Mr Sanidas stated that he had relied on the joint expert report of the town planners which stated that there was a lot of risk attached to any redevelopment of the subject land. The risk did not preclude the attainment of the 1.5:1 FSR for a two-storey building. He agreed that the floor space could be located below ground to maximise the FSR. Mr Sanidas considered this a high risk proposal.
2. The 20% adjustment was adopted in part because that is the approach Mr Sanidas took in another court case concerning land at Frenchs Forest. Any hypothetical purchaser seeking to establish another tyre outlet centre along Parramatta Road would potentially make an allowance of some kind for the risk of carrying out modification works. An adjustment for equivalence with the subject land to show that there is a risk in obtaining a tyre outlet permit is warranted. Overall the 20% reflects his assessment of the risk of development as a tyre retail centre and the development costs for this.
3. Mr Sanidas agreed there is no evidence at all suggesting that the highest and best use of 167 Parramatta Road (Snowmaster site) is a car tyre outlet. He did not agree that the 20% adjustment was misconceived however.
4. Concerning FSA sales, the sale at 113 Dobroyd Parade had not yet settled at the time of the hearing and he agreed it warranted caution in these circumstances.
5. Mr Sanidas agreed with Mr Lunney that during 2016 prices in this area of Parramatta Road had accelerated from 2015. Mr Sanidas has adopted the same rate of increase and decrease for time when adjusting his sales. He agreed with Mr Lunney that acquisitions for WestConnex have driven up demand for properties in the B6 zone. Other factors included a housing boom and low interest rates and other developments in the area. He did not make any adjustment for the WestConnex influence on the market in his sales although these occurred in full knowledge of that project, and during its initial construction.

Mr Lunney's criticism of Mr Sanidas' FSA sales

1. Mr Lunney considered that the analysis of 57-61 Parramatta Road was incorrect as it had an advantageous corner site and unusually large frontage suggesting it should be adjusted downward, not upward, in relation to the subject land. The Metro petrol station site is irrelevant as it was acquired as a commercial investment, not as a redevelopment site. Number 113 Dobroyd Parade Haberfield is a very recent (incomplete) sale (November 2016) nearly one year after the acquisition and it is difficult to de-escalate for the substantial market movement since then. The transaction of 253-255 Parramatta Road Haberfield resulted from the acceptance of the RMS statutory offer during litigation in this Court and provides little assistance for that reason as it was not an open market transaction. Mr Sanidas' analysis of FSA sales appears to be "reverse engineering" to achieve $2,300/m2.

Mr Lunney's comparable sales

1. In Mr Lunney's opinion the FSR approach using the $/m2 FSA basis is a common and accepted method of valuation which is well suited to the assessment of properties in the B6 zone. Sales in the B6 zone are generally comparable given the size and location of the zone on both sides of Parramatta Road for the whole Ashfield local government area. Business premises and shops are permissible uses in the B6 zone. The subject land has a permissible density of 1.5:1 FSR, and height of building limit of 10 m. The subject land is similar to numerous other properties in the surrounding area. Mr Lunney identified three sales which he considered provided the best evidence of land value. He analysed these on a redevelopment basis to derive a rate of $1,650/m2 to $1,675/m2 for the subject land. The potential FSA for each property is calculated by assuming that each of the sale properties are to be developed in a manner which maximises the applicable FSR control that applies to each of the properties. It is important to identify sales which are for redevelopment sites. In his opinion, an analysis on a $/m2 FSA basis is appropriate and correct, as the market in this locality typically seeks to develop land in a manner which maximises the available FSR potential. A property with higher FSR controls typically attracts a premium price in comparison to another property which has a lower FSR control (all other factors being equal).
2. Mr Lunney selected the following sales: Address Sale Date and Price Site Area FSR Control $/m2 potential FSA (unadjusted) Adjust for time Adjust for Location/ Corner $/m2 potential FSA (Adjusted) Potential FSA 124-126 Parramatta Road Ashfield (adjoins Tideswell St) 9/9/15 1,846m2 2:1 $1,403 +4.5% 0 $1,466 $5,500,000 3692m2 167 Parramatta Rd Haberfield 27/2/15 1,638m2 1.5:1 $1,527 +15% -5% $1,680 (Snowmaster) $3,900,000 2,457m2 502-506 Parramatta Rd and 164 Frederick Street Ashfield 9/2/16 1,455m2 1.5:1 $1,859 -3% -10% $1,617 $4,030,000 2,167.5m2

1. The above sales reflect very consistent values when analysed on a dollars per potential FSA basis. The sales at 502-506 Parramatta Road and 164 Frederick Street Ashfield enjoy a very prominent location on the busy traffic-light controlled intersection of Frederick Street and Parramatta Road. Mr Lunney analysed the two sales as one because they were offered for sale on the same day, were bought by the same owner and were settled on the same day and the purchaser intends developing them as a single development. This sale would require downward adjustment of at least 10% for location to reflect a value of $1,617/m2 potential FSA.
2. Number 124-126 Parramatta Road was sold on 9 September 2015 and 8 Tideswell Street was sold on 15 September 2015 to the same purchaser. Mr Lunney did not consider there was any evidence to suggest that the later purchase of 8 Tideswell Street was interdependent with the earlier purchase of 124-126 Parramatta Road. He is not aware of any development application being submitted for both properties. Mr Lunney stated in the joint report that the purchase price of $2,550,000 for 8 Tideswell Street was the market value for the four existing residential units on the site. The two transactions should not be analysed as a single transaction.
3. Mr Lunney referred in his report and the joint report to six RMS sales within the B6 zone along Parramatta Road. All were acquired to facilitate the construction of the WestConnex project. The sales occurred very close to the date of acquisition so that no adjustment for time was needed. Four of the six sales are identified as having less than 25 m frontage to Parramatta Road, the minimum necessary for development under the LEP. Whilst capable of amalgamation with adjoining properties, these properties suffered a disadvantage in comparison with the subject land. Mr Lunney adjusted all the sales in relation to the subject land by upwards of 10% for frontage. While not open market transactions they provide consistent results. While treating these sales with caution he placed some weight on them as the average value of $1,684/m2 FSA is slightly higher than his assessment of market value of $1,675/m2 in his original report.

Cross-examination of Mr Lunney on FSA sales

1. Mr Lunney was cross-examined on his opinion that the market in the subject locality typically seeks to develop land in a manner which maximises the available FSR potential. He stated that he has two examples and that he could not immediately think of any more examples but that they are two very proximate sites and very close to the relevant date. It was put to Mr Lunney that the conclusions he makes in his report ignore individual site characteristics along Parramatta Road. Mr Lunney did not agree. He had looked at the sites and "there's nothing that immediately jumps out to [him] to say this is a site that couldn't be developed in a manner that achieved its maximum FSR potential". Mr Lunney did not agree that his approach of averaging values for various sale properties after adjustment for comparability to the subject land was not appropriate in the circumstances.
2. As noted in the joint report a number of the RMS sales Mr Lunney identified in his report had frontages of less than 25 m. He did not agree that no guarantee that any of these sites could be amalgamated with their neighbours warranted a much larger adjustment for frontage in relation to the subject land. Mr Lunney did not agree as he did not consider such vendors would sell for a discount greater than 10%. He considered he had adjusted the RMS sales to reflect the fact they were not amalgamated.
3. In relation to 124-126 Parramatta Road and the adjoining property at the rear 8 Tideswell Street, Mr Lunney made no enquiries of the purchaser of both sites as to their intention to redevelop the site. Mr Lunney did not agree that the property at 8 Tideswell Street was ripe for redevelopment. He agreed the property was a dated two-storey residential flat building. He would have been surprised if the site had achieved the purchase price of $2,550,000 if vacant. The purchase price paid was the market rate for four units. Mr Lunney agreed that access from Parramatta Road is discouraged and so access via Tideswell Street would be a benefit and something that would potentially increase the likelihood of consent being granted to redevelop 124-126 Parramatta Road. Mr Lunney agreed that the purchaser of the sites had purchased 8 Tideswell Street in order to achieve access to a redevelopment of 124-126 Parramatta Road. Without a development application or plans he was not able to say whether or not the building on 8 Tideswell Street would be demolished. Mr Lunney accepted that on Mr Sanidas' approach his calculation of $2,030/m2 FSA was correct, pre-adjustment, for the combined sale of 124-126 Parramatta Road and 8 Tideswell Street Ashfield.
4. In relation to 167 Parramatta Road Haberfield (Snowmaster site) Mr Lunney was asked whether he had considered in the potential redevelopment of the site the potential for contaminant migration from the neighbouring service station. He stated that he had. He accepted that he had not got any contamination reports. Mr Lunney accepted that the site has an awkward lot shape and stated that to a large extent it is both benefitted and disadvantaged by its shape as it has two street frontages which is a good thing. He accepted that in theory the lot configuration is something that may hinder the attainment of the maximum FSR control. Mr Lunney agreed that there was no consent for a tyre outlet business and that the improvements would not be capable of use as a retail car tyre outlet and associated workshops.
5. In relation to 502-506 Parramatta Road and 164 Frederick Street, Mr Lunney was aware that the two sites were dissected by a public laneway. He was aware of the RMS acquisition occurring below their surface. He did not consider that acquisition would affect the potential redevelopment of the site to achieve 1.5:1 FSR. When shown the contract for sale Mr Lunney was asked whether he had undertaken any analysis or sought any advice as to the flooding affectation on the redevelopment potential of the land. He stated that he did not have a flood report. Mr Lunney was shown a letter attached to the contract for sale dated 15 October 2015 from the Sydney Motorway Corporation referring to flood related development controls for residential development. Mr Lunney had analysed the stratum plans and identified that the tunnel depth is at 35 m. Mr Lunney agreed that there was no development consent for a tyre outlet business and that the improvements would not be capable of use as a retail car tyre outlet and associated workshops. Mr Lunney stated that it was purchased as a redevelopment site.

Criticism of Mr Lunney's sales by Applicants

1. Mr Lunney's sales analysis was criticised by the Applicants' counsel. Mr Lunney's analysis of 124-126 Parramatta Road failed to consider that it was purchased at the same time as the adjoining 8 Tideswell Street. It is likely the two sites will be developed together as access is not permitted from Parramatta Road for that street frontage. Mr Lunney did not make further inquiries, as he conceded in cross-examination. If 8 Tideswell Street is combined with 124-126 Parramatta Road this reflects Mr Sanidas' assessment of $2,300/m2 for the FSA analysis. Mr Lunney agreed in cross-examination that the pre-adjustment figure of $2,030/m2 was correct.
2. Number 167 Parramatta Road adjoins a petrol station and is exposed to potential remediation costs from migration of off-site contaminants. Mr Lunney did not make any inquiries to understand whether the rate reflected that inherent latent cost, as conceded in cross-examination. The site has an awkward lot configuration and is next to a heritage conservation area. No adequate assessment has been undertaken to determine whether the 1.5:1 FSR could be achieved for this, demonstrating a flaw in the FSA analysis based on averaging. No weight can be placed on this sale.
3. Numbers 502-506 Parramatta Road and 164 Frederick Street Ashfield are dissected by a public laneway and Mr Lunney has not provided any evidence for his assertion that the purchaser of the sites intends to develop the two properties as a single development. Mr Lunney did not make any enquiries about the substratum acquisition affecting the land or the RMS road reservation on Frederick Street.

Finding on direct comparison sales approach

1. The comparable sales approach is a commonly applied method of valuation whereby sales of similar properties are compared to a subject property in order to derive a value. As no two properties are identical, adjustments will be necessary in that comparison process. Generally the fewer and smaller the adjustments made by a valuer the better. A useful elucidation of this process and the role of the valuer is found in Brewarrana Pty Ltd v Commissioner of Highways (1973) 32 LGERA 170 at 179-180. The valuers have selected a number of different sales they consider comparable to the subject land for the purposes of the direct comparison sales approach.
2. The first three sales identified by Mr Sanidas for direct comparison (non FSA basis) set out above in par 104 show a range of $2,381/m2 to $4,196/m2 on a site improved basis or $3,000/m2 to $12,000/m2 GLA. One sale is the Metro petrol station site. For reasons already given in par 79 above I do not consider the Metro petrol station site to be useful as a comparable lease or sale. The market it operates in is clearly different to the subject land given the very high GLA $/m2 of $12,000/m2 and site area improved of $4,196/m2. Further, as Mr Lunney identified, that sale was not for a redevelopment site, which appears a more appropriate basis for comparison given the location of the subject land in the B6 Enterprise Corridor zone under the LEP on busy Parramatta Road. That sale provides no assistance.
3. Mr Sanidas' adjustments to the two remaining sales to make them comparable to the subject land is problematic. I agree with the RMS' criticism of the adjustment of 20% of the Snowmaster site and 502-506 Parramatta Road Haberfield said to reflect the cost of rendering them suitable for a car tyre retail outlet as misconceived particularly as the latter is a vacant lot. In Mr Sanidas' original report this adjustment was supported solely on the basis that such a figure had been accepted in another court case, Speter v Road and Maritime Service [2016] NSWLEC 128. That case did not purport to set out a principle that authorised such an allowance in every case but reflected the particular facts in that case.
4. The adjustment is also based on an approach to valuation by Mr Sanidas which underpinned the Applicants' case whereby the highest and best use of the subject land is assumed to be a car tyre retail outlet. I have rejected that approach in relation to the assessment of market rental value and the same conclusion must also apply in this context. Consequently cross-examination of Mr Lunney in relation to each of his sales as to whether they were suitable premises for a car tyre retail outlet was irrelevant.
5. No basis for making any adjustment for rendering premises suitable as a car tyre retail outlet is demonstrated. As this was a substantial adjustment to both sales this suggests that Mr Sanidas' derived rate of $3,300/m2 is far too high.
6. Both valuers also compared sales on an FSA basis, Mr Lunney's preferred approach. The overall criticism of this approach by the Applicants was that Mr Lunney assumed that each redevelopment sale would achieve the maximum FSR in deriving a rate. Cross-examination was directed to each of Mr Lunney's three sales to suggest that there were circumstances of the land which suggested that the full FSR would not necessarily be achieved. As a general principal of valuation on a $/m2 FSA basis, an assumption that buyers of redevelopment sites in the B6 zone would seek to maximise their use of FSR is valid, subject to there being some evidence of risk that the maximum is not achievable or not likely to be achievable on a particular site.
7. Mr Lunney selected 124-126 Parramatta Road Ashfield, 167 Parramatta Road Haberfield (Snowmaster site) (also analysed by Mr Sanidas on a non-FSR basis) and the two adjoining lots at 502-506 Parramatta Road and 164 Frederick Street Ashfield. According to Mr Lunney these show a range of $1,466/m2 to $1,617/m2 FSA when adjusted as set out in the table in par 114 above.
8. Mr Lunney's analysis of 124-126 Parramatta Road was criticised because he did not analyse the sale together with the sale of 8 Tideswell Street, the property adjoining, to the same person six days later. That criticism is valid given the high likelihood the two properties were purchased virtually together in order to enable redevelopment with access from Tideswell Street, no access being permitted onto busy Parramatta Road from 167 Parramatta Road because of its limited frontage. Mr Sanidas' figures for the analysis of this sale were accepted by Mr Lunney as otherwise correct in cross-examination, deriving an adjusted figure of $2,300/m2 on an FSA basis. I accept Mr Sanidas' analysis of these sales and consider this figure is the upper range of the FSA sales identified by the valuers.
9. The Snowmaster site analysis was criticised because Mr Lunney failed to make relevant inquiries such as the possibility of contamination from the garage next door. According to Mr Lunney's oral evidence that observation also applies to the subject land. This risk factor was not identified by Mr Sanidas in his consideration of this sale. Although he was not considering this sale on an FSR basis the possibility of contamination would appear to be a relevant factor to mention as a matter of consistency in terms of the criticism of Mr Lunney. Mr Sanidas did not explain in his oral evidence why he did not analyse this sale on an FSA basis. As already identified above in par 127 I consider the redevelopment approach is an appropriate basis for comparison of sales with the subject land. While I accept that the possibility of contamination from the adjoining garage would be a relevant risk factor for a prudent hypothetical purchaser to consider the risk is not so obvious that I would expect Mr Lunney to have obtained an expert report in order to rule out such a risk. The rate of $1,680/m2 was derived from this sale for the subject land with an upward adjustment of 10% overall by Mr Lunney. Factors adjusted for were timing of the sale in February 2015 (upwards) and superior location (downwards). No adjustment was made for size although I note that the Snowmaster site is larger at 1,638m2 compared to the subject land at 1,333m2. The level of adjustment of 10% appears appropriately conservative.
10. Mr Lunney's analysis of two adjoining lots at 502-506 Parramatta Road and 164 Frederick Street Ashfield was criticised because he did not adjust the sale to take into account the public laneway in the middle of the two lots or take into account the acquisition of a stratum of land underneath by the RMS. Given the prime location of these properties on a corner on Parramatta Road I do not consider the existence of the public laneway is material. Mr Lunney considered the stratum would not be perceived as affecting the land's development potential, due to its depth of 35 m. These sites have a similar size of 1,455 m2 compared to the subject land. Mr Lunney's adjustment of slightly over 10% downwards to derive a rate of $1,617 for the subject land appears reasonable.
11. Mr Lunney referred to six RMS sales as a way of checking his rate. Four of the RMS sales were properties with less than 25 m frontages to Parramatta Road, preventing their redevelopment without amalgamation with an adjoining lot. The criticism of their use by the Appellant on this basis is warranted. Mr Lunney accepted in his report that such sales should be considered with caution as they are not open market transactions. I do not have regard to these sales to any great extent given their obvious limitations.
12. Considering Mr Sanidas' FSA sales, he derived a figure of $2,300/m2 for the subject land from the car yard at 57-61 Parramatta Road Haberfield, the Metro petrol station site and 113 Dobroyd Parade Haberfield. For the reasons I have already given the Metro petrol station cannot assist. Number 113 Dobroyd Parade Haberfield is a very recent sale yet to complete at the time of hearing which transacted approximately a year after the date of acquisition in a rising market. Consequently it is preferable that this sale be excluded, leaving the car yard at 57-61 Parramatta Road which transacted in November 2015. Mr Sanidas analysed the sale as showing an FSR of $2,000/m2 after adjusting it upwards by 15% to apply it to the subject land because of the latter's superior location in Mr Sanidas' view. Mr Lunney criticised the analysis of this sale as he considered the subject land was inferior not superior so that the sale should have been adjusted downwards. I agree with Mr Lunney. The Parramatta Road frontage of the subject land at 30.5 m was markedly smaller than this property at 46 m. The car yard is also located on a valuable corner location unlike the subject land. The fact it has inferior improvements to the subject land is not relevant. I note in addition that the car yard is smaller (740 m2) than the subject land (1,333 m2) which would require a positive adjustment. Properly analysed this sale should be adjusted downwards to a small extent to apply it to the subject land suggesting a rate of a little under $2,000 m2.
13. The RMS sale of 253-255 Parramatta Road referred to by Mr Sanidas (included in the table in par 106 above) cannot assist, being an agreement to accept the Valuer-General's determination in the course of an appeal in this Court. The price was not negotiated in an open market transaction.
14. My reasoning results in a reasonably wide range of values based on the FSA sales evidence accepted by me of $2,300/m2 (Tideswell Street/Parramatta Road sales) to a little less than $2,000/m2 for 57-61 Parramatta Road to $1,675/m2 from Mr Lunney's three sales. Doing the best I can I consider that $2,000/m2 is the appropriate rate to be applied to the subject land.

Preferred approach of the Applicants?

1. As identified above in par 24 Mr Lunney considered the term and reversion method of valuation was most appropriate. It was agreed during the hearing that I would determine the inputs to that method in the course of considering the market rental method. Having done so, I am delivering this judgment without making final orders in order to provide the opportunity to the Applicants to determine if they wish to finalise their claim based on the term and reversion approach, or any other method canvassed in this judgment in light of my conclusions.

Disturbance (s 55(d) JT Act)

1. Some disturbance items as described under ss 59(1)(a)-(b) and part of a claim under (e) are agreed to be paid by the RMS, as identified in the table in par 4 above.
2. Costs for buying a replacement property such as stamp duty, new mortgage costs and relocation are also claimed on the basis these fall under ss 59(1)(c), (d) and (e). The Applicants' investment use of the land is submitted to be an actual use of the land. The same disputed sums are also claimed in the alternative under subsection (f). As I determine below that these sums are not claimable as disturbance it is unnecessary to resolve if it is appropriate to claim such costs in the alternative under subsection (f). I note that such an approach was criticised by the Court of Appeal in Roads & Traffic Authority of New South Wales v Peak [2007] NSWCA 66 at [100]-[102].
3. The Applicants submitted that they were active investors because they managed the property themselves as attested to in the second affidavit of Mr Hatzivasiliou summarised above in par 11. Consequently they submitted the costs of their purchase of a replacement property are compensable.
4. I agree with the RMS that being personally active in collecting rent and other management activities is not an actual use of the subject land over and above the leasing of the land. The circumstances are not distinguishable from Speter at [87]-[92] where a comprehensive consideration of a number of relevant authorities was helpfully undertaken. As I can add nothing further to that analysis, I gratefully adopt the reasoning of Robson J. That part of the Applicants' disturbance claim is not claimable under ss 59(1)(c)­-(d) and part (e) or in the alternative under (f).

Conclusion

1. The Applicants in particular will need to consider this judgment and determine what final claim for market value they wish to seek depending on which valuation method they decide to pursue. I will discuss with the parties a timetable for bringing the matter back before me for final orders to be made. Such orders should include the amount of disbursements claimable as a result of the reasoning in this judgment.

Addendum made on 31 March 2017

1. In accordance with the terms of paragraph 145 of my judgment of 28 February 2017 the parties provided me with short minutes of order. I am satisfied that these orders accord with my findings and accordingly I make orders in accordance with the attached short minutes of order.

ATTACHMENT 16.154352 SMO filed online 310317 (33.7 KB, pdf)

Amendments 13 October 2017 - 31-3-17 Addendum added to finalise orders 16 October 2017 - attachment added DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 October 2017