Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177 - QLC 2009 case summary — Zoe

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Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177

[2009] QLC 177

Land Court of Queensland|2009-11-24|Before: Mr J

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At a glance

Source facts

Court

Land Court of Queensland

Decision date

2009-11-24

Before

Mr J

Catchwords

Practice and Procedure - resumption - owner and several mortgagees possible claimants - non-appearance by one mortgagee - power to hear in claimant's absence - determination to bind all parties.

Source

Original judgment source is linked above.

Catchwords

Practice and Procedure - resumption - owner and several mortgagees possible claimants - non-appearance by one mortgagee - power to hear in claimant's absence - determination to bind all parties.

Judgment (117 paragraphs)

[1]

[1] These proceedings arise out of the resumption of land situated at 85 Montague Road, South Brisbane, by the Brisbane City Council (the respondent) under the provisions of the Acquisition of Land Act 1967 (the Act). As at the date of resumption, 31 August 2007, the land was owned by Mio Art Pty Ltd and subject to mortgages held by Perpetual Nominees Ltd, Grenfell Securities Ltd, Greener Investments Pty Ltd and Neovest Ltd. Proceedings against these parties were commenced by the Brisbane City Council on 29 November 2007 under s.25 of the Act (Reference to Land Court by constructing authority). Pursuant to orders of this Court, Grenfell Securities, Greener Investments and, ultimately, Mio Art entered appearances by filing claims for compensation in this Court. The action against Perpetual Nominees Ltd was discontinued by Notice dated 29 April 2008. Grenfell Securities withdrew its claim by Notice dated 24 November 2008.

[2] The Court also ordered Neovest Ltd to enter an appearance by filing a claim for compensation on or before 14 January 2008. Neovest failed to comply with that order, has not filed a claim for compensation and did not appear at the hearing. The Court has been advised that Neovest is in liquidation and, by order of the Supreme Court of Queensland dated 16 May 2008, the Brisbane City Council was granted leave to proceed with its originating application filed in this Court against Neovest. of the Act provides that where a claimant fails to enter an appearance on or before the date fixed by the Court, the Land Court may hear and determine the matter of the amount of compensation in the absence of the claimant. Pursuant to Orders of the Court made on 20 May 2008, all of the proceedings were heard together. The determination in this matter will, therefore, bind all the parties to all the matters before the Court, including Neovest Ltd.

[59]

[30] The subject site is in the area covered by Kurilpa 1. Although the Plan was in circulation as at the date of resumption, Kurilpa 1 had no statutory force as at that date. Mr Ovenden and Mr Panaretos considered that the prudent purchaser would take the plan into account as reflecting Council's intentions for the area. Mr Buckley said that draft documents should be given weight when they have been publicly advertised or have some sort of formal acknowledgment. As the adoption date approaches, they receive more and more weight. He accepted, however, that town planners would advise a prudent purchaser of the existence of a draft plan such as Kurilpa 1 as it gave a guide to Council's intentions as to planning initiatives in the area.

[31] As Kurilpa 1 had been in circulation for some months prior to the date of resumption, I consider that the prudent purchaser as at that date would have been aware of its content and its potential impact on the subject site. The weight to be attached to this draft Plan is, however, in issue. I will defer discussion of that issue until I have considered the evidence as to the draft Plan's potential impact on the development of the subject site.

[32] Kurilpa 2 was published some 3 or 4 months after the date of resumption. That Plan indicated a building height of 12 storeys in the vicinity of the subject. Both Dr Smith (for Mio Art) and Mr Horsburgh (for Greener) suggested to witnesses that this Plan could be taken into account in determining the development potential of the subject site as at the date of resumption, because the purchaser, having acquired the site as at 31 August 2007, would not have finalised development plans by December 2007, when Kurilpa 2 was published.

[33] While it may be correct that such a purchaser would not have obtained development approval by December 2007, I do not accept that that of itself leads to the conclusion that its content can be taken into account. Section 20(2) of the Act provides that compensation is to be assessed according to the value of the estate or interest of the claimant in the land taken as at the date of resumption. This means that the prudent purchaser, as described in the quotes from Spencer set out above, must be assumed to know the relevant facts about the land as at that date. Evidence of events occurring after that date is not generally relevant to the assessment of compensation unless it is evidence which confirms a foresight held by the prudent purchaser as at the date of resumption.[4]

[34] Mr Panaretos did not rely on Kurilpa 2 but referred to it in his evidence. I will consider his evidence when discussing the evidence concerning the height of the proposed development.

[35] Mr Buckley took a different approach. Although he acknowledged that Kurilpa 2 was not available as at the date of resumption, he said that his experience was that Kurilpa 1 would have generated discussion leading to potential revision. He said that a prudent purchaser would discuss development prospects with the Council and it would have been indicated to the purchaser that Kurilpa 1 was under review. This was ultimately confirmed when Kurilpa 2 was published with a height of 12 storeys. In his view the broad intent and the broad direction of development pressure as at the date of resumption was likely to increase.

[36] I accept that it is likely that the prudent purchaser would have been informed in August 2007 that Kurilpa 1 was under review. However, there is no evidence as to the content of any review at that time and in particular as to whether the proposal to raise the relevant height limit to 12 storeys was in circulation. In those circumstances I do not consider that Mr Buckley's evidence on this point was sufficient to enable me to say that this was information that was available to the prudent purchaser as at the date of resumption.

[60]

[37] "Smart Cities: rethinking the city centre" is a report prepared by the Smart State Council on the initiative of the Queensland Government and published in May 2007. The report calls for the identification of a holistic vision and structure for the city centre and, relevantly to the subject land, recommends that the planning approach to the City Centre be redefined by regarding its urban growth potential as belonging to four super-precincts. Precinct 3 is identified as South Brisbane/Southbank and comprises Southbank, Kurilpa and the West End Riverside Precincts.[5] The subject land is situated in the West End Riverside Precinct.

[38] A reproduction in the Smart Cities report of the Brisbane City Council Brisbane City Master Plan study for high density Brisbane CBD shows a connection via the new Kurilpa Bridge to Southbank and, ultimately, the West End Riverside Precinct.[6] The report states that the CBD Peninsula is being challenged in its role as the core primary activity generator of the City by commercial development occurring in Fortitude Valley and South Brisbane. Consequently Council was considering permitting heights up to 20 levels in these adjoining precincts. The need to expand the CBD domain had been caused by the fact that much of the existing CBD had been built out by residential towers and by increasing demand for large floor plate offices conducive to new workplace offices for which sites are too expensive or unavailable in the CBD.[7] The report contemplates residential renewal of redundant industrial land with the emphasis currently shifting into the West End Riverside Precinct as well as internal sites in South Brisbane.[8]

[39] Mr Horsburgh submitted that the Smart Cities report gave an indication as to the infrastructure that was being considered for the subject area. This would provide information as to the commercial feasibility of the site with regard to amenity for end users and potential investors, separately from any consideration of development capacity. This was particularly important for the subject land because of its unusually large size.

[40] None of the town planners referred to the Smart Cities report in preparing their reports for these proceedings and the report was not discussed by them at their joint meetings. Mr Buckley said that the report had no weight within the statutory framework because the proposed development on the subject site was a code assessable development. The evidence indicates that the document is a high level document although it may be, as Mr Panaretos said, that long term investors and developers may be interested in it because it indicated the type of changes that might feed into the planning scheme. Given the long term nature of the report, its authors' acknowledgment that it presents "a vision of Brisbane as a centre piece for the Smart State" and the lack of weight attached to it by the town planners, it seems at best that the prudent purchaser could only regard it as indicating possible long term development initiatives. Such a person would not in my opinion consider that it was directly relevant to ascertaining the highest and best use of the subject land as at the date of resumption.

[61]

[41] Mr Ovenden's assessment of the town planning issues affecting the subject site and Mr O'Brien's design were influenced by the development approval for the subject site which was current as at the date of resumption (the Capulet approval).

[42] The Capulet approval is dated 7 July 2005 and approves a development for office purposes which was obtained when the site was included in the SP12 (Mixed Industry and Business) Area. The approval had required an application for impact assessment (generally inappropriate) development. The approved GFA was 17,560 m² with a nett lettable area of 15,658 m². The approved development consisted of 3 x 6 storey buildings and one 7 storey building. A subsequent development application made in late 2005 for a mixed office and residential development with a maximum height of 12 storeys and a gross floor area of 33,295 m² was not properly made and did not proceed.

[43] The application was initially made on 17 February 2003. Mr O'Brien said that that plan showed three buildings, 6 storeys high, an almost continuous built form along the river frontage, relatively narrow pedestrian spaces on site, vehicular access entirely from Bouquet Street with no road widening and a total GFA of 23,427 m² with a plot ratio of 2.65:1. That design was not approved.

[44] An internal Council memorandum identified the following issues:

the bulk of the buildings to Montague Road which obscured views to the river and park vegetation - breaking the building form along this elevation and the river elevation would preserve those views and provide improved visual amenity to the street;

the overall length of the river elevation (over 103 metres) raised similar concerns;

the proposed building would partially obscure views to the heritage building.

[45] An Information Request issued in May 2003 said that the proposal did not meet Performance Criteria P3 having regard to the view through to the Brisbane River. The proposed plot ratio of approximately 2.66 exceeded the acceptable solution plot ratio of .35 and was assessed to result in excessive building scale and bulk and was not supported. An Urban Design Analysis was required which satisfactorily addressed the integration of the proposal with the adjoining industrial uses and the riverside interface to the north and north-west of the site. As part of this assessment a 3 dimensional model which addressed the bulk scale and height of the amended proposal was required. Setbacks of 6 metres to the riverside alignment and 3 metres to Montague Road were required. The proposal should demonstrate an acceptable solution in the provision of pedestrian access/linkage from Montague Road to and along the riverside drive parkland and the river. This should include landscaped buildings setbacks to assist in the integration of new development with the public open space.

[46] The matter was appealed to the Planning and Environment Court and was settled, with a consent order approving -

Four buildings with two of the buildings linked at the uppermost five levels

Three buildings with 6 storeys and one with 6 storeys above the ground storey void

Setbacks: to Riverside Drive - 6 metres to building A extending to 12 metres at that uppermost floor; 6 metres to building B extending to 10 metres and 13 metres at the uppermost floor; nil to Montague Road, 3 metres to building B and nil to building A in Lanfear Street.

Spaces between buildings - at the river frontage 22 metres at ground floor, and 24 metres at uppermost floor and becoming wider further into the site; at Montague Road - 22 metres and decreasing to 12 metres before gradually widening; at Lanfear Street 25 metres.

GFA/plot ratio: 17,560 m²; 1.99:1

Carparking: 1 basement level providing 127 car spaces (1 car/138m²GFA approximately)[9]

[47] Mr Ovenden said that the approved development broke down the form to the river because the Council was very clear that it did not want to see a 103 metre face of the building to the river in that location. The development approved had a plot ratio of 1.99 made in the context of the scale of development that was happening in the area at that time. The constraints applied by the Council were not prescribed in the planning scheme, but he considered that, as the local authority, the Council was indicating what it wanted to achieve in the relationship of built form to the river and to the parkland, and pedestrian access through the site. In Mr Ovenden's view, both Greener and Mio Art's proposals created a massive wall to the river rather than responding in a sympathetic way to the parkland and to the riverfront. He said that the planning philosophy was about unlocking not blocking the river.

[48] In Mr Ovenden's opinion the development approval would be very relevant to a prudent purchaser of the subject site. Even though the Council had moved on with the GFA, he considered that the urban design issues applied in arriving at this approval would be highly relevant to a prudent purchaser seeking to develop the site as at the date of resumption.

[49] Mr O'Brien had regard to the Capulet development approval in his design proposal. He acknowledged that, although the WEWDLP had changed after that particular time, he did not think that the attitudes of the Council officers would have changed significantly from those expressed in the Capulet application.

[50] Mr O'Brien said that the substantial spaces shown between the buildings on his plan allowed for good views between the Montague Road/Boundary Street intersection through to and across the river; views were available at ground level through the site to Lanfear Street, and from Lanfear Street and down Merivale Street to the heritage place; building B was able to achieve some views to the river through the substantial space between buildings A and D. A substantial pedestrian plaza was provided at the junction of the pedestrian space link and at the end of Lanfear Street. There was substantial pedestrian access to the river through the spaces between the buildings. The height of the building adjacent to the riverside parkland was 2 to 3 storeys above the trees. The building frontages ran for 48 metres, then a 22 metre gap, then an 18 metre wide building. The buildings terraced back from the river.

[51] Mr McNaughton did not regard the site history as terribly relevant because Kurilpa was an urban renewal area. He thought that the Capulet approval had only a limited and tenuous relevance to the district Local Plan current as at the date of resumption. He was aware that the Council had a concern about height, which had been responded to by the developer reducing the height of the building, and he was also aware that Kurilpa 1 referred to 9 storeys, whereas the Local Plan spoke about 10. The Council's concern about height on the subject site was in 2003, he emphasised. He had drawn on the Capulet building footprints, forms and open spaces in deriving his design. Capulet had been supported by the Planning and Environment Court's consent order in July 2005 and gave him some level of comfort about what was likely to be approved.

[52] Mr Lane did not consider that it was necessary to refer back to the 2005 approval because the scheme was several years old, was developed under a different planning instrument and he was not privy to the brief of the developers who made the application or what they were trying to achieve.

[53] Four of the issues identified as remaining in dispute after the town planners' joint meeting were also issues in the Capulet approval process, viz the appropriate response to the site's relationship to the Brisbane River, whether a site structure plan would result in reduced building height and bulk, whether and what type of through link was required and the necessity of stepping the building to the heritage site. The relevance of the Capulet approval is discussed further, below, in relation to each of those issues.

[62]

[54] Mr Ovenden said that it was a necessary requirement that a structure planning exercise be carried out on the subject site to arrive at a reasonable outcome for the development. He said that this was a unique situation as the Local Plan did not stipulate height and setbacks adjacent to the river but instead required a developer to prepare a structure plan and submit it to the Council. He considered that the function of the structure plan was to guide building scale and mass, the space between buildings and the achievement of access to the riverside. He also said that the 2005 Capulet development approval was relevant to the preparation of the structure plan and the detailed design of a development.

[55] Mr Ovenden appended a structure plan prepared by LVO Architecture to his report which, he said, expressed the principles and provisions of the WEWDLP, applicable planning scheme codes and provisions of Kurilpa 1. It also incorporated the design principles established with the Capulet development approval on the subject site. The structure plan was supplemented with images of bulk and mass prepared for the precinct and for each of the parties' proposal.

[56] Mr Ovenden identified the key elements shown on the LVO structure plan as -

integration with the riverfront

a building bulk setback line to the riverfront parkland

major view windows identified in the WEWDLP

an open space corridor through the site to the river - with opportunity to achieve an active plaza space as well as breaking up the building form

acknowledgment of the importance placed on protecting views to the heritage place.

[57] In accordance with those general features, LVO Architecture's development concept for the site prior to resumption showed four separate buildings on the site linked with a ground level open space and plaza areas at the end of Lanfear Street. The development has a maximum of 10 storeys scaling down to 6 storeys towards the riverfront. Vehicular access was limited to Bouquet Street consistent with the Capulet development approval and the advice from Mr Colin Beard, Council's consultant traffic engineer. By limiting access to Bouquet Street, a comfortable public pedestrian environment was created in the central plaza area.

[58] When compared with the Capulet approval, Mr Ovenden said, the design had increased the podium and tower envelopes and building height to the greatest extent possible without compromising the objectives of complementing the riverfront park setting (in terms of breaking down and scaling back building mass) and creating high quality public access to the river side and through the site.

[59] Mr O'Brien said that the purpose of the structure plan was to describe the scale and massing of the proposed buildings, and the spaces between them and the access to the river. The structure plan also set out the constraints on the site - setbacks, heights, etc - and established the building envelope and footprint. Mr O'Brien concluded that a prudent purchaser whose only information was the WEWDLP, the centre design code and Kurilpa 1 would recognise that without the benefit of the structure plan referred to in P2/A2 for Precinct 3, there was a very high level of risk in applying a height of 10 storeys to a development with a high site cover over the subject land.

[60] Mr Panaretos acknowledged that because the subject site exceeded 1,500 m² the preparation of a structure plan was required and he had prepared a one dimensional plan. In his opinion, the acceptable solution indicated the intended contents of the structure plan but not the objectives for development on the site which could be gleaned from the preamble to the code. He disagreed that the purpose of the structure plan was to show how the proposed building would fit into the precinct. The Local Plan Code's requirement for a site structure plan opened possibilities for building designers to explore and respond to the urban context of development sites, whilst striving to achieve the Local Plan's intent. Mr Panaretos said that his structure plan demonstrated how the proposal responded to and integrated with its context. Mr Panaretos said that his plan addressed bulk along the Montague Road boulevard because the boulevard was created through buildings with a continuous façade bulked up against the street, which would be enhanced by street planting, full width footpaths and street furniture etc.

[61] Mr Panaretos said that it was not necessary to prepare a structure plan of the type prepared by LVO Architecture which showed in graphic form the site relationship to the river and riverside park, the walkway areas and the proposed building. In Mr Panaretos' opinion, the LVO structure plan failed to address the requirements for the integration of art and cultural activity uses within the precinct. It also missed the opportunity to exploit a great public space in front of the building.

[62] Mr Panaretos did not accept that a structure plan could be used to reduce the 10 storey height of a proposed building because -

There was nothing in the plan to suggest that a site over 1,500 m², for which a structure plan was required, should be penalised in favour of smaller sites which have a code assessable expectation of 10 storeys.

The requirement for a site structure plan gave an opportunity for architects to respond to immediate site contexts through subtlety and innovation in their design over and above the broad statements of intent in the plan. Hence a greater height of 10 storeys may be warranted in appropriate situations.

Conversely, lower heights may also be warranted on parts of key sites such as at the interface with established low rise residential areas or to give richness or form on very large sites.

Codes are not intended to be open-ended documents with uncertain outcomes.

[63] Mr McNaughton accepted that the Local Plan called for a structure plan to address building bulk and scale. He agreed that the purpose of the structure plan was to give effect to the development principles in the Local Plan and to give effect to the intent of the precinct in which the land is located. He had prepared a structure plan for the site which differed from Mr O'Brien's. Mr McNaughton said that Mr O'Brien had chosen to prepare a structure plan based upon a large part of a precinct. Mr McNaughton's plan focussed on the site and properties adjoining the site.

[64] Mr McNaughton's structure plan established a design solution with three building footprints similar to the Capulet site. His plan showed concourses between the three buildings for 2 storeys and thereafter the buildings are connected from Level 3 up. The effect would be that a person would walk from the open sky at one end through the concourse which opens up to the sky again in the central courtyard, then into a 2 storey concourse and then out to the river. The spaces between buildings are both the existing road corridors and the concourses and central courtyard within his design.

[65] Mr Buckley agreed that as a town planner he would advise a purchaser that a structure plan would have to be prepared which should address the matters set out in A2. He had not prepared a structure plan because he considered that to be the role of the architects. Moreover it was not necessary to prepare a structure plan and then design a building in that order. Rather it was an iterative process with one informing the other.

[66] Mr Buckley said that the requirement that a structure plan be prepared meant nothing more than that regard must be had to the site context, opportunities identified and design outcomes sought. Because the Integrated Planning Act envisaged that developments which comply with codes be approved, the code itself must give some guidance as to the issues that may require some design performance. Mr Buckley saw the structure plan as a contextual document that indicated how a proposed building would fit on to the site and how it would fit into the overall area. Mr Buckley did not consider that, had a structure plan been prepared, the GFA reflected in the LVO plans would be the result. Nor could such a plan affect the bulk or scale of the building on the site.

[67] Mr Lane accepted that the Council could retain some control over the development in relation to height, bulk and separation between buildings through the structure plan process. He acknowledged that a structure plan would be necessary before making a development application, but he did not consider that it was necessary to prepare one before the building was designed. Mr Lane had not prepared a structure plan. He relied instead on significant urban planning work he had carried out in 2000 and the following years which he regarded as more comprehensive than the structure plans prepared by the other parties. His background experience in undertaking that study and in understanding how the WEWDLP might be interpreted meant that he did not need to overlay initially with a structure plan specifically in relation to the site.

[63]

[68] I consider that Development Principle 3.3 for Precinct 3 - Riverside North and Acceptable Solution A2 in paragraph 5.3 of the WEWDLP Code would clearly indicate to the prudent purchaser that a structure plan is to be prepared for sites of more than 1,500 m² and that the structure plan is to provide an indication of building bulk, scale and space between buildings and public access to the riverside. That conclusion is confirmed by the evidence. All the witnesses whose evidence is discussed above accepted that a structure plan was necessary for this site.

[69] The real issue is the role of the structure plan and, in particular, whether it could be used by the Council to control the bulk and scale of the proposed development and to require visual and physical permeability through the site. I consider that the prudent purchaser would conclude that that was likely, for a number of reasons.

[70] While I consider that such a purchaser would expect a development proposal that complied with specific town planning requirements to be approved, there are no express provisions in the instruments applicable to the subject site dealing with the bulk and scale of the proposed development or visual and physical permeability through the site. Mr Ovenden said that the function of the structure plan was to guide those aspects of the development. Mr Lane also accepted that the Council would retain some control over the development in relation to those issues with a structure plan. I consider that a prudent purchaser would accept Mr Ovenden's opinion in preference to the other town planners because it is evident from Acceptable Solution A2 that those issues were of concern for sites over 1,500 m². While A2 is not prescriptive as to those issues, it nevertheless has the effect that they are matters which are raised for scrutiny by Council. There would seem to be little point in A2 if it were not used by Council to guide those aspects of the developments.

[71] Further, the experience of the Capulet approval process indicates that issues such as the height and bulk of the proposed development, the integration of the development with the riverside parkland, through links and the preservation of views to the heritage building were of concern to the Council at that time and the original development proposal was modified to address Council's concerns. The planning regime has changed since the Capulet approval. Nevertheless Acceptable Solution 2 clearly indicates that the function of the structure plan is to give an indication of building bulk, scale and space between buildings and public access to the riverside.

[65]

[72] Development principle 2.5 in the WEWDLP Code provides that developments fronting the Riverside Park are to complement the existing parkland setting. Performance Criterion P1 in paragraph 5.3 of the WEWDLP is that "Development maintains views to Mt Coot-tha and the Taylor Ranges when viewed from the Riverside Expressway and views of the CBD when viewed from Coronation Drive". Acceptable Solution A1 is that "Building height does not exceed 10 storeys".

[73] Paragraph 2.8 provides that new development will enhance the park and the riverside setting through improving access to these parks, the use of appropriate building setbacks, materials and design, and landscaping.

[74] The respondent proposed a development of 4 buildings with buildings 3 and 4 joined at levels 2 to 6 inclusive. The buildings within 45 metres of the river frontage to the site were 6 storeys and those for the remainder of the site were 10 storeys. Mio Art proposed a footprint of three buildings of 12 storeys which are joined from levels 3 to 12. Greener proposed a development of 1 building of 10 storeys along the riverfront and 12 storeys to the Montague Road, Boundary Street and part of the Bouquet Street frontage.

[75] Although the WEWDLP code indicated a building height of 10 storeys for the subject site, Mr Ovenden said that Kurilpa 1 envisaged a scaling back of development. Consistently with Kurilpa 1, Mr Ovenden considered that the Council would have applied a 9 storey limit along the whole area fronting the river, including the subject site.

[76] Mr Panaretos accepted that the effect of Kurilpa 1 was that the proposed height applicable to the subject site as at the date of resumption was 9 storeys. In terms of maintenance of views as required by the Local Plan, Mr Panaretos had not done a view analysis but he considered that the City Council had done so when it indicated in Kurilpa 2 that buildings of 12 storeys would be an acceptable solution. Mr Panaretos did not rely on Kurilpa 2 but used it to illustrate that if the height analyses had been done, they would have established that 12 storeys was acceptable to maintain the view lines as required in the Local Plan. This would have formed a basis for providing the Council with an alternative solution to a 10 storey development.

[77] I do not consider that a prudent purchaser would accept Mr Panaretos' reasoning that the fact that Kurilpa 2 has an indicative building height of 12 storeys for land in the vicinity of the subject was evidence that, if a view analysis were undertaken, the site could be developed to at least 12 storeys and comply with the requirements for the preservation of views. Kurilpa 2 acknowledges that, as the Kurilpa area continues to redevelop, the views to the CBD and the Range will be affected and, accordingly, Kurilpa 2 states that the intention is to maintain glimpsed views through the Kurilpa precinct. Thus it is clear that by the time Kurilpa 2 was published (in December 2007) the Council had abandoned the intention of preserving those views.

[78] Mr Panaretos said that in his opinion there was nothing arising out of the structure plan required by Acceptable Solution A2 that would result in a reduced height of a building on the subject site. In fact he thought it more likely to result in a higher building because there is generous public space at that point in Montague Road. Moreover, as long as the building was not going to offend the performance criteria then it should in fact be higher than its surroundings. Lower heights may be warranted on parts of key sites such as at the interface with established low rise residential areas, or to give richness or form on very large sites. However he did not accept that that reasoning would apply to the subject site in connection with its relationship with the river as there was nothing in the site context that suggested that. There was no requirement in the Local Plan or in the planning scheme generally for a lower rise interface with the Brisbane River.

[79] Mr McNaughton had chosen a code assessable design which generally exceeded the acceptable solutions but proposed an alternative solution to satisfy the performance criteria. He considered that to be a low risk course of action which he would recommend to a purchaser seeking to buy the site on an unconditional contract. While developers put pressure on their architects to seek maximum development potential, which he regarded as something greater than highest and best use, he believed that his design reflected the highest and best use. He did not consider that Mr O'Brien's design represented an appropriate attempt to identify the highest and best use of the site.

[80] Mr McNaughton said that there were clear precedents (listed in Mr Panaretos' report) in the Kurilpa area where the Council's urban renewal planners were encouraging developers to seek additional height. He acknowledged, however, that some of the applications referred to by Mr Panaretos were not made until after the date of resumption and some were not in Precinct 3.

[81] In accordance with the development principles at 2.5 that developments fronting the riverside park are to complement the existing parkland setting, and 2.8 that the river's edge will remain as a dominant feature of the Local Plan area, Mr McNaughton conceded that a 6 storey building next to the river's edge would, to a degree, be more likely to complement the parkland and feature the river's edge rather than a 10 or 12 storey building. In Mr McNaughton's opinion, the impact of a taller building behind the jacaranda trees would not be huge because there would probably be a glazed building façade on the building. In his view Kurilpa 2 confirmed that a 12 storey building would be an appropriate solution although he accepted that it was not an acceptable solution under the definition of that term in the city plan.

[82] Mr Buckley said that the effect of a code assessable application was that approval must be given if an application complies with the criteria in the code. In this particular case there was no GFA limit. He accepted that the height limit on the subject would have been 9 storeys had Kurilpa 1 gone to fruition. In his view, however, the WEWDLP Code was the statutory document at the time of resumption and it indicated that 10 storeys was the height limit and that document was the instrument with the greatest weight. A prudent purchaser could take the view that he was entitled to a development of 10 storeys.

[83] Mr Buckley said that the whole context of Kurilpa 1 was that it was an acknowledgment that the area was changing dramatically from large industry and other mixed uses to becoming an area similar to the CBD in terms of land uses and intensity of development. Although there was nothing in either the Local Plan or Kurilpa 1 indicating that a development of 12 storeys might be supported, Mr Buckley's opinion was that an increase from 10 to 12 storeys would certainly be within the realms of reasonable expectations. The addition of an extra 2 storeys would not affect the views referred to in Performance Criteria 1. Such a change would not have the effect of making the application impact assessable. The planning principles applicable to the subject site were different from those in neighbouring precincts where there were clear requirements for site links and controls on applicable GFA.

[84] Although Mr Buckley had agreed in the joint town planners report that the development parameters set out in Table 1 of that report were a comprehensive summary, he said that that height was conditioned by a range of other interpretations. It was not his understanding that there was an agreement between the planners that the maximum height was 10 storeys. Indeed, Mr O'Brien did not accept that a building of 10 storeys was appropriate.

[85] Mr Buckley thought that Greener's proposal sufficiently addressed the relationship required for the site in respect of the river. While a smaller building would not be as obvious as a larger one, the vegetation in front of the site and the mature trees would provide a screening effect which would limit the visual dominance of the building.

[86] Mr Lane said that he had a different opinion about the view lines across the river and from Coronation Drive from some others. The practicality of preserving the views in perpetuity was questionable. While he acknowledged that mass and bulk might be relevant, he queried their importance and how controllable that outcome would be over time with the other development proposals going on behind the subject. He also considered that the view to the building should be considered - it would be an important building and if it became a landmark building, a reference point for the City, it was equally important that it be clearly visible. The fact that the drafters of the code may not have envisaged a building of the type proposed by Mr Lane did not necessarily negate it as a solution.

[87] Mr Lane said that his idea that the building be a landmark or an icon arose from his understanding of the whole context of the area. He agreed there was nothing in the WEWDLP that referred to the principle that the site warranted a landmark building nor anything to indicate that a building on this site should be visible from the other side of the river, but he said, there was nothing to suggest that it should not. This was his interpretation from his professional experience as an architect and from discussions with the Council and others. On the advice of the town planner he had taken the view that both the draft Kurilpa Structure Plans would carry less weight because they had no legal basis.

[88] Mr Lane did not accept that his building dominated the park land but believed that it could be seen to complement and provide a backdrop of reflection of the park land. However Mr Lane respected Mr O'Brien's concerns about the relationship of a 10 storey building to the parkland. In an endeavour to meet those concerns, Mr Lane had prepared an alternative design, 1C, in which the building was stepped from 8 storeys to 12 storeys. Mr Lane said that if the Council wished to have the building envelope stepped away from the river, that issue could be resolved within the negotiation process and, in his opinion, such a negotiated position would not necessarily trigger an impact assessable application. In his view such an outcome should only be achieved if it had little or no effect on the GFA. The general agreement was that some flexibility existed within the planning instrument to allow greater heights towards Montague Road without triggering impact assessment although Mr Ovenden and Mr O'Brien had reservations about that. Although it was agreed that an increase in height would not trigger impact assessment there was no agreement that there should therefore be an increase in height. Mr Lane's advice was that he was entitled to put in a proposal above the 10 storey height limit and that the P1 test was one of the things to be taken into account. He said that a similar issue had arisen in relation to the new millennium Art Centre, the height of which was very similar to Mr O'Brien's scheme whereas his and Mr McNaughton's were higher.

[66]

[89] Mr O'Brien included in his report a number of photographs of the subject site as it exists and also with the design proposals of Mr O'Brien, Mr McNaughton and Mr Lane superimposed upon it. The photographs were taken from Coronation Drive, Victoria Bridge, Cordelia and Peel Streets. The photo points (that is the point from which the photos were taken) were selected because they were locations which were identified in the WEWDLP as points from which views should be maintained. As no specific points had been identified along Coronation Drive or from Victoria Bridge in the Local Plan, the photos were from a range of different points.

[90] The effect of this evidence can be summarised fairly briefly. Perhaps not surprisingly, the evidence demonstrated that Mr O'Brien's design of 6 storeys for the riverside buildings obscured less of the CBD buildings when viewed from the specified points on Coronation Drive as compared with the buildings of 10 and 12 storeys in the other proposals. When viewed from North Quay, there was less difference between the three schemes in the degree of interference with the views of the Taylor Ranges.

[91] Mr Hinson SC tendered a table of comparative heights and structures within the WEWDLP.[10] The table showed the heights of the LVO scheme, the Mio Art scheme and the Greener scheme at both the riverfront and Montague Road ends and the heights of trees in the riverside parkland in the vicinity of the subject site. The heights are RLs (restricted or relative levels). A condition of the Capulet approval restricted the height of buildings in that development to RL 26.6.

[92] Of the existing buildings it appears that the highest point is the chimney stack on the ACI glass factory site which has an RL of 49.49. The Jacarandas in the vicinity are at RL 23. The LVO proposal has the highest point of its riverfront building at RL 28.2. Mr McNaughton's proposal is RL 49.8. Mr O'Brien said subsequently that he could not contest Dr Smith's information that the height of the Mio Art scheme was 48.5 metres not 49.8. The eaves on the GOMA building are at a height of RL 28.3 which is approximately the same height as the riverfront section of the LVO proposal. By way of comparison, the Hanson concrete batch and plant buildings, (a large scale industrial development within the general vicinity of the subject site), are at RL 29.07 and RL 29.02. They are about 1.5 to 2 metres above the riverfront part of the LVO proposal but between 13 to 20 metres below Mr McNaughton's and Mr Lane's proposal.

[93] The photo montages imposing Mr O'Brien's proposed development into the existing scene showed, he said, how his scheme complied with the requirement that the riverside development was to be complementary to the riverside parkland. This had been achieved by stepping the building down to 6 storeys which also helped preserve the views of the CBD.

[94] Kurilpa 1 allows 16 storey buildings in Hope Street. Mr Horsburgh suggested that if those buildings were constructed, any views from Victoria Bridge to the subject site would be obscured and, therefore, that was no reason to limit the height of the subject to 9 storeys. Similarly, if a higher building were constructed on the site, he did not consider that it would obscure CBD views from Coronation Drive. Mr Ovenden's response in both cases was that the intention in Kurilpa 1 was fairly strong, namely that the Council wanted to keep a lower profile to retain views of the City from Coronation Drive and views of Mt Coot-tha from the Expressway.

[95] Mr Horsburgh submitted that the photo montages that Mr O'Brien had prepared showed the proposals in relation to the subject site within the context of the current development in the locality. What they failed to show was how the parties' proposals would look in the future when other sites in the area had been redeveloped. The effect was to over-emphasise the impact of the proposed developments according to Mr Horsburgh. Mr O'Brien said that his structure plan showed 10 storeys along Montague Road which currently did not exist. He acknowledged that those buildings had not been translated through to the photo montages. Nor had Mr O'Brien shown other development proposals in the vicinity of the subject. The proposals related to buildings which are set much further back from the river, he said, and the context of his drawings was to show a site relationship to the river and the riverside park, not something which was a couple of hundred metres behind.

[96] In Mr Lane's opinion, it was important to show the building in its future context, not just as surrounded by the low industrial buildings which were likely to be redeveloped over time. While the building he proposed might look largely out of context in the immediate future, it was clear that the intent of the various town planning documents was to increase scale and density in that part of the peninsula. On balance it was quite clear that the sites either side of the subject were under constant review and likely development pressure.

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[97] The WEWDLP Code provided, at the date of resumption, for a building height of 10 storeys for the subject land. The respondent submitted that Mr O'Brien's proposal for a development with a lower height limit of 6 storeys along the riverfront end of the subject site was an appropriate development for the site.

Performance Criterion P1 in the WEWDLP Code that the development maintain views to Mt Coot-tha and the Taylor Ranges when viewed from the Riverside Expressway and views of the CBD when viewed from the Riverside Expressway and views of the CBD when viewed from Coronation Drive;

the provision in Kurilpa 1 that says that an important determinant of maximum building height is the desire to retain glimpsed views of Mt Coot-tha and the ranges from Victoria Bridge. Analysis indicates that by limiting building heights along the river front to 9 storeys these views can be preserved. The maintenance of cityviews from Coronation Drive is also an important consideration;

the Council's requirements as demonstrated in the Capulet development approval process and the ultimate outcome in that case of an approval of 3 x 6 storey buildings and one 7 storeys;

the evidence from the photographs, together with the parties' design proposals superimposed on them, of the effect of those proposals on the specified views;

the evidence of the comparative heights of the design proposals and the trees in the river parkland and other buildings in the vicinity.

[98] Both Mr Panaretos and Mr Buckley gave evidence that the purchaser of the subject would be entitled to obtain approval for a 10 storey development on the site. Mr Ovenden acknowledged that a building height of 10 storeys was an acceptable solution but because Kurilpa 1 which proposed 9 storeys, was in circulation as at the date of resumption, Mr Ovenden said that it was unlikely that a development above 10 storeys would be approved.

[99] I do not consider that the prudent purchaser would consider that the Capulet process and approval could be used to limit the height of the development to 6 storeys along the river front. Capulet was assessed under a different planning regime from that in place as at the date of resumption. The subject site was then in the Western Riverside Precinct within the South Brisbane Local Plan. The relevant Local Plan Code provision specified a maximum building height of 12 metres (approximately 3 to 4 storeys) above ground level with the associated performance criteria seeking to protect views and vistas. No plot ratio was prescribed. Even within that regime, buildings of 6 storeys were approved in Capulet for the riverside frontage of the subject site.

[100] The WEWDLP, introduced after the consent order, provided that the Acceptable Solution for the preservation of the requisite views was that the building height not exceed 10 storeys. This was a significant change. Further, the evidence showed that the Kurilpa area was, at the date of resumption, recognized as an urban renewal area. Consistently with the town planning evidence, I consider therefore that the prudent purchaser could reasonably anticipate a different response from the Council in relation to height issues from that which prevailed during the Capulet process, because of the increased height allowed in the Acceptable Solution.

[101] There are other relevant considerations. One of those is the provision in Kurilpa 1 that riverside development in the subject's vicinity would be limited to 9 storeys. The evidence as to the applicability of that draft Plan was that it was not a binding instrument although it did reflect Council's thinking at the relevant time. Thus the prudent purchaser may anticipate that Council would require that the development along the riverside be stepped down to address any concerns about height in the riverside area.

[102] Allied with Kurilpa 1 were the respondent's photographs, photo montages and comparative height table - evidence which showed the potential impact of the parties' proposed developments on the viewlines and riverside parkland. In my opinion this evidence established no more than that the smaller development proposed by Mr O'Brien would have less impact on the views and parkland than the larger developments of the other parties. I consider that Mr Horsburgh's point was well made that the impact of the proposed development should not be considered simply against the existing neighbourhood, but it should be remembered that Kurilpa is an urban renewal area where approvals for higher and more intensive developments, particularly in the core area, had been granted and were likely to continue to be granted.

[103] The weight of the town planning evidence was that the provisions of the WEWDLP Code entitled a developer to approval for a development of 10 storeys. Kurilpa 1 and the photographic and other evidence must be weighed against that provision. In my opinion, since the Code allowed a development of 10 storeys the prudent purchaser was entitled to expect a development of that height on the subject site. There may be issues with the preservation of the viewlines if this proposal were pursued. If the preservation of views and the relationship of the development to the parkland remained a concern of Council during negotiations, an alternative scheme modelled on Mr Lane's design 1C could reasonably be expected to result - that is, that the building be stepped down to say 8/9 storeys at the riverside frontage, moving up to 11/12 storeys at the Montague Road end of the site. Such a response would also contribute to the creation of a boulevard along Montague Road as explained by Mr Panaretos. While the Code provides that the acceptable solution is 10 storeys, I have accepted the evidence of Mr Buckley and Mr Panaretos that a height increase would not attract impact assessment to the application. In my opinion, the matter is one for negotiation but the ultimate outcome would be that the prudent purchaser would be entitled to expect that a development with an overall average height of 10 storeys would be approved. Such a development may in fact be 8 or 9 storeys along the riverside parkland, stepped up to 11 or 12 storeys at the Montague Road end of the site.

[104] I do not consider that the prudent purchaser would consider it to be likely that Council would approve a development of 12 storeys, as proposed by Mio Art or one with 10 storeys along the riverfront and 12 storeys along Montague Road as proposed by Greener. My conclusions on this point are in part dictated by my conclusions concerning the bulk, scale and density of development, discussed below. However, with respect to the riverside development, the experience of the Capulet approval indicates that the Council was concerned about the height of any development along the riverside. That experience plus the provision in Kurilpa 1 pointing to a 9 storey limit do not provide any encouragement to the prudent purchaser that a height of more than 10 storeys would be approved, other than as part of a negotiation to lower the height of the development along the parkland.

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[108] As set out above, Mr O'Brien's development concept showed four separate buildings, with a maximum of 10 storeys scaling down to 6 storeys towards the river. His design incorporates an open space between the buildings from Montague Road to the riverside parkland of 12 metres, 16 to 12 metres between the buildings at the other end of the site and 18 to 20 metres at the Montague Road frontage. This forecourt is open to the sky. There is also a plaza (12 x 14 metres) at the intersection of Boundary, Lanfear and Merivale Streets and a 9 metre plus space between the heritage building and the closest building on the subject land. There are setbacks to the riverside drive of 6 metres increasing to 12 metres at one corner, 3 metres to all other streets at ground level, zero for levels 3 and 4 and 3 metres for levels 5 to 10.

[109] At Level 2 of his design, buildings 3 and 4 are connected to accommodate those tenants who would require a larger foot plate. At Levels 7, 8, 9 and 10, the development goes from 6 storeys to 10 storeys across two of the buildings, that is approximately the back third of the site. Mr O'Brien agreed that the design could be altered to perhaps increase the floor space but, he said, that would not be a process that would be undertaken at this stage. Rather the developer would need the site under his control before starting to push the envelope a little.

[110] Mr O'Brien said that there was no definition in the Local Plan specifying the size of spaces between buildings. What would be suitable, he said, would depend upon the context and the development of the structure plan. The Local Plan referred to the need for plazas and open spaces within the site and he considered that these would be useful for people as a quick and convenient recreational space. The Local Plan did not refer to central atrium spaces but he did not consider that any internal atrium space could be substituted for an active plaza space. He agreed that his development could be described as an office park development.

[111] Mr O'Brien said that he had taken into account the requirements of the West End Local Plan relating to opening up views to the river, open space plazas, pedestrian access to the river, the relationship of the buildings to the riverside parkland and the fact that the riverside parkland and the river edge are to dominate the built form. In addition, the centre design code required a 3 metre setback at ground floor level and the local area plan required the heritage property next door to be shown off. Taking all those matters into consideration, he considered that his plan represented the highest and best use of the subject site.

[112] Mr Horsburgh pointed out that the floor plate of the four buildings from levels 1 to 6 approximates 50% of the site cover and the floor plate size from levels 6 to 10 is approximately 25% of the site cover. Mr O'Brien said that was purely coincidental and not something that he had realized until pointed out by Mr Horsburgh. Similarly the fact that the bulk represented 40% of the site was also a coincidence. By contrast, Mr Horsburgh pointed out that in the after-design, the gross building area represents almost 60% of the site area. Mr O'Brien reiterated that that was complete coincidence as he had not considered the figures previously and it was not an objective of his design. I have accepted Mr O'Brien's evidence on these issues.

[113] Mr Ovenden considered that the LVO building design proposed on behalf of the respondent Council created an appropriate planning outcome by achieving visible and physical permeability through the site to the greatest extent possible, with an open space corridor through the site. Importantly, the proposal respected the riverside parkland, unlike Mr Panaretos' assessment which seemed to make no mention of the riverside setting and focussed on Montague Road and the boulevarding along Montague Road. Mr Ovenden rejected the suggestion that the location of the driveways and service areas between the building and the riverside parks on the LVO plan was contrary to the intention of Kurilpa 1 to provide pedestrian access to the parklands. In Mr Ovenden's opinion the LVO plans provided a reasonable balance between achieving a lower profile of development towards the river, complementing the riverside parkland setting and achieving an intensity of development at 10 storeys towards the rear of the site, a balance which he was confident the Council would support based on the range of planning documents available and the historical context of the site.

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[116] Mr McNaughton's ground floor plan shows three buildings with a centre courtyard and concourses either side of that courtyard leading to the riverfront and Montague Road. The central courtyard is 40 m x 30 m with concourses varying in width between 10 metres at the river frontage and 9 metres at the Montague Road end to 7 metres. The courtyard and concourses are open for 2 storeys and thereafter the concourses are bridged between levels 3 to 12. Although the building footprints in Mr McNaughton's design resembled those of the Capulet concept at Levels 1 and 2, the connection from Levels 3 to 12 of all of his buildings is not a feature of the Capulet design. There are setbacks of 6 metres to Riverside Drive, 3 metres at the ground floor level on the other street frontages, nil at levels 2, 3 and 4 and 3 metres at levels 5 to 12.

[117] Mr McNaughton confirmed that his design proposed a site which is open at all hours between buildings 1A, 3A and 2B and 3B. That concourse runs through into the central courtyard and the central courtyard is an area of Lanfear Street that is open 24/7. The concourse averages 9 metres wide. There is also a pedestrian flow path between 1B and 1A which is open during office hours.

[118] Mr McNaughton identified eight key elements which he saw as representing the major differences between himself and LVO and which led to the cumulative difference in the plot ratio and gross floor area of the different designs. The eight elements, listed in approximate order of reducing importance, are -

Building height adjoining river park

Overall building height

Variations in width of spaces between buildings

Variations in building setback dimensions from alignments

Three metre wide road resumption in Bouquet Street

Setback to the Foggitt and Jones heritage building

Reduction in LVO's building 4 ground floor area due to above ground truck service area

Significant insets to the façades of the LVO buildings 2 and 3-4.[11]

[119] Item 1 is the building height adjoining the river park - Mr McNaughton had calculated that the effect of Item 1 was in the order of 10,000 m² difference between the two proposals. Item 2, overall building height, caused a difference of 11,000 m². The third item, variations in width of spaces between buildings, resulted in nearly 10,000 m² difference. That is about 30,000 m² in total, and the difference between his and Mr O'Brien's scheme was approximately 32,000 to 33,000 m².

[120] There was no real difference between the architects as to the setbacks on the various boundaries although Mr McNaughton made the point that he had adopted an average 3½ metre setback and Mr O'Brien had adopted 4½ metres which had an effect on the available square metrage in the building when that amount was factored into each floor of the building space. Pedestrian concourse setback from street boundaries and footpath awnings were agreed upon by the architects.

[121] Although the WEWDLP required public access to the riverside to be addressed, Mr McNaughton said that the Local Plan West End Riverside Structure Plan showed two pedestrian links through Precinct 3 but no pedestrian access ways through or adjacent to the site. Further, access to the river was available along Boundary and Merivale Streets which combine and run to the river as does Bouquet Street. Nevertheless he agreed with Mr O'Brien that a pedestrian connection through the subject was a desirable outcome. Mr McNaughton had shown this with the pedestrian concourse, the entry foyer to Building 1 and a 24/7 connection between the Foggitt and Jones heritage building and Building 1 on his plan. While the Local Plan nominated a 6 metre wide link open to the sky through the ACI factory site, it did not say anything in relation to the subject site so that he could not see any statutory requirement to keep the concourse area open to the sky.

[122] Mr McNaughton was cross-examined at some length by Mr Hinson SC as to Mr McNaughton's criticism of Mr O'Brien's design proposal. Although Mr McNaughton was highly critical of Mr O'Brien, it appears that his criticism was not driven by any personal animosity, but was based on his strongly held view that Mr O'Brien's design did not reflect the highest and best use of the site. In the circumstances, I have accepted that Mr McNaughton's evidence concerning the issues in this case was given honestly and with the objectivity appropriate to an expert witness.

[123] Mr Ovenden did not consider that the plans drawn by Mr McNaughton met with the Kurilpa 1 intent in terms of its requirement of visual and physical permeability through the site. There were no views of the river maintained through the Mio Art proposal. Mr Ovenden did not consider that the access to the river provided by the public roads adjacent to the subject and the proposals on the riverside structure plan to provide pedestrian links through other sites would be sufficient to meet Council's intent of providing pedestrian access to the river. The permeability of the development site was an issue with the Capulet development approval and he did not consider that the Council would allow a site the size of the subject to be developed without promoting a link to the riverside.

[124] Mr Panaretos considered that the McNaughton plan provided a connection through the site in terms of an ability to walk from Montague Road to the riverside. He also thought that there would be a visual corridor through at a pedestrian level although he was not sure of heights, ground contours and so on. He agreed that it would be necessary to stand at the doorway or directly across the road from the doorway in order to see through to the riverside. There was a much greater ability with Mr O'Brien's design to see from Montague Road through to the riverside. However, he considered that Mr O'Brien's 17 metre separation between the riverside buildings was excessively wide.

[125] Mr Panaretos also said that it was not necessary to provide for space through the site because it was adjacent to Bouquet Street and Boundary Street, both of which provide access points to the river. The site is a narrow wedge, with a 36 metre frontage to Montague Road, or one-third the width of a CBD block, and about 90 metres wide at its widest. If another access were created through the site, the disadvantage would be that the developer would seek to create an oasis internal to the site, investing money in high quality finishes in an internal arcade or walkways, with shopfronts etc. This would generate activity at the expense of the public spaces on the outside of the building.

[126] Mr Panaretos accepted that the LVO design created clear visual and physical corridors through the buildings on the subject site so that the river could be seen from Montague Road. However, he considered that it did not have a great connection at the Montague Road/Boundary Street corner or relate well to the Montague Road boulevard. There was a tension between permeability and the continuous frontage façade on Montague Road and there would need to be a balance between the two.

[127] Mr Panaretos also expressed some doubts about the Thomson Adsett design as it addressed Montague Road because it has a setback of 9 metres at ground level which would create gaps in the building up of the boulevard discussed previously by him.

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[128] Mr Lane proposed a single building with an atrium 5.5 metres wide extending through the height of the building. Mr Lane acknowledged that visual permeability of the site and accessibility to and from the site was desirable. This was achieved in his design with the treatment of the ground floor plane with the building set back at 9 metres, with a 6 metre setback commencing at first-floor level and then tapering to a 3 metre setback overall at the upper level. The setback at ground level provided ample opportunity, Mr Lane said, for visual linkages between Montague Road and the river and across the site between Bouquet Street and Lanfear Street.

[129] At ground floor level there are 6 separate office buildings with significant open space between each, which, Mr Lane said, envisaged pedestrian participation in the ground floor plaza drawing interest into the lobby's volumetric atrium space. The spaces between office buildings on the ground floor level would be closed outside business hours.

[130] Mr Lane's design envisaged access to the river via Bouquet or Lanfear Streets. Part of the reason he had sought to open up the ground floor was to encourage people to come to the building and enjoy the ambience in and around the building. Mr Lane said that the public would be encouraged to do that as much as possible. He considered that he had complied with the intent of the precinct that referred to ground level buildings providing a public right of access to the river.

[131] Mr Lane said that there was no reference in the WEWDLP to a requirement that there be a pedestrian access corridor through the subject site. By contrast, the WEWDLP talked about access to the river through both the ACI and the Parmalat Multiplex sites. He had a personal and professional view that activation of ground floor planes of large buildings should occur at the perimeter to engender a sense of social interaction. To this end he set the building back at the ground plane some 9 metres. The code only required a setback of 3 metres but he was aware of the volume of people who would be ultimately occupying the building and also of the potential for the building to engender pedestrian traffic flow on either side.

[132] Mr Lane said that the "open to the sky" link was a requirement in another part of the WEWDLP and did not refer to the subject site. Because his building was stepped back from the surrounding streets by 9 metres at the ground plane and canted out, it provided protection, shade and an enveloping sense as well as visual interest and substantial openness to the sky. Mr Lane considered that his design had far more openness to the sky than the other schemes because it added on to the existing public thoroughfares on the perimeter of the buildings.

[133] While Mr Lane acknowledged that his proposed building was large, that was not necessarily bad. There were some minutiae in the town planning documents that might constrain the development of the site, but his opinion was that because the Council and the Government wanted to regenerate the area, his firm was bound to develop a building which had a significant status and difference, that would be a leadership project. The building was designed on environmentally sustainable design principles. He took the view that a reasonable person owning this block of land would have an expectation that a building of that quality could be achieved on the site.

[134] Mr Lane said that with a large building such as this, the façade should be treated to provide a sense of scale relief. He had sought to articulate the façade in two ways -

he canted it outwards to provide a degree of interest and unusual nature to the building. He found the building less confronting than the other designs in Mr O'Brien's montages, because of the angular nature of the façade and the way it addressed the ground floor plane.

he deliberately sought to fragment the façade to reduce heat load demand on the building. In this environment the river and the Jacarandas would be reflected in the glass which would generate quite a lot of interest, as opposed to a flat façade. The character of the building would change with the weather and would reflect activity occurring during the day.

the spider's web approach to the façade utilised different triangular forms and tinted/acoustic double-glazing to break down the overall scale. The effect was to give a shimmering or fragmenting appearance which gave an illusion of the apparent scale of the façade.

[135] Mr Lane said that the relatively large floor plate size with generous open plan office space in his design presented an ideal opportunity for the developer to present to market a wide range of options in respect to tenancy fitout sizes. This would address the growing problem in Brisbane where larger corporate clients were finding difficulty in finding appropriate rental space on one floor that would meet their needs.

[136] In general, Mr Lane proposed a number of alternative schemes which might be regarded as iterations of the fundamental core scheme and he had satisfied himself that on balance, he would end up with a gross floor area varying somewhere between 65,000 and 75,000 m². Even if some of the issues that Council might raise were taken into account he was still able to maintain that GFA.

[137] In Mr Lane's view the other architects had designed a type of office park development - multiple buildings intended to create an environment in which those who work in the buildings could enjoy additional benefits. He said that because of the broader context of this site and the reality that, for the short term at least, the site would be affected by the relatively heavy industrial uses on either side of it, a more insular inward looking building would be appropriate. His design proposed a single building intended to be a self contained office community. His building promoted internal interaction on the site because there would be greater propensity for people to interact meaningfully in a single building, visibly connected, rather than in a series of discrete buildings separated by some form of courtyard. The design would provide a more protective environment whereby the building's external façade presented as a protective envelope to the office spaces contained within the site.

[138] In Mr Lane's opinion, Mr O'Brien's and Mr McNaughton's schemes produced a yield which was a direct response to the fundamental decision to have multiple buildings on the site and the consequent need to step the buildings away from each other and provide space around individual buildings. The advantage of one building was that Mr Lane could manage the space more efficiently. In part the GFA yield was a result of that fundamental conceptual difference. Mr Lane agreed that the question of separation had consequences in terms of mass and bulk but there was room for differences of opinion about whether buildings are massive, bulky or other. He considered that the LVO scheme was less than the highest and best use of the site and that the Mio Art proposal was probably closer to the mark. He had discussed his proposed design with the town planner Mr Buckley, who had advised him that the design was code assessable.

[139] Mr Buckley said that the references in the Local Plan to movement and permeability were general provisions only and neither the specific provisions of the Plan nor the general ones said that every site must have a mid-block connection. In Mr Buckley's view the context of the site should be taken into account. Because the subject site was adjacent to Bouquet Street there was an existing permeable connection between Montague Road and Riverside Drive which could be used by both pedestrians and vehicles. Coming from the west, the easiest way to the river was down Bouquet Street or to follow the natural flow of the building which cants away along Boundary Street and then cross over Lanfear Street between the Foggitt and Jones building and the designated office there. There would be 9 metres available on the site under the building on either side and additionally 10 metres on the road kerb in both Boundary and Bouquet Streets. He thought there would be debate as to whether the corridor needed to be open to the sky. In his view the Council would accept Mr Lane's plan because Bouquet Street provided an alternative. Mr Buckley accepted that if the Council required physical and visual corridors to create permeability through the site, that would have an effect on the GFA of the site.

[140] Mr Buckley said that the construction of the Kurilpa Bridge would change the dynamics of the area in which the subject land is situated by providing easy pedestrian access to the Law Courts, Roma Street station etc. He was aware from his experience that office developments in the Southbank area had larger footplates than have been permitted in the Central Business District where the Council requires that the tower blocks be quite slender. The result is that the buildings on the south side of the river are lower but wider which suits large tenants who wish to accommodate all of their employees on one or perhaps two floors.

[141] Mr Buckley said that the physical limits around the development of the site were very few in number. Because the Local Plan prescribed height only and not GFA, there was a less interventionist approach than in relation to other precincts in the general area. The lack of GFA, bulk and size limits in Precinct 3, where the subject is situated, was to be contrasted with the more prescriptive requirements in the adjoining precinct, Precinct 5. In his view the lack of controls in Precinct 3 was quite significant, particularly the fact that there was no floor space control as this indicated that the planning authority was allowing the market to be stimulated or encouraged by not trying to restrict those sites. In his opinion a prudent purchaser would reasonably expect an outcome consistent with the Thomson Adsett or McNaughton plans (and also the Brisbane City Council plans).

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[142] There is no designated GFA or plot ratio applicable to the subject site in the planning instruments. Table 1 of the Centre Design Code provides that where no Local Plan or centre concept plan specifies the maximum growth floor area in a special purpose centre the maximum GFA is not to exceed .35 times the site area. It was generally agreed that this was unrealistically low for the subject site but that Council could use the requirement to retain control over the approval process and that a proposal for a higher GFA would need to be justified.

[143] Kurilpa 1 provided that development capacity was calculated on the following provisions:

Building heights up to 9 storeys adjacent to the river and up to 16 storeys within the core of the study area.

The estimated development capacity of the Kurilpa area is 224,000 m² (approximately) of non-residential floor space by 2026.

[144] The respondent proposed a GFA of 34,175 m² and a plot ratio of 3.87:1. Mio Art proposed a GFA of 66,579 m² and a plot ratio of 7.54:1. Greener proposed a GFA of 71,750 m² and a plot ratio of 8.13:1.

[145] Mr Ovenden said that the WEWDLP reflected a conscious decision by Council not to extend the CBD into the South Brisbane area. The CBD has a Multi Purpose Centre designation which provides the planning framework for the hierarchy of retail based centres in the City. The subject land area is designated Special Purpose Centre 13 (SP 13) - Office Park and the City Plan stipulates that Special Purpose Centres are not to take on the role of a Multi Purpose Centre unless this is specifically provided for in a Local Plan. In Mr Ovenden's opinion, the WEWDLP, particularly where the subject is located, did not seek to take on the role of the CBD with its associated high intensity development.

[146] Mr Ovenden's opinion was that the intention of Kurilpa 1 was that transit oriented development principles would consolidate the core area of activity around the bus station, the train station and Southbank. Consistently with that intention the Council had, in recent years, approved a number of relatively intense commercial developments, generally in the wedge around Boundary and Melbourne Streets with the focus on the South Brisbane railway station, closer to the core area than the subject. That would then transition out in intensity of development to West End and the river. That intention should be taken into account in informing the form, intensity and consequently the gross floor area of any development on the subject land.

[147] Mr Ovenden had examined the plot ratios in relation to eleven recently approved/proposed South Brisbane developments ranging in size from 698 m² to 15,813 m² and, inversely, where the plot ratios ranged from 8.5 to 4.39 and included a table setting out this information in his report -

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[148] Mr Ovenden's opinion was that this table demonstrated a pattern of plot ratio which, in general terms, decreased as allotment size increased. He had formed the view that it was unrealistic to achieve a plot ratio in excess of 7, as proposed by Greener Investments and Mio Art, on an allotment size of 8,825 m² (the subject site) in this part of the City. Such a plot ratio created a bulky built form which was an overdevelopment of the site.

[149] Further, each of the claimants' proposals contemplated a development which would constitute a third of the development capacity intended for the whole area and, in Mr Ovenden's opinion, this also was completely contrary to the Plan.

[150] Mr Horsburgh suggested to Mr Ovenden that the developers of the Ausenco site had increased their proposed development from 5 to 8 storeys and he asked whether that sort of permission was common in a shifting aggressive town planning environment. Mr Ovenden thought that Kurilpa 1 would have encouraged the developer to go higher on that site. He considered that the Ausenco plot ratio of 4.11 to be appropriate for that site because the development fitted into the adjoining development within the street. However, he said, each development needed to be considered within its context. It was not possible to apply the ratio achieved in Ausenco directly to the subject site because of the difference in size of the two sites. Ausenco is 3,557 m² compared to the subject which is approximately 8,825 m².

[151] Mr Horsburgh also referred Mr Ovenden to a town planning report that he (Mr Ovenden) had prepared in respect of the Parmalat site at 94 Montague Road. This site was resumed by the Council and the development did not go ahead. Mr Ovenden had suggested, in conceptual terms, that a GFA of 11,090 m² (plot ratio 6.93) could be achieved. Mr Ovenden said that he had given the advice before the issue of Kurilpa 1. The site was 1,600 m² which was not comparable with the subject site of 8,800 m² or the Parmalat Multiplex site of 1.6 ha. The proposed development was a 10 storey building. He considered that such a development would be consistent with other developments nearby, in particular 35 Boundary Street where the plot ratio was 5.

[152] Mr Horsburgh suggested to Mr Ovenden that, rather than taking a broad view of what was occurring in Brisbane, Mr Ovenden had concentrated on the subject site to the point of having a structure plan on it and pedestrian access through it, even though the broader scheme showed much larger sites without those access routes and, accordingly, that Mr Ovenden had become blind to the larger principles. Mr Ovenden rejected that analysis again repeating his view that commercial office development was to be concentrated in the area in close proximity to the rail and bus stations and along the major roads in the hierarchy.

[153] Mr O'Brien's opinion was that although Kurilpa 1 did not discuss plot ratios, the language suggested an intention for buildings of relatively small scale with active pedestrian plazas and spaces, buildings up to 9 storeys high and with a 10 metre setback to the river frontage. He had applied that language to the subject site and had inferred that it would be necessary to provide large open spaces on the subject site. In Kurilpa 1 the subject land is intended to be occupied by the bridge and the balance is shown as an investigation area for public parkland and or community use. Mr O'Brien assumed that, ignoring the resumption, the Council would apply the same constraints and opportunities to the subject land as it had applied to the Parmalat riverside site.

[154] Mr O'Brien did not consider that a large site such as the subject would obtain a higher plot ratio than his development. It was possible that a smaller plot might obtain a reasonably high plot ratio but he did not believe that it would be the equivalent of what would be in the core area of Kurilpa nor in the CBD. Mr O'Brien agreed that the sites at 43 Peel Street, 6 Cordelia Street and 35 Boundary Street together probably had an average plot ratio of 7.5, but he did not believe that they were comparable sites with the subject because of their size and location. They were not between Montague Road and the riverside and were not, therefore, subject to the issues of complementing the river setting and parkland and the other ideas, including unlocking the river, expressed in Kurilpa 1.

[155] In Mr Panaretos' opinion, there was a minimalist intervention approach in the Local Plan code applicable to the site and therefore a range of design possibilities was available. The concept plans drafted by Mr McNaughton for the before site demonstrated a suitable design solution at the upper end of possibilities for site development yield, which addressed code requirements and thus had very reasonable prospects of approval.

[156] Mr Panaretos regarded Mr Ovenden's table setting out the relationship between the size of the site and the plot ratios as circumstantial or at least superficial. He did not consider that the reference in Kurilpa 1 to an estimated development capacity for the area of 224,000 m² of non-residential floor space was a normative prescription. He acknowledged that this may have been a matter that came up in discussions with Council but it was not something that he would raise with a client in relationship to an individual application. He believed that the general intent of development applications in the Kurilpa area indicated that the draft Kurilpa Structure Plan was being used to intensify development in the area. He did not accept that Mio Art's proposal to put the same GFA on the subject as Multiplex were proposing on a block twice the size was over-development of the subject site. Performance criteria 2 and 3 indicated to Mr Panaretos that there was an encouragement to bulk and scale for those sites which fronted Montague Road.

[157] Mr Buckley rejected the suggestion that the Greener proposal represented an overdevelopment of the subject site. He said that the development threshold or limits were set by the Plan and in this case the Plan imposed GFA limits in some precincts and not in others. Because there were no GFA limits and no restrictions on bulk etc (compared with the neighbouring precincts), Mr Buckley regarded the planning authority as having made a conscious decision, probably because this was an urban renewal area where there was a change from an old land use to new, to encourage the market to look at different outcomes. While a developer must look at the issues talked about in A2, there was no prescription as to the number of buildings etc and there were a myriad possible designs that could relate to the neighbourhood quite appropriately.

[158] Although Kurilpa 1 referred to a development capacity for the Kurilpa area of 224,000 m² of non-residential floor space by 2026, Mr Buckley did not consider that that would be enforced strictly because, in his experience, town planning simply did not work that way. Therefore, although the Greener plan contemplated a building of some 71,000 m², he did not think that the designated development capacity would be a bar to the construction of a building of that size. Mr Buckley conceded under cross-examination that he had assumed in his report that the Thomson Adsett plan showed a building of 10 storeys whereas part of the building is 12 storeys. However he said that the outcome would still be the same for the reasons he had given earlier.

[159] Mr Lane assessed the maximum GFA for the subject by the following process. If he took a height of 10 storeys and a 100% site cover, the maximum achievable was 88,000 m² - he accepted that that was not realistic. However he considered that a 10 storey limit with the setback parameters would come in at somewhere between 70,000 and 88,000 m². It was not a fixed target. He had personal experience, as the owner of two blocks of land in the area, that Council was wanting greater density in the area and that they were under pressure from the State Government to provide greater density notwithstanding the WEWDLP or other documents. His decision on the GFA was influenced by that information - the GFAs were not precise in the documents. Further his town planners had advised him that what he proposed was reasonable.

[160] Mr Lane said that his experience with the Council was that if an environmentally sustainable building is presented, the Council was prepared to negotiate and grant concessions in terms of GFA and so on. He was not aware of any landmark buildings in the area that have gone over 10 storeys. Mr Lane's desire to have an environmentally sustainable development was not only consistent with Council's interest at the time but also the briefing client.

[161] In his opinion a developer who purchased the site would not accept any proposal from an architect which represented a significant underdevelopment of the site. Further, while planning documents were the formal frameworks for approval, they are not the sole basis upon which the decision is made and frequently there are formal and informal discussions with senior people and politicians. Nevertheless, an architect has an overlay of a duty of care to ensure that the building is successful in its environment and that it provides for what is intended in the spirit of the documents.

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[162] Mr Lane said, more than once, that the subject land was an important site in the Kurilpa area, and that it provided the opportunity to design a building of significant status and difference, a leadership project, an important building. In his report he said that "our clients considered themselves to be 'visionary' and that they were keen to explain the benefits of such design principles."

[163] Mr Hinson SC asked Mr Lane whether it would be correct to say that Mr Horsburgh was a visionary client who was prepared to be bold and innovative and that Mr Lane's scheme was designed accordingly, in the hope that Mr Horsburgh, as the vendor of the site, could persuade a purchaser to share the vision. Mr Lane said that that was not entirely correct because even before he had a briefing with his client he had done a lot of analysis from first principles looking at what he believed the site deserved irrespective of the identity of the client. The fact that he saw this as an opportunity to establish a landmark building in the area did not mean that had he chosen a more conventional design, he would have come up with a GFA that was dissimilar.

[164] Mr Lane acknowledged that he was required to look at what a reasonable person might consider to be the highest and best use of the site. However, he said in his report that an owner/developer who purchased the site would be seeking to achieve near maximum development potential within the regulatory framework. He saw a difference between a hypothetical client and an owner/developer where there was an existing embedded interest in the project - they might have different wants or needs. In his view it was up the courts to determine what weighting if any to put on that difference. He said that he was trying to take a view on what the implication might be on both sides because he was aware that there was already an owner of this property and that his client had an interest in that. Equally he said, he had advised his client on a number of occasions that he would not support some suggestions because he believed that they would be beyond what was reasonable.

[165] Mr Lane has proposed a single building with a GFA of 71,750 m² and a plot ratio of 8.13:1. That is to be contrasted with the designs proposed by Mr O'Brien and Mr McNaughton. No structural plan was prepared. Mr Lane appears to have relied on his knowledge of the area derived from the earlier urban planning work he had undertaken. While Mr Lane had been advised by Mr Buckley that his proposal was code assessable, Mr Buckley gave very little weight to the references in the planning instruments to active plaza spaces, public access to the river, building bulk, scale and space between buildings in A2 and, it seems, to the references in Kurilpa 1 to mid-block connections and permeability. Mr Buckley also seems to have given no weight to the fact that the requirement in the Centre Design Code of a plot ratio of ·35 could be used to control the density of development. The building does not respond to the definition in City Plan of SP13, Office Park, which denotes a use of premises for office development that promotes integration with surrounding office, special purpose and residential activities. The centre design code, P7 also refers to promoting integration with the surrounding area and the rest of the centre. Rather, Mr Lane appears to have sought to internalise the community so that it was self-contained with minimal interaction with the outside world. The building does not respond to the references in the planning instruments to issues of bulk and scale and space between buildings, on sites more than 1,500 m². While there is public access to the river around the perimeter of the building and along the adjoining roads there is no public access through the site outside office hours. In my opinion, the building represents an over-development of the site and the prudent purchaser could not reasonably expect that the development would be approved.

[166] Mr Lane's design was clearly influenced by his opinion that the subject site presented the opportunity to develop an iconic building in the Kurilpa area. That in itself is not something for which Mr Lane should be criticised. However Mr Lane also said that his clients were visionary and keen to explore the benefits of such design principles and that an owner/developer who purchased the site would be seeking to achieve the maximum development potential on the site. While I accept that Mr Lane did not adopt his client's brief uncritically, I have formed the view that Mr Lane's design does not seek to reflect the highest and best use that a prudent purchaser might expect. Mr Lane appears to have been influenced by the fact that his client had a substantial financial interest in the outcome and Mr Lane has not drawn any clear distinction between the goals of his client and those of a prudent purchaser. The result is that I consider that that Mr Lane's proposal reflects a design for an owner who wished to develop the site to its greatest extent rather than being a design which reflects the highest and best use that a prudent purchaser could reasonably expect to achieve.

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[167] I have come to the conclusion that the reasonable purchaser would expect Council to require that a development on the subject site provide physical and visual permeability through the site because of the provisions in the planning instruments, the weight of the evidence, the history of the Capulet approval, and the bulk and scale of the proposed development.

[168] The planning instruments provide that development is to enhance the riverside parks, improve access to the river and provide a public right of access to the river. A structure plan is to be provided for sites over 1,500 m² which gives an indication of building bulk, scale and space between buildings and public access to the riverside. Kurilpa 1 provides that mid-block connections will improve permeability of the area for pedestrians and development of the riverside area needs to provide good permeability to allow a high level of physical and visible connection to the river. While Kurilpa 1 was not a binding instrument, I have indicated previously that I consider that the prudent purchaser would be aware of its content as at the date of resumption and take it into account as a reflection of Council's attitude to the matters covered by it.

[169] Both Mr O'Brien's and Mr McNaughton's designs showed a footprint of 3 buildings at ground level on the subject site. Mr Lane showed one building. Mr Ovenden considered that pedestrian access through the site was necessary pointing out that permeability of the site was an issue with the Capulet approval. He therefore did not consider that it would be sufficient to rely on the existing road structure to satisfy Council's requirements for the provisions of public access to the river. Mr McNaughton and Mr Panaretos said that it was not necessary to maintain public access through the site because the adjacent roads provided access and, Mr McNaughton said, there was no access shown on the Local Plan West End Riverside Structure Plan. However Mr McNaughton considered that pedestrian access through the site was a desirable outcome.

[170] As well as the evidence of Mr O'Brien, Mr Ovenden and Mr McNaughton that pedestrian access through the site was at least desirable, there is the evidence of the Capulet approval. It is clear from both the information request issued during the approval process and the final consent order that maintenance of access through the site was required. Further, the bulk and scale of the development as originally proposed was not accepted for reasons which included the obstruction of views through to the river and the requirement to provide pedestrian access. There was nothing in the evidence to indicate that Council would adopt a different attitude to the provision of visual and physical access through the site and the bulk and scale of the development.

[171] In my opinion, the weight of the evidence is such that a prudent purchaser would consider that it is likely that Council would require visual and physical access through the site.

[172] There remain the questions of whether such access should be open to the sky and whether Mr O'Brien had been over-generous in the provision of space between the buildings. Mr McNaughton's plan shows his buildings connected between levels 3 and 12 other than above the courtyard. Mr O'Brien's design shows two buildings connected from level 2. The size of the subject land, its location along the riverside park, the bulk and scale of the proposed development and potential plot ratio are all relevant to a discussion of these issues. My decision that the prudent purchaser could reasonably expect approval for a development with an average height of 10 storeys is also relevant because a development of that height will increase the bulk, scale and density of the development. Although the site is in a recognized urban renewal area where increasing density of development might be expected and the height indicated by the WEWDLP for the subject site has increased since the Capulet approval, the location of the subject site adjacent to the riverside parkland would, in my opinion, lead the prudent purchaser to the conclusion that the way in which the development addressed the parkland would remain a significant concern for the planning authority.

[173] I consider that a prudent purchaser would think it unlikely that Council would approve a development of the type proposed by Mr McNaughton - that is where a large part of the pedestrian access through the site is limited to a concourse, two storeys high and closed to the sky. Further, such a development does not respond to the issues of bulk, and density. It is also doubtful whether views through to the river in Mr McNaughton's design would be sufficient to comply with Council's requirements in this regard.

[174] While it was generally agreed that the maximum GFA of **·**35 times the site area was unrealistically low for the subject, the evidence indicated that Council could rely on that provision to require a justification for a higher GFA. The history of the Capulet approval indicates that bulk and scale, and therefore density were issues for the Council at that time. There is also Mr Ovenden's evidence, which I have accepted, that the intensity of developments approved in the vicinity of the subject decreases as the size of the allotment increases. Taking all these matters into account, I consider that the prudent purchaser would conclude that it is unlikely that a development with a plot ratio of 7.54 would be approved for the subject.

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[177] For the reasons set out above, I consider that the prudent purchaser would conclude that, as compared with the other designs, the respondent's proposed design more closely resembles the type of development that would receive Council approval.

[178] However, such a purchaser would expect approval for a development averaging 10 storeys across the site. The evidence is sparse, but Mr McNaughton said that he had calculated the major differences in GFA between his and Mr O'Brien's designs. He said that the difference attributable to the different riverfront heights was about 10,000 m². His proposed development showed a 12 storey building in that area whereas Mr O'Brien's shows 6 storeys. Using the 10,000 m² as a base, I consider that if Mr O'Brien's development were converted from 6 to 10 storeys, an extra 6,000 m² GFA (approximately) would result.

[179] There was also evidence indicating that Mr O'Brien's design shows generous spaces between the buildings and that there may be room for increased GFA in his proposal. That evidence has led me to conclude that the prudent purchaser may consider the design to be conservative in this regard. There was no specific evidence quantifying the impact these matters may have on the GFA. However I consider that, doing the best I can, the prudent purchaser could reasonably expect a design to be approved with an additional 10,000 m² GFA including the extra 6,000 m² resulting from the increased height, as compared with Mr O'Brien's design.

[180] The resulting GFA would be approximately 44,000 m² and give a plot ratio of 4.98:1.

[181] This is not inconsistent with the development application made concerning the Parmalat Multiplex land, in the vicinity of the subject. The transaction and development application concerning that land are discussed in detail below as part of my consideration of the valuation evidence. The respondent's evidence was that an achievable GFA of 16,893 m² for that site was approximately 80,000 m² or a plot ratio of 4.74:1. Given that the Parmalat and Multiplex site is twice the size of the subject land, I consider that the prudent purchaser could reasonably expect a plot ratio of at least that amount for the subject, so that a plot ratio of 5 could be regarded as reasonably achievable.

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[184] The areas in disagreement were

There was disagreement about 0.35 being the applicable plot ratio for the subject site. Mr Robertson and Mr Horsburgh indicated that it was their understanding that there was no plot ratio under the Local Plan and if there was a conflict with other plans the Local Plan prevailed.

It was not agreed that the Parmalat Multiplex contract was a sale.

There was general disagreement as to the appropriate GFA to be taken into account.

There was general disagreement as to the correct rate per square metre to apply to the net lettable area for each architectural scheme in the hypothetical development/land residual approach.

There was general disagreement as to the application of the comparable sales by each valuer.

[185] Mr JM Horsburgh is a director of Greener Investments, and appeared on behalf of Greener Investments at the hearing of this matter and gave evidence in relation to the value of the subject land. Mr Horsburgh is not a registered valuer but he has acquired knowledge of the value of property and the market for properties through his occupation as a developer and investor. Mr Horsburgh said that most of the information that he had presented in his valuation report was factual information which he wished the Court to take into account. However he believed he also had some experience that would lend weight to his opinions. He said that he had attempted to be as impartial as possible, which he realised was very difficult for an interested party.

[186] Mr Horsburgh said that he had studied the text book by Hyam on valuation and had carried out other research at the Brisbane City Council which included some fairly lengthy valuations of urban land. He confirmed that companies that he has been associated with have carried out developments to the point of taking them through the development application stage but he has not been involved in construction. He had engaged valuers in the past, when acquiring land or lending money on the security of land, because it was a requirement of the funding institution. He had never carried out an exercise of this nature at such length previously. He had had occasion to look at the value of properties and to do the research and determine what he thought the property was worth. He had done this more intensely when selling and he referred in particular to his properties which were on the market at the time. He had also acquired residential properties in the past, and some commercial developments, without engaging a valuer. He did not claim to have the expertise of the registered valuers.

[187] I have considered Mr Horsburgh's evidence on the basis that he has knowledge of the property market acquired through his experience as an investor and a developer but not as an expert witness. Mr Horsburgh did not claim to have the expertise of a registered valuer. Further, as Mr Horsburgh acknowledged, he is an interested party in these proceedings. While I consider that Mr Horsburgh gave evidence honestly and endeavoured to be impartial he does not have the independence that the Court expects from an expert witness. Consequently, while I have accepted the factual information provided in his evidence, I have placed less weight on his opinion evidence than I have given to the opinion evidence of the registered valuers.

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[191] Mr Johnston used a rate per square metre of land to value the land in the before case. Mr Robertson used a rate per square metre of GFA saying that he considered that to be the most appropriate comparable approach because it encapsulated the development potential of the site. Mr Horsburgh's methodology is discussed below.

[192] Mr Robertson rejected the suggestion that a rate per square metre of land area was a better method of valuation than a rate per square metre of GFA where there is a sale of land which does not have a development approval in place. He said that, where there is significant advice available as to the appropriate GFA under a code assessable application, a purchaser would have to be reasonably confident as to the development potential of the property because there was significantly less risk in such an application than in an impact assessable application. He did agree that once a development approval had been given, it would be known what the GFA was but if there were no development approval in place, a developer would not have the same degree of certainty about the GFA.

[193] Mr Johnston did not agree that a valuation based on a rate per square metre of GFA should be used as a prime method unless the relevant property has achieved an approval for a Material Change of Use (MCU), where there was no risk involved. If there were no MCU, Mr Johnston said, there was major risk in using GFA calculations, particularly where there are complicated town planning issues involved, because the Council may not approve the GFA for that site.

[194] In my opinion the prudent purchaser would consider that a rate per square metre of GFA should not be used for this valuation. One of the central issues in dispute in these proceedings concerns the development potential of the subject land. That reflects the uncertainty that can attach to the development approval process. Similarly where there is no approval in place for a sale property as at the date of sale, there is uncertainty as to the development potential of the site. That being the case, it would be reasonable for the prudent purchaser to adopt a valuation methodology based on a rate per square metre of land because it provides a more reliable guide to the value of the subject land.

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[195] Details of the sales that were common to all or some of the parties are set out below. Mr Johnston adjusted his analysed figures on a comparative basis to allow for various differentials between the properties such as demolition costs, Council headworks, contamination charges, piling costs and GST to reach an adjusted sale rate per square metre of land and per square metre of GFA, using the LVO scheme for the latter purpose. Mr Robertson did not make these adjustments. It appears that he had been engaged just prior to the hearing and had carried out his valuation in about a week. Mr Horsburgh did not make these adjustments because, he said, the sites he had chosen were sufficiently similar to and with the same issues as the subject. He regarded plot ratio as a much more significant difference between the sites.

[196] I accept that the adjustments should have been made to enable the properties to be compared on the same basis.

[197] 144 Montague Road, South Brisbane: This is the Ausenco site which was common to all parties. The property sold for $7,500,000 on 11 May 2007 and there was an onsale on 3 December 2007 for $13,010,000. The structures on the site were demolished and a five level commercial development with a GFA of 14,988 m² was underway at the time of the hearing. Mr Johnston analysed the sale to a rate per square metre of GFA of $500.40 and a rate per square metre of land area of $2,107.92. Mr Robertson analysed the sale to $2,108/m² land and $508/m² GFA.

[198] Mr Johnston commented that the sale site was inferior to the subject because it was not on the river although it was envisaged that some river and City views would be available from the upper floor of the development.

[199] There was a resale of this property in December 2007 for $13,010,000 by which time the property had been preleased to Ausenco. Mr Johnston said that the first sale was more relevant to the subject site because, at the time of that sale, there was no development approval in place. The second sale was a package where there was an 8 year guaranteed cashflow. His investigations had also revealed that an incentive was involved in the preleasing. By comparison the subject in the before case had an approval for a 6 storey development as discussed at some length previously.

[200] Mr Robertson also considered that the first sale of Ausenco was the more relevant. He agreed that the sale was inferior to the subject in terms of location and development but said that it was a useful sale because it fell within the same Local Plan as the subject. Its proximity to the subject was also helpful in terms of the locational factors and the sale took place about the right timeframe in the market. He had used the second sale in a similar way as his sale 4, the Edmonstone Street sale, namely to give an upper limit for a lower risk project.

[201] Mr Horsburgh relied only on the second Ausenco sale without reference to the fact that, as at the date of the second sale, a development approval was in place and the entire complex had been preleased for 8 years. Mr Horsburgh analysed the December sale to $3,657 per m² of land and to $539 per m² GFA on the basis of an adopted plot ratio of 3.9:1 which he considered was the maximum plot ratio that a prudent purchaser would have considered achievable.

[202] I do not consider that the prudent purchaser would accept that the December sale should be used as evidence of the value of the subject because the leasing agreements were in place at the time of sale.

[203] 512 Wickham Street, Fortitude Valley: This sale was common to all the parties. The property has an area of 9,708 m² and sold on 25 May 2007 for $27,000,000. Mr Robertson and Mr Horsburgh analysed this sale to $2,781 per m² of land and Mr Robertson analysed it to $557/m² GFA. Mr Johnston analysed it to $2,924 per m² after making the adjustments referred to above. Mr Horsburgh said that the final development scheme approved for the site in October 2008 represented a plot ratio of 5.1. However, the information available at the time of acquisition indicated that a plot ratio of 3.2:1 represented the potential development capacity of the land and on that basis he had adopted a plot ratio of 3.2:1 which gave a unit value of $869 per m² of GFA.

[204] Mr Johnston said that the site is located opposite the Emporium development and it was ultimately approved for some 4,900 m² of retail development and an 8 and 13 storey commercial tower. The site is well located for retail in the hub of the northern sector of Fortitude Valley. It has good access to public transport and, overall, Mr Johnston considered it to be a superior site to the subject.

[205] Mr Robertson agreed that the sale was in a multi-purpose centre, MP2 in the City Plan and that was a very different environment from the subject site. There was therefore, he said, some difficulty in comparing the sale with the subject. The sale is on the intersection opposite the Valley Police Station and the Emporium retail development is across Wickham Street. Mr Robertson considered it to be superior in terms of retail but inferior in terms of office space location. He agreed that it was a superior site in terms of mixed use, i.e. for retail and office use but not for offices alone. He considered that the subject site which was on the river and at the more cultural end of town where pedestrian access was available, was a better location for quality offices although less accessible by public transport. He did not see that the lack of through access (because the subject area is on the Kurilpa peninsula) was a difficulty for office workers.

[206] 56 Edmonstone Road, Bowen Hills: This sale was common to Mr Johnston and Mr Robertson. The property has an area of 9,302 m² and sold on 16 July 2007 for $11,500,000.

[207] Mr Johnston analysed the sale to $1,236.29 per m² of land and $860 per m² of GFA. His adjusted figures were $629 per m² of land $703 per m² of GFA. Mr Robertson analysed the sale to $1,236 per m² of land and $860 per m² of GFA.

[208] Mr Johnston said that the property had been sold with a development approval in place and building plans. Thus the holding costs associated with gaining Council approval did not have to be borne by the purchaser. The property backs on to Breakfast Creek and while it is a little further from town, Mr Johnston regarded it as a reasonable sale. It is similar in size to the subject land.

[209] Mr Robertson considered that the property was substantially inferior to the subject in terms of location for office space, but there was minimal risk involved with the purchase.

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[210] Mr Johnston valued the subject site in the before case on the basis that it was best suited for commercial office development. He noted that on the eastern boundary of the site in the before situation an existing rail line generated a high degree of noise (a decibel level up to 87). The railway line would also limit the outlook of certain floors of the proposed development. The riverfront location would have been an attraction to the market place. The issue of public transport was one that required investigation due to the numbers of people using the proposed building.

[211] As the before development was very large, the leasing take-up would be of concern and it was likely that preleasing would be a prerequisite to development. From his examination of leasing take-up and potential developments in the location of the site, Mr Johnston concluded that there was a potential oversupply of commercial accommodation in the area of the subject land.

[212] In the after situation, Mr Johnston said, the balance area may be injuriously affected by both onramps to the bridge, and accordingly additional noise abatement steps may be necessary. However there was also some enhancement in the after situation because the location of the site would allow easy access to the site and to the City centre.

[213] Mr Johnston relied on six transactions for the purpose of his direct comparison valuation. The first of those transactions was a contract for the sale of land at 98 Montague Road, South Brisbane, the Parmalat Multiplex contract, which did not settle. The use to be made of that contract was a matter of dispute between the parties and this issue is discussed further below. The remaining five transactions relied on by Mr Johnston were completed sales. Mr Johnston analysed each of his sales to a rate per square metre of land and potential GFA and adjusted the figures as described above.

[214] The table below sets out brief details of the transactions other than the three sales described above.[12]

[94]

[218] This contract contained a clause whereby the contracting parties agreed not to disclose any confidential information relating to the provisions of the contract, the negotiations relating to the contract and the performance of the contract.

[219] A copy of the contract was produced to the Court, and is the subject of a restrictions order made by the Court on 18 November 2008. The parties and relevant witnesses were given access to the contract for the purpose of these proceedings and subject to undertakings signed by them that they would not disclose its content. Subject to hearing the parties' submissions, it is proposed to restrict publication of the sections of this decision dealing with the details of this contract as specified in the orders made at the time of delivery of the judgment.

[220] The Parmalat Multiplex site is situated at 98 - 128 Montague Road, South Brisbane, in the vicinity of the subject land. A contract of sale of the site between Parmalat Australia (vendor) and Multiplex Montague Pty Ltd (purchaser) was executed on 6 November 2007. The contract was not completed and was rescinded by agreement.[13]

[221] RESTRICTED

[222] RESTRICTED

[223] This contract was Mr Johnston's prime indication of value in the location. He relied on the contract because the Parmalat land was located directly opposite the subject property, although it was a large site, nearly twice the land area of the subject. The majority of the Parmalat land is in the same precinct as the subject land. Use of this transaction removed the need to make the adjustments that would be necessary when one goes outside the area. Mr Johnston said that, by comparison with the subject, the Parmalat Multiplex site had no river frontage but that city and river views were envisaged from the fourth level of the proposed development. In general terms the Parmalat Multiplex site was inferior to the subject because of the lack of river frontage.

[224] RESTRICTED

[225] RESTRICTED

[226] Neither Mr Robertson nor Mr Horsburgh relied on this contract and Mr Johnston's use of it in his valuation was trenchantly criticised by the other parties for a number of reasons.

[227] Dr Smith suggested to Mr Johnston that the transaction was not a genuine contract but a put and call option.

[228] There is no evidence that the contract created a put and call option, nor that it constituted an unaccepted offer. On the face of it, the contract was a standard contract for the sale of the land with special conditions attached. While clause 3.3 allowed the contract to be terminated by either party if a condition was not satisfied or waived, I consider that it was a binding agreement and while it was on foot neither party was at liberty to withdraw at will.[14]

[229] It was also submitted that the contract should not be relied on because it did not represent a completed sale. Further, Mr Johnston was cross-examined at some length as to his reasons for not stating in his report that the contract had been rescinded by agreement between the parties. While Mr Johnston's omission of any reference to the rescission of the contract was not satisfactorily explained, that does not affect the issue as to whether the contract should be relied on for the valuation.

[230] The contract was negotiated between two commercial entities each of which, the evidence indicated, had obtained independent valuation advice. There was no evidence as to the reasons for or circumstances surrounding the rescission of the contract. Given that I have found that the contract was negotiated between two commercial entities who had taken advice and, also, that I consider that the contract was binding while on foot, the subsequent rescission of the contract does not in my opinion, alter the fact that the contract appears to be evidence of market value. The rescission is not a reason for the contract not be used as evidence of market value.[15]

[231] The contract was executed on 6 November 2007, some two months after the date of resumption. After sales may be used as evidence of value provided that they are in all respects comparable.[16] As Mahoney JA said in Housing Commissioner of New South Wales v Falconer[17] evidence of those sales is permitted to establish prices that "a relevant vendor and purchaser found acceptable at that date for comparable land. The assumption of the law is that from that evidence it is possible to infer what the relevant vendor and purchaser would have found acceptable for the subject land."

[232] Mr Johnston said that the market value for land in the locality of the subject increased by at least 5% between August and November 2007, although he was not prepared to place a final figure on the increase because he had not done the research. He had not discounted the Parmalat Multiplex contract to allow for the increase. It is noted that the parties have agreed that the contract for the sale of the residual land executed on 27 November 2007 and therefore also an after sale, reflected the market value of the residual land as at the date of resumption. For that reason and also because any increase in the market reflected in the Parmalat Multiplex contract price is not in issue, I consider that the contract may be relevant evidence of value.

[233] However, both claimants submitted that the contract should not be used because the confidentiality clause in the contract had the effect that the details of the sale would not have been available to the prudent purchaser as at 31 August 2007. I do not accept this submission. By analogy with the authorities dealing with after sales, I consider that evidence of comparable confidential sales is admissible to establish the price that that vendor and purchaser were prepared to pay, and to infer from that what the market would have paid for the subject land.

[234] The Parmalat Multiplex contract contained a number of conditions which may indicate that the price agreed does not reflect the value which would be achieved by an unconditional contract. While the conditions do not appear to be unusual for a contract of that nature, there was no evidence as to their effect if any, on the price agreed.

[235] RESTRICTED

[236] Finally, there is the question of whether the sale land is sufficiently comparable with the subject to provide appropriate evidence of value.

[237] The sale land is in close proximity to the subject and approximately 85% of it is in the same Precinct as the subject. The sale is about twice the size of the subject.

[238] Although the sale land is twice the size of the subject, its proximity to the subject and the similarity in planning constraints would, I consider, lead the prudent purchaser to regard the sale as relevant to the sale of the subject land. My conclusion is therefore that the contract may be admitted as evidence of market value of the subject land as at the date of resumption.

[239] That being the case, I consider that the evidence as to the development application lodged for this site is relevant to the matters in issue. The evidence showed that a development plan had been prepared for the site during 2007 with the pre-lodgement meeting documentation lodged in November 2007. Thus it was prepared in the same planning context as the resumption of the subject land. The development was impact assessable. The Parmalat site has an area of 16,893 m². The proposed plan showed that five buildings were contemplated with a GFA of 68,060 m² which gives a plot ratio of 4.39:1. A structure plan had been prepared for the site which included views, a mid-block link, active uses and courtyard amongst the issues discussed. It appears that the firm of planning consultants which had acted in Capulet had also acted on behalf of Multiplex or Parmalat in respect of the proposed application for that site.

[240] As the contract of the sale of the site between Parmalat and Multiplex was rescinded, the development application was not pursued and has not been approved.

[241] Mr Johnston considered that a further 12,000 m² of GFA would have been approved for the site increasing the achievable plot ratio to 4.74:1.

[242] Mr Ovenden saw the development application in respect of the Parmalat Multiplex site as reflecting the intention of Kurilpa 1 in that it envisaged buildings which ranged from 6 to 12 storeys rather than the maximum of 10 storeys that the Local Plan indicated. Most of the site lay in the same precinct as the subject site. In his view, the development plans reflected the statutory bases of both the structure plan and the Local Plan provisions and had achieved a sensible balance between open space, built form and scale of development to create view corridors through the site. The site is 1.6 ha and the development proposed a plot ratio in the vicinity of 4:1. In his opinion, the scheme was highly compliant other than in relation to car parking. By way of contrast the Mio Art and Greener proposals contemplate the same GFA for the subject which is approximately half the size of the Parmalat Multiplex site.

[243] Mr Buckley said that there had been no discussion of the Parmalat Multiplex proposal at the joint conclave of the town planners and architects. The differences between the subject site and the Parmalat Multiplex site were too great to enable the two to be compared, in his opinion. 15% of the Parmalat Multiplex site was in another precinct and the proposed development was impact assessable. The Parmalat Multiplex site has a very long frontage to Montague Road and was quite different from the subject which has a road next to it, Bouquet Street, which links Riverside Drive to Montague Road. Because the Parmalat Multiplex application was subject to impact assessment, he could see that the Council would require a through site link.

[244] I consider that the development application provides some evidence of relevance to the development potential of the subject. However because the application did not result in an approval and because the site is twice the size of the subject I do not consider that too much weight can be placed on the application.

[99]

[249] Mr Robertson considered the sale was a distressed sale because it was sold by a mortgagee in possession. When asked to explain why, if the sale at $9,000,000 represented market value as agreed by the parties, it mattered whether the vendor was a mortgagee in possession or anyone else, Mr Robertson's response appeared to be that it was a distressed sale because it was a mortgagee sale. In the end he said that he did not consider that the $9,000,000 was strictly market value and that the price should be uplifted by a factor of 10% to $9,900,000.

[250] Assuming the use of the sale of the residual land as evidence of value, I do not consider that Mr Robertson's allowance of 10% for the distressed nature of the sale is legitimate. Such an allowance is contrary to the agreed position of the parties that the sale price of $9,000,000 represents the market value of the property.

[251] Mr Robertson said that his 30% adjustment for injurious affection was a judgment and reflected his opinion of the value of the site if it had not been injuriously affected. He considered that the figure was probably conservative. A number of factors adversely affected the balance site post resumption, Mr Robertson said.

[252] One significant factor was the Hale Street Bridge road infrastructure and the additional noise that would be generated by the road traffic. He had no acoustic information as to the additional noise. The road elevations would impact on city views from the site although he conceded that to some degree at least, those views would have been obstructed by the GOMA building. The resultant irregular configuration of the site post resumption was less efficient than the original site. Moreover the residual land had less river frontage.

[253] An area of land along Bouquet Street was included in the resumption for road widening purposes. Although this meant that the owner would not have to dedicate part of the land for that purpose nor incur the associated costs, Mr Robertson considered that, on balance, the loss was greater than the gain. The owner had suffered the loss of the land and the opportunity to offset contributions and negotiate additional GFA, if road dedication had been required.

[254] As at the date of sale of the residual land there was a moratorium on development of the site until 30 June 2010 because the Brisbane City Council was leasing the site for construction purposes. Mr Robertson considered this to be a double edged sword because, although the purchaser had the benefit of a holding income while obtaining development approval, it would not want the site to remain undeveloped for three years, given the purchase price and the strength of the market. He did not accept that it would have taken three years from the date of resumption to obtain development approval.

[255] Mr Robertson said that the enhancement from the construction of the bridge was probably a general benefit for the area but for the residual site it was a plus and minus. It gave some exposure to the bridge and access out of the site on to the bridge would be good. However, there would not be good access into the site because of the proposed median strip in front of it. Similarly when leaving the site to go to South Brisbane or West End, the access was more difficult.

[256] When asked whether he agreed with Mr Robertson's approach of applying a percentage factor to the after sale to arrive at the before valuation, Mr Johnston said that it would be extremely difficult to compare the after sale to the before on this land. Relevant issues to be taken into account were that the Brisbane City Council, as part of the scheme, had widened and constructed Bouquet Street, the design on the balance area varied from the design on the before area, and the land was subject to temporary occupation by the Brisbane City Council who were paying rent at the time of the sale of $240,000 a year. The purchasers of the site, were receiving the holding income which allowed them to go through the planning steps to get the development up and running so that the ground rent was defraying holding costs. The balance property would be located at the gateway to South Brisbane and the Brisbane CBD including a link to Hale Street northerly which will allow connection across to the other side of town.

[257] I consider that there is some difficulty in using the sale of the residual land to establish the before value of the subject site because of the adjustments necessary to allow for the injurious affection and enhancement of the site resulting from the resumption. There is no market evidence to assist in quantifying the allowances to be made for those factors so that Mr Robertson has relied on his professional judgment to determine the quantum.

[258] Mr Robertson's calculations may be reworked, to remove the 10% allowance for the distressed sale and, for the reasons set out above, to apply a rate per square metre of land, rather than a rate per square metre of GFA. His allowance for enhancement also requires consideration. Mr Robertson allowed $25 per m² of GFA which, on his figures, represented approximately 3.5%. I will apply that percentage to the rate per square metre of land. The resulting calculations are -

[102]

[263] Mr Horsburgh approached the valuation by selecting sales in his area of comparison which were the urban renewal areas stretching from Highgate Hill and West End, through the CBD to Fortitude Valley and to Newstead. To that end he identified sales of development sites located in the urban renewal area within a 3 km radius of the Brisbane CBD.

[264] The features of the subject land emphasized by Mr Horsburgh in his oral evidence were that it was river front land (although there was a buffer between the land and the river) and it was an "island site". He saw a commonality with large development sites where developers were seeking to put together a large island of space that then relaxed the town planning environment because neighbours were not involved.

[265] Mr Horsburgh chose as his sales, properties which have characteristics similar to the subject site. The best sales, he said, were large sites in traditional industrial use areas with multi-staged high density commercial office development proposals. His selection of comparable sales was dictated by the size of the land and the development capacity and he also had regard to construction costs and market rents. In Mr Horsburgh's opinion, the productive capacity (plot ratio) of a particular site was the primary consideration which a purchaser would have in mind at the time of purchase.

[266] Mr Horsburgh had therefore chosen plot ratio as the crucial feature in his sales reconciliation. He thought that, rather than looking at smaller adjustments such as for contamination and piling infrastructure charges, the most significant point of difference was the productive capacity or the plot ratio differential.

[267] Relying on the reports by Thomson Adsett Architects and Buckley Vann Planning Consultants, Mr Horsburgh had determined that the maximum code assessable plot ratio for the subject site was 8.1:1. However, for the purpose of his valuation report, he adopted a plot ratio of 7. This was in recognition of the unique characteristics of the land - a very large undeveloped site in a high density planning precinct. He was also aware that in moving from the CBD towards either West End or Newstead there was a general town planning approach of reducing the plot ratio as the size of the sites increases in the industrial areas. Rather than reducing the dollars per GFA down to account for that, he considered that the more realistic approach was that a developer would adopt a smaller plot ratio of, in this case 7.1. All his discussions with development managers of the comparable sales properties showed that development capacity was the crucial issue.

[268] Mr Horsburgh said that an analysis of his sales showed that the rate per square metre of land ranged from approximately $4,000/m² to $6,000/m² up to approximately $6,000/m² to $11,000/ m², depending on land area, productive capacity and ripeness for development. The more comparable sites indicated a narrower range of approximately $4,500/m² to $8,000/m². A large amount of the variation was explained by the different productive capacity differential applied. For a plot ratio of 7, his analyses showed a range from $4,500/m² to $8,000/m². His analyses also showed that as land size increases the rate per square metre of land decreased. Similarly, as the land size increased, the potential development intensity dropped reflecting different planning attitudes in the traditionally industrial areas where large sites were available. Accordingly, the dollar value per square metre of GFA decreased.

[269] Based on the features of comparison mentioned above, Mr Horsburgh adopted a rate per square metre of land of $5,500. On that basis the value of the subject land before resumption was $48,537,500.

[270] Mr Horsburgh also analysed his comparable sales on a rate per square metre of GFA. The GFA used for each sale was that which investigation showed was reasonably expected to be achieved at the time of sale. Where available, Mr Horsburgh relied on the plot ratios used by development managers in their feasibility studies during the purchase. Mr Horsburgh's sales analysis revealed an analysed rate per GFA ranging from $600 to $1,200 depending on condition of sale, pedigree of development application and plot ratio. He said that the more comparable sites indicated a narrower range of approximately $800 to $900. Mr Horsburgh adopted a unit value per GFA of $850. On this basis he calculated the value of the subject land before resumption at $52,508,750 (61,775 m² GFA at $850 per m² of GFA).

[271] Mr Horsburgh has not applied the results of his sales analyses directly to the subject land. Rather, he adjusted the analysed sales figures to show what would have been paid for each sale property if a plot ratio of 7:1 (being his adopted plot ratio, as explained above) were applied. I do not consider that the prudent purchaser would accept that this valuation methodology can be used to value the subject land. Mr Horsburgh's approach is not a recognized valuation methodology and it involves averaging which, it is well recognized, is not a valid methodology. Such a purchaser is unlikely, therefore, to consider that Mr Horsburgh's methodology demonstrates a market value for the subject land. However the prudent purchaser may consider that Mr Horsburgh's principal sales, analysed in an orthodox way, may be relevant to the subject valuation.

[272] Mr Horsburgh identified three sales as particularly relevant to this valuation because they were larger than the subject site in size, they were in an urban renewal area and they were master planned, multi-staged commercial office developments with development capacities ranging from 40,000 to 59,000 m² of GFA. His graph shows two GFA figures for each of his main sales. He relied on the higher figure in each case which represented what was actually achieved by the developer following an impact assessment approval after the developer had acquired the site. The difference between the two figures represents the owner's profit. He did not consider that it was necessary to draw a distinction between a code assessable and an impact assessable application.

[273] Mr Horsburgh's sale 1 is a property at 150 - 180 Breakfast Creek Road, Newstead which sold on 24 November 2006 for $40,000,000. The site has an area of 19,863 m². The property has an extended frontage to Breakfast Creek Road and frontages to four other streets. Breakfast Creek Road is an arterial road which provides good vehicular access. The property is contaminated with copper lead and zinc, acid sulphate and radioactive sands. The purchaser proposed to develop an office park on the site of 7 buildings. Mr Horsburgh had been advised by the purchaser's development manager that the plot ratio used in their feasibility study was 2.5:1. An application lodged in April 2008 was ultimately approved at a plot ratio of 2.30:1. Mr Horsburgh adopted a plot ratio of 2.1 as the maximum plot ratio a prudent purchaser would have considered to be potentially achievable. He analysed the sale of the whole site to $2,014 per m² of land and $1,007 per m² of GFA.

[274] Part of the site (approximately 3,882 m²) was the subject of a contract of sale with the ABC in late 2007 which showed a rate of $3,977/m² land. The contract was subsequently cancelled by the ABC because of concerns about radiation contamination. It was understood that legal action followed.

[275] Mr Johnston said that he would treat the sale with a great deal of caution because there were a number of issues that arose. One was the location of the property on a main arterial road with an extended frontage and four street boundaries. The site is a gateway into and out of the City. In his view it was a superior property in terms of location but to be weighed against that were the contamination and the low water table which exists in the area. There was potential for the contamination to extend off the site onto surrounding properties.

[276] Mr Horsburgh's sale 2, Waterloo Junction, is located at 4-12 Commercial Road, Newstead. The property has an area of 14,112 m² and is made up of a number of individual lots which were sold between July 2006 and April 2007. The total price was $44,544,899. Mr Horsburgh analysed the amalgamated site to $3,157 per m² of land. He was advised by the development manager of the purchaser that the plot ratio used in their feasibility study was between 3 and 3.5:1. The development application represented an overall plot ratio of 2.5. Mr Horsburgh concluded that a prudent purchaser would have considered a plot ratio of 2.5 to be potentially achievable and on that basis he analysed the sale price to $1,283 per m² of GFA.

[277] The property is bounded by Commercial Road, Stratton and Ann Streets with a large frontage to Ann Street. The Waterloo Hotel which was on one of the sites, was included in the sale. The hotel is heritage listed and the sale also included the hotel licence.

[278] In Mr Johnston's opinion the property was superior to the subject property for a number of reasons. The sale property included the heritage hotel and the licence. The site was opposite a prime location in the Emporium precinct, there is good traffic flow, good access and good public transport.

[279] Mr Horsburgh did not accept that an adjustment should have been made because the price paid for the site represented not only the land which was available for redevelopment but also the hotel with the liquor licence. He said that he did not look at it that way because the hotel being heritage listed would have to remain and it would be difficult to build around.

[280] Mr Horsburgh withdrew his sale 4, and his sale 5 was 144 Montague Road, discussed above.

[281] Mr Horsburgh's sale 6 is 395 St Paul's Terrace, Fortitude Valley which has an area of 1,695 m². The contract of sale was executed on 13 September 2007 and settled in January 2008. Mr Horsburgh analysed the sale to $5,646 per m² and, adopting a plot ratio of 6.4:1, the maximum plot ratio that in his opinion a prudent purchaser would have considered as achievable, to $941 per m² of GFA. The property is located in Fortitude Valley, opposite the Brunswick Street railway station. It has two street access. At the date of sale, the site was improved with a 3 storey commercial building which was tenanted.

[282] Mr Johnston said that the sale was in a far superior location as compared with the subject and the sale was a far smaller site. He would not rely on it as a comparable sale because of its location.

[283] Mr Horsburgh's sale 7 is a property at 949 Ann Street, Fortitude Valley of 1,525 m². The property was sold in December 2006 with settlement in July 2008. Mr Horsburgh analysed the sale to $6,492 per m² of land and to 1,042 m² of GFA having adopted a plot ratio of 6.2:1 on the same bases as the other sales.

[284] The site is located in Fortitude Valley opposite the Emporium development and is a corner site bounded by Ann and Chester Streets. The frontage to Ann Street provides good exposure to traffic and good vehicular access. The site was improved with buildings and awnings and used as a car sales yard.

[285] Mr Johnston said that the sale is located in the hub of the Valley on the back of the very popular James Street precinct. The sale had resale potential. Mr Johnston had no knowledge of the contract or the reason for the length of time between contract and date of settlement. In Mr Johnston's view the sale was superior to the subject.

[286] Mr Horsburgh acknowledged that he had not placed a lot of reliance on his sales 8 and 9 because they were residential developments. He had included them because he was looking for sales of large site areas.

[287] Of his other sales, he said that he had tried not to place too much relevance on one sale over the other. They had varying factors of comparability. Ausenco was nice because it is a fairly large site close to the subject. Newstead Circle was not ideal because it is much further away but it has the commonality of being an island and the consequent planning flexibility. Generally, Mr Horsburgh said, he would place less reliance on the smaller site sales.

[103]

[288] Mr Hinson SC tendered a copy of an email report, apparently commissioned by Greener Investments, from a Mr Horrigan, a valuer, who determined the before value in the order of $22,000,000 and the after value at around $9,000,000.[18] Mr Horsburgh pointed out that the valuation was clearly premised on the sale of the Parmalat site and its treatment as a valid sale. He said that at that time Mr Horrigan had not been informed that the Parmalat contract was not on foot. Mr Horsburgh saw the email as being the result of pressure that he had put on Mr Horrigan for an answer, because of his (Mr Horsburgh's) financial situation.

[289] Mr Hinson SC also tendered copies of two reports by Mr Greg Clarke, valuer. In the first report Mr Clarke assessed compensation at $15,800,000. In his second report, which is in draft form, he assessed compensation at $21,500,000. The direct comparison was carried out on a gross floor area basis.

[290] Mr Horsburgh said that because of the time pressures Mr Clarke had produced an initial draft and had told Mr Horsburgh subsequently in a meeting that there was a mistake at p.38 in his residual land calculation in that he had not applied the GFA rates that he had reconciled from his sales evidence through to his assessment of value. Mr Horsburgh believed that that was due to the haste with which Mr Clarke had done the calculation. Mr Clarke then corrected the draft.

[291] Mrs Amanda Horsburgh gave evidence about the pressures that she and her husband were under because of their financial difficulties and the time constraints imposed by the Court. She said that they had been let down by Mr Horrigan, their original valuer who had pulled out and had, in his email, given advice contrary to what he had said verbally to themselves and to Mr Clarke. Mr Horrigan's verbal advice was that they were talking about rates of $800 odd per square metre of GFA, whereas, in his email, his opinion is a rate of around $270 per m² of GFA based on a plot ratio of about 8. She said that the Horsburghs had no idea that they could have subpoenaed Mr Clarke and Mr Horrigan to give evidence.

[292] I do not consider that I can attach any weight to the evidence of Mr Horrigan's and Mr Clarke's opinions as to the value of the subject land as neither valuer was called to give evidence in support of the valuations.[19]

[106]

[294] The weight of the evidence indicates that the common sales, 144 Montague Road (first sale), and 512 Wickham Street are very relevant to the valuations. 56 Edmonstone Street is less so because of its location. Montague Road shows a rate of $2,137/m² land and 512 Wickham Street shows $2,924/m² land. 56 Edmonstone Street shows $1,236/m² land.

[295] For the reasons discussed previously, I consider that the Parmalat Multiplex contract should be taken into account. It shows $1,978/m² land. The site is much larger than the subject.

[296] Mr Horsburgh's sale 1, Newstead Circle, is also relevant although there are contamination issues. That site is also much larger than the subject and has a much lower achievable GFA than the subject. The sale analyses to $2,014/m² land. I do not consider that Mr Horsburgh's Sale 5, Waterloo Junction, can be used in the absence of any analysis as to the value of the hotel and liquor licence included in the sale.

[297] The remaining sales of the valuers and Mr Horsburgh are of less relevance.

[298] The respondent's valuer has applied a rate of $2,500/m² land to the subject land on the basis of a development with a plot ratio of 3.87:1. As indicated above I consider that the reasonable purchaser would anticipate a plot ratio of 4.98:1. On that basis I consider that such a purchaser would expect to pay more than $2,500/m² for the subject land in the before case. The sale with the most comparable GFA is 512 Wickham Street which showed $2,781/m² land or $2,924/m² land after making Mr Johnston's adjustments. There are differences between the sale and the subject particularly the retail potential of the sale and the different planning regime applicable. To be weighed against that is the riverside location of the subject. The property at 144 Montague Road is much smaller than the subject and the Parmalat Multiplex site is much larger. Both are in inferior locations, as compared with the subject, because they have no river frontage. Taking all those circumstances into account, I consider that the subject should be valued at $2,900/m² land which gives a value of $25,592,500 which may be rounded to $25,600,000. This represents $582/m² of GFA on a proposed GFA of 44,000/m².

[299] The value of the land in the before case is determined at $25,600,000. The value of the residual land is agreed at $9,000,000. The total compensation payable is, therefore, $16,600,000. The Court has been advised that advances totalling $13,500,000 have been paid. The balance payable is, therefore, $3,100,000. I will hear the parties as to any orders to be made in respect of the payment of that sum and interest.

[300] As indicated at paragraphs [218] and [219] of my reasons for judgment, there is information in these reasons concerning the content of the Parmalat Multiplex contract of sale. That contract is the subject of orders made on 18 November 2008 limiting publication of the details of the contract. Consistently with those orders, I propose making orders restricting publication of those parts of my decision which deal with the contents of the Parmalat Multiplex contract. I will hear the parties as to that proposal and any orders.

[301] I will also hear the parties as to any orders for costs.

Mio Art Pty Ltd & Ors v Brisbane City Council [2009] QLC 177

At a glance

Court

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Judgment (117 paragraphs)

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Cases Cited (2)