Warwick Farm Central Pty Ltd v Valuer General - [2024] NSWLEC 25 - NSWLEC 2023 case summary — Zoe

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Warwick Farm Central Pty Ltd v Valuer General

[2024] NSWLEC 25

Land and Environment Court (NSW)|2023-10-27|Before: Pritchard J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2023-10-27

Before

Pritchard J

Catchwords

[2016] NSWLEC 2 Commonwealth Custodial Services Ltd (as Trustee for Burwood Trust Fund) v Valuer-General (NSW)
Trust Company of Australia Ltd v Valuer-General (NSW) (2006) 148 LGERA 38
[2006] NSWLEC 400 Gollan v Randwick Municipal Council [1961] AC 82
(1960) LGRA 275

Source

Original judgment source is linked above.

Catchwords

[2016] NSWLEC 2 Commonwealth Custodial Services Ltd (as Trustee for Burwood Trust Fund) v Valuer-General (NSW)Trust Company of Australia Ltd v Valuer-General (NSW) (2006) 148 LGERA 38[2006] NSWLEC 400 Gollan v Randwick Municipal Council [1961] AC 82(1960) LGRA 275(1960) 34 ALJR 253[2018] NSWLEC 7 Spencer v The Commonwealth of Australia (1907) 5 CLR 418[1907] HCA 82 Tenstat v Valuer GeneralWoolworths Limited v Valuer General [2012] NSWLEC 1361 Toohey's Ltd v The Valuer General (NSW) [1925] AC 439(1924) 7 LGR (NSW) 48(1924) 25 SR (NSW) 75 Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer General (No 3) (2011) 182 LGERA 118[2011] NSWLEC 85 Trust Co Ltd v Minister Administering the Crown Lands Act 1989 (2012) 211 LGERA 158[2012] NSWLEC 73 Trust Company of Australia Ltd v Valuer-General (2007) 154 LGERA 437[2007] NSWCA 181 Valuer General v Marano (1978) 5 QLCR 194 Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1

Judgment (307 paragraphs)

[1]

[6]

The easement and sewer pipe

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).
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.
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.
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.
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).

[7]

Zoning

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
Residential accommodation was prohibited in the B5 Business Development zone.
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

[9]

The statutory valuation task

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…
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.
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.
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…
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]
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]
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.
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]
In Brisbane City Council, Gibbs J held that it would be appropriate to have regard to disabilities affecting the land.
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.
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."
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]

[10]

The comparable sales methodology

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.
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."
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].
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."
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.
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.
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.
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."
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.
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.
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.

[13]

Flood engineers

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:
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.
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.
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.
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.
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.

[14]

Town planners

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.
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.
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.

[17]

The most likely use of the subject land

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.
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.
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.
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.
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.
Mr Konidaris' sales were located in Hoxton Park, Warwick Farm, Austral and Gledswood Hills.
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.

[25]

The appellant's closing submissions

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'".
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.
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.
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.
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.
In relation to the sales evidence and adjustments relied upon by each of the valuers, the appellant submitted as follows.

[26]

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

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".
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).
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".

[28]

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

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.
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".
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".
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.
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".
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".
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.

[32]

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

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".
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".
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.
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.

[37]

Valuer-General's submissions

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.
The Valuer-General also accepted that development scenario (c) referred to by the town planners (seniors living) was not a likely use.
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.
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".
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.

[39]

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

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".
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".
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."
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".
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.
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.
The Valuer-General submitted that the Court would accept Mr Hubbard's multiple concerns and disregard this sale.

[43]

Englobo sales and emerging areas

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".
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".
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".
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.
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".

[44]

Zoning

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".
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.
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.
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".
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".
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".
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".

[48]

Exposure and access to the M4 and M7 motorways

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".
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.
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".
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.

[54]

Easement

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.
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.
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).
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."
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.
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.
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.

[62]

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.
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.
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.

[66]

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.
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.
As at the date of sale, December 2018, a decision on the development application had not been made.
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".
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.
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.
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.
Accordingly, the Court adjusted rate for 42 Sargents Road, Minchinbury is $615/m2.

[85]

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.
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.
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.
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.
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%

[92]

Endnotes

Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1; [2016] NSWCA 48 at [20] (Basten JA).
Trust Company of Australia v Valuer-General (2007) 154 LGERA 437; [2007] NSWCA 181 (Trust Company of Australia) (Beazley, Ipp and Campbell JJA).
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.
[1925] AC 439; (1924) 7 LGR (NSW) 48; (1924) 25 SR (NSW) 75 at 76 (Lord Dunedin).
Trust Company of Australia at [32]..
(1907) 5 CLR 418 at 432; [1907] HCA 82 (Griffith CJ).
(1955) 91 CLR 610; [1955] HCA 13.
[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).
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).
Kogarah at [86].
(1978) 140 CLR 41; [1978] HCA 40.
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).
Commonwealth Custodial Services at [69]-[76] (Biscoe J); Trust Company of Australia at [17] and [68] (Campbell JA, Beazley and Ipp JJA agreeing).
(1979) 6 QLCR 95.
(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).
[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).
[2018] NSWLEC 59; referred to in Shuang Wang v Valuer General [2021] NSWLEC 74 at [19] (Pain J).
(1954) 20 LGR (NSW) 1.
(1972) 2 NSWLR 63; (1972) 28 LGRA 23.
[2005] NSWCA 89.
(2008)160 LGERA 375; [2008] NSWLEC 112 (Jagot J).
(2012) 211 LGERA 158; [2012] NSWLEC 73 (Pain J).
[2012] NSWLEC 199.
(2003) 212 CLR 111; [2003] HCA 8 (McHugh, Gummow, Kirby, Hayne and Callinan JJ).
[2009] NSWLEC 225 (Biscoe J).
LDCP pages 37-38.
(2016) 215 LGERA 226; [2016] NSWLEC 2.
[2022] NSWLEC 11 (Duggan J).
[2004] NSWLEC 684.
(1979) 6 QLCR 95.
(Land Court of Qld, 29 Oct 1993, unrep).
(1997) 17 QLCR 331.
(1980) 7 QLCR 106.
(1996-1997) 16 QLCR 435.
[2010] NSWLEC 1023.
(2017) 228 LGERA 320; [2017] SASC 158.
(2013) 195 LGERA 1; [2013] NSWLEC 18.
(1978) 5 QLCR 194.
(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

[109]

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).
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.
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.
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.
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).

[139]

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]:

[171]

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.
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.
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.
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.
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.
Mr Konidaris' sales were located in Hoxton Park, Warwick Farm, Austral and Gledswood Hills.
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:

[189]

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".
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).
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".

[193]

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.
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".
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".
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.
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".
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".
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.

[199]

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".
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".
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:

[213]

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".
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".
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."
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".
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.
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.
The Valuer-General submitted that the Court would accept Mr Hubbard's multiple concerns and disregard this sale.

[219]

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".
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".
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".
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.
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".

[220]

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".
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.
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.
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".
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".
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".
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".

[224]

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".
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.
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".
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.

[232]

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.
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).
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."
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.
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.
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.

[242]

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.
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.
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.

[245]

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.
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.
As at the date of sale, December 2018, a decision on the development application had not been made.
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".
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.
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.
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.
Accordingly, the Court adjusted rate for 42 Sargents Road, Minchinbury is $615/m2.

[262]

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.
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.
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.
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.
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.

Parties

Applicant/Plaintiff:

Warwick Farm Central Pty Ltd

Respondent/Defendant:

Valuer General

Legislation Cited (7)

Australian Jockey Club Act 1873(NSW)

Valuation of Land Act 1916(NSW)ss 4, 6A, 35C, 37, 40

Sydney Water Act 1994(NSW)s 44

Land Act 1916

Jockey Club Act 1873

Lands Act 1989

Water Act 1994

Cases Cited (63)

lia) Pty Ltd v Valuer-General [2009] NSWLEC 225 Kemp Investments (NSW) Pty Ltd and Flaherty v Valuer-General (2013) 195 LGERA 1; [2013] NSWLEC 18 Knapp v Valuer General [2004] NSWLEC 684 Kogarah Town Centre Pty Limited v Valuer General (No 3) [2014] NSWLEC 1124 Leichhardt Council v Roads and Traffic Authority of NSW (2006) 149 LGERA 439; [2006] NSWCA 353 Leppington Pastoral Company Pty Ltd v Valuer General [2010] NSWLEC 1023 Lewis Berger and Sons (Queensland) Pty Limited (1979) 6 QLCR 95 Marroun v Roads and Maritime Services [2012] NSWLEC 199 Maurici v Chief Commissioner of State Revenue (2003) 212 CLR 111; [2003] HCA 8 Norwest City Pty Ltd ATF Norwest City v Valuer General [2018] NSWLEC 50 Olefines Pty Ltd v Valuer-General of New South Wales (2018) 228 LGERA 407; [2018] NSWLEC 18 Perisher Blue Pty Ltd as Trustee for the Snow Trust v Valuer General [2023] NSWLEC 41 Port Macquarie West Bowling Club Ltd v The Minister (1972) 2 NSWLR 63; (1972) 28 LGRA 23 Raynbird v Valuer-General (1980) 7 QLCR 106 Richard Capuano v Roads and Maritime Services [2018] NSWLEC 59 Royal Sydney Golf Club v Federal Commissioner of Taxation (1955) 91 CLR 610; [1955] HCA 13 Scambiaterra v Valuer General [2003] NSWLEC 339 Shuang Wang v Valuer General [2021] NSWLEC 74 Smith v Eurobodalla Shire Council [2005] NSWCA 89 SNS Pty Ltd v Roads and Maritime Services (NSW) (2018) 232 LGERA 224; [2018] NSWLEC 7 Spencer v The Commonwealth of Australia (1907) 5 CLR 418; [1907] HCA 82 Tenstat v Valuer General; Woolworths Limited v Valuer General [2012] NSWLEC 1361 Toohey's Ltd v The Valuer General (NSW) [1925] AC 439; (1924) 7 LGR (NSW) 48; (1924) 25 SR (NSW) 75 Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer General (No 3) (2011) 182 LGERA 118; [2011] NSWLEC 85 Trust Co Ltd v Minister Administering the Crown Lands Act 1989 (2012) 211 LGERA 158; [2012] NSWLEC 73 Trust Company of Australia Ltd v Valuer-General (2007) 154 LGERA 437; [2007] NSWCA 181 Valuer General v Marano (1978) 5 QLCR 194 Valuer General of New South Wales v Oriental Bar Pty Ltd (2016) 217 LGERA 1; [2016] NSWCA 48 Yaglan Investments Pty Ltd v Council of the Shire of Albert (1997) 17 QLCR 331 Texts Cited: Fricke, Compulsory Acquisition of Land in Australia (2nd ed, Law Book Co, 1982) Hyam, The Law Affecting Valuation of Land in Australia (6th ed, Federation Press, 2020) Newton & Conolly, Land Acquisition (7th ed, LexisNexis Butterworths, 2017) Category: Principal judgment Parties: Warwick Farm Central Pty Ltd (Appellant) Valuer General (Respondent) Representation: Counsel: R White (Appellant) R Seiden SC and A Pearman (Respondent)

[2017] SASC 158

[2006] NSWLEC 400

(2008) 160 LGERA 375

(2017) 228 LGERA 320

(1978) 140 CLR 41

(2016) 215 LGERA 226

(2006) 148 LGERA 38

(1960) 34 ALJR 253

(2013) 195 LGERA 1

(2006) 149 LGERA 439

(2003) 212 CLR 111

(2018) 228 LGERA 407