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Land and Environment Court of New South Wales |
Last Updated: 22 October 2008
NEW SOUTH WALES LAND AND ENVIRONMENT COURT
CITATION:
Mitchell v Roads and Traffic Authority of New South Wales;
Beresfield Spares Pty Ltd v Roads and Traffic Authority of New South Wales
[2008] NSWLEC 258
PARTIES:
APPLICANTS
John David Mitchell
Beresfield
Spares Pty Ltd
RESPONDENT
Roads and Traffic
Authority of New South Wales
FILE NUMBER(S):
30847 of 2006; 30848 of 2006
CATCHWORDS:
Compulsory Acquisition of Land :- partial acquisition - market
value - application of comparable sales - whether tenant business can
claim
special value if not entitled to claim market value - whether interest in land
can be acquired by inference under statutory
compensation scheme - effect of
compensation notice - whether disturbance resulting from carrying out of public
purpose claimable
under s 59(f) of Land Acquisition (Just Terms Compensation)
Act 1991- whether alternative claim available under s 55(f)
LEGISLATION CITED:
Contaminated Land
Management Act 1997
Conveyancing Act 1919 s 196
Land
Acquisition (Just Terms Compensation) Act 1991 s 55, s 57, s 59, s
66
Land and Environment Court Act 1979
Local Government
Act 1919
Main Roads Act 1924 s 27E
Motor Dealers Act
1974
Roads Act 1993 s 6
Newcastle Local Environmental
Plan 2003
CASES CITED:
Almona Pty Ltd v Roads and
Traffic Authority of New South Wales [2008] NSWLEC 112
Ashfield
Municipal Council v Roads and Traffic Authority of New South Wales [2001] NSWCA 370; (2001) 117
LGERA 203
Boland v Yates Property Corp Pty Ltd [1999] HCA 64; (1999) 74 ALJR 209
Commissioner of Succession Duties (South Australia) v Executor
Trustee and Agency Company of South Australia Limited [1947] HCA 10; (1947) 74 CLR
358
Fitzgerald v Blacktown City Council (unreported; NSWLEC, Talbot
J, 28 March 1994)
Fitzpatrick Investments Pty Ltd v Blacktown City
Council [No 2] [2000] NSWLEC 139; (2000) 108 LGERA 417
Lewis v Bell (1985) 1 NSWLR
731
McBaron v Roads and Traffic Authority of New South Wales (1995)
87 LGERA 238
Minister for Education and Training v Tanner [2003] NSWCA 164; (2003)
128 LGERA 281
Mir Bros Unit Constructions Pty Limited v Roads &
Traffic Authority of New South Wales [2006] NSWCA 314
Mitchell v
Newcastle City Council [2008] NSWLEC 1140
Niezabitowski and Anor v
Roads and Traffic Authority (NSW) [2006] NSWLEC 462; (2006) 147 LGERA 417
Roads and
Traffic Authority of New South Wales v Peak [2007] NSWCA 66
Spencer
v The Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418
Walker Corporation
Pty Limited v Sydney Harbour Foreshore Authority [2008] HCA 5; (2008) 82 ALJR
489
West v Roads and Traffic Authority of New South Wales (1995) 88
LGERA 266
TEXTS CITED:
Hyam, Alan A, The Law
Affecting Valuation of Land in Australia (Sydney: The Federation Press, 2004)
CORAM:
Pain J
DATES OF HEARING:
29 April 2008
30 April 2008 (on site
view)
1, 2, 5, 6, 7, 12, 16 and 19 May 2008
JUDGMENT
DATE:
22 September 2008
LEGAL
REPRESENTATIVES
APPLICANTS
Ms S
Duggan
SOLICITORS
Thompson Norrie
Solicitors
RESPONDENT
Mr J
Maston
SOLICITORS
Blake
Dawson
JUDGMENT:
THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH
WALES
Pain J
22 September
2008
30847 of 2006, 30848 of 2006 Mitchell v Roads and Traffic
Authority of New South Wales; Beresfield Spares Pty Ltd v Roads and Traffic
Authority of New South Wales
JUDGMENT
1 Her
Honour: The Applicant Mr Mitchell is the owner of land at 201 New England
Highway, Thornton. By notice published in the Government Gazette
on 12 May 2006
the Respondent (the RTA) compulsorily acquired part of Mr Mitchell’s land
for the purposes of the Roads Act 1993. Mr Mitchell has appealed to this
Court under s 66 of the Land Acquisition (Just Terms Compensation) Act
1991 (the JT Act) (proceedings no 06/30847) seeking compensation for market
value and disturbance. The Court must determine compensation
under s 66(2) of
the JT Act.
2 Prior to acquisition Mr Mitchell’s land was
41,771.92m2 and after the acquisition 36,704m2. The land acquired was two narrow
strips of 1,855m2 and 1,280m2 along the western or Weakleys Drive (formerly
Minmi Road) frontage (lots 31 and 32 DP1091199), a narrow
strip of land of
1,876m2 along the southern boundary of the land (lot 37 DP1091199) and a small
triangular shaped piece of land of
56.29m2 in the south-eastern corner (lot 38
DP1091199). The total area acquired was 5067.92m2.
3 In addition to the
land acquired on the western and southern boundaries, Mr Mitchell also argued
the acquisition included the right
of access from his land to the service road
which adjoined his northern boundary until 2007. That service road is no longer
available
as a result of the roadworks now undertaken by the RTA. That this
right of access was acquired is disputed by the RTA as no land
along the
northern boundary was acquired as part of this acquisition.
4 Mr
Mitchell’s land is occupied by the Applicant Beresfield Spares Pty Ltd
(Beresfield) and is used by that company for the
purposes of an auto wrecking
yard. The business wrecks motor vehicles and conducts retail sales of wrecked
vehicles as a whole or
in parts. Mr Mitchell is also business manager and
director of Beresfield. He described in his affidavit (sworn 22 April 2008) the
nature of the business as it is conducted on the land. Beresfield has been
operating continuously since 7 March 1960 on Mr Mitchell’s
land.
5 Damaged car bodies are located on the unimproved balance of land in
the open, stored in rows so that forklift truck can get between
the rows for the
purposes of accessing those vehicles when required. Parts are salvaged and
placed in the retail sales/store area.
The cars are kept for large parts, such
as doors, and when the car is no longer of use for spare parts it is crushed and
sold as
scrap. Beresfield has also appealed pursuant to s 66 of the JT Act
(proceedings no 06/30848) seeking compensation for special value
and
disturbance.
6 The acquired land has been used for the public purpose
under the Roads Act of the construction of the changed intersection of Weakleys
Drive and the New England Highway. This work involves cutting off and
altering
the level of the land at Weakleys Drive with a retaining wall which prevents
anyone using the access road on the northern
boundary of Mr Mitchell’s
land. Access has been provided to the site from further south along Weakleys
Drive on the western
boundary and via a new road built on the acquired land on
the southern boundary.
7 The acquired land is collectively known as lots
31, 32, 37 and 38 in Deposited Plan DP1091199. Mr Mitchell’s land is now
known
as lots 17, 18 and 19 in DP1091199, lot 3 DP28565 and lot 2 DP653982. A
plan is annexed and marked “A” identifying these
respective lots.
Before acquisition Mr Mitchell’s land was known as lot 1 DP653981, lot 2
DP653982 and lots 3, 4 and 5 in Deposited
Plan DP28565.
Relevant
provisions of the JT Act
8 Section 55 of the JT Act
provides:
Relevant matters to be considered in determining amount of
compensation
In determining the amount of compensation to which a
person is entitled, regard must be had to the following matters only (as
assessed
in accordance with this Division):
(a) the market value of
the land on the date of its acquisition,
(b) any special value of the
land to the person on the date of its acquisition,
(c) any loss
attributable to severance,
(d) any loss attributable to
disturbance,
(e) solatium,
(f) any increase or decrease in
the value of any other land of the person at the date of acquisition which
adjoins or is severed
from the acquired land by reason of the carrying out of,
or the proposal to carry out, the public purpose for which the land was
acquired.
9 Section 59 provides:
Loss attributable to
disturbance
In this Act:
loss attributable to
disturbance of land means any of the following:
(a) legal
costs reasonably incurred by the persons entitled to compensation in connection
with the compulsory acquisition of the
land,
(b) valuation fees
reasonably incurred by those persons in connection with the compulsory
acquisition of the land,
(c) financial costs reasonably incurred in
connection with the relocation of those persons (including legal costs but not
including
stamp duty or mortgage costs),
(d) stamp duty costs
reasonably incurred (or that might reasonably be incurred) by those persons in
connection with the purchase
of land for relocation (but not exceeding the
amount that would be incurred for the purchase of land of equivalent value to
the land
compulsorily acquired),
(e) financial costs reasonably
incurred (or that might reasonably be incurred) by those persons in connection
with the discharge
of a mortgage and the execution of a new mortgage resulting
from the relocation (but not exceeding the amount that would be incurred
if the
new mortgage secured the repayment of the balance owing in respect of the
discharged mortgage),
(f) any other financial costs reasonably
incurred (or that might reasonably be incurred), relating to the actual use of
the land,
as a direct and natural consequence of the
acquisition.
10 In Commissioner of Succession Duties (South Australia)
v Executor Trustee and Agency Company of South Australia Limited [1947] HCA 10; (1947) 74
CLR 358 at 373-4 Dixon J said:
[t]here is some difference of purpose in
valuing property for revenue cases and in compensation cases. In the second the
purpose is
to ensure that the person to be compensated is given a full money
equivalent of his loss, while in the first it is to ascertain what
money value
is plainly contained in the asset so as to afford a proper measure of liability
to tax. While this difference cannot
change the test of value, it is not without
effect upon a court’s attitude in the application of the test. In a case
of compensation
doubts are resolved in favour of a more liberal estimate, in a
revenue case, of a more conservative estimate.
11 This principle was
expressed by Talbot J in McBaron v Roads and Traffic Authority of New South
Wales (1995) 87 LGERA 238 at 244-5:
[I]t is appropriate to seek to do
justice by adopting a generous approach in favour of the resumee to ensure that
just compensation
is paid so far as the Act allows. Therefore any discretion
should be exercised in favour of the claimant where practicable in order
to
achieve a just result.
Compensation claims
summary
12 As a consequence of the acquisition Mitchell and Beresfield
claim compensation under s 55 of the JT Act.
Mitchell TOTAL: $
3,652,178.02 (plus statutory interest)
(a) 55(a) market value, $684,169.00
(b) 59(a), included in Beresfield claim
(c) 59(b), included in Beresfield
claim
(d) 59(f), disturbance, $2,968,009.02
Beresfield TOTAL:
$903,535.65 (plus statutory interest)
(a) 55(b) special value, $74,750.00
(b) 59(a), agreed at $15,500.92
(c) 59(b), agreed at
$15,400.00
(d) 59(f) disturbance, $797,884.73
Market value
(Mitchell claim only)
13 The subject land is on the corner of the
New England Highway and Weakleys Drive. It is connected to water and electricity
services
but not the sewer. The sewer could be connected for $80,000. The land
is not within a mine subsidence area but is affected by shallow
mine workings.
It also has contamination due to its long standing use as a wrecking yard. It
is zoned 4(a) Urban Services under
the Newcastle Local Environmental Plan
2003 which allows a range of light industrial and storage uses.
Expert
evidence relevant to market valuation
14 Evidence of expert witnesses
was provided by way of individual and joint reports. The experts in land and
business valuation, town
planning and traffic also gave oral evidence. The
evidence of the mine subsidence experts (Mr Hawkins and Mr Holt), contamination
experts (Mr Bozinovski and Mr Caples), quantity surveyors (Mr Corbett and Mr
Meredith) and the effluent disposal experts (Mr Geary,
Mr Bozinovski, Mr Heads
and Mr Hale) was not in dispute. The mine subsidence experts agreed that the
land is affected by at least
three former underground coal mines and there is
potential for mine subsidence. The contamination experts agreed that any
contamination
identified does not render the site unsuitable for ongoing use in
its current form, but disagreed on the methodology in assessing
the remedial
cost to address the impact of contamination on industrial land use. The effluent
disposal experts agreed on the design
of an effluent disposal system, the land
acquired having been previously used for this purpose.
15 The town
planning experts (Mr David Humphris and Mr Adam Hobbs for the Applicants and Mr
Anthony Rowan for the RTA) provided individual
reports and joint reports and
gave oral evidence. They considered the effect of existing development consents
on the land. They agreed
there was no identified development approval for the
use of lot 1 DP653981 (now DP1091199) and lot 2 DP653982 (both of which were
previously owned by Mr and Mrs Lees until 1970). The land valuation experts (Mr
Tew for the Applicants and Mr Graham McDonald for
the RTA) were provided with
joint reports of the above experts prior to their own joint conference and
report.
(i) application of comparable sales
16 The valuers Mr
McDonald and Mr Tew agreed that the “before and after” method of
valuation is the appropriate method
for determining the market value of the
acquired land. This method involves the calculation of the difference between
the values
at the date of acquisition of the whole of the land before
acquisition and of the residue land after acquisition. The difference
is the
amount of market value. The valuers disagreed on the appropriate value of the
land acquired based on their different views
of what sales were comparable. The
valuers prepared a joint report which identified the comparable sales relied on
by them. They
agreed that in the “before” scenario the highest and
best use of the land is its current use, namely as a vehicle wrecking
yard and
associated business. This does not include that part of the business involving
the sale of whole cars for which a claim
of special value is made by Beresfield
(see par 54 below). Mr Tew considered the highest and best use in the after
scenario was the
same as in the before scenario (as did Mr McDonald) or,
alternatively, as a redevelopment site for industrial purposes.
17 The
valuers agreed that in light of the reports of other experts the presence of
mine workings will not affect the continuation
of the current use of Mr
Mitchell’s land. The current use of the land was also not affected by any
contamination on the land.
Mr McDonald/RTA
18 Mr McDonald
argued that the appropriate rate to adopt in the before and after calculation is
$55.00/m2 producing a diminution in
value of $278,736.00 as the market value of
the acquired land. Mr McDonald considered sale 3 (No 93 Weakleys Drive,
Beresfield) was
the most comparable sale and the only relevant sale. It is close
to Mitchell’s land, has the same zoning and is comparable
in size. The
sale demonstrated value of $65/m2. In his written evidence he adjusted the sale
down when applying it to the subject
land because the latter was affected by
contamination $10/m2 and underground mining $2/m2 to derive a figure of $55/m2.
He changed
this calculation during the hearing to make no adjustment for
underground mining. He still adjusted the sale downwards by $10/m2
for
contamination to apply it to the subject land. In cross-examination he agreed
that sale 3 had an inferior location compared to
Mr Mitchell’s as it only
fronted Weakleys Drive.
19 The RTA submitted, based on Mr
McDonald’s evidence, that sale 3 was comparable with the subject land. In
Walker Corporation Pty Limited v Sydney Harbour Foreshore Authority
[2008] HCA 5; (2008) 82 ALJR 489 the High Court accepted Spencer v The
Commonwealth of Australia [1907] HCA 82; (1907) 5 CLR 418 at 441 that the hypothetical
vendor and purchaser are supposed to be “perfectly acquainted with the
land, and cognisant of all circumstances which might affect its value, either
advantageously
or prejudicially ...” when dealing with market value
under the JT Act. Mr Tew did not consider the sale on the basis of an existing
leasehold over its entirety.
Mr McDonald considered the matter on the basis of a
sale with vacant possession and also subject to a leasehold
interest.
20 Mr Mitchell’s land has poor potential for light
industrial subdivision development as a result of the substantive risks due
to
underground mining as agreed in the joint report of the mining experts.
Potential purchasers would consider these physical constraints
affecting the use
of the subject land.
21 A properly informed purchaser would be aware of
the contamination problem and the range of remediation costs likely to be
incurred,
as identified by the contamination experts; Mr Caples estimates
$467,500 and Mr Bozinovski roughly $290,000 (May 2006 prices). A
prudent,
hypothetical purchaser would make allowance for possible contamination costs
because under the Contaminated Land Management Act 1997 an order
requiring a clean up of contamination could be made. Sale 3 is not so
constrained.
22 Of Mr Tew’s sales, the RTA argued the analysis of
sales 12 and 15 to find a 70 per cent difference between the two explicable
solely by reference to an electricity easement on much of sale 15 is incorrect.
The difference in price is due to the fact that the
properties had very
different features. The Cameron Park property (sale 15) has a different,
inferior zoning and a different local
government area to sale 12 and sold for
less than a quarter of sale 12. Sale 12 has a 4(a) urban services with an area
of 15,900m2.
Mr Tew/Applicant
23 Mr Tew considered sale 3
because it was relied on by Mr McDonald. While comparable, he considered it was
inferior to the subject
land due to a substantial area affected by an easement
and that it was under utilised. The sale demonstrated $67.50/m2, $70.85/m2
when
adjusted for time, for the easement-free land. He considered the easement
affected land should have a nil value. Other minor
adjustments were made for
topography, location and contamination. He derived $135/m2 for the subject land.
A table (exhibit JJ) showed
how he adjusted sale 3 upwards substantially when
applying it to the Mitchell land as follows:
(i) No easement affected land:
the largest adjustment was $35/m2 (half of the total adjustment made) because
the subject land was
not affected by an easement whereas sale 3 was.
(ii) contamination: adjusted upwards by $5/m2.
(iii) englobo land:
adjusted upwards by $10/m2 for englobo land meaning the reduced development risk
for the subject land.
(iv) development potential: sale 3 had greater
development potential than it was currently used for and would need development
consent
so the value was adjusted upwards by $5/m2. The latter two categories
appear to overlap.
24 Mr Tew considered a number of vacant industrial
lots to derive a value for the acquired land. Sales 5 (72 Enterprise Drive,
Beresfield),
6 (corner New England Highway and Government Road, Thornton) and 12
(corner Weakleys Drive and John Renshaw Drive, Beresfield). Sale
15 was also
considered in relation to sale 12 as these two sales were said by Mr Tew to
demonstrate the substantial reduction in
the market for easement affected land.
25 Sale 5 at $149/m2 showed a value of $171/m2 adjusted for time. When
analysed down in relation to the subject land due to the latter’s
smaller
size, lack of superior services and absence of immediate development potential
by $30/m2 , the subject land showed a value
of $141/m2.
26 Sale 6 which
had a superior zoning of 3(c) special business showed a rate of $217/m2 adjusted
for time to $255/m2. This was adjusted
down by Mr Tew for inferior zoning,
lesser development potential, smaller size to derive a rate of $138/m2 for the
subject land.
Mr Tew considered the site was superior to the subject land in a
number of respects but he considered it had a similar location with
similar
exposure. He then deducted a further amount for risk of contamination and mine
subsidence to show a value of $113/m2 for
the subject land.
27 Sale 12
sold for $194/m2. When adjusted for time the sale demonstrated $214/m2. This was
adjusted down substantially by $75/m2
for development potential, services and
size to arrive at $139/m2 for the subject land.
28 Sale 15 (27 Kalinga
Close, Cameron Park) sold for $42/m2 which, adjusted for time, reduced to
$39/m2. It was substantially affected
by an easement and was adjusted upward by
$70/m2 in relation to the subject site. Other adjustments upward were for
topography, zoning,
location and development potential.
29 Mr Tew argued
that the appropriate rate to adopt for the Mitchell land in the before and after
calculation is $135/m2 producing
a value of $684,169.00 as the market value of
the acquired land in lots 31, 32, 37 and 38 of DP109119.
30 In addition
to Mr Tew’s evidence the Applicant otherwise submitted that neither the
mine workings nor contamination affect
the value for the highest and best use of
the land as a wrecking yard. Mr Tew did not consider sale 3 was directly
comparable. He
considered the vacant industrial land was more comparable in
sales 5, 6 and 12. Mr McDonald was wrong to dismiss sales 5, 6 and 12
on the
basis they needed to be subdivided. Mr McDonald has not properly analysed sale
3. Sale 3 is affected by a significant easement
and that affects its value. Mr
McDonald admitted in cross-examination that contamination was only an issue if
there was an immediate
requirement to remediate and there is not. The
contamination has no impact on the continuation of the current use. He adjusted
sale
3 twice for contamination in any event as the sale price already allowed
for contamination. His analysis should be revised so that
there is no reduction
for contamination, lack of development risk is recognised by five per cent and
superior location by $10/m2
plus an amount for englobo land.
(ii)
should whole of land be valued for highest and best use?
31 The JT Act
does not permit the inclusion in market value of “any increase in the
value of the land caused by its use in a manner or for a purpose contrary to
law”: s 56(1)(c) of the Act. The RTA argued that lots 1 and 2 did not
have development consent for the wrecking yard use. This was also
the conclusion
of the town planners in their joint report.
DA 89/74
32 DA
89/74 is a “certificate of consent” dated 29 April 1974. The
location of the proposed development is stated to
be: New England Highway,
Beresfield, lots 3/4. The description of the development is:
Additions
to an existing storage building, generally in accordance with the layout plan
submitted, subject to the proposed parking
area being graded, drained and paved
with a suitable hard standing material to the satisfaction of the City
engineer.
33 There is a note that a formal building
application was required and that the work was to be substantially commenced
within 12
months of the date of the consent. A plan reproduced on the Council
file shows the proposed additions to an existing building on
lot 4 to be partly
on lot 3 (the two western-most lots).
DA 193/83
34 DA 193/83
was granted on 21 June 1983 and states:
... notice is hereby given of the
determination by the Council of the development application number 193/83
relating to the land described
as follows: lots 1-4, Part 5, DP 28565, No. 197
New England Highway, Beresfield.
The development was
for:
Erection of additions to rear and side of existing motor vehicle
wrecking and storage workshop.
35 The plans produced by the
Council numbered 193/83 show a workshop extension recognisable as building
4.
DA 48/83
36 The notice states that the application was for
consent to:
Second hand motor vehicle parts storage
shed.
The land referred to in the Notice of Determination is
Lots 1, 2, 3 and 4 and Part 5, DP 28565. The date of consent is 28
February 1983. One plan sheet is drawing number 243-01 with the numbers 48/83
written over the plan.
The other plan sheet shows the north-western corner of
the subject land only and highlights the workshop extension apparently the
same
as that referred to in the previous development consent considered above.
RTA’s submissions
37 The RTA submitted that the
development consents for use of the subject land demonstrated that lots 1 and 2
(the most eastern blocks
as they were prior to acquisition) did not have
development consent for use as a wrecking yard. These were the two lots owned by
Mr and Mrs Lees as at 1969 and later purchased by Mr Mitchell. The RTA did not
dispute that at the date of acquisition lots 3, 17
and 18 had the benefit of
development consent. This was agreed by the town planning experts in their joint
report who stated use
of lots 1 and 2 for the existing business was unlawful.
That land was zoned 4(a) Non-urban and Rural 1(a) which prohibited use for
a
wrecking yard between 1981 and 1995.
(i) There is no evidence DA89/74
gave consent to the use of lots 1 and 2 for a wrecking yard.
(ii) There is
no evidence that DA193/83 related to the use of the two eastern lots for the
purposes of a wrecking yard at the date
of acquisition.
(iii) It is possible
that DA48/83 was an application for the same work as the previous consent, but
in any case, it is clearly a development
consent for building work and the same
comments as were made with the previous consent apply to this.
38 None of
the consents evidenced a development consent for the use of the eastern most
lots (lots 1 and 2) for the purpose of a car
wrecking business. Accordingly, the
conclusion of the town planners was correct and the Court is able to
independently determine
the matter for itself.
39 Therefore when
comparing sale 3 with the subject land there is a need to outlay development
application fees, architect’s
fees and to allow for delay in the ability
to use the 34 per cent of the site which had no development consent, for the
purposes
of carrying on the highest and best use of the subject land, namely for
the wrecking business. To the extent that sale 3 did not
have development
consent for industrial subdivision and/or industrial development, there was no
difference between the two properties
as both need development consent to
utilise their development potential.
40 It is not appropriate to adjust
sale 3 upward for the cost and delay of obtaining development consent for
permission to use the
land as compared with the subject land, contrary to the
approach of Mr Tew.
Applicant’s submissions
41 The two
1983 development consents were for uses of the land as well as use of buildings.
Accordingly, the use was lawful. The town
planners reached their conclusion that
lots 1 and 2 did not have development consent by taking into account extraneous
matters. Only
the terms of the development consents must be construed in order
to determine what consent has been given for.
42 For DA 48/83:
(i) The
Notice of Determination indicated that consent was granted relating to four lots
plus part of lot 5.
(ii) Condition 1 incorporated by express reference the
submitted plans and the application form. By the application form the proposed
use was described as “motor vehicle parts (second hand) storage”.
The proposed hours of operation for the whole use and maximum number of
employees for the total site were also indicated.
(iii) the application
incorporated a Lot Plan which showed lots 1-5.
(iv) The conditions imposed
upon the development consent related to the use of the land in its entirety and
not merely to the use
of the building. See for example condition 4, 8 and
9.
When considered in its entirety, development consent DA 48/83 was a
consent to use the land for the purpose of a wrecking yard as
well as construct
a workshop extension.
43 DA 193/83 was also a consent for the use of the
entirety of the land.
(i) The Notice of Determination identified the land as
“Lot 1-4, Part 5 DP28565...”
(ii) Condition 3 incorporated
by express reference the plans and application form. The plans and application
form identified the
proposed use as “dismantling storage and sales of
motor vehicles” and identified the scope of the existing use as
carried out on the land. Further, the DA proposed in terms that the application
related to the whole of the land.
(iii) The conditions imposed upon the
development consent related to the use of the land beyond the mere erection of a
building as
is submitted by the RTA. See for example Conditions 1, 2, 6, 7, 8,
9, 10, 11, 14, 15 and 16.
Finding on market value
44 The
determination of market value must be assessed on the basis that the land was
sold on the date of acquisition by a prudent
hypothetical vendor to a
hypothetical purchaser (Walker Corporation Pty Ltd v Sydney Harbour Foreshore
Authority at [48] – [51]). In this case the valuers agreed that the
sale should be on a vacant possession basis (not on the basis the
land is a
rental investment).
(i) should whole of land be valued for highest and
best use?
45 The RTA has argued that as 34 per cent of the site does not
have development consent the whole property cannot be valued as able
to be used
for the agreed highest and best use in light of s 56(1)(c) of the JT Act. I
consider the Applicant’s construction
of the relevant development consents
at par 41-43 are correct. Accordingly, the development consent did relate to the
whole of the
Mitchell land in 1983, contrary to the conclusions of the town
planners.
46 I also agree with the Applicant’s alternative
submission that there is no evidence that even if lots 1 and 2 did not have
development consent there is evidence suggesting that would impact on the value
of the land. Given the land’s use for over
30 years as a wrecking yard
with the knowledge of the Council and that lots 1 and 2 have been used largely
for the storage of vehicle
bodies I do not consider a prudent hypothetical
purchaser would consider it a real risk that development consent would not be
granted.
Accordingly, the whole of the Applicant’s property should be
valued on the basis of its highest and best use.
(ii) application of
comparable sales
47 The valuers agreed that the valuation must be made on
the basis of vacant possession. I agree with Mr McDonald that sale 3 is the
most
comparable sale for the subject site given its location close to the subject
site. It has the same zoning (4(a) Urban Services
zone) and is of generally
similar size and has generally similar development potential. It is not part of
an established industrial
subdivision site, the same as the subject land, unlike
sales 5, 6 and 12 relied on by Mr Tew. These sales required a large to very
large adjustment downwards to render them applicable to the subject site, an
indicator that they are not particularly comparable
(see par 25-27). Reasons for
their greater value included their superior location and far greater development
potential.
48 I do not agree with all the adjustments made to sale 3 by
Mr McDonald and Mr Tew in applying that sale to the subject site.
49 The
main adjustment to consider in relation to sale 3 is in relation to the easement
affected land. Mr Tew considered the easement
affected land in sale 3 had nil
value and also that it would affect the valuation of the balance of non-easement
affected land because
it could affect how drainage and stormwater flows were
developed. He made a large adjustment of $35/m2 in relation to the subject
land
as a result because it is not affected by any easement.
50 He relied on
a comparison between sale 12 at Beresfield in the 4(a) urban services zone which
had an area of 15,904m2 and sold
for $3.1 million and sale 15 at Cameron Park
which was 18,478m2 in the 4(1) industrial zone under the Lake Macquarie LEP and
sold
for $780,000. I agree with the RTA’s criticism of his reliance on
sale 15 and sale 12 solely to demonstrate a low value for
easement land. Sale 15
was at Cameron Park, which is a different area to Beresfield. It had a different
zoning and was obviously
in a quite different location. There could be several
factors other than easement affectation of land in sale 15 which influenced
the
sale price. I consider Mr Tew’s approach to the valuation of the easement
resulted in too generous an adjustment upwards
when valuing Mr Mitchell’s
land.
51 The RTA submitted that the easement land could be valued on the
basis that it could be used for carparking, landscaping and access,
inter alia.
I agree that some value should be attributed to the easement land in sale 3 and
that while there should be some adjustment
of that sale upwards in relation to
the subject land it should not be of the magnitude identified by Mr Tew. I
consider $15/m2 is
appropriate.
52 Other upward adjustments should be
made for the lack of development risk of the subject land and superior location
given the exposure
to two major roads compared to sale 3. There is no need to
adjust the sale down for contamination or underground mine workings given
the
agreement of the valuers that the highest and best use of the property is its
current use.
53 I consider that sale 3 should be adjusted upwards as
follows from $67/m2:
(i) $15/m2 to allow for greater visibility given its
exposure to Weakleys Drive and the New England Highway;
(ii) $15/m2 to allow
for the lack of easement affected land on Mr Mitchell’s
land;
(iii) $10/m2 to allow for the superior development potential for the
whole site.
to derive an amount of $98/m 2. Applying this to the before and
after areas of land the amount of market value is $496,656.16.
Special
value (Beresfield only)
54 Section 57 of the JT Act defines
“special value”:
Special value
In this Act:
special value of land means the financial value of any
advantage, in addition to market value, to the person entitled to compensation
which is
incidental to the person’s use of the
land.
Applicant’s submissions
55 The definition of
special value does not refer to the person entitled to compensation being the
same as the person claiming market
value. Special value results from an
attribute of the land so that a person entitled to compensation other then the
person claiming
market value can claim special value.
56 Beresfield
claims special value under s 55(b) of the JT Act in the amount of $74,750. Part
of Beresfield’s business is the
sale of whole vehicles which have been
brought to the land. Mr Mitchell’s affidavit sworn 22 April 2008 states
that up to 35
motor vehicles were stored in this area at any one time. The
vehicles were displayed in the north-western corner of the land as it
abutted
the corner of the New England Highway and Weakleys Drive. The elevated and open
location made the vehicles visible to drivers
on the New England Highway and
Weakleys Drive. Both the location and visibility of such a display area provided
a direct financial
advantage to Beresfield as a consequence of affording the
broad exposure to passing trade of vehicles displayed. Following the acquisition
of the land along Weakleys Drive that area is no longer available. Further, to
the extent that any area remains it will no longer
be available for vehicle
display due to the need to reconfigure the site.
57 Mr Mitchell, a
director of Beresfield, held a motor vehicle dealers’ licence which
enabled him to take advantage of the site
in a way not open to any member of the
public, relying on Callinan J in Boland v Yates Property Corp Pty Ltd
[1999] HCA 64; (1999) 74 ALJR 209 at [292].
58 Mr Tew’s evidence supported a
claim for special value over an area of 650m2 which included 150m2 of land not
acquired by
the RTA. Mr Tew has calculated special value on the basis of a
capitalisation of an estimated rental of 650m2 to arrive at special
value in the
amount of $74,750.00.
RTA’s submissions
59 The RTA denies
any special value accrued to Beresfield as a consequence of the acquisition. Mr
McDonald stated in the joint report
(exhibit C) that s 55(b) was not applicable.
Further, the claim relates to the use of an unimproved surface of part of the
land acquired
for the display and sale of damaged cars. The company is a lessee
from the owner Mr Mitchell. If part of the leased land was used
by the company
for the display of damaged cars and this use was lawful such an activity can
still be conducted on the residue land.
(i) No development consent
60 There was and is no development consent for the use of selling of
cars the subject of this claim. According to the town planning
evidence, DA
121/75, which appeared to be the basis for the claim of special value, did not
approve that use of this area of land
(exhibit C, p 36). Under DA 193/83
landscaping was to be provided in the north-western corner. Alternatively,
according to Mr Rowan’s
evidence it is required for a customer parking
area.
(ii) Special value available only if applicant also entitled to
market value
61 In order for there to be a claim for special value, the
claimant must also be able to claim market value. Beresfield is not entitled
to
claim market value. (The Applicant argued that while there must be a claim of
market value for the land available, as there is
for Mr Mitchell, so that
special value is in addition to market value (see Mir Bros Unit Constructions
Pty Limited v Roads & Traffic Authority of New South Wales [2006] NSWCA
314 at [84]) market value does not need to be attributable to the claimant for
special value.)
(iii) Added value not demonstrated
62 The
financial accounts of Beresfield do not separate the income derived from the
area in question or the income from the selling
of registered as opposed to
unregistered damaged cars, from the overall income of the business in the period
of years examined by
the business valuers: evidence of Mr Deane. It is
therefore not possible for the Applicant, by reference to any direct evidence,
to quantify the value of the alleged “special advantage”.
63 The method adopted by Mr Tew is to assign an arbitrarily higher land
value rate per square metre, based on an arbitrarily higher
rental value of the
particular land area (see par 58 and exhibit D) and to adopt $25/m2 rental value
which is capitalised at 10 per
cent to give an increased land value. No
reasoning is exposed, and no comparable rentals are given. The rental level
capitalised
by Mr Tew yields a land value double that applied for the business
as a whole. ($25/m2 capitalised at 10 per cent = $250/m2 land
value compared to
his adopted $135/m2 or Mr McDonald’s $55/m2). The basis for this higher
rent is not disclosed. It has no
necessary or evident relationship with the
ability to sell a number of cars from this part of the land which Beresfield
leased from
Mr Mitchell.
(iv) no “special”
characteristic required
64 More fundamentally, the ability to enjoy the
special value and obtain financial advantage from it was said to lie in the fact
that
Mr Mitchell held a motor dealers’ licence. At the date of acquisition
such licences were issued under the Motor Dealers Act 1974. There is no
dispute that Mr Mitchell held, as was claimed, a dealers’ licence under
the Motor Dealers Act. Section 10 of that Act provides the
Director-General of the Department of Fair Trading may grant licences under the
Act including “dealers’
licences”.
65 No art,
science, academic qualification or special experience is needed for the holder
of a motor dealers’ licence. A very
large proportion of the community
would be entitled to obtain such a licence if they so desired. Almost anybody in
the community
could hold a motor dealers’ licence and sell damaged
registered motor cars from the area in question or indeed other areas
on the
land, or on other land in suitable locations in the area or
elsewhere.
Finding on special value
66 In Boland v Yates
Callinan J stated at [292]:
The special value of land is its value to the
owner over and above its market value. It arises in circumstances in which there
is
a conjunction of some special factor relating to the land and a capacity on
the part of the owner exclusively or perhaps almost exclusively
to exploit
it....There will in practice be few cases in which a property does have a
special value for a particular owner. Obviously
neither sentiment nor a long
attachment to it will suffice. The special quality must be a quality that has an
economic significance
to the owner...
67 In Mir Bros Unit
Constructions Pty Limited v RTA, Spigelman CJ (Handley and Tobias JJA
concurring) held at [84] that:
Where there is no difference between the
value of the land in general, and its value to the owner, there is no special
value: Turner v Minister for Public Construction [1956] HCA 7; (1956) 95
CLR 245. That principle is now enshrined in the statutory definition of
“special value” which requires such value to be “in
addition
to market value”.
68 A threshold issue to determine before
considering any further arguments is whether special value can be claimed under
the JT Act
if market value is not claimed by the same person/entity. Mr Mitchell
has claimed market value, not Beresfield, but the latter is
claiming special
value. The definition of “special value” is set out in s 57. The
Applicant submitted that it is the
land which must give rise to market value and
to which special value attaches, not the claimant of market value. Special value
can
be claimed by the person entitled to compensation which is incidental to the
person’s use of the land. While in addition to
market value, as specified
in the definition in s 57, the definition does not specify that the person
entitled to special value must
be the same as the person who is entitled to
market value. No authority was provided by the Applicant where the claimant for
special
value was not the owner claiming market value such as in this case where
the tenant of acquired land has claimed special value.
69 I do not
consider that submission can be correct in light of both the definition of
“special value” in the JT Act and
case law. The latter clearly
states that special value accrues to the owner of land in addition to market
value. Section 57 refers
to the financial value of any advantage, in addition to
market value, to the person entitled to compensation which is incidental
to the
person’s use of the land. The definition does not literally state that
market value must be claimed by the person also
claiming special value. The
definition refers to “the person entitled to compensation”. The
construction of the section
in the context of s 55 and s 56 of the JT Act
suggests that the person entitled to compensation means the person entitled to
market
value. Special value, while related to the land, must also relate to the
person claiming it. It is not solely an attribute of the
land which determines
whether special value is claimable. I do not therefore accept the
Applicant’s submission that special
value is largely an attribute of the
land to sustain its argument that the person able to claim is not restricted to
the person entitled
to market value.
70 The cases referred to by the
parties, Boland at [292] and Mir Bros at [71], refer to the owner
of land being the person entitled to special value in addition to market value.
In the discussion in
Hyam, Alan A, The Law Affecting Valuation of Land in
Australia (Sydney: The Federation Press, 2004) at pp 280-281, the
consideration of special value is in the context of special value being to
the
owner. Only the owner of land can claim market value.
71 I do not
consider Beresfield can claim special value. It is unnecessary that I determine
the balance of the arguments concerning
special
value.
Disturbance
72 The bulk of the Applicants’
claims for compensation is for disturbance. Some items claimed by Beresfield are
agreed. The
RTA disputes the whole of the disturbance claim of Mr Mitchell.
Pursuant to s 59(f) of the JT Act the following is claimed according
to a table
filed by the Applicants after the hearing:
(a) Mitchell
(i) $366,428 (land
value for road widening on southern boundary). If allowed this amount will be
less as Mr Tew’s figure of
$135/m2 must be reduced to $98/m2 in light of
my finding on market value at par 53.
(ii) $1,703,300 (cost of DA works
approved by the Court)
(iii) $18,972.02 (costs of Class 1 appeal and
development application)
(iv) $799,309.00 (southern road works as per DA)
(v) $100,000.00 (temporary access and management)
(b) Beresfield
(i) $20,000 (cost to relocate and temporary storage) - quantum and liability
agreed
(ii) $714,979 (loss of vehicle storage resulting in loss of business
value as a consequence of the reduction in the area available
for vehicle
storage) – liability disputed
(iii) $62,905.73 (costs of advice
pre-acquisition) - quantum agreed
73 In relation to the Beresfield claim,
the RTA agrees that it should pay item (i). It disputes item (ii), the loss of
vehicle storage
area. In relation to item (iii), I am unable to find reference
during the hearing to the amount of $62,905.73 claimed. I note that
while the
amount is agreed by the RTA I am not sure if it admits liability for all of this
sum. This needs to be clarified by the
parties. The RTA also agreed to pay the
costs of moving the transpiration bed on the acquired land and that also needs
to be added
if not included in the above amounts.
74 The bulk of the
disturbance claim is related to changes which have been made or are proposed to
be made for the reconfiguration
of the business being conducted on the land as a
result of the loss of the northern access to the residue land.
Change in access arrangements/interest in land acquired?
75 Prior to this acquisition of land and the subsequent road works
undertaken by the RTA in 2007, Mr Mitchell’s land enjoyed
access via a
service/access road within the road reserve that ran parallel to the formed
pavement of the New England Highway and
the northern boundary of Mr
Mitchell’s land. Beresfield’s business had developed over many years
taking advantage of
its exposure and frontage to the New England Highway by
orienting its retail sales component to the north of the site. Customers
attending at the premises accessed the northern part of the site along the
northern access road and parked either on the access road
or in a customer
parking area on the northern side of lot 4 accessed from the access
road.
76 As a consequence of the cessation of access via the northern
road (which necessitated the relocation of the access point) Mr Mitchell
and
Beresfield have had to reorganise their access and business operations. They
claim costs associated with the reconfiguration
of the business as consequential
on the acquisition as a substantial disturbance claim under s 59(f) of the JT
Act. This is said
to arise because there has been an acquisition of an interest
in land, the right to access the property across the northern boundary.
As a
result other financial costs have been reasonably incurred (or will be incurred)
relating to the actual use of the land as a
direct and natural consequence of
the acquisition. The claim for disturbance due to this interest in land being
acquired is available
relying on the Court of Appeal in Peak.
77 Mr Mitchell argued that as a consequence of the acquisition the
access has been relocated to Weakleys Drive further to the south.
He claims as
disturbance under s 59(f) that in order to maintain the business’ exposure
to the New England Highway and to provide
suitable access and parking for light
and heavy vehicles it is necessary that Mr Mitchell undertake works generally
comprising:
(i) Provision of separate vehicle access to the site for heavy
and light vehicles;
(ii) The demolition of part of the dismantling shed to
enable the provision of access, parking, setback and landscaping;
(iii) The
relocation of the floor space of the dismantling shed to the east of the
existing dismantling shed;
(iv) The demolition of the buildings fronting the
northern boundary of the subject site between the dismantling shed and the sites
boundary (comprising 2 storage areas, retail building and caretaker’s
residence);
(v) The erection of a new retail sales building facing the New
England Highway.
(vi) The creation of customer car parking to the north and
west of the dismantling shed and new retail building;
(vii) Relocation of
transpiration bed (agreed by RTA);
(viii) Internal fencing along the eastern
and western access points;
(ix) Widening of the southern
road.
78 These works have been the subject of a development application
which was approved by this Court on 24 April 2008. The cost of the
works the
subject of that application has been calculated by a quantity surveyor at
$1,703,300 (items (i)-(vii), see exhibit G) and
the southern road works (item
(ix)), at $779,309. It was submitted that these works reflect the advice
received from the Council
about its requirements under the relevant planning
instruments that the landscaping is less than that required by the relevant
development
control plan. Further the access is as required by the RTA and the
Council (see exhibit HH).
79 The Beresfield claim under s 59(f) arises
from the necessary changes to the conduct of the business on the residue land.
These
are a result of the reduction of land area available following the changed
access, internal access roads and landscaping required
by the development
consent granted by the Court. The loss of the storage area, consisting of the
acquired land, has been accounted
for in the market value of the land acquired.
This part of the claim concerns the impact on the residue land of the changed
arrangements
necessitated by the acquisition. The new access roads for light and
heavy vehicles now take up part of the land area of the residue
land so that
there is less area available for the storage of vehicles. Landscaping was
required to be provided pursuant to the Council’s
instruments and also by
the Court when it granted approval and this takes up more land area. The
business losses claimed are as calculated
by Mr Tew.
80 The RTA disputes
that any interest in land beyond the four lots identified in the gazettal notice
on the southern and western boundaries
of Mr Mitchell’s land have been
acquired. The actual use of land on those lots was for the storage of damaged
cars in the open
air and as the site of part of a transpiration bed. As that
land was also not used for access to the site none of the other matters
arise as
a direct and natural consequence of the acquisition either. Disturbance in
relation to these items if proven is not disputed.
Mr McDonald identifies the
cost of moving the vehicles off the acquired land as $12,000 as compensation
payable to Beresfield under
s 59(f). The RTA does not consider the balance of
matters he identifies at p 39 of exhibit C as compensable. In relation to Mr
Mitchell,
Mr McDonald identifies the transpiration bed relocation as compensable
under s 59(f) and the RTA agrees. The remainder of the disputed
disturbance
claims are disputed.
81 The RTA otherwise submitted that access across
the northern boundary of Mr Mitchell’s land was across lots 7 and 8
DP237977
which are owned by the RTA (acquired by way of agreement in 1969). No
acquisition notice has been published in relation to these
lots. There is no
jurisdiction for the Court to consider a different claim in respect of which no
compensation notice has been published.
82 Two aspects of this issue
arise for consideration but one does not necessarily follow from the other: (i)
whether the northern
access to the residue land is an “interest in
land” under the JT Act requires determination; (ii) a related but separate
issue is whether that interest was acquired as part of this acquisition process.
Even if I find that an interest in land within the
meaning of the JT Act existed
at the date of acquisition there is a real issue as to whether it was acquired.
Whether both matters
are determined in the Applicants’ favour or not, the
issue then arises of whether the amounts sought as disturbance are recoverable
in whole or in part under s 59(f) in light of Peak, or on some other
basis. If any disturbance is recoverable, the amount must also be
determined.
(i) is the northern access from the service road an
“interest in land” under the JT Act?
83 Section 4 of the JT
Act defines land as including an “interest in land”. Interest in
land is defined as:
interest in land means:
(a)
a legal or equitable estate or interest in the land, or
(b) an
easement, right, charge, power or privilege over, or in connection with, the
land.
84 Mr Mitchell claims that the entitlement to access across the
northern boundary comprises an interest in land within the meaning
of the JT Act
on any or all of the following bases:
(a) a statutory entitlement pursuant to
the Roads Act, as the access road was a public road
(b) a licence
(c) a
contractual entitlement.
Evidence of long-term access on northern
boundary
85 The documentary evidence relied on by the Applicants
discloses the following:
(a) Prior to 1958 the New England Highway was a dual
carriageway (one lane west and one lane east).
(b) Mr Mitchell’s land
(and the land to the east) enjoyed direct access from the highway.
(c) In
1958 the Department of Main Roads (the DMR), predecessor to the RTA, acquired
the land fronting the New England Highway pursuant
to a road widening order (the
1958 acquisition). The land acquired at that time was dedicated as a public
road.
(d) After the 1958 acquisition Mr Mitchell’s land (and land to
the east) continued to enjoy access from the New England Highway.
(e) In
1969 the DMR acquired further land from Mr Mitchell (the 1969 acquisition). The
land acquired was for road purposes, with the
intention of providing what was
then known as the “Beresfield deviation”. The 1969 acquisition from
Mr Mitchell, by way
of agreement for sale, was for lots 7 and 8 of DP 237977
(being the land north of present lots 3 and 17) and for lots 5 and 6 in
DP
237977 from Mr and Mrs Lees (being the land north of present lots 19 and
2).
(f) Upon acquisition of the land the RTA constructed an access road along
the northern boundary for access to Mr Mitchell’s
land and the land to the
east. The access road ran parallel to the New England Highway and entry to the
access road was from Weakleys
Drive (formerly Minmi Road), near the intersection
with the New England Highway.
(g) The road was the sole vehicular access to
the business of Beresfield Spares and residential properties to the east. The
road
was maintained by the Council.
(h) The Applicants have by themselves,
their customers and staff continued to access the land via the northern access
road since its
construction until it was removed some time in about 2007, that
is, for 37 years.
(i) As a consequence of the road works at the intersection
of Weakleys Drive and the New England Highway, the access road has been
removed
and access is no longer available over the northern boundary of the
Mitchell’s land. Access is now via either an access
point on Weakleys
Drive or off the road (proposed public road) which runs along the realigned
southern boundary of Mr Mitchell’s
land.
86 A letter sent from the
DMR to a consultant valuer, Mr Skelton, prior to the sale of the land in 1969
states that the DMR was prepared
to purchase the land subject to various
conditions, including one which stipulated that the DMR would “restore
access”
at its own expense during road construction. This access was to be
“via a service road off Minmi Road [Weakleys Drive] along
the northern
boundary of the property” (exhibit B, tab 34). The agreement for sale
between Mr Mitchell and the Commissioner
for Main Roads, dated 5 November 1969,
for part lots 7 and 8 of DP 237977 contained special conditions that provided,
inter alia,
that the DMR would “adjust any affected utility service and
access” either during or prior to road reconstruction at
the DMR’s
expense (exhibit B, tab 35).
87 The Applicants argued that the 1969
acquisition of land by the DMR did not extinguish Mr Mitchell’s right to
access the land
then acquired. At no time prior to the commencement of these
proceedings was it asserted that the northern access road was not a
public road
or that access to Mr Mitchell’s land via the access road was by means
other than as of right.
Public road
88 Until the issue was
raised during this litigation the most obvious basis on which Mr Mitchell
probably considered he had a right
to his northern access was that the service
road was a public road. The RTA disputes that has been the case since the land
on his
northern boundary was purchased by its predecessor in 1969. The RTA
argued that no public road was created on the land which became
the service road
to the north of Mr Mitchell’s land on land acquired by the RTA in
1969.
89 The Roads Act defines a public road as:
Public road
means:
(a) Any road that is open or dedicated as a public road,
whether under this or any other Act or law; and
(b) Any road that is
declared to be a public road for the purposes of this Act.
90 The
Savings and Transitional Provisions of that Act provides:
Existing public
roads:
(15) Any road that, immediately before the relevant
commencement, was a public road is taken to be a public road within the meaning
of this Act.
91 Where a road is a public road the adjoining owner has
the statutory rights of access provided for in the Roads Act. In
particular, s 6 provides:
6 Right of access to public road by owners of adjoining
land
(1) The owner of land adjoining a public road is entitled, as
of right, to access (whether on foot, in a vehicle or otherwise) across
the
boundary between the land and the public road.
(2) The right
conferred by this section does not derogate from any right of access that is
conferred by the common law, but those
rights are subject to such restrictions
as are imposed by or under this or any other Act or law.
92 Prior to
the commencement of the Roads Act the creation of a public road was governed by
other legislation including the Local Government Act 1919 (the LG Act)
and the Main Roads Act 1924 (both of which are now repealed).
93 The land acquired in 1958 on the northern boundary of Mr
Mitchell’s land (see par 85) was dedicated as public road under
the LG
Act. The status of this land as a public road is not disputed. The 1969
acquisition is argued by the Applicant to be a public
road because of the
operation of the Main Roads Act. The definition of “public road” in
that Act stated that it included
“proposed public road or proposed
deviation” (s 3). “Main road” is similarly defined as
including “a proposed main road or proposed deviation
thereof”. The Applicant’s arguments rely on s 27D and E of the
Main Roads Act in Part VB of that Act as in force in 1969.
94 Section 27D
of the Main Roads Act provided:
In this Part “re-alignment”
means any alteration of the alignment of a main road for the purpose of widening
the road
and “re-aligned” has a corresponding
meaning.
95 Section 27E of the Main Roads Act
provided:
(1) Notwithstanding the provisions of any Act the Commissioner
may cause the alignment of any main road to be re-aligned.
(2) Any
such re-alignment may be carried into effect by the acquisition under this Act
or any amendment thereof of the necessary land,
or under the succeeding
provisions of this section relating to the re-alignment method of acquiring
land, or by a combination of
those methods.
(3) Where the
Commissioner proposes to apply the re-alignment method of acquisition to any
lands affected by a re-alignment he shall
-
(a) cause a plan of the
proposal to be submitted for the approval of the Governor;
(b) cause
to be served a notice upon the owners of lands affected by the re-alignment and
upon the council of the area; and
(c) notify the approval of the
Governor in the Gazette.
Until such plan has been approved and
such notices are served and such approval notified as aforesaid the interests of
such owners
shall not be affected by the re-alignment.
(4) A plan
showing the re-alignment shall be lodged by the Commissioner in the office of
the Registrar-General, with the Department
of Lands and with the
Valuer-General.
...
(7) Whether or not the Commissioner has
elected to apply the re-alignment method he may at any time and notwithstanding
any such election
decide to purchase or resume any or all of the lands affected
by the re-alignment.
96 By operation of s 4(1) of that Act the
definition of words used in the Main Roads Act were to have the
same meaning as that in the LG Act unless such definitions were
inconsistent with the Main Roads Act.
97 Section 4 of the LG Act
provided:
“Public road” means road which the public are
entitled to use and includes any road dedicated as a public road by any
person
or notified, proclaimed or dedicated as a public road under the authority of any
Act, including this Act, or classified as
a main road in the Gazette of the
thirty-first day of December, one thousand nine hundred and six.
Relevant plans/documents of past acquisitions
98 Prior to
1958, the Applicant’s land enjoyed direct access to New England Highway to
the north. In 1958 the DMR acquired,
pursuant to the LG Act, the northern
portion of lots 1 - 4 DP 28565 (at the time only lots 3 and 4 were owned by the
Applicant).
This portion of land, 20m wide, ran parallel to the south of the
Highway. A notation on DP 28565 (dated 21 April 1958) states that
this stretch
of land was to be dedicated as a public road. The Applicant retained its
northern access to the Highway following this
acquisition.
99 In 1969 the
DMR acquired more of Mr Mitchell’s land on the northern boundary by way of
agreement for sale. Deposited Plan
237977 (dated 1969) graphically indicates the
extent of this acquisition and is described as a plan of “land to be
acquired for the purposes of the Main Roads Act 1924, as amended”. The
plan also notes that:
[l]ots 1 to 10 inclusive, delineated hereon are to
be acquired for road [sic] and there will be no objections to such lots being
shown
as road on Certificates of Title for adjoining lands, after acquisition.
Lots 5 - 8, inter alia, were delineated, being newly excised
northern portions of lots 1 - 4 respectively. These lots were acquired
from the
Applicant and the then owners of lots 1 and 2. Certificates of title dated July
1970 for lot 1 DP 653981 (originally lot
1 DP 28565, now known as lot 19 DP
1091199) and lot 2 DP 653982 (formerly known as lot 2 DP 28565) were relied upon
by the Applicant
as consistent with the notation on DP 237977 that what was
being acquired in 1969 was “for road”, as the land immediately
to
the north of and adjoining the lots on the certificates of title is indicated as
being the New England Highway (see tabs 8 and
9 of exhibit B). The Applicant
submitted that this is consistent with the fact that the 1969 acquisition did
not extinguish the Applicant’s
right to access the land
acquired.
100 A further deposited plan was relied upon by the Applicant,
DP 545676 (dated November 1970), being the plan of the lots immediately
to the
east of the Applicant’s land. This plan notes and illustrates a
“local access road” running east-west along
the top of the
Applicant’s land into the western boundary of the land depicted in the
DP.
101 The RTA relies on an internal (departmental) sketch of lots 1 - 4
of DP 28565, compiled from the Department of Main Roads NSW
and dated 7 February
1968 (exhibit B, tab 29). This sketch illustrated the proposed “Beresfield
deviation” of the New
England Highway in 1969 and the land to be acquired
in order to facilitate it. The land acquired in 1958 is noted as being
“dedicated as Public Road by DP28565”. Another departmental
sketch dated 21 April 1970 identifies a service road 40 feet wide separate to
the New England Highway to the
north of Lots 1 and 2 DP 28565.
102 A
statement of Mr Steve Bates, Senior Property Officer for the RTA, dated 16 April
2008, was read by the RTA. Mr Bates maintains
the records of the status of land
for the RTA and also did so for the DMR. He attests that there has never been a
proclamation by
the Governor or dedication under the LG Act or Main Roads Act or
any other Act that the service road to the north of Mr Mitchell’s
land was
a public road. A title search would show that it remained in the ownership of
the DMR/RTA. Nor has any DP been registered
for the service road stating that
the land is a public road. Deposited Plan 237977 does not do so. In 1967 the
Beresfield deviation
was approved by the DMR and required access to and from the
New England Highway from the land acquired in 1958. Additional land acquisition
within lots 1 - 4 was also necessary. DP 237977 was registered as lots 5 - 8
were then acquired in 1969. Part of the land acquired
by the DMR in 1969 was
included in the Beresfield deviation roadway. The remainder of the land acquired
lay between the southern
boundary of the reconstructed New England Highway and
the northern boundary of the land comprising part of former lots 1 - 4 inclusive
in the 1958 plan. The land acquired in 1969 (lots 5 - 8, being the land north of
lots 1 - 4) was used as a service road, albeit with
no street lighting or
drainage as would be typically provided for in a public road. Part of the
service road was sealed by the DMR.
Applicants’ submissions
103 If the northern access road was a public road, that interest was
acquired when the Applicants lost their ability to use it as
a result of the
acquisition. In Minister for Education and Training v Tanner
[2003] NSWCA 164; (2003) 128 LGERA 281 it was held that a loss of access to a public road is
an “interest in land” for the purpose of s 4 of the JT Act.
104 The lands identified in DP237977 (see par 99) were acquired in 1969.
The Certificate of Title issued after the 1969 acquisition
identified the
residue of the land after acquisition as fronting the New England Highway. The
purpose of this acquisition was for
the purposes of facilitating the
“Beresfield deviation.” The Beresfield deviation included a proposal
to divert the New
England Highway south easterly along the route of the
deviation.
105 The Main Roads Act, as it applied in 1969, defined a main
road as including: “a proposed main road or proposed deviation
thereof”. “Public road” includes proposed public roads and
proposed deviations. The definition of “public road” in
the LG Act
is inclusive and not exhaustive of the manner in which a road may become a
public road. Part VB of the Main Roads Act provided for the widening of
main roads by realignment. Realignment of a main road was to be effected by
lodging a plan in the office
of the Registrar-General, with the Department of
Lands and with the Valuer-General. Thereafter realignment was to be effected by
acquisition. Acquisition could be achieved by a number of methods including the
purchase or resumption of the lands affected by the
realignment. The 1958
acquisition resulted in the creation of a public road through widening or
opening. The 1969 acquisition resulted
in a public road though acquisition. The
provisions of the Main Roads Act applied notwithstanding the provisions of any
other Acts.
This consequence is also evidenced by the notation on DP 545676 (see
par 100). Upon acquisition of the land in the deposited plan
the road was
widened and thereafter formed part of the existing public road.
106 On
the date of acquisition in 1969 these acquired lots became a public road and
continued as such until the date of acquisition
in 2006, the subject of these
proceedings, by virtue of the operation of the Savings and Transitional
provisions of the Roads Act.
RTA’s submissions
107 The
evidence of Mr Bates and the documents referred to on the RTA file confirm that
the land acquired in 1969 immediately to the
north of Mr Mitchell’s land
did not become public road.
108 In DP 28565 only a small part of what was
acquired by purchase in 1969, that is lots 7 and 8, was needed for realignment
of the
New England Highway. Sketch plans on the RTA’s files demonstrate
this (dated 7 February 1968, see par 101).
109 There was no automatic
vesting or opening of a public road over land acquired by the DMR as the
realignment method under s 27E(2)
was not used in the 1969 acquisition. There
was no other provision of the Main Roads Act or the LG Act which automatically
declared
land acquired by the DMR to be a main road or a public road. The
realignment method requires the registration of a plan approved
by the Governor
and its gazetting. Owners are notified and thereafter their titles are affected.
Building on the proposed realigned
area of their land is prohibited: s 27E(3),
(4) and (6). The registration of the realignment plan is essential to the
realignment
method. Under the realignment method compensation was payable when
the s 27E notice was served (if vacant land) or when the land
was cleared of
buildings (if not). At that time the land in the plan is vested in the Council
for the public road: s 27E(5).
110 The Applicants submitted s 27E(4),
which requires the registration of the plan, applies not only to the realignment
method but
also to realignment by the alternative method being simply an
“acquisition under this Act” referred to in s 27E(2). This
is
incorrect. Subsection 27E(4) is one of the “succeeding provisions”
referred to in s 27E(2), which apply only to the
realignment
method.
111 There was no automatic vesting or opening of a public road
over land acquired by the DMR, when the realignment method was not
used. The
realignment or alteration of the alignment of the New England Highway (a main
road) did not affect the whole of the land
acquired by the DMR in
1969.
112 The unregistered plans in exhibit B (at tab 29, see par 101)
illustrate the limit of the widening of the highway to create the
motorway
adopted by the DMR in 1969-1970. This plan notes the extent of existing public
road. It does not abut the Applicant’s
northern boundary.
113 The
reference to “proposed main road or proposed deviation thereof” in
the definition of “Main Road” in
s 3(1) of the Main Roads Act
relates in this case to that area of the acquired land in lots 7 and 8 DP 237977
actually proposed,
required and used for the highway deviation. This did not
include the land between the deviation road and the land immediately north
of
the residue of Mr Mitchell’s land which he sold to the DMR in
1969.
114 Further s 196 of the Conveyancing Act 1919 as then in
force applied and was not complied with so that the land cannot be a public
road.
Finding on public road
115 There is no dispute that the
land acquired in 1958 on Mr Mitchell’s northern boundary became a public
road. In issue is
whether the land purchased in 1969 by the DMR on Mr
Mitchell’s (and Mr and Mrs Lee’s) northern boundaries became a
public
road.
116 Under the savings and transitional provisions of the
Roads Act, a public road when that Act came into force continues to be so.
There
is a right to access the public road under s 6. The Applicant maintains that the
relevant land did become a public road in
1969 when it was acquired because of s
27E(2) of the Main Roads Act, which refers to acquisition in addition to the
realignment method.
The effect of s 27 of the Main Roads Act is disputed as the
RTA argued that only by the realignment method can the necessary plan
under s
27E(4) come into effect. This can occur only for the realignment method, not for
acquisition. That construction of ss (2),
given the reference to “or under
the succeeding provisions of this section relating to the re-alignment method of
acquiring
land”, suggests that the plan referred to in ss (4) relates only
to the realignment method which was not the same as the acquisition
undertaken
in 1969. The RTA’s submission on the effect of s 27E at par 109 - 110 is
correct.
117 The Applicant relied on the certificate of title (see par
99) which identifies all the land on the northern boundary as the New
England
Highway and the notation in DP 237977 that the acquired land can be shown as
“road” on a certificate of title.
A road does not automatically
become a public road under the Mains Roads Act or the LG Act as then in force.
This is confirmed by
s 196 of the Conveyancing Act as then in force which
provided that:
(1) In this section the expressions “public
road”, “road”, and “subdivision” have the same
meaning
as, unless inconsistent with their context or subject matter, they
respectively have, or shall have, in the Local Government Act,
1919 as amended
...
(2) Every person who by any Act is required to procure the
registration of a plan of a public road or of a subdivision shall lodge
in the
office of the Registrar-General a plan of the road or
subdivision.
...
(7) Every plan lodged in pursuance of this
section shall contain a statement showing whether:
(a) any, and, if
any, which of the roads shown on the plan are intended to be dedicated to the
public;
...
(14) This section applies to land under the
provisions of the Real Property Act, 1900.
118 As the RTA
submitted, the statements in the certificates of title relied on by the
Applicant do not satisfy the requirements of
s 196. The same finding applies to
DP 545676 which the Applicant relied on as showing a local access road on the
northern boundary
of land in DP 28565. That does not provide any evidence it was
a public road in light of the statutory regime then in force for the
making of
public roads. It also follows that the RTA’s submissions at par 111-113
are also correct.
119 Given my conclusion that there was no extension of
the highway into all the land acquired on the northern boundary and given that
the realignment method under s 27E was not used, the certificate of title
notation relied on by the Applicant’s case is not
sufficient evidence to
give rise to a finding that the land immediately to the north was a public road.
The distinction drawn in
the Applicant’s submissions between the
realignment method of acquisition as opposed to the realignment method of
compensation
does not appear relevant to the issue of whether a public road has
been created.
120 The evidence of Mr Bates of the RTA is that there has
been no declaration as a public road of the land on the northern boundary
of the
land acquired from Mr Mitchell in 1969 under either the Main Roads Act or the LG
Act (which was not relevant to the 1969 acquisition).
The history of the
relevant documents relating to the acquisition in 1969 are attached to his
statement and confirm that is the case.
While part of the land acquired in 1969
became part of the New England Highway not all of it did as the land on the
northern boundary
was not required, according to the DMR sketches. Mr
Bates’ evidence is that had someone inquired of the RTA whether that road
on the northern boundary was a public road, he or she would have been told it
was not. His conclusion should be accepted given the
documentary evidence and
his occupation as senior property officer at the RTA and the DMR for 17 years.
121 Further, the physical changes to the land immediately after 1969
confirm the RTA’s argument that the New England Highway
did not include
the land immediately abutting the northern boundary of Mr Mitchell’s land.
That land was physically separate
from the highway and described as a service or
local road in the plans referred to in argument. It was accessed from
Weakley’s
Drive from that time.
122 Newcastle City Council
undertook maintenance of the road but no conclusion that it was a public road
can be drawn from that. As
submitted by the RTA, if the land had been vested in
the control of Newcastle City Council an acquisition notice would have been
issued to the Council and one has not been.
123 I therefore agree with
the arguments of the RTA that there has been no dedication or determination that
the land acquired in 1969
from Mr Mitchell, which immediately abuts his northern
boundary, was then or has been dedicated since as a public road. No interest
in
land on this basis therefore existed on his northern
boundary.
Licence
124 The RTA admits there was a
“bare” licence to use the service road on the northern boundary of
Mr Mitchell’s
land from 1969. There is no evidence that the licence had
been terminated before the date of acquisition so that it existed up to
and on
that date. The RTA argued that the licence was gratuitous and terminable at will
and not a right in rem, relying on Ashfield Municipal Council v
Roads and Traffic Authority of New South Wales [2001] NSWCA 370; (2001) 117 LGERA 203 at 215;
Lewis v Bell (1985) 1 NSWLR 731.
125 I consider there is no
distinction in the definition of “interest” in s 4 of the JT Act
between a right in rem or a right in personam so that arguably
there is an interest created in land by the bare licence, as submitted by the
Applicant. It is ultimately unnecessary
that I finally determine this issue in
light of my finding in the next section that no interest in land on the northern
boundary
was acquired by the RTA in relation to the acquisition the subject of
these proceedings.
(ii) was an interest in land acquired as part of
the acquisition?
126 The Applicant also argued that he had a
right/privilege under contractual arrangements he argued were made in 1969 with
the DMR
as contemplated by the definition of “interest in land”.
Before determining this additional issue it is necessary that
I determine if any
interest in land within the meaning of the JT Act existed in relation to the
northern boundary access. If there
was no acquisition of an interest in land,
whether based on a licence or some other basis, there is no further utility in
determining
that issue.
127 The RTA argued that regardless of the
interest in land said to exist by the Applicant (assuming there is one, contrary
to its
other arguments), it is necessary to determine if any interest in land
based on the use of the northern access road has been acquired.
The steps taken
in the acquisition process need to be considered. The formal steps provided for
under the JT Act for compulsory acquisition
are in accordance with the following
sections:
11 Notice of intention to acquire land by compulsory
process
(1) An authority of the State may not acquire land by
compulsory process unless the authority has given the owners of the land written
notice of its intention to do so.
(2) The authority of the State is
not prevented from acquiring the land by agreement after giving the proposed
acquisition notice.
19 Compulsory acquisition by notice in
Gazette
(1) An authority of the State that is authorised to
acquire land by compulsory process may, with the approval of the Governor,
declare,
by notice published in the Gazette, that any land described in the
notice is acquired by compulsory process.
20 Effect of
acquisition notice
(1) On the date of publication in the
Gazette of an acquisition notice, the land described in the notice is, by force
of this Act:
(a) vested in the authority of the State acquiring the land, and
(b) freed and discharged from all estates, interests, trusts,
restrictions, dedications, reservations, easements, rights, charges,
rates and
contracts in, over or in connection with the land.
39 Claim for
compensation
(1) A person who wishes to claim compensation
under this Part must lodge a claim in accordance with this section with the
authority
of the State that is acquiring the land concerned.
(2) A
claim for compensation must be in the form prescribed by the regulations or (if
no such form is prescribed) in the form approved
by the
Minister.
(3) The claim form may require information to be verified by
statutory declaration.
(4) A claim for compensation may be withdrawn
by the claimant.
42 Notice of compensation entitlement and
offer of compensation
(1) An authority of the State which has
compulsorily acquired land under this Act must, within 30 days after the
publication of the
acquisition notice, give the former owners of the land
written notice of the compulsory acquisition, their entitlement to compensation
and the amount of compensation offered (as determined by the
Valuer-General).
43 Particulars to be included in notice of
compensation entitlement and offer of compensation
A
compensation notice given to a former owner of land must:
(a) be
in the form prescribed by the regulations or (if there is no prescribed form)
the form approved by the Minister, and
(b) notify the owner that the
land has been compulsorily acquired, and
(c) state that the owner is
entitled to compensation, and
(d) offer to pay a specified amount of
compensation as determined by the Valuer-General and be accompanied by a form of
deed of release
and indemnity for completion if the offer is accepted,
and
(e) inform the owner of the right to object to the amount
offered.
45 Deemed acceptance of offer of
compensation
(1) If a person entitled to compensation under
this Part does not, within 90 days after receiving a compensation notice:
(a) accept the amount of compensation offered by the authority
of the State, or
(b) lodge with the Land and Environment Court an
objection to the amount of compensation offered,
the offer of
compensation is taken to have been accepted.
Acquisition
documents
128 The sections of the JT Act above prescribe the steps that
must be followed prior to and following a compulsory acquisition. The
following
steps took place.
(i) Proposed acquisition notices (PANs) were sent to the
Applicants on 31 January 2006 pursuant to s 11 of the JT Act. These stated
the
land to be acquired:
Schedule
Lots 31, 32, 37 and 38,
Deposited Plan 1091199, being parts of the land in Certificates of Title Auto
Consol 7900-141, 5-28565 and
1-653981 respectively
(ii) The
Applicants completed compensation claim forms pursuant to s 39 of the JT Act.
The description of land in these was “Lots 31, 32, 37 and 38, Deposited
Plan 1091199, being parts of the land in Certificates of Title Auto Consol
7900-141, 5/28565
and 1/653981 (presently Volume 11370 Folio 47
respectively).” The claim lodged by Mr Mitchell stated that
disturbance was claimed for:
financial costs reasonably to be incurred
relating to the relocation/reconfiguration of buildings involved in the actual
use of the
land, as a direct and natural consequence of acquisition...
The claim lodged by Beresfield stated that disturbance was claimed
for business operations on a certain basis if disturbance did not
exceed 12
months and the full value of goodwill of the business if disturbance of business
operations occurred for over 12 months.
(iii) The acquisition notice
referred to in s 19 was published in the Government Gazette on 12 May 2006. The
descriptions of the land
then acquired by virtue of s 20 are identical to those
in the PANs and the compensation claim form, apart from the words in brackets
in
the latter which are the current title reference.
(iv) The Valuer-General
issued his determination of compensation in respect of lots 31, 32, 37 and 38 in
DP1091199.
(v) The compensation notice for Mr Mitchell sent on 19 June
2006 pursuant to s 42 offered the amount of $844,000 as compensation and
stated:
If this amount of compensation is acceptable you should:
(i)
sign the attached forms
...
(iii) if you have not returned
the claim for compensation (form 2) you must send it with the acceptance forms,
otherwise compensation
cannot be paid to you.”
...
“Payment of the compensation will be made in full within
28 days of you signing and returning properly completed:
1. The
annexed deed of release and indemnity;
2. The direction as to payment
form, and
3. The instrument for the restriction as to
user.
129 Attached to the notice was a Deed of Release and Indemnity
stating:
WHEREAS
A. By acquisition notice published
in the Government Gazette of 12 May 2006 the land described in the schedule
hereto was compulsorily
acquired by the RTA.
B. The Releasor has
agreed to accept compensation offered by the RTA and to enter into this deed
pursuant to the provisions of the
Land Acquisition (Just Terms Compensation) Act
1991.
NOW THIS DEED WITNESSES:
1. The
Releasor:
(a) accepts the sum of $844,000 compensation offered in the
RTA’s compensation notice dated 19 June 2006, together with statutory
interest, in full satisfaction for the acquisition by the RTA of the
Releasor’s interest in the land described in the schedule
hereto;
(b) confirms that the nature and extent of the
Releasor’s interest has not in any way altered from the interest disclosed
in
the claim for compensation signed by the Releasor and dated 7 April
2006;
(c) confirms that the Releasor will not in any manner attempt to
dispose of the interest in the land compulsorily acquired by the
RTA;
and
(d) acknowledges that the compensation is subject to the Releasor
entering into a restriction as to user pursuant to Section 88(E) of the
Conveyancing Act 1919 relating to the restriction of access from the residue of
the property owned by the Releasor to part of the land described in the
schedule
and that the Releasor has signed a restriction as to user which the Releasor
acknowledges is to be lodged on the title of
the residue of the Releasor’s
land.
2. In consideration of the payment by the RTA of the amount
of compensation and statutory interest set out above the
Releasor:-
(a) hereby releases unconditionally and forever all
claims, demands, entitlements which the Releasor has or asserts to have or
could,
would or might but for this release have against the RTA for or in
respect of the compulsory acquisition of the land described in
the schedule and
for the granting of the restriction as to user;
(b) agrees to
indemnify and keep indemnified the RTA from and against any and all claims that
may be made against the RTA in respect
of the said compulsory acquisition,
including any claim by any person who establishes a superior interest to the
interest claimed
by the Releasor in the land described in the
schedule.
...
SCHEDULE
Lots 31, 32, 37 and 38
Deposited Plan 1091199, being parts of the land in Certificates of Title Auto
Consol 7900-141, 5/28565 and
1/653981
respectively.
...
130 Attached to the Deed was a
Restriction on the Use of Land by a Prescribed Authority pursuant to s 88E(3) of
the Conveyancing Act which refers to the land affected as Auto Consol 7900-141
and 18/1091199. Annexure A states:
TERMS OF RESTRICTION ON THE USE OF
LAND
No means of access shall be constructed or be allowed to be
constructed to or from the land the subject of the restriction from or
to the
proposed controlled access road or freeway (partly comprising Lots 31 and 32
Deposited Plan 1091199) adjoining the land the
subject of this restriction and
no part or parts of the said land shall be used as a means of access to or from
the proposed controlled
access road or freeway without the written consent of
the prescribed authority (which consent may be revoked at any time at its
discretion
and without compensation). The restrictions contained shall cease to
apply if the proposed controlled access road or freeway after
having been
declared a controlled access road or freeway under the Roads Act 1993,
thereafter ceases to be such a controlled access road or freeway.
The
compensation notice sent by the RTA to Beresfield did not refer to a s 88E(3)
instrument concerning restriction on the use of
land (and offered,
appropriately, a lesser amount of compensation).
Applicant’s
submissions
131 The Applicant argued that an interest in land which has
been acquired does not have to appear in the acquisition notice published
in the
gazette; see Tanner. In that case the interest acquired in the land was
not referred to in the acquisition notice (I note the interest was founded in
the land that was specified in the acquisition notice, unlike in this matter).
It is clear when the circumstances of the case are
considered that an interest
in land which was the northern access to the property was acquired.
(i) The
document entitled Grade-separated interchange at Weakleys Drive Review of
environmental factors (REF) (dated August 2005, tab 3 of exhibit B) for the
inter-change at Weakleys Drive produced by the RTA in August 2005 referred
specifically
to changes in the proposed access for Beresfield Spares:
“No access from the frontage road (will be removed for widening of the
New England Highway)” (at p 100). The pre-acquisition valuation by the
Valuer-General (see exhibit QQ) which formed the basis for the offer of
compensation
to Mr Mitchell considered that the interest in the northern land
was to be acquired. There are several references in the valuation
to the change
of access as a result of the northern boundary access being removed and
recognition that would result.
(ii) The RTA’s valuation (Wolthers
report) also refers to the loss of access to the highway from Mr
Mitchell’s land.
(iii) Upon the issuing of the PANs (pursuant to s 11)
Mr Mitchell and Beresfield made their claims for compensation (exhibit 12). They
claimed compensation for the loss of their interest
over the northern land.
(iv) At no time was it suggested that this basis of the claim was in error.
Rather, the Acquisition Notice and the Determination
of Compensation proceeded
on the same basis as Mr Mitchell and Beresfield.
(v) The pleadings also
confirmed this approach. In fact the Applicants were not aware this would be
disputed until the RTA’s
traffic expert stated in a joint conference with
the Applicants’ traffic expert that he had been instructed not to assume
the
access road was a public road.
132 The Applicant argued that the
RTA’s submissions relating to the deed of release and indemnity and the
offer of compensation
seek to dissect those notices rather than read them as a
whole. On a true construction it is apparent:
(i) When read as a whole in
their context the offer is “conditional” on the claimant accepting
the conversion of their
interest into monetary value which conversion included
the entering into the Deed of Release and the s 88E instrument.
(ii) The s
88E instrument relates to the whole of the land referred to in the title
documents on the first page: Auto Consol 7900-141
and 18/1091199. Access is to
restricted along Weakleys Drive and also along the northern boundary of the
Applicant’s land.
(iii) If the RTA’s submission that the land is
limited only to the land which accesses Weakleys Drive is correct, those words
need to be implied into the s 88E instrument. Once registered the document
speaks for itself and is incapable of interpretation in
the manner contended for
by the RTA.
(iv) The reference to “part” in the s 88E instrument
(see par 130) is not a reference to the land to which the restriction
relates
but rather to the location of the road to which the indemnity and the s 88E
instrument refer.
(v) There is no warrant in any of the documents to accept
the contention that the restriction was on access from lots 17 and 18 DP
1091199
to the acquired lots 31 and 32 along Weakleys Drive only. Rather, the reference
to Weakleys Drive and the highway make it
plain that what was intended was to
give effect to the terms of the DP restricting access along both the northern
and western boundaries
of the entirety of Mr Mitchell’s land.
(vi) Such
position is confirmed in the DP at tab 10 of exhibit B (see par 99) which was
for the purposes of the acquisition and identifies
the land for the controlled
access road which does not include any part of the
highway.
RTA’s submissions
133 The 1969 acquisition of
part of Mr Mitchell’s land on the northern boundary of his property
extinguished any claim for compensation
based on loss of access. That is clear
from the release signed by Mr Mitchell at that time.
134 In terms of this
acquisition, the PAN sent to Mr Mitchell pursuant to s 11 specifies the land to
be acquired as lots 31, 32, 37 and 38 in DP 1091199. That is a complete
description of what was purchased.
The same description was contained in the
claim for compensation forms lodged by both Applicants under s 39 of the JT Act.
The same
description appeared in the gazetted acquisition notice and the
Valuer-General’s determination of compensation.
135 The deed of
release and indemnity sent to Mr Mitchell refers in cl 1(d) to a proposed s 88E
instrument. That instrument is separate
to the acquisition of land under the JT
Act and is an invitation to execute the proposed s 88E instrument. It is
necessary because,
as stated in the panel in DP 1091199 (sheet 1 of 8, tab 11 of
exhibit B) concerning the intention to create easements and restrictions,
certain lots in the current DP including lots 31 and 32 are required for
controlled access roads under s 49 of the Roads Act. That Act and section
provide for the declaration of any main road, inter alia, to be a controlled
access road. Section 68 of the Roads Act provides for the payment of
compensation to the owner of the land for any loss or damage arising from the
loss of access. No action
has yet been taken under the Roads Act to have the
road declared a controlled access road. The panel on DP 1091199 also stated that
access will be restricted across the
boundaries marked R, S and T (the whole
frontage of residue land to Weakleys Drive and the New England Highway). This
identification
is solely referable to the statement of intention to require land
for controlled access roads under the Roads Act. The inclusion of the s 88E
instrument as part of the deed of release was in anticipation of the Minister
declaring a controlled
access road under the Roads Act and is separate from the
deed of indemnity and release relating to the acquisition. As it was not signed
by Mr Mitchell it has not
come into effect in any event.
136 Further the
instrument has not been executed and has not come into effect. In these
circumstances it cannot provide any definition
of the land/interest in land the
subject of the acquisition. In addition, if the road had been a public road in
relation to which
the Council had responsibility there would have been an
acquisition notice issued to the Council.
137 The Applicants’
claims for disturbance due to loss of access are based on the Court making a
finding by implication on the
evidence. That is untenable given the clear
statutory process for the acquisition of land set out in the
Act.
Finding on whether interest in land (northern access)
acquired
138 The Applicants relied on Tanner to argue that an
interest in land does not have to be specified in an acquisition notice to be
the subject of a claim for compensation
under the JT Act. In that case the
Minister for Education acquired land on which was a public road. Tanner’s
land adjoined
the acquired land but had not itself been acquired. The effect of
the acquisition was that the road ceased to be a public road (s
41 Roads Act)
and so Tanner’s right to access it was extinguished. It was determined
that the ability to gain access to that acquired land
from the adjoining land
was an “interest in land”, and so was a compensable interest. The
significant difference between
that case and this one is that the land acquired
from Mr Mitchell referred to in the acquisition notice and the gazette notice
did
not include any land on the northern boundary of his property. The interest
in land I have found to exist in relation to land on
the northern boundary is
not land referred to in the formal acquisition process under s 11, s 19, s 39
and s 42 of the JT Act.
139 The RTA was already the owner of the land on
the northern boundary of Mr Mitchell’s land having purchased it in 1969.
The
northern access to Mr Mitchell’s property was cut off sometime in 2007
as a result of the road works carried out at the Weakleys
Drive intersection,
separate to this acquisition process. No specific correspondence has been
tendered by the parties in relation
to the exact circumstances surrounding the
cut off of the northern boundary of Mr Mitchell’s land but I have been
told that
notice was given to Mr Mitchell that this would occur. The northern
access road was cut off after the new access from Weakleys Drive
and the new
road on the acquired land on the southern boundary were constructed. As
submitted by the RTA if the four lots the subject
of the acquisition notice had
not been required so that no compulsory acquisition process was undertaken at
all, it is difficult
to see how Mr Mitchell would have had any claim available
to him under the JT Act when his northern boundary was cut off.
140 The
RTA submits, correctly, that the Applicants are arguing that the acquisition of
the interest arises by inference separate
from the acquisition process. Apart
from Tanner, no case was referred to by the Applicant to support its
case. Despite considerable research there is no case where, in a statutory
compensation scheme in NSW and other Australian jurisdictions, acquisition by
inference has been recognised in the absence of any
reference in the statutory
acquisition process to acquisition of the physical land over which the interest
in land arises.
141 In relation to the documents relied on by the
Applicants in their argument (par 131), documents prepared in relation to the
roadworks
at the Weakleys Drive intersection by the RTA such as the REF are not
steps in the acquisition process under the JT Act. The valuation
reports
prepared for the RTA and the Valuer-General refer to loss of access across the
northern boundary taking place. It is likely
that at the time these were
prepared it was considered that the service road on the northern boundary was a
public road so that there
was a right of access from it to Mr Mitchell’s
land as provided for under the Roads Act. Even had I found that to be the case,
and I have not, the issue would still arise as to whether in this acquisition
process there
was an acquisition of an interest in land given that no
acquisition of land on the northern boundary occurred in this acquisition.
I am
not bound by any finding in those reports and they cannot provide a basis for
the legal argument the Applicants are making.
The Applicants’ claim for
compensation does not explicitly claim compensation for their loss of interest
over the northern
land, as can be seen from the wording set out above in par
128(ii). Even if the claim forms did, that alone cannot enliven the claim
for
acquisition of an interest in land given the specific statutory steps in place
under the JT Act.
142 The Applicants relied on the inclusion of the s 88E
instrument as part of the deed of indemnity contained in the statutory notice
of
compensation provided by the RTA pursuant to s 43 of the JT Act. That instrument
if executed would create a restriction on the
use of the northern boundary of Mr
Mitchell’s land for access to the land to the north. I agree with the
RTA’s argument
that a finding that acquisition has occurred for an
interest in land cannot be based solely on such a document which is provided
after the PAN, gazettal of the acquisition notice and claim for compensation has
been made in relation to land defined in those notices.
In the absence of any
other written notice or instrument earlier in the acquisition process suggesting
that interest was acquired,
the s 88E instrument cannot define that interest
after the acquiring event has occurred when the gazettal notice is published.
Essentially
the process under the JT Act commenced in this case with the
acquiring authority identifying the land it intended to acquire in the
PAN.
Under s 20, on the publication of the notice in the gazette under s 19, the land
specified in that notice is vested in the acquiring
authority. Any interest in
land would have to exist at that time. Given that the notice did not refer to
any land on the northern
boundary it cannot be expanded later, by inference. As
submitted by the RTA if the s 88E instrument is not executed the restriction
as
to user does not come into effect. That is another reason why it cannot found an
argument that an interest in land has been acquired
by virtue of the operation
of that instrument.
143 I have come to this conclusion reluctantly and
consider it would have been highly desirable for this issue to have been
clarified
far earlier in the acquisition process by the RTA, preferably before
these proceedings were commenced. It is clearly a substantial
change in the way
the Applicant expected his claim to be assessed and arose late in the
proceedings during the preparation of expert
traffic evidence when the issue was
first raised that the land on the northern boundary was not a public road.
Further, as I note
below in relation to my concerns about the nature of the deed
of indemnity and release provided by the RTA, the implications of that
document
as the RTA intended it were only made known during final submissions at the
hearing.
Effect of compensation notice/deed of release/s 88E
instrument
144 A statutory notice issued under the JT Act is an important
step in the compulsory acquisition process. The acceptance of such
a notice
determines whether compensation is accepted by the resumee or an appeal is
lodged in this Court, the only options open to
the resumee under s 43(d) and (e)
of the JT Act. According to the arguments of the RTA’s counsel it is
acceptable to have an
instrument which is directed to a release of rights under
another part of the Roads Act unrelated to the acquisition included as part of
the statutory notice issued under the JT Act. The s 88E instrument is presented
in the deed of indemnity and release at 1(d) and 2(b) (par 129) as a
non-negotiable term of acceptance of the offer of compensation
under the JT Act.
The RTA’s counsel submitted that acceptance of the s 88E instrument was
optional and the compensation notice
was an invitation only to enter into the
instrument. That is contrary to the language used in the compensation notice
which is not
couched in optional terms. Further there is nothing explicit in the
notice of compensation to identify to the recipient Mr Mitchell
that the s 88E
instrument is intended as a release in relation to the creation of a controlled
access road under s 49 of the Roads Act, as it is now submitted that it was. Nor
has a document such as an explanatory covering letter from the RTA to the
Applicant or his
advisors which suggests this is the RTA’s intention been
provided.
145 When asked how a recipient would become aware that the
intention of the compensation notice was that the s 88E instrument was
optional,
the RTA’s counsel stated that it was assumed that the recipient would have
lawyers to advise him or her. On inquiry
of the Applicants’ lawyers, they
advised the first time they became aware that this was the intention behind the
s 88E instrument
was when the matter was raised by the RTA’s counsel in
Court in his final submissions. This is not appropriate administrative
practice
for a well resourced acquiring authority exercising compulsory acquisition
powers conferred on it by the Roads Act to be carried out in accordance with the
JT Act in my view. It places onerous requirements on the recipient of a notice
for compensation
to understand the nature of the offer being made to him or her
in the absence of specific advice from the RTA about what its statutory
notice
intends.
146 These comments apply regardless of whether it is open
legally for the RTA to include in a compensation notice and a deed of release
and indemnity under s 43 a restriction on the use of land, which is unrelated to
the claim for compensation under the JT Act. I doubt
that this can be done
lawfully under s 43 of the JT Act. It is not sufficient for the RTA to state
that the terms of the deed of
indemnity have not been defined either in the
regulations or by the Minister as the Act provides for (s 43(a)). That does not
mean
that any matter the RTA wishes can be included as part of the statutory
compensation notice issued pursuant to the JT Act. Any such
notice and deed of
release and indemnity, which is a condition of acceptance of the offer of
compensation under the JT Act, must
be limited by the terms and objects of that
Act in the absence of any specific statutory provision suggesting otherwise.
147 The arguments before me do not raise the validity of the statutory
compensation notice directly but its effect is important for
the parties’
arguments. Given the finding in Niezabitowski and Anor v Roads and Traffic
Authority (NSW) [2006] NSWLEC 462; (2006) 147 LGERA 417 at [43] – [44] that such notices
continue to be open for acceptance up to the date of the Court’s
determination of compensation,
this further underscores their significance in
the statutory regime under the JT Act. Given the current form of the notice and
attached
documents it is a matter of concern that the notice is not one Mr
Mitchell could accept in its current form if he now wanted to do
so.
Contractual entitlement/privilege/right - Estoppel/unjust
enrichment
148 Additional arguments were put by the Applicant concerning
other ways his interest in land could be characterised legally. Another
basis
for claiming that an interest in land had been acquired related to finding that
a collateral contract was entered into in 1969
between Mr Mitchell and the DMR
concerning the maintenance of access on the land acquired on the northern
boundary. This was disputed
by the RTA. The Applicant also argued that the RTA
is estopped from now asserting a lack of entitlement to the northern access in
the circumstances of this case. Alternatively, the RTA has been unjustly
enriched because it was able to acquire the land in 1969
for a lesser value
based on its representation to Mr Mitchell that a right of access would be
retained. The Court was said to have
jurisdiction to determine these issues
because it is appropriate for the Court to consider all matters relevant to the
assessment
of compensation and to determine all legal and equitable claims that
arise for determination. There is no authority cited in support
of this
submission.
149 I agree with the RTA’s submissions that the Court
has no jurisdiction to determine such claims, which are separate from
the claim
under the JT Act. The Court must determine compensation in accordance with the
provisions of that Act and is not able to
consider any claim which may arise
between the parties other than as provided for under that Act. Section 16(1) of
the Land and Environment Court Act 1979 cannot extend the Court’s
jurisdiction into a claim for restitution based on unjust enrichment. It is
conceptually difficult
to see how such a claim can arise in this matter given
the defined provisions of the JT Act. The same applies to a claim based on
estoppel. Whether there is a legal issue concerning the basis on which Mr
Mitchell’s access to the service road on his northern
boundary was cut off
in 2007 by the RTA is not a matter I can consider in these
proceedings.
Can disturbance be claimed under s 59(f) by Mr
Mitchell?
150 I have found that there was no acquisition of an
interest in land in relation to access on the northern boundary. The Applicant
Mr Mitchell largely based his entitlement to disturbance on a proposition I have
rejected. The RTA has provided access on the acquired
land to Mr
Mitchell’s land and that is part of the public purpose of the acquisition
and that has had an impact on the use
of the residue land. The issue of whether
that can give rise to a disturbance claim under s 59(f) needs to be considered.
There was
extensive evidence on the disturbance claim some of which may continue
to be relevant and I will therefore summarise it below.
Summary of
evidence relevant to disturbance
151 Throughout the life of the business,
building construction on the land occurred mainly on lots 3 and 4. Five
buildings are described
in Mr Mitchell’s affidavit and include a
“retail” building closest to the New England Highway (1), two
storage
buildings further back (2 and 3), a large dismantling and storage shed
(4) and another storage shed on lot 5 (5). Since the acquisition,
building 1 has
been used only for storage and part of building 4 as a retail sales area.
Parking space for about 15 cars has been
created near building 4 and is accessed
from a light vehicle driveway that runs along the western boundary of the
premises to Weakleys
Drive.
152 A fence used to run along the back of
the retail area preventing unauthorised persons from accessing areas past the
retail sales
area and parking area. As at the acquisition date, customers would
park north of the retail building on the access road and in an
adjacent car
park. Building 1 was the first point of contact for customers who entered it to
purchase small car parts. For larger
car part sales customers were then directed
to building 4 which was not open to the public. Buildings 2 and 3 were closed to
the
public. Part of building 4 (constructed in two parts over time) contained
and was originally designed for a sales area for complete
vehicles, but was not
used as such as at the acquisition date. The other part of the building is a
dismantling shed from where car
bodies are placed in designated locations on the
unimproved remainder of the premises. Building 5 was used as storage for bulky
and/or
valuable parts and business machinery as at the acquisition date.
153 With the exception of small retail parts sold to customers, the
present arrangements for delivery of goods sold to customers are
neither
desirable nor efficient in terms of safety of access and workload for staff.
Bulky part sales are either conveyed by trolley
to customers’ cars or
customers access the fenced-off storage area via a gate (opened by a staff
member) to proceed direct
to the dismantling shed for loading. An area utilised
for storage of vehicle bodies on the unimproved part of the land has been
reduced
to accommodate both the western access road to the retail building and
the temporary access for vehicles to the dismantling shed.
154 Mr
Mitchell described the various forms of disruption that have been caused to the
business over a period of eight months from
August 2007. Delivery of stocks of
damaged cars by heavy vehicles proceed via the storage area gateway to the
dismantling shed (through
a narrow and temporary gravel road) as they cannot
negotiate the tight turn up the current western access road from the Weakleys
Drive entrance. Such entry is arranged by two-way radio once the vehicle arrives
and unloading occurs in front of the loading shed
due to lack of access to the
cranes within. In some cases, due to size, unloading occurs near building 5
using mobile cranes. Such
practices are disruptive to the normal conduct of
business.
155 The preparation of the new retail sales area, construction
of the gravel access road and preparation of new signage on the residue
land was
carried out intermittently over approximately three months up to September 2007
by staff, volunteers, Mr Mitchell and his
son. This work was carried out
occasionally during business hours, but more often from 5pm to 7pm and
occasionally on weekends. The
work involved moving stock and business equipment
and is ongoing to a lesser degree. Two months work for two forklift operators
(Mr
Mitchell and his son with help from staff) was spent relocating stored
vehicle bodies, and amounted to approximately 200 hours work.
Mr Mitchell also
spent considerable time managing the RTA works undertaken on the acquired land
in relation to the impact on the
residue land.
Expert evidence - town
planners
156 The town planners, Mr Humphris and Mr Hobbs also gave
evidence relevant to disturbance issues. Mr Rowan gave his opinion of what
a
purchaser would seek consent for from the Council for the modification of access
arrangements to fit in with the approved building
layout and operation of the
site in light of earlier consents issued by the Council. Mr Rowan considered
that light and heavy vehicles
could access the site from the new Weakleys Drive
access and use a driveway close to the western boundary and that was the
simplest
solution available to the Applicant. That would bring customers to the
sales areas approved at the end of building 4. With northern
access customers
have had to traverse the site to get to their approved sales area at the end of
building 4. A western access allows
a more isolated or contained access and is
therefore an improvement and accords with the 1983 consent.
157 He also
considered that a heavy vehicle could enter the site from the current entry
point along Weakleys Drive. Heavy vehicles
can be managed on site with good
management such as in the area near building 5 which has an alternative access
gate. A forklift
truck could easily meet a truck or other delivery vehicle to
pick up an engine or car body and then the truck would perform a manoeuvre
in
order to get back out of the Weakleys Drive gate. If there was a two-way radio
connection at the gate an employee could come and
let them into the site through
the gate. Alternatively trucks could drive in front of building 4 and between
buildings 1 and 2 when
entering from the western boundary. The truck numbers are
low, at four per week.
158 Mr Rowan considered that heavy vehicles could
travel past the dismantling shed (building 4) and turn right between buildings 1
and 4 without any modification to building 4. In cross-examination he was asked
on what basis he considered the works were the direct
and natural consequence of
the acquisition. He considered that the cheapest option which enabled the lawful
use of the land was based
on effecting various development consents granted
rather than based on what was happening on the land. If a council approved a
development
consent which required that additional work be done because of
current standards so that more than previously existed was to be provided
and
there was no greater benefit as a result, that would be “like for
like”. There is potential for “overkill”
in that the DCP
requires works to be done as determined by Hoffman C (see Mitchell v
Newcastle City Council [2008] NSWLEC 1140). He had not had any discussions
with Newcastle City Council about any of the options he proposed to determine if
these were likely
to be approved by the Council. Mr Rowan did not think this was
material as he was able to consider the LEP and DCP.
159 There was a
moderate benefit under the on-site parking arrangements approved in the recent
2008 development consent compared to
the previous off-site parking on the
service road. He agreed there was a slight disadvantage to customers under the
newer proposal
as there was some overlap between the heavy vehicle manoeuvring
and customers on site. He considered apart from the provision of
much greater
on-site parking that in terms of convenience, visibility and proximity the
recently approved development consent was
similar to that existing at the date
of acquisition.
160 Mr Rowan had not assessed the turning circle
requirements of his proposal for all vehicles to enter the site along the
western
boundary.
161 Mr Hobbs was engaged as an architect to advise the
Applicant about the development application for the site given the loss of
access to the north and in light of the land otherwise acquired by the RTA. He
considered the way the current business was operating
and devised a scheme which
provided a similar operational outcome. Key issues were the separation of light
and heavy vehicle access
across the site boundaries, ensuring the areas of
building on the site remained in a similar amount and amenity issues in relation
to building 1 in terms of its use and position in relation to the highway.
Current council controls also needed to be considered.
162 Mr Humphris
was engaged to provide town planning advice on the permissibility of various
uses and the history of consents. He
also considered that heavy vehicles should
enter the premises separately from the customer vehicles.
Traffic
engineers
163 Traffic engineers Mr Pindar, called by the Applicant, and
Mr Brogan, called by the RTA, also gave evidence in their joint report
and
orally concerning access arrangements to the site. In their joint report Mr
Pindar stated that the preferred access arrangement
was for light vehicles to
use the new Weakleys Drive driveway and the two way access road along the
western boundary of the site
to the new car parking area (western access road).
Heavy vehicles should use the public road (southern boundary). It is desirable
to separate light and heavy vehicles for safety reasons and their physical
separation accords with the relevant RTA Guideline (section
6) (exhibit GG)
which guideline is not linked to any volume of traffic.
164 Before
acquisition the access along the northern boundary was via a public road very
close to the New England Highway intersection,
was very visible and had
extensive parking along it that the business could rely on. It had a reasonable
degree of safety as there
was minimal interaction with heavy vehicles. He agrees
the current access point on Weakleys Drive does not comply with current road
safety standards largely because a right turn out of Weakleys Drive across the
median strip is allowed. If the median strip was closed
the road could function
satisfactorily as a left in/left out access arrangement.
165 In relation
to customer parking, the access for customers from Weakleys Drive enables them
to turn conveniently into the site,
travel a short distance and park in an area
where there is no interaction with heavy vehicles. There is sufficient parking
allowed
in the plans approved as part of the development application whereby
about 20 spaces is sufficient for normal peak demands for this
type of business.
Under Mr Brogan’s proposed scheme there is customer parking in the north
eastern corner which is more removed
from the existing/proposed retail sales
area. Given the low volume of truck activity there would not be any greater risk
to pedestrian
safety than in the pre-acquisition situation where pedestrians and
motorists used the northern access road in the absence of pedestrian
footpath
facilities. Mr Pindar considered the pre-acquisition arrangements were markedly
safer than Mr Brogan’s proposal. Under
the former, trucks entered the site
through a gate and unloaded and turned around away from the general public,
always moving in
a forward direction.
166 Mr Brogan stated in the
traffic engineers’ joint report that a preferred access arrangement is to
provide for all vehicles
to use the new public road on the southern boundary.
This would consolidate vehicular access to a single point, reduce the cost of
the access works and minimise the need for and cost of building relocation and
reconstruction. He considered the new driveway along
Weakleys Drive should be
removed as it impeded traffic flow efficiency along that major road. The low
heavy vehicle arrival rate
negates the need for separation of light and heavy
vehicles. Mr Pindar considered this approach was workable but not optimal as it
was less safe and involved greater travel time due to the greater distance of
800m required to be travelled. The access along the
northern boundary before
acquisition was dangerous and unsafe due to the minimal site distance of the
access road from the intersection
of two higher order arterial roads. It was
dangerous for both vehicles turning left from the New England Highway on route
to Weakleys
Drive travelling south and also vehicles turning right from the
highway into Weakleys Drive. The traffic volumes identified in the
REF showed
substantially increased traffic volumes for the intersection between 1995 and
2004 with further increases in the future.
The unsafe location of the existing
driveway would have required changes to on-site access regardless of the
RTA’s road upgrade
proposals and the associated compulsory acquisition.
167 Mr Brogan was asked in cross-examination and agreed that if
comparing “like with like” for pre and post acquisition
situations
that his proposal did not provide the amenities that were available to the
business pre-acquisition.
168 Mr Pindar was asked his opinion on Mr
Rowan’s proposed access on the western boundary and he considered the
driveway as
constructed would need to be changed to allow safe access. Splays
would be required on either side of the property boundary between
the existing
kerb line of Weakleys Drive. In relation to access by heavy vehicles past
building 4, Mr Pindar considered that the
corner of that building would need to
be partially demolished. The extent would depend on whether landscaping was
required but even
if there was no landscaping the building would be affected. He
and Mr Brogan also considered that buildings 2 and 3 would need to
be demolished
for this to occur.
169 In relation to Mr Rowan’s proposal that
trucks could stop at the gate and unload, Mr Pindar considered that a 30m
diameter
turning circle/cul de sac would be necessary to enable them to exit the
site in a forward direction. Mr Brogan agreed that this would
be difficult and
land hungry as it would need a turning circle of between 12m to 15m radius (that
is, 24m to 30m diameter). Mr Brogan
considered that depending on the size of the
truck, assuming it could proceed through the gate to unload, it could use the
space
between the aisles of cars to turn around. It was likely the shape of the
aisles would have to be altered to enable this to
happen.
Applicant’s submissions
170 As identified at par
72, Mr Mitchell has claimed disturbance under s 59(f) for five items. Whether
any items are claimable as
disturbance is affected by my finding that an
interest in land being the right to access his land on the northern boundary was
not
acquired. Most of the expert evidence outlined above is directed to a change
in arrangements made on the site because of the loss
of the northern access but
it is also clear from that evidence that there is an impact on the residue land
as a result of the access
roads built on the acquired land.
171 I will
summarise the Applicant’s case albeit that relies on a finding that the
northern access was part of the interest
in land acquired. The Applicant relies
on Peak to argue that disturbance in the substantial amounts sought by
him can be claimed. The use of the northern access was so intimately
related to
the use of the residue land that it must be considered on the same basis as was
recognised in Peak. The 1983 development consent (193/83) required
vehicular access from the northern boundary. All the parking and vehicular
access
was from that northern access road. A significant reconfiguration of the
buildings on the site to facilitate the continued use of
the site for the
purpose is necessary. But for the acquisition Mr Mitchell was not required to
lodge a DA to continue his use of
the land for its current purpose. But for the
lodgement of the DA, the Council could not have required in 2006 that the use
conform
with Council’s planning controls. It is reasonable for a claim
under s 59(f) for the Applicant to be put back in the position
he was in prior
to the acquisition so that the business can operate in a manner which assists
the business. Having to comply with
the 2006 requirements of the Council (and
the Court) is not betterment. The requirements of the development consent enable
Mr Mitchell
to operate his business as it was before the
acquisition.
RTA’s submissions
172 As there was no
acquisition of the northern access there can be no claim for disturbance.
Further, Peak does not apply to enable a claim for disturbance in this
case. In Peak the Court of Appeal held that costs incurred relating to
the actual use of the land arising as a direct and natural consequence of
the
acquisition were claimable. This suggests there must be a distinction between
the acquisition and the public purpose. Almona Pty Ltd v Roads and Traffic
Authority of New South Wales [2008] NSWLEC 112 held that the focus of s
59(f) is the costs connected to the acquisition itself, not the carrying out of
the public purpose. The
change in access arrangements built on the acquired land
is the carrying out of the public purpose.
173 Further the amount of
disturbance to the land claimed is excessive given that access to the land has
been provided by the RTA
from Weakleys Drive and, at the Applicant’s
request, for heavy trucks along the southern boundary road. That road was
strengthened
to enable access by heavy trucks and large gates installed on the
boundary of the Applicant’s property to enable access at
the
Applicant’s request. Accordingly more than adequate access has been
provided to the land. The RTA constructed the new access
to the subject land
from Weakleys Drive and the southern road in anticipation of the future
declaration of the area on the northern
boundary as a controlled access road
(and no right to compensation under s 68 of the Roads Act is likely to
exist).
174 The previous access from Weakleys Drive along the northern
boundary was unsatisfactory for traffic safety. The intersection was
accident
prone due to short sightlines and could not have continued in its existing form
in any event. It would have been stopped
by an appropriate authority whether the
RTA or the Council.
175 Because Mr Mitchell did not have development
consent for lots 1 and 2 a substantial area of the business required consent and
a development application to obtain this would have been necessary in any event.
In other words, the reason for the lodging of the
DA (now the 2008 consent) was
not only the need to alter the northern access. As he lodged the DA over the
whole site and sought
greater usage and increase in land area for reasons
unrelated to external access to the site, the Council required a range of
conditions
for parking and landscaping which went beyond the change in access.
More than 50 per cent of the storage area for cars needed development
consent.
Finding on whether and what disturbance claimable by
Mitchell
176 Mr Mitchell has not succeeded in his argument that an
interest in land has been acquired in relation to the northern access, which
underpinned his argument that all of the DA costs are necessary and reasonable
to award as disturbance under s 59(f). Whether any claim for disturbance remains
needs to be determined. The RTA argued it had provided reasonable access to the
residue
land by providing access to Mr Mitchell’s land using the acquired
land on the western boundary to widen Weakleys Drive. Mr
Mitchell had to build a
new entrance to his property in order to utilise the access from Weakleys Drive.
The southern boundary road
was built on land acquired from Mr Mitchell. There is
an impact on the use of the residue land as a result of the works undertaken
on
the acquired land. The use of the residue land is intimately connected with the
acquired land as the whole was used in the business.
The works undertaken on the
acquired land are however part of the carrying out of the public purpose of the
acquisition.
177 In Mir Bros at [88] Spigelman CJ held that
disturbance costs may only be awarded under s 59(f) for costs relating to the
actual use of the acquired land. In Peak, Beazley and Tobias JJA held at
[71] (Basten J writing a separate judgment but otherwise concurring) that if the
actual use of the
residue land is so intimately connected with the actual use of
the acquired land so that use of the one is dependent on use of the
other, that
is sufficient to bring a claim for disturbance within s 59(f). The costs of
building a new house on the residue land were costs reasonably incurred relating
to the actual use of the acquired land
and its connection with the residue land,
namely the use of the residence as an intimate part of the acquired land as a
cattle breeding
business. Those costs were a natural consequence of the
acquisition.
178 The Court of Appeal also held that the resumee’s
costs of building a new house on the residue land because of the adverse
impact
of noise, glare and lack of privacy from the new highway on the existing
dwelling on the residue land was compensable under
s 59(f) because the use of
the acquired land included its use as a buffer from the impact of the old
highway. That use was lost to the resumee.
179 The RTA submitted that s
59(f) focuses on the actual use of the acquired land and the costs arising from
the acquisition, not from the implementation of the public
purpose on the
acquired land. The carrying out of the public purpose on the acquired land and
the impact that has on the residue
land is not the cost to which s 59(f) is
directed. In this case while the new access arrangements on the acquired land
are intimately connected with the use of the residue
land that is not
necessarily a compensable cost under s 59(f). This issue was directly considered
in Almona.
180 In Almona the applicant was claiming costs
incurred as a direct and natural consequence of the acquisition under s 59(f)
including the impact of the construction of the particular road works on the
acquired land which were the public purpose of the acquisition.
Jagot J held at
[56] – [62] that such costs which arose from the carrying out of the
public purpose were not compensable under
s 59(f). Her Honour noted at [63] that
s 55(f) may be engaged by the same set of facts. That section concerns loss of
value of the residue land resulting from the carrying out
of the public purpose.
The facts in this case are not distinguishable from those in Almona in
that the carrying out of the public purpose on the acquired land does impact on
the residue land and that impact is the subject
of the Applicant’s
disturbance claim rather than a claim under s 55(f) relating to the loss of
value of the residue land. In the interests of judicial comity I consider I must
apply the findings in Almona in light of her Honour’s thorough
reasoning consistent with the Court of Appeal in Peak as found at [74]
where Beazley J stated:
The public purpose was the reason for the
acquisition. Section 59(f) focuses on costs reasonably incurred relating to the
actual use of the land as a direct and natural consequence of the
acquisition. [emphasis as in original]
Jagot J also referred to this
passage in Peak in support of her reasoning in [58]. A modified claim for
disturbance by Mr Mitchell under s 59(f) based on the impact on the residue land
of the works carried out pursuant to the public purpose on the acquired land is
not open
in light of the provisions of the JT Act and in light of the reasoning
in Almona.
181 As the judicial valuer I am able to determine what
is the just amount of compensation payable to the Applicant provided that it
is
in accordance with the JT Act. The Applicant did not base his claim on s 55(f),
injurious affection to the residue land. Given
what I consider are unfortunate
circumstances surrounding this acquisition for Mr Mitchell in light of the
compensation notice served
on him and the expectation he had since 1969 that his
northern access was to a public road, I consider I should explore all reasonable
options for him to claim compensation in accordance with the JT Act. It may be
that a claim under s 55(f) is maintainable by him
and that can be considered in
terms similar to some of Mr Mitchell’s disturbance claim in relation to
the cost of the impact
of the changed access arrangements on the residue land.
Before finally resolving that issue I will ask the parties if they wish to
further address that matter. I will provide my findings on the evidence
presented on disturbance concerning access arrangements as
this may assist the
parties in any further submissions.
182 The RTA argued that the DA lodged
by Mr Mitchell (approved by the Court on 24 April 2008) was required for other
reasons apart
from the acquisition. I do not agree with the RTA’s
submissions that the DA was necessary in order to regularise the use of
the
whole of Mr Mitchell’s land as a wrecking yard as follows from my earlier
findings in relation to market value at par 45.
183 The RTA’s
submission that the new access was to take into account future action to declare
a controlled road under the Roads Act (about which there is no specific evidence
in this case but simply submissions from counsel to that effect) does not alter
the fact
that the changed access on the acquired land was part of the public
purpose. Nor can the RTA rely on the submission that the intersection
of the
service road that existed previously was unsafe and would have required
alteration/closure in any event to suggest that the
change is access was
inevitable. I note that the traffic engineers had differing views as to whether
that was the case. Mr Pindar
considered that safe access could have continued
satisfactorily into the future if the median strip opposite had been closed. Mr
Brogan considered it was unsafe and would have to have been changed regardless.
In any event, whether such an intervening event may
occur or was likely to occur
in the future is irrelevant in considering a claim for compensation under the JT
Act which must consider
the impacts which have occurred as a result of the
acquisition, in light of circumstances that existed at the date of acquisition.
184 The RTA argued it had provided reasonable access from Weakleys Drive
and from the southern boundary and there was no loss to Mr
Mitchell but I do not
agree. It was reasonable for Mr Mitchell to seek development consent for changes
on the residue land necessitated
by the change in access arrangements on that
land resulting from the works undertaken on the acquired land. Those changes
were motivated
by the reasonable need of Mr Mitchell to continue his business
(Beresfield) in a safe and efficient manner. I accept Mr Mitchell’s
argument that it is necessary to have separate access for light and heavy
vehicles to continue the business in an appropriately safe
manner for customers
and trade deliveries. That is confirmed by the advice of Mr Humphris, town
planner. That was also the advice
of Mr Hobbs based on the Council’s
requirements. This was the advice of the RTA to the Council in relation to the
DA, contrary
to Mr Brogan’s evidence that it is not necessary (he was not
given that RTA advice apparently). It is also the opinion of Mr
Pindar, traffic
engineer (par 163). That has resulted in Mr Mitchell lodging a development
application and being required to comply
with current development standards and
requirements of the relevant council and now the Court, which approved the DA in
April 2008.
185 When granting development consent, the Commissioner
required the southern access road pavement to be widened to 13m with kerbs
and
gutters, footway formation, street lighting and associated drainage works. That
cost reasonably arises as part of the need for
Mr Mitchell to adjust the access
on the residue land.
(ii) Temporary access and
management
186 Mr Mitchell is also claiming $100,000 for:
(i) the
cost of constructing temporary access (gravel sealed road), fencing and car
parking in order to provide continued access for
customers attending the
business of Beresfield: $60,000
(ii) painting, uplifting & signage to
temporary accommodation: $20,000
(iii) time Mr Mitchell spent in managing the
RTA works as they impacted daily on the residue land during the construction
phase of
the new road on the southern boundary and on Weakleys Drive: $20,000.
The affidavit and oral evidence of Mr Mitchell to support this claim is
identified at par 155. The Applicant argued this amount was
recoverable under s
59(f).
187 The RTA disputed this claim because the work was done by Mr
Mitchell and his staff, not by separate contractors. There are no
demonstrated
out of pocket expenses payable by Mr Mitchell. Personal time is not compensable,
only costs that have actually been
incurred; West v Roads and Traffic
Authority of New South Wales (1995) 88 LGERA 266 at 274-276, Ironhill Pty
Ltd v Transgrid [2004] NSWLEC 700; (2004) 139 LGERA 398 at [260].
Finding
188 In West, Talbot J did not allow compensation for an amount
calculated for the personal time spent by the owners in looking for alternative
property to buy to replace the house and land acquired. That claim was made
under s 59(c) as part of a claim for relocation costs.
A separate claim pursuant
to s 59(c) and (f) was made by the tenant, a company, which used a house on the
acquired property, for
the costs of a consultant employed in the business
conducted by the tenant on the property. This was necessary because the
principal
in the business was occupied by the impact of the acquisition on the
business and could not perform his usual duties in the tenant’s
business.
That part of the claim was upheld by Talbot J under s 59(f). He held that the
evidence established that the tenant was
using the land for the conduct of its
business and there was a causal connection between the costs referred to in s
59(f) and the
acquisition. The facts in that matter did come within s 59(f) as
the costs incurred related to the actual use of the acquired land.
189 The parties’ submissions in relation to this part of the
disturbance claim did not specifically address whether the claim
could come
under s 59(f) as “... other financial costs reasonably incurred...
relating to the actual use of the land, as a direct and natural consequence
of
the acquisition.” Rather the RTA focussed on whether there was any
actual loss demonstrated, arguing there was not. Given that s 59(f) has
been
recognised as a “catch-all” provision in Fitzpatrick Investments
Pty Ltd v Blacktown City Council [No 2] [2000] NSWLEC 139; (2000) 108 LGERA 417 at [20] and
that West recognised that costs arising from the disruption to business
as a result of the acquisition is a claimable cost the possibility
for a claim
exists.
190 However, the costs claimed by Mr Mitchell appear to relate
to the impact on the residue land of the carrying out of the public
purpose on
the acquired land rather than any cost incurred as a result of the acquisition.
That distinction was considered in Almona as already discussed at par
180. The costs of the acquisition, namely the cost of moving the transpiration
bed and the cost of moving
stored vehicles which were located on the acquired
land, have been claimed by Beresfield and are agreed to be paid by the RTA. In
light of my earlier finding based on Peak and Almona whether this
claim is available to Mr Mitchell under s 59(f) is an issue. As the parties did
not directly address this issue in their
arguments I will invite further
submissions as to whether s 59(f) can apply to the amounts claimed.
Beresfield claim for disturbance
191 As identified at par
72(b), one of the disturbance items claimed by Beresfield is not disputed,
namely item (i) (see par 202).
Item (iii) needs to be clarified. The other
substantial claim for disturbance is for loss of business value resulting from
loss of
vehicle storage on both the acquired and residue land (item (ii)).
Loss of business value
192 The evidence of the business
valuers, Mr Tew for the Applicant and Mr Deane for the RTA, was based on a claim
of business loss
resulting from the loss of area for vehicle storage which would
arise from all the DA works intended to be undertaken. Before acquisition
the
total number of cars that could be stored on the land was 800 to 1200 cars.
After acquisition and after the DA works have been
implemented there is only
room for up to 504 cars according to Mr Tew’s evidence. Mr Tew valued the
loss of storage area on
four possible bases. He considered he was valuing the
detrimental impact of the loss of storage area on the business
profitability/trading
performance of the existing business. This can be valued
on:
(i) a piecemeal approach being the land area lost based upon land value
of $714,979,
(ii) a representation of the profitability of the business as a
function of the available vehicle storage area pre-acquisition/post-acquisition
to arrive at a similar amount (present value approach),
(iii) the cost of
renting comparable off-site storage of a size and accessibility to replace the
lost storage area on the site (see
exhibit RR),
(iv) cost of purchasing
comparable storage off-site of a size and accessibility to replace the lost
storage area on the subject site
($1,063,530 p 29 exhibit D), this cost being
factored into the expense items in the trading figures and amortised over the
anticipated
remaining life of the business.
193 Mr Deane considered there
was no impact on the business as a result of the lesser area available. He had
never heard of the piecemeal
approach adopted by Mr Tew. He disagreed with Mr
Tew’s present value approach. He considered it was more profitable for Mr
Mitchell/Beresfield to sell car bodies for scrap than continue to store them
on-site once the valuable components had been stripped
from the car bodies. He
therefore considered that 550 to 600 cars was ample stock to meet any reasonable
needs. That is a 10 per
cent to 20 per cent margin over one year’s
purchase of 500 cars. He considered it was inefficient to hold more than 600 car
bodies at any time.
194 The evidence of Mr Mitchell was that not
everything of value was stripped from the car bodies but rather some parts were
effectively
stored in these. Mr Tew therefore considered Mr Deane’s
approach failed to take into account the benefits of the business providing
a
broad variety of spare parts (makes and models) on-site. On his calculations 600
cars required 19,200m2 assuming 32m2 per car.
The available storage after
acquisition and consequential works for access and landscaping is 16,133.7m2
which is enough for 504
cars. There needs to be a significant change to the
business in order to maintain revenues and profitability and over time the
business
may not be sustainable.
195 Both business valuers agreed there
had been no adverse impact on the business since the acquisition and subsequent
road works
undertaken around the residue land since 2006. Mr Tew considered this
was due to the efforts of Mr Mitchell/Beresfield to minimise
disruption.
Applicant’s submissions
196 Based on this evidence the
Applicant submitted that there was a reduction of up to 50 per cent in the
number of cars able to be
stored on the site. (This was in the context of the
northern access being acquired which I have now held was not). A change in the
business model should not have to be undertaken by the Applicant because of the
acquisition. It was agreed by the valuers that the
business was well run and
profitable. Mr Tew has valued the loss of business on the basis that it should
continue as before given
it has been operating successfully since the 1960s.
This is contrasted with Mr Deane’s approach which suggests the Applicant
should change its business model to minimise business losses by focussing on
scrap sales rather than parts sales, with the totality
of vehicles brought on to
the site to be sold as scrap. More staff would need to be employed to strip cars
of all valuable items.
It is not appropriate to assess business loss on the
basis that business should change. A wholesale change to the business whereby
it
would become essentially a scrap metal dealer, with the buying and selling of
500 car bodies per year, is not a business for which
development consent has
been granted.
197 Further, Mr Deane did not properly inform himself
about the nature of Beresfield’s business, despite having access to its
financial records and spending time with Mr Mitchell. He did not know the
different value of the car parts to car bodies, nor that
cars are stripped over
time and not all at once. He made assumptions which did not reflect the nature
of the business. His assumption
about the worth of the car at $1,100 being split
50/50 between parts and scrap value does not reflect the actual worth to the
existing
business of the car parts which in many cases are stored on the car
body. The value of the car even on an 80/20 split at $300 is
more valuable than
as scrap. Mr Deane’s calculations are only correct if a car body is worth
less than $230 as scrap.
RTA’s submissions on business
loss/vehicle storage
198 There is no disturbance claim available to
Beresfield. No business loss accrued to Beresfield as a result of the
acquisition or
is likely to. There has been no loss after the acquisition, as
agreed by the business valuers. It was unreasonable to expect compensation
in
excess of what the business was worth if sold, as the Applicant’s claim
for disturbance does. The business can continue
to operate profitably in line
with the business model identified by Mr Deane.
Finding
199 In
terms of the evidence, I agree with the Applicant’s submission that it is
unreasonable to expect Beresfield to change
its business model to that valued by
Mr Deane. Both valuers agreed the existing business is well run and profitable.
It is reasonable
for Beresfield to continue to undertake its business in the
manner developed over many years. That requires that there be adequate
land
available for the storage of car bodies. The storage of large numbers of car
bodies is an important part of Beresfield’s
business model. The extent to
which Beresfield can claim disturbance for alterations to the business as a
result of lost vehicle
storage area is more limited than claimed however, given
my finding that the northern access was not an interest in land acquired
in this
acquisition process.
200 Land for vehicle storage has been lost on the
acquired land. A claim based on the loss of that area for storage is
maintainable
under s 59(f) as it is a financial cost incurred relating to the
actual use of the acquired land arising as a direct and natural
consequence of
the acquisition. The area of land lost for use for vehicle storage is 5067.92m2,
being the area of the acquired land.
There should not be any deduction for the
small area of the transpiration bed. Although not the primary basis argued for
by Mr Tew,
a legitimate and more easily calculated amount would be the cost of
either buying or renting a comparable land area. The cost of
buying similar land
would presumably be the same as the market value payable to Mr Mitchell however,
which may be an excessive amount.
Accordingly, whether there is an amount for
business loss able to be calculated by Mr Tew for the loss of a smaller area
needs to
be clarified.
201 The use of the residue land is intimately
connected with the acquired land in terms of the operation of the business by
Beresfield.
That part of the claim for business loss which relates to the impact
on the residue land of the carrying out of the public purpose
on the acquired
land is not available under s 59(f) as already discussed at par 179-180. If
there is an impact on the business conducted
on the residue land which results
from the carrying out of the public purpose, there may be a claim available to
the Applicant, Mr
Mitchell, under s 55(f) in light of, say, loss of rental
income from Beresfield. Beresfield as a tenant could not have a claim for
injurious affection under s 55(f) as it is not the owner of the residue land
Relocation work by Mr Mitchell and staff for
Beresfield
202 Item (i) (par 72(a)) is a claim for $20,000 for works
undertaken by Mr Mitchell and his staff to relocate motor vehicle bodies
from
the acquired land, inter alia. The Applicant submitted that this work was
necessary as a direct consequence of the acquisition
and related to the actual
use of the land acquired. This claim is accepted by the RTA and I consider it is
claimable as disturbance.
Summary
203 I am mindful of the need
to finalise this matter and not cause the parties significant additional costs
in doing so. There remain
some outstanding issues and the extent to which these
require additional submissions and possibly evidence will need to be discussed
with the parties. I will summarise what is determined and what remains to be
determined. Compensation for market value is recoverable
under s 55(a) by Mr
Mitchell for $496,656.16. Most of Mr Mitchell’s claim for disturbance (par
72(a)(i) –(iv)) is not
recoverable as disturbance under s 59(f). Whether
additional compensation is claimable pursuant to s 55(f) for injurious affection
to the residue land as a result of carrying out the public purpose is a matter
to be clarified, as identified at par 181 (concerning
the cost of the change in
access arrangements on the residue land) and par 201 (concerning loss of income
from Beresfield). I have
also requested clarification from the parties whether
the $100,000 claimed by Mr Mitchell for temporary works and other items (par
72(a)(v)) is recoverable under s 59(f) (par 190).
204 For
Beresfield’s claim, disturbance is recoverable under s 59(a) for
$15,500.92, under s 59(b) for $15,400 and under s 59(f)
for $20,000 for item (i)
at par 72(b). Whether liability is disputed in relation to item (iii) par 72(b)
of $62,905.83 needs to be
clarified with the parties. The RTA has agreed to pay
the cost of moving the transpiration bed and I need clarification that has
been
included in these amounts. As stated in par 201, disturbance under s 59(f) for
business loss due to the area of acquired land
lost for vehicle storage (item
(ii) par 72(b)) may also be recoverable albeit for a lesser area. Before
determining the amount, I
require brief clarification of Mr Tew’s evidence
concerning business loss if the area lost is restricted to the acquired land
area. I am hoping this can be done in a way that does not incur much extra
expense. A timetable for dealing with these issues will
be
necessary.
[<img
src="/lecjudgments/2008nswlec.nsf/files/30847_48_of_2006_Pain_AnnexureA.jpg/$file/30847_48_of_2006_Pain_AnnexureA.jpg"
alt="Annexure
A">]
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