In brief
The Valuer-General contended that the value of the subject land was $18,500,000. The Appellant appealed the determination to the Land Court and argued that a valuation of $14,500,000 was more appropriate.
The Court favoured the Valuer-General's evidence regarding the highest and best use of the subject land and the valuation method but favoured the Appellant's analysis of the comparable sales, with the result that the Appellant's appeal was allowed and the value of the subject land was reduced.
Issues in the appeal
The appeal concerned the following issues:
- the highest and best use of the subject land as at the valuation date;
- the correct valuation method; and
- the comparable sales to be used to value the subject land.
The highest and best use of the subject land
The subject land is comprised of three sites which are subject to easements which comprise the Tennyson Reach development. Site One is 10,000m² and is improved with two residential towers. Site Two is 6,387m² and is improved with one residential tower. Site Three is 1,931m² and is located on the opposite side of the road and is improved with a gymnasium, swimming pool and a waste disposal facility for the benefit of the residential towers on Site One and Site Two. As at the valuation date, Site One and Site Two were in the High Density Residential Zone and Site Three was in the Special Purpose (Utility Services) Zone under the
Brisbane City Plan 2014.
The Appellant's valuer opined that the highest and best use of the subject land was the current use with minor changes to Site Two. The Valuer-General's town planning expert disagreed and argued that a more intense residential use was the highest and best use of all three sites comprising the subject land.
The Valuer-General's town planning expert argued that the
Brisbane City Plan 2014 allows for greater height limits than the planning scheme which applied at the time of construction, being the
Brisbane City Plan 2000. It was argued that the greater height limits resulted in additional development opportunities.
The Appellant's valuer opined that the greater height limits under the Brisbane City Plan 2014 would not have resulted in higher development due to economic constraints. The Court noted that this was merely the opinion of the valuer and not supported by any relevant analysis.
The Court agreed with the Valuer-General's town planning expert that the Brisbane City Plan 2014, which allows for greater building height, would enable greater development potential for the subject land. The Court noted that the Appellant did not present evidence from a town planning expert in response to the Valuer-General's town planning expert.
The Valuer-General also relied on evidence given by a valuer. The Court preferred the evidence of the Valuer-General's valuer, which was consistent with the Valuer-General’s town planning expert, being that the highest and best use of the subject land was specifically a 15 storey residential building on each of Site One and Site Two, and a low to medium density 3 storey residential building on Site Three.
Correct valuation methodology
Both valuers used a direct comparison method to determine the value of the subject land.
The Appellant's valuer used the following five bases for the comparison:
1. rate per square metre of site area;
2. rate per potential or approved unit;
3. rate per potential or approved two bedroom equivalent;
4. rate per potential or approved bedrooms; and
5. rate per square metre of gross floor area.
The Valuer-General's valuer used one basis, being a rate per square metre of site area.
The Court determined that the correct method to value the subject land was to apply a rate per square metre, and that the other methods that the Appellant's valuer sought to use could not be used because the units of measurement could not be quantified by the existing buildings (see paragraph [
43]).
Expert witnesses considered a number of comparable sales to determine the value of the land
The experts' joint report considered eleven comparable sales for the purpose of valuing the subject land. The Appellant's valuer relied on sales numbered one, two and three, and valued all three separate sites as a whole. The Valuer-General's valuer relied on sale number two and sales numbered four to eleven, and valued Site Three separately to Site One and Site Two.
The Valuer-General's valuer put significant reliance on sale six which the Court deemed to be incomparable as the sale was not in the conventional market. Furthermore the Valuer-General's valuer did not provide an explanation as to how the unadjusted rate used in the valuation was determined. The Court held that "
the sales relied upon by the respondent do not support the value claimed to be deduced from the sales" (at paragraph [
101]).
The Court was satisfied that the Appellant's comparable sales represented the range of possible values for the subject land. It held that the Valuer-General's comparable sales evidence did not establish a satisfactory basis for the Court to accept its valuation as correct.
Court determined that the Appellant's valuation was preferred
In respect of the issues in the appeal, the Court relevantly found as follows:
- the Court agreed with the Valuer-General's town planning expert that the highest and best use of the subject land was one with more residential development;
- the Court determined that the correct valuation method was to apply a rate per square metre of site area; and
- the Court determined that the Appellant's valuation, based on the comparable sales one, two and three, was correct.
The Court agreed with the valuation contended for by the Appellant's valuer and held that the value of the subject land was $14,500,000.