Warwick Farm Central Pty Ltd v Valuer General

1. As appears from the table above, the issued land values under challenge for the 2019 and 2020 valuing years, and the 2021 valuing year are $19,800,000 and $25,100,000 respectively. The appellant contends for approximately half these values in the sum of $9,493,200 for the 2019 and 2020 valuing years and $13,185,000 for the 2021 valuing year. The valuations provided by the Valuer-General's expert valuer for each of the valuation dates are higher than the issued land values at $24,000,000 for the 2019 and 2020 valuing years, and $30,300,000 for the 2021 valuing year.
2. On an appeal under s 37(1) of the VLA, the Court may pursuant to s 40(1): 1. confirm or revoke the decision to which the appeal relates, 2. make a decision in place of the decision to which the appeal relates, 3. remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision.
3. Pursuant to s 40(2), on an appeal, the appellant has the onus of proving the appellant's case.
4. In summary, the appellant contends that the land values determined by the Valuer-General are too high, and that the Court should revoke the decisions of the Valuer-General for each of the valuing years and replace them with the land values contended for by the appellant.
5. Following finalisation of evidence from town planners and flood engineers, the contest between the parties has essentially reduced to a dispute between valuers as to the relevance of the competing sales for which each contends and the adjustments to be made to those sales for the purposes of direct comparison to the subject land. There are no common sales. The town planners and flood engineers were not required for cross-examination.
6. The Court has determined that the Valuer-General's valuations of the subject land were too high.

Characteristics of the subject land

1. The subject land is 29,300 m2 (2.93 ha) of vacant, generally level land. It is of irregular shape, an island site with 4 street frontages. The 4 street frontages are Warwick Street (northern boundary), Manning Street (western boundary), Munday Street (southern boundary) and Governor Macquarie Drive (eastern boundary). A portion of the northern frontage is directly adjacent to the Hume Highway, with a signalised intersection left and right onto the Highway from Governor Macquarie Drive. It is adjacent to the Warwick Farm train station, and a distance of 1.5 kilometres (kms) to the Liverpool central business district (CBD).
2. The dimensions of the subject land (taken from DP 1162276) are as follows: Northern boundary (Hume Highway and Warwick Street) 194.73m irregular Western boundary (Manning Street) 55.27m Southern boundary (Munday Street) 287.66m Splay corner (Munday Street and Governor Macquarie Drive) 13.91m arc Eastern boundary (Governor Macquarie Drive) 183.34m irregular Splay corner (Governor Macquarie Drive and Hume Highway) 16.71m arc

1. Warwick Farm Racecourse is to the east of the subject land, and it is adjoined by residential zoned land to the west and south (together with horse stables to the south).

Development consents

1. On 28 February 2013, Liverpool City Council (Council) approved a development application for a Masters Home Improvement Centre (the 2013 development consent). The 2013 development consent was never taken up, and lapsed on 28 February 2018.
2. An aerial photograph of the subject land, showing its 4 street frontages, is extracted below:
3. The Valuer-General's town planning and flooding experts refer to a development consent granted in relation to the subject land on 5 January 2023, and therefore some two years after the last of the 3 dates the valuations were made (the 2023 development consent). The relevant development application was lodged on 29 September 2021, again after the last of the dates the valuations were made. The Court is satisfied that the extent to which, if at all, the development consent adds value to the subject land is to be disregarded for the purposes of s 6A of the VLA. [1]

The easement and sewer pipe

1. The subject land is burdened by easement No J182313, for sewage purposes, dated 14 January 1963 (the easement), in favour of what was at the relevant time the Metropolitan Water Sewerage and Drainage Board (now Sydney Water).
2. The easement is 3.66m wide, approximately 146m in length, and is in the south-eastern portion of the land. It severs the land into two portions with the smaller portion of the severed land to the eastern side of the easement.
3. The easement is shown on DP 1162276 to run at an angle, roughly along the length of Governor Macquarie Drive from the Hume Highway to Munday Street. It traverses the subject land about 51.25m west from the corner of Munday Street and Governor Macquarie Drive to a point just south of the corner of Governor Macquarie Drive and Hume Highway. It provides Sydney Water with the right to construct and maintain works for sewerage purposes and prohibits the appellant from erecting, constructing or placing any building or structure over the easement.
4. The appellant contended that the subject land is traversed north to south by a large rising sewer main with a diameter of 375mm. Whilst pursuant to s 6A of the VLA the subject land is to be valued unencumbered, the authorities recognise that structures on the land which decrease the value of the land compared with its natural or virgin state are not to be disregarded. [2] Accordingly, the appellant submitted, the presence of the sewer main bisecting the subject land, and its impact on the development potential or costs of developing the subject land are to be taken into account in assessing the land values. [3] The appellant contended that a 10% adjustment from the comparable sales not affected by a rising sewer main was appropriate to reflect the risks and additional cost burden associated with relocating the rising sewer main.
5. The Valuer-General contended that whilst the easement is the site of a planned rising sewer main, the appellant bears the onus of proving that there is in fact such a sewer main, and that it should be taken into account in the valuations. Further, the Valuer-General contended that in the event that the appellant discharges its onus of proving that a rising sewer main has been installed, there are statutory covenants in favour of Sydney Water under s 44 of the Sydney Water Act 1994 (NSW) (Sydney Water Act).

Zoning

1. At each of the valuing years, the Liverpool Local Environmental Plan 2008 (LLEP) applied to the subject land which was zoned B5 Business Development. The objectives of the B5 zone and permissible uses as at the valuing years were as follows: Zone B5 Business Development Objectives of zone To enable a mix of business and warehouse uses, and specialised retail premises that require a large floor area, in locations that are close to, and that support the viability of, centres. To maintain the economic strength of centres by limiting the retailing of food and clothing. To provide for a larger regionally significant business development centre in a location that is highly accessible to the region. To ensure a reasonable concentration of business activity. 2. Permitted without consent Nil 3. Permitted with consent Building identification signs; Business identification signs; Car parks; Centre-based child care facilities; Community facilities; Environmental facilities; Environmental protection works; Flood mitigation works; Food and drink premises; Garden centres; Hardware and building supplies; Hotel or motel accommodation; Landscaping material supplies; Light industries; Liquid fuel depots; Office premises; Oyster aquaculture; Passenger transport facilities; Places of public worship; Plant nurseries; Public administration buildings; Pubs; Recreation areas; Recreation facilities (indoor); Recreation facilities (outdoor); Respite day care centres; Restaurants or cafes; Roads; Specialised retail premises; Storage premises; Tank-based aquaculture; Timber yards; Vehicle sales or hire premises; Warehouse or distribution centres 4. Prohibited Pond-based aquaculture; Any other development not specified in item 2 or 3
2. Residential accommodation was prohibited in the B5 Business Development zone.
3. The key planning controls as at the valuing years were agreed between the parties' town planners and are summarised in the table below: 1 July 2019 1 July 2020 1 July 2021 Zoning B5 B5 B5 Height of building Maximum permissible 15m Maximum permissible 15m Maximum permissible 15m Floor space ratio Maximum permissible 0.75:1 Maximum permissible 0.75:1 Maximum permissible 0.75:1 Lot size Minimum permissible 2 ha Minimum permissible 2 ha Minimum permissible 2 ha Flood prone Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood. Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood. Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood. Bushfire n/a n/a n/a

1. Part 6 of the Liverpool Development Control Plan 2008 (LDCP) provided as follows in relation to B5 zones (emphasis added): The Business Development zone is intended for use by bulky goods premises and other uses that require large floor plates which have limited opportunity to locate within commercial centres. B5 zones Business Development zones are located in areas of high accessibility to the arterial road network.

The statutory valuation task

1. In relation to land value, s 6A of the VLA provides as follows: (1) The land value of land is the capital sum 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. (2) Notwithstanding anything in subsection (1), in determining the land value of any land it shall be assumed that - (a) the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates, and (b) such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used, but nothing in this subsection prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that the improvements, if any, other than land improvements, referred to in subsection (1) had not been made…
2. The valuer has to consider what the land would fetch as at the date of the valuation as if the improvements made had not been made. As Lord Dunedin said in Toohey's Ltd v The Valuer General (NSW) [4] of the task of the valuer (at 443) (emphasis added): Now, what he has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made. Words could scarcely be clearer to show that the improvements were to be left entirely out of view. They are to be taken, not only as non-existent, but as if they never had existed. It is, therefore, to approach the question from a completely wrong point of view to begin with a valuation which takes in the improvements and then proceed by means of subtraction of a sum arrived at by an independent valuation in order to find the required figure. What the Act requires is really quite simple. Here is a plot of land; assume that there is nothing on it in the way of improvement; what would it fetch in the market? It will be observed that the value is not what has been sometimes designated by the expression "prairie value." The land must be taken as it exists at the date of the valuation.
3. There are no relevant improvements to the subject land here, except for boundary fencing. It was not suggested by the Valuer-General that the rising sewer main (if it exists) is an improvement, in particular that it is an "underground drain" within the meaning of s 4 of the VLA.
4. Section 6A(1) of the VLA requires, at each valuing year, the postulation of a notional sale. This notional sale is one that is assumed to take place in a market, and the seller would conclude the sale for the highest price it could obtain in that market: Trust Company of Australia at [32] (Campbell JA) (Beazley and Ipp JJA agreeing). In this way, the concept of the highest and best use comes to apply through the notional sale that s 6A requires to occur. [5] The notional sale occurs between a hypothetical willing purchaser and a not unwilling vendor. As Griffith CJ said in Spencer v The Commonwealth of Australia (Spencer v The Commonwealth) at 432: [6] …what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and not an unwilling vendor would come together…
5. It is the hypothetical, unencumbered fee simple that is to be valued, "the fee simple as the highest estate unencumbered and subject to no conditions" restructuring the use or enjoyment of the land: Royal Sydney Golf Club v Federal Commissioner of Taxation (Royal Sydney) at 623 (Dixon CJ, McTiernan, Webb, Fullagar, Kitto JJ). [7] The purpose behind the fee simple being taken as an unencumbered fee simple (insofar as the provision is found in a taxing statute) was identified in Royal Sydney at 623 as follows: It seems evident that the fee simple mentioned must be taken as free from encumbrances which, if they impaired the value of the estate, nevertheless operated to confer upon some other person an estate or interest in land. Were it otherwise the taxable value of the land would be diminished but the correlative estate or interest would not come into tax unless by some chance it were an interest falling under some specific provision imposing liability. See also Gollan v Randwick Municipal Council (Gollan) at 100, 101 on appeal from the Supreme Court of NSW. [8]
6. As noted previously, pursuant to s 40(2) of the VLA, the appellant has the onus of proving its case, relevantly, that the issued land values for each of the valuing years are too high. [9] If the appellant does not discharge its onus, the appeal must be dismissed and the issued statutory values confirmed. [10]
7. Accordingly, the value of the estate in fee simple is taken as involving the hypothesis of a "fee simple unencumbered and subject to no conditions" restricting the use or enjoyment of the land: Royal Sydney at 623. It is the hypothetical "absolute or pure title" that is to be valued: Gollan at 101.
8. The Valuer-General identified two "qualifiers" to the above proposition: 1. The first qualifier concerns the distinction between "a public law affecting the enjoyment of land and a restriction of title": Royal Sydney at 624. Where there is an encumbrance or restriction to a specific parcel, or a law that affects an area (even a small area) chosen "independently of all questions of title or ownership" that control the use of the land, the restriction is ignored: Royal Sydney at 624. The Sydney Water Act is not such a public law as it applies specifically and peculiarly when there are assets of Sydney Water in situ, and thus is not a law of general application. 2. The second qualifier concerns the state of the land. The land is to be valued in its actual, rather than its notional state: Brisbane City Council v The Valuer-General for the State of Queensland (Brisbane City Council) [11] at 50 and 57 (Gibbs J). Accordingly, as the Valuer-General submitted in opening, where there is a physical disability such as a body of water, this may be taken into account. [12] Where there is a man made disability (a worsement) this too might be taken into account. [13]
9. In Brisbane City Council, Gibbs J held that it would be appropriate to have regard to disabilities affecting the land.
10. However, the Valuer-General submitted, even if there is a rising sewer main within the subject land, it does not here negatively affect the land in the requisite sense, requiring it to be taken into account.
11. The Valuer-General referred to Lewis Berger and Sons (Queensland) Pty Ltd [14] (Lewis Burger) where the Land Court (Mr Barry) at 101 found that "the easement as it attaches to the servient tenement [was] an encumbrance" and was to be "disregarded in ascertaining the unencumbered value of the subject land."
12. In closing, the appellant submitted that the Court, exercising its Class 3 jurisdiction, is not obliged to act only on the basis of evidence adduced by expert valuers who appear as witnesses. As judicial valuer, the Court is entitled to reject the whole of the expert evidence and, drawing on the experience of the Court, do as best as it can to identify an appropriate level of discount or an appropriate quantum of adjustment to the comparable sales: Leichhardt Council v Roads and Traffic Authority of NSW. [15]

The comparable sales methodology

1. Notwithstanding the absence of any common sales, the parties were in agreement that the appropriate valuation methodology was the direct comparison method based on an analysis of comparable land sales, the use of comparable sales being preferred as the primary method of valuation. It is long established that, ordinarily, the best evidence of the market value of land is that of comparables.
2. In Tenstat v Valuer General; Woolworths Limited v Valuer General [16] at [35]-[43], Parker AC referred to the direct comparison of sales evidence approach as the conventional method of valuation (emphasis in original), and identified the four steps in the process of undertaking a valuation using comparable sales evidence: 35. It is well established that, if comparable sales are available, the direct comparison of sales evidence approach is the conventional method of valuation (Graham Trilby Pty Ltd v Valuer General [2009] NSW LEC 1087 at 41(Trilby); Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 at 156; Riverbank Pty Ltd v Commonwealth (1974) 48 AJLR 483 at 484; Marroun v Roads and Maritime Services [2012] NSWLEC 196 at 196 (Marroun)). 36. The process of undertaking a valuation using comparable evidence comprises several steps, including the: a accumulation; b analysis; c adjustment; and d application of potentially genuinely comparable sales (Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73 (Trust Company); Marroun, 197). 37. A Court depends upon the established expertise of valuer witnesses called on both sides of the case (Marroun, 197). 38. As Sugerman J said in Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1, at 18-19: "The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant." 39. The accumulation of potentially genuinely comparable sales seeks to identify and establish a pool of relevant comparable sales from which information may be deduced concerning the value of the subject property (Trust Company, 110 and 111; Marroun, 198). 40. Generally the competing parties produce lists which the Court must sift to identify some which are "truly comparable", or a "reasonably representative" sample and "relevant and sufficient in volume" (Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111, at 121). 41. Where the comparable sales differ in substantial ways from the subject property, a process of reasoning is required to establish their utility or otherwise (Leichhardt Municipal Council v Seatainer Terminals (1981) 48 LGRA 409, at 414). 42. In Brewarrana v Commissioner of Highways (No 2) 6 SASR (Brewarrana) at page 551, Wells J observed: "there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not." 43. Further, Wells J went on to observe that: "The evidence in this case suggests strongly to my mind that, at the initial stages, a valuer will almost certainly look at all known sales in potentially relevant areas, if for no other reason than to discern patterns of prices and changes in price levels over important periods."
3. In Richard Capuano v Roads and Maritime Services (Capuano), [17] Robson J at [13]-[19] summarised the widely accepted methodology of the comparable sales approach. That methodology, using comparable sales evidence, is undertaken in four steps: accumulation, analysis, adjustment and application: 13. It is generally accepted that, insofar as there are comparable properties available, being sales of properties sufficiently similar to the subject property as to allow a comparison to be made between them, the conventional valuation method is the comparable sales approach. The manner in which that method should be applied is now well-known: River Bank Pty Ltd v Commonwealth (1974) 4 ALR 651; (1974) 31 LGRA 244 at 652; Graham Trilby Pty Ltd v Valuer-General [2008] NSWLEC 217 at [27]; Graham Trilby Pty Ltd v Valuer-General [2011] NSWLEC 68 at [24]; Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]; New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 ('Cremation Company') at [84]-[88] and [97]-[104]. 14. The accepted methodology for the comparable sales approach is that it be undertaken in four steps, being accumulation, analysis, adjustment, and application: Constantine v Blacktown City Council (No 2) [2016] NSWLEC 81 at [100] (Moore J); Hoy v Coffs Harbour City Council [2015] NSWLEC 128 at [83] (Pain J) (leave to appeal this judgment was refused in Hoy v Coffs Harbour City Council [2016] NSWCA 257; (2016) 281 LGERA 411 at [61] (Bathurst CJ, with Simpson and Payne JJA agreeing)); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (No 6) [2015] NSWLEC 18 at [344] (Pain J); Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [197] (Sheahan J and Parker AC) ('Marroun') (affirmed on appeal in Marroun v Roads and Maritime Services [2013] NSWCA 358; (2013) 211 LGERA 391 at [75] (Tobias AJA, with Basten and Gleeson JJA agreeing)); Cremation Company at [99]. 15. First, the valuer (which includes the Court acting as valuer on appeal) is to accumulate comparable properties. In Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8, McHugh, Gummow, Kirby, Hayne and Callinan JJ commented at [18] that the "sales to be treated as comparable sales need to be truly comparable", although they added that the Court should not be "unreasonably selective". 16. Secondly, the valuer should analyse those comparable sales. This often involves converting the value of those sales into another measurement that can be easily compared: Marroun at [201] (Sheahan J and Parker AC). 17. Thirdly, the valuer (judicial or otherwise) should adjust those properties it considers comparable to create equivalence with the unimproved subject property. I note the comments of Biscoe J in Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]: The basis for the valuers' valuation assessments is the sales comparison method. Accepted valuation practice permits adjustments for differences, such as in location, area and time to enable valuers to have comparable values which, following adjustment, account for the various differences with the subject property. Such adjustments are generally based on a reasoning process drawing on the skill and experience of the valuer and are undertaken to derive an opinion of value through a deductive process. Because properties are rarely identical, adjustments for differences are obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property. Too many adjustments potentially render the comparable sale unsafe to rely upon. Caution is therefore required where large adjustments are to be made. Reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable. Third, the Court should then apply these adjusted values to the subject property. The purpose of this is to determine, based on comparable sales and as best it can, what value the subject property would obtain if it were to be sold on the market. 18. Fourthly, the valuer should apply the comparable sales approach to determine a value of the subject property based on the adjusted values of the comparable properties. 19. Although there has been some judicial debate, it is now accepted that the process of making explicit adjustments for differences in the valuation method allows the adjustment process to be logical and transparent as opposed to an implicit process comprising a single adjustment that risks rejection for want of transparency: Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73; (2012) 211 LGERA 158 at [115]; Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 at [45]; and Marroun at [203]-[207].
4. In Perisher Blue, Duggan J said at [19] that sales of land with "sufficiently similar characteristics" are to be identified and adjustments made "to render the sales suitably comparable to inform a determination of the unimproved value of the Subject Land."
5. In Land Acquisition (7th ed, LexisNexis Butterworths, 2017), Newton & Conolly said at 250: The onus is upon the party submitting evidence of the value of the land to prove that the sales relied upon are in fact comparable. Having established that prima facie there are grounds for showing comparability, the onus moves to the other party to show that the sales referred to are not comparable. It may be contended that the sales were of an unusual nature, were too distant in time, had different features, were of a 'forced' nature, or for some other reason did not amount to a comparable sale or, if they were comparable, they were weak and unconvincing evidence of the resumed land's market value.
6. In Bingham v Cumberland County Council, [18] Sugerman J at 18-19 considered the absence of comparable sales evidence as follows: In the absence of sufficient guidance to be had from sales, the valuer may find himself in a position resembling that to which Lord Romer referred Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer Vizapatam [1939] AC 302 at 312-313 in which he 'will have no market value to guide him, and he will have to ascertain as best he may from the materials before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land'. In these cases that would not be because the land, in terms of Lord Romer's judgment, had 'some unusual, and it may be unique, features as regards its position or its potentialities' but because it derived a certain uniqueness from the character of the provisions and restrictions affecting it and consequences of the affection, which would take a sale of it outside the ordinary run of transactions in otherwise comparable lands and thus preclude direct comparison ... The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in the other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant.
7. In Port Macquarie West Bowling Club Ltd v The Minister, [19] Else-Mitchell J said at 65-66 in relation to the absence of sales data of comparable lands similarly zoned: … there were no sales data of comparable lands similarly zoned and each valuer did the best he could with the material available. The board recognized this and stated that it had been faced with an unusual problem, but it referred to the decision of Hardie J. in Park Beach Hotel Pty. Ltd. v. The Minister [(1970) 21 The Valuer 453 and 534] as affording it some guidance. In that case, which concerned the conversion of a lease of open space land under the same provisions of the Crown Lands Consolidation Act, the valuation of the land was reached by taking sales of business sites nearby and making a deduction therefrom to compensate for the zoning restrictions imposed on open space lands under the local Coffs Harbour Planning Scheme Ordinance. What the local land board did in the present matter was to adopt Mr. Walker's figure of $106,000 as a value on a virtually unrestricted basis and, in reliance on Hardie J.'s decision in the Park Beach Hotel case, deduct 14 per cent therefrom to reduce the price to $91,160. It appears to me that the board was entitled to take this course in the circumstances of the case, because it was common ground that there were no sales of land similarly zoned and that left little option to the valuers but to use sales of land differently zoned, subject to a deduction for such difference as a basis for determining the value or price of the subject land.
8. In Smith v Eurobodalla Shire Council, [20] McClellan AJA said at [121] (Mason P and Santow JA agreeing) of cases where there is no direct market evidence in relation to a particular property (emphasis added): There is no doubt that the foundation for an expert's opinion must be adequately proved. This will include the evidence necessary to qualify the person as an expert in the relevant field and proof of the facts in respect of which the expert is requested to give an opinion. As Heydon JA acknowledges, this can give rise to difficulties in areas such as land valuation where, in many cases, the available market evidence is limited and the expert's judgment must be based upon accumulated experience. Sometimes when evidence of comparable sales is not available, alternative but less satisfactory methods of valuation may be utilised. (Various methods are discussed in Alan Hyam, The Law Affecting the Valuation of Land in Australia, 3rd ed, p 113ff). But there will be many cases, particularly in relation to sales of "unique" property, where this may not be possible and a valuer will be required to exercise his or her judgment having regard to the objective material which is available, however inadequate. If there is simply no direct market evidence in relation to a particular property, this does not mean that a valuer cannot express an opinion as to its value. As McClure J points out in the Full Court of the Supreme Court of Western Australia case in Western Australian Planning Commission v Arcus Shopfitters (2003) WASCA 295, Makita does not mean that an opinion will be excluded where the objective material is not complete "but the valuer must reveal as far as possible the reasoning process actually employed so as to enable the court to evaluate the evidence and the expert's conclusions."
9. And in Almona Pty Ltd v Roads and Traffic Authority of New South Wales, [21] Jagot J said at [27] of the difficulties which arise where there is a lack of comparable sales (emphasis added): The site is unusual and the acquisition presents difficulties for the valuer attempting to assess the value of the land taken. I accept that both valuers have attempted to apply methods capable of providing assistance to the Court in all the circumstances. Given the lack of comparable sales, the caution of Wells J in Bronzel v State Planning Authority (1979) 21 SASR 513 at 516; 44 LGRA 34 at 38 is apt. Wells J observed that: … this Court should be slow to reject any method that, in expert hands, is capable of yielding a result within bounds that are not unreasonable. The limitations of every method must, of course, always be kept clearly in mind. I am of the opinion that the approach likely to result in the most direct and reliable resolution of the outstanding differences between the valuations is to consider the particular features of each valuation that are capable of yielding to adverse criticism.
10. In Fricke, Compulsory Acquisition of Land in Australia (2nd ed, Law Book Co, 1982), the learned author said at 344: There are times when no comparable evidence or even near-comparable evidence is available. It is in such instances that the valuer must draw from his experience and knowledge and whilst he should never be an advocate in making his valuation, he may in these circumstances need to become one to sustain it.
11. And in Hyam, The Law Affecting Valuation of Land in Australia (6th ed, Federation Press, 2020), the learned author said at 137: …in the absence of directly comparable sales evidence, a valuer, or a court, should look to those sales of lesser comparability, analyse them and make the necessary adjustments in applying them for the purpose of assessing the task at hand. Failing any sales of remotely comparable properties other methods of valuation should be utilised.

Expert evidence

1. The following expert evidence was served: 1. For the appellant: 1. Individual Flood Engineering Report prepared by Mr Samer El Haddad, dated 7 July 2023. 2. Individual Town Planning Report prepared by Mr Robert Chambers, dated July 2023. 3. Individual Valuation Report prepared by Mr Angelo Konidaris, dated 27 September 2023. 1. For the Valuer-General: 1. Individual Flood Engineering Report prepared by Mr Daniel Dhiacou, dated 21 July 2023. 2. Individual Town Planning Report prepared by Mr Paul Grech, dated 21 July 2023. 3. Individual Valuation Report prepared by Mr Cameron Hubbard, dated 27 September 2023. 1. Joint reports: 1. Joint Report of flooding experts filed on 18 August 2023 (the flooding joint report). 2. Joint Report of town planners filed on 18 September 2023 (the joint report of town planners). 3. Joint Report of valuers filed on 16 October 2023 (the joint report of valuers). 4. Supplementary Joint Report of valuers filed on 26 October 2023 (the supplementary joint report of valuers).

Issues arising from the evidence

1. There were some disagreements which remained between the flood engineers and the town planners following joint conferencing. However, they need not be resolved by the Court. That is because the valuers agreed on some key assumptions which rendered those disagreements unnecessary to decide.
2. The principal issue in the case relates to the valuation evidence. Whilst each valuer adopted the comparable sales methodology, there were as previously noted no common sales between them.
3. The evidence is summarised as follows:

Flood engineers

1. Council's eplanning website identified the subject land in the Medium Flood Risk category at each of the valuing years, as reproduced below. This means that it is land below the 1% Annual Exceedance Probability (AEP), but not subject to high hydraulic hazards:
2. The flood engineers agreed that for any development to take place on the subject land, compensatory earthworks would be required to ensure no loss of flood storage on site up to the 1% AEP flood level and to prevent cumulative offsite flood impacts. The town planners agreed that the amount of compensatory flood storage that would be required would vary depending on the design of any proposed development.
3. The LDCP contains flooding controls relevant to new commercial and industrial development on sites within the medium flood risk category. Those controls were agreed and summarised in the flooding joint report. In order to meet the flood planning controls, any proposed development on the subject land would need to: 1. be raised to the flood planning level which is equal to the 1% AEP + freeboard; 2. be designed in such a manner that all buildings and structures are flood compatible up to the 1% AEP + freeboard; 3. be structurally sound up to the 1% AEP + freeboard; 4. have nil or negligible effects on flooding elsewhere in the floodplain by providing flood compensatory storage on site in the form of an open area where the water could be stored, impacting on the ability to build across the full extent of the site. Alternatively, the builder would have to provide a flood void under the structure which would increase the costs of the development; 5. ensure that any basement car parking is protected from flooding up to the 1% AEP + freeboard; and 6. provide reliable pedestrian or vehicle access during a 1% AEP flood event to a publicly accessible location above the Probable Maximum Flood (PMF) event.
4. The flood experts also agreed that the necessity for earthworks and/or a suspended slab to permit commercial or industrial development in order to comply with the LDCP controls would likely result in the costs of development being higher than on a flood free site.
5. The appellant's flood expert, Mr El Haddad, was of the opinion that any prospective developer of the subject land would need to reach an agreement with Sydney Water to relocate the rising main out of the footprint of a proposed development. The Valuer-General's flood expert, Mr Dhiacou, accepted that he did not have sufficient expertise to express a view on that matter, but opined that if a development on the subject land could be designed without structures over the sewer, then there would be no need to relocate the sewer.
6. The appellant's town planner, Mr Chambers, considered that because the LDCP controls identify the subject land as subject to a flood constraint, this would likely add to the cost, complexity and risk of having a development application approved.

Town planners

1. The town planners agreed on the potential opportunities for the development of the subject land and the relevant constraints. They also agreed on the key planning controls that applied at each of the valuing years. They agreed on three likely development scenarios: 1. A single end user complex, such as a Bunnings warehouse and associated car parking, that could occupy the whole of the subject land (similar to the Masters Home Improvement Centre with its associated parking which was approved in the 2013 development consent). This would be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (a)). 2. A mixed-use development comprising large format bulky goods retailing outlets and other specialty outlets similar to that approved in the 2023 development consent. This would also be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (b)). 3. A development with seniors living above a commercial use and/or medical centre/private hospital under the provisions of the State Environmental Planning Policy (Housing) 2021 and the State Environmental Planning Policy (Infrastructure) 2007 relating to seniors housing. This would also be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (c)). This option was dismissed by both valuers, and accordingly has been disregarded by the Court as judicial valuer.
2. The planners agreed that it could take in the order of 12 months for development applications for the proposals in options (a) and (b) to be determined by Council, and longer if there were an appeal. As noted above at [24], the planners also agreed on the key planning controls applying to the comparable sales relied upon by the valuers.
3. The planners disagreed in certain respects as to the potential for an uplift in zoning of the subject land to include residential at each of the valuing years. However, the Court has disregarded this disagreement because the valuers subsequently agreed that no residential premium would be attached to the subject land.

Valuers: areas of agreement

1. The valuers reached a number of agreements, including in relation to the following: 1. The sale of the subject land in 2017 is not relevant to the valuations of the subject land. 2. The land is located in a "flood planning zone" (referred to as a "flood planning area" in the LLEP (cl 5.21) and the joint report of town planners) that would require on site flood storage to facilitate development. 3. The "high level of uncertainty relating to any uplift for rezoning for residential purposes is such that there would be no resulting premium over and above the existing B5 Business Development zoned value rates applied by a hypothetical purchaser at any of the valuation dates." 4. The highest and best use of the land for each of the valuing years would be a use permitted within the B5 Business Development zone. 5. A potential seniors living development does not represent the highest and best use of the land. 6. There was no market movement between 2019 and 2020, but a large increase from 2020 to 2021 of 27%. 7. The land is constrained by an easement for sewage purposes which bisects the land. The impact of the easement was not agreed.
2. The valuers agreed that development option (c) identified by the town planners is not a likely use, and was disregarded by both experts.
3. In relation to the methodology of valuation, the valuers agreed the direct comparison of sales approach analysed on a rate per square metre of site area.

Valuers: areas of disagreement

1. After joint conferencing, the valuers remained in disagreement in relation to the following issues: 1. the most likely use of the subject land; 2. the impact of the sewer pipe; 3. the impact of flooding on development costs; and 4. sales evidence and adjustments.

The most likely use of the subject land

1. The Valuer-General's valuation expert, Mr Hubbard, considered that the most likely use of the subject land is for a warehouse and distribution centre use, being a use permitted in the B5 Business Development zone. Accordingly, Mr Hubbard chose sales of land purchased for warehouse use.
2. Mr Hubbard's sales were located at Minchinbury, Granville, Prestons, Chipping Norton and Wetherill Park. The majority of these sales were within established industrial areas with the exception of Granville.
3. The appellant's expert, Mr Konidaris, was of the opinion that whilst warehouse and distribution centre uses are permissible in the B5 zone, those uses tend to be grouped together in established industrial areas, with "excellent road transport links". Mr Konidaris was of the opinion that the subject land is relatively isolated, not in an established industrial area, is surrounded by residential development and the Warwick Farm Racecourse, and does not have the benefit of complementarity with other warehouse and distribution centre users. He considered that the most likely use of the subject land is for bulky goods retailing and that a warehousing/distribution use is not a likely use of the subject land.
4. This difference between the valuers was fundamental to the choice of sales made by each of them. Mr Hubbard relied upon sales of sites which were purchased for warehouse use. Mr Konidaris' sales were mainly of sites purchased for bulky goods retailing.
5. Mr Konidaris opined that Mr Hubbard's chosen sales, being sites located in established industrial areas such as Minchinbury, Prestons, Chipping Norton industrial estate and Wetherill Park, were not similar to the location of the subject land, and were superior locations for warehouse and distribution centre users. Mr Konidaris considered that the prices paid in those established areas reflect the superior location in relation to Warwick Farm for bulky good users, but also the advantages of being located in a fully serviced industrial estate.
6. Mr Konidaris' sales were located in Hoxton Park, Warwick Farm, Austral and Gledswood Hills.
7. The market evidence relied upon by the valuers demonstrated that sites sold to warehouse and distribution centre users attract a significant premium compared to sites purchased for bulky goods retailing uses. Accordingly, there was a very significant difference in values contended for by Mr Hubbard and by Mr Konidaris: 1. Mr Hubbard was of the opinion that his sales supported a land value of $820 /m2. 2. Mr Konidaris' analysis of his very different sales supported a land value of $360 /m2.

The impact of the sewer pipe

1. Following joint conferencing, Mr Konidaris made a 10% adjustment to the land value of the subject land when compared to the sales selected by him, opining that such adjustment captures the time, cost and risk inherent in the potential relocation of the sewage infrastructure.
2. Notwithstanding his acknowledgement that the land is "constrained" by the easement, Mr Hubbard placed no detriment on the location of the sewage infrastructure.

Impact of flooding on development costs

1. In relation to the impact of flooding on development costs, both experts agreed that a discount is necessary to account for the additional costs associated with developing the subject land compared to the sales selected by each of them. Mr Hubbard suggested a discount of 5%, Mr Konidaris a discount of 10%.

Sales evidence and adjustments

1. The first and fundamental issue which arises in the proceedings is the accumulation of potentially relevant comparable sales "from which information may be deduced concerning the value of the subject property": Trust Co Ltd v Minister Administering the Crown Lands Act 1989 [22] at 110, 111; Marroun v Roads and Maritime Services [23] at 198 (Sheahan J), that is, which of the sales relied upon by the valuers are the appropriate or more appropriate, comparable sales, or whether any of them are generally or truly comparable and provide a reasonably representative same of sales "relevant and sufficient in volume": Maurici v Chief Commissioner of State Revenue [24] (Maurici) at 121. However, as McHugh, Gummow, Kirby, Hayne and Callinan JJ added in Maurici, the Court should not be "unreasonably selective"; also Capuano at [15] (Robson J).
2. The second issue concerns the adjustments that should be made to the properties it considers comparable to create equivalence with the subject land: Holcim (Australia) Pty Ltd v Valuer-General [25] (Holcim) at [31] (Biscoe J); Capuano at [17] (Robson J) to determine the land values of the subject land.
3. Mr Konidaris relied upon 6 sales. Mr Hubbard relied upon 7 sales. There are different sales relating to the 2019 and 2020 valuation dates, and the 2021 valuation date.
4. The sales for the valuing years 1 July 2019 and 1 July 2020 relied upon by the appellant's valuer, Mr Konidaris, were as follows: Reference Address AK 1 (19/20) Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park AK 2 (19/20) 28-34 Orange Grove Road, Warwick Farm AK 3 (19/20) 184 Fifth Avenue, Austral AK 4 (19/20) 402-412 Bringelly Road, Austral

1. The sales for the valuing years 1 July 2019 and 1 July 2020 relied upon by the Valuer-General's valuer, Mr Hubbard, were as follows: Reference Address CH 1 (19/20) 42 Sargents Road, Minchinbury CH 2 (19/20) 17 John Hines Avenue, Minchinbury CH 3 (19/20) 1 Woodville Road, Granville CH 4 (19/20) 3 Melito Court, Prestons CH 5 (19/20) 42-46 Alfred Road, Chipping Norton

1. Mr Konidaris' sales for the valuing year 1 July 2021 were as follows: Reference Address AK 1 (2021) 120 - 130 Fifth Avenue, Bringelly AK 3 (2021) 9 Gregory Hills Drive, Gledswood Hills

1. Mr Hubbard's sales for the valuing year 1 July 2021 were as follows: Reference Address CH 1 (2021) 24-40 Alfred Road, Chipping Norton CH 2 (2021) 1011-1027 Canley Vale Road, Wetherill Park

1. Each of the sales, with commentary, was identified in tables attached to the joint report of valuers. The valuers also prepared two further tables, one for the 2019 and 2020 valuing years, and one for the 2021 valuing year, setting out their respective adjustments to each other's sales.
2. The Court was taken to each of the sales on a site inspection conducted on the first day of the hearing. The map below shows the location of the 13 sales relied on by the parties.
3. The table below shows the adjustments made by the valuers to the sales selected by each of them for the valuing years 1 July 2019 and 1 July 2020.
4. The table below shows the adjustments made to the sales selected by each of the valuers for the valuing year 2021.

The appellant's closing submissions

1. In closing submissions, the appellant referred to the explanation given by the Valuer-General's expert, Mr Hubbard, for the 5% adjustment made by him for flooding in relation to the sales selected by Mr Konidaris, and submitted that Mr Hubbard appeared to have "taken the view that some of the sales might be 50% similarly affected and others [were] in a 'low-risk planning area' and therefore the sales are the 'subject of flooding'".
2. However, the appellant submitted, a closer examination demonstrates that the sales selected by Mr Konidaris are not the subject of flooding, or are not sites where works would need to be undertaken to raise the land above the 1% AEP flood level and provide compensatory flood storage. The LDCP, it was submitted, divides land into 4 areas in respect of flooding: High Flood Risk Category, Medium Flood Risk Category, Low Flood Risk Category and No Flood Risk Mapping. [26] The Low Flood Risk Category is "all other land within the floodplain (i.e. within the extent of the PMF) but not identified within either the High Flood Risk category or the Medium Flood Risk category." The LDCP provides at 38 that: The Low Flood Risk Category is where the risk of damages is low for most land uses. The Low Flood Risk Category is that area above the 1% AEP flood and most land uses would be permitted within this Category.
3. Therefore, the appellant submitted, where the sales are located in the Low Flood Risk Category, they are not sites where works would need to be undertaken to raise the land above the 1% AEP flood level as would be necessary in relation to the subject land. Those sales were submitted to include: 1. AK 1 (19/20) - Low Flood Risk Category. 2. AK 2 (19/20) - Low Flood Risk Category. 3. AK 3 (19/20) - Low Flood Risk Category in the B5 Business Development zoned part of the property - high flood velocities in the C2 Environmental Conservation zoned part of the property which is not developable (formerly the E2 Environmental Conservation zone until the LLEP was amended by the Standard Instrument (Local Environmental Plans) Amendment (Land Use Zones) Order 2021 on 3 November 2021, which commenced on 1 December 2022). 4. AK 4 (19/20) - as for AK 3 (19/20). 5. CH 1 (19/20) - Blacktown local government area - Flood free. 6. CH 2 (19/20) - Blacktown local government area - Low Flood Risk - no planning restrictions. 7. CH 3 (19/20) - Parramatta local government area - Flood free. 8. CH 4 (19/20) - 42% of the land is within the Medium Flood Risk Category, but filling has mitigated flood risk resulting in no flood storage being required and the land no longer being flood affected. 9. CH 5 (19/20) - front part of the property is above the 1% AEP; southern part with flood depths of less than one metre. Development in the south would have undercroft areas, and no compensatory earthworks would be required. 10. AK 1 (2021) - only 10% of the land is in the Medium Flood Risk Category, and this would not be considered to be an impediment to development. 11. AK 3 (2021) - Camden local government area - Flood free. 12. CH 1 (2021) - Low Flood Risk Category. 13. CH 2 (2021) - Low Flood Risk Category.
4. Accordingly, the appellant submitted, all of the comparable sales are Low Flood Risk, flood free, in locations where the higher flood risk parts of the sites are in the undevelopable C2 Environmental Conservation zone (Austral sales AK 3 (19/20) and AK 4 (19/20)), or where the Medium Flood Risk Category areas are on much smaller parts of the site compared to the subject land which is located in the Medium Flood Risk Category.
5. The appellant submitted that Mr Hubbard had been too conservative in his 5% adjustment, and that the 10% adjustments for flooding made by Mr Konidaris better reflect the added development costs and risks associated with developing the subject land.
6. In relation to the sales evidence and adjustments relied upon by each of the valuers, the appellant submitted as follows.

AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

1. In relation to this sale, the appellant submitted that the land when purchased was occupied by a Bunnings Warehouse, and as such it is one of the agreed development scenarios applicable to the subject land with similar zoning to the subject land. The appellant submitted that in rejecting this sale because it was not an "open market transaction", the Valuer-General's expert Mr Hubbard had misunderstood the sale that was relied upon by Mr Konidaris, being a sale from Home Consortium to Charter Hall. The earlier sale was a sale from Woolworths to Home Consortium of all of the Masters properties around Australia. The appellant submitted that Home Consortium leased several of the Masters properties to Bunnings Warehouse, and that in 2017 Charter Hall acquired from Home Consortium 6 of the sites that were leased to Bunnings Warehouse. The appellant submitted that "there is no reason to suspect that the latter sale was not a market transaction".
2. Mr Konidaris' opinion was that this was a market transaction, and referred to "evidence that properties such as this are typically marketed on an Expressions of Interest basis to institutional investors". Further, the appellant submitted in relation to this sale that "[n]othing turns on the fact that it was one of 6 sites acquired by Charter Hall around the country - there [was] no reason to believe that this infected the market value. Whilst the property exchanged and sold on the same day, this did not suggest an anxious purchaser or anxious vendor and thus undermine the test of market value": citing Spencer v The Commonwealth at 441 (Isaacs J).
3. Mr Konidaris' adjustments for location were submitted by the appellant to be appropriate given the "proximity of the sale to the M7 (and right on the exit for Cowpasture Road)", and a "location with surrounding industrial neighbours, thus de-risking the site for a purchaser looking to develop it" for a B5 Business Development purpose. The appellant submitted that "[l]ocation next to industrial neighbours" is "an important attribute for the purpose of an industrial development and on a par with access to roads".

AK 2 (19/20) - 28-34 Orange Grove Road, Warwick Farm

1. In relation to AK 2 (19/20), the appellant submitted that Mr Hubbard was mistaken in not considering this sale to be a market transaction. Mr Hubbard conceded that the property was marketed, the marketing document was in evidence, and that if sold at auction, that would be an indicator of an open market transaction. The evidence was that the land sold for $22m on 2 September 2019, after the auction held on 6 June 2019. The whole property was put to market, and the half share was acquired for $11m, the equivalent value being $22m as market value. The appellant also submitted in relation to this sale that the sale of half of the land satisfies the test in Spencer v The Commonwealth, citing CFS Managed Property Limited v Valuer General at [141] (Pain J). [27]
2. The appellant noted the agreement of both valuers that the sale is located in close proximity to the subject land, and that the subject land is better located than AK 2 (19/20). Mr Konidaris made an adjustment of 10% because the subject land has better exposure and access than AK 2 (19/20). (Mr Hubbard opined that an adjustment of 10-15% is warranted for the same reasons).
3. The appellant submitted that it was unclear from the oral evidence why Mr Hubbard made an additional adjustment of +15% for "zoning" when the sale and the subject land are both located in the B5 Business Development zone.

AK 3 (19/20) - 184 Fifth Avenue, Austral; AK 4 (19/20) - 402-412 Bringelly Road, Austral; AK 1 (2021) - 120-130 Fifth Avenue, Austral

1. The appellant submitted that all of AK 3 (19/20) - 184 Fifth Avenue, Austral, AK 4 (19/20) - 402-412 Bringelly Road, Austral, and AK 1 (2021) - 120-130 Fifth Avenue, Austral (the Austral sales) can be treated as englobo sales which mean that they have an advantage over the sales which comprised building improvements.
2. In oral evidence, Mr Hubbard said that an englobo sale "means that the site's … underdeveloped and there may not be any services in there to develop". Mr Hubbard agreed with counsel for the appellant that "it's easier to make adjustments [for englobo sales] because you don't have to make a lot of assumptions about removing the value of improvements".
3. In relation to the Austral sales, both valuers made an adjustment for location. Mr Konidaris made an adjustment of +10% because the subject land has "better exposure and access". The appellant submitted that in other respects the Austral sales have "some similarities" with the location of the subject land, the subject land being "relatively undeveloped other than residential and horseracing uses".
4. In relation to Mr Hubbard's adjustment of +30% for location based on the subject land "lacking 'exposure' to a main road", being "located further away" from the Sydney CBD and Austral being "inferior to Warwick Farm", the appellant submitted that, Mr Hubbard had made a further adjustment for configuration which also includes "street exposure". This was submitted by the Valuer-General to be a case of double counting, and that Mr Hubbard's adjustments should be reduced accordingly. Unlike Mr Hubbard, Mr Konidaris' adjustment for street frontages (configuration) was submitted to be captured in the overall location adjustment.
5. Mr Konidaris opined that that there should be "no adjustment for proximity to the Sydney CBD" as a "bulky goods user, the most likely user of the Austral sites", would be looking to "support a local market and not the wider Sydney market".
6. The appellant referred to the agreement of the valuers that the Austral sales were market sales, notwithstanding that they may have sold through options. The transfer dates were 2019, as relied upon by Mr Konidaris. The documents relied upon by the Valuer-General did not provide evidence that the Austral sales were the subject of options. Nonetheless, the appellant submitted, "options do not reflect a market price at the date when the option is entered into" (in this case in 2017) "because generally when properties are purchased on option there is a premium for the time value of money".
7. In any event, the appellant submitted, no adjustment was necessary because there was no market movement between 2017 and 2019 in the Austral region. As Mr Hubbard said in evidence, the Austral area was unserviced in 2017 and was unserviced as at the date of hearing.

CH 1 (19/20) - 42 Sargents Road, Minchinbury and CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

1. In relation to the sales CH 1 (19/20) - 42 Sargents Road, Minchinbury and CH 2 (19/20) - 17 John Hines Avenue, Minchinbury (the Minchinbury sales) relied upon by Mr Hubbard, the appellant submitted that Minchinbury is a superior location to Warwick Farm for warehouse/distribution uses. It is located some 27 kms from the subject land in the Blacktown local government area, and the B5 Business Development zone in Blacktown was submitted to be "much more of an industrial focused zone; the majority of the zone being warehouses and distribution centres". It is located close to the M4 and M7 motorways with "excellent access, ideal for warehouse/distribution centre users who require easy access to the principal road network". The appellant submitted that Mr Hubbard's Minchinbury sales show analysed rates of $707/m2 and $825 /m2.
2. Mr Konidaris gave evidence orally that CH 1 (19/20) was acquired by Telstra for a data centre, and that land suitable for data centres attracted a premium over regular industrial land. Mr Konidaris compared CH 1 (19/20) with other vacant similarly zoned land in Minchinbury which sold at about half the rate of CH 1 (19/20), together with other sales at Erskine Park and Horsley Park for data centres also demonstrating that large premiums were paid.

CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

1. In relation to CH 2 (19/20) relied upon by Mr Hubbard, the appellant submitted that other than location, the principal difference between this sale and the subject land related to site preparation; the sale land having already been through the process of site preparation prior to the sale, whereas the subject land was not yet prepared. The sale land had been levelled and was "ready to go" for development. The appellant submitted that this reflected Mr Konidaris' adjustment of -5%.

CH 3 (19/20) - 1 Woodville Road, Granville

1. The appellant acknowledged that the adjustments in relation to CH 3 (19/20) were relatively similar between the valuers, except for location. The valuers agreed that the sale was superior because it was closer to the Parramatta CBD and to the M4 motorway. Mr Konidaris was of the opinion that a greater adjustment for location needed to be made because it is a premium location for bulky goods uses, including for motor vehicle sale yards, and because "Parramatta is generally a more expensive location than the Liverpool LGA". He opined that the sale shows an analysed rate of $1,366/sqm, highlighting the "superior location" of a "Parramatta location".

CH 4 (19/20) - 5 Melito Court, Prestons

1. This was the first of Mr Hubbard's industrial land sales, being land zoned in part IN2 Light Industrial and, in part, IN3 Heavy Industrial. The appellant noted that in his individual report, Mr Hubbard had made adjustments totalling +55% which the appellant submitted "would suggest that this was not a very comparable sale" to the subject land. The most significant difference, the appellant submitted, was in adjustments in relation to location, Mr Konidaris opining that CH 4 (19/20) "has multiple superior attributes compared to the Subject Land". Further, the appellant submitted that the adjustment of both valuers for location was "so great that each must logically accept that it is not a comparable location" to the subject land. However, each had "different reasons for doing so". The sale, the appellant submitted, is "located within an A-grade industrial park, on the M7 [motorway], close to the junction with the M5 [motorway], and the M31 [Hume motorway] going south" which, it was agreed, "makes it an ideal location for either the warehouse/distribution user and the heavy industrial user". In oral evidence, Mr Hubbard agreed the Prestons location has "not just the warehouse and distribution uses", but also "the heavy industrial uses".
2. The appellant submitted that Mr Hubbard made an adjustment for zoning in favour of the subject land because bulky goods retailing is not permissible at Prestons. However, any such adjustment, the appellant submitted, "has to be weighed against the fact that most IN3 [Heavy Industrial] uses are not permissible" on the subject land, and it is "irrelevant that the sales that were zoned heavy industrial were acquired for warehouse/distribution use because they were competing in the market against the heavy industrial user".
3. The appellant also referred to the acceptance by Mr Hubbard in answer to a question by the Acting Commissioner that the adjustment for zoning in relation to this sale was not based on any analysis but was just an opinion: ACTING COMMISSIONER: …Mr Hubbard, you made a plus 10 adjustment for 5 Melito Court, Prestons, because of zoning. What analysis did you undertake to arrive at that 10% between the zones. WITNESS HUBBARD: I just made the opinion that ours was a superior zoning because it had the availability of the bulky goods retailing. ACTING COMMISSIONER: But you haven't analysed any-- WITNESS HUBBARD: I haven't analysed anything, it's just an opinion.
4. The appellant also noted that the Valuer-General had made a large adjustment for configuration on the basis that the units would lack exposure to the street (in comparison to the subject land). But Mr Hubbard had not explained why warehouse/distribution users need or value exposure to the street when compared to, say, a McDonalds or a bulky good retailer. Mr Konidaris' opinion was that exposure is a far smaller factor for warehouse/distribution users who value industrial grade roads, exposure to principal transport routes and locations within established industrial parks.

CH 5 (19/20) - 42-46 Alfred Road, Chipping Norton and CH 1 (2021) - 24-40 Alfred Road, Chipping Norton

1. The CH 5 (19/20) - 42-46 Alfred Road, Chipping Norton and CH 1 (2021) - 24-40 Alfred Road, Chipping Norton (the Chipping Norton industrial estate sales) relied on by Mr Hubbard were also zoned IN 3 Heavy Industrial. The appellant submitted, again, that the significant difference between the two valuers related to the adjustments for location, Mr Konidaris opining that Chipping Norton is an established industrial precinct for which purchasers pay a premium. As in relation to Prestons, Mr Hubbard had made the same adjustment for zoning which, the appellant submitted, was wrong for the reasons given in relation to CH 4 (19/20).

AK 3 (2021) - 9 Gregory Hills Drive, Gledswood Hills

1. In relation to this sale, the appellant submitted that the land has prominent access to Gregory Hills Drive, a busy local thoroughfare, but has inferior exposure compared to the subject land. According to Mr Konidaris, it is fully serviced and surrounded by modern industrial development.

CH 2 (2021) - 1011-1027 Canley Vale Road, Wetherill Park

1. The appellant submitted that this sale, relied upon by the Valuer-General, was a sale to the anxious adjoining owner of the Greenway Shopping Centre which subsequently submitted a development application for staff car parking for 161 car spaces, thus freeing up additional customer car parking for the shopping centre.
2. In addition, the appellant submitted, the acquisition of the land permitted the owner of the shopping centre to perform a boundary adjustment to ensure that the entirety of the shopping centre and associated car parking are located on one lot. Further, the appellant submitted, the property is located in the Fairfield local government area, 14 kms from the subject land and in the established Wetherill Park Industrial Area. The location of CH 2 (2021), the appellant submitted, is "superior" to that of the subject land.

The impact of the sewer pipe

1. In relation to the sewer pipe, the appellant submitted that it had proved that a rising sewer main exists on the subject land. To the extent that the Valuer-General relies upon earlier documents, the best evidence is contained in the positive confirmation in a letter dated 9 November 2021 from Sydney Water that a "critical Sydney Water 375mm wastewater pressure main traverses the site". That being the case, any potential development over or adjacent to the main is subject to the approval of Sydney Water. The technical guidelines published by Sydney Water suggest that its concurrence may not be forthcoming.
2. Accordingly, Mr Konidaris made a 10% adjustment to the land value of the subject land compared to the sales to capture the time, cost and risk inherent in the potential relocation of the sewage infrastructure. Further, the appellant submitted, while the Valuer-General's expert Mr Hubbard initially placed no detriment on the location of the pipe, in oral evidence he conceded that an adjustment of between 2-5% is warranted.

Valuer-General's submissions

1. In summary, the Valuer-General submitted that: 1. The subject land is located within a flood planning zone that would require on site flood storage to facilitate development. 2. The high level of uncertainty relating to any uplift for rezoning for residential purposes was such that there would be no resulting premium over and above the existing B5 Business Development zoned value rates applied by a hypothetical purchaser at any of the relevant valuation dates. 3. The highest and best use of the land would be a use permitted within the B5 Business Development zone. 4. A potential seniors living development does not represent the highest and best use. 5. There was no market movement between 2019 and 2020, but a large increase from 2020 to 2021 of 27%. 6. The subject land is constrained by an easement for sewage purposes which bisects the land.
2. The Valuer-General also accepted that development scenario (c) referred to by the town planners (seniors living) was not a likely use.
3. The Valuer-General submitted that the Court would not be satisfied that the appellant has discharged its onus of demonstrating that the land values issued by the Valuer-General are too high, and that the issued land values should remain undisturbed.
4. The Valuer-General referred to the agreement between the parties that there was a "dearth of sales" around the dates the valuations were made and within the immediate location of the subject land, and that there were no common sales. In relation to the 13 sales before the Court, 9 for the 2019 and 2020 valuing years and 4 for the 2021 valuing year, the Court, it was submitted, "is presented with a stark choice between, on the one hand, the two industrially zoned Chipping Norton sales" upon which the Valuer-General relies "just 5 kms" from the subject land, "supported by B5 [Business Development zone] sales further afield in Minchinbury, Granville and Wetherill Park and on the other hand, the appellant's two unsafe sales, closer to the subject land in Warwick Farm and Hoxton Park and the four entirely unsuitable distant sales, the englobo sales in the still emerging area of Austral and the relatively vacant area of Gledswood Hills".
5. The Valuer-General submitted that in conformity with the experts' expectation that in "the adoption of an appropriate rate per square metre would be ideally [sic] having regard to properties within close proximity to the Subject Land", the Court would be most attracted to the proximate, industrially zoned Chipping Norton sales appropriately adjusted and supported by more distant B5 Business Development zone sales.

Unsafe sales

1. The Valuer-General submitted that AK 1 (19/20) Lot 10, Cowpasture Road, AK 2 (19/20) 28-34 Orange Grove Road, Warwick Farm and AK 1 (2021) 120-130 Fifth Ave, Austral are unsafe sales.

AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

1. The Valuer-General submitted that AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park presents multiple difficulties. First, Mr Konidaris accepted that this sale was one of 6 properties sold together. He accepted that it was therefore not a single sale. Mr Hubbard initially made no adjustments on the basis that he deemed it to be "a non-open market transaction and out of line" and that "inferior properties" were selling at a "higher rate than both values rely upon".
2. When Mr Hubbard was asked to assume that the sale was one of six sites sold together (as opposed to one of approximately 82, which was an earlier transaction) he said in his opinion this would be part of a portfolio, "not a single transaction".
3. The Valuer-General referred to Anastasios Prilis v Valuer-General (Anastasios Prilis) [28] where at [53] Duggan J rejected a sale as comparable on the basis that it was sold within a portfolio and that there was insufficient evidence to determine from the sale of the portfolio a value to be attributed to the particular sale. The Valuer-General submitted that whilst there was "a designated sale price for the site … the principle remains that in a portfolio sale it is unsafe to pluck out a single sale and rely on it when it was sold as a package with other properties."
4. Further, in relation to AK 1 (19/20) the Valuer-General submitted that while Mr Konidaris accepted there had been no open marketing, he was of the opinion that institutional investors transact from each other on a regular basis, and there is typically no marketing campaign. Accordingly, the Court would accept Mr Hubbard's concerns that the sale was not an open market transaction. Moreover, Mr Hubbard had concerns that the property exchanged and settled on the same date, 11 October 2017, suggesting that the sale had been negotiated sometime prior to October 2017. Mr Konidaris said the price was negotiated about six months earlier, and it cannot be evidence of a future market as at October 2017. When asked by senior counsel for the respondent in oral evidence whether he would agree that the market sale would be in 2017, not 2019, Mr Konidaris said "[a]rguably, yes".
5. When asked by the Court whether a sale taking place in October 2017 affected each valuer's analysis in considering a subsequent sale, Mr Konidaris said the market between the sales date and the earlier valuation date showed no change. Mr Hubbard did not agree with Mr Konidaris that there had been no market movement between 2017 and 2019. Referencing his CH 4 sale, Mr Hubbard said there was a sale in April 2017 at $9.79 million and that the property had resold in May 2020 for $14.74 million, showing a significant increase in those years. The expert report of Mr Konidaris, Mr Hubbard said, did not disclose the basis on which he formed the view that there was no market movement between 2017 and 2019.
6. Further, in relation to AK 1 (19/20) being a sale "well in advance of 2019/20", Mr Hubbard said it was an "old" sale. Mr Konidaris accepted that the improvements on the sale were substantial and open to a degree of subjectivity.
7. The Valuer-General submitted that the Court would accept Mr Hubbard's multiple concerns and disregard this sale.

AK 2 (19/20) - 28-34 Orange Grove Road, Warwick Farm

1. The Valuer-General submitted that AK 2 (19/20), the sale closest to the subject land, was also "problematic". The problem with reliance upon this sale at $22,000,000 was submitted to be twofold: first, a transfer showing consideration of only $11,000,000; and secondly, Mr Konidaris' acceptance that this was a "half interest" to a related party.
2. The Valuer-General referred to Mr Konidaris' concession that if $11,000,000 is 50% of $22,000,000, reliance upon the 100% amount would in fact be a hypothetical sale "of a whole interest". The Valuer-General submitted that "the Court would accept Mr Hubbard's view that reliance upon a half sale to a company related to a former owner does not provide a market sale". Notwithstanding that the property was marketed, Mr Hubbard did not know if the property had sold at auction. Again, the Valuer-General submitted that the Court would not accept the circumstances of this sale, like AK 1 (19/20), rendering it "unsafe" such that the Court would not rely upon it.

AK 3 (19/20) - 184 Fifth Avenue, Austral and AK 4 (19/20) - 402-412 Bringelly Road, Austral

1. Both these sales were accepted by the appellant's valuer Mr Konidaris to be sales negotiated in 2017. For the same reasons as in relation to AK 1 (19/20), the Valuer-General submitted that they would be dismissed as not comparable.

AK 1 (2021) - 120-130 Fifth Avenue, Austral

1. The Valuer-General submitted the AK 1 (2021) sale to Coles was unsafe given Mr Konidaris' "frank admission" that "Coles often buys properties off-market before they pounce because they want to beat people like Woolworths to the jump".

Englobo sales and emerging areas

1. The Valuer-General submitted that the Court would "immediately dismiss" the appellant's englobo sales at Austral (AK 3 (19/20) - 184 Fifth Avenue, Austral, AK 4 (19/20) - 402-412 Bringelly Road, Austral, and AK 1 (2021) - 120-130 Fifth Avenue, Austral) as "not being comparable". The Valuer-General submitted that the 3 sales in Austral, 16 kms from the subject land, were "in an entirely different market".
2. Mr Hubbard's opinion was that the Austral sales are in "emerging" areas, and that the subject land has already "emerged". In oral evidence, Mr Konidaris said when put to him by the respondent's senior counsel that Austral was "equivalent" to Warwick Farm that "if you put it in terms of a timeline, it may be three to five years before you see Austral turning into something that's completely different and I would say the same for the subject property." Notwithstanding his adherence to equivalence between the sales, Mr Konidaris accepted that there was "a lot of grassland" "around the Austral sites". On the other hand, the Valuer-General submitted, it "would have been patently obvious from the view" that the subject land is "in a built up area, and despite the nearby land used for horses and residential, there is a deal of industry including the large car yards opposite".
3. The Valuer-General submitted that an englobo parcel of land "bears no comparability" with the subject land which is in an "established area with industrial grade roads, a signalised intersection leading directly onto the Hume Highway and the ability to travel in either direction, close to the M5 [motorway], in immediate proximity to a railway station, close to the Liverpool CBD and closer to the Sydney CBD".
4. The Valuer-General referred to Mr Konidaris' acceptance that the subject land is closer to the Sydney CBD, that the Austral sales are at some distance from the Sydney CBD, that the subject land is better located, and that in 2019 industrial grade roads did not exist in Austral. Nevertheless, Mr Konidaris maintained that these sales were relevant comparable sales.
5. In addition to the Austral sales, Mr Konidaris had relied upon AK 3 (2021), a sale at Gledswood Hills, also in an emerging area. The Valuer-General submitted that the Court would not accept that this sale, with vacant land directly opposite and nearby, was appropriately proximate or comparable to the subject land. The Valuer-General submitted that the Court would not accept Mr Konidaris' opinion in relation to the equivalence of the subject land with the Austral sales, and would "rely instead upon the more orthodox approach in considering proximity/distance as a relevant factor, indeed a key factor in determining which are the best comparable sales".

Zoning

1. In relation to CH 5 (19/20) and CH 1 (2021), the Valuer-General submitted that these were "open market sales following a marketing campaign" and which Mr Hubbard said, "represent the floor, below which any rate per square metre achieved following adjustment should not drop". This was submitted to be so because the IN3 Heavy Industrial zoning sales are a "lesser zone" than the B5 Business Development zone of the subject land. While zoning of the subject land permits bulky good use, the highest and best use determined by the planning experts also "permits a number of uses in the IN3 Heavy Industrial zone, including Light industries, and Warehouse or distribution centres". Relevantly, the Valuer-General submitted, the industrial zoning "does not permit a bulky goods use". It is for these reasons that Mr Hubbard opined the B5 Business Development zone "is worth more" than the IN3 Heavy Industrial zone "such that the IN3 zoned sales", the Valuer-General submitted, "represent his floor".
2. The Valuer-General referred to Mr Hubbard's opinion that "if there were two sales side by side and one permitted Industrial zoning and the other the B5 zoning", the "B5 zoning would be considered superior because it permits along with warehouse and distribution centres, retail uses including general retail and a McDonalds style use", having regard to the location of the subject land in "proximity to both the Hume Highway and the major feeder road from the industrial zone to the Hume Highway, Governor Macquarie Drive". In Mr Hubbard's opinion, the market "pays more for this range of uses" than for industrial zoning.
3. Further, the Valuer-General submitted, Mr Konidaris' adherence to the view that the value of industrial sites is "higher" than that of the subject land, including, because they were "being phased out". The Valuer-General emphasised that given that the subject land "allows a major industrial use (warehouse and distribution) the added value of scarcity should inure to the benefit" of the subject land; "a proposition which Mr Hubbard accepted as he sees the industrial values as setting the floor on the value" of the subject land.
4. The Valuer-General also referred to Mr Konidaris' doubt as to whether warehousing and distribution would be a feasible use of the subject land. The Valuer-General submitted that Mr Konidaris' doubts arose not because of any physical constraints such as configuration, exposure, or industrial roads or access to major highways, but because of the nature of the surrounding uses. The Valuer-General noted that "Mr Hubbard flatly disagreed with the scepticism and considered warehouse and distribution a possible use" of the subject land. In Mr Hubbard's opinion, "a prospective B5 sale attracts both the B5 [Business Development zone] and industrial market, whereas a prospective IN3 [Heavy Industrial zone] sale attracts only an industrial market".
5. The Valuer-General further referred to Mr Konidaris' opinion that it is unlikely that the subject land would be used for a warehouse or distribution centre given the adjoining residential neighbours. The Valuer-General submitted that Mr Konidaris has "no claimed expertise in town planning", and that if such a proposition were to be seriously advanced, the appellant had the opportunity to put on supporting evidence, and the appellant's planning evidence did not support this view. In his evidence, the appellant's town planner Mr Chambers did not mention warehouse use other than to include it in his land use tables. The Valuer-General's town planner, Mr Grech was of the view that warehouse and distribution centres are one of the "most pertinent uses" of the subject land having regard to its locational context. Further, Mr Chambers did not raise any planning concern about a warehouse or distribution centre in the joint report of town planners. That the planners "considered a retail use to be the highest and best use", suggested, the Valuer-General submitted, that "they did not consider [i]ndustrial uses to be at a premium to retail".
6. In any event, the Valuer-General submitted, the Court could "confidently dismiss Mr Konidaris' industrial zoning superiority argument" and adopt Mr Hubbard's opinion that the zoning of the subject land is "superior". The Court would have regard to "the permissible uses in the B5 [Business Development] zone", the "multiple access points to the site", the "agreed industrial grade roads" and, from the view, the evidence that trucks currently use the "surrounding road network" of the subject land, direct left and right turn access via a "signalised intersection onto a national highway in proximity to the M5 [motorway] (agreed to be 7 kms), suitable configuration" and the absence of any "physical impediment to development".
7. The Valuer-General also referred to Mr Konidaris seeking to support his position that industrial zoning sat at a premium to B5 zoned land, by pointing to relatively lower priced sales in Minchinbury. However, the Valuer-General submitted, there were "so many other factors at play in the lower prices" there achieved that this was "not a sound argument", the location differences alone warranting a "huge difference".

Location

1. In relation to location, the Valuer-General submitted that matters for consideration in the location adjustment include what Mr Konidaris agreed can be called an "industrial neighbour premium (or good neighbour premium), data centre premium, exposure, access to the motorways, distance to the CBDs and configuration". The adjustment applied by Mr Konidaris to the sales was generally a downward adjustment against the subject land by -10% to -20%, including on sales in the distant Gledswood Hills, 26 kms from the subject land, and an "astounding downwards adjustment of -35% on the Chipping Norton sales". Mr Konidaris, it was submitted, only applied a positive adjustment to the subject land "on the englobo Austral sales", "applying just +10%".

Industrial neighbour premium

1. In relation to the appellant's invitation to the Court to apply an industrial neighbour premium within the critical location adjustment for the subject land, Mr Konidaris developed "what could be described as an industrial neighbour theory"; that is, "that industrially zoned properties value being located together" with other industrial properties on the basis purchasers "gain comfort" that a development application for a similar use is likely to be achieved. He therefore applied an industrial neighbour premium within his location adjustment to a number of the sales.
2. The Valuer-General relied on the evidence of Mr Hubbard that purchasers of industrially zoned properties only have regard to access and industrial grade roads, and that industrial users are "primarily" in the industrial zone for the "four walls" and a warehouse to "distribute their goods in due course".
3. The Valuer-General submitted that the Court would dismiss Mr Konidaris' opinion that the subject land is isolated in terms of a warehouse and distribution centre, and any other retail style use. On the view, it was apparent that the subject land is within close proximity to a very large Peter Warren car yard and an adjoining retail style centre on the opposite side of the Hume Highway. Further, the Valuer-General submitted, the Court would accept Mr Hubbard's opinion in relation to a wider market for the B5 Business Development zone, and not accept Mr Konidaris' opinion that industrial zoning is superior to that of the B5 zone. This being so, for example, the -35% locational adjustment applied by Mr Konidaris to each of the Chipping Norton sales would be dismissed in favour of Mr Hubbard's +10% upwards adjustment.
4. In the alternative, Mr Hubbard considered that there was a real risk that Mr Konidaris had double counted by using both a zoning and good neighbour adjustment within his 35% location adjustment.

Data centre premium

1. In relation to the "data centre premium" sought to be relied on by the appellant, the Valuer-General submitted that noting that CH 1 (19/20) 42 Sargents Rd analysed at $707 /m2 did not sell for a higher rate than nearby CH 2 (19/20) 17 John Hines Ave analysed at $825 /m2, any such premium would be dispelled.
2. Further, the Valuer-General submitted, the Court would also accept that a site that is suitable for a data centre has no regard to industrial neighbours. Accordingly, the Court would accept that Mr Konidaris had doubled up by including an adjustment for both data centre suitability and an adjustment for industrial neighbours. In any event, as Mr Hubbard opined, the premium should not apply noting that "they haven't commenced construction of the data centre" and that the development application might lapse "shortly". Mr Hubbard was also of the opinion that other sales in Minchinbury were "selling well in excess of what Telstra paid" for CH 1 (19/20), confirming that a premium was not paid, but simply "an industrial value".
3. Further, the Valuer-General contended, the Court would not have any regard to evidence first delivered in concurrent evidence as to other data centre sales across the broader Sydney region, noting that Mr Hubbard had not seen any of these sales and so was not in a position to comment on this "new" information.

Exposure and access to the M4 and M7 motorways

1. In relation to exposure, the Valuer-General submitted that the appellant's case is that the subject land "does not have as good exposure" as a number of the sales relied upon by Mr Konidaris, the subject land being "further away from" and Mr Konidaris' sales being "generally positioned closer to" the M4 and M7 motorways. The Valuer-General submitted that the Court would accept that the subject land has "good exposure to a national highway and to Governor Macquarie Drive", making the site "suitable for retailing uses including a McDonalds style use along with multi goods use and warehouse and distribution uses".
2. In relation to the appellant's contention that the subject land does not enjoy good exposure in relation to either the Hume Highway or Governor Macquarie Drive, the Valuer-General submitted that such "assertion was immediately dispelled on the view" travelling past the subject land returning from the Orange Grove sale (AK 2 (19/20). The subject land could be seen from the Hume Highway, and Mr Konidaris agreed that the subject land is visible from the Hume Highway. Mr Hubbard was of the opinion that the subject land enjoys exposure from a national highway "filtered by trees…and also the change in the elevation to the land", the highway being, it was submitted by the Valuer-General, to be a highway with six lanes three wide each and turning lane.
3. The Valuer-General also submitted that it was evident from the view that the subject land has "good exposure" to Governor Macquarie Drive, being a major feeder road from the industrial area. Additionally, it was known at the valuing years from the Deposited Plan (DP1162276) that Governor Macquarie Drive was to be dedicated for road widening and, it was submitted, that trees beyond the boundary of the subject land and within the adjacent Lot 3 "would therefore likely be removed". The Court, the Valuer-General submitted, would not accept evidence from the Bar table (or from Mr Konidaris) that the road widening had already taken place. In any event, even with the trees, the Valuer-General submitted, that there was "ample exposure".
4. The Valuer-General also referred to the appellant's submission that the subject land is inferior to a number of the sales on the basis of access to motorways. The Valuer-General submitted that the subject land also has good access to both national highways, with a signalised intersection, and is in relative proximity (an agreed 7 kms) to the M5 motorway. The Court would also have regard to the fact that while a number of the sales have proximate access to the various motorways, a signalised intersection allowing traffic to go in either direction is an advantage over access to a motorway permitting movement in a single direction.

Distance to the CBDs

1. The Valuer-General submitted that the Court would have little difficulty accepting that a locational adjustment ordinarily pays attention to distance to the CBD and that the subject land is very well located in proximity to the Liverpool CBD and the Sydney CBD.
2. The Valuer-General noted that Mr Konidaris did not take into account proximity to the CBD as important, although he conceded that "for a bulky goods use, proximity to Liverpool and closer residential centres is important". This was, the Valuer-General submitted, inconsistent with what Mr Konidaris said about local shoppers in Austral and bulky goods use. Mr Hubbard said that the subject land was both closer to the Sydney CBD and provides access to Sydney south and north and west, and that it was "generally accepted that as you go further west property prices are cheaper".

Configuration

1. In relation to configuration, the Valuer-General referred to Mr Hubbard's allowance of a percentage in relation to some of the sales on the basis that the subject land is an island site with the benefit of four street frontages. This was submitted to be a matter particularly relevant to the Austral sales which do not have the same exposure in terms of street frontages. The Valuer-General submitted that the Court would accept that the subject land "should be positively adjusted in respect of this excellent attribute for either bulky goods or any warehouse and distribution centre use", the subject land enjoying "access from three of its four boundaries".

Flooding

1. The Valuer-General noted that in addition to making an adjustment for location, each of the valuers had made a uniform downward adjustment for flooding, each making "a value judgment". Mr Hubbard applied ‑5% uniformly to each sale, Mr Konidaris -10%. The Valuer-General submitted that the Court could accept anywhere between -5% to -10%, including as judicial valuer, -7.5%.

Size

1. The Valuer-General noted the agreement of the experts that smaller sites attract a higher rate per square metre and that as a site gets bigger the rate generally becomes lower, the principle being that the smaller the size, the more valuable the property per square metre. Mr Konidaris, however, was of the view that 3 ha and 4 ha sites are in the same market, and that no adjustment was required since the larger the block the less the incremental adjustments. The Valuer-General submitted that this would not be accepted as on valuable properties such as the subject land, "the difference between 3 ha and 4 ha would be substantial", and that "to assume a purchaser would be ambivalent is not sustainable". Mr Hubbard opined that it would be appropriate to apply a size adjustment.

Land improvements: benching

1. The Valuer-General referred to Mr Konidaris' acceptance that his land improvement adjustment was essentially to do with "benching", in other words with site preparation and readying a site for the laying of a slab. But Mr Konidaris conceded that whilst some of his land improvement adjustments had included "road upgrades and things like that", the roads surrounding the subject land "are probably suitable for a light industrial use". On that basis, Mr Konidaris agreed that he ought "possibly marginally" reduce the negative factor on his land improvements. Mr Hubbard disagreed that such an adjustment was required, and considered that it would be doubled up when the analysed rate is sheared of improvements.
2. The Valuer-General submitted that no adjustment for benching should be applied.

Easement

1. The Valuer-General referred to the parties' agreement that restrictions on title are ignored. That prohibition, the Valuer-General submitted, extends to restrictions arising from the Sydney Water Act: Royal Sydney at 623-624; and see by analogy Gollan at 98 where restrictions under the Australian Jockey Club Act 1873 (NSW) mirrored the reservations on title. Here, the reservation on title was, relevantly, in the following terms: [An] easement or right to use for the construction and maintenance of works for sewerage purposes the surface and the subsoil or undersurface of the said land …the transferor doth hereby covenant with the transferee that the transferor will not erect construct or place any building or other structure [whatsoever] on the said land.
2. The dispute between the parties in relation to the easement was first, as to whether the sewer exists; and secondly, whether there is a physical defect or disability caused by the sewer (if it exists). The Valuer-General submitted that as to the first issue, the sewer diagram attached to the contract for sale of the subject land was equivocal, and that an inference arises that the letter from Sydney Water dated 9 November 2021 (referred to above at [118]) merely assumes the existence of a sewer. As to the second issue concerning the state or quality of the land, the Valuer-General submitted that the relevant defect must be something that rises above the restrictions on title, Gollan providing a useful example. There, the restrictions as to the use of the land for horse racing and reservations as to road widening and gravel and timber could, in one sense, be seen as having physical effects; yet they were ignored. It would be inconsistent with the conclusion in Gollan for a valuation to make allowances for physical effects arising from an easement: here, the prohibition on building over the easement.
3. The Valuer-General submitted that "[p]hysical defects focus on the lie of the land (the quality of the land) and not on restrictions as to user (such as building over a portion)". The following examples were submitted to be apposite: Brisbane City Council (a wide body of water) at [50] and [55]; Knapp v Valuer General at [25] (Murrell C) [29] (visual overlooking); the examples cited in Commonwealth Custodial Services at [67]-[69] (Biscoe J) (concerning "worsements"); Lewis Berger (Mr Barry) [30] (pipeline under the ground ignored as disability from the easement); Benfer v Chief Executive, Department of Lands (Trickett) [31] (privacy and noise disturbance); Yaglan Investments Pty Ltd v Council of the Shire of Albert (Mr Scott) [32] (electricity easement caused visual impairment); Scambiaterra (Moore C) (electricity easement considered but not carriageway); Raynbird v Valuer-General (Dunn J, Mr Smith, Mr Carter) [33] (prior quarry operations affecting soil quality) and Caltex Oil (Australia) Pty Ltd v Chief Executive, Department of Lands (Fryberg J and Mr Neate) [34] (contamination); Leppington Pastoral Company Pty Ltd v Valuer General at [24]-[25] (Parker AC) [35] (asbestos contamination; but not contamination from tanks); Bosnakis v Valuer-General (Parker J) [36] (debris and subsurface contamination); Kemp Investments (NSW) Pty Ltd and Flaherty v Valuer-General at [25] (Biscoe J) [37] (structures, albeit not proved); Valuer General v Marano (Andrews J, Mr Smith, Mr McDowell) [38] (stones); Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer General (No 3) (Pain J) [39] (relocating drain ignored, as drain land improvement).
4. Here, the Valuer-General submitted, "it cannot be said that the sewer manifests a physical defect", there being "nothing akin to a ventilation shaft or stack, no prominent tower exhausting odorous or toxic waste, no transmission towers or electricity lines causing visual impairment; and no suggestion of risk of contamination." Assuming the sewer exists, the Valuer-General submitted, it is neither a man-made 'worsement', nor a natural physical defect."
5. The Valuer-General referred to the explanation of Mr Konidaris for his adjustment of 10% in relation to the easement, in effect, reiterated in cross examination. The cross examination of Mr Hubbard went to the same point, Mr Hubbard accepting an adjustment of 2% (assuming an adjustment of this nature is legally warranted). The Valuer-General submitted that the adjustment contended for by the appellant arises from the risk of an inability to build over the easement and the flow on effect for the development potential of the subject land, and that even this risk needs to be seen in the context of DA 1134/2021, lodged with Liverpool City Council on 29 September 2021, and the earlier approved, though lapsed, DA in 2013, DA 1321/2011.
6. The Valuer-General submitted that the detriment asserted by the appellant arises from the terms of the easement (the legal encumbrance), and must be ignored. There is nothing additional that arises from the physical structure, the mere existence of the sewer (assuming it to exist) not, itself, harming or debilitating the subject land.
7. The Valuer-General submitted that: "if one, for the purposes of argument, assumes that there, in fact, exists no Sewer, the Easement nevertheless precludes building over the Easement. This restriction on user arises from the title and must be ignored. The detriment Mr Konidaris points to arises under this scenario - from the mere existence of the Easement." Assume instead, the Valuer-General submitted, that there is a sewer present, the result would be the same. The subject land may not yet be built over but that would be because of the "blot on title", and not because there exists a sewer. For that reason, there would be no need to consider the costs of removing the sewer (if it exists). The costs of moving the sewer and the risk that it may not be removed or that the subject land may not be built over need not be factored into the valuation. To do otherwise would be to reintroduce the legal impediment into the valuation.

The Valuer-General's submissions in conclusion

1. The Valuer-General submitted in conclusion that to describe (as Mr Konidaris did) the subject land as lying in an emerging area was submitted to negate "the patent vibrancy of the [Warwick] Farm precinct and its central location". Mr Hubbard's opinion that B5 Business Development zoned land is superior to IN 2 Light Industrial and IN 3 Heavy Industrial zoned land was logical and to be preferred, given that it allows both warehouse and distribution centre and retail uses.
2. In any event, the Court would dismiss the sales selected by Mr Konidaris: 1. the subject land not being readily comparable with the englobo Austral sales absent industrial grade roads (at the valuing years), or the sale at Gledswood Hills surrounded by grassland; 2. sales where the price had been negotiated up to 2 years before the sale/transfer date (for example, the Austral sales) being old and not reliable given how far in advance of sale the price was reached; and 3. a hypothetical sale (Orange Grove Rd (AK 2 (19/20)) not being a market sale comparable to a single sale.

Highest and best use

1. It arises first for the Court to determine the highest and best use of the subject land; that is whether it be as contended by the appellant as "a mixed use development comprising large format bulky goods and other speciality outlets", that is, "a use consistent with the most recent development consent", or as contended by the Valuer-General as "a bulky goods type use or mix of bulky goods and industrial". The Court has found that the highest and best use of the subject land is as a specialised retail premises that require a large floor area.
2. The Court concludes in relation to the comparable sales sought to be relied upon by each of the valuers as follows.

AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park Address: Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park Distance from subject land: Approximately 11 kms Sale Price: $36,824,064 Sale Date: October 2017 Area: 34,000 m2 AK 1 (19/20) Type of Sale: Improved Zoning: B6 Enterprise Corridor Planning Scheme: LLEP Analysed Rate: $590 / m2 Adjusted Rate: $350 / m2 by Mr Konidaris Adjusted Rate: $620 / m2 by Mr Hubbard

1. This property was one of a bundle of 6 properties sold to the same purchaser in a single transaction in October 2017, in the absence of open marketing, and which exchanged and sold on the same day.
2. Neither the appellant nor Mr Konidaris provided any evidence as to how the price for this sale was derived. The Valuer-General and Mr Hubbard rejected this sale as a suitable comparable because of the lack of detail about the sale. In Anastasios Prilis, Duggan J at [53] rejected a sale as comparable on the basis it was sold within a portfolio and there was insufficient evidence to determine from the sale of the portfolio a value to be attributed to the particular sale.
3. In the joint valuation report, Mr Hubbard opined that "agreement to sell the property occurred in 2016 (3 years prior to the first valuing year)".
4. The Court considers that the date of sale of this property, relied on by the appellant in October 2017 is too remote from both valuing years (1 July 2019 and 1 July 2020), that the properties differ in substantial ways and that the property AK 1(19/20) is insufficiently similar to the subject land in terms of its dissimilar location, zoning and amenity.
5. As a result of the unknown circumstances surrounding the sale price and the date of sale, the Court has disregarded AK 1 (19/20) as a truly or genuinely comparable sale. As submitted by the Valuer-General, it is unsafe to pick out a single sale and rely on it when it was sold as a package with other properties. The Court has found that this was not an open market transaction; and also, as acknowledged by Mr Konidaris, that the improvements on the sale were substantial, and open to a considerable degree of subjectivity. Without being unreasonably selective, the Court considers this to be a sale which requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

AK 2 (19/20) - 28-34 Orange Grove Road, Warwick Farm Address: 28 - 34 Orange Grove Road, Warwick Farm Distance from subject land: Approximately 2.5 kms Sale Price: $22,000,000 Sale Date: September 2019 Area: 29,800 m2 AK 2 (19/20) Type of Sale: Improved Zoning: B5 Planning Scheme: LLEP Analysed Rate: $425 / m2 Adjusted Rate: $404 / m2 by Mr Konidaris Adjusted Rate: $531 / m2 by Mr Hubbard

1. This property at Warwick Farm was closest to the subject land, although both valuers agreed that the subject land is better located than AK 2 (19/20), Mr Konidaris accepting that the subject land has better exposure and access.
2. The evidence was that only $11,000,000 was paid for the fee simple of this property in September 2019. The appellant and Mr Konidaris said that this sale represented one half of the fee simple to a related party. The submission by the appellant and the evidence of Mr Konidaris was that one half of the fee simple of $11,000,000 equates to a total sale price of $22,000,000 for the whole fee simple of this comparable sale. There were no documents in evidence capable of establishing this assertion by the appellant and its valuer Mr Konidaris. The Court has accepted the submission of the Valuer-General and the evidence of Mr Hubbard that this sale would be rejected as comparable because of the circumstances surrounding the sale; that is, that reliance upon a half sale to a company related to a former owner does not represent a market sale. Notwithstanding evidence that the property was marketed, there was no evidence that the property sold at auction.
3. Accordingly, the Court has disregarded AK 2 (19/20) as a truly or genuinely comparable sale, it being a sale between related parties and not representative of a market sale. Without being unduly selective, the Court considers that the sale differs in substantial ways and requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

AK 3 (19/20) - 184 Fifth Avenue, Austral Address: 184 Fifth Avenue, Austral Distance from subject land: Approximately 16 kms Sale Price: $6,000,000 Sale Date: March 2019 Area: 22,210 m2 AK 3 (19/20) Type of Sale: Some minor improvements Zoning: Majority B5 with part C2 Environmental Conservation and part SP2 Infrastructure Planning Scheme: LLEP Analysed Rate: $400 / m2 Adjusted Rate: $360 / m2 by Mr Konidaris Adjusted Rate: $500 / m2 by Mr Hubbard

1. This property at Austral (one of the three Austral sales) relied upon by the appellant has a regular shape with minimal improvements, is located on a local road without kerbing and guttering in a non-urban precinct, unserviced in 2017 when the option for its sale was entered into, and unserviced as at the date of sale (and at the date of hearing). The characteristics of this property, relied on by the appellant, are dissimilar to those of the subject land in terms of its inferior location, lack of exposure / visibility from a major arterial road and inferior ease of access.
2. Both expert valuers considered this property to be inferior to the subject land, the subject land having better exposure and access. In particular, Mr Konidaris made an overall negative adjustment. Even though Mr Hubbard made an overall positive adjustment to this sale, his resulting adjusted rate was $500 / m2 which is significantly lower than the Valuer-General's rate of $676 / m2. The Court does not accept the appellant's submission that this site was relevantly similar to the subject land, or that the subject land is in a "relatively underdeveloped location". The three sites in Austral are, as the Valuer-General submitted, in an entirely different market. They are, as the Valuer-General submitted, in emerging areas, the subject land having already "emerged", being in a built up area, with a deal of industry, including large car yards opposite. As submitted by the Valuer-General above at [139], an englobo parcel of land is not comparable with the subject land.
3. The Court has disregarded AK 3 (19/20) as a truly or genuinely comparable sale as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020. The sales differ in substantial ways, and the property AK 3 (19/20) is insufficiently similar to the subject land in terms of its dissimilar location, inferior exposure / visibility from a major arterial road and inferior ease of access.

AK 4 (19/20) - 402-412 Bringelly Road, Austral Address: 402 - 412 Bringelly Road, Austral Distance from subject land: Approximately 16 kms Sale Price: $17,263,000 Sale Date: September 2019 Area: 42,800 m2 AK 4 (19/20) Type of Sale: Some minor improvements Zoning: Majority B5 with part C2 Environmental Conservation Planning Scheme: LLEP Analysed Rate: $403 / m2 Adjusted Rate: $423 / m2 by Mr Konidaris Adjusted Rate: $544 / m2 by Mr Hubbard

1. This property at Austral (one of the three Austral sales) has a wide frontage to a major divided road, has minor improvements, is located in a non-urban precinct, and has a larger land area. These characteristics are dissimilar to the characteristics of the subject land in terms of its dissimilar location, inferior exposure / visibility from a major arterial road and inferior ease of access.
2. Again, the Court has declined to make adjustments that are too large for the purposes of direct comparison.
3. Accordingly, the Court has disregarded AK 4 (19/20) as a comparable sale as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

CH 1 (19/20) - 42 Sargents Road, Minchinbury Address: 42 Sargents Road, Minchinbury Distance from subject land: Approximately 27 kms Sale Price: $14,292,500 Sale Date: December 2018 Area: 20,230 m2 CH 1 (19/20) Type of Sale: Some minor improvements Zoning: B5 Planning Scheme: Blacktown LEP Analysed Rate: $707 / m2 Adjusted Rate: $813 / m2 by Mr Hubbard Adjusted Rate: $354 / m2 by Mr Konidaris

1. This property, one of the two properties at Minchinbury, located in the Blacktown local government area, relied upon by the Valuer-General, has some minor improvements, a wide frontage to a main road with secondary road access at the rear, a smaller area than that of the subject land, and is located in an established precinct. It is located approximately 27 kms from the subject land.
2. The evidence was that the property was purchased in December 2018 by Telstra with a development application being lodged for a data centre prior to the exchange of the sale.
3. As at the date of sale, December 2018, a decision on the development application had not been made.
4. Mr Konidaris was of the opinion that this sale should be disregarded because sales of properties suitable for data centres attract a premium over regular industrial land and are more valuable than sales of properties where data centres are not capable of obtaining development consent. The appellant submitted that Minchinbury is a superior location to Warwick Farm for warehouse/distribution uses, in "much more of an industrial focused zone".
5. The Court finds that this sale does not represent a sale with development approval for a data centre at the date of exchange. It does not accept the appellant's submission in relation to a data centre premium that would be applied to this property.
6. The Court has determined that this sale, notwithstanding its distance from the subject land, is capable of being considered a truly or genuinely comparable sale in terms of its same zoning, and lack of improvements.
7. The Court has made an overall negative adjustment of 15%, taking into account both the positive and negative differences in the characteristics of the two properties, namely, the property's dissimilar location, inferior exposure / visibility from a major arterial road, inferior ease of access, smaller land area, lack of improvements, and the same zoning and lack of improvements directly compared to the subject land.
8. Accordingly, the Court adjusted rate for 42 Sargents Road, Minchinbury is $615/m2.

CH 2 (19/20) - 17 John Hines Avenue, Minchinbury Address: 17 John Hines Avenue, Minchinbury Distance from subject land: Approximately 27 kms Sale Price: $15,183,300 Sale Date: August 2019 Area: 18,400 m2 CH 2 (19/20) Type of Sale: Vacant Zoning: B5 Planning Scheme: Blacktown LEP Analysed Rate: $825 / m2 Adjusted Rate: $825 / m2 by Mr Hubbard Adjusted Rate: $454 / m2 by Mr Konidaris

1. This property, relied upon by the Valuer-General, has three street frontages, an irregular shape, an area smaller than the area of the subject land, and is located in an established precinct.
2. Mr Konidaris considered this sale not to be a suitable comparable as a development application was lodged for the construction of a warehouse and distribution centre post the settlement of the sale in early 2020.
3. The Court finds that the subsequent development application for a warehouse and distribution centre lodged in relation to this sale property confirms that its B5 Business Development zoning is capable of securing a range of permissible uses, including "a mixed use development comprising large format bulky goods and specialty outlets…consistent with the most recent development consent", as contended by the appellant, and "a bulky goods type use or a mix of bulky goods and industrial" as contended by the Valuer General. The zoning is similar to that of the relevant B5 Business Development zoning of the subject land.
4. The Court has determined that this sale is capable of being considered a truly or genuinely comparable sale property for the valuing years 1 July 2019 and 1 July 2020 because of the same zoning, the lack of improvements, and the similar sale date to the valuing year 2019.
5. The Court has made an overall negative adjustment of 25%, taking into account both the positive and negative differences in the characteristics of the two properties, namely the property's dissimilar location, inferior exposure / visibility from a major arterial road, inferior ease of access, smaller land area, lack of improvements, the date of sale similar to the valuing year 2019, and the same zoning directly compared to the subject land.
6. Accordingly, the Court adjusted rate for 17 John Hines Avenue, Minchinbury is $660/m2.

CH 3 (19/20) - 1 Woodville Road, Granville Address: 1 Woodville Road, Granville Distance from subject land: Approximately 14 kms Sale Price: $12,100,000 Sale Date: August 2020 Area: 8,788 m2 CH 3 (19/20) Type of Sale: Vacant Zoning: B5 Planning Scheme: Parramatta LEP Analysed Rate: $1,366 / m2 Adjusted Rate: $820 / m2 by Mr Hubbard Adjusted Rate: $342 / m2 by Mr Konidaris

1. This property is located adjacent to the intersection of Parramatta Road and Woodville Road, is an irregular shape, is of a considerably smaller area than that of the subject land and has superior exposure / visibility to that of the subject land.
2. Further, this property has a superior floor space ratio (namely, 1.0:1) and a significantly superior location to that of the subject land.
3. Because of these significant different characteristics, being a much smaller land area, a superior location, superior exposure / visibility, and superior floor space ratio and without being "unreasonably selective", the Court has determined that this property requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020, and accordingly has disregarded it.

CH 4 (19/20) - 5 Melito Court, Prestons Address: 5 Melito Court, Prestons Distance from subject land: Approximately 10 kms Sale Price: $14,740,000 Sale Date: July 2020 Area: 28,330 m2 CH 4 (19/20) Type of Sale: Vacant Zoning: Part IN2 Light Industrial and Part IN3 Heavy Industrial Planning Scheme: LLEP Analysed Rate: $520 / m2 Adjusted Rate: $806 / m2 by Mr Hubbard Adjusted Rate: $312 / m2 by Mr Konidaris

1. This property, relied upon by the Valuer-General, has a long triangular shape, is zoned in part IN2 Light Industrial and in party IN3 Heavy Industrial, and is within a flood prone precinct. It is located at a distance of approximately 10 kms from the subject land. The Court accepts the submission of the appellant that the adjustments made by Mr Hubbard of + 55% suggest that this is not "a very comparable sale" to the subject land. As the appellant submitted, most IN3 Heavy Industrial uses are not permitted on the subject land. Further, the Court does not accept Mr Konidaris' opinion that the subject land is isolated in terms of a warehouse and distribution centre, and any other retail use. The subject land is within proximity to a very large Peter Warren caryard.
2. The Court, without being unduly selective, does not consider in the circumstances here that a property with a different zoning to that of the subject land can be the subject of direct comparison.
3. Accordingly, the Court has disregarded CH 4 (19/20) as a truly or genuinely comparable sale property for the valuing years 1 July 2019 and 1 July 2020, as it requires too many adjustments in relation to its inferior location, inferior visibility / exposure from a major arterial road and dissimilar zoning.

CH 5 (19/20) - 42-46 Alfred Road, Chipping Norton Address: 42 - 46 Alfred Road, Chipping Norton Distance from subject land: Approximately 5 kms Sale Price: $7,750,000 Sale Date: August 2021 Area: 9,149 m2 CH 5 (19/20) Type of Sale: Improved Zoning: IN3 Heavy Industrial Planning Scheme: LLEP Analysed Rate: $778 / m2 Adjusted Rate: $817 / m2 by Mr Hubbard Adjusted Rate: $505 / m2 by Mr Konidaris

1. This property at Chipping Norton relied upon by the Valuer-General has a regular shape, is improved, zoned IN3 Heavy Industrial and has an area which is significantly smaller than that of the subject land. The Valuer-General submitted, and the Court accepts, it was an open market sale following a marketing campaign.
2. The Court does not consider that a property with a different zoning to that of the subject land can be the subject of direct comparison. Also, there are significant differences in relation to its land area, visibility / exposure from a major arterial road, zoning, and the existence of improvements.
3. Accordingly, because of the dissimilar land areas, zoning, visibility / exposure from a major arterial road and the existence of improvements, the Court has disregarded this sale as it requires too many adjustments in order to be considered a truly or genuinely comparable sale when directly compared to the subject land.

AK 1 (2021) - 120-130 Fifth Avenue, Austral Address: 120 - 130 Fifth Avenue, Austral Distance from subject land: Approximately 16 kms Sale Price: $14,000,000 Sale Date: April 2022 Area: 24,200 m2 AK 1 (2021) Type of Sale: Partially improved Zoning: B5 Planning Scheme: LLEP Analysed Rate: $578 / m2 Adjusted Rate: $549 / m2 by Mr Konidaris Adjusted Rate: $780 / m2 by Mr Hubbard

1. This property, also one of the three Austral properties relied upon by the appellant, for the valuing year 1 July 2021, has a regular shape, is partially improved, and is located on a local road without kerbing and guttering in a non-urban area.
2. The Court finds that the characteristics of this property are dissimilar to those of the subject land in relation to its inferior location, exposure / visibility from a major arterial road and the date of sale when compared to the valuing year 2021. The Court does not consider it appropriate to make adjustments that are too large for the purpose of direct comparison where the characteristics of the two properties are insufficiently similar.
3. Accordingly, the Court, without being unduly selective, has disregarded this sale as truly or genuinely comparable as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing year 1 July 2021.

AK 3 (2021) - 9 Gregory Hills Drive, Gledswood Hills Address: 9 Gregory Hills Drive, Gledswood Hills Distance from subject land: Approximately 26 kms Sale Price: $25,835,755 Sale Date: May 2022 Area: 41,600 m2 AK 3 (2021) Type of Sale: Vacant Zoning: B5 Planning Scheme: Camden LEP Analysed Rate: $621 / m2 Adjusted Rate: $527 / m2 by Mr Konidaris Adjusted Rate: $869 / m2 by Mr Hubbard

1. This property at Gledswood Hills, relied upon by the appellant, has an irregular shape with a wide frontage to a main road, and is located in an emerging urban area, with vacant land directly opposite and nearby, and is approximately 26 kms from the subject land.
2. The Court finds that the characteristics of this property are dissimilar to those of the subject land in relation to its land area, lack of exposure / visibility from a major arterial road and its inferior location. It is, as submitted by the Valuer-General also in an emerging area.
3. Without being unduly selective, the Court considers it inappropriate to make adjustments that are too large for the purpose of direct comparison.
4. Consequently, the Court has disregarded this sale as truly or genuinely comparable for the valuing year 1 July 2021 as it requires too many adjustments.

CH 1 (2021) - 24-40 Alfred Road, Chipping Norton Address: 24 - 40 Alfred Road, Chipping Norton Distance from subject land Approximately 5 kms Sale Price: $60,514,000 Sale Date: December 2021 Area: 49,900 m2 CH 1 (2021) Type of Sale: Obsolete improvements Zoning: IN3 Heavy Industrial Planning Scheme: LLEP Analysed Rate: $1,000 / m2 Adjusted Rate: $1,250 / m2 by Mr Hubbard Adjusted Rate: $650 / m2 by Mr Konidaris

1. This property, the second of the Chipping Norton sales relied upon by the Valuer-General, has an "L" shape, obsolete improvements, a wide frontage to a main road, an area which is much larger than the area of the subject land, and is zoned IN3 Industrial Heavy Industrial.
2. As in relation to CH 4 (19/20), and without being unduly selective, the Court does not consider that a property with a different zoning to that of the subject land can be the subject of direct comparison.
3. Accordingly, the Court has disregarded this property as requiring too many adjustments to be a truly or genuinely comparable sale property for the valuing year 1 July 2021 for the purpose of direct comparison to the subject land.

CH 2 (2021) - 1011-1027 Canley Vale Road, Canley Vale Address: 1011 - 1027 Canley Vale Road, Canley Vale Distance from subject land: Approximately 14 kms Sale Price: $17,985,000 Sale Date: May 2021 Area: 13,917 m2 CH 2 (2021) Type of Sale: Vacant land Zoning: B5 Planning Scheme: Fairfield LEP Analysed Rate: $1,292 / m2 Adjusted Rate: $1,163 / m2 by Mr Hubbard Adjusted Rate: $581 / m2 by Mr Konidaris

1. This property, relied on by the Valuer-General, is two adjoining parcels of vacant land adjacent to the Greenway Shopping Centre. The property was sold in May 2021 to the adjacent Greenway Shopping Centre. The analysed rate is significantly higher than the analysed rates of the other comparable sales relied on by the Valuer-General.
2. The Court finds that this sale represents a sale to an adjoining owner, and does not meet the test in Spencer v The Commonwealth at 441 which requires a valuer to consider the "value of the land … not by means of a forced sale, but by voluntary bargaining between the [seller and purchaser who are] willing to trade, but neither of them so anxious to do so that [they] would overlook any ordinary business consideration." Accordingly, the Court has disregarded this sale for the purpose of direct comparison to the subject land for the valuing year 1 July 2021.

Conclusions

1. It follows that the Court has concluded as follows (doing the best it can with the evidence before it) in relation to the comparable sales sought to be relied on by the parties and their valuers for the valuing years 1 July 2019 and 1 July 2020: AK 1 (19/20) Disregarded AK 2 (19/20) Disregarded AK 3 (19/20) Disregarded AK 4 (19/20) Disregarded CH 1 (19/20) Court adjusted rate $615 / m2 CH 2 (19/20) Court adjusted rate $660 / m2 CH 3 (19/20) Disregarded CH 4 (19/20) Disregarded CH 5 (19/20) Disregarded

1. The Court has concluded as follows in relation to the comparable sales sought to be relied on by the parties for the valuing year 1 July 2021: AK 1 (2021) Disregarded AK 3 (2021) Disregarded CH 1 (2021) Disregarded CH 2 (2021) Disregarded

1. This leaves the Court, as judicial valuer, with a very limited pool of relevant comparable sales from which information may be derived concerning the subject land. The majority of the sales relied upon by the parties differ from the subject land in substantial ways, and cannot be said to be genuinely or truly comparable. Nor do they provide a reasonably representative sample of relevant sales, sufficient in volume, capable of being adjusted to create equivalence with the unimproved subject land. As Biscoe J cautioned in Holcim at [31], too many adjustments potentially render the comparable sale unsafe to rely upon.
2. However, doing the best I can, and having regard to the two sales I consider relevant for the valuing years 1 July 2019 and 1 July 2020, those sales being sales relied upon by the Valuer-General's valuer Mr Hubbard, the Court has adopted an adjusted land value rate of the comparable properties in the range of between $615 / m2 and $660 / m2. Bearing in mind the principles set down in Spencer v The Commonwealth, the Court considers a rate towards the lower end of this range to be fair and reasonable in the circumstances of the subject land if it were to be sold on the market. Accordingly, the Court has adopted a land value rate of $625 /m2 for the subject land for the valuing years 1 July 2019 and 1 July 2020.
3. For the valuing year 1 July 2021, I have determined that there is no sale relied upon by either party which is truly or genuinely comparable for the purpose of direct comparison to the subject land. Having decided that no suitable comparable sales have been provided for the valuing year 1 July 2021, it arises to adopt an alternative method to determine the land value for that valuing year.
4. The parties and the expert valuers, Mr Hubbard and Mr Konidaris, agreed that the same comparable sales could be analysed for the purpose of assessing the land values for the valuing years 1 July 2019 and 1 July 2020 as there was no market movement between those years. The parties also agreed that there was a general uplift in the order of 25% in land values in the vicinity of the subject land between the valuing years 1 July 2020 and 1 July 2021.
5. This general uplift in land values is demonstrated by the assessed land values for the valuing years 1 July 2020 and 1 July 2021 for the subject land as set out below. Valuer Land value for valuation dates 1 July 2019, 1 July 2020 Land value for valuation dates 1 July 2021 Percentage increase AK $9,495,000 $13,185,000 38.9% Valuer-General $19,800,000 $25,100,000 26.8% CH $24,000,000 $30,000,000 25.0%

1. As the only reliable comparable sales capable of being analysed and adjusted were those for the valuing years 1 July 2019 and 1 July 2020 and the general uplift in land values for property with similar characteristics to those of the subject land ranged between, say 25% and 39%, it is not unreasonable to positively adjust the determined land value rate for the valuing years 1 July 2019 and 1 July 2020 to derive a land value for the valuing year 1 July 2021.
2. Based on the evidence, the Court has determined that the uplift in the land value for the subject property for the valuing years 1 July 2019 and 1 July 2020 to the valuing year 1 July 2021 is 25%.
3. The determined land value rate of $625 / m2 for the valuing years 1 July 2019 and 1 July 2020 increased by 25% is a land value rate of $781.25 / m2 for the valuing year 1 July 2021.

Determined land values

1. The Court determines the land values for the subject land as follows:

Land value for valuation date 1 July 2019

1. Area of 29,300 m2 x determined land value rate of $625 / m2 = $18,312,500.

Land value for valuation date 1 July 2020

1. Area of 29,300 m2 x determined land value rate of $625 / m2 = $18,312,500.

Land value for valuation date 1 July 2021

1. Area of 29,300 m2 x determined land value rate of $781.25 / m2 = $22,890,625.

Orders

1. The Court has determined land values for each of the valuing years to be below the values ascertained by the Valuer-General. Accordingly, the appeal is upheld, and the Court revokes the decisions of the Valuer-General and decides in place of the decisions of the Valuer-General as follows.
2. In proceedings 2022/256791, 2022/256815 and 2022/256816: 1. The appeal is upheld. 2. The Valuer-General's decision dated 30 June 2022 disallowing the appellant's objection to the Valuer-General's valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is revoked. 3. The Valuer-General's decision dated 30 June 2022 disallowing the appellant's objection to the Valuer-General's valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year as at 1 July 2020 is revoked. 4. The Valuer-General's decision dated 30 June 2022 disallowing the appellant's objection to the Valuer-General's valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive Warwick Farm, NSW for the valuing year 1 July 2021 is revoked. 5. The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is $18,312,500. 6. The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2020 is $18,312,500. 7. The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2021 is $22,890,625.

Endnotes

1. Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1; [2016] NSWCA 48 at [20] (Basten JA).
2. Trust Company of Australia v Valuer-General (2007) 154 LGERA 437; [2007] NSWCA 181 (Trust Company of Australia) (Beazley, Ipp and Campbell JJA).
3. Being a "physical disability" on the land: Scambiaterra v Valuer General [2003] NSWLEC 339 (Scambiaterra) at [40] (Moore C). In any event, the appellant submitted, if the sewer were to be regarded as an improvement, it would be a "land improvement" as it is an "underground drain", and thus could not be disregarded under s 6A(1) of the VLA.
4. [1925] AC 439; (1924) 7 LGR (NSW) 48; (1924) 25 SR (NSW) 75 at 76 (Lord Dunedin).
5. Trust Company of Australia at [32]..
6. (1907) 5 CLR 418 at 432; [1907] HCA 82 (Griffith CJ).
7. (1955) 91 CLR 610; [1955] HCA 13.
8. [1961] AC 82; (1960) LGRA 275; (1960) 34 ALJR 253; [1960] 3 All ER 449; confirmed in Broken Hill Pty Ltd v Valuer General (1969) 70 SR (NSW) 169; see also Perilya Broken Hill v Valuer General (2015) 10 ARLR 235 at 247, 254; [2015] NSWCA 400 (Leeming JA).
9. Perisher Blue Pty Ltd as the Trustee for the Snow Trust v Valuer General (NSW) [2023] NSWLEC 41 (Perisher Blue) at [76] and [86] (Duggan J); Kogarah Town Centre Pty Limited v Valuer General (No 3) (Kogarah) [2014] NSWLEC 1124 at [77] (Moore SC and Brown C); Olefines Pty Ltd v Valuer-General of New South Wales (Olefines) (2018) 228 LGERA 407; [2018] NSWLEC 18 at [151]-[152] (Molesworth AJ).
10. Kogarah at [86].
11. (1978) 140 CLR 41; [1978] HCA 40.
12. Brisbane City Council at 50 and 55 (Gibbs J) (Stephen, Mason, Murphy and Aickin JJ agreeing); Commonwealth Custodial Services Ltd (as Trustee for Burwood Trust Fund) v Valuer-General (NSW) (2006) 148 LGERA 38; [2006] NSWLEC 400 (Commonwealth Custodial Services) at [49] (Biscoe J); Trust Company at [28] (Campbell JA) (Beazley and Ipp JJA agreeing); Scambiaterra at [39]-[40] (Moore C).
13. Commonwealth Custodial Services at [69]-[76] (Biscoe J); Trust Company of Australia at [17] and [68] (Campbell JA, Beazley and Ipp JJA agreeing).
14. (1979) 6 QLCR 95.
15. (2006) 149 LGERA 439; [2006] NSWCA 353 at [83] (Spigelman CJ); Norwest City Pty Ltd ATF Norwest City v Valuer General [2018] NSWLEC 50 (Moore J).
16. [2012] NSWLEC 1361 (Parker AC); applied in SNS Pty Ltd v Roads and Maritime Services (NSW) (2018) 232 LGERA 224; [2018] NSWLEC 7 at [123] (Pain J). See also Adams v Valuer General [2014] NSWLEC 1005 (Parker AC).
17. [2018] NSWLEC 59; referred to in Shuang Wang v Valuer General [2021] NSWLEC 74 at [19] (Pain J).
18. (1954) 20 LGR (NSW) 1.
19. (1972) 2 NSWLR 63; (1972) 28 LGRA 23.
20. [2005] NSWCA 89.
21. (2008)160 LGERA 375; [2008] NSWLEC 112 (Jagot J).
22. (2012) 211 LGERA 158; [2012] NSWLEC 73 (Pain J).
23. [2012] NSWLEC 199.
24. (2003) 212 CLR 111; [2003] HCA 8 (McHugh, Gummow, Kirby, Hayne and Callinan JJ).
25. [2009] NSWLEC 225 (Biscoe J).
26. LDCP pages 37-38.
27. (2016) 215 LGERA 226; [2016] NSWLEC 2.
28. [2022] NSWLEC 11 (Duggan J).
29. [2004] NSWLEC 684.
30. (1979) 6 QLCR 95.
31. (Land Court of Qld, 29 Oct 1993, unrep).
32. (1997) 17 QLCR 331.
33. (1980) 7 QLCR 106.
34. (1996-1997) 16 QLCR 435.
35. [2010] NSWLEC 1023.
36. (2017) 228 LGERA 320; [2017] SASC 158.
37. (2013) 195 LGERA 1; [2013] NSWLEC 18.
38. (1978) 5 QLCR 194.
39. (2011) 182 LGERA 118; [2011] NSWLEC 85. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 March 2024

CH 2 (2021) - 1011-1027 Canley Vale Road, Canley Vale

Determined land values

Land value for valuation date 1 July 2019

Land value for valuation date 1 July 2020

Land value for valuation date 1 July 2021

1. By amended Class 3 applications filed 24 May 2023, Warwick Farm Central Pty Ltd (the appellant), being a person dissatisfied with the Valuer-General's determination, appeals pursuant to s 37(1) of the Valuation of Land Act (NSW) 1916 (VLA). The appellant challenges the determination by the Valuer-General of the value of land it owns at Lot 1 Governor Macquarie Drive, Warwick Farm, NSW (also known as 240 Governor Macquarie Drive, Warwick Farm, NSW), being Lot 1 in DP 1162276 (the subject land). The relevant valuation dates are 1 July 2019, 1 July 2020 and 1 July 2021 (the valuing years).
2. The appellant seeks that the Valuer-General's notices of determination given pursuant to s 35C of the VLA decisions of 30 June 2022 disallowing its objections to the valuations of the subject land be revoked.
3. The matter was heard between 23 and 27 October 2023. I thank Acting Commissioner Kempthorne for his considerable assistance. This decision is, of course, my own, the Court acting as judicial valuer.
4. The land values and the land value rates per square metre (/m2) the subject of the Valuer-General's determinations and the land values and the land value rates /m2 contended for by the appellant are as follows:

1. As appears from the table above, the issued land values under challenge for the 2019 and 2020 valuing years, and the 2021 valuing year are $19,800,000 and $25,100,000 respectively. The appellant contends for approximately half these values in the sum of $9,493,200 for the 2019 and 2020 valuing years and $13,185,000 for the 2021 valuing year. The valuations provided by the Valuer-General's expert valuer for each of the valuation dates are higher than the issued land values at $24,000,000 for the 2019 and 2020 valuing years, and $30,300,000 for the 2021 valuing year.
2. On an appeal under s 37(1) of the VLA, the Court may pursuant to s 40(1):

(a) confirm or revoke the decision to which the appeal relates,

(b) make a decision in place of the decision to which the appeal relates,

(c) remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision.

1. Pursuant to s 40(2), on an appeal, the appellant has the onus of proving the appellant's case.
2. In summary, the appellant contends that the land values determined by the Valuer-General are too high, and that the Court should revoke the decisions of the Valuer-General for each of the valuing years and replace them with the land values contended for by the appellant.
3. Following finalisation of evidence from town planners and flood engineers, the contest between the parties has essentially reduced to a dispute between valuers as to the relevance of the competing sales for which each contends and the adjustments to be made to those sales for the purposes of direct comparison to the subject land. There are no common sales. The town planners and flood engineers were not required for cross-examination.
4. The Court has determined that the Valuer-General's valuations of the subject land were too high.

1. The subject land is 29,300 m2 (2.93 ha) of vacant, generally level land. It is of irregular shape, an island site with 4 street frontages. The 4 street frontages are Warwick Street (northern boundary), Manning Street (western boundary), Munday Street (southern boundary) and Governor Macquarie Drive (eastern boundary). A portion of the northern frontage is directly adjacent to the Hume Highway, with a signalised intersection left and right onto the Highway from Governor Macquarie Drive. It is adjacent to the Warwick Farm train station, and a distance of 1.5 kilometres (kms) to the Liverpool central business district (CBD).
2. The dimensions of the subject land (taken from DP 1162276) are as follows:

Northern boundary (Hume Highway and Warwick Street)

Splay corner (Munday Street and Governor Macquarie Drive)

Splay corner (Governor Macquarie Drive and Hume Highway)

1. Warwick Farm Racecourse is to the east of the subject land, and it is adjoined by residential zoned land to the west and south (together with horse stables to the south).

1. On 28 February 2013, Liverpool City Council (Council) approved a development application for a Masters Home Improvement Centre (the 2013 development consent). The 2013 development consent was never taken up, and lapsed on 28 February 2018.
2. An aerial photograph of the subject land, showing its 4 street frontages, is extracted below:

1. The Valuer-General's town planning and flooding experts refer to a development consent granted in relation to the subject land on 5 January 2023, and therefore some two years after the last of the 3 dates the valuations were made (the 2023 development consent). The relevant development application was lodged on 29 September 2021, again after the last of the dates the valuations were made. The Court is satisfied that the extent to which, if at all, the development consent adds value to the subject land is to be disregarded for the purposes of s 6A of the VLA.[1]

1. The subject land is burdened by easement No J182313, for sewage purposes, dated 14 January 1963 (the easement), in favour of what was at the relevant time the Metropolitan Water Sewerage and Drainage Board (now Sydney Water).
2. The easement is 3.66m wide, approximately 146m in length, and is in the south-eastern portion of the land. It severs the land into two portions with the smaller portion of the severed land to the eastern side of the easement.
3. The easement is shown on DP 1162276 to run at an angle, roughly along the length of Governor Macquarie Drive from the Hume Highway to Munday Street. It traverses the subject land about 51.25m west from the corner of Munday Street and Governor Macquarie Drive to a point just south of the corner of Governor Macquarie Drive and Hume Highway. It provides Sydney Water with the right to construct and maintain works for sewerage purposes and prohibits the appellant from erecting, constructing or placing any building or structure over the easement.
4. The appellant contended that the subject land is traversed north to south by a large rising sewer main with a diameter of 375mm. Whilst pursuant to s 6A of the VLA the subject land is to be valued unencumbered, the authorities recognise that structures on the land which decrease the value of the land compared with its natural or virgin state are not to be disregarded.[2] Accordingly, the appellant submitted, the presence of the sewer main bisecting the subject land, and its impact on the development potential or costs of developing the subject land are to be taken into account in assessing the land values.[3] The appellant contended that a 10% adjustment from the comparable sales not affected by a rising sewer main was appropriate to reflect the risks and additional cost burden associated with relocating the rising sewer main.
5. The Valuer-General contended that whilst the easement is the site of a planned rising sewer main, the appellant bears the onus of proving that there is in fact such a sewer main, and that it should be taken into account in the valuations. Further, the Valuer-General contended that in the event that the appellant discharges its onus of proving that a rising sewer main has been installed, there are statutory covenants in favour of Sydney Water under s 44 of the Sydney Water Act 1994 (NSW) (Sydney Water Act).

1. At each of the valuing years, the Liverpool Local Environmental Plan 2008 (LLEP) applied to the subject land which was zoned B5 Business Development. The objectives of the B5 zone and permissible uses as at the valuing years were as follows:

Zone B5 Business Development

Objectives of zone

To enable a mix of business and warehouse uses, and specialised retail premises that require a large floor area, in locations that are close to, and that support the viability of, centres.

To maintain the economic strength of centres by limiting the retailing of food and clothing.

To provide for a larger regionally significant business development centre in a location that is highly accessible to the region.

To ensure a reasonable concentration of business activity.

2. Permitted without consent

Nil

3. Permitted with consent

Building identification signs; Business identification signs; Car parks; Centre-based child care facilities; Community facilities; Environmental facilities; Environmental protection works; Flood mitigation works; Food and drink premises; Garden centres; Hardware and building supplies; Hotel or motel accommodation; Landscaping material supplies; Light industries; Liquid fuel depots; Office premises; Oyster aquaculture; Passenger transport facilities; Places of public worship; Plant nurseries; Public administration buildings; Pubs; Recreation areas; Recreation facilities (indoor); Recreation facilities (outdoor); Respite day care centres; Restaurants or cafes; Roads; Specialised retail premises; Storage premises; Tank-based aquaculture; Timber yards; Vehicle sales or hire premises; Warehouse or distribution centres

4. Prohibited

Pond-based aquaculture; Any other development not specified in item 2 or 3

1. Residential accommodation was prohibited in the B5 Business Development zone.
2. The key planning controls as at the valuing years were agreed between the parties' town planners and are summarised in the table below:

Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood.

Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood.

Total site by 1% of 1 in 100 year period flood. Partial site by 2% of 1 in 50 year flood.

1. Part 6 of the Liverpool Development Control Plan 2008 (LDCP) provided as follows in relation to B5 zones (emphasis added):

The Business Development zone is intended for use by bulky goods premises and other uses that require large floor plates which have limited opportunity to locate within commercial centres. B5 zones Business Development zones are located in areas of high accessibility to the arterial road network.

1. In relation to land value, s 6A of the VLA provides as follows:

(1) The land value of land is the capital sum 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.

(2) Notwithstanding anything in subsection (1), in determining the land value of any land it shall be assumed that -

(a) the land may be used, or may continue to be used, for any purpose for which it was being used, or for which it could be used, at the date to which the valuation relates, and

(b) such improvements may be continued or made on the land as may be required in order to enable the land to continue to be so used,

but nothing in this subsection prevents regard being had, in determining that value, to any other purpose for which the land may be used on the assumption that the improvements, if any, other than land improvements, referred to in subsection (1) had not been made...

1. The valuer has to consider what the land would fetch as at the date of the valuation as if the improvements made had not been made. As Lord Dunedin said in Toohey's Ltd v The Valuer General (NSW)[4] of the task of the valuer (at 443) (emphasis added):

Now, what he has to consider is what the land would fetch as at the date of the valuation if the improvements made had not been made. Words could scarcely be clearer to show that the improvements were to be left entirely out of view. They are to be taken, not only as non-existent, but as if they never had existed. It is, therefore, to approach the question from a completely wrong point of view to begin with a valuation which takes in the improvements and then proceed by means of subtraction of a sum arrived at by an independent valuation in order to find the required figure. What the Act requires is really quite simple. Here is a plot of land; assume that there is nothing on it in the way of improvement; what would it fetch in the market? It will be observed that the value is not what has been sometimes designated by the expression "prairie value." The land must be taken as it exists at the date of the valuation.

1. There are no relevant improvements to the subject land here, except for boundary fencing. It was not suggested by the Valuer-General that the rising sewer main (if it exists) is an improvement, in particular that it is an "underground drain" within the meaning of s 4 of the VLA.
2. Section 6A(1) of the VLA requires, at each valuing year, the postulation of a notional sale. This notional sale is one that is assumed to take place in a market, and the seller would conclude the sale for the highest price it could obtain in that market: Trust Company of Australia at [32] (Campbell JA) (Beazley and Ipp JJA agreeing). In this way, the concept of the highest and best use comes to apply through the notional sale that s 6A requires to occur.[5] The notional sale occurs between a hypothetical willing purchaser and a not unwilling vendor. As Griffith CJ said in Spencer v The Commonwealth of Australia (Spencer v The Commonwealth) at 432:[6]

...what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and not an unwilling vendor would come together...

1. It is the hypothetical, unencumbered fee simple that is to be valued, "the fee simple as the highest estate unencumbered and subject to no conditions" restructuring the use or enjoyment of the land: Royal Sydney Golf Club v Federal Commissioner of Taxation (Royal Sydney) at 623 (Dixon CJ, McTiernan, Webb, Fullagar, Kitto JJ).[7] The purpose behind the fee simple being taken as an unencumbered fee simple (insofar as the provision is found in a taxing statute) was identified in Royal Sydney at 623 as follows:

It seems evident that the fee simple mentioned must be taken as free from encumbrances which, if they impaired the value of the estate, nevertheless operated to confer upon some other person an estate or interest in land. Were it otherwise the taxable value of the land would be diminished but the correlative estate or interest would not come into tax unless by some chance it were an interest falling under some specific provision imposing liability.

See also Gollan v Randwick Municipal Council (Gollan) at 100, 101 on appeal from the Supreme Court of NSW.[8]

1. As noted previously, pursuant to s 40(2) of the VLA, the appellant has the onus of proving its case, relevantly, that the issued land values for each of the valuing years are too high.[9] If the appellant does not discharge its onus, the appeal must be dismissed and the issued statutory values confirmed.[10]
2. Accordingly, the value of the estate in fee simple is taken as involving the hypothesis of a "fee simple unencumbered and subject to no conditions" restricting the use or enjoyment of the land: Royal Sydney at 623. It is the hypothetical "absolute or pure title" that is to be valued: Gollan at 101.
3. The Valuer-General identified two "qualifiers" to the above proposition:

(1) The first qualifier concerns the distinction between "a public law affecting the enjoyment of land and a restriction of title": Royal Sydney at 624. Where there is an encumbrance or restriction to a specific parcel, or a law that affects an area (even a small area) chosen "independently of all questions of title or ownership" that control the use of the land, the restriction is ignored: Royal Sydney at 624. The Sydney Water Act is not such a public law as it applies specifically and peculiarly when there are assets of Sydney Water in situ, and thus is not a law of general application.

(2) The second qualifier concerns the state of the land. The land is to be valued in its actual, rather than its notional state: Brisbane City Council v The Valuer-General for the State of Queensland (Brisbane City Council)[11] at 50 and 57 (Gibbs J). Accordingly, as the Valuer-General submitted in opening, where there is a physical disability such as a body of water, this may be taken into account.[12] Where there is a man made disability (a worsement) this too might be taken into account.[13]

1. In Brisbane City Council, Gibbs J held that it would be appropriate to have regard to disabilities affecting the land.
2. However, the Valuer-General submitted, even if there is a rising sewer main within the subject land, it does not here negatively affect the land in the requisite sense, requiring it to be taken into account.
3. The Valuer-General referred to Lewis Berger and Sons (Queensland) Pty Ltd[14] (Lewis Burger) where the Land Court (Mr Barry) at 101 found that "the easement as it attaches to the servient tenement [was] an encumbrance" and was to be "disregarded in ascertaining the unencumbered value of the subject land."
4. In closing, the appellant submitted that the Court, exercising its Class 3 jurisdiction, is not obliged to act only on the basis of evidence adduced by expert valuers who appear as witnesses. As judicial valuer, the Court is entitled to reject the whole of the expert evidence and, drawing on the experience of the Court, do as best as it can to identify an appropriate level of discount or an appropriate quantum of adjustment to the comparable sales: Leichhardt Council v Roads and Traffic Authority of NSW.[15]

1. Notwithstanding the absence of any common sales, the parties were in agreement that the appropriate valuation methodology was the direct comparison method based on an analysis of comparable land sales, the use of comparable sales being preferred as the primary method of valuation. It is long established that, ordinarily, the best evidence of the market value of land is that of comparables.
2. In Tenstat v Valuer General; Woolworths Limited v Valuer General[16] at [35]-[43], Parker AC referred to the direct comparison of sales evidence approach as the conventional method of valuation (emphasis in original), and identified the four steps in the process of undertaking a valuation using comparable sales evidence:

35. It is well established that, if comparable sales are available, the direct comparison of sales evidence approach is the conventional method of valuation (Graham Trilby Pty Ltd v Valuer General [2009] NSW LEC 1087 at 41(Trilby); Redeam Pty Ltd v South Australian Land Commission (1977) 40 LGRA 151 at 156; Riverbank Pty Ltd v Commonwealth (1974) 48 AJLR 483 at 484; Marroun v Roads and Maritime Services [2012] NSWLEC 196 at 196 (Marroun)).

36. The process of undertaking a valuation using comparable evidence comprises several steps, including the:

a accumulation;

b analysis;

c adjustment; and

d application

of potentially genuinely comparable sales (Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73 (Trust Company); Marroun, 197).

37. A Court depends upon the established expertise of valuer witnesses called on both sides of the case (Marroun, 197).

38. As Sugerman J said in Bingham v Cumberland County Council (1954) 20 LGR (NSW) 1, at 18-19:

"The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant."

39. The accumulation of potentially genuinely comparable sales seeks to identify and establish a pool of relevant comparable sales from which information may be deduced concerning the value of the subject property (Trust Company, 110 and 111; Marroun, 198).

40. Generally the competing parties produce lists which the Court must sift to identify some which are "truly comparable", or a "reasonably representative" sample and "relevant and sufficient in volume" (Maurici v Chief Commissioner of State Revenue [2003] HCA 8; (2003) 212 CLR 111, at 121).

41. Where the comparable sales differ in substantial ways from the subject property, a process of reasoning is required to establish their utility or otherwise (Leichhardt Municipal Council v Seatainer Terminals (1981) 48 LGRA 409, at 414).

42. In Brewarrana v Commissioner of Highways (No 2) 6 SASR (Brewarrana) at page 551, Wells J observed:

"there is no hard and fast rule by the application of which a valuer may, whatever the circumstances, draw the line that clearly separates the sales that are comparable from those that are not."

"The evidence in this case suggests strongly to my mind that, at the initial stages, a valuer will almost certainly look at all known sales in potentially relevant areas, if for no other reason than to discern patterns of prices and changes in price levels over important periods."

1. In Richard Capuano v Roads and Maritime Services (Capuano),[17] Robson J at [13]-[19] summarised the widely accepted methodology of the comparable sales approach. That methodology, using comparable sales evidence, is undertaken in four steps: accumulation, analysis, adjustment and application:

13. It is generally accepted that, insofar as there are comparable properties available, being sales of properties sufficiently similar to the subject property as to allow a comparison to be made between them, the conventional valuation method is the comparable sales approach. The manner in which that method should be applied is now well-known: River Bank Pty Ltd v Commonwealth (1974) 4 ALR 651; (1974) 31 LGRA 244 at 652; Graham Trilby Pty Ltd v Valuer-General [2008] NSWLEC 217 at [27]; Graham Trilby Pty Ltd v Valuer-General [2011] NSWLEC 68 at [24]; Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]; New South Wales Cremation Company Pty Limited v Valuer General [2016] NSWLEC 135 ('Cremation Company') at [84]-[88] and [97]-[104].

14. The accepted methodology for the comparable sales approach is that it be undertaken in four steps, being accumulation, analysis, adjustment, and application: Constantine v Blacktown City Council (No 2) [2016] NSWLEC 81 at [100] (Moore J); Hoy v Coffs Harbour City Council [2015] NSWLEC 128 at [83] (Pain J) (leave to appeal this judgment was refused in Hoy v Coffs Harbour City Council [2016] NSWCA 257; (2016) 281 LGERA 411 at [61] (Bathurst CJ, with Simpson and Payne JJA agreeing)); Allandale Blue Metal Pty Ltd v Roads and Maritime Services (No 6) [2015] NSWLEC 18 at [344] (Pain J); Marroun v Roads and Maritime Services [2012] NSWLEC 199 at [197] (Sheahan J and Parker AC) ('Marroun') (affirmed on appeal in Marroun v Roads and Maritime Services [2013] NSWCA 358; (2013) 211 LGERA 391 at [75] (Tobias AJA, with Basten and Gleeson JJA agreeing)); Cremation Company at [99].

15. First, the valuer (which includes the Court acting as valuer on appeal) is to accumulate comparable properties. In Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8, McHugh, Gummow, Kirby, Hayne and Callinan JJ commented at [18] that the "sales to be treated as comparable sales need to be truly comparable", although they added that the Court should not be "unreasonably selective".

16. Secondly, the valuer should analyse those comparable sales. This often involves converting the value of those sales into another measurement that can be easily compared: Marroun at [201] (Sheahan J and Parker AC).

17. Thirdly, the valuer (judicial or otherwise) should adjust those properties it considers comparable to create equivalence with the unimproved subject property. I note the comments of Biscoe J in Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 at [31]:

The basis for the valuers' valuation assessments is the sales comparison method. Accepted valuation practice permits adjustments for differences, such as in location, area and time to enable valuers to have comparable values which, following adjustment, account for the various differences with the subject property. Such adjustments are generally based on a reasoning process drawing on the skill and experience of the valuer and are undertaken to derive an opinion of value through a deductive process. Because properties are rarely identical, adjustments for differences are obviously necessary but caution is required through making as few adjustments as possible, in a consistent manner, to ensure the reliability of the comparable sale when related to the subject property. Too many adjustments potentially render the comparable sale unsafe to rely upon. Caution is therefore required where large adjustments are to be made. Reflecting the significant roles of skill, experience and personal assessment in the adjustment process, the scope for differences in the quantum and direction of adjustment between valuers can be considerable. Third, the Court should then apply these adjusted values to the subject property. The purpose of this is to determine, based on comparable sales and as best it can, what value the subject property would obtain if it were to be sold on the market.

18. Fourthly, the valuer should apply the comparable sales approach to determine a value of the subject property based on the adjusted values of the comparable properties.

19. Although there has been some judicial debate, it is now accepted that the process of making explicit adjustments for differences in the valuation method allows the adjustment process to be logical and transparent as opposed to an implicit process comprising a single adjustment that risks rejection for want of transparency: Trust Company Limited v Minister Administering the Crown Lands Act 1989 [2012] NSWLEC 73; (2012) 211 LGERA 158 at [115]; Tomago Aluminium Company Pty Limited v Valuer General [2010] NSWLEC 4 at [45]; and Marroun at [203]-[207].

1. In Perisher Blue, Duggan J said at [19] that sales of land with "sufficiently similar characteristics" are to be identified and adjustments made "to render the sales suitably comparable to inform a determination of the unimproved value of the Subject Land."
2. In Land Acquisition (7th ed, LexisNexis Butterworths, 2017), Newton & Conolly said at 250:

The onus is upon the party submitting evidence of the value of the land to prove that the sales relied upon are in fact comparable. Having established that prima facie there are grounds for showing comparability, the onus moves to the other party to show that the sales referred to are not comparable. It may be contended that the sales were of an unusual nature, were too distant in time, had different features, were of a 'forced' nature, or for some other reason did not amount to a comparable sale or, if they were comparable, they were weak and unconvincing evidence of the resumed land's market value.

1. In Bingham v Cumberland County Council,[18] Sugerman J at 18-19 considered the absence of comparable sales evidence as follows:

In the absence of sufficient guidance to be had from sales, the valuer may find himself in a position resembling that to which Lord Romer referred Raja Vyricherla Narayana Gajapatiraju v Revenue Divisional Officer Vizapatam [1939] UKPC 15; [1939] AC 302 at 312-313 in which he 'will have no market value to guide him, and he will have to ascertain as best he may from the materials before him what a willing vendor might reasonably expect to obtain from a willing purchaser for the land'. In these cases that would not be because the land, in terms of Lord Romer's judgment, had 'some unusual, and it may be unique, features as regards its position or its potentialities' but because it derived a certain uniqueness from the character of the provisions and restrictions affecting it and consequences of the affection, which would take a sale of it outside the ordinary run of transactions in otherwise comparable lands and thus preclude direct comparison ... The valuer, in arriving at his opinion in these difficult matters may have to draw upon his general knowledge and experience, including perhaps experience in the other situations which, although lacking in complete comparability, may yet provide an experienced valuer with guidance and suggestions as to the general approach which may be made and as to considerations which may become relevant.

1. In Port Macquarie West Bowling Club Ltd v The Minister,[19] Else-Mitchell J said at 65-66 in relation to the absence of sales data of comparable lands similarly zoned:

... there were no sales data of comparable lands similarly zoned and each valuer did the best he could with the material available. The board recognized this and stated that it had been faced with an unusual problem, but it referred to the decision of Hardie J. in Park Beach Hotel Pty. Ltd. v. The Minister [(1970) 21 The Valuer 453 and 534] as affording it some guidance. In that case, which concerned the conversion of a lease of open space land under the same provisions of the Crown Lands Consolidation Act, the valuation of the land was reached by taking sales of business sites nearby and making a deduction therefrom to compensate for the zoning restrictions imposed on open space lands under the local Coffs Harbour Planning Scheme Ordinance. What the local land board did in the present matter was to adopt Mr. Walker's figure of $106,000 as a value on a virtually unrestricted basis and, in reliance on Hardie J.'s decision in the Park Beach Hotel case, deduct 14 per cent therefrom to reduce the price to $91,160. It appears to me that the board was entitled to take this course in the circumstances of the case, because it was common ground that there were no sales of land similarly zoned and that left little option to the valuers but to use sales of land differently zoned, subject to a deduction for such difference as a basis for determining the value or price of the subject land.

1. In Smith v Eurobodalla Shire Council,[20] McClellan AJA said at [121] (Mason P and Santow JA agreeing) of cases where there is no direct market evidence in relation to a particular property (emphasis added):

There is no doubt that the foundation for an expert's opinion must be adequately proved. This will include the evidence necessary to qualify the person as an expert in the relevant field and proof of the facts in respect of which the expert is requested to give an opinion. As Heydon JA acknowledges, this can give rise to difficulties in areas such as land valuation where, in many cases, the available market evidence is limited and the expert's judgment must be based upon accumulated experience. Sometimes when evidence of comparable sales is not available, alternative but less satisfactory methods of valuation may be utilised. (Various methods are discussed in Alan Hyam, The Law Affecting the Valuation of Land in Australia, 3rd ed, p 113ff). But there will be many cases, particularly in relation to sales of "unique" property, where this may not be possible and a valuer will be required to exercise his or her judgment having regard to the objective material which is available, however inadequate. If there is simply no direct market evidence in relation to a particular property, this does not mean that a valuer cannot express an opinion as to its value. As McClure J points out in the Full Court of the Supreme Court of Western Australia case in Western Australian Planning Commission v Arcus Shopfitters (2003) WASCA 295, Makita does not mean that an opinion will be excluded where the objective material is not complete "but the valuer must reveal as far as possible the reasoning process actually employed so as to enable the court to evaluate the evidence and the expert's conclusions."

1. And in Almona Pty Ltd v Roads and Traffic Authority of New South Wales,[21] Jagot J said at [27] of the difficulties which arise where there is a lack of comparable sales (emphasis added):

The site is unusual and the acquisition presents difficulties for the valuer attempting to assess the value of the land taken. I accept that both valuers have attempted to apply methods capable of providing assistance to the Court in all the circumstances. Given the lack of comparable sales, the caution of Wells J in Bronzel v State Planning Authority (1979) 21 SASR 513 at 516; 44 LGRA 34 at 38 is apt. Wells J observed that:

... this Court should be slow to reject any method that, in expert hands, is capable of yielding a result within bounds that are not unreasonable. The limitations of every method must, of course, always be kept clearly in mind. I am of the opinion that the approach likely to result in the most direct and reliable resolution of the outstanding differences between the valuations is to consider the particular features of each valuation that are capable of yielding to adverse criticism.

1. In Fricke, Compulsory Acquisition of Land in Australia (2nd ed, Law Book Co, 1982), the learned author said at 344:

There are times when no comparable evidence or even near-comparable evidence is available. It is in such instances that the valuer must draw from his experience and knowledge and whilst he should never be an advocate in making his valuation, he may in these circumstances need to become one to sustain it.

1. And in Hyam, The Law Affecting Valuation of Land in Australia (6th ed, Federation Press, 2020), the learned author said at 137:

...in the absence of directly comparable sales evidence, a valuer, or a court, should look to those sales of lesser comparability, analyse them and make the necessary adjustments in applying them for the purpose of assessing the task at hand. Failing any sales of remotely comparable properties other methods of valuation should be utilised.

(1) For the appellant:

(a) Individual Flood Engineering Report prepared by Mr Samer El Haddad, dated 7 July 2023.

(b) Individual Town Planning Report prepared by Mr Robert Chambers, dated July 2023.

(c) Individual Valuation Report prepared by Mr Angelo Konidaris, dated 27 September 2023.

(2) For the Valuer-General:

(a) Individual Flood Engineering Report prepared by Mr Daniel Dhiacou, dated 21 July 2023.

(b) Individual Town Planning Report prepared by Mr Paul Grech, dated 21 July 2023.

(c) Individual Valuation Report prepared by Mr Cameron Hubbard, dated 27 September 2023.

(3) Joint reports:

(a) Joint Report of flooding experts filed on 18 August 2023 (the flooding joint report).

(b) Joint Report of town planners filed on 18 September 2023 (the joint report of town planners).

(c) Joint Report of valuers filed on 16 October 2023 (the joint report of valuers).

(d) Supplementary Joint Report of valuers filed on 26 October 2023 (the supplementary joint report of valuers).

1. There were some disagreements which remained between the flood engineers and the town planners following joint conferencing. However, they need not be resolved by the Court. That is because the valuers agreed on some key assumptions which rendered those disagreements unnecessary to decide.
2. The principal issue in the case relates to the valuation evidence. Whilst each valuer adopted the comparable sales methodology, there were as previously noted no common sales between them.
3. The evidence is summarised as follows:

1. Council's eplanning website identified the subject land in the Medium Flood Risk category at each of the valuing years, as reproduced below. This means that it is land below the 1% Annual Exceedance Probability (AEP), but not subject to high hydraulic hazards:

1. The flood engineers agreed that for any development to take place on the subject land, compensatory earthworks would be required to ensure no loss of flood storage on site up to the 1% AEP flood level and to prevent cumulative offsite flood impacts. The town planners agreed that the amount of compensatory flood storage that would be required would vary depending on the design of any proposed development.
2. The LDCP contains flooding controls relevant to new commercial and industrial development on sites within the medium flood risk category. Those controls were agreed and summarised in the flooding joint report. In order to meet the flood planning controls, any proposed development on the subject land would need to:

(1) be raised to the flood planning level which is equal to the 1% AEP + freeboard;

(2) be designed in such a manner that all buildings and structures are flood compatible up to the 1% AEP + freeboard;

(3) be structurally sound up to the 1% AEP + freeboard;

(4) have nil or negligible effects on flooding elsewhere in the floodplain by providing flood compensatory storage on site in the form of an open area where the water could be stored, impacting on the ability to build across the full extent of the site. Alternatively, the builder would have to provide a flood void under the structure which would increase the costs of the development;

(5) ensure that any basement car parking is protected from flooding up to the 1% AEP + freeboard; and

(6) provide reliable pedestrian or vehicle access during a 1% AEP flood event to a publicly accessible location above the Probable Maximum Flood (PMF) event.

1. The flood experts also agreed that the necessity for earthworks and/or a suspended slab to permit commercial or industrial development in order to comply with the LDCP controls would likely result in the costs of development being higher than on a flood free site.
2. The appellant's flood expert, Mr El Haddad, was of the opinion that any prospective developer of the subject land would need to reach an agreement with Sydney Water to relocate the rising main out of the footprint of a proposed development. The Valuer-General's flood expert, Mr Dhiacou, accepted that he did not have sufficient expertise to express a view on that matter, but opined that if a development on the subject land could be designed without structures over the sewer, then there would be no need to relocate the sewer.
3. The appellant's town planner, Mr Chambers, considered that because the LDCP controls identify the subject land as subject to a flood constraint, this would likely add to the cost, complexity and risk of having a development application approved.

1. The town planners agreed on the potential opportunities for the development of the subject land and the relevant constraints. They also agreed on the key planning controls that applied at each of the valuing years. They agreed on three likely development scenarios:

(1) A single end user complex, such as a Bunnings warehouse and associated car parking, that could occupy the whole of the subject land (similar to the Masters Home Improvement Centre with its associated parking which was approved in the 2013 development consent). This would be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (a)).

(2) A mixed-use development comprising large format bulky goods retailing outlets and other specialty outlets similar to that approved in the 2023 development consent. This would also be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (b)).

(3) A development with seniors living above a commercial use and/or medical centre/private hospital under the provisions of the State Environmental Planning Policy (Housing) 2021 and the State Environmental Planning Policy (Infrastructure) 2007 relating to seniors housing. This would also be subject to a maximum FSR of 0.75:1, and site works would likely need to be undertaken to address flooding, including compensatory flood storage that might be required for a particular development, as discussed in the flooding joint report (option (c)). This option was dismissed by both valuers, and accordingly has been disregarded by the Court as judicial valuer.

1. The planners agreed that it could take in the order of 12 months for development applications for the proposals in options (a) and (b) to be determined by Council, and longer if there were an appeal. As noted above at [24], the planners also agreed on the key planning controls applying to the comparable sales relied upon by the valuers.
2. The planners disagreed in certain respects as to the potential for an uplift in zoning of the subject land to include residential at each of the valuing years. However, the Court has disregarded this disagreement because the valuers subsequently agreed that no residential premium would be attached to the subject land.

1. The valuers reached a number of agreements, including in relation to the following:

(1) The sale of the subject land in 2017 is not relevant to the valuations of the subject land.

(2) The land is located in a "flood planning zone" (referred to as a "flood planning area" in the LLEP (cl 5.21) and the joint report of town planners) that would require on site flood storage to facilitate development.

(3) The "high level of uncertainty relating to any uplift for rezoning for residential purposes is such that there would be no resulting premium over and above the existing B5 Business Development zoned value rates applied by a hypothetical purchaser at any of the valuation dates."

(4) The highest and best use of the land for each of the valuing years would be a use permitted within the B5 Business Development zone.

(5) A potential seniors living development does not represent the highest and best use of the land.

(6) There was no market movement between 2019 and 2020, but a large increase from 2020 to 2021 of 27%.

(7) The land is constrained by an easement for sewage purposes which bisects the land. The impact of the easement was not agreed.

1. The valuers agreed that development option (c) identified by the town planners is not a likely use, and was disregarded by both experts.
2. In relation to the methodology of valuation, the valuers agreed the direct comparison of sales approach analysed on a rate per square metre of site area.

1. After joint conferencing, the valuers remained in disagreement in relation to the following issues:

(1) the most likely use of the subject land;

(2) the impact of the sewer pipe;

(3) the impact of flooding on development costs; and

(4) sales evidence and adjustments.

1. The Valuer-General's valuation expert, Mr Hubbard, considered that the most likely use of the subject land is for a warehouse and distribution centre use, being a use permitted in the B5 Business Development zone. Accordingly, Mr Hubbard chose sales of land purchased for warehouse use.
2. Mr Hubbard's sales were located at Minchinbury, Granville, Prestons, Chipping Norton and Wetherill Park. The majority of these sales were within established industrial areas with the exception of Granville.
3. The appellant's expert, Mr Konidaris, was of the opinion that whilst warehouse and distribution centre uses are permissible in the B5 zone, those uses tend to be grouped together in established industrial areas, with "excellent road transport links". Mr Konidaris was of the opinion that the subject land is relatively isolated, not in an established industrial area, is surrounded by residential development and the Warwick Farm Racecourse, and does not have the benefit of complementarity with other warehouse and distribution centre users. He considered that the most likely use of the subject land is for bulky goods retailing and that a warehousing/distribution use is not a likely use of the subject land.
4. This difference between the valuers was fundamental to the choice of sales made by each of them. Mr Hubbard relied upon sales of sites which were purchased for warehouse use. Mr Konidaris' sales were mainly of sites purchased for bulky goods retailing.
5. Mr Konidaris opined that Mr Hubbard's chosen sales, being sites located in established industrial areas such as Minchinbury, Prestons, Chipping Norton industrial estate and Wetherill Park, were not similar to the location of the subject land, and were superior locations for warehouse and distribution centre users. Mr Konidaris considered that the prices paid in those established areas reflect the superior location in relation to Warwick Farm for bulky good users, but also the advantages of being located in a fully serviced industrial estate.
6. Mr Konidaris' sales were located in Hoxton Park, Warwick Farm, Austral and Gledswood Hills.
7. The market evidence relied upon by the valuers demonstrated that sites sold to warehouse and distribution centre users attract a significant premium compared to sites purchased for bulky goods retailing uses. Accordingly, there was a very significant difference in values contended for by Mr Hubbard and by Mr Konidaris:

(1) Mr Hubbard was of the opinion that his sales supported a land value of $820 /m2.

(2) Mr Konidaris' analysis of his very different sales supported a land value of $360 /m2.

1. Following joint conferencing, Mr Konidaris made a 10% adjustment to the land value of the subject land when compared to the sales selected by him, opining that such adjustment captures the time, cost and risk inherent in the potential relocation of the sewage infrastructure.
2. Notwithstanding his acknowledgement that the land is "constrained" by the easement, Mr Hubbard placed no detriment on the location of the sewage infrastructure.

1. In relation to the impact of flooding on development costs, both experts agreed that a discount is necessary to account for the additional costs associated with developing the subject land compared to the sales selected by each of them. Mr Hubbard suggested a discount of 5%, Mr Konidaris a discount of 10%.

1. The first and fundamental issue which arises in the proceedings is the accumulation of potentially relevant comparable sales "from which information may be deduced concerning the value of the subject property": Trust Co Ltd v Minister Administering the Crown Lands Act 1989[22] at 110, 111; Marroun v Roads and Maritime Services[23] at 198 (Sheahan J), that is, which of the sales relied upon by the valuers are the appropriate or more appropriate, comparable sales, or whether any of them are generally or truly comparable and provide a reasonably representative same of sales "relevant and sufficient in volume": Maurici v Chief Commissioner of State Revenue[24] (Maurici) at 121. However, as McHugh, Gummow, Kirby, Hayne and Callinan JJ added in Maurici, the Court should not be "unreasonably selective"; also Capuano at [15] (Robson J).
2. The second issue concerns the adjustments that should be made to the properties it considers comparable to create equivalence with the subject land: Holcim (Australia) Pty Ltd v Valuer-General[25] (Holcim) at [31] (Biscoe J); Capuano at [17] (Robson J) to determine the land values of the subject land.
3. Mr Konidaris relied upon 6 sales. Mr Hubbard relied upon 7 sales. There are different sales relating to the 2019 and 2020 valuation dates, and the 2021 valuation date.
4. The sales for the valuing years 1 July 2019 and 1 July 2020 relied upon by the appellant's valuer, Mr Konidaris, were as follows:

Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

1. The sales for the valuing years 1 July 2019 and 1 July 2020 relied upon by the Valuer-General's valuer, Mr Hubbard, were as follows:

1. Mr Konidaris' sales for the valuing year 1 July 2021 were as follows:

1. Mr Hubbard's sales for the valuing year 1 July 2021 were as follows:

1. Each of the sales, with commentary, was identified in tables attached to the joint report of valuers. The valuers also prepared two further tables, one for the 2019 and 2020 valuing years, and one for the 2021 valuing year, setting out their respective adjustments to each other's sales.
2. The Court was taken to each of the sales on a site inspection conducted on the first day of the hearing. The map below shows the location of the 13 sales relied on by the parties.

1. The table below shows the adjustments made by the valuers to the sales selected by each of them for the valuing years 1 July 2019 and 1 July 2020.

1. The table below shows the adjustments made to the sales selected by each of the valuers for the valuing year 2021.

1. In closing submissions, the appellant referred to the explanation given by the Valuer-General's expert, Mr Hubbard, for the 5% adjustment made by him for flooding in relation to the sales selected by Mr Konidaris, and submitted that Mr Hubbard appeared to have "taken the view that some of the sales might be 50% similarly affected and others [were] in a 'low-risk planning area' and therefore the sales are the 'subject of flooding'".
2. However, the appellant submitted, a closer examination demonstrates that the sales selected by Mr Konidaris are not the subject of flooding, or are not sites where works would need to be undertaken to raise the land above the 1% AEP flood level and provide compensatory flood storage. The LDCP, it was submitted, divides land into 4 areas in respect of flooding: High Flood Risk Category, Medium Flood Risk Category, Low Flood Risk Category and No Flood Risk Mapping.[26] The Low Flood Risk Category is "all other land within the floodplain (i.e. within the extent of the PMF) but not identified within either the High Flood Risk category or the Medium Flood Risk category." The LDCP provides at 38 that:

The Low Flood Risk Category is where the risk of damages is low for most land uses. The Low Flood Risk Category is that area above the 1% AEP flood and most land uses would be permitted within this Category.

1. Therefore, the appellant submitted, where the sales are located in the Low Flood Risk Category, they are not sites where works would need to be undertaken to raise the land above the 1% AEP flood level as would be necessary in relation to the subject land. Those sales were submitted to include:

(1) AK 1 (19/20) - Low Flood Risk Category.

(2) AK 2 (19/20) - Low Flood Risk Category.

(3) AK 3 (19/20) - Low Flood Risk Category in the B5 Business Development zoned part of the property - high flood velocities in the C2 Environmental Conservation zoned part of the property which is not developable (formerly the E2 Environmental Conservation zone until the LLEP was amended by the Standard Instrument (Local Environmental Plans) Amendment (Land Use Zones) Order 2021 on 3 November 2021, which commenced on 1 December 2022).

(4) AK 4 (19/20) - as for AK 3 (19/20).

(5) CH 1 (19/20) - Blacktown local government area - Flood free.

(6) CH 2 (19/20) - Blacktown local government area - Low Flood Risk - no planning restrictions.

(7) CH 3 (19/20) - Parramatta local government area - Flood free.

(8) CH 4 (19/20) - 42% of the land is within the Medium Flood Risk Category, but filling has mitigated flood risk resulting in no flood storage being required and the land no longer being flood affected.

(9) CH 5 (19/20) - front part of the property is above the 1% AEP; southern part with flood depths of less than one metre. Development in the south would have undercroft areas, and no compensatory earthworks would be required.

(10) AK 1 (2021) - only 10% of the land is in the Medium Flood Risk Category, and this would not be considered to be an impediment to development.

(11) AK 3 (2021) - Camden local government area - Flood free.

(12) CH 1 (2021) - Low Flood Risk Category.

(13) CH 2 (2021) - Low Flood Risk Category.

1. Accordingly, the appellant submitted, all of the comparable sales are Low Flood Risk, flood free, in locations where the higher flood risk parts of the sites are in the undevelopable C2 Environmental Conservation zone (Austral sales AK 3 (19/20) and AK 4 (19/20)), or where the Medium Flood Risk Category areas are on much smaller parts of the site compared to the subject land which is located in the Medium Flood Risk Category.
2. The appellant submitted that Mr Hubbard had been too conservative in his 5% adjustment, and that the 10% adjustments for flooding made by Mr Konidaris better reflect the added development costs and risks associated with developing the subject land.
3. In relation to the sales evidence and adjustments relied upon by each of the valuers, the appellant submitted as follows.

AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

1. In relation to this sale, the appellant submitted that the land when purchased was occupied by a Bunnings Warehouse, and as such it is one of the agreed development scenarios applicable to the subject land with similar zoning to the subject land. The appellant submitted that in rejecting this sale because it was not an "open market transaction", the Valuer-General's expert Mr Hubbard had misunderstood the sale that was relied upon by Mr Konidaris, being a sale from Home Consortium to Charter Hall. The earlier sale was a sale from Woolworths to Home Consortium of all of the Masters properties around Australia. The appellant submitted that Home Consortium leased several of the Masters properties to Bunnings Warehouse, and that in 2017 Charter Hall acquired from Home Consortium 6 of the sites that were leased to Bunnings Warehouse. The appellant submitted that "there is no reason to suspect that the latter sale was not a market transaction".
2. Mr Konidaris' opinion was that this was a market transaction, and referred to "evidence that properties such as this are typically marketed on an Expressions of Interest basis to institutional investors". Further, the appellant submitted in relation to this sale that "[n]othing turns on the fact that it was one of 6 sites acquired by Charter Hall around the country - there [was] no reason to believe that this infected the market value. Whilst the property exchanged and sold on the same day, this did not suggest an anxious purchaser or anxious vendor and thus undermine the test of market value": citing Spencer v The Commonwealth at 441 (Isaacs J).
3. Mr Konidaris' adjustments for location were submitted by the appellant to be appropriate given the "proximity of the sale to the M7 (and right on the exit for Cowpasture Road)", and a "location with surrounding industrial neighbours, thus de-risking the site for a purchaser looking to develop it" for a B5 Business Development purpose. The appellant submitted that "[l]ocation next to industrial neighbours" is "an important attribute for the purpose of an industrial development and on a par with access to roads".

AK 2 (19/20) - 28-34 Orange Grove Road, Warwick Farm

1. In relation to AK 2 (19/20), the appellant submitted that Mr Hubbard was mistaken in not considering this sale to be a market transaction. Mr Hubbard conceded that the property was marketed, the marketing document was in evidence, and that if sold at auction, that would be an indicator of an open market transaction. The evidence was that the land sold for $22m on 2 September 2019, after the auction held on 6 June 2019. The whole property was put to market, and the half share was acquired for $11m, the equivalent value being $22m as market value. The appellant also submitted in relation to this sale that the sale of half of the land satisfies the test in Spencer v The Commonwealth, citing CFS Managed Property Limited v Valuer General at [141] (Pain J).[27]
2. The appellant noted the agreement of both valuers that the sale is located in close proximity to the subject land, and that the subject land is better located than AK 2 (19/20). Mr Konidaris made an adjustment of 10% because the subject land has better exposure and access than AK 2 (19/20). (Mr Hubbard opined that an adjustment of 10-15% is warranted for the same reasons).
3. The appellant submitted that it was unclear from the oral evidence why Mr Hubbard made an additional adjustment of +15% for "zoning" when the sale and the subject land are both located in the B5 Business Development zone.

AK 3 (19/20) - 184 Fifth Avenue, Austral; AK 4 (19/20) - 402-412 Bringelly Road, Austral; AK 1 (2021) - 120-130 Fifth Avenue, Austral

1. The appellant submitted that all of AK 3 (19/20) - 184 Fifth Avenue, Austral, AK 4 (19/20) - 402-412 Bringelly Road, Austral, and AK 1 (2021) - 120-130 Fifth Avenue, Austral (the Austral sales) can be treated as englobo sales which mean that they have an advantage over the sales which comprised building improvements.
2. In oral evidence, Mr Hubbard said that an englobo sale "means that the site's ... underdeveloped and there may not be any services in there to develop". Mr Hubbard agreed with counsel for the appellant that "it's easier to make adjustments [for englobo sales] because you don't have to make a lot of assumptions about removing the value of improvements".
3. In relation to the Austral sales, both valuers made an adjustment for location. Mr Konidaris made an adjustment of +10% because the subject land has "better exposure and access". The appellant submitted that in other respects the Austral sales have "some similarities" with the location of the subject land, the subject land being "relatively undeveloped other than residential and horseracing uses".
4. In relation to Mr Hubbard's adjustment of +30% for location based on the subject land "lacking 'exposure' to a main road", being "located further away" from the Sydney CBD and Austral being "inferior to Warwick Farm", the appellant submitted that, Mr Hubbard had made a further adjustment for configuration which also includes "street exposure". This was submitted by the Valuer-General to be a case of double counting, and that Mr Hubbard's adjustments should be reduced accordingly. Unlike Mr Hubbard, Mr Konidaris' adjustment for street frontages (configuration) was submitted to be captured in the overall location adjustment.
5. Mr Konidaris opined that that there should be "no adjustment for proximity to the Sydney CBD" as a "bulky goods user, the most likely user of the Austral sites", would be looking to "support a local market and not the wider Sydney market".
6. The appellant referred to the agreement of the valuers that the Austral sales were market sales, notwithstanding that they may have sold through options. The transfer dates were 2019, as relied upon by Mr Konidaris. The documents relied upon by the Valuer-General did not provide evidence that the Austral sales were the subject of options. Nonetheless, the appellant submitted, "options do not reflect a market price at the date when the option is entered into" (in this case in 2017) "because generally when properties are purchased on option there is a premium for the time value of money".
7. In any event, the appellant submitted, no adjustment was necessary because there was no market movement between 2017 and 2019 in the Austral region. As Mr Hubbard said in evidence, the Austral area was unserviced in 2017 and was unserviced as at the date of hearing.

CH 1 (19/20) - 42 Sargents Road, Minchinbury and CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

1. In relation to the sales CH 1 (19/20) - 42 Sargents Road, Minchinbury and CH 2 (19/20) - 17 John Hines Avenue, Minchinbury (the Minchinbury sales) relied upon by Mr Hubbard, the appellant submitted that Minchinbury is a superior location to Warwick Farm for warehouse/distribution uses. It is located some 27 kms from the subject land in the Blacktown local government area, and the B5 Business Development zone in Blacktown was submitted to be "much more of an industrial focused zone; the majority of the zone being warehouses and distribution centres". It is located close to the M4 and M7 motorways with "excellent access, ideal for warehouse/distribution centre users who require easy access to the principal road network". The appellant submitted that Mr Hubbard's Minchinbury sales show analysed rates of $707/m2 and $825 /m2.
2. Mr Konidaris gave evidence orally that CH 1 (19/20) was acquired by Telstra for a data centre, and that land suitable for data centres attracted a premium over regular industrial land. Mr Konidaris compared CH 1 (19/20) with other vacant similarly zoned land in Minchinbury which sold at about half the rate of CH 1 (19/20), together with other sales at Erskine Park and Horsley Park for data centres also demonstrating that large premiums were paid.

CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

1. In relation to CH 2 (19/20) relied upon by Mr Hubbard, the appellant submitted that other than location, the principal difference between this sale and the subject land related to site preparation; the sale land having already been through the process of site preparation prior to the sale, whereas the subject land was not yet prepared. The sale land had been levelled and was "ready to go" for development. The appellant submitted that this reflected Mr Konidaris' adjustment of -5%.

1. The appellant acknowledged that the adjustments in relation to CH 3 (19/20) were relatively similar between the valuers, except for location. The valuers agreed that the sale was superior because it was closer to the Parramatta CBD and to the M4 motorway. Mr Konidaris was of the opinion that a greater adjustment for location needed to be made because it is a premium location for bulky goods uses, including for motor vehicle sale yards, and because "Parramatta is generally a more expensive location than the Liverpool LGA". He opined that the sale shows an analysed rate of $1,366/sqm, highlighting the "superior location" of a "Parramatta location".

1. This was the first of Mr Hubbard's industrial land sales, being land zoned in part IN2 Light Industrial and, in part, IN3 Heavy Industrial. The appellant noted that in his individual report, Mr Hubbard had made adjustments totalling +55% which the appellant submitted "would suggest that this was not a very comparable sale" to the subject land. The most significant difference, the appellant submitted, was in adjustments in relation to location, Mr Konidaris opining that CH 4 (19/20) "has multiple superior attributes compared to the Subject Land". Further, the appellant submitted that the adjustment of both valuers for location was "so great that each must logically accept that it is not a comparable location" to the subject land. However, each had "different reasons for doing so". The sale, the appellant submitted, is "located within an A-grade industrial park, on the M7 [motorway], close to the junction with the M5 [motorway], and the M31 [Hume motorway] going south" which, it was agreed, "makes it an ideal location for either the warehouse/distribution user and the heavy industrial user". In oral evidence, Mr Hubbard agreed the Prestons location has "not just the warehouse and distribution uses", but also "the heavy industrial uses".
2. The appellant submitted that Mr Hubbard made an adjustment for zoning in favour of the subject land because bulky goods retailing is not permissible at Prestons. However, any such adjustment, the appellant submitted, "has to be weighed against the fact that most IN3 [Heavy Industrial] uses are not permissible" on the subject land, and it is "irrelevant that the sales that were zoned heavy industrial were acquired for warehouse/distribution use because they were competing in the market against the heavy industrial user".
3. The appellant also referred to the acceptance by Mr Hubbard in answer to a question by the Acting Commissioner that the adjustment for zoning in relation to this sale was not based on any analysis but was just an opinion:

ACTING COMMISSIONER: ...Mr Hubbard, you made a plus 10 adjustment for 5 Melito Court, Prestons, because of zoning. What analysis did you undertake to arrive at that 10% between the zones.

WITNESS HUBBARD: I just made the opinion that ours was a superior zoning because it had the availability of the bulky goods retailing.

ACTING COMMISSIONER: But you haven't analysed any--

WITNESS HUBBARD: I haven't analysed anything, it's just an opinion.

1. The appellant also noted that the Valuer-General had made a large adjustment for configuration on the basis that the units would lack exposure to the street (in comparison to the subject land). But Mr Hubbard had not explained why warehouse/distribution users need or value exposure to the street when compared to, say, a McDonalds or a bulky good retailer. Mr Konidaris' opinion was that exposure is a far smaller factor for warehouse/distribution users who value industrial grade roads, exposure to principal transport routes and locations within established industrial parks.

CH 5 (19/20) - 42-46 Alfred Road, Chipping Norton and CH 1 (2021) - 24-40 Alfred Road, Chipping Norton

1. The CH 5 (19/20) - 42-46 Alfred Road, Chipping Norton and CH 1 (2021) - 24-40 Alfred Road, Chipping Norton (the Chipping Norton industrial estate sales) relied on by Mr Hubbard were also zoned IN 3 Heavy Industrial. The appellant submitted, again, that the significant difference between the two valuers related to the adjustments for location, Mr Konidaris opining that Chipping Norton is an established industrial precinct for which purchasers pay a premium. As in relation to Prestons, Mr Hubbard had made the same adjustment for zoning which, the appellant submitted, was wrong for the reasons given in relation to CH 4 (19/20).

AK 3 (2021) - 9 Gregory Hills Drive, Gledswood Hills

1. In relation to this sale, the appellant submitted that the land has prominent access to Gregory Hills Drive, a busy local thoroughfare, but has inferior exposure compared to the subject land. According to Mr Konidaris, it is fully serviced and surrounded by modern industrial development.

CH 2 (2021) - 1011-1027 Canley Vale Road, Wetherill Park

1. The appellant submitted that this sale, relied upon by the Valuer-General, was a sale to the anxious adjoining owner of the Greenway Shopping Centre which subsequently submitted a development application for staff car parking for 161 car spaces, thus freeing up additional customer car parking for the shopping centre.
2. In addition, the appellant submitted, the acquisition of the land permitted the owner of the shopping centre to perform a boundary adjustment to ensure that the entirety of the shopping centre and associated car parking are located on one lot. Further, the appellant submitted, the property is located in the Fairfield local government area, 14 kms from the subject land and in the established Wetherill Park Industrial Area. The location of CH 2 (2021), the appellant submitted, is "superior" to that of the subject land.

1. In relation to the sewer pipe, the appellant submitted that it had proved that a rising sewer main exists on the subject land. To the extent that the Valuer-General relies upon earlier documents, the best evidence is contained in the positive confirmation in a letter dated 9 November 2021 from Sydney Water that a "critical Sydney Water 375mm wastewater pressure main traverses the site". That being the case, any potential development over or adjacent to the main is subject to the approval of Sydney Water. The technical guidelines published by Sydney Water suggest that its concurrence may not be forthcoming.
2. Accordingly, Mr Konidaris made a 10% adjustment to the land value of the subject land compared to the sales to capture the time, cost and risk inherent in the potential relocation of the sewage infrastructure. Further, the appellant submitted, while the Valuer-General's expert Mr Hubbard initially placed no detriment on the location of the pipe, in oral evidence he conceded that an adjustment of between 2-5% is warranted.

(1) The subject land is located within a flood planning zone that would require on site flood storage to facilitate development.

(2) The high level of uncertainty relating to any uplift for rezoning for residential purposes was such that there would be no resulting premium over and above the existing B5 Business Development zoned value rates applied by a hypothetical purchaser at any of the relevant valuation dates.

(3) The highest and best use of the land would be a use permitted within the B5 Business Development zone.

(4) A potential seniors living development does not represent the highest and best use.

(5) There was no market movement between 2019 and 2020, but a large increase from 2020 to 2021 of 27%.

(6) The subject land is constrained by an easement for sewage purposes which bisects the land.

1. The Valuer-General also accepted that development scenario (c) referred to by the town planners (seniors living) was not a likely use.
2. The Valuer-General submitted that the Court would not be satisfied that the appellant has discharged its onus of demonstrating that the land values issued by the Valuer-General are too high, and that the issued land values should remain undisturbed.
3. The Valuer-General referred to the agreement between the parties that there was a "dearth of sales" around the dates the valuations were made and within the immediate location of the subject land, and that there were no common sales. In relation to the 13 sales before the Court, 9 for the 2019 and 2020 valuing years and 4 for the 2021 valuing year, the Court, it was submitted, "is presented with a stark choice between, on the one hand, the two industrially zoned Chipping Norton sales" upon which the Valuer-General relies "just 5 kms" from the subject land, "supported by B5 [Business Development zone] sales further afield in Minchinbury, Granville and Wetherill Park and on the other hand, the appellant's two unsafe sales, closer to the subject land in Warwick Farm and Hoxton Park and the four entirely unsuitable distant sales, the englobo sales in the still emerging area of Austral and the relatively vacant area of Gledswood Hills".
4. The Valuer-General submitted that in conformity with the experts' expectation that in "the adoption of an appropriate rate per square metre would be ideally [sic] having regard to properties within close proximity to the Subject Land", the Court would be most attracted to the proximate, industrially zoned Chipping Norton sales appropriately adjusted and supported by more distant B5 Business Development zone sales.

1. The Valuer-General submitted that AK 1 (19/20) Lot 10, Cowpasture Road, AK 2 (19/20) 28-34 Orange Grove Road, Warwick Farm and AK 1 (2021) 120-130 Fifth Ave, Austral are unsafe sales.

AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

1. The Valuer-General submitted that AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park presents multiple difficulties. First, Mr Konidaris accepted that this sale was one of 6 properties sold together. He accepted that it was therefore not a single sale. Mr Hubbard initially made no adjustments on the basis that he deemed it to be "a non-open market transaction and out of line" and that "inferior properties" were selling at a "higher rate than both values rely upon".
2. When Mr Hubbard was asked to assume that the sale was one of six sites sold together (as opposed to one of approximately 82, which was an earlier transaction) he said in his opinion this would be part of a portfolio, "not a single transaction".
3. The Valuer-General referred to Anastasios Prilis v Valuer-General (Anastasios Prilis)[28] where at [53] Duggan J rejected a sale as comparable on the basis that it was sold within a portfolio and that there was insufficient evidence to determine from the sale of the portfolio a value to be attributed to the particular sale. The Valuer-General submitted that whilst there was "a designated sale price for the site ... the principle remains that in a portfolio sale it is unsafe to pluck out a single sale and rely on it when it was sold as a package with other properties."
4. Further, in relation to AK 1 (19/20) the Valuer-General submitted that while Mr Konidaris accepted there had been no open marketing, he was of the opinion that institutional investors transact from each other on a regular basis, and there is typically no marketing campaign. Accordingly, the Court would accept Mr Hubbard's concerns that the sale was not an open market transaction. Moreover, Mr Hubbard had concerns that the property exchanged and settled on the same date, 11 October 2017, suggesting that the sale had been negotiated sometime prior to October 2017. Mr Konidaris said the price was negotiated about six months earlier, and it cannot be evidence of a future market as at October 2017. When asked by senior counsel for the respondent in oral evidence whether he would agree that the market sale would be in 2017, not 2019, Mr Konidaris said "[a]rguably, yes".
5. When asked by the Court whether a sale taking place in October 2017 affected each valuer's analysis in considering a subsequent sale, Mr Konidaris said the market between the sales date and the earlier valuation date showed no change. Mr Hubbard did not agree with Mr Konidaris that there had been no market movement between 2017 and 2019. Referencing his CH 4 sale, Mr Hubbard said there was a sale in April 2017 at $9.79 million and that the property had resold in May 2020 for $14.74 million, showing a significant increase in those years. The expert report of Mr Konidaris, Mr Hubbard said, did not disclose the basis on which he formed the view that there was no market movement between 2017 and 2019.
6. Further, in relation to AK 1 (19/20) being a sale "well in advance of 2019/20", Mr Hubbard said it was an "old" sale. Mr Konidaris accepted that the improvements on the sale were substantial and open to a degree of subjectivity.
7. The Valuer-General submitted that the Court would accept Mr Hubbard's multiple concerns and disregard this sale.

AK 2 (19/20) - 28-34 Orange Grove Road, Warwick Farm

1. The Valuer-General submitted that AK 2 (19/20), the sale closest to the subject land, was also "problematic". The problem with reliance upon this sale at $22,000,000 was submitted to be twofold: first, a transfer showing consideration of only $11,000,000; and secondly, Mr Konidaris' acceptance that this was a "half interest" to a related party.
2. The Valuer-General referred to Mr Konidaris' concession that if $11,000,000 is 50% of $22,000,000, reliance upon the 100% amount would in fact be a hypothetical sale "of a whole interest". The Valuer-General submitted that "the Court would accept Mr Hubbard's view that reliance upon a half sale to a company related to a former owner does not provide a market sale". Notwithstanding that the property was marketed, Mr Hubbard did not know if the property had sold at auction. Again, the Valuer-General submitted that the Court would not accept the circumstances of this sale, like AK 1 (19/20), rendering it "unsafe" such that the Court would not rely upon it.

AK 3 (19/20) - 184 Fifth Avenue, Austral and AK 4 (19/20) - 402-412 Bringelly Road, Austral

1. Both these sales were accepted by the appellant's valuer Mr Konidaris to be sales negotiated in 2017. For the same reasons as in relation to AK 1 (19/20), the Valuer-General submitted that they would be dismissed as not comparable.

1. The Valuer-General submitted the AK 1 (2021) sale to Coles was unsafe given Mr Konidaris' "frank admission" that "Coles often buys properties off-market before they pounce because they want to beat people like Woolworths to the jump".

1. The Valuer-General submitted that the Court would "immediately dismiss" the appellant's englobo sales at Austral (AK 3 (19/20) - 184 Fifth Avenue, Austral, AK 4 (19/20) - 402-412 Bringelly Road, Austral, and AK 1 (2021) - 120-130 Fifth Avenue, Austral) as "not being comparable". The Valuer-General submitted that the 3 sales in Austral, 16 kms from the subject land, were "in an entirely different market".
2. Mr Hubbard's opinion was that the Austral sales are in "emerging" areas, and that the subject land has already "emerged". In oral evidence, Mr Konidaris said when put to him by the respondent's senior counsel that Austral was "equivalent" to Warwick Farm that "if you put it in terms of a timeline, it may be three to five years before you see Austral turning into something that's completely different and I would say the same for the subject property." Notwithstanding his adherence to equivalence between the sales, Mr Konidaris accepted that there was "a lot of grassland" "around the Austral sites". On the other hand, the Valuer-General submitted, it "would have been patently obvious from the view" that the subject land is "in a built up area, and despite the nearby land used for horses and residential, there is a deal of industry including the large car yards opposite".
3. The Valuer-General submitted that an englobo parcel of land "bears no comparability" with the subject land which is in an "established area with industrial grade roads, a signalised intersection leading directly onto the Hume Highway and the ability to travel in either direction, close to the M5 [motorway], in immediate proximity to a railway station, close to the Liverpool CBD and closer to the Sydney CBD".
4. The Valuer-General referred to Mr Konidaris' acceptance that the subject land is closer to the Sydney CBD, that the Austral sales are at some distance from the Sydney CBD, that the subject land is better located, and that in 2019 industrial grade roads did not exist in Austral. Nevertheless, Mr Konidaris maintained that these sales were relevant comparable sales.
5. In addition to the Austral sales, Mr Konidaris had relied upon AK 3 (2021), a sale at Gledswood Hills, also in an emerging area. The Valuer-General submitted that the Court would not accept that this sale, with vacant land directly opposite and nearby, was appropriately proximate or comparable to the subject land. The Valuer-General submitted that the Court would not accept Mr Konidaris' opinion in relation to the equivalence of the subject land with the Austral sales, and would "rely instead upon the more orthodox approach in considering proximity/distance as a relevant factor, indeed a key factor in determining which are the best comparable sales".

1. In relation to CH 5 (19/20) and CH 1 (2021), the Valuer-General submitted that these were "open market sales following a marketing campaign" and which Mr Hubbard said, "represent the floor, below which any rate per square metre achieved following adjustment should not drop". This was submitted to be so because the IN3 Heavy Industrial zoning sales are a "lesser zone" than the B5 Business Development zone of the subject land. While zoning of the subject land permits bulky good use, the highest and best use determined by the planning experts also "permits a number of uses in the IN3 Heavy Industrial zone, including Light industries, and Warehouse or distribution centres". Relevantly, the Valuer-General submitted, the industrial zoning "does not permit a bulky goods use". It is for these reasons that Mr Hubbard opined the B5 Business Development zone "is worth more" than the IN3 Heavy Industrial zone "such that the IN3 zoned sales", the Valuer-General submitted, "represent his floor".
2. The Valuer-General referred to Mr Hubbard's opinion that "if there were two sales side by side and one permitted Industrial zoning and the other the B5 zoning", the "B5 zoning would be considered superior because it permits along with warehouse and distribution centres, retail uses including general retail and a McDonalds style use", having regard to the location of the subject land in "proximity to both the Hume Highway and the major feeder road from the industrial zone to the Hume Highway, Governor Macquarie Drive". In Mr Hubbard's opinion, the market "pays more for this range of uses" than for industrial zoning.
3. Further, the Valuer-General submitted, Mr Konidaris' adherence to the view that the value of industrial sites is "higher" than that of the subject land, including, because they were "being phased out". The Valuer-General emphasised that given that the subject land "allows a major industrial use (warehouse and distribution) the added value of scarcity should inure to the benefit" of the subject land; "a proposition which Mr Hubbard accepted as he sees the industrial values as setting the floor on the value" of the subject land.
4. The Valuer-General also referred to Mr Konidaris' doubt as to whether warehousing and distribution would be a feasible use of the subject land. The Valuer-General submitted that Mr Konidaris' doubts arose not because of any physical constraints such as configuration, exposure, or industrial roads or access to major highways, but because of the nature of the surrounding uses. The Valuer-General noted that "Mr Hubbard flatly disagreed with the scepticism and considered warehouse and distribution a possible use" of the subject land. In Mr Hubbard's opinion, "a prospective B5 sale attracts both the B5 [Business Development zone] and industrial market, whereas a prospective IN3 [Heavy Industrial zone] sale attracts only an industrial market".
5. The Valuer-General further referred to Mr Konidaris' opinion that it is unlikely that the subject land would be used for a warehouse or distribution centre given the adjoining residential neighbours. The Valuer-General submitted that Mr Konidaris has "no claimed expertise in town planning", and that if such a proposition were to be seriously advanced, the appellant had the opportunity to put on supporting evidence, and the appellant's planning evidence did not support this view. In his evidence, the appellant's town planner Mr Chambers did not mention warehouse use other than to include it in his land use tables. The Valuer-General's town planner, Mr Grech was of the view that warehouse and distribution centres are one of the "most pertinent uses" of the subject land having regard to its locational context. Further, Mr Chambers did not raise any planning concern about a warehouse or distribution centre in the joint report of town planners. That the planners "considered a retail use to be the highest and best use", suggested, the Valuer-General submitted, that "they did not consider [i]ndustrial uses to be at a premium to retail".
6. In any event, the Valuer-General submitted, the Court could "confidently dismiss Mr Konidaris' industrial zoning superiority argument" and adopt Mr Hubbard's opinion that the zoning of the subject land is "superior". The Court would have regard to "the permissible uses in the B5 [Business Development] zone", the "multiple access points to the site", the "agreed industrial grade roads" and, from the view, the evidence that trucks currently use the "surrounding road network" of the subject land, direct left and right turn access via a "signalised intersection onto a national highway in proximity to the M5 [motorway] (agreed to be 7 kms), suitable configuration" and the absence of any "physical impediment to development".
7. The Valuer-General also referred to Mr Konidaris seeking to support his position that industrial zoning sat at a premium to B5 zoned land, by pointing to relatively lower priced sales in Minchinbury. However, the Valuer-General submitted, there were "so many other factors at play in the lower prices" there achieved that this was "not a sound argument", the location differences alone warranting a "huge difference".

1. In relation to location, the Valuer-General submitted that matters for consideration in the location adjustment include what Mr Konidaris agreed can be called an "industrial neighbour premium (or good neighbour premium), data centre premium, exposure, access to the motorways, distance to the CBDs and configuration". The adjustment applied by Mr Konidaris to the sales was generally a downward adjustment against the subject land by -10% to -20%, including on sales in the distant Gledswood Hills, 26 kms from the subject land, and an "astounding downwards adjustment of -35% on the Chipping Norton sales". Mr Konidaris, it was submitted, only applied a positive adjustment to the subject land "on the englobo Austral sales", "applying just +10%".

1. In relation to the appellant's invitation to the Court to apply an industrial neighbour premium within the critical location adjustment for the subject land, Mr Konidaris developed "what could be described as an industrial neighbour theory"; that is, "that industrially zoned properties value being located together" with other industrial properties on the basis purchasers "gain comfort" that a development application for a similar use is likely to be achieved. He therefore applied an industrial neighbour premium within his location adjustment to a number of the sales.
2. The Valuer-General relied on the evidence of Mr Hubbard that purchasers of industrially zoned properties only have regard to access and industrial grade roads, and that industrial users are "primarily" in the industrial zone for the "four walls" and a warehouse to "distribute their goods in due course".
3. The Valuer-General submitted that the Court would dismiss Mr Konidaris' opinion that the subject land is isolated in terms of a warehouse and distribution centre, and any other retail style use. On the view, it was apparent that the subject land is within close proximity to a very large Peter Warren car yard and an adjoining retail style centre on the opposite side of the Hume Highway. Further, the Valuer-General submitted, the Court would accept Mr Hubbard's opinion in relation to a wider market for the B5 Business Development zone, and not accept Mr Konidaris' opinion that industrial zoning is superior to that of the B5 zone. This being so, for example, the -35% locational adjustment applied by Mr Konidaris to each of the Chipping Norton sales would be dismissed in favour of Mr Hubbard's +10% upwards adjustment.
4. In the alternative, Mr Hubbard considered that there was a real risk that Mr Konidaris had double counted by using both a zoning and good neighbour adjustment within his 35% location adjustment.

1. In relation to the "data centre premium" sought to be relied on by the appellant, the Valuer-General submitted that noting that CH 1 (19/20) 42 Sargents Rd analysed at $707 /m2 did not sell for a higher rate than nearby CH 2 (19/20) 17 John Hines Ave analysed at $825 /m2, any such premium would be dispelled.
2. Further, the Valuer-General submitted, the Court would also accept that a site that is suitable for a data centre has no regard to industrial neighbours. Accordingly, the Court would accept that Mr Konidaris had doubled up by including an adjustment for both data centre suitability and an adjustment for industrial neighbours. In any event, as Mr Hubbard opined, the premium should not apply noting that "they haven't commenced construction of the data centre" and that the development application might lapse "shortly". Mr Hubbard was also of the opinion that other sales in Minchinbury were "selling well in excess of what Telstra paid" for CH 1 (19/20), confirming that a premium was not paid, but simply "an industrial value".
3. Further, the Valuer-General contended, the Court would not have any regard to evidence first delivered in concurrent evidence as to other data centre sales across the broader Sydney region, noting that Mr Hubbard had not seen any of these sales and so was not in a position to comment on this "new" information.

1. In relation to exposure, the Valuer-General submitted that the appellant's case is that the subject land "does not have as good exposure" as a number of the sales relied upon by Mr Konidaris, the subject land being "further away from" and Mr Konidaris' sales being "generally positioned closer to" the M4 and M7 motorways. The Valuer-General submitted that the Court would accept that the subject land has "good exposure to a national highway and to Governor Macquarie Drive", making the site "suitable for retailing uses including a McDonalds style use along with multi goods use and warehouse and distribution uses".
2. In relation to the appellant's contention that the subject land does not enjoy good exposure in relation to either the Hume Highway or Governor Macquarie Drive, the Valuer-General submitted that such "assertion was immediately dispelled on the view" travelling past the subject land returning from the Orange Grove sale (AK 2 (19/20). The subject land could be seen from the Hume Highway, and Mr Konidaris agreed that the subject land is visible from the Hume Highway. Mr Hubbard was of the opinion that the subject land enjoys exposure from a national highway "filtered by trees...and also the change in the elevation to the land", the highway being, it was submitted by the Valuer-General, to be a highway with six lanes three wide each and turning lane.
3. The Valuer-General also submitted that it was evident from the view that the subject land has "good exposure" to Governor Macquarie Drive, being a major feeder road from the industrial area. Additionally, it was known at the valuing years from the Deposited Plan (DP1162276) that Governor Macquarie Drive was to be dedicated for road widening and, it was submitted, that trees beyond the boundary of the subject land and within the adjacent Lot 3 "would therefore likely be removed". The Court, the Valuer-General submitted, would not accept evidence from the Bar table (or from Mr Konidaris) that the road widening had already taken place. In any event, even with the trees, the Valuer-General submitted, that there was "ample exposure".
4. The Valuer-General also referred to the appellant's submission that the subject land is inferior to a number of the sales on the basis of access to motorways. The Valuer-General submitted that the subject land also has good access to both national highways, with a signalised intersection, and is in relative proximity (an agreed 7 kms) to the M5 motorway. The Court would also have regard to the fact that while a number of the sales have proximate access to the various motorways, a signalised intersection allowing traffic to go in either direction is an advantage over access to a motorway permitting movement in a single direction.

1. The Valuer-General submitted that the Court would have little difficulty accepting that a locational adjustment ordinarily pays attention to distance to the CBD and that the subject land is very well located in proximity to the Liverpool CBD and the Sydney CBD.
2. The Valuer-General noted that Mr Konidaris did not take into account proximity to the CBD as important, although he conceded that "for a bulky goods use, proximity to Liverpool and closer residential centres is important". This was, the Valuer-General submitted, inconsistent with what Mr Konidaris said about local shoppers in Austral and bulky goods use. Mr Hubbard said that the subject land was both closer to the Sydney CBD and provides access to Sydney south and north and west, and that it was "generally accepted that as you go further west property prices are cheaper".

1. In relation to configuration, the Valuer-General referred to Mr Hubbard's allowance of a percentage in relation to some of the sales on the basis that the subject land is an island site with the benefit of four street frontages. This was submitted to be a matter particularly relevant to the Austral sales which do not have the same exposure in terms of street frontages. The Valuer-General submitted that the Court would accept that the subject land "should be positively adjusted in respect of this excellent attribute for either bulky goods or any warehouse and distribution centre use", the subject land enjoying "access from three of its four boundaries".

1. The Valuer-General noted that in addition to making an adjustment for location, each of the valuers had made a uniform downward adjustment for flooding, each making "a value judgment". Mr Hubbard applied ‑5% uniformly to each sale, Mr Konidaris -10%. The Valuer-General submitted that the Court could accept anywhere between -5% to -10%, including as judicial valuer, -7.5%.

1. The Valuer-General noted the agreement of the experts that smaller sites attract a higher rate per square metre and that as a site gets bigger the rate generally becomes lower, the principle being that the smaller the size, the more valuable the property per square metre. Mr Konidaris, however, was of the view that 3 ha and 4 ha sites are in the same market, and that no adjustment was required since the larger the block the less the incremental adjustments. The Valuer-General submitted that this would not be accepted as on valuable properties such as the subject land, "the difference between 3 ha and 4 ha would be substantial", and that "to assume a purchaser would be ambivalent is not sustainable". Mr Hubbard opined that it would be appropriate to apply a size adjustment.

1. The Valuer-General referred to Mr Konidaris' acceptance that his land improvement adjustment was essentially to do with "benching", in other words with site preparation and readying a site for the laying of a slab. But Mr Konidaris conceded that whilst some of his land improvement adjustments had included "road upgrades and things like that", the roads surrounding the subject land "are probably suitable for a light industrial use". On that basis, Mr Konidaris agreed that he ought "possibly marginally" reduce the negative factor on his land improvements. Mr Hubbard disagreed that such an adjustment was required, and considered that it would be doubled up when the analysed rate is sheared of improvements.
2. The Valuer-General submitted that no adjustment for benching should be applied.

1. The Valuer-General referred to the parties' agreement that restrictions on title are ignored. That prohibition, the Valuer-General submitted, extends to restrictions arising from the Sydney Water Act: Royal Sydney at 623-624; and see by analogy Gollan at 98 where restrictions under the Australian Jockey Club Act 1873 (NSW) mirrored the reservations on title. Here, the reservation on title was, relevantly, in the following terms:

[An] easement or right to use for the construction and maintenance of works for sewerage purposes the surface and the subsoil or undersurface of the said land ...the transferor doth hereby covenant with the transferee that the transferor will not erect construct or place any building or other structure [whatsoever] on the said land.

1. The dispute between the parties in relation to the easement was first, as to whether the sewer exists; and secondly, whether there is a physical defect or disability caused by the sewer (if it exists). The Valuer-General submitted that as to the first issue, the sewer diagram attached to the contract for sale of the subject land was equivocal, and that an inference arises that the letter from Sydney Water dated 9 November 2021 (referred to above at [118]) merely assumes the existence of a sewer. As to the second issue concerning the state or quality of the land, the Valuer-General submitted that the relevant defect must be something that rises above the restrictions on title, Gollan providing a useful example. There, the restrictions as to the use of the land for horse racing and reservations as to road widening and gravel and timber could, in one sense, be seen as having physical effects; yet they were ignored. It would be inconsistent with the conclusion in Gollan for a valuation to make allowances for physical effects arising from an easement: here, the prohibition on building over the easement.
2. The Valuer-General submitted that "[p]hysical defects focus on the lie of the land (the quality of the land) and not on restrictions as to user (such as building over a portion)". The following examples were submitted to be apposite: Brisbane City Council (a wide body of water) at [50] and [55]; Knapp v Valuer General at [25] (Murrell C)[29] (visual overlooking); the examples cited in Commonwealth Custodial Services at [67]-[69] (Biscoe J) (concerning "worsements"); Lewis Berger (Mr Barry)[30] (pipeline under the ground ignored as disability from the easement); Benfer v Chief Executive, Department of Lands (Trickett)[31] (privacy and noise disturbance); Yaglan Investments Pty Ltd v Council of the Shire of Albert (Mr Scott)[32] (electricity easement caused visual impairment); Scambiaterra (Moore C) (electricity easement considered but not carriageway); Raynbird v Valuer-General (Dunn J, Mr Smith, Mr Carter)[33] (prior quarry operations affecting soil quality) and Caltex Oil (Australia) Pty Ltd v Chief Executive, Department of Lands (Fryberg J and Mr Neate)[34] (contamination); Leppington Pastoral Company Pty Ltd v Valuer General at [24]-[25] (Parker AC)[35] (asbestos contamination; but not contamination from tanks); Bosnakis v Valuer-General (Parker J)[36] (debris and subsurface contamination); Kemp Investments (NSW) Pty Ltd and Flaherty v Valuer-General at [25] (Biscoe J)[37] (structures, albeit not proved); Valuer General v Marano (Andrews J, Mr Smith, Mr McDowell)[38] (stones); Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer General (No 3) (Pain J)[39] (relocating drain ignored, as drain land improvement).
3. Here, the Valuer-General submitted, "it cannot be said that the sewer manifests a physical defect", there being "nothing akin to a ventilation shaft or stack, no prominent tower exhausting odorous or toxic waste, no transmission towers or electricity lines causing visual impairment; and no suggestion of risk of contamination." Assuming the sewer exists, the Valuer-General submitted, it is neither a man-made 'worsement', nor a natural physical defect."
4. The Valuer-General referred to the explanation of Mr Konidaris for his adjustment of 10% in relation to the easement, in effect, reiterated in cross examination. The cross examination of Mr Hubbard went to the same point, Mr Hubbard accepting an adjustment of 2% (assuming an adjustment of this nature is legally warranted). The Valuer-General submitted that the adjustment contended for by the appellant arises from the risk of an inability to build over the easement and the flow on effect for the development potential of the subject land, and that even this risk needs to be seen in the context of DA 1134/2021, lodged with Liverpool City Council on 29 September 2021, and the earlier approved, though lapsed, DA in 2013, DA 1321/2011.
5. The Valuer-General submitted that the detriment asserted by the appellant arises from the terms of the easement (the legal encumbrance), and must be ignored. There is nothing additional that arises from the physical structure, the mere existence of the sewer (assuming it to exist) not, itself, harming or debilitating the subject land.
6. The Valuer-General submitted that: "if one, for the purposes of argument, assumes that there, in fact, exists no Sewer, the Easement nevertheless precludes building over the Easement. This restriction on user arises from the title and must be ignored. The detriment Mr Konidaris points to arises under this scenario - from the mere existence of the Easement." Assume instead, the Valuer-General submitted, that there is a sewer present, the result would be the same. The subject land may not yet be built over but that would be because of the "blot on title", and not because there exists a sewer. For that reason, there would be no need to consider the costs of removing the sewer (if it exists). The costs of moving the sewer and the risk that it may not be removed or that the subject land may not be built over need not be factored into the valuation. To do otherwise would be to reintroduce the legal impediment into the valuation.

1. The Valuer-General submitted in conclusion that to describe (as Mr Konidaris did) the subject land as lying in an emerging area was submitted to negate "the patent vibrancy of the [Warwick] Farm precinct and its central location". Mr Hubbard's opinion that B5 Business Development zoned land is superior to IN 2 Light Industrial and IN 3 Heavy Industrial zoned land was logical and to be preferred, given that it allows both warehouse and distribution centre and retail uses.
2. In any event, the Court would dismiss the sales selected by Mr Konidaris:

(1) the subject land not being readily comparable with the englobo Austral sales absent industrial grade roads (at the valuing years), or the sale at Gledswood Hills surrounded by grassland;

(2) sales where the price had been negotiated up to 2 years before the sale/transfer date (for example, the Austral sales) being old and not reliable given how far in advance of sale the price was reached; and

(3) a hypothetical sale (Orange Grove Rd (AK 2 (19/20)) not being a market sale comparable to a single sale.

1. It arises first for the Court to determine the highest and best use of the subject land; that is whether it be as contended by the appellant as "a mixed use development comprising large format bulky goods and other speciality outlets", that is, "a use consistent with the most recent development consent", or as contended by the Valuer-General as "a bulky goods type use or mix of bulky goods and industrial". The Court has found that the highest and best use of the subject land is as a specialised retail premises that require a large floor area.
2. The Court concludes in relation to the comparable sales sought to be relied upon by each of the valuers as follows.

AK 1 (19/20) - Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

Lot 10, Cowpasture Road, Len Waters Estate, Hoxton Park

1. This property was one of a bundle of 6 properties sold to the same purchaser in a single transaction in October 2017, in the absence of open marketing, and which exchanged and sold on the same day.
2. Neither the appellant nor Mr Konidaris provided any evidence as to how the price for this sale was derived. The Valuer-General and Mr Hubbard rejected this sale as a suitable comparable because of the lack of detail about the sale. In Anastasios Prilis, Duggan J at [53] rejected a sale as comparable on the basis it was sold within a portfolio and there was insufficient evidence to determine from the sale of the portfolio a value to be attributed to the particular sale.
3. In the joint valuation report, Mr Hubbard opined that "agreement to sell the property occurred in 2016 (3 years prior to the first valuing year)".
4. The Court considers that the date of sale of this property, relied on by the appellant in October 2017 is too remote from both valuing years (1 July 2019 and 1 July 2020), that the properties differ in substantial ways and that the property AK 1(19/20) is insufficiently similar to the subject land in terms of its dissimilar location, zoning and amenity.
5. As a result of the unknown circumstances surrounding the sale price and the date of sale, the Court has disregarded AK 1 (19/20) as a truly or genuinely comparable sale. As submitted by the Valuer-General, it is unsafe to pick out a single sale and rely on it when it was sold as a package with other properties. The Court has found that this was not an open market transaction; and also, as acknowledged by Mr Konidaris, that the improvements on the sale were substantial, and open to a considerable degree of subjectivity. Without being unreasonably selective, the Court considers this to be a sale which requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

AK 2 (19/20) - 28-34 Orange Grove Road, Warwick Farm

1. This property at Warwick Farm was closest to the subject land, although both valuers agreed that the subject land is better located than AK 2 (19/20), Mr Konidaris accepting that the subject land has better exposure and access.
2. The evidence was that only $11,000,000 was paid for the fee simple of this property in September 2019. The appellant and Mr Konidaris said that this sale represented one half of the fee simple to a related party. The submission by the appellant and the evidence of Mr Konidaris was that one half of the fee simple of $11,000,000 equates to a total sale price of $22,000,000 for the whole fee simple of this comparable sale. There were no documents in evidence capable of establishing this assertion by the appellant and its valuer Mr Konidaris. The Court has accepted the submission of the Valuer-General and the evidence of Mr Hubbard that this sale would be rejected as comparable because of the circumstances surrounding the sale; that is, that reliance upon a half sale to a company related to a former owner does not represent a market sale. Notwithstanding evidence that the property was marketed, there was no evidence that the property sold at auction.
3. Accordingly, the Court has disregarded AK 2 (19/20) as a truly or genuinely comparable sale, it being a sale between related parties and not representative of a market sale. Without being unduly selective, the Court considers that the sale differs in substantial ways and requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

Majority B5 with part C2 Environmental Conservation and part SP2 Infrastructure

1. This property at Austral (one of the three Austral sales) relied upon by the appellant has a regular shape with minimal improvements, is located on a local road without kerbing and guttering in a non-urban precinct, unserviced in 2017 when the option for its sale was entered into, and unserviced as at the date of sale (and at the date of hearing). The characteristics of this property, relied on by the appellant, are dissimilar to those of the subject land in terms of its inferior location, lack of exposure / visibility from a major arterial road and inferior ease of access.
2. Both expert valuers considered this property to be inferior to the subject land, the subject land having better exposure and access. In particular, Mr Konidaris made an overall negative adjustment. Even though Mr Hubbard made an overall positive adjustment to this sale, his resulting adjusted rate was $500 / m2 which is significantly lower than the Valuer-General's rate of $676 / m2. The Court does not accept the appellant's submission that this site was relevantly similar to the subject land, or that the subject land is in a "relatively underdeveloped location". The three sites in Austral are, as the Valuer-General submitted, in an entirely different market. They are, as the Valuer-General submitted, in emerging areas, the subject land having already "emerged", being in a built up area, with a deal of industry, including large car yards opposite. As submitted by the Valuer-General above at [139], an englobo parcel of land is not comparable with the subject land.
3. The Court has disregarded AK 3 (19/20) as a truly or genuinely comparable sale as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020. The sales differ in substantial ways, and the property AK 3 (19/20) is insufficiently similar to the subject land in terms of its dissimilar location, inferior exposure / visibility from a major arterial road and inferior ease of access.

Majority B5 with part C2 Environmental Conservation

1. This property at Austral (one of the three Austral sales) has a wide frontage to a major divided road, has minor improvements, is located in a non-urban precinct, and has a larger land area. These characteristics are dissimilar to the characteristics of the subject land in terms of its dissimilar location, inferior exposure / visibility from a major arterial road and inferior ease of access.
2. Again, the Court has declined to make adjustments that are too large for the purposes of direct comparison.
3. Accordingly, the Court has disregarded AK 4 (19/20) as a comparable sale as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020.

1. This property, one of the two properties at Minchinbury, located in the Blacktown local government area, relied upon by the Valuer-General, has some minor improvements, a wide frontage to a main road with secondary road access at the rear, a smaller area than that of the subject land, and is located in an established precinct. It is located approximately 27 kms from the subject land.
2. The evidence was that the property was purchased in December 2018 by Telstra with a development application being lodged for a data centre prior to the exchange of the sale.
3. As at the date of sale, December 2018, a decision on the development application had not been made.
4. Mr Konidaris was of the opinion that this sale should be disregarded because sales of properties suitable for data centres attract a premium over regular industrial land and are more valuable than sales of properties where data centres are not capable of obtaining development consent. The appellant submitted that Minchinbury is a superior location to Warwick Farm for warehouse/distribution uses, in "much more of an industrial focused zone".
5. The Court finds that this sale does not represent a sale with development approval for a data centre at the date of exchange. It does not accept the appellant's submission in relation to a data centre premium that would be applied to this property.
6. The Court has determined that this sale, notwithstanding its distance from the subject land, is capable of being considered a truly or genuinely comparable sale in terms of its same zoning, and lack of improvements.
7. The Court has made an overall negative adjustment of 15%, taking into account both the positive and negative differences in the characteristics of the two properties, namely, the property's dissimilar location, inferior exposure / visibility from a major arterial road, inferior ease of access, smaller land area, lack of improvements, and the same zoning and lack of improvements directly compared to the subject land.
8. Accordingly, the Court adjusted rate for 42 Sargents Road, Minchinbury is $615/m2.

CH 2 (19/20) - 17 John Hines Avenue, Minchinbury

1. This property, relied upon by the Valuer-General, has three street frontages, an irregular shape, an area smaller than the area of the subject land, and is located in an established precinct.
2. Mr Konidaris considered this sale not to be a suitable comparable as a development application was lodged for the construction of a warehouse and distribution centre post the settlement of the sale in early 2020.
3. The Court finds that the subsequent development application for a warehouse and distribution centre lodged in relation to this sale property confirms that its B5 Business Development zoning is capable of securing a range of permissible uses, including "a mixed use development comprising large format bulky goods and specialty outlets...consistent with the most recent development consent", as contended by the appellant, and "a bulky goods type use or a mix of bulky goods and industrial" as contended by the Valuer General. The zoning is similar to that of the relevant B5 Business Development zoning of the subject land.
4. The Court has determined that this sale is capable of being considered a truly or genuinely comparable sale property for the valuing years 1 July 2019 and 1 July 2020 because of the same zoning, the lack of improvements, and the similar sale date to the valuing year 2019.
5. The Court has made an overall negative adjustment of 25%, taking into account both the positive and negative differences in the characteristics of the two properties, namely the property's dissimilar location, inferior exposure / visibility from a major arterial road, inferior ease of access, smaller land area, lack of improvements, the date of sale similar to the valuing year 2019, and the same zoning directly compared to the subject land.
6. Accordingly, the Court adjusted rate for 17 John Hines Avenue, Minchinbury is $660/m2.

1. This property is located adjacent to the intersection of Parramatta Road and Woodville Road, is an irregular shape, is of a considerably smaller area than that of the subject land and has superior exposure / visibility to that of the subject land.
2. Further, this property has a superior floor space ratio (namely, 1.0:1) and a significantly superior location to that of the subject land.
3. Because of these significant different characteristics, being a much smaller land area, a superior location, superior exposure / visibility, and superior floor space ratio and without being "unreasonably selective", the Court has determined that this property requires too many adjustments for the purpose of direct comparison to the subject land for the valuing years 1 July 2019 and 1 July 2020, and accordingly has disregarded it.

Part IN2 Light Industrial and Part IN3 Heavy Industrial

1. This property, relied upon by the Valuer-General, has a long triangular shape, is zoned in part IN2 Light Industrial and in party IN3 Heavy Industrial, and is within a flood prone precinct. It is located at a distance of approximately 10 kms from the subject land. The Court accepts the submission of the appellant that the adjustments made by Mr Hubbard of + 55% suggest that this is not "a very comparable sale" to the subject land. As the appellant submitted, most IN3 Heavy Industrial uses are not permitted on the subject land. Further, the Court does not accept Mr Konidaris' opinion that the subject land is isolated in terms of a warehouse and distribution centre, and any other retail use. The subject land is within proximity to a very large Peter Warren caryard.
2. The Court, without being unduly selective, does not consider in the circumstances here that a property with a different zoning to that of the subject land can be the subject of direct comparison.
3. Accordingly, the Court has disregarded CH 4 (19/20) as a truly or genuinely comparable sale property for the valuing years 1 July 2019 and 1 July 2020, as it requires too many adjustments in relation to its inferior location, inferior visibility / exposure from a major arterial road and dissimilar zoning.

CH 5 (19/20) - 42-46 Alfred Road, Chipping Norton

1. This property at Chipping Norton relied upon by the Valuer-General has a regular shape, is improved, zoned IN3 Heavy Industrial and has an area which is significantly smaller than that of the subject land. The Valuer-General submitted, and the Court accepts, it was an open market sale following a marketing campaign.
2. The Court does not consider that a property with a different zoning to that of the subject land can be the subject of direct comparison. Also, there are significant differences in relation to its land area, visibility / exposure from a major arterial road, zoning, and the existence of improvements.
3. Accordingly, because of the dissimilar land areas, zoning, visibility / exposure from a major arterial road and the existence of improvements, the Court has disregarded this sale as it requires too many adjustments in order to be considered a truly or genuinely comparable sale when directly compared to the subject land.

1. This property, also one of the three Austral properties relied upon by the appellant, for the valuing year 1 July 2021, has a regular shape, is partially improved, and is located on a local road without kerbing and guttering in a non-urban area.
2. The Court finds that the characteristics of this property are dissimilar to those of the subject land in relation to its inferior location, exposure / visibility from a major arterial road and the date of sale when compared to the valuing year 2021. The Court does not consider it appropriate to make adjustments that are too large for the purpose of direct comparison where the characteristics of the two properties are insufficiently similar.
3. Accordingly, the Court, without being unduly selective, has disregarded this sale as truly or genuinely comparable as it requires too many adjustments for the purpose of direct comparison to the subject land for the valuing year 1 July 2021.

AK 3 (2021) - 9 Gregory Hills Drive, Gledswood Hills

1. This property at Gledswood Hills, relied upon by the appellant, has an irregular shape with a wide frontage to a main road, and is located in an emerging urban area, with vacant land directly opposite and nearby, and is approximately 26 kms from the subject land.
2. The Court finds that the characteristics of this property are dissimilar to those of the subject land in relation to its land area, lack of exposure / visibility from a major arterial road and its inferior location. It is, as submitted by the Valuer-General also in an emerging area.
3. Without being unduly selective, the Court considers it inappropriate to make adjustments that are too large for the purpose of direct comparison.
4. Consequently, the Court has disregarded this sale as truly or genuinely comparable for the valuing year 1 July 2021 as it requires too many adjustments.

CH 1 (2021) - 24-40 Alfred Road, Chipping Norton

1. This property, the second of the Chipping Norton sales relied upon by the Valuer-General, has an "L" shape, obsolete improvements, a wide frontage to a main road, an area which is much larger than the area of the subject land, and is zoned IN3 Industrial Heavy Industrial.
2. As in relation to CH 4 (19/20), and without being unduly selective, the Court does not consider that a property with a different zoning to that of the subject land can be the subject of direct comparison.
3. Accordingly, the Court has disregarded this property as requiring too many adjustments to be a truly or genuinely comparable sale property for the valuing year 1 July 2021 for the purpose of direct comparison to the subject land.

CH 2 (2021) - 1011-1027 Canley Vale Road, Canley Vale

1. This property, relied on by the Valuer-General, is two adjoining parcels of vacant land adjacent to the Greenway Shopping Centre. The property was sold in May 2021 to the adjacent Greenway Shopping Centre. The analysed rate is significantly higher than the analysed rates of the other comparable sales relied on by the Valuer-General.
2. The Court finds that this sale represents a sale to an adjoining owner, and does not meet the test in Spencer v The Commonwealth at 441 which requires a valuer to consider the "value of the land ... not by means of a forced sale, but by voluntary bargaining between the [seller and purchaser who are] willing to trade, but neither of them so anxious to do so that [they] would overlook any ordinary business consideration." Accordingly, the Court has disregarded this sale for the purpose of direct comparison to the subject land for the valuing year 1 July 2021.

1. It follows that the Court has concluded as follows (doing the best it can with the evidence before it) in relation to the comparable sales sought to be relied on by the parties and their valuers for the valuing years 1 July 2019 and 1 July 2020:

1. The Court has concluded as follows in relation to the comparable sales sought to be relied on by the parties for the valuing year 1 July 2021:

1. This leaves the Court, as judicial valuer, with a very limited pool of relevant comparable sales from which information may be derived concerning the subject land. The majority of the sales relied upon by the parties differ from the subject land in substantial ways, and cannot be said to be genuinely or truly comparable. Nor do they provide a reasonably representative sample of relevant sales, sufficient in volume, capable of being adjusted to create equivalence with the unimproved subject land. As Biscoe J cautioned in Holcim at [31], too many adjustments potentially render the comparable sale unsafe to rely upon.
2. However, doing the best I can, and having regard to the two sales I consider relevant for the valuing years 1 July 2019 and 1 July 2020, those sales being sales relied upon by the Valuer-General's valuer Mr Hubbard, the Court has adopted an adjusted land value rate of the comparable properties in the range of between $615 / m2 and $660 / m2. Bearing in mind the principles set down in Spencer v The Commonwealth, the Court considers a rate towards the lower end of this range to be fair and reasonable in the circumstances of the subject land if it were to be sold on the market. Accordingly, the Court has adopted a land value rate of $625 /m2 for the subject land for the valuing years 1 July 2019 and 1 July 2020.
3. For the valuing year 1 July 2021, I have determined that there is no sale relied upon by either party which is truly or genuinely comparable for the purpose of direct comparison to the subject land. Having decided that no suitable comparable sales have been provided for the valuing year 1 July 2021, it arises to adopt an alternative method to determine the land value for that valuing year.
4. The parties and the expert valuers, Mr Hubbard and Mr Konidaris, agreed that the same comparable sales could be analysed for the purpose of assessing the land values for the valuing years 1 July 2019 and 1 July 2020 as there was no market movement between those years. The parties also agreed that there was a general uplift in the order of 25% in land values in the vicinity of the subject land between the valuing years 1 July 2020 and 1 July 2021.
5. This general uplift in land values is demonstrated by the assessed land values for the valuing years 1 July 2020 and 1 July 2021 for the subject land as set out below.

Land value for valuation dates 1 July 2019, 1 July 2020

1. As the only reliable comparable sales capable of being analysed and adjusted were those for the valuing years 1 July 2019 and 1 July 2020 and the general uplift in land values for property with similar characteristics to those of the subject land ranged between, say 25% and 39%, it is not unreasonable to positively adjust the determined land value rate for the valuing years 1 July 2019 and 1 July 2020 to derive a land value for the valuing year 1 July 2021.
2. Based on the evidence, the Court has determined that the uplift in the land value for the subject property for the valuing years 1 July 2019 and 1 July 2020 to the valuing year 1 July 2021 is 25%.
3. The determined land value rate of $625 / m2 for the valuing years 1 July 2019 and 1 July 2020 increased by 25% is a land value rate of $781.25 / m2 for the valuing year 1 July 2021.

1. The Court determines the land values for the subject land as follows:

1. Area of 29,300 m2 x determined land value rate of $625 / m2 = $18,312,500.

1. Area of 29,300 m2 x determined land value rate of $625 / m2 = $18,312,500.

1. Area of 29,300 m2 x determined land value rate of $781.25 / m2 = $22,890,625.

1. The Court has determined land values for each of the valuing years to be below the values ascertained by the Valuer-General. Accordingly, the appeal is upheld, and the Court revokes the decisions of the Valuer-General and decides in place of the decisions of the Valuer-General as follows.
2. In proceedings 2022/256791, 2022/256815 and 2022/256816:

(1) The appeal is upheld.

(2) The Valuer-General's decision dated 30 June 2022 disallowing the appellant's objection to the Valuer-General's valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is revoked.

(3) The Valuer-General's decision dated 30 June 2022 disallowing the appellant's objection to the Valuer-General's valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year as at 1 July 2020 is revoked.

(4) The Valuer-General's decision dated 30 June 2022 disallowing the appellant's objection to the Valuer-General's valuation of Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive Warwick Farm, NSW for the valuing year 1 July 2021 is revoked.

(5) The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2019 is $18,312,500.

(6) The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2020 is $18,312,500.

(7) The value of the land being Lot 1 in Deposited Plan 1162776, Lot 1 Governor Macquarie Drive, Warwick Farm, NSW for the valuing year 1 July 2021 is $22,890,625.

[1] Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1; [2016] NSWCA 48 at [20] (Basten JA).

[2] Trust Company of Australia v Valuer-General (2007) 154 LGERA 437; [2007] NSWCA 181 (Trust Company of Australia) (Beazley, Ipp and Campbell JJA).

[3] Being a "physical disability" on the land: Scambiaterra v Valuer General [2003] NSWLEC 339 (Scambiaterra) at [40] (Moore C). In any event, the appellant submitted, if the sewer were to be regarded as an improvement, it would be a "land improvement" as it is an "underground drain", and thus could not be disregarded under s 6A(1) of the VLA.

[4] [1924] NSWStRp 78; [1925] AC 439; (1924) 7 LGR (NSW) 48; (1924) 25 SR (NSW) 75 at 76 (Lord Dunedin).

[5] Trust Company of Australia at [32]..

[6] (1907) 5 CLR 418 at 432; [1907] HCA 82 (Griffith CJ).

[7] (1955) 91 CLR 610; [1955] HCA 13.

[8] [1961] AC 82; (1960) LGRA 275; (1960) 34 ALJR 253; [1960] 3 All ER 449; confirmed in Broken Hill Pty Ltd v Valuer General (1969) 70 SR (NSW) 169; see also Perilya Broken Hill v Valuer General (2015) 10 ARLR 235 at 247, 254; [2015] NSWCA 400 (Leeming JA).

[9] Perisher Blue Pty Ltd as the Trustee for the Snow Trust v Valuer General (NSW) [2023] NSWLEC 41 (Perisher Blue) at [76] and [86] (Duggan J); Kogarah Town Centre Pty Limited v Valuer General (No 3) (Kogarah) [2014] NSWLEC 1124 at [77] (Moore SC and Brown C); Olefines Pty Ltd v Valuer-General of New South Wales (Olefines) (2018) 228 LGERA 407; [2018] NSWLEC 18 at [151]- [152] (Molesworth AJ).

[11] (1978) 140 CLR 41; [1978] HCA 40.

[12] Brisbane City Council at 50 and 55 (Gibbs J) (Stephen, Mason, Murphy and Aickin JJ agreeing); Commonwealth Custodial Services Ltd (as Trustee for Burwood Trust Fund) v Valuer-General (NSW) (2006) 148 LGERA 38; [2006] NSWLEC 400 (Commonwealth Custodial Services) at [49] (Biscoe J); Trust Company at [28] (Campbell JA) (Beazley and Ipp JJA agreeing); Scambiaterra at [39]-[40] (Moore C).

[13] Commonwealth Custodial Services at [69]-[76] (Biscoe J); Trust Company of Australia at [17] and [68] (Campbell JA, Beazley and Ipp JJA agreeing).

[14] (1979) 6 QLCR 95.

[15] (2006) 149 LGERA 439; [2006] NSWCA 353 at [83] (Spigelman CJ); Norwest City Pty Ltd ATF Norwest City v Valuer General [2018] NSWLEC 50 (Moore J).

[16] [2012] NSWLEC 1361 (Parker AC); applied in SNS Pty Ltd v Roads and Maritime Services (NSW) (2018) 232 LGERA 224; [2018] NSWLEC 7 at [123] (Pain J). See also Adams v Valuer General [2014] NSWLEC 1005 (Parker AC).

[17] [2018] NSWLEC 59; referred to in Shuang Wang v Valuer General [2021] NSWLEC 74 at [19] (Pain J).

[18] (1954) 20 LGR (NSW) 1.

[19] (1972) 2 NSWLR 63; (1972) 28 LGRA 23.

[20] [2005] NSWCA 89.

[21] (2008)160 LGERA 375; [2008] NSWLEC 112 (Jagot J).

[22] (2012) 211 LGERA 158; [2012] NSWLEC 73 (Pain J).

[23] [2012] NSWLEC 199.

[24] (2003) 212 CLR 111; [2003] HCA 8 (McHugh, Gummow, Kirby, Hayne and Callinan JJ).

[25] [2009] NSWLEC 225 (Biscoe J).

[27] (2016) 215 LGERA 226; [2016] NSWLEC 2.

[28] [2022] NSWLEC 11 (Duggan J).

[29] [2004] NSWLEC 684.

[30] (1979) 6 QLCR 95.

[31] (Land Court of Qld, 29 Oct 1993, unrep).

[32] (1997) 17 QLCR 331.

[33] (1980) 7 QLCR 106.

[34] (1996-1997) 16 QLCR 435.

[35] [2010] NSWLEC 1023.

[36] (2017) 228 LGERA 320; [2017] SASC 158.

[37] (2013) 195 LGERA 1; [2013] NSWLEC 18.

[38] (1978) 5 QLCR 194.

[39] (2011) 182 LGERA 118; [2011] NSWLEC 85.