Scambiaterra v Valuer General

3 The relevant base date for the present valuation appeal is 1 July 2000 at which date the Valuer General has valued the two allotments with a combined valuation of $755,000.

4 The present appeal is an appeal pursuant to s37(1) of the Valuation of Land Act 1916 ("the Act") which provides that an owner of land may appeal to this Court the owner is dissatisfied with the Valuer General's determination of that owner's objection to a valuation.

5 The Court has a range of powers pursuant to s40(1) of the Act when dealing with this appeal. The Court may do a number of things, which include confirming or revoking the decision and making a decision in place of the decision to which the appeal relates. There is no submission by either party that I should, if I consider the valuation should be varied, exercise my power to remit to the Valuer General for determination in accordance with these reasons.

6 I am therefore confining myself to whether I should confirm or revoke the relevant value and if I should revoke it, what I should substitute in its place.

7 I note in this regard that the respondent's valuation in evidence posit a valuation somewhat higher than that which is the subject of the appeal, namely Mr McDonald's valuation at $840,000. I also note that the applicant has the benefit of a disclaimer from the Valuer General's representatives that it does not ask me to make any order, if I were minded to do so, higher than the valuation of $755,000.

8 I also note that the onus is placed on the appellant of proving his case, that is displacing the valuation, by virtue of the provisions of s40(2) of the Act.

9 The basis for valuation is established by s6A(1) of the Act which reads: The land value of land is the capital sum for which the fee-simple of the land might be expected to realise if offered for sale on such reasonable terms and conditions as a bona fide seller would require, assuming that the improvements, if any, thereon or appertaining thereto, other than land improvements, and made or acquired by the owner or the owner's predecessor in title had not been made.

10 In short hand terms, this has been described by both experts who have given evidence in these proceedings as being a valuation of the "highest and best use""

11 The matter was initially heard on 18 and 19 August during the course of which hearing a view of the site and a range of other sites broadly in the south western region of Sydney were undertaken.

12 Expert evidence has been given in the proceedings in both the form of written statements of evidence and oral evidence by Mr P McDonald, a valuer employed by the respondent, and by Mr L Neskovski, a valuer retained by the applicant.

13 In the initial statements of evidence that were filed and which were discussed in the proceedings in August, it appeared that both valuers had assumed that the highest and best use of the site was either a mixed commercial and residential development or a residential development simpliciter.

14 During the course of the August proceedings, I questioned whether that was an appropriate consideration of the permitted highest and best use in light of the zoning of the site.

15 The site is zoned 5(a) Special Uses A pursuant to IDO 25 - City of Campbelltown.

16 The land use table in the Interim Development Order provides that: On the zone map such an area will be designated in yellow with scarlet lettering that no activities are permitted without the consent of the council. That the only activities that are permitted on the site are those with the consent of the council which relate to development for the particular purpose indicated by scarlet lettering on the IDO map. Any purpose ordinarily incidental or subsidiary to the special use, drainage, open space, roads, utility installations other than gas holders or generating works.

17 The scarlet lettering on the map is the words "Local Centre". As a consequence of my raising that issue, the proceedings were adjourned to enable the parties to consider further what, in fact, would be the highest and best use lawfully permitted for the site and thus to be the subject of consideration and evaluation in these proceedings.

18 Helpfully in enabling the parties and the Court to consider this, Mr McDonald received a letter dated 14 November 2003 from a representative of Campbelltown City Council - Ms Anne Starr, a senior development planner.

19 Three paragraphs of that letter are relevant in the present proceedings. They are paras 2, 3 and 4. Those paragraphs read: 2. The table to IDO 25 relevant to the 5A Special Uses A Zone does not specifically permit or prohibit residential uses. You are directed to item 3 of the table which permits the council's consent to development for the purpose indicated by scarlet lettering on the IDC map, to any purpose ordinarily incidental or subsidiary to the special use, et cetera. The IDO map and the accompanying DCP map identify the land in scarlet lettering as 'Local Centre'. 3. It is difficult to infer what planning philosophy underpinned the IDO and specifically local centre given the planning instruments gazettal in 1977. It would appear that any residential use would have to be ordinarily incidental or subsidiary to the nominated local centre. To the best of my knowledge the local centre appellation generally related to shopping centre and associated community or neighbourhood uses. In that regard it would appear that an applicant at 1 July 2000 would need to demonstrate a subsidiary or incidental relationship between any proposed residential development, the existing local centre community/commercial uses. It may have been possible at the relevant date to consider an application for residential component, eg, caretaker's flat, to support the existing centre without a concurrent commercial proposal. It is difficult to see how residential development on a larger scale could be considered incidental or subsidiary to a local centre use certainly without some community nexus. 4. Relevant instruments at 1 July 2000 would be restricted to IDO 25. There does not appear to be any site specific internal police, for example, that would have guided assessment.

20 Both expert witnesses have given further statements of evidence based on mixed uses in light of that advice from Campbelltown City Council.

21 Although there has been much debate about how the site might be divided up to conform with such mixed uses, there is a degree of congruence underlying the experts' analysis of what might be permissible uses on the site.

22 At the commencement of the proceeding I directed the expert witnesses to confer as to those matters upon which they agreed and those matters upon which they disagreed and the reasons for that disagreement. The best attribute that could be ascribed to that report was its brevity. It did not, however, significantly advance the causes in the case.

23 I turn first to the evidence of Mr McDonald. Mr McDonald has suggested that the present two allotments would appropriately be subdivided by subdividing the larger allotment into two and retaining the existing smaller allotment. A map was tendered upon which he marked on a deposited plan where it would be appropriate for this subdivision to occur.

24 He then ascribed three potential uses - one to each of the allotments. They were a service station use to the smaller allotment; a commercial use to the larger allotment (both of which would generally be in the south eastern corner of the site) and a community use purpose to the balance of the site. These areas represented 3000 square metres, 1459 square metres and 10,061 square metres respectively. He did not excise, for the purpose of his valuation, either of the easements that burden the site.

25 He advocated a commercial use valuation of $80m2, a service station use valuation of $90m2 and an average community purpose use valuation of $47m2, giving a total value for the site of $840,000.

26 He provided, in addition, an illustrative analysis as to how one might reach the $47m2 valuation for community purposes by instancing one possible way such a community purpose might be carried out on the site with a hierarchy of internal uses within that.

27 Mr Neskovski's evidence fell into a number of parts - the first of which related to what I will describe as his 3 A methodology, which was a subdivision of the site effectively consolidating the two existing allotments and creating four new allotments, the south eastern of which would be a petrol station/convenience store in notional terms. The north western portion, which would be accessed by a comparatively narrow access way or road from Dobell Drive, would be of some 6800 square metres which he depicts as being a possible site to be used for the purposes of religious worship. A local shopping centre site which is generally coincidental with a portion of the present or the totality of the present shopping centre, but is somewhat larger, the present shopping centre being of some 2200 square metres of floor space and finally a site to the western end of about 1500 square metres which he posits could be used for a child care centre.

28 Undertaking an analysis of that, he discounts the areas for easements and results in a site area that he would treat out of a total site area of 1.452 hectares to what he would regard as I term it, a functional site area of 1.358 hectares.

29 He then undertook an analysis of a valuation in differing terms to that undertaken by Mr McDonald. It was Mr McDonald's evidence that he had undertaken a holistic approach to evaluation taking into account a range of factors to arrive at his valuation whereas Mr Neskovski has undertaken a process with a great deal more precision. He has taken what he describes as a gross realisation market value as at 1 July 2000 which he reaches as being approximately $821,000 from which he deducts those costs which he says necessarily would be incurred whether before or after the carrying out of that sale in the purpose of its development to give what would be the net value of the land, a sum which arrives at as being slightly in excess of $500,000 - but adopting $500,000 as the valuation that he suggests should be adopted by the Court as being appropriate for the outcome of this appeal.

30 He also offered a valuation which was described as a method 3B valuation which was based on taking the purchase price of the property as at 24 July 2002, which is the most recent commercial sale of the totality of the property; making allowance for market movements from the base date to the date of that sale and then deducting the depreciated value of the buildings and the car park improvements to arrive at a market land value of $491,000 in round terms which he would then adopt to support his proposed $500,000 valuation.

31 During the course of submissions there were a number of different propositions put as to what is the appropriate method for valuation.

32 I was taken to a decision of Stephen J in the case of Riverbank v The Commonwealth (1974) 48 ALGR 483 in which, at 484, his Honour dealt with the comparison between two possible methods of valuation and said, describing the comparative value method: This is no more than a conventional valuation technique involving comparable sales, complicated only by the fact that Riverbank contains lands of very variable quality and that naturally enough no other recent sale of land in the locality involved precisely the same combinations of land qualities.

33 He continued a little further down the same page where he said: But all this is the stuff of valuation. The reason why it is an art not a science and once recognised it Nevertheless does not protract from the character of this method of valuation is a proper one for use in determining..." and then continued dealing with the case that was then presently before him. I accept that it is appropriate to use a comparative sales method in dealing with the valuations here too. That, however, is not to dismiss either of Mr Neskovski's methods 3A or 3B out of hand, as I will return to them in some considerable detail later in these reasons.

34 The respondent submitted that I should prefer Mr McDonald's approach as being an approach based on simplicity and cost effectiveness and its ease of implementation.

35 In addition the respondent submitted that Mr McDonald had given evidence that he had allowed for the relatively low costs of subdivisions and other deductions in his approach by reducing the square metre rates that he had applied to the subject site. That was certainly consistent with Mr McDonald's oral evidence in these proceedings.

36 In many respects there are a number of areas where the numbers that are applied by Mr McDonald and by Mr Neskovski are not radically different. If, for example, one were to apply Mr Neskovski's numbers for valuations per square metre for commercial uses, community purposes and service station, one would arrive at a total valuation on Mr Neskovski's numbers applied to Mr McDonald's methodology of $751,455.

37 I would indicate that after consideration of the alternative broad approaches I prefer Mr McDonald's approach and therefore would be disposed to dismiss the appeal because of this.

38 However in order to give complete fairness and consideration to Mr Neskovski's evidence I have undertaken a detailed analysis of his methodology and numbers to which I propose to turn. There are a number of matters in detail relating to the table that Mr Neskovski provided in support of methodology 3B that I need to deal with before I turn to calculations undertaken pursuant to it.

39 The first of those matters relates to the treatment of easements. I was taken by the applicant to the decision of Gibbs J in Brisbane City Council v The Valuer General for the State of Queensland (1978) 140 CLR 41 at 48 where his Honour indicated, adopting the proposition from a number of earlier authorities, that the unimproved value of the land when being assessed for the purposes of the Act would be taken as a hypothetical unencumbered fee simple without regard to any restrictions on title or user other than those imposed by general law.

40 Gibbs J also adopted the proposition that it would be appropriate to have regard to physical disabilities affecting the land. It is therefore appropriate for me to determine, with respect of each of the two easements that burden the land, whether I consider they should be discounted in area for the purposes of these calculations.

41 There are two such easements. One of them relates to the provision of electricity services to the shops and the other one of them relates to an access right of carriageway generally travelling in a northern direction across the centre of the site.

42 I am satisfied from what was seen on the view that it would be appropriate to discount the area of the easement for the supply of electricity to the shops. It is however a comparatively small area of approximately forty-four square metres.

43 I am not satisfied that the right of carriageway should be discounted. It is of benefit to the site that it would serve, whether it is defined as being the site pursuant to Mr McDonald's delineation of the notional subdivision of the site or whether it would be the delineation spoken for by Mr Neskovski. In any event I consider it appropriate not to discount the right of carriageway area for valuation purposes and considering the options available in method 3A of Mr Neskovski

44 The second matter where I consider that there should be some adjustment made to the calculations. During the course of the hearing I questioned Mr Neskovski as to what be an appropriate range for the selling agents' commission and he indicated that it would be 2.5% to 3% plus Goods and Services Tax. He has adopted that range for the purposes of his calculations. I am satisfied from what was the competitive and economic climate at the time of the base date in July 2000 that it would be appropriate to adopt the bottom rather than the top of the range, therefore I have applied a figure of 2.75% inclusive of Goods and Services Tax.

45 The next area where I have concerns to the basis of calculation concerns the profit and risk margin which Mr Neskovski adopts as 15%. Although not questioned on a range, it was the respondent's submission that this was highly speculative and indeed the respondent did not advance an alternative proposition. I consider that it is appropriate to regard this as being somewhat speculative. It should be based on a reasonable commercial return and I consider that Mr Neskovski has applied something that would be at significantly the top of the range and that a 10% figure would be appropriate given the range of deductions that he has advocated, many of which I am minded to permit, which would otherwise have been subsumed in the profit and risk calculation. There is, in my assessment, some element of double dipping in this regard in this calculation.

46 I have therefore adopted 10% as being a reasonable figure in this area.

47 With respect to the right of carriageway and the possibility of reconstruction, the respondent made two submissions. Firstly, that the deduction of the costs of the reconstruction of the right of carriageway (which Mr Neskovski has put at $42,000) has no statutory basis in s 6A(1) of the Act.

48 It is my view that this constitutes a misunderstanding of the approach that Mr Neskovski has taken in methodology 3A.

49 Mr Neskovski has taken what amounts to a high starting point and then calculated backwards to reach what he would regard as the 6A (1) valuation and, subject to the issues of calculation that I am addressing, it is a not unreasonable methodology for him to advocate.

50 I therefore reject the proposition to undertake a deduction of that nature or indeed a number of the other costs would be contrary to the provisions of the Act.

51 The second element of the respondent's submission was that "There is no basis in fact for concluding that such a reconstruction would be required or if the owner of the subject land would be required to pay for it".

52 This is a significant different proposition to that concerning the statutory objection. There is no compelling evidence of a reason to assume that reconstruction of the right of way would be required, particularly in light of the benefits of its use to the large area that is proposed for the allotment and the likely passive use (referred to in the evidence of Mr McDonald and not contradicted by Mr Neskovski) of significant portions of that area of the site.

53 I am not satisfied, the onus falling on the appellant to establish each of the elements upon which it relies, that it is appropriate to allow for the cost of reconstruction of the right of way.

54 Given that, that matters which would remain in the costs of that nature are the survey and planning costs, connection for sewerage, council DA fees. I do not consider it appropriate to allow a contingency sum attaching to that. The remainder of the basis of calculation I would allow as being an appropriate structure as per Mr Neskovski's 3A proposal.

55 That takes me to the issue of what numbers should then be inserted if the various matters as modified by my decisions on a number of the rates of application should be inserted with respect to Mr Neskovski's proposed lots A, B, C and D.

56 The first issue it would seem to me in this regard is to consider what should be made of the contentions with respect to the various elements.

57 I turn first to the issue of the ascribing of a commercial valuation. Both Mr McDonald and Mr Neskovski considered the sales which are the sales which are appearing as Sales 2 and 3 in Mr McDonald's most recent statement of evidence which are replicated as Sales 6 and 7 on p 28 of Mr Neskovski's report.

58 There is some disagreement between the parties as to what conclusion should be derived. Those are comparatively modest differences. Mr Neskovski advocated the rate of $75m2 for the shop and commercial site and $85m2 for the convenience store. Mr McDonald advocated $5 more per square metre in each instance as can be seen from the calculations that I will turn to shortly. Although they make some difference, they do not in the overall scheme of things make radically large difference to the conclusions that I have reached.

59 I therefore do not consider it necessary to reach a determined conclusion as to which of those numbers should be applied as I do not consider it affects the outcome of the appeal.

60 In light of all the differences between the experts over a whole range of other matters it was refreshing to reach the position where Mr McDonald was prepared to adopt the number advanced by Mr Neskovski as being the appropriate valuation for Mr Neskovski's proposed lot D for a child care centre, it being $75m2.

61 I was taken by counsel for the applicant to the decision of the Full Bench of the High Court in Maurici v The Chief Commissioner of State Revenue (2003) 77 ALGR 727, at page 732, concerning the use of comparative valuations. The decision of the Court, in this regard, reads: A fair estimate could only be made here on the basis of a fair, that is to say, a reasonably representative group of comparable sales. A group of comparable sales cannot be represented if it does not go beyond sales of scarce vacant land. That is not to say that sales of comparable vacant land may not provide some useful evidence of value, but as JFN Murray observes in Principles and Practice of Valuation in discussing valuations under Federal Land Tax legislation of land in its notionally unimproved state, sale evidence must be relevant and sufficient in volume.

62 This creates somewhat of a conundrum in considering the issues associated with what might be described as the religious valuation element in these proceedings. That is the valuation that Mr McDonald gave in his statement of evidence as being Sale 9.

63 There were three valuations that broadly related to what I will describe as religious sales and which were dealt with in Mr McDonald's statement of evidence and were subject to extensive consideration in the oral evidence process.

64 In this regard, the respondent (I consider quite properly) has discarded two of the religious sales. They were Sales 10 and 11 in Mr McDonald's statement of evidence. Sale 10 evidences the value of some $310m2, which is clearly outside any rational valuation range in the region and must reflect some particular value or attribute to the site. Sale 11 represents a value of slightly less than $90m2 and is also obviously well above the range that might be appropriate for the site.

65 The respondent has therefore not relied on them for the purpose of valuation but does rely on them to establish that there is in fact a market for what might be described as religious purchase properties in the relevant region.

66 I am satisfied that, although not relied upon for valuation, there is a sufficient sample of sales of land in the vicinity to consider a comparable sale as being Sale 9 and in this regard I will return to this when analysing Mr Neskovski's evidence in this regard.

67 However, it was Mr McDonald's assertion that the sale was one which was appropriate for consideration in this context.

68 Sale 9 involved a sale from the Uniting Church New South Wales Trust Association to the Corporation of the Presiding Bishop of the Church of Jesus Christ of the Latter Day Saints. I would indicate that there is no suggestion by either the applicant or the respondent that there was any discount for Christian fraternity given in the valuations involved in the sale and they are being treated entirely according to the figures in evidence.

69 The site was a significantly larger site, being approximately slightly smaller than twice the site of the subject appeal and it realised a valuation of $55.60m2.

70 It was Mr Neskovski's evidence, in this regard, that the site simply had no relevance whatsoever and he gave as the principal reason in this regard that there was effectively a lack of a market for such sites in the Claymore vicinity there having been a what might be described as a churn of church sites in the general vicinity of the shopping centre. This is almost a reverse position to that in Maurici, there being a scarcity of buyers rather than a scarcity of supply.

71 He noted a number of differences between the sites and suggested that I ought disregard it entirely and suggested that if anything was to be compared with site 9 it was his Sale 10 which was a site in Frost Road, although there is no evidence as to the proposed future use of that site.

72 I accept that Frost Road might be an additional useful comparison to Sale 9 but I also accept that subject to the need to be cautious about the differences between the sites. It is appropriate to have regard to the sale of Site 9 as being a matter of relevance and appropriate for determining what might be applied as a factor to the Church development site portion of any calculation under Mr Neskovski's method 3A.

73 However, Mr Neskovski did give some further evidence (whilst not accepting that it was appropriate to consider Sale 9) as to what factors he considered to be appropriate to be taken into account if Sale 9 were, contrary to his evidence, to be considered.

74 The first point was that the smaller nature of the subject site would attract a valuation premium because of its lesser size and he attributed a positive effect of ten per cent in that regard.

75 He then considered that there ought to be a significant discount because the site was located in Claymore and that this was socially and functionally much less attractive for such purposes. The social and functional detriment that he identified being the issue of resident objections leading to religious organisations tending, in his evidence, to relocate to or develop in industrial areas rather than in residential areas and he suggested that this discount should be between twenty-five and thirty per cent.

76 As the Sale 9 sale had taken place some two years prior to the base date for the present appeal, he suggested that an improvement in valuation of approximately fifteen per cent should be allowed. He therefore agreed that the impact of the subject site in making such a comparison with Mr McDonald's Sale 9 would be between the zero to minus five per cent range that is a maximum discount of five per cent.

77 With respect to the Frost Road sale, the sale took place on 15 March 2000. I would therefore consider it appropriate not to make any adjustment for market movement between that date and the base date. The sizes are, in very broad terms, comparable and I would therefore accept that, of the adjustments that Mr Neskovski proposed for the Sale 9 site, the only one that would be appropriate to apply would be the discount for Claymore of twenty-five to thirty per cent. The sale price of the Frost Road site was $60.25m2. Implying a discount of 25 to 30% would give a range of $45.18m2 to $42.17m2 in the Claymore area. Therefore, as they are in the middle of the range between the community purpose valuations of Mr Neskovski of $40m2 and Mr McDonald of $47m2, I have not taken the time during the period since we adjourned this morning to prepare a spreadsheet dealing with those calculations.

78 However, I have prepared spreadsheets to undertake calculations based on the elements of Mr Neskovski's 3A approach with the adjustments on rates and inclusions of items that I indicated earlier in this decision. I have undertaken four sets of calculations.

79 The first is based on Mr Neskovski's rates of $75 and $85m2, $40m2 and $70m2, where applying those to his 3A formulation would give, what I will would describe as an item 24 in his table calculation in each case. That item is the market land value as at 1 July 2000.

80 The Neskovski rates would give a valuation of approximately $622,500 or marginally higher than that.

81 The application of Mr McDonald's rates of $80m2, $90m2, $47m2 and $70m2 would give a valuation of approximately $683,300.

82 The application of the rates which would be derived from the application of Mr Neskovski's discounts, the $56.60m2 rate derived from the sale of Site 9, that is a 5% discount would give a valuation of $714,000 and the application of no discount to the Site 9 comparison, that is rates of $80m2, $90m2, $56m2 and $70m2 would give a valuation of slightly less than $729,000.

83 Mr McDonald was asked in cross-examination what would be the result if he applied what might generally be described as Mr Neskovski's 3A methodology to his basis of treatment of the site. His evidence was that it would result in a deduction of approximately $100,000 from his valuation of $840,000. That is, it would result in a valuation of $740,000 and he said "That would be to clear, if you wanted to go down that particular road"."

84 I have considered what conclusion I should reach as to the application of Mr Neskovski's 3A methodology if properly applied and allowing for the variations that I have determined are appropriate.

85 It would seem to me that in light of Mr McDonald's evidence and the various calculations that I have undertaken on the basis that I consider satisfactory that it would not be unreasonable or improbable to reach a valuation of $755,000.

86 I am certainly not satisfied on the basis of the application of Mr Neskovski's 3A methodology and the uncertainties that are attendant thereupon that I would have the appropriate degree of comfortable satisfaction required by Briggenshaw v Briggenshaw (1938) 60 CLR 366 to be satisfied that application of Mr Neskovski's methodology 3A would satisfy the onus required under s 42 of the Act that I should vary the valuation.

87 Although described by Mr Neskovski as being a check method only, for completeness and fairness to the applicant, I should consider Mr Neskovski's proposed methodology 3B which is set out at pages 16 and 17 of his statement of evidence. As I noted earlier this is based on taking the actual purchase price of the land as at 2002, discounting for market movements and depreciated value of buildings and car parks.

88 In this regard the respondent's submissions concerning this analysis are as follows: This analysis hinges on the rate of $225 per square metre attributed by Mr Neskovski to the buildings on the land. No basis for arriving at this figure is provided in Mr Neskovski's report and he was not able to provide in any cross-examination other than to say he based it on his general experience. He was not able to point to any figures from which it's derived. Documents recording the material upon which he based his opinion and the workings of the calculations were sought by a notice to produce and none were provided.

89 The applicant not did contest that latter position as to its accuracy. The respondent submitted that "The sum of $225 per square metre as the depreciated value of the buildings was an entirely arbitrary value which renders this aspect of Mr Neskovski's report of no weight."

90 It was Mr Neskovski's evidence in oral evidence that $225m2 was calculated using his professional judgment and it constituted "My honest opinion of the added value of those improvements on the land""

91 I note, in Mr Neskovski's statement of evidence at p 16, that he stated: The suggested increase in the Claymore Market Place of about $250,000 or 27.7, 8 per cent in some five years is further evidence that the Claymore Shopping Centre is near to economically obsolete"

92 However, he qualified that further down the page when he said The Rosemeadow and Eagle Vale Shopping Centres might suggest that the commercial use for the entire site might initially be inappropriate. However the major obstacle is what would a prudent hypothetical purchaser develop upon the site. Given the fact that whilst the shopping centre only occupies about 50 % of the site the shopping centre building is centrally located on the site which to the Valuer's mind suggests strongly that the Claymore Shopping Centre is not economically obsolete.

93 Mr Neskovski was asked by me whether his first opinion that the centre might be regarded as being economically obsolete would result in an appropriate application of the valuing proposition that when one has valueless buildings on the land, they should not be given a depreciated value but should be regarded as a cost obstruction so that the cost of demolition would be deducted from any value.

94 Mr Neskovski did not accept this proposition and, in light of the qualification that he gives at the foot of p 16, I accept his evidence in this regard.

95 However, I am not satisfied that there is a demonstrably rational basis for acceptance of the $225m2 for the existing 2230.5 square metres of floor space on the site. Indeed, had Mr Neskovski concluded that the appropriate depreciated value of that area of the site was $339.55m2, one would arrive at a zero land value for the site.

96 Absent some compelling rational evidence to underpin the valuation of $225m2 for the depreciated value of the building, such as a conventional depreciation process to derive that figure, I am not prepared to accept the validity of the outcome of his method 3B. That is not to say I am determining that method 3B itself is inappropriate, merely that in the present circumstances I am not able to be satisfied on a Briggenshaw basis as to the outcome that would be reached from such calculation.

97 Therefore, I have reached the conclusion that the applicant has not discharged the requisite onus under s 40(2) of the Act.

98 The orders that will be formally issued by the Court in this appeal, therefore, will be: 1. The appeal is dismissed. 2. Pursuant to s 40(1)(a) of the Valuation of Land Act 1916, the valuation as at 1 July 2000 for lot 503 Deposited Plan 263776 and lot 100 Deposited Plan 852796 of $755,000 is confirmed. 3. The exhibits are returned.

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