Commissioner of ACT Revenue v Rosnet Pty Limited, Canberra Centre Holdings Pty Limited (Formerly Canberra Permanent Co-Operative Building Society Limited) and Canberra Centre Holdings Pty Limited [1994] ACTSC 71 (5 July 1994)

SUPREME COURT OF THE ACT

COMMISSIONER FOR ACT REVENUE v. ROSNET PTY LIMITED, CANBERRA CENTRE HOLDINGS
PTY LIMITED (formerly Canberra Permanent Co-Operative Building Society
Limited) and CANBERRA CENTRE HOLDINGS PTY LIMITED
No. SCA73, 77, 78 of 1993
Number of pages - 11
Taxation And Revenue
[1994] ACTSC 236; (1994) 28 ATR 399
(1994) 94 ATC 4424

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
HIGGINS J

CATCHWORDS

Taxation And Revenue - land tax - rates - assessment of unimproved value of sites in integrated development - appeal and cross-appeal from Administrative Appeals Tribunal (ACT) - requirements of relevant legislation - various valuation methods - rules applicable to calculation - relationship between sites - how taken into account - use of actual cost of valuation method - errors in application of valuation method.

Administrative Appeals Tribunal Act 1989 (ACT), s.46
Rates and Land Tax Act 1926 (ACT), s.5(1)(aa)

Waterford v Commonwealth of Australia [1987] HCA 25; (1987) 71 ALR 673
Politis v Federal Commissioner of Taxation (1988) 2 ATC 5029
Times Consultants Pty Ltd v Collector of Customs (Qd) (1987) 76 ALR 313
Nizich and Anor v Federal Commissioner of Taxation (1991) ATC 4747
Hamilton v Demgold Pty Ltd (1990) 97 ALR 481
Kiddle v Deputy Federal Commissioner of Land Tax [1920] HCA 17; (1919) 27 CLR 316
Tooheys Ltd v The Valuer General (1925) AC 439
Tetzner v The Colonial Sugar Refining Company Ltd (1957) The Valuer 477

(PC)

Melwood Units Pty Ltd v Commissioner of Main Roads (1978) 37 LGRA 387 (PC)
Re Firth and Minister for Capital Territory (1979) 2 ALD 183
Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA

409
Myer (SA) Stores Ltd v Valuer-General (1986) 60 LGRA 158

HEARING

CANBERRA, 24 May 1994
5:7:1994

Counsel for the Appellants: Mr T Webster, with
Mr P Walker

Instructing solicitors: ACT Government Solicitor

Counsel for the Respondents/Cross-Appellants: Mr P McClellan, QC

Instructing solicitors: Mallesons Stephen Jaques

ORDER

THE COURT ORDERS THAT:
The matter be remitted to the Administrative Appeals Tribunal (ACT) to rehear the matter in accordance with these reasons.

DECISION

HIGGINS J The appellant seeks to set aside the decision of the Administrative Appeals Tribunal (ACT) (the AAT) reviewing and varying a decision of the appellant fixing, after re-determination, the unimproved value of certain parcels of land. The respondents are the various Crown lessees of the five blocks of land concerned. They have cross-appealed, seeking to have the valuations further reduced.

2. The parcels of land in question form part of a shopping, office and parking station complex in Canberra City known as the Canberra Centre. There was a further block of land involved in the Centre, namely Block 1 Section 70 Division of City (1/70 City). That parcel of land was formed out of the closure of portion of Ainslie Avenue. It was valued by the appellant at $1.4m. No issue was raised before the Tribunal as to the correctness of that valuation. Since 1 January 1988, the date at which the values in question take effect, 1/70 City has been consolidated with 2/38 City and 3/38 City. Those are two of the five blocks in question. The remainder are identified as 3/53 City, 1/51 City and 9/56 City.

3. The valuations, as redetermined by the appellant, were,

2/38 City - $10.4m 3/38 City - $15m
3/53 City - $7m 1/51 City - $15m
9/56 City - $5.7m

4. Those valuations were objected to by the respective registered proprietors. They submitted that the values should have been,

2/38 City - $3.5m 3/38 City - $9m
3/53 City - $3m 1/51 City - $8.5m
9/56 City - $2.5m

5. As a result of those objections, before the hearing before the AAT had commenced, the appellant decided to reduce two of the valuations as follows,

2/38 City - $9m 9/56 City - $5.5m

6. The other valuations were confirmed.

7. At the hearing before the AAT, the appellant conceded that some of the valuations should be further reduced. The result of that concession was to propose the following valuations,

2/38 City - $7.6m 3/38 City - $13m
3/53 City - $5.7m 9/56 City - $4.8m

8. No concession was made concerning 1/51 City.

9. The Tribunal had before it evidence of valuation tendered on behalf of the appellant and the respondents. The respondents' valuation relied on expert analysis of a sale of a 50% interest in the Canberra Centre in March 1990 to the Queensland Treasury Corporation (QTC). The valuer, Mr Wilkinson, estimated the value of the improvements and calculated that the aggregate of the unimproved values of the six sites in question was $25m. He considered that to have sold the unimproved sites individually as at the relevant date would, even if a realistic proposal, recover a lesser total return. Sales of some of the individual sites to the developer in 1986 were also considered. They yielded, in Mr Wilkinson's opinion, a value of $19m, excluding 1/70 City. However, Mr Wilkinson did not suggest that this was an appropriate reflection of value as at the prescribed date. He also considered sales of other shopping centre sites elsewhere in Australia. They were, in his opinion, of limited assistance.

10. There was some dispute as to what costs of the development of the Canberra Centre should be regarded as relevant to the value of the improvements. The result, however, was an aggregate figure to be apportioned between the respective parcels of land.

11. The appellant's case was that the method adopted by Mr Wilkinson should be rejected. Evidence was offered from Mr Charlton, a valuer employed by the Australian Valuation Office. Mr Charlton analysed recent sales of commercial retail and office sites in the Canberra region. From that analysis he deduced various values per square metre for various areas within the site. From that, he deduced a value of $600-650 per m2 of Gross Floor Area (GFA). He rejected the utility of analysing the sale to the QTC. His valuations were in accordance with those conceded by the appellant at the hearing.

12. If the dispute was as to which method of valuation adopted produced the more reliable result there would be no issue of law involved. It would simply be a choice of one of two perfectly legitimate valuation methods. The result of the application of legitimate valuation methods rationally applied may vary from one valuer to another but such a question would, also, raise no issue of law.

13. The respondents have also altered their position. They now contend that, on the basis of Mr Wilkinson's analysis, but allocating various additional items of cost to the value of the improvements, the unimproved value of the sites in question, should, in aggregate, be reduced to $16.62m.

14. The AAT, by majority, decided that the total unimproved value of the Canberra Centre was $35.5m. The majority allocated that value between the sites as follows,

2/38 City - $7.6m 3/38 City - $9.9m
3/53 City - $3m 1/51 City - $11.5m
9/56 City - $2.5m

15. Although there had been no objection to it, the majority reduced the value assigned to 1/70 from $1.4m to $1m, thus making up the total of $35.5m.

16. The dissenting opinion of the late Mr Woodley rejected the sale to QTC as a proper basis for valuation. He considered the value to be deduced from comparable sales, the method relied on by Mr Charlton, to be, variously, between $300 and $500 per m2 of GFA. That, having regard to the terms of each lease as to permitted GFA, produced an aggregate value, in his opinion, of $38m. However, Mr Woodley added a qualification to that opinion as follows,

... given the stated statutory assumptions required for determination
of separate unimproved values for each leased block this may well not
be the result achieved by proceeding with separate valuations which,
in my view, is the appropriate basis of determination.

17. It is not stated whether, in Mr Woodley's view, such separate valuations would result in a higher or lower aggregate value. It would follow from Mr Wilkinson's opinion, if accepted, that there would be a lesser aggregate value if that exercise was undertaken.

18. The appellant relied upon a number of grounds of appeal. Section 46 of the Administrative Appeals Tribunal Act 1989 (ACT) confers appellate jurisdiction on this Court from a decision of the AAT only "on a question of law".

What is a "question of law"?
19. It was stated by Brennan J in Waterford v Commonwealth of Australia [1987] HCA 25; (1987) 71 ALR 673, 689 that,

The error of law which an appellant must rely on to succeed must arise
on the facts as the AAT has found them to be or it must vitiate the
findings made or it must have led the AAT to omit to make a finding it
was legally required to make. There is no error of law simply in
making a wrong finding of fact.

20. In Politis v Federal Commissioner of Taxation (1988) 2 ATC 5029, 5032, Lockhart J deprecated too critical an approach to the perception of errors of law.

21. Statutory construction is a question of law: see Times Consultants Pty Ltd v Collector of Customs (Qd) (1987) 76 ALR 313. However, the question whether a particular set of facts comes within the description of ordinary English words used in a statute is one of fact: see Nizich v Federal Commissioner of Taxation (1991) ATC 4747, 4752 per French J.

22. The first matter to be determined, therefore, is what, if anything, the statute in question relevantly required.

Statutory requirements
23. "Unimproved value" is defined, for the purposes of the Rates and Land Tax Act 1926 (ACT) (the Rates Act), in the following terms, interpolating the dates referred to,

5.(1) For the purposes of this Act, the unimproved value of a parcel
of land held under a lease from the Commonwealth is the capital sum
that might be expected to have been offered on the relevant date
(1.1.88) for the lease of the parcel of land, it being assumed -
(a) that the only improvements on or to the parcel of land were the
improvements (if any) by way of clearing, filling, grading, draining,
levelling or excavating -
(i) where the Territory or Commonwealth had, before that parcel of
land become rateable as a separate parcel, granted a development lease
of land that included that parcel of land - made by the lessee under
that lease or by the Territory or Commonwealth, or the cost of which
was borne by the lessee or by the Territory or Commonwealth; or
(ii) in any other case - made by the Territory or Commonwealth or
the cost of which was borne by the Territory or Commonwealth;
(aa) that the circumstances that existed on the prescribed date
(9.6.89) also existed on the relevant date;
(b) that, on the relevant date, the lease had an unexpired term of
ninety-nine years;
(c) that the rent payable under the lease throughout the term of
ninety-nine years commencing on the relevant date was a nominal rent;
and
(d) that, on the relevant date, the lease was not subject to s.28A
or 28B of the City Area Leases Act 1936-1966.

24. The appellant submitted that the correct approach was to view each site as vacant but, in so doing, to have regard to the development then completed or contemplated on each of the other sites. The appellant concedes that it is appropriate to have regard to the fact that the five sites in contention, together with 1/70 City, form part of an integrated shopping complex. It follows, it seems to me, that in valuing each site, the valuer is required to have regard to that circumstance.

25. In my view, the legislation requires that each site be valued as realistically as possible, but consistently with the statutory assumptions.

26. The Tribunal had evidence before it that the highest value for each site was to be achieved by considering their value in the context of the Canberra Centre complex. The contribution of each site to the whole value could not be tested in a market context but some allocation between them is required. The Tribunal did make such an allocation.

27. The appellant says that, even if the Tribunal was entitled to value the whole site and allocate values between the separate parcels, it erred in applying that methodology. It is further contended that the Tribunal erred in choosing the "cost of construction" method rather than "comparable sales". The appellant contends that, in any event, in applying the "cost of construction" method, the Tribunal erred in assigning some costs to construction so as to reduce the deduced unimproved value.

Method of valuation
28. The legislation does not prescribe the method of valuation to be adopted. It requires only a decision as to what capital sum would have been offered for a lease of a site with only the improvements specified by s.5(1)(a), assuming artificially that the lease was for 99 years from the "relevant date". In the absence of a genuine offer in fact being made at the relevant date, the amount of any offer which "might be expected" is necessarily speculative. Given the role of the "prescribed date", the offer most reflective of value at the relevant date would reflect an offer which might be expected at that time with due allowance for any difference in the state of the relevant market.

29. As is not unusual, there was a contest between the valuers called by each party. No doubt other valuers, had they been called, might have used other methods or arrived by the same methods at different results. It may be assumed that each party has relied on the method and result found to be most favourable.

30. The method used by Mr Wilkinson relied on an analysis of the QTC sale. He rejected the comparable sales method on the basis that there were no relevantly comparable sales. He discounted the price paid by QTC because of a rent guarantee given to QTC by the vendors. To have included that special value would have been an error as appears from the majority judgments in Hamilton v Demgold Pty Ltd (1990) 97 ALR 481. The extent of the allowance would be a matter of expert judgment.

31. Mr Wilkinson then proceeded to estimate the replacement cost of the improvements. He estimated $195,454,216 as the figure in question. The deduced remainder was $38,045,784. Part of that sum, Mr Wilkinson concluded, was attributable to "Interest on acquisition costs" ($11,807,310), "Legal Costs" ($80,000) and "Stamp duty on purchase" ($1,340,000). In his opinion, in rounded figures, the aggregate unimproved value was $25,000,000. This figure was rounded up from $24,818,474.

32. Mr Wilkinson considered that an assumed sale of the relevant six leases individually would not, in aggregate, realise that total sum. This was due to the highest and best use of each site being, in his opinion, part of the integrated whole represented by the Canberra Centre.

33. The Tribunal, by majority, accepted that "actual cost" was, in the circumstances, a better guide than some theoretical cost. This approach was justified on the basis that the costs in question were, at the time of the sale to QTC, either recently or were then currently being incurred. QTC would have had a reasonable knowledge of what such costs would have been.

34. However, it is apparent that the majority of the Tribunal erred in relying on exhibit V, which estimated the total cost of the development at $194,888,073, instead of exhibit W which it plainly intended to use. Exhibit W detailed the actual costs at $191,216,724, a difference to the deduced unimproved value of +$3,671,349. Exhibit V was an earlier projection of development costs which turned out, uncharacteristically perhaps, to be an over-estimate.

35. The majority of the Tribunal rejected submissions that actual costs should be further reduced by disregarding a $1.5m bonus paid to the builder for timely completion. Incentives to tenants were also characterised as part of development costs and, again, the majority declined to deduct those costs from the development costs, regarding them as part of the actual cost of the improvements.

36. The appellant contended that interest charged on funds provided for the development should be regarded as entrepreneurial or "Society" profit. It was further contended that no such profit should have been included in the development cost, even if that was the accepted valuation method.

37. If the error made by the majority in relying on the wrong exhibit is corrected, then, even if no other adjustment is made, the aggregate unimproved value would become approximately $38.2m. This is very close to the aggregate value of $38m accepted by the dissenting member, Mr Woodley.

38. The appellant's valuer, Mr Charlton, preferred to engage in an analysis of comparable sales. Accordingly, his primary method of valuation did not depend at all on the "actual costs" of the Canberra Centre development. He deduced an aggregate unimproved value of $47.5m at the relevant date.

39. He did not, according to the majority of the Tribunal, make sufficient allowance for the increase in government - provided street level carparks having a depressing effect on the values of the structured carpark areas. Nor, in their view, did Mr Charlton take account of the requirement to proceed first with structured carparks in accordance with clause 3(a) of each of the new Crown Leases. That requirement, it was conceded, would effectively "cost" $8.5m. If it was appropriate to deduct the latter sum, Mr Charlton's valuation would have fallen to an aggregate of $39m.

40. The majority of the Tribunal differed from the position urged by the respondents in that they disregarded as "improvements" the cost of holding charges. Those charges were particularised as "Rates and Taxes", "CBS Administrative Expenses", "Entertainment" and "Travel". However, "recoveries from tenants" were also disregarded by the majority. They also reduced the amount shown as "Interest" to reflect the tax benefit thereof to the developer.

41. The majority then apportioned the aggregate value, to some extent arbitrarily, but along the lines generally adopted by Mr Wilkinson. However, in doing so, they attributed only $1.m to 1/70 City, although no challenge had been made to the value assessed for it of $1.4m.

42. As it was also necessary to value the unimproved value of the consolidated lease over 2 and 3/38 City and 1/70 City, the Tribunal added together the values for those blocks as separate parcels, that is, $18.5m, including a value of $1m for 1/70 City.

43. I have already noted the approach of the majority to Mr Charlton's valuation methodology. Mr Woodley adopted the approach urged by Mr Charlton. He did not regard the actual development cost approach as "reliable". It might be used, in his view, as a check but not as the primary method of valuation. In any event, Mr Woodley was of the view that, in applying Mr Wilkinson's approach, interest charges should not have been reduced to take account of tax benefits. That would have reduced the aggregate unimproved value to be deduced by $11.35m. However, Mr Woodley also expressed the view that holding charges for each stage of the project should have been reduced so that they ceased on completion of each relevant stage. That would have increased the aggregate unimproved value by some unspecified amount. It might not have altered the net result.

44. Mr Woodley accepted the assumption that each individual block was to be assessed as vacant but with regard to its relationship to each other block as developed at the relevant date. That accords with the appellant's submission.

45. Adopting the comparable sales approach, Mr Woodley considered that the retail space was, on average, to be valued at $500 for each m2 of permitted GFA, for office space, $450 and non-retail parking space, $300. That yielded a result of $38m. It should be possible to use that formula to apportion that aggregate result between the blocks in question with or without allowance for the possibility of separate sale. In view of the majority decision, Mr Woodley did not undertake that exercise.

46. The calculation of unimproved value is an artificial process. There are some rules of law which relevantly constrain the calculation of it. The case of Kiddle v Deputy Federal Commissioner of Land Tax [1920] HCA 17; (1919) 27 CLR 316 concerned the ascertainment of the unimproved value of pastoral land. Part of it had been improved. Part of it, although attempts had been made at improvement, had been adversely affected by those attempts. Knox CJ noted that improvements which adversely affected or did not increase the value of land could be ignored. Relevantly, so far as the present case is concerned, it was pointed out that not every expenditure in respect of improvements on land adds to improved value, even if the improvements, as constructed, are of value in themselves. In particular, the decision draws attention to the propriety of making allowances in ascertaining the value of improvements for (at 320),

... loss of interest on all outlay during the period which must elapse
before such outlay became fully productive ...

47. Whether cost of improvements equates to value of those improvements and whether the total value thereof may be regarded as adding to the unimproved value of particular land is a matter of expert judgment. The case is, however, authority for the propriety of allowing interest and other holding charges pending productive use of the relevant improvement as part of the cost of improvements and relevant to the valuation process.

48. The case of Tooheys Ltd v The Valuer General (1925) AC 439 was referred to. It was suggested that it was authority for the proposition that to deduct the value of improvements from improved value of land will not yield a true unimproved value. Reliance was placed on the following passage in the advice of the Board, delivered by Lord Dunedin (at 443),

It is, therefore, to approach the question from a completely wrong
point of view to begin with a valuation which takes in the
improvements and then proceed by means of subtraction of a sum arrived
at by an independent valuation in order to find the required figure.

49. However, that is not a statement which forbids the deduction of the value of improvements from the improved value to find the unimproved value of a parcel of land. If it were, it would be impossible to value land where there are no comparable sales of unimproved land. The decision merely draws attention to the need properly to analyse the various components of improved value to ensure that the unimproved value is that which remains after the current development cost of the physical improvements are deducted.

50. The appropriate method to ascertain unimproved value of improved land was, according to Knox CJ in the Kiddle case at 320, by,

... ascertaining the amount which it would cost to make the
improvements in question at the relevant date, including a proper
allowance for loss of interest on all outlay during the period which
must elapse before such outlay became fully productive, and by
deducting from the sum so ascertained a proper allowance for
depreciation or partial exhaustion of the improvements.

51. The goodwill or premium value of the buildings on site, in Tooheys case (supra) a liquor licence for hotel premises, is not part of the unimproved value even if it is not part of the cost of improvements. Even though, for the purposes of ascertaining unimproved value, the site in question is notionally regarded as vacant land, the contribution of the improvements thereon to the value of the surrounding neighbourhood is not to be disregarded: Tetzner v The Colonial Sugar Refining Company Ltd (1957) The Valuer 477 (PC).

52. To reject a principle of assessment or a transaction which affords some rational evidence of value without there being a rational basis for doing so would be erroneous: Melwood Units Pty Ltd v Commissioner of Main Roads (1978) 37 LGRA 387 (PC).

53. However, none of the three methods proposed in this case to deduce the value of the sites in question is inherently lacking in rationality. In Re Firth and Minister for Capital Territory (1979) 2 ALD 183, a Tribunal consisting of Smithers J, Hall (SM) and Woodley (M), considered that in the absence of comparable sales of unimproved land, it is permissible either to deduce the unimproved value of comparable sites by deducting the actual value of improvements or by an exercise of conducting a hypothetical development of the site completed at the relevant date.

54. The decision highlights the need to identify those expenses, such as agent's commission on sale, which are properly to be regarded as fees for services. Such fees are not relevant to the value of improvements or the unimproved site. They may be contrasted with, for example, architects' fees which would properly be included in an assessment of development costs.

55. A judgment as to whether a sale is sufficiently comparable is a matter of expert opinion. It may not be capable of an exact exposition of reasoning. It should be interfered with on appeal only if the conclusion is not reasonably open or is the result of an error of principle: Leichhardt Municipal Council v Seatainer Terminals Pty Ltd (1981) 48 LGRA 409.

56. Two major questions arose in relation to this valuation. The first was the role of each site in relation to the other. The second was the use of actual cost which, though current, to some extent reflected special terms of the relevant leases which depressed returns from tenants during development by giving priority to low revenue yield structured carparks in carrying out the construction.

57. The case of Myer (SA) Stores Ltd v Valuer-General (1986) 60 LGRA 158 has some similar features to the present. In that case, several separate sites had been jointly developed to form a department store and shopping mall complex. However, as is the case under the Territory legislation, unimproved value had to be ascertained in respect of each separate site. Thus, whilst the value of the whole site might reflect the highest and best use of the aggregated sites, that value has to reflect the possibility that the site in question, viewed separately, might not be incorporated in a retail shopping mall. Whether or not that approach depresses the value of that separate site is, of course, a matter of expert opinion.

58. As to the other issue, in Hamilton v Demgold Pty Ltd (supra), Neaves J commented at 491 that,

... it was not to the entirety of the terms of the lease over the land
which had, in fact, been granted by the Commonwealth to which regard
was to be had in the valuation process.
... the potentiality which the land had for future development was an
important factor bearing on its value. That potentiality was to be
assessed having due regard to the purpose clause contained in the
lease ... and ... the provisions ... under which that purpose clause
might be varied.

59. In that case it was a term of the agreement pursuant to which the lease was granted that the Commonwealth would occupy the premises as a tenant. Wilcox J pointed out that that agreement benefited only the original Crown lessee. A hypothetical purchaser would value the lease less than the original lessee because of that difference.

60. In this case, it was agreed that the order of development required by the leases had added to the cost of the development. Once the improvements were erected, however, that consideration would be spent. It would be future earnings which would influence a willing, but not anxious, buyer. The price which the vendor would be prepared to accept, absent financial pressure to do so would, of course, seek to recover such costs and to realise a profit.

61. It was objected by the appellant that, the reference to the profit sought by the vendor was inappropriate. It was a denial of natural justice. However, the valuation Mr Wilkinson performed had yielded an unimproved value of $25m, excluding 1/70 City. He had used the development cost method to analyse the sale to QTC. Using that same method with an adjustment for profit, a valuation of $35.5m was arrived at. Without allowance for that profit, $49m would have been the relevant valuation. In my view, there is no substance in this complaint by the appellant. It was obvious that even if special costs were to be ignored, the profit a developer would reasonably seek would properly add to the price to be paid and, hence, to the value of the development. Some special costs might, of course, have to be absorbed into that profit.

62. It was open to conclude that the actual development hypothesis examined by Mr Wilkinson provided a means for logically deducing an aggregate unimproved value. However, there were, in my view, a number of errors in its application.

63. Holding and administration charges were properly reflected in the development cost. However, it does not seem to me that such expenses would add value to the development after completion of the part to which they relate. The expenses after that time would be relevant to the net return from the site. Those expenses might then be relevant if a capitalisation of net returns method was to be used to ascertain the total improved value.

64. Tax deductibility of interest and other charges is an advantage attaching to the developer. It may or may not be regarded as a benefit by that developer. For example, if the developer's tax liability was already zero, it would be irrelevant. In my opinion, it should not have been regarded as something which reduced the cost of development. The tax deductibility ought to have been ignored. There is a question as to whether the expense in question was properly reflected in the cost of the development or in the operation of the improvements to produce income. It may well be that some apportionment would have been necessary.

65. Additionally, of course, there is the confusion of exhibit W with exhibit V.

66. It follows that, at least to that extent, the appeal and the cross-appeal must each succeed. There is, however, the question of adjustment of the aggregate site value so as to reflect the separate value of each block.

67. The process of deduction of unimproved value from the sale to QTC, whilst no doubt capable of yielding the value placed by QTC on the whole aggregated site does not, without a difficult adjustment, yield the statutorily required result. It does not seem to me that the majority of the AAT satisfactorily addressed that issue. No doubt, correctly applied, it could be concluded that, if separate valuations produced a total for the several unimproved values exceeding that aggregate, some error would have occurred.

68. It seems to me that the late Mr Woodley's approach was the correct one. It happens to accord, on one view of it, with the valuation adopted by the majority, after the erroneous reference to exhibit V is corrected. It would be speculative to attempt to predict whether the whole site valuation would remain consistent if all relevant errors were corrected.

69. I note that although he did not do so, Mr Woodley's methodology would provide a rational means for arriving at the separate values of each site subject to the allowance I have referred to.

70. The matter should be remitted to the AAT to rehear the matter in accordance with these reasons.