Land and Environment Court New South Wales Medium Neutral Citation: Jim Bricknell v Valuer General of New South Wales [2025] NSWLEC 1121 Hearing dates: 27, 28 November 2024 and 10 December 2024 Date of orders: 28 February 2025 Decision date: 28 February 2025 Jurisdiction: Class 3 Before: Davidson AC Decision: The Court orders: (1) The appeal is dismissed. (2) The land value of the property legally described as Lot 29 in Deposited Plan 1242738, known as 14 Brolga Drive, Gulmarrad, NSW 2463 (Subject land) for the valuation date of 1 July 2022 is confirmed as $4,000,000. (3) The allowance pursuant to s 14L(1)(b) of the Valuation of Land Act 1916 is confirmed as $30,000. Catchwords: VALUATION APPEAL – land valuation appeal – whether the land value is too high – whether the s 14L allowance is too low – whether the land should be valued under s 6A1 or s 6A2 – whether land should be valued together or separately – orders. Legislation Cited: Biodiversity Conservation Act 2016 Land and Environment Court Act 1979, s 19 Valuation of Land Act 1916, ss 6A, s14L, s26, 27B, 37, 40 Clarence Valley Local Environmental Plan 2011 Cases Cited: ACN 115 840 509 Pty Limited v Kiama Municipal Council (2006) 145 LGERA 147; [2006] NSWLEC 151 DEM (Aust) Pty Limited v Pittwater Council (2004) 136 LGERA 187; [2004] NSWCA 434 Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 Hornsby Shire Council v Malcolm (1986) 60 LGRA 429 Kogarah Town Centre Pty Limited v Valuer General (No. 3) [2014] NSWLEC 1124 Mangoola Coal Operations Pty Limited v Muswellbrook Shire Council [2020] NSWLEC 66, Olefines Pty Ltd v Valuer-General of New South Wales (2018) 228 LGERA 407; [2018] NSWLEC 18 Pepperwood Ridge Pty Limited v Newcastle City Council (2015) 142 LGERA 231; [2005] NSWLEC 257 Perisher Blue Pty Ltd v Valuer General (NSW) [2023] NSWLEC 41 Tetzner v Colonial Sugar Refining Co Ltd [1958] AC 50 Tomago Aluminium Company Pty Ltd v Valuer General [2010] NSWLEC 4 Toohey's Ltd v The Valuer-General (1924) 25 SR (NSW) 75 Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer-General (No 3) (2011) 183 LGERA 118; [2011] NSWLEC 85 Valuer-General v Fivex Pty Ltd (2015) 206 LGERA; [2015] NSWCA 53 Category: Principal judgment Parties: Jim Bricknell (Applicant) Valuer General of New South Wales (Respondent) Representation: B Chapman (Agent for the Applicant) Counsel: A Pearman (Respondent) Solicitors: Crown Solicitor of NSW (Respondent) File Number(s): 2023/458356 Publication restriction: No Judgment 1. COMMISSIONER: Jim Bricknell (the Applicant) appeals the determination of the Valuer General (the Respondent) dated 24 October 2023 pursuant to s 37(1) of the Valuation of Land Act 1916 (Valuation Act) in respect of the valuations of the land value of the property legally described as Lot 29 in Deposited Plan 1242738, known as 14 Brolga Drive, Gulmarrad, NSW 2463 (Subject Land) for the valuation date of 1 July 2022. 2. Pursuant to s 6A of the Valuation Act, the Respondent ascertained the land value of the Subject Land at 1 July 2022 as $4,000,000 with an allowance of $30,000 pursuant to s 14L(1)(b), of the Valuation Act. The respondent issued a notice of valuation to the applicant with the last date to object being 12 July 2023. 3. On 12 July 2023, the Applicant made an objection to the Respondent on the grounds that the value was too high, and allowances/concessions were incorrect. 4. By letter dated 24 October 2023, the Respondent disallowed the Applicants objection, confirming the land value of $4,000,000 and leaving the s 14L(1)(b) allowance of $30,000 undisturbed. 5. The Applicant was dissatisfied with the determination of the objection and appealed pursuant to s 37(1) of the Valuation Act. The Applicant contends that the land value of the Subject Land is $1,810,000 with an allowance under s 14L(1)(b) of $100,000. 6. These proceedings fall within Class 3 of the Court's jurisdiction pursuant to s 19(b) of the Land and Environment Court Act 1979 (LEC Act). 7. The statutory power or function to be exercised in determining the proceedings is s 40(1)(b) of the Valuation Act. 8. The Applicant appeals the determination of the Valuer General made on 24 October 2023 in respect of the objection made by the Applicant to the valuations of the land value of the land and the allowance pursuant to s 14L (1)(b) as of 1 July 2022, 9. The Applicant has the onus of proving their case, pursuant to s 40(2) of the Valuation Act. Under s 40(1) of the Valuation Act, the Court can confirm, revoke, make another decision or remit a matter to the Valuer-General. 10. If the Applicant does not discharge its onus the appeal must be dismissed, and the issued land value and allowances confirmed [1] . Agreed Facts 1. The Subject land is divided into two separate allotments. The smaller allotment is an irregular shaped, mostly level, battleaxe allotment zoned R5 - Large Lot Residential with an area of approximately 1.02 ha (Homesite). The larger allotment is a regular shaped, gently undulating allotment zoned R1 General Residential with an area of approximately 12.92 ha (Development Land). The applicant and Hui-Lien Li are the registered proprietors of the land as joint tenants. 2. The following facts are agreed between the parties: 1. The Subject Land is referred to as 14 Brolga Drive, Gulmarrad, NSW 2463. 2. The Subject Land consists of two separate allotments: 1. An irregular shaped, mostly level, battleaxe allotment zoned R5 Large Lot Residential with an area of approximately 1.02 ha (Homesite). 2. A regular shaped, gently undulating allotment zoned R1 General Residential with an area of approximately 12.92 ha (Development Land). 1. The two allotments together have an area of approximately 13.94 ha. 2. The Subject Land is subject to the Clarence Valley Local Environmental Plan 2011. It is subject to the following constraints: 1. Greenfield Housing Code Area. 2. Urban Release Area 3. Acid Sulfate Soils Class 5 (part) 4. Biodiversity Conservation Land - State 1. The Homesite is connected to services. 2. The Development Land is available to be connected to services. 3. To develop the Development Land the intersection of Brooms Head Road and Sheehans Lane will require upgrading. 4. The Homesite is approximately 50% cleared of vegetation. 5. The Development Land is predominantly cleared of vegetation. 6. The Homesite has a minimum lot size of 4,000 square metres. Planning Background and Site Characteristics 1. The relevant planning control for both allotments for both the valuing year and the date the valuation was made (DVM) was the Clarence Valley Local Environmental Plan 2011 (the LEP). The Homesite land was zoned R5 Large Lot Residential while the Development Land was zoned R1 General Residential. 2. There is a minimum lot size of 4,000m2 for the R5 zoned Homesite land. There is no minimum lot size for the R1 zoned Development Land prescribed in the LEP. In oral evidence, Mr Arneil advised the relevant development control plan restricts the lot size of land in the R1, R2 and R3 zones to a minimum 400 square metres subject to other conditions. This was not contested by the Applicant. 3. The Subject Land is subject to approved development application DA2004/0720 (2004 approval) for a 43-lot rural residential subdivision. The approval had substantial commencement due the subdivision of part of Lot 19 in Deposited Plan 1057764 into 13 lots, leaving the Subject land as residue land to be subdivided into an additional 30 separate lots. 4. Mr Feeney undertook his valuation on the basis there were no environmental issues that would impact the valuation of the property. 5. Mr Arneil described the land as having no bushfire or flooding issues. 6. The Development Land forms a part of the Urban Release Area (URA) in the Galmarrad locality. The URA consists of three parcels of land including the Development Land, Lot 2 in Deposited Plan 1199142 (the MHE land) and Lot 1 in Deposited Plan 1199142 (the pub land). The development of the three properties in the URA is contingent on the upgrade of the intersection of Brooms Head Road and Sheehan's Lane, funded by the developers of the three parcels, and the extension of the council sewer, also at the cost of the developers of the three parcels. Apportionment of costs was left to the developers to determine. 7. The MHE land adjoins the Development Land and was the subject of Feeney sale 9 and Arneil sale 5. Development application 2019/0423, for the development of a modular home estate, was approved on 28 June 2021, subject to conditions which included a commitment for purchasing $2,920,170.54 in biodiversity credits. 8. The pub land adjoins the MHE land to the north. Development application 2020/0729 seeking approval of an 86-lot subdivision and retail premises including shop and food and drink premises (pub) on the land was before Council on at the DVM. Approval has subsequently been granted. 9. Mr Feeney described the Homesite land as being situated on the northeastern side of Brolga Drive and below road with the battle axe shaped section at the bottom of surrounding sloping land, partly subject to inundation in heavy rain periods, citing a drainage corridor along the whole of the southern boundary which fills with water and restricts usability of the land. 10. Mr Arneil described the Homesite land as an irregular shaped mostly level battle axe allotment, with an access handle of approximately 250 square metres, approximately 50% cleared with the remainder being timbered, mostly along the southern boundary and the northeastern corner. 11. The Homesite land was not inspected during the site view. 12. Mr Feeney described the Development Land as having frontage to Sheehan's Lane and Major Mitchel Drive. Vehicular access is not permitted off Sheehan's Lane. 13. Mr Arneil described the Development Land as being a regular shaped gently undulating allotment, with the land rising from Major Mitchell Drive, on the southern boundary, through to the rear northern boundary, and also rising from Sheehan's Lane, on the western boundary through to the mid-section, before falling gently to the eastern boundary which adjoins R5 Large Lot Residential zoned land. 14. The Development Land was inspected during the site view in the company of the valuers and the respondents' representatives. We observed it from the adjoining MHE land. It was evident the land was flood free and mostly cleared. Legislative Provisions 1. The Subject Land is to be valued in accordance with the requirements of s 6A of the Valuation Act which provides: 6A Land value (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. (3) Notwithstanding anything in subsection (1), in determining the land value of any land, being land in relation to which, at the date to which the valuation relates, there was a water right— (a) the land value shall include the value of the right, and (b) it shall be assumed that the right shall continue to apply in relation to the land. (4) For the purpose of determining the value of a water right, the value of any water secured by, or referable to, that right is to be ignored. 1. The allowance is to be determined in accordance with s 14L of the Valuation Act which provides: 14L Expenditure for which allowance is to be made. (1) For the purpose of ascertaining the land value of any land, the Valuer-General is to ascertain a reasonable allowance for profitable expenditure by the owner, occupier or lessee in respect of— (a) any effective land improvements on or appertaining to the land, and (b) any visible and effective improvements which, although not on the land, have been constructed— (i) for the purpose of supplying water to the land, or (ii) for the purpose of draining the land, protecting the land from inundation or making some other provision for the more beneficial use of the land. (2) In the case of a stratum, the Valuer-General is also to ascertain a reasonable allowance for profitable expenditure by the owner or occupier on any visible and effective improvements which, although not in the stratum, have been constructed exclusively for the benefit of the stratum. (3) An allowance for profitable expenditure is to be calculated on the assumption that— (a) the allowance is being calculated at the date by reference to which the land value is being determined, and (b) any improvements that have been taken into account for the purpose of ascertaining the land value of the land were in existence at the date referred to in paragraph (a). (4) An allowance for profitable expenditure is to be entered in the Register of Land Values in respect of any land value to which it relates. 1. The powers of the court to make a decision are set out in s 40 of the Valuation Act which provides: 40 Powers of Land and Environment Court on appeal (1) On an appeal, the Land and Environment Court may do any one or more of the following— (a) confirm or revoke the decision to which the appeal relates, (b) make a decision in place of the decision to which the appeal relates, (c) remit the matter to the Valuer-General for determination in accordance with the Court's finding or decision. (2) On an appeal, the appellant has the onus of proving the appellant's case. 1. The planning controls for R1 General Residential, R2 Low Density Residential and R5 Residential are prescribed in the LEP: Zone R1 General Residential 1 Objectives of zone • To provide for the housing needs of the community. • To provide for a variety of housing types and densities. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. 2 Permitted without consent. Home-based child care; Home occupations; Home occupations (sex services) 3 Permitted with consent. Attached dwellings; Boarding houses; Caravan parks; Centre-based child care facilities; Community facilities; Dwelling houses; Educational establishments; Environmental protection works; Exhibition homes; Exhibition villages; Flood mitigation works; Food and drink premises; Group homes; Health consulting rooms; Home businesses; Home industries; Hostels; Information and education facilities; Multi dwelling housing; Neighbourhood shops; Oyster aquaculture; Places of public worship; Pond-based aquaculture; Recreation areas; Residential accommodation; Residential flat buildings; Respite day care centres; Roads; Semi-detached dwellings; Seniors housing; Shop top housing; Tank-based aquaculture; Tourist and visitor accommodation 4 Prohibited Rural workers' dwellings; Any other development not specified in item 2 or 3. Zone R2 Low Density Residential 1 Objectives of zone • To provide for the housing needs of the community within a low density residential environment. • To enable other land uses that provide facilities or services to meet the day to day needs of residents. 2 Permitted without consent. Home-based child care; Home occupations; Home occupations (sex services) 3 Permitted with consent. Bed and breakfast accommodation; Boarding houses; Boat sheds; Centre-based child care facilities; Community facilities; Dwelling houses; Educational establishments; Environmental protection works; Exhibition homes; Exhibition villages; Flood mitigation works; Group homes; Health consulting rooms; Home businesses; Home industries; Information and education facilities; Neighbourhood shops; Oyster aquaculture; Places of public worship; Pond-based aquaculture; Recreation areas; Residential accommodation; Respite day care centres; Roads; Tank-based aquaculture; Water recreation structures 4 Prohibited Attached dwellings; Multi dwelling housing; Residential flat buildings; Rural workers' dwellings; Any other development not specified in item 2 or 3. Zone R5 Large Lot Residential 1 Objectives of zone • To provide residential housing in a rural setting while preserving, and minimising impacts on, environmentally sensitive locations and scenic quality. • To ensure that large residential lots do not hinder the proper and orderly development of urban areas in the future. • To ensure that development in the area does not unreasonably increase the demand for public services or public facilities. • To minimise conflict between land uses within this zone and land uses within adjoining zones. • To ensure development is not adversely impacted by environmental hazards. • To protect areas of vegetation and waterways with conservation value and scenic amenity. 2 Permitted without consent. Environmental protection works; Home-based childcare; Home occupations; Home occupations (sex services) 3 Permitted with consent. Bed and breakfast accommodation; Centre-based child care facilities; Community facilities; Dual occupancies; Dwelling houses; Environmental facilities; Exhibition homes; Exhibition villages; Extensive agriculture; Farm buildings; Flood mitigation works; Health consulting rooms; Home businesses; Home industries; Horticulture; Information and education facilities; Neighbourhood shops; Oyster aquaculture; Pond-based aquaculture; Recreation areas; Respite day care centres; Roads; Roadside stalls; Secondary dwellings; Tank-based aquaculture; Viticulture 4 Prohibited Any development not specified in item 2 or 3. Should the Home Site and Development Land be valued together. 1. On the first sitting day of the hearing, I questioned the parties on why the Homesite and Development Land were being valued as one parcel. I asked this question as Lot 29 consisted of two distinct parcels, separated by roadway and other lands, were subject to different zones and the smaller parcel contained an occupied residential dwelling with ancillary improvements. The Respondent also chose to value Lot 29 on a piecemeal basis and specific to the different zoning controls for the parcels. Submissions 1. The respondent submitted s 26(1) of the Valuation Act would appear to permit the Valuer General to value the two parcels forming Lot 29 as one parcel. The section contemplates that where parcels of land adjoin, they are to be included in one valuation provided that any such parcels do not have buildings erected upon them which are adapted to separate occupations. The parcels are certainly owned by the same person and are not leased. The provision, therefore, does not apply. At issue then pursuant to s 26 is whether the parcels of land are adjoining. 2. The respondent cited various cases that consider the meaning of "adjoining" although not in the context of ss 26 or 27B of the Act. 15. In Mangoola Coal Operations Pty Limited v Muswellbrook Shire Council [2020] NSWLEC 66, Moore J at [137] adopted the approach of the Court of Appeal in Hornsby Shire Council v Malcolm (1986) 60 LGRA 429. Malcolm was a planning case where the word "adjoining" in the context of a SEPP was construed by the Court of Appeal as having a wider meaning beyond strict abutment but where there was sufficient proximity to bring the proposed development within the word "adjoins" when considering zoning for urban development. 16. Preston CJ found in ACN 115 840 509 Pty Limited v Kiama Municipal Council (2006) 145 LEGRA 147; [2006] NSWLEC 151 where the land "adjoins" will be a matter of fact and degree. Citing Malcolm at [20] his Honour noted that the Court of Appeal had held that land that was separated from land zoned for urban purposes by a road (Mid Dural Road) and a roadside reserve zoned open space and of 15m in width, was still land that adjoins the land zoned for urban uses. 17. At [25] in DEM (Aust) Pty Limited v Pittwater Council (2004) 136 LGERA 187; [2024] NSWCA 434, his Honour recorded there were intervening crossroads between the lands, but the land proposed to be developed was held to be land that adjoins land zoned primarily for urban purposes. 18.At [26] his Honour also cited Pepperwood Ridge Pty Limited v Newcastle City Council (2005) 142 LGERA 231; [2005] NSWLEC 257 in which Pain J held the reasoning in Malcolm applies and is binding in finding that 'adjoins' means 'is near to' or 'is neighbouring on' rather than the exact meaning of "is coterminous with". In that case the land was separated from land zoned 2(a) Residential by a road of 30m in width, consisting of a four-lane highway and a median strip. Her Honour did not find the presence of this physical barrier to be significant. 19. At [31] his Honour found that the cases of the Court of Appeal and the Land and Environment Court were consistent in holding that it is not necessary, in order for the Subject land to answer the description of being land that "adjoins" land zoned primarily for urban purposes, to be coterminous with (that is, have a common boundary with) or be immediately adjoining the 2(a) Residential land. It is sufficient that the Subject Land is "near to" or is "neighbouring on" or is "in sufficient proximity to" the 2(a) Residential land which is land zoned primarily for urban purposes. Also, determining whether land answers the description of being land that "adjoins" involves matters of fact and degree. His Honour had no difficulty finding that the Subject land adjoins land zoned primarily for urban purposes notwithstanding a separation of some 65m. 20. Relevantly, the two parcels comprising the Subject Land are remnants of Lot 19 in DP 1223575, which was subdivided upon registration of DP1242738 on 13 August 2018, and as such formerly comprised a single contiguous parcel. The parcels comprising the Subject Land are separated only by lots which, together with the Subject Land, formerly comprised Lot 19 in DP 1223575. 21. In addition, and if necessary, the Respondent relies upon s 27B(5) (s 27B overriding s 26), for the discretion to include adjoining lots that are owned by the same person in the one valuation. 22. The Respondent also draws comfort from s 27B(2)(b) which clearly contemplates that a single lot can be included in one valuation, the Subject lot being a single lot albeit in two parcels. 1. The submissions of the Respondent were supported by the Applicant. 2. As neither party seeks the land to be separately valued and the land is subject to a consent which would allow further subdivision of the land, I will make my decision based on the land being valued as one parcel. Valuation evidence: 1. An inspection of the Development Land was undertaken in the company of representatives of the Respondent and the expert for the Applicant. The Applicant did not attend as he was unwell. The Homesite was not inspected as he did not wish to be disturbed. The agent for the applicant also did not attend the view. In addition, an inspection of the sales considered most comparable to the Development Land was undertaken. 2. The parties each qualified an expert valuer to give evidence in the proceedings, Mr Feeney for the Applicant and Mr Arneil for the Respondent. 3. The valuers prepared individual reports and participated in joint conferencing. 4. Mr Feeney, in his report in chief, valued the Homesite land and the Development Land together as a single development lot. 5. In his report in chief, Mr Arneil valued the Homesite land separately, reflecting its use as a homesite, and the Development Land was valued as a development site. The two values were then combined to arrive at a land value for the whole of the Subject land. 6. In the joint conference the valuers agreed on the facts set out above. The valuers also agreed on the following: 1. The valuation should be undertaken in accordance with s 6A of the Valuation Act 2. The Subject Land has connected and or available for connection electricity, town water and internet. The 'Homesite' has an enviro cycle. 3. To develop the 'Development Land' the land is required to be connected to sewer. 4. To develop the 'Development Land' the intersection at Brooms Head Road and Sheehans Lane will require upgrading. 5. Direct comparison of sales evidence is the appropriate valuation method. 6. The 'Development Land' has development potential. 7. The 'Homesite' section of the Subject Land cannot be subdivided into more than one lot. 8. The market participants for the Subject Land may be that of developers, either within the general marketplace or that of the adjoining owner, directly to the north. 9. Both valuers agree that when undertaking the valuation utilising the direct comparison method that appropriate adjustments are required for the analysis of the sale to arrive at a land value and for comparison purposes to the Subject Land. 1. The valuers disagreed on the following: 1. The appropriate basis of valuation of the Homesite land. 2. The appropriate "in line discount" applicable for the Homesite land. 3. The highest and best use of the Development Land 4. The relevant provision of s 6A being either s 6A(1) or s 6A(2). 5. The costs to be considered for connection of sewer and upgrading the intersection of Brooms Head Road and Sheehans Lane and allowance for the payment of biodiversity credits. 6. The appropriate sales to be used in the valuation of the Development Land. 7. The appropriate adjustments to apply when using the direct comparison approach. 8. The application of the direct comparison approach. Homesite land 1. Mr Feeney, in his report in chief, undertook the valuation of the Homesite and Development Land together as an englobo parcel of land based on the 2004 approval. 2. Mr Feeney determined an englobo value for the whole of the Subject land, using the methodology fully set out below under Development Land, arriving at a per lot basis of $58,800. This reflected a value for the Homesite of $58,800. 3. Mr Feeney considered the valuation of the Homesite land on a piecemeal basis in the Joint Expert Report (JER). He opined a prudent purchaser would consider the market for rural residential sites had peaked on 1 July 2022 and they would allow for a falling market during the time required to prepare, lodge and obtain a development approval. He considered a prudent developer would estimate a future selling price of $400,000. He further opined that a developer would make an adjustment of $200,000 for not having a separate title, resulting in a land value for the Homesite land of $200,000. 4. Mr Arneil, in his report in chief, valued the Homesite land separate to the Development Land by using direct comparison to comparable sales. He used large lot residential sales for comparison as he considered them the best form of evidence as they reflect the highest and best use of the Homesite land. The sales relied upon by Mr Arneil were: 1. Sale 1 - 90 Dianella Drive, Gulmarrad. 2. Sale 2 - 38 Major Mitchell Drive, Gulmarrad. 3. Sale 3 - 37 Frogmouth Drive, Gulmurrad. 1. He made adjustments for location and services, land area, topography and shape and access. He determined the stand alone Homesite to have a land value of $600,000 at the valuation date. He then applied a 20% discount to the land value determined by his comparison. He opined a hypothetical purchaser would on sell this portion of land as a single homesite and would allow for associated costs including a portion of transfer duty, selling costs (agent commissions (3%) and legals) and costs incurred undertaking a two-lot subdivision. He also allowed for a 10% profit and risk allowance. Mr Arneil arrived at a land value of $480,000 for the Homesite land. 2. Mr Arneil also considered the valuation of the Homesite land, together with the Development Land, on the basis of the existing R5 Large Lot Residential development approval in the JER using the methodology fully set out below under Development Land. Comparable sales adjustments to Homesite land 1. Mr Feeney engaged with Mr Arneils' homesite sales in the JER, accepting the analysed land value for 1 July 2022 as adopted by Mr Arneil while making his own adjustments in comparison to the Homesite land. The adjustments of the two valuers are detailed in the following table. 2. The valuers agreed on the adjustment for topography and shape of -5% and that adjustment is accepted for all sales. 3. Mr Feeney agreed with the zero adjustment for access for sale 1 but disagreed with the -2.5% adjustments for Sales 2 and 3. No rationale was provided for the -2.5% adjustment for access. I will accept Mr Feeneys' adjustment of 0% 4. Mr Feeney agreed with Mr Arneils' -5% adjustment for location and services for Sales 1 and 3 but disagreed with Mr Arneils' +7.5% adjustment for Sale 2. Mr Feeney considered the location of all residential lots in Gulmarrad to be similar. During the inspection tour, it was obvious that there were minor differences in the appeal of locations visited, although there are no sales before the courts to illustrate such differences in value. Sale 1 is located approximately 2.6 kilometres from the Homesite land and Sale 3 approximately 1.7 kilometres distant. Sale 2 is approximately 600 metres from the Homesite land, being on the newly constructed section of Major Mitchel Drive. The locality, of Sale 2, would appear to be in the same general locality of the Homesite land and the sale price being lower than the other sales may reflect other features such as the existing stand of trees over a significant portion of the site. I will accept Mr Arniels adjustment of -5% for Sales 1 and 3 but will adopt a 0% adjustment for Sale 2. 5. Mr Feeney did not consider adjustments for size to be applicable. He provided evidence of paired sales from 2020 and 2021 to support this view. He plotted these sales on a cadastral map but did not provide a description of these sales, making true comparison difficult. Mr Arneil adopted an adjustment of 10% for Sale 1 and 15% for Sales 2 and 3. He provided no rationale for the adjustments. I find Mr Feeneys' evidence difficult to adopt due to the lack of other features which may have affected the sales values of the properties selected for comparison. The sales selected were also between 1 and 2 years prior to the valuation date. A comparison between Sale 1 and 3 does appear to support his opinion based on analysed land values and the other adjustments made. However, there does appear to be a slight advantage to a larger site. I will adopt a +2.5% for Sale 1 and a +5% adjustment for Sales 2 and 3. 6. My total adjustment for Sale 1 is -7.5% resulting in an adjusted land value of $555,000. 7. My total adjustment for Sale 2 is 0% resulting in an adjusted land value of $500,00000. 8. My total adjustment for Sale 3 is -5.0% resulting in an adjusted land value of $560,500. 9. I consider Sale 1 to be most similar to the Homesite land and will adopt an adjusted land value of $550,000, if sold separate to the Development Land. Finding on Homesite valuation basis and land value 1. The subdivision of the original Lot 19 resulted in the Homesite land being subdivided in all but title. I accept Mr Arneils piecemeal approach to the land and accept his opinion that a developer purchasing Lot 29 would seek to subdivide the Homesite land from the Development Land to allow a sale to occur. 2. I accept Mr Feeneys' opinion that a prudent developer would consider 1 July 2022 to be the peak of the market for rural residential homesites. Both valuers agreed the market for development sites peaked sometime around the beginning of 2022. A prudent developer purchaser would not expect to achieve the same sale price for the Homesite land if selling after a delay required to subdivide it from the Development Land. 3. However, I reject Mr Feeneys' approach to determining an allowance for the subdivision of the Homesite from the Development Land. He based his opinion on a developer including the land in a development of the whole of Lot 29, thereby apportioning costs and delays to the Homesite land based on undertaking a full-scale development of the whole of Lot 29. His adjustment of $200,000 had no explanation of how it was determined. 4. I prefer the opinion of Mr Arneil, finding it to be more realistic of a developer seeking a return on that land while preparing for developing the rest of Lot 29. He was also more scientific in his approach to determining an allowance for costs and delay of subdividing the Homesite land for sale. However, I consider his adjustment of 10% for profit and risk to be too low for the prudent purchaser concerned of the risk that the market had reached its peak and may experience a modest decline. I will apply a 30% adjustment, reflecting 20% adjustment for profit and risk, rather than the 10% applied by Mr Aneil. 5. Adjusting my analysed land value of $550,000 by -30%, reflecting the costs and time delays to subdivide and sell the individual land, I find the land value of the Homesite land, when contributed to the overall land value of the Subject land, to be $385,000. Development Land 1. The parties agree the Development Land has development potential for future residential development. 2. The R1 General Residential zone permits all development permitted under the R2 Low Density Residential zone, with the addition of higher density residential development, seniors housing, food and drinks premises and shop top housing among the other additional uses. 3. In his report in chief, Mr Feeney relied on 6 primary sales of englobo land zoned R5, to determine the land value of the Subject Land (inclusive of Homesite land) based on the existing 2004 approval, which he considered the highest and best use. 4. He did not directly compare these sales to the Subject Land. He instead determined an undeveloped lot value based on subsequent subdivision and yield achieved for each site. He then divides what he refers to as the general selling price of developed lots at the contract date of the sale, by the undeveloped lot value, to arrive at a "market discount" "per potential undeveloped englobo lot compared to a saleable developed lot". He uses the `derived discount from these sales to determine an applicable discount for the Subject land based on a 30-lot subdivision (inclusive of Homesite land) with a saleable development lot value of $490,000 each. 5. Based on his analysed englobo sales, Mr Feeney applies an 88% discount to a 4,000 square metre saleable lot value of $490,000, arriving at an englobo lot rate of $58,800. He then multiplied this rate by 30 lots to arrive at a land value for the Subject Land of $1,764,000 ($1,705,200 for the Development Land). 6. He also applied an alternative basis, derived from his sales analysis, opining that a 30-lot potential subdivision has a land value sale price equivalent to the sale price of between 2.73 and 3.92 fully developed saleable 4000 square metre lots. He adopted 3.8 fully developed lots at $490,000 arriving at $1,862,000 ($1,799,934 for the Development Land). 7. He determined the land value of the Subject Land as $1,810,000 ($1,749,667 for the Development Land excluding the Homesite). 8. He adopted the above approaches as an alternative to the hypothetical method of valuation which he described as assuming the Subject land is fully developed and ready for sale and then deducting all potential costs, as well as making allowances for profit and risk. He opined "there are numerous estimations in a hypothetical method of valuation. A variation of some of the unknown future estimated approvals, costings, selling periods, selling prices and interest rates does dramatically alter the determination." 9. Mr Arneil, in his report in chief, adopted a traditional method of direct comparison accumulating comparable sales having regard to the Development Lands' highest and best use, analysing these to a land value on a rate per Ha, adjusting those sales to create equivalence with the unimproved Development Land, then applying the adjusted land value rates to determine the land value of the Development Land. He adopted a rate of $400,000 which he applied to the 12.92 Ha of the Development Land to arrive at a land value of $5,168,000. Comparable sales for Development Land. 1. A total of 11 development site sales were considered by the valuers of which, three were common. The common sales are: 1. Lot 131 Parkland Drive, Gulmarrad, 2022 sale sold 22 October 2022 (Quarry sale). 2. 1 Rannoch Avenue, Maclean sold 17 August 2021 (Rannoch sale). 3. Lot 2 Brooms Head Road, Gulmarrad sold to K1 Project Pty Ltd (Second MHE sale) Appropriate sale of the MHE land to use for comparison. 1. The adjoining MHE land was purchased with a contract date of 6 October 2021 for $12,375,000 (the Second MHE sale). It was zoned R1 General Residential and had an area of 19.2 Ha. Mr Arneil reported the sale coincided with a sale from the Applicant to the vendor of the second MHE sale, for $7,370,000, which was contracted on 7 October 2021 (the First MHE sale), the day after the second sale. Both sales settled on 27 October 2021. The First MHE sale was the sale addressed most in oral evidence by both valuers. 2. Mr Feeney advised that the purchaser of the First MHE sale was introduced by a real estate agent in McLean. He advised the parties had reached an agreement at $6,200,000 for the land in 2019. After that point, the parties continued negotiations without the involvement of the agent. Mr Feeney opines a vendor that has achieved a $12 million sale one day before would be happy to sign a contract for $7.37 million knowing there was a gross five million dollar difference. 3. Mr Arneil, in oral evidence, preferred the use of the $12 million sale as the First MHE sale was not DA approved, needed road upgrades, and the length of the DA process was an unknown. He also preferred it as it included the added value of the DA, giving clarity of what you can do. He also believed the purchase price of the first sale to have been determined when the development application was lodged in 2019, not reflecting the increase in the market to the contract date in October 2021. 4. I prefer the use of the First MHE sale for reasons not dissimilar to those expressed by Mr Arneil. The First MHE sale is more in line with the situation of the Development Land in relation to the challenges and risks involved in developing the land. The increase in the negotiated purchase price, between 2019 and 2021, was 19% reflecting negotiations continuing well into the regional boom period. In the absence of any evidence from either valuer on the market movement for development sites during this period, other than opinion on when the market peaked for both development sites and developed sites, I have no reason to doubt this increase reflects the meeting of two minds near the peak of that market. 5. The Second MHE sale was identified in the reports in chief of both valuers as being between two companies. As observed by Mr Feeney, the sale price was significantly different to that of the First MHE sale where the Applicant was the vendor. There is no evidence provided for the second sale on the parties, their relationship, or the circumstances and conditions of the second sale. 6. In contrast, the First MHE sale has considerable transparency. The parties are known to be at arm's length. It was purchased conditional on consent of the development application lodged by the purchaser. The vendor was indemnified against all costs in connection to the development application. A copy of the deed of call option has been tendered to the court [2] as has a copy of the contract of sale. The conditions of approval have also been detailed to the court based on the minutes of a council meeting [3] . Therefore, the First MHE sale is accepted as the applicable MHE sale. Further appropriate sales to use for comparison purposes. 1. Of the other 8 sales considered by the valuers, I find only Fenny Sale 5 at 70 Rosella Road Gulmurrad, sold 22 July 2020 (Rosella sale), aids in determining the land value for the Development Land. The remaining 7 sales were not considered useful for determining the land value of the Development Land for the following reasons. 1. Feeney Sale 1 at 53 Clyde Drive Gulmarrad, was purchased with a contract date of 11 September 2020 for $327,000. It had a site area of 2.632 Ha. Site restrictions limit any potential subdivision with Mr Feeney advising four potential lots may be possible with an undeveloped lot value of $81,750. He determined a 65% discount per potential englobo lot compared to a saleable developed lot value of $230,000. This sale was not addressed in the JER or in oral evidence and was not the subject of a site view. I consider this sale to not be useful as a comparable due to the considerable adjustment for size required to compare it to the Subject land. 2. Feeney Sale 2 at 49 Australia Drive Gulmurrad was purchased with a contract date of 19 January 2021 for $410,000. It had a site area of 4.358 Ha. Subsequent development approval permitted subdivision to 7 lots from which Mr Feeney deduced an undeveloped lot value of $58,571. He determined a 75% discount per potential englobo lot compared to a saleable developed lot value of $230,000. This sale was not addressed in the JER or in oral evidence and was not the subject of a site view. I consider this sale to not be useful as a comparable due to the considerable adjustment for size required to compare it to the Subject land. It also appears out of line when considered next to the list of sales of developed large residential lots of 4,000 sq metres or more provided by Mr Feeney. 3. Feeney Sale 3 at Lot 131 Parklands Drive Gulmurrad was purchased with a contract exchanging in December 2014 with a subsequent development approval for regrading of a former quarry site. The sale is considered of no assistance in determining the land value of the Subject land due to its age, particularly as a more current sale of the site is available. It does provide some guidance on the suitability of the subsequent sale. 4. Feeney Sale 6 at Mahogany Drive Gulmurrad was purchased with a contract date of 21 July 2016 for $957,000. It had a site area of 23.27 Ha. The site sold with development approval for 35 lots. Mr Feeney deduced an added value of the development approval of $350,000. Deducting this from the sale price, Mr Feeney deduced an undeveloped lot value of $17,343. Based on this he determined an 89% discount per potential englobo lot compared to a saleable developed lot value of $155,000. This sale is considered of no assistance due to its age. 5. Feeney Sale 7, at 33 Jubilee Street Townsend was purchased with a contract date of 23 February 2022 for $2,750,000. The land was zoned R2 Low Density Residential. Mr Feeney did not use this sale to determine the land value of the Development Land. He opined sales sold during a booming market should be treated with caution, the purchaser appeared to not act prudently, and the sale should not be relied upon to value other englobo properties given the changing market conditions as at 1 July 2022 (which is the valuation date). As neither valuer analysed or relied upon this sale, and it was not inspected on the site view it provides little assistance to the court in determining the land value of the Subject land if only developed for uses consistent with a low density residential zone. 6. It is regrettable neither valuer truly engaged with this sale, as it would appear, on face value, to be more suitable than the Rannoch sale, but it does lend some support to the analysis and adjustment of that sale. 7. Feeney Sale 10, at 90 Carrs Road Yamba was purchased, with a contract date of 23 December 2020, for $7,672,000. The land was zoned R1 General Residential. The property had an area of 7.78 Ha and sold with approval for a 200 manufactured housing estate. Mr Feeney opined this sale proved the Second MHE sale was too high considering the demand for sites at Yamba substantially exceeded the slow uptake of MHE sites in Gulmarrad. The comparison of uptake in sales was an observation made by Mr Feeney. No physical evidence was provided to illustrate the uptake of MHE sites for either location. Mr Feeney principally used this sale to discredit the MHE sale as out of line. As neither valuer provided an analysis of this sale, nor relied upon it, the sale is of no assistance to determine the land value of the Development Land. 8. Arneil Sale 4, at 120 Carrs Drive Yamba, was purchased with a contract date of 6 July 2021 for $5,300,000. It was zoned R1 General Residential, C3 Environmental Management and C2 Environmental Conservation under the LEP. The land was an irregular shaped low lying waterfront reserve allotment fronting Oyster Channel to its western boundary. The land zoned R1 was approximately 8.6ha with the remaining 7.6ha being zoned C2 and C3. The land is 100% flood prone and 100% acid sulfate soils. The land requires significant fill to develop. 9. Mr Feeney, in his report in chief, identified an adjoining sale of 110 Carrs Road, having an area of 1.5 Ha and a contract date 9/10/2021, for $1,700,000. He explained the two sales, purchased by the owner of the adjoining MHE development, were the subject of a development application for an additional 216 manufactured homes estate. As of August 2024, the council had not supported that application. 10. Mr Arneil considered the older style single dwelling on the site added no value. Mr Arneil deducted $300,000 from the sale price reflecting the value of the 7.6 Ha of C2 and C3 land at a rate per Ha of $40,000. His analysed land value of $5,000,000 for the R1 zoned land reflects $581,395 per Ha. 11. This land is significantly inferior to the Development Land, due to environmental issues, but is located in a superior waterfront reserve location near Yamba. In the JER, Mr Feeney made references to low-density residential lot sales which reflected Gulmarrad sale prices being between 31% and 39% lower than those in Yamba, opining the premium for Yamba was over 50% compared to Gulmarrad. Mr Arneil applied a 25% reduction for the location. There is, however, no evidence on the difference in value of MHE sites or a comparison of the returns for the two locations. Mr Arneil provided only 5% adjustment for topography and shape, despite the sale land being completely flood prone. He considered the development potential to be the same despite the environmental issues. 12. The site was not inspected on the view. There is no information on the amount of fill required to develop the property, the likely cost of filling the property or if filling of the property would be permitted, especially given half the land is zoned for conservation. The sale is located a considerable distance from the Development Land, in a very different locality, was purchased by an adjoining owner and faces obstacles to development with unknown associated costs. The adjoining sale identified by Mr Feeney has not been included in the analysis and no enquiries appear to have been made of the purchaser or other parties associated with the sale. There also does not appear to have been enquiries made of council in regard to the development application and its likelihood of success. 13. Based on the above, I considered the investigation and analysis of Mr Arneil to be insufficient, and the sale does not assist the court in determining the land value of the Development Land. Valuation of the Development Land based on the existing 2004 approval (s6A(2)). 1. I have considered the following two sales to determine the land value of the Development Land based on the 2004 approval, one being the only sale relied upon by Mr Arneil and the other for the reasons detailed above. 1. Lot 131 Parkland Drive, Gulmarrad, sold 12 October 2022 (Quarry sale). 2. 70 Rosella Road Gulmarrad, sold 22 July 2020 (Rosella sale). 3. Both sales were inspected during the site view tour. The Quarry Sale 1. The Quarry sale was purchased with a contract date of 12 October 2022 for $1,705,000. It had a site area of 18.09 Ha. 2. In his report in chief Mr Feeney opined the quarry sale required site regeneration, additional associated road costs, separate negotiations with neighbours for road access (subject to council approval), and a development application would need to consider the Biodiversity and Conservation Act 2016. He identified the presence of large boulders on the site close to the surface, no top soil and three retention ponds that require filling. 3. At page 15 of his report in chief he provided detail of the conditions of sale based on his conversations with Mr Stephen Hawke, having questioned him on the sale of his former property, Lot 131 at Gulmarrad. According to Mr Feeney, Mr Hawke advised the purchaser had considered 14 to 17 lots may be achievable on the site, more than a provided concept plan detailing a possible 11 lot subdivision. He advised further that the agreed purchase price was conditional on the purchaser paying $1,425,000 on settlement with the remainder held in trust to be released to either vendor or purchaser after 18 months. If the purchaser is successful in achieving subdivision approval of only 11 lots, the balance of the money held in trust will be returned to the purchaser. If the purchaser can receive council approval for 14 or more lots, than the purchaser will release, to the vendor, the balance of the $280,000 or a proportion thereof, depending on the number of lots approved by council. If the purchaser does not lodge a DA, then the balance of the money is to be released to the purchaser. No evidence was tendered to support the conditions of the contract. No development application has been lodged, to date, so it is likely the vendor will receive the full $1,705,000 [4] . 4. Mr Feeney made enquiries of council and was advised compliance with the requirements of the Rural Fire Service (RFS) would be needed to obtain approval and that where nature reserves are located, it was usual for an asset protection zone to adjoin the nature reserve. He opined the RFS documents are very detailed and when combined with councils' no net loss of native land policy, the endangered emu hot spot locality and the extensive heavily timbered nature reserve on the sale property, the subdivision potential would be restricted. It was his view that a prudent owner would estimate the subdivision potential to be five lots. He estimated that, even if 8 lots could be achieved, the costs would most likely equal $550,000 per lot making any development unviable. [5] 5. Mr Feeney considered the subdivision of only five lots was possible on this site and deduced an undeveloped lot value of $340,000 based on that number. He opined this reflected a 41% discount per potential englobo lot compared to a saleable developed lot value of $575,000. Mr Feeney considered this sale to be out of line with other sales evidence and development of the site, based on the sale price, would not be viable. He opined a subdivision application for the land could result in biodiversity credits exceeding $400,000 being payable [6] . He considered this to be an out of line sale. 6. In oral evidence, Mr Feeney revised his estimate of biodiversity contributions to be as high as $3,000,000 based on enquires made of the project manager for the site. He said the project manager also advised that after two years, he was still uncertain if development was viable and will not know until a development application is approved and that they were currently looking at legal proceedings against the advice they received. 7. Mr Arneil adopted the Quarry sale, in his report in chief, as Arneil sale 7. He described it as: An irregular shaped low lying heavily timbered allotment. The land has a gentle fall to the central section then rises gently toward the north/northeast which is slightly undulating. The land has been part cleared in the northeastern corner approximately 3.5ha, which comprises three large waterholes which appear to be a former quarry. The land is dissected by a natural watercourse that runs in a north/south direction and unformed road reserves. Noted as being Bushfire prone (vegetation buffer) along the eastern boundary, approximately 4.4ha (24%) [7] . 1. He considered the sale inferior to the Development Land in terms of location, services, developable land area, topography/shape, access and development potential and approval. He calculated a value for the undevelopable part of the land at $464,000, based on 11.6 Ha at $40,000 per Ha. He deducted that from the sale price to determine a land value for the remaining developable land of $1,241,000 reflecting $191,217 per Ha for the remaining 6.49Ha of developable land. He adopted this as the value of R5 developable land based on the 11 lot concept plan mentioned above. He did not use this sale to arrive at a land value for the Development Land based on an R5 Large Lot Residential use. It was, instead, adjusted to the Development Land based on R1 General Residential [8] . 2. In the JER he briefly analysed the sale based on the concept plan for 11 lots described above. Comparing it to the Development Land, he adopted 30 lots at $160,000 equalling $4,800,000. He explained this reflected a rate of $155,000 per lot based on the 11 lot concept plan and an upward adjustment of $5,000 to reflect the sale being inferior to the Development Land. As a check method, he adopted one third of a gross realisation of $14,250,000 for the Development Land, to arrive at a land value of $4,750,000. I note he based analysis on the full sale price without deduction of the value he apportioned to the undevelopable land [9] . 3. The Respondent submitted they did not contend that the Quarry Sale can be usefully adjusted and the only reason the Respondent uses the sale is to demonstrate a floor, with the sale achieving $1,705,000 for some 7 Ha of low lying land, bushfire prone and requiring earthworks regarding the three dams, and with no bushfire access, yet achieving a sum more than the sum the Applicant contends on a 6A(1) basis ($1,500,000) [10] for the Subject Land and close to the sum the Applicant contends on a s 6A(2) basis ($1,810,000) [11] , despite the Subject Land having some 12.92 Ha of elevated developable land with good access and R1 zoning allowing development of many smaller parcels than the sales' R5 zoning would permit. Finding on the Quarry Sale 1. I find Mr Arneils' analysis and application of this sale to be unreliable for determining the value of the Development Land on the basis of an R5 Large Lot Residential use alone. Mr Feeney made extensive investigations which I have not seen replicated in the evidence of Mr Arneil. The viability of developing this site for a large lot subdivision has not been proven to date. The costs appear to be considerable and the lot yield uncertain. 2. In the comparison made in the JER, Mr Arneil did not apply adjustments to the sale compared to the Subject land, which is far superior and assumed to have approval. He instead made a $5,000 adjustment per lot to reflect the superiority of the Development Land, reflecting a positive adjustment of 3% overall. The 3% adjustment is inconsistent with the table of adjustments [12] in his report in chief. In that table, when comparing the sale to the Development Land, he applied a 40% adjustment for topography alone. 3. If Mr Arneil applied similar adjustments, to those in his table in the JER, when making comparison to the Development Land based on the 2004 approval, and then added $3,000,000 in biodiversity contributions, he would arrive at $6,580,000. Dividing that by his adopted 11 lots, would result in $598,000 per lot. Applying $598,000 per lot to 30 lots would result in a land value for the Development Land of $17,940,000, well above the gross realisation of $14,250,000 adopted in his check method. 4. The sale price for the Quarry land is also a multiplier of 8.4 times the sale price achieved 8 years earlier which seems extraordinary despite the remedial work apparently undertaken after the earlier sale, but not obvious on inspection. 5. I agree with the Applicant that this sale does not assist the court. I also do not consider it a reliable sale for comparison to the Development Land on the basis of the R1 General Residential zone for the same reasons. 6. However, I also agree with the Respondent that the sale represents a floor which the land value of the Subject land must be higher than. I also consider the sale illustrates there was still an appetite for development land around the time of the valuation date. The Rosella Sale 1. The Rosella sale was purchased with a contract date of 22 July 2020 for $742,000. It had a site area of 8.08 Ha. The site sold with development approval for 16 lots. Mr Feeney deduced an added value of the development approval of $182,000. Deducting this from the sale price, Mr Feeney deduced an undeveloped lot value of $35,000. Based on this he determined an 83% discount per potential englobo lot compared to a saleable developed lot value of $205,000. 2. Mr Feeney also determined a multiplier based on the sale. Dividing the analysed sale price by the saleable developed lot value of $205,000, he determined the analysed sale price was equivalent to purchasing 2.73 residentially fully developed 4,000 square metre sites. Mr Feeney also undertook this analysis for the 2016 Mahogany Drive sale, which I have already identified as too old to be used as a comparable. That analysis resulted in a multiplier of 6.17 for a 35 lot subdivision. 3. Mr Arneil did not engage with the Rosella sale. 4. In closing submissions, Ms Pearman opined: 58. Mr Feeney analyses his Sale 5 (70 Rosella Road, Gulmarrad) and makes a positive adjustment in favour of the sale due to it having a development approval by deducting the value of the DA. This approach is flawed where s.6A(2) is relied upon in respect of a current use. 59. Molesworth AJ in Olefines said [13] : "The acceptance of the "can continue" basis upon which this exercise proceeds, means that the continuance of the use does not trigger any of the normal requirements to obtain the requisite approvals via a normal development application process, rather it is to be assumed that all approvals are in place." 60. This finding was not overturned on appeal. Therefore when utilising s 6A(2) it is assumed that the Subject Land already has all the relevant approvals in place, including any DA approvals, in order to continue the current use. 61. There is no basis for a negative adjustment where comparable sales also have the benefit of a development approval. Finding on the Rosella Sale 1. I agree with the opinion of the respondent in regard to the Rosella sale. If valuing the land as an englobo parcel based on the assumptions in s 6A(2) of the Valuation Act, the land must be valued assuming all approvals are in place and subdivision can commence from the valuation date of 1 July 2022. Therefore, Mr Feeney was in error when deducting the added value of the development approval for the purchase price of the Rosella sale. 2. Mr Feeneys' analysis should, accordingly, be adjusted by deducing an undeveloped lot value based on the full purchase price of $742,000. This results in an undeveloped lot value of $46,375. By adopting this value, a 77% discount per potential englobo lot results compared to a saleable developed lot value of $205,000. Additional Sales zoned R5 Large Lot Residential (s6A(2)) 1. Mr Feeney also provided a lengthy list of sales of large lot residential R5 sales dating from January 2018 to July 2023. He provided these to illustrate a high volume of sales of vacant lots in 2020 and 2021. He opined they identified: 1. a dramatic rise and fall in selling prices of lots in the locality. 2. a dramatic slowdown in the number of sales from the beginning of 2022. 3. the common lack of premium paid for a block which is larger than 4,000 square metres and 4. the premium paid for a lot on the high side of the road compared to a lot on the low side of the road. 5. He opined that a prudent purchaser of an englobo parcel would consider such data. 1. My review of the data confirms there appeared to be a significant rise in the market value of large lot residential sites between July 2020 and July 2022, approaching a near tripling in value and coinciding with a significant number of sales, followed by a modest downturn in 2023. 2. The premium for a larger site and block on the high side of the road cannot be determined from the data due to a lack of description or direct comparison between sites. Finding. 1. In the absence of an acceptable analysed and adjusted sale provided in evidence by the Respondent, I must rely on the Rosella Sale as the only evidence to determine the land value of the Subject Land based on the 2004 Approval. 2. Mr Feeney first adopted the value of 3.8 fully developed lots at $490,000 per lot, based on the sale of 14 Lorikeet Road Gulmarrad described as lot 17 in Deposited Plan 1064126, to arrive at a land value of $1,862,000. 14 Lorikeet Road was one of the bulk sales relied upon by Mr Feeney. Mr Feeney did not make a comparison between that sale and those that would result from subdivision of the Development Land. The sale was not inspected during the view. 3. As a second approach, Mr Feeney discounted the fully developed lot value of $490,000, based on the sale of 14 Lorikeet Road, by 88% to arrive at $58,800 per englobo lot. He multiplied this by 30 lots, arriving at a land value for the whole of the Subject land, of $1,764,000. 4. Based on the above, Mr Feeney determined the land value, based on the R5 Large Lot Residential use, to be $1,810,000 for the valuing year 1 July 2022. 5. Mr Feeney's first valuation method of arriving at a multiplier by dividing the value of a fully developed lot into the purchase price of the whole undeveloped englobo site, then applying it to value the Development Land is not accepted. The method is based on using an average sale price rather than a comparison of developed site sales to those which would result from the subdivision of the land. Mr Feeney also did not make an adequate adjustment based on the number of lots achievable, which should have altered his multiplier. By not making that adjustment, the resulting land value is artificially lowered. 6. Mr Feeneys' second method reflects a hybrid of the direct comparison approach, with adjustments time, location access and services reflected in his average developed lot value, and the hypothetical model with the deductions for costs wrapped into a single discount factor. It is still based on an averaging of sales and would normally be given the appropriate weight on that basis. While his analysis is unconventional, it is preferred to reliance on the Quarry Sale, for the reasons set out above, to determine the land value of the Development Land and his analysis is accepted. 7. The analysis of Mr Feeney must, however, be adjusted to reflect the full sale price with no deduction for development approval. Discounting the fully developed lot value of $490,000 by the more appropriate 77%, results in an englobo lot value of $112,700. Multiplying $112,700 by 30 lots results in a deduced land value of $3,381,000. 8. The analysis of Mr Feeney included the Home Site. To determine the land value of the Development Land alone, based on the use of R5 Large Lot Residential, I will adopt 29 lots at $112,700 arriving at a land value of $3,268,300. Valuation of the Development Land based on planning controls at the DVM (s6A(1)) Comparable sales. 1. I consider the following two sales to be the only ones that provide assistance in determining the land value of the Development Land based on the planning controls alone (s6A(1)) 1. 1 Rannoch Avenue, Maclean sold 17 August 2021 (Rannoch sale). 2. Lot 2 Brooms Head Road, Gulmarrad sold 7 October 2021 (First MHE sale). 3. Both sales were inspected during the site view tour. Both sales were purchased for development which would be permissible on the Development Land. The First MHE sale 1. The First MHE sale was not analysed and adjusted by either valuer. Mr Arneil analysed and adjusted the Second MHE sale while Mr Feeney did not engage with either sale. For the reasons set out above I consider the First MHE sale to be the appropriate, and only, sale available to the court to analyse and adjust to determine the land value of the Development Land based on the zoning applicable at the DVM. 2. The land was purchased with a contract date of 7 October 2021 for $7,370,000. It was zoned R1 General Residential and had an area of 19.2 Ha. It is located in the URA immediately adjoining the Development Land and is also referred to above as the MHE land. The land is an irregular shaped gently undulating allotment comprising of a slightly elevated ridge situated above Sheehans Lane with a slight to gentle fall to the east and north and is identified as 100% acid sulfate soils. 3. DA 2019/0423 for the construction of a 250 dwelling manufactured home estate was lodged on 12 August 2019 by the purchaser of the land and was approved 22 June 2021. Various modifications to the conditions of the DA have been lodged since approval. Consent requires contributions of $1,162,050 and payment of Biodiversity Credits amounting to $2,920,170.54. 4. The sale from the Applicant to the purchaser in the sale contract was conditional on the approval of DA2019/0423. The option agreement between the parties indemnified the Applicant for any costs, expenses and liabilities incurred as a result of the application and the requirements of the council or any other competent authority in relation to the development application [14] . Therefore, the purchaser incurred all costs of the development consent, but avoided any risk associated with approval or holding costs during the time taken to achieve approval. 5. Mr Feeney did not analyse either MHE sale in his report in chief. He did make reference to the Second MHE sale, opining the sale reflected a different market to that of the Development Land and the "sale was not a comparable usage to the Subject property". 6. Mr Feeney again referenced the Second MHE sale in the joint expert report. He detailed the conditions of approval for development requiring "the extension of the sewerage about 1.8 km to the eastern boundary estimated to cost about $2million, the upgrading of the nearby road intersection estimated to cost about $1million and the payment credits Biodiversity equating to $2.92million". 7. He opined that proceeding with the development approval for a 250 dwelling modular home estate would lead to the purchaser incurring "additional development costs of about $6,000,000". He further said "a valuer has to be cautious when comparing sales having different highest and best uses". 8. In oral evidence, Mr Feeney primarily repeated he considered the Second MHE Sale to be out of line with his sale 10, 90 Carrs Drive. Mr Feeney did not undertake an analysis of his Sale 10 to determine a land value for the Development Land. 9. Mr Arneil, in his report in chief, analysed the Second MHE sale as supporting $644,531 per Ha for DA approved R1 zoned land. In comparing this land to the Development Land, he made negative adjustments of 10% for location and services, 5% for access and 25% for the development approval. He made a positive adjustment of 5% for developable area for a total adjustment of negative 35%, with a per Ha rate of $418,945. The Rannoch sale 1. The Rannoch sale was the only sale relied upon by Mr Feeney to determine the land value of the Development Land as zoned. Mr Arneil also relied on this sale. Analysis of this sale can only reflect the value of the land based on the underlying R2 Low Density Residential use. It would, to use Ms Pearmans' words "demonstrate a floor" to the land value as it reflects a lessor development potential than that of land zoned R1 General Residential. 2. The land was purchased with a contract date of 17 August 2021 for $7,150,000. The land had an area of 13.75 Ha. Approximately 13.25 Ha was zoned R2 Low Density Residential, approximately 4,600 square metres was zoned R3 Medium Density Residential with the approximate 380 square metre remainder zoned C3 Environmental Management. All permitted development in the R2 and R3 zones is also permissible in the R1 zone. It is located at the northern end of Rannoch Avenue within the McLean township. The land is an irregular shaped, low lying but mostly level and partly filled, allotment requiring further fill. The land is 100% flood prone and 100% acid sulphate. All services are available to the land. 3. Mr Feeney identified the land was sold with 6 separate development approvals providing for 150 lots in subdivision plus 22 strata residential flats. 4. Mr Arneil identified the land to have approval for 142 single residential lots, 7 duplex lots and one medium density site. 5. Mr Feeney, in his report in chief, opined the sale appeared to be purchased by an overanxious purchaser during a boom market who did not act prudently by allowing for all risks of developing and the possibility of a slowing market and should not be relied upon for market evidence as of 1st July 2022. In oral evidence, Mr Feeney, in the joint expert report, opined this was the best sale for determining the land value of the Subject Land on the basis of s 6A(1). In oral evidence he identified it as his best sale. 6. Mr Feeney adjusted the sale to the valuation date by deducting $650,000 (-9%). He further deducted $1,500,000 (-21%) for the existing development approval. He then deducts costs he believes will be incurred to develop the Subject Land including $2,000,000 for biodiversity payments, $1,000,000 toward extending the sewer, and $500,000 contribution to the intersection upgrade. His deductions result in an adjusted land value of $1,500,000. He further opines there is a 10% selling difference between McLean and Gulmarrad resulting in an adjusted land value of $1,250,000. Based on this he adopted a land value of $1,250,000 for the Development Land reflecting $97,000 per Ha. 7. Mr Arneil did not change the purchase price in analysing the sale. He made a negative 15% adjustment for location and services (-$1,072,500), no adjustment for size, a positive adjustment of 10% for topography and shape ($715,000), no adjustment for access and a negative adjustment of 20% for the development approval (-$1,430,000). Mr Aneils' total adjustment was negative 25% (-$1,787,500). From this, he derives an adjusted land value for the Development Land of $390,000 per Ha of site. For the purpose of valuing the Development Land, he applied a rate of $400,000 per Ha of site. Appropriate development cost adjustments for the Development Land. 1. Mr Feeney raised the costs that a potential developer may encounter specific to the Development Land if it was purchased based on its zoning of R1 General Residential. The costs identified were approximately $3,000,000 for infrastructure and $2,000,000 for biodiversity credits totalling $5,000,000. 1. The extension of the sewer from councils' existing sewer main at Diamond Head Road with the manhole identified as being 3 kilometres away estimated at $2,000,000. 2. The upgrading of the intersection of Brooms Head Road and Sheehans' Lane, estimated at $1,000,000 by council, to be paid by the developers of the URA. 3. The payment of biodiversity credits estimated by Mr Feeney to be $2,000,000. The estimate was based on a pro rata of the approximate $2,900,000 in biodiversity credits determined for the adjoining MHE land. Mr Arneil did not make any adjustment for these costs in determining the land value based on its zoning of R1 General Residential. Cost to extend the sewer. 1. Mr Feeney, in his report in chief, cites "Cl 7.8 Essential Services" (incorrectly referred to as Cl 7.10) requiring Council to be satisfied that any infrastructure services essential to a proposed development are available or be made available. 2. Mr Feeney, in the JER, opines that at the date of valuation, the sewer mains were not extended, and it was unknown when they would be extended. Most importantly, it is unknown when the adjoining owner of the MHE land will create a sewer easement and when they will dedicate that easement to council. In adjusting the Rannoch sale, he estimated the cost to be between $2,000,000 and $3,000,000 and allowed $1,000,000 as a shared cost when adjusting the sale to the Development Land 3. In oral evidence, Mr Feeney agreed that, if the sewer were extended from Diamond Head Road and easements over the sewer were dedicated to council, the cost of sewer provision to the Development Land would be minimal. He also agreed a prudent purchaser would contact the owner of the adjoining MHE land and make enquiries of the progress of works and would have asked the relevant questions so they could have full knowledge of what was going to happen to the sewer and when it would be available. 4. Mr Arneil, in his report in chief, quotes the ordinary council meeting held 22 June 2021 that concluded: 5. "The sewer main is to extend from Brooms Head Road to benefit and service Lot 29 DP1242738 generally in accordance with the services concept plan Drawing 0004 Rev. B 2.12.20. An easement for sewerage purposes must be created over any sewer mains within the development that are to be dedicated to Council."Mr Arneil relied on aerial photos of the MHE land to determine some work had commenced on the land at the valuation date. 6. The Applicant submitted that the parties agreed that to develop the Development Land, the land is required to be connected to the sewer. (over $2m). It was further submitted "The Respondent, on the basis of a third party completing about $3 million of civil works at an unknown future date and ignoring the fact that the Subject property has to pay about $2 million in Biodiversity credits is adopting false assumptions, to create equivalence of his development sales to the Subject property." The cost to extend the sewer and dedicate easement was estimated at $2,150,000. 7. It was further submitted that to base an agreed purchase price between a prudent seller and purchaser, on a third party extending a sewer line over 2 kilometres and connecting the sewer to the Subject property before a construction certificate is issued, is not the actions of a prudent purchaser and seller. 8. In December 2024, the Subject property does not have a sewer line extended to its boundary and does not have a sewerage easement benefiting the title deed of the Subject property. 9. The Respondent submitted the Subject is arguably well located as part of the URA to be developed involving the Development Land and the two lots to the north. The Development Land is the southernmost parcel of the three and arguably the last to be developed. This has significant benefits in terms of development and cost of infrastructure. 10. The Respondent made further submissions specific to the sewer; 73. Condition A2.10 [15] of the DA [16] required the developer to make satisfactory arrangements with other property developers to meet the costs of the provision of utility services, relevantly the sewer. Further, the MHE land had a condition of consent requiring it to have an easement bringing the sewer to the Subject Land [17] . 74. The Applicant says nothing in the reply about the costs of a sewer but it submits an allowance of $2,000,000 for the cost of the sewer should be factored into development costs for the Development Land. 75. The MHE land immediately to the north has now completed construction of the sewer to the boundary of the Applicant's land, or at worst 50m off the boundary as evidenced by the developed lots on the MHE. 76. Relevantly the Applicant was the owner of the land at the time of sale [18] . 77. At issue is what the hypothetical parties would have thought was the likelihood, as at the DVM, of the sewer being constructed to the boundary of the Applicant's land. 78. The Respondent says the MHE was approved in 2019 and as at the DVM had commenced works. The aerial dated 11 September 2022, one month prior to the DVM, shows trucks on the MHE land at the Sheehans Lane access point to that land. 79. As none of the 250 lots approved were capable of being created until the sewer was in place, the usual procedure being that the developers do sewer works prior to commencing any lot works [19] , the Respondent submits the hypothetical parties would have considered that the sewer would likely have been constructed by the MHE developer to the Subject Land. 80. Further the hypothetical parties would also have been aware at the DVM that the land further north, the pub land, was seeking a development consent for infrastructure including shops, a pub, and multiple residential lots. The first notification was in 2021. Ultimately the Council approved the infrastructure including the pub, shops and 86 residential lots in 2023. 1. The Respondent further submitted that, whilst under s 6A(1), the Subject land must be considered devoid of improvements, everything else in the real world is in place [20] . Therefore, the sewer works, and surrounding development are matters of which a hypothetical purchaser would be aware. At the DVM the hypothetical parties would also have thought it more likely than not that the sewer would be brought to the Subject land by the MHE developer. Finding on sewer extension cost 1. Cl 7.8 of the LEP uses the wording "Development consent must not be granted to development unless the consent authority is satisfied that any of the following services that are essential for the proposed development are available or that adequate arrangements have been made to make them available when required" A distinction between those words and Mr Feeneys' evidence is that the requirement is for infrastructure to be available or adequate arrangements are made to make them available when required. It is to be assumed that the sewer works and dedication of an easement to council would be required prior to an occupation certificate being issued for any dwellings on the site. 2. On the site view, when inspecting the MHE land, a sewer pit was identified to exist not too far from the Development Land at that point in time. The development approval for the MHE land was conditional on the extension of the sewer to the benefit of the Development Land and an easement over the sewer lines dedicated to council. The subdivision works certificate CC2022/0452 [21] , endorsed by council on 10 February 2023, referenced drawing set No 21-245 both undated (sheet 1) and dated July 2022 (sheets 2, 4, 5, 6, 7, 8, 9, and 10), was approved in part for pressure sewer rising main works. The application date was not provided but the document identifies the owner of the MHE land was proceeding with planning and construction of the rising sewer main in accordance with the conditions of consent for the development of the MHE land at the valuation date. 3. A prudent purchaser making the appropriate enquiries would be aware of the foregoing. They would also make enquiries of council and the adjoining developer as to the progress of works to extend the sewer to the Development Land. I am satisfied that such a developer would expect sewer being available to the property, through the easement dedicated to council, by the time they had received approval for their own development and more relevantly when the services were required for that development. Further, the dedication of the easement to council would infer no requirement to contribute to the cost of constructing the rising sewer main once complete. It was a condition of consent for the MHE land that "the sewer main is to extend from Brooms Head Road to benefit Lot 29 DP1242738 generally in accordance with the services concept plan Drawing 0004 Rev B 2.12.20. An easement for sewerage purposes must be created over any sewer mains within the development that are to be dedicated to Council" [22] . It is noted that the minutes of the Council meeting referenced a proposal put forward by the developer of the MHE for a shared funding arrangement for the provision of the sewer similar to that proposed for the road intersection [23] , detailed below. That proposal apportions a minimal contribution by the Development Land. 4. I agree with the Respondents'' submission that "at the DVM the hypothetical parties would also have thought it more likely than not that the sewer would be brought to the Subject land by the MHE developer". I also agree that any cost to connect to that sewer would be minimal. 5. I see no reason to deduct additional costs for sewer provision to the Development Land when make comparison to the sales evidence. Cost to upgrade of the intersection 1. Mr Feeney, in the JER, opined that despite three years since the development application (MHE land), it is still unknown when and who will upgrade the intersection. He allowed $500,000, or half of the estimated cost, as the Development Lands' share of the upgrade. 2. In oral evidence he conceded he did not expect the Southern land of the URA to be developed first and that if it was not the first in line to be developed it would be a possibility it would not incur the $1,000,000 in costs for the intersection upgrade [24] . He also advised that from his reading of the Council minutes, whoever develops the land first will have to provide the intersection [25] . 3. Mr Arneil, in the JER, opined that, at the DVM, it was known that the intersection would likely be upgraded by the developer of the MHE land. He based this on the consent to develop the MHE land being conditional on the upgrade of the intersection. He referenced the minutes of the Council meeting [26] in respect to the intersection upgrade, where the proposition of a cost split between the three lot owners of the URA was proposed as part of the development application for the MHE land. The apportionment was 53% for the northern land, 38% for the middle land and 9% for the southern land (the Development Land). The Council did not support the breakup for various reasons and made the following statement. "It is noted that all adjoining developments in the URA or other developments in the area that significantly increase the traffic load on the intersection will also be conditioned to provide the full intersection upgrade if it has not already been completed. It is up to the developers to negotiate a shared cost arrangement / agreement if they do not want to pay for the whole of the intersection upgrade as Council has no mechanism to apportion the cost. The upgrade of the intersection has been required as a condition of consent." 1. The Applicant made the same submissions as those made for the cost of connecting the sewer to the Development Land. 2. The Respondent cited the oral evidence of Mr Feeney and opined that while the Council required the developers of the three parcels in the URA to work out the cost apportionment for their selves, the hypothetical parties would consider it unlikely that the Subject Land would incur costs by way of contribution to the road intersection upgrade. Consequently, the court would make no allowance for the road upgrade. Finding on intersection upgrade cost 1. I prefer the view of the Respondent. It is likely the whole of the cost of the intersection upgrade would be borne by the first developer within the URA. At best, the developer of the Pub Land may provide a contribution as their development application was under consideration. The proposed apportionment of cost to the southern land initially proposed by the MHE developer was minimal. As the southern land would be the last to be developed, it is unlikely to contribute to the intersection upgrade. Therefore, no allowance is made for the upgrade of the intersection. Cost of Biodiversity credits. 1. Mr Feeney, in his report in chief and the JER, opined that the developer of the Development Land, if an application were made to develop the land in accordance with the R1 zone, would be required to purchase biodiversity credits at a cost of approximately $2,000,000. 2. In oral evidence he referenced a conversation with the council senior statutory planner where he was advised it would be reasonable to expect that a pro rata on area basis of the area of the MHE land would be applied to the Development Land. He further advised the council officer indicated the cost would be in the vicinity of $2,000,000. 3. Mr Arneil spoke with the same council officer. He confirmed that the Development Land would be subject to some buyer credits, but nowhere near the credits required for the adjoining land. He also advised that, until a DA is lodged, and all the reports are done, in front of them, there is no way anyone could make any form of judgement and put a figure on it. He further advised that, in his view, given that the land had been cleared it wouldn't be as high as the adjoining land. Finding on biodiversity costs 1. Attempting to determine the likely cost of biodiversity credits without lodging a DA with a BDAR and other required reports is a task fraught with peril implying significant risks. The respondent did include a Flora and Fauna assessment for the Development Land, but it predates the Biodiversity Conservation Act and provides me little comfort. 2. I am of the view that where the Development Land is compared to the First MHE sale, a purchaser would be satisfied the risk is similar and no adjustment is required. It would be reasonable to apply an adjustment to the Rannoch sale as neither valuer has identified a requirement for the purchaser to purchase biodiversity credits. With nothing more to go on than the reported conversation of the valuers with the same council officer, I will adopt the $2,000,000 as a pro rata of the costs from the MHE land, reflecting the risk that a developer would consider appropriate if making similar enquiries. This would be deducted in analysing the Rannoch Sale. Appropriate adjustment for market movement. 1. In Oral evidence, the valuers agreed that the market for development sites peaked in December 2021 while the market for R5 large lot residential sites peaked in July 2022. Mr Feeney opined the development site market was in "freefall" from December 2021 due to confidence being eroded by interest rate increases and falling sales volumes. Mr Arneil opined the development site market continued to rise till December 2021 and fell in the subsequent months, till the valuation date, to the same level as it was 12 months prior. 2. Neither valuer provided evidence specific to the market movement of development sites during the period. Mr Feeney provided a large number of unanalysed sales of large residential lots to support his opinion of falling sales volumes for those lots. Finding on adjustment for market movement 1. Arneil sale 7, Parkland Drive Gulmarrad, contracted in October 2022 and settled in March 2023. It is a difficult site with considerable environmental issues and a yet to be determined lot yield. The $1,705,000 purchase price was considered too high by Mr Feeney. It was, however, purchased by an experienced property developer. It would suggest there was still an appetite for development sites, if available. Therefore, I prefer the view of Mr Arneil that the market at 1 July 2022 was similar to that of 1 July 2021. Sale adjustments and application to Development Land. 1. In his report in chief, Mr Feeney did not consider the land value of the Development Land based on the zoning of R1 General Residential in place on both the valuation date and the DVM. 2. In the JER, Mr Feeney adjusted the Rannoch sale as detailed above, resulting in a land value of $1,250,000 and a per Ha rate of $97,000 for the Development Land . His final conclusion in the JER, determined a land value on a 6A(1) basis as $1,292,000 for the Development Land, reflecting $100,000 per Ha. 3. Mr Arneil, in his report in chief, relied on the traditional method of direct comparison. He analysed four comparable sales to arrive at a land value for each, as at the valuation date. He then adjusted those sales in comparison to the Development Land to arrive at a rate of $400,000 per Ha for the Development Land. He made no adjustment for the costs used as adjustments by Mr Feeney. His adjustments are set out in the following table. 4. In submissions, Ms Chapman relied on Holcim [27] and Tomago [28] , opining the respondent offered no sales evidence to support any of the adjustments and did not provide a sufficiently detailed and transparent explanation for the reasoning process for each adjustment. 5. In submissions, Ms Pearman relied on Perisher Blue [29] , opining sales of land with sufficiently similar characteristics are to be identified and adjustments made to render the sales sufficiently comparable to inform a determination of the unimproved value of the Subject land. She noted that Mr Arneil made a number of explicit and commonly adopted adjustments to his sales while Mr Feeney did not, excepting adjustments in the JER to the Respondents Homesite sales. Finding on sales adjustments and land value of Development Land 1. Mr Arneil relied on his experience as a valuer in making his adjustments. He did not provide evidence to support his adjustments but did provide a rationale in cross examination. His adjustments were made as percentages under headings commonly used before the Court. 2. Mr Feeney did not make percentage adjustments under those headings. He instead deducted costs specific to the Development Land from the sale price of the Rannoch Sale after adjusting the sale price for time. 3. It is my view that both valuers have ignored important facts in arriving at their valuations based on the permitted use of the land. In reports in chief and the JER, neither valuer made a comparison between the First MHE Sale and the Development Land. Mr Feeney did not make adjustments to the development site sales under the headings used by Mr Arneil and Mr Arneil did not consider the costs that may be encountered in developing the land compared to the comparable sales, notably the payment of biodiversity credits. 4. In analysing and adjusting the Rannoch Sale, I do not accept Mr Feeneys' adjustment for time. I accept Mr Arneils -15% adjustment for location and services and his positive 10% adjustment for topography and shape and negative 20% for development approval, resulting in total adjustments of -25%. This results in a land value of $5,362,500. From this, I deduct $2,000,000 for biodiversity credits likely payable by the developer of the Development Land. This results in an adjusted land value of $3,362,500 or $244,545 per Ha. Applied to the Subject, it reflects a land value of $3,159,521 if developed based on an R2 Low Density Residential use. This would place a floor under the land value of the Development Land, being the minimum development achievable. 5. In analysing and adjusting the First MHE Sale, I first adjust the sale by $3,000,000 reflecting the purchase price was negotiated including the knowledge that construction of the rising sewer main, provision of sewer connection to the Development Land and upgrading the road intersection were conditions of consent. I make no adjustment for time, resulting in an analysed land value of $10,370,000. I accept Mr Arneils -10% adjustment for location and services, +5% for development land area, 0% for topography and shape and -5% for access. 6. His adjustment for development consent was based on the full value of the consent being paid by the purchaser of the Second MHE Sale. The First MHE Sale was conditional on consent with the price paid negotiated based on the conditions of consent. The purchaser bore the costs of obtaining consent but paid no holding costs and the sale price reflected no risk. I will reduce Mr Arniels' -25% adjustment for development approval to -20%, reflecting holding costs and risk associated with obtaining development approval, but not the costs of obtaining approval. 7. A total adjustment of -30% results in an adjusted land value of $7,259,000 or $378,073 per Ha. I make no deductions for biodiversity credits as this was a cost that also informed the purchase price of the adjoining MHE land. Multiplied by 12.92 Ha I arrive at a land value of $4,884,703 for the Development Land based on its R1 Residential zone. Application of s 6A of the Valuation Act Applicants' Submissions 1. The Applicant submitted that the highest and best use of the land is determined under s 6A(2) of the Valuation Act. This was based on the continuing use as a subdivision site, based on the 2004 approval, which allowed residential subdivision development without the current development requirements of complying with the 2017 Biodiversity offset legislation [30] , upgrading of a nearby road intersection and the provision of town sewerage. The cost savings of the existing DA, when compared to the analysis of the sales and the historical demand for vacant land, results in a development with a higher profit margin having a lower risk factor. 2. The land value is best determined based upon the potential for the land to be used for a form of development that will generate the highest return on investment. This is by the continuing use of the existing 2004 approval. Applicants evidence 1. Mr Feeney, in his report in chief, opined the highest and best use of the Subject land was determined with a land value based on s 6A(2) of the Valuation Act as adopted in the case of Olefines Pty Ltd v Valuer General. [31] He considered the 2004 approval and an approved construction certificate to be improvements that could be continued. He then undertook his valuation based on finishing the development permitted by the 2004 approval. 2. He did not undertake a valuation of the land based on existing planning controls to determine which would be a higher value. He relied on the avoidance of the costs described above, the untested demand for small lots in the locality, the average historical demand for small residential lots near Mclean and the existing consent avoiding the requirements of current planning controls to arrive at his conclusion. In the JER he did make a comparison between the Subject land and the R2 Low Density Residential sale in Mclean to support his opinion. 3. In oral evidence, Mr Feeney confirmed he relied on the words "for any purpose for which it was being used, or for which it could be used [32] ", to support his contention that s 6A(2) is the relevant section applying to the land. He opined that because the 2004 approval, issued in 2005 for 43 lots, had 13 lots already subdivided from the Subject Land, that the commencement of the development resulted in an existing use of the 2004 approval as well as the continuing use of the approval from this point to the date of the valuation and onwards. Respondents' submissions 1. The respondent submitted the s 6A(2) assumptions are not material and Mr Feeney is confusing an existing consent with an existing use right. The s 6A(2) assumptions permit the continuation of an existing use where the current use is a prohibited use under the relevant planning scheme, or where the current use is greater than what could be achieved under the planning controls as at the DVM. 2. Relevantly, the current zoning of the Development Land, R1 General Residential, allows a greater density than that approved under the development approval. Moreover, as at the valuation date, no development had occurred on the Development Land pursuant to the development consent and it remained a vacant paddock. 3. Therefore, while the s 6A(2) assumptions are required to be made, the assumptions are not determinative or material in these proceedings [33] . 4. On the basis there is no existing use to be recognised, Mr Arneil values the land as he must do as vacant land, (Toohey's) [34] , with no allowance for improvements, there being no land improvements. The Applicant's rationale for pressing the s 6A(2) assumptions appears to be based on the "existing usage" of the 2004 DA, it being said it commenced when some 13 lots were subdivided from the DA. This is not however to the point. Use of the section was helpfully explained by the Court of Appeal in 2015 in Valuer-General of New South Wales v Fivex Pty Ltd (Fivex) [35] Finding on the appropriate application of s 6A 1. Olefines considered existing improvements that would not be permitted by the planning controls at the valuation date and the continuation of the use of those improvements. Fivex considered the applicability of s 6A(2) where improvements on the land reflected an exceedance of that permitted by the planning controls pertinent at the valuation date. Neither proceeding considered the applicability of an existing consent that may or may not benefit the land by providing a higher valued use than that allowed under the planning controls existing at the DVM. I am unaware of any authority that does consider if an existing development consent on vacant land should be contemplated when determining land value pursuant to the provisions of s 6A. 2. The 2004 approval is not an improvement on or to the land, but something which exists in the real world, outside the hypothetical bubble of the Subject land. The Applicant appears to seek an application of the assumptions in s 6A(2) to the effect that, in determining the land value of the land it shall be assumed that the land may be used for any purpose which it could be used at the date to which the valuation relates. It believes the land could be used for the purpose of continuing subdivision based on the existing 2004 approval. The Respondent is quite clearly stating the land could not be used for the continuation of development permitted by the 2004 approval. 3. In Opera House Car Park, [36] Pain J opined at [19]: "That the fee simple is an interest in land which enables the holder to enjoy the benefits of the land to its greatest extent" 1. For the Subject Land , the question of if the assumptions in s 6A(2) should apply, due to the use permitted by the existing 2004 approval, is only of relevance if that use enables the holder to enjoy the benefits of the land to its greatest extent. 2. I have determined, in the analysis above, that the development consent appurtenant to the land is not the most beneficial, or highest and best, use of the land and therefore, irrespective of the submissions made by the parties, the assumptions in s 6A(2) are not determinative to these proceedings. Section 14L(1)(b) Allowance Evidence 1. Mr Feeney, in his report in chief, included an allowance, under s 14L(1)(b) of the Valuation Act, of $100,000 in his final valuation. He provided no explanation in the report of how he arrived at that number. 2. Mr Arneil, in his report in chief, did not provide for an allowance under s 14L(1)(b). 3. The JER was silent on the disagreed position of the valuers. Submissions 1. In opening submissions, the applicant contended for an allowance of $100,000. 2. In opening submissions, the Respondent contended the Applicant had provided no justification for the allowance claimed and sought confirmation of the $30,000 allowance as appears on the Register of Land Values for 1 July 2022. 3. During the hearing, the Applicant explained the allowance claimed was for the extension of Major Mitchell Drive and submitted invoices totalling $128,000, being the contribution the Applicant made to the construction of the road. The Applicant [37] added that the allowances were applicable to the Development Land, not the Homesite. 4. In final submissions, the Respondent contended the issue pursuant to s 14L is whether the invoices provided relate to "profitable expenditure" by the Applicant in respect to "the land" and that access to the site is from the road off Sheehans Lane via the adjoining MHE land. The Respondent did not seek to disturb the register and submitted the Applicant had not discharged the onus of proof in relation to the allowance. Finding on s 14L(1)(b) allowance 1. The Applicant seeks an allowance for visible and effective improvements which, although not on the land, have been constructed making provision for the more beneficial use of the land. 2. The Applicant, in their valuation evidence, has not provided any evidence that the land value would be lower if these improvements had not been made. In submissions, the sole basis was the Applicants contribution to the construction of a road to the south of the Development Land. 3. An allowance under s 14L is for profitable expenditure. The first step in deciding if an allowance is applicable is to determine the increase in the land value of the land resulting from the expenditure. The allowance is then limited by the actual cost of the improvement. The Applicant has applied the second step but has not undertaken the first step, particularly in relation to the highest and best use of the land. The Applicant has failed in their onus of proof that the s 14L(1)(b) allowance is too low and the allowance of $30,000 is confirmed. Conclusion 1. The land value of the Subject land, based on the use permitted by the existing development approval, is determined as follows; Homesite $385,000 Development Land (based on 29 lots) $3,268,300 Land value of Lot 29 $3,653,300 1. The land value of the Subject land, based on development permitted under an R2 Residential zone, by reference to the Rannoch Sale, is determined as follows; Homesite $385,000 Development Land $3,159,521 Land value of Lot 29 $3,544,521 1. The land value of the Subject land, based on development permitted under an R1 General Residential zone, by reference to the First MHE Sale, is determined as follows; Homesite $385,000 Development Land $4,884,703 Land value of Lot 29 $5,269,703 1. The land value of $5,269,703 is higher than the issued land value. The issued land value of $4,000,000 is not too high and is confirmed, meaning the appeal, in relation to the land value, should be dismissed and the land value, as issued, confirmed. Orders: Proceedings 2024/158170 1. The Court orders: 1. The appeal is dismissed. 2. The land value of the property legally described as Lot 29 in Deposited Plan 1242738, known as 14 Brolga Drive, Gulmarrad, NSW 2463 (Subject land) for the valuation date of 1 July 2022 is confirmed as $4,000,000. 3. The allowance pursuant to s 14L(1)(b) of the Valuation of Land Act 1916 is confirmed as $30,000. Michael Davidson Acting Commissioner of the Court ******** Endnotes 1. Kogarah Town Centre Pty Limited v Valuer General (No. 3) [2014]NSWLEC 1124 at [86] 2. Deed of Call Option dated 29 November provided in Exhibit A 3. Exhibit 4, Tab 3 4. EB page 15 5. EB page 16 6. EB page 16 to 17 7. EB page 70 8. EB page 60 9. EB page 90 10. EB page 114 11. EB page 40 12. EB page 60 13. Olefines Pty Ltd v Valuer-General of New South Wales (2018) 228 LGERA 407 [2018] NSWLEC 18 at [133] 14. Cl 7.2 of the Deed of Call Option dated 29 November provided in Exhibit A, 15. EB 123 A2.10 16. for the MHE land 17. Transcript 41 lines 8-12 18. Ibid lines 14-18 19. Ibid lines 20-24 20. Tetzner v Colonial Sugar Refining Co Ltd [1958] AC 50 21. Exhibit E 22. Exhibit 4, Tab 3 in re MHE, pp 75, Condition 16 23. Exhibit 4, Tab 3 in re MHE, pp 62, Issue 2 24. Transcript 44-45 lines 42-45 25. Transcript 44 lines 35-40 26. Exhibit 4, Tab 3 in re MHE, pp 62-63, Issue 2 27. Holcim (Australia) Pty Ltd v Valuer-General [2009] NSWLEC 225 per Biscoe J [31] 28. Tomago Aluminium Company Pty Ltd v Valuer General [2010] NSWLEC 4 [47] 29. Perisher Blue Pty Ltd v Valuer General (NSW) [2023] NSWLEC 41 at [19] 30. Biodiversity Conservation Act 2016 31. Olefines Pty Limited v Valuer General of New South Wales (2018) 228 LGERA 407; [2018] NSWLEC 18 32. s 6A(2) of the Valuation Act 33. Valuer-General v Fivex Pty Ltd (2015) 206 LGERA; [2015] NSWCA 53 at [27]–[29], [31] and [34] 34. Toohey's Ltd v The Valuer-General (1924) 25 SR (NSW) 75 at 76 35. Valuer-General of New South Wales v Fivex Pty Ltd [2015] NSWCA 53, (2015) 206 LGERA 450 36. Trust Company Limited ATF Opera House Car Park Infrastructure Trust No 1 v The Valuer-General (No 3) (2011) 183 LGERA 118; [2011] NSWLEC 85 at paras [10] to [26] 37. Transcript D1 44 page 12 lines 20 - 24 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: 28 February 2025