Apokis v Transport for NSW

[2020] NSWCA 39

Court of Appeal

Supreme Court

New South Wales

• Summary available

Medium Neutral Citation:

Apokis v Transport for NSW [2020] NSWCA 39

Hearing dates:

27 February 2020

Date of orders:

13 March 2020

Decision date:

13 March 2020

Before:

Basten JA at [1];
Leeming JA at [63];
Brereton JA at [64]

Decision:

(1)   In matter number 2017/388163, dismiss the summons seeking leave to appeal.
(2)   In the appeal, matter number 2019/333192:
(a)   extend the time within which to file the notice of appeal up to and including 24 October 2019;
(b)   grant the appellant leave to file in this proceeding the amended notice of appeal contained in the orange appeal book at pp 73-78;
(c)   dismiss the appeal.
(3)   Order that Sam Apokis pay the costs of the respondent of the two proceedings in this Court.

Catchwords:

APPEAL – civil – notice of appeal – extension of time to apply for leave to appeal – where notice of appeal filed almost two years after the material date – where government respondent consented to late filing – relevance of model litigant policy

 

VALUATION – compulsory acquisition of land – assessment of compensation – market value – role of “judicial valuer” – valuation of non-marketable parcel – assessment of value before and after acquisition – Land Acquisition (Just Terms Compensation) Act 1991 (NSW), s 56(1)

VALUATION – compulsory acquisition of land – assessment of compensation – disturbance – where acquired land included resource – assessment of value where resource only had value because of the carrying out of the public purpose for which the land was acquired – whether claimed disturbance related to “actual use” of acquired land – Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 55(d) and 59(f)

Legislation Cited:

Civil Procedure Act 2005 (NSW), s 56; Pt 6
Land Acquisition (Just Terms Compensation) Act 1991 (NSW), ss 54, 55, 56, 59; Pt 3, Div 4
Land Acquisition (Just Terms Compensation) Amendment Act 2016 (NSW), Sch 1 [14]
Land and Environment Court Act 1979 (NSW), ss 57, 61
Transport Administration Act 1988 (NSW), s 3C; Sch 7, Pt 29, cl 218

Cases Cited:

Almona Pty Ltd v Roads and Traffic Authority (NSW) [2008] NSWLEC 112; (2008) 160 LGERA 375
Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Ltd (1934) 51 CLR 509; [1934] HCA 41
Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78
Goode v Valuer-General (1979) 22 SASR 247
Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 547
ISPT Pty Ltd v Valuer General [2009] NSWCA 31; 165 LGERA 25
Liao v New South Wales [2014] NSWCA 71
Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251
Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority of New South Wales [2006] NSWCA 314
Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252
Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands [1947] AC 565
Roads & Traffic Authority of New South Wales v Blacktown City Council [2007] NSWCA 20
Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41
Roads and Traffic Authority of New South Wales v Peak [2007] NSWCA 66
Roads and Traffic Authority of New South Wales v Perry (2001) 52 NSWLR 222; [2001] NSWCA 251
Royal Sydney Golf Club v Federal Commissioner of Taxation (1957) 97 CLR 379; [1957] HCA 31
Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82
Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (2005) 63 NSWLR 407; [2005] NSWCA 251
Turner v Minister of Public Instruction (1956) 95 CLR 245; [1956] HCA 7
Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority (2008) 233 CLR 259; [2008] HCA 5

Texts Cited:

NSW Government – Model Litigant Policy for Civil Litigation

Category:

Principal judgment

Parties:

Sam Apokis (Appellant)
Transport for NSW (Respondent)

Representation:

Counsel:
Mr N Eastman / Ms R McEwen (Respondent)

 

Solicitors:
Ashurst Australia (Respondent)

  Appellant by leave represented by Mr N Elali

File Number(s):

2019/333192

 Decision under appeal 

Court or tribunal:

Land and Environment Court

Jurisdiction:

Class 3

Citation:

[2017] NSWLEC 163

Date of Decision:

04 December 2017

Before:

Moore J

File Number(s):

2016/153005

headnote

[This headnote is not to be read as part of the judgment]

The appellant was the registered proprietor of land near Dirty Creek in northern New South Wales. On 19 December 2014 the land was acquired by Roads and Maritime Services (now Transport for NSW) for the purpose of the Woolgoolga-Ballina section of the Pacific Highway upgrade project. Prior to the acquisition, most of the land was bushland, other than a quarry and associated works on the north-east corner of the land.

On 7 April 2015, the NSW Valuer General determined that the compensation payable to the appellant for the land was $252,000. The Appellant commenced proceedings in the Land and Environment Court challenging that assessment. On 4 December 2017, the Land and Environment gave judgment assessing compensation at $152,912.86 plus interest.

While the notice of appeal was filed significantly out of time, leave to appeal was granted as the respondent did not oppose the appellant’s request to extend time to appeal.

In the Court of Appeal, the issues on appeal were whether the primary judge –

(i)   mistook his function in assessing the market value of the acquired land;

(ii)   erred in rejecting a claim for lost royalties based on the resource excavated from the acquired land and used it in the construction of the highway.

The Court held, dismissing the appeal:

In relation to (i):

per Basten JA, Leeming JA, and Brereton JA:

1. The judicial function under s 56(1) of the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) was not to make an objective valuation of the land, but to determine the amount a hypothetical willing but not anxious purchaser and a willing but not anxious vendor would have agreed upon for the acquired land at the date of acquisition: [44], [62], [66]. This is an essentially factual exercise: [45], [62], [63].

Spencer v The Commonwealth (1907) 5 CLR 418; [1907] HCA 82; Turner v Minister of Public Instruction (1956) 95 CLR 245 at 267-268; Housing Commission of New South Wales v Falconer [1981] 1 NSWLR 54 and ISPT Pty Ltd v Valuer General [2009] NSWCA 31 referred to.

2. The statutory test for market value is not directly applicable where no marketable parcel of land is acquired: [46], [62], [63]. The conventional approach is to value the whole of the land before acquisition and the residual lands after acquisition, with the value of the acquired land assessed as the difference between the two figures: [46], [62], [67].

3. The market value of acquired land cannot include any increase in value caused by the carrying out of the public purpose for which the land was acquired. In this case, there was no market for the resource on the acquired land absent the major upgrade of the highway; therefore the value of that resource was to be disregarded: [49]-[51], [62], [63].

Roads and Traffic Authority of New South Wales v Perry (2001) 52 NSWLR 222; [2001] NSWCA 251; Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd (2005) 63 NSWLR 407; [2005] NSWCA 251, referred to.

per Brereton JA (Leeming JA agreeing):

4. To the extent that the primary judge did not adopt the conventional ‘before and after’ approach, his calculation favoured the appellant and did not involve an error of which the appellant could complain: [62], [71].

In relation to (ii):

5. The value which could have been extracted from continued ownership of the land was not a loss due to disturbance; nor did it relate to the actual use of the land by the former owner: [54], [56], [62], [63].

Almona Pty Ltd v Roads and Traffic Authority (NSW) [2008] NSWLEC 112; (2008) 160 LGERA 375; Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252; Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41, applied.

Further, per Brereton JA (Leeming JA agreeing):

6.   The fundamental question under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) is what is just compensation for the acquisition of land. This directs attention to the amount the owner is worse off as a result of the acquisition: [62], [66]. There was no error in the primary judge’s approach.

Judgment

1. BASTEN JA: On 19 December 2014, by notice published in the Government Gazette, Roads and Maritime Services acquired part of a parcel of land owned by Sam Apokis (the appellant) near Dirty Creek in northern New South Wales. The land was acquired for the purpose of the Woolgoolga-Ballina section of the Pacific Highway upgrade project. In round figures, the appellant’s property comprised an area of some 76ha, of which a strip with an area of 19ha running roughly in an east-west direction through the property was acquired, leaving two blocks on either side of the acquired land, the northerly block having an area of 40ha and the southerly block 17ha.

2. By a determination issued on 7 April 2015, the NSW Valuer General determined the compensation payable in an amount of $252,000. On 7 July 2015, the appellant commenced proceedings in the Land and Environment Court seeking a determination of the compensation payable.

3. In a judgment delivered on 4 December 2017, Moore J assessed compensation in an amount of $152,912.86 plus interest. [1] As a greater amount had already been paid, that assessment involved the appellant repaying the respondent an amount of $75,577.54. Orders to that effect were entered on 15 December 2017. Although the appellant filed and served a notice of intention to appeal in December 2017, which noted that the appeal was to be lodged no later than 4 March 2018 (the correct date was 15 March 2018), no proceedings were commenced until, on 1 August 2019, a summons seeking leave to appeal was filed and served. Shortly thereafter, on 24 October 2019, a few weeks short of two years from the date on which judgment had been delivered in the Land and Environment Court, the appellant filed a notice of appeal in this Court. In November 2019 the summons was “withdrawn”.

Procedural issues

1. Apokis v Roads and Maritime Services [2017] NSWLEC 163.

(a)   representation of appellant

4. The appellant had solicitors and counsel acting for him in the Land and Environment Court. The notice of intention to appeal to this court was signed by a solicitor. Another solicitor appears to have acted for the appellant for a period. The withdrawn summons in this Court appears to have been signed by Mr Apokis himself; however, the notice of appeal was signed by a Nathan Elali in the capacity of “representative”. Mr Elali signed an acknowledgment that court fees will be payable during the proceedings. The contact details on the front page of the notice of appeal identified Mr Nathan Elali as the representative, although the document was filed for Mr Apokis with the words “Self-represented” against the item requiring an entry for legal representative. The written submissions in this Court were signed by Mr Elali, who sought leave to appear at the hearing of the appeal.

5. Counsel for the respondent stated that his instructing solicitors, on learning that Mr Elali proposed to appear at the hearing without Mr Apokis, had written to Mr Elali requesting written confirmation of his authority to represent Mr Apokis. Otherwise, counsel informed the Court, his client took no objection to Mr Elali appearing. Mr Elali conceded that he had no written authority to appear for Mr Apokis, that he was not a legal practitioner and that he was an undischarged bankrupt.

6. The question of authority was a point well taken: no document which formed part of the appeal had been signed by Mr Apokis, nor, the Court was advised, had he attended at any directions hearing in the matter. Not without some misgivings, the Court granted Mr Elali leave to speak on behalf of the appellant, on condition that he file, within 24 hours, a written authority from Mr Apokis to bring the proceedings and take steps in the proceedings on behalf of Mr Apokis. He was advised that absent such authority, the proceedings might be summarily dismissed. That authority was provided by way of a statutory declaration sworn by Mr Apokis.

7. A determining factor in granting Mr Elali leave was to avoid imposing additional costs on the respondent in circumstances where a refusal to hear from Mr Elali would, in all likelihood, have resulted in the adjournment of the appeal to another date.

(b)   extension of time

8. A further procedural step concerned the requirement for an extension of time within which to lodge the appeal. Order 1 in the notice of appeal sought an extension of time, a step which would usually be taken by notice of motion supported by an affidavit. No affidavit was provided, nor was any explanation for the delay given to this Court prior to the hearing.

9. The respondent’s counsel stated that his client did not oppose an extension of time and indeed thought that such an extension had been granted by the Registrar. However, no order was made in the appeal proceedings to that effect and it would be surprising if the Registrar had made such an order in the absence of any explanation for the delay, even assuming the order was not opposed.

10. In explanation of the stance taken by the respondent, counsel said that the respondent (i) suffered no prejudice from an extension of time, (ii) believed it was acting in accordance with the model litigant policy in not opposing an extension, and (iii) on that basis, considered that an extension promoted the just, quick and cheap disposal of the litigation, as required by s 56 of the Civil Procedure Act 2005 (NSW). These propositions should not be allowed to pass without comment.

11. First, on the assumption, reflected in the respondent’s written submissions, that it had been advised that the appeal was largely misconceived and lacking in merit, it is difficult to understand how it was not prejudiced by running up further costs if the matter went to a full hearing, costs which might well not be recoverable in circumstances where there was then an absence of evidence that the appellant had commenced the proceedings. Indeed, the potential prejudice included the expenses incurred in preparing the 19 volumes of appeal books containing the evidence at trial, and continuing to incur liability for fees and costs of solicitors and counsel.

12. So far as the model litigant policy is concerned, there is considerable overlap with the obligation under Pt 6 of the Civil Procedure Act to facilitate the just, quick and cheap resolution of the real issues in the proceedings. The policy requires that a government authority not take advantage of a claimant who lacks resources to litigate a legitimate claim, and not to rely on technical defences, being defences that lack substantive merit. [2] However, the policy expressly provides that the obligation does not prevent an agency from “requiring opposing litigants to comply with procedural obligations”. [3]

    2. Model Litigant Policy for Civil Litigation, pars 3.1, 3.2(d), (e) and (f); Liao v New South Wales [2014] NSWCA 71 at [357] (Barrett JA, Beazley P agreeing).

    3.    Policy, par 3.4(f).

13. The procedural rules, including time limits relating to the commencement and prosecution of civil proceedings (including appeals), have a number of purposes. With respect to appeals, one is undoubtedly to protect the successful party from being unable to rely upon the finality of a judgment in its favour for an indefinite period. However, there are also various aspects of the public interest which may be engaged. For example, undue delay in commencing an appeal which may result in a retrial may adversely affect the quality of the evidence available and may cause ongoing stress for parties and witnesses which could, with a timely resolution of the matter, have been diminished. Once proceedings had been commenced, the Court also has an interest in their timely dispatch. The ready agreement of a government authority to a request to extend time, to waive requirements of court rules or to disregard orders fixing a timetable for proceedings, does nothing to advance the public interest in the quick, just and cheap resolution of the proceedings, whatever the convenience of the parties may prefer.

(c)   identity of respondent

14. Although not adverted to by the parties, RMS was dissolved on 19 December 2019 and replaced by a new statutory corporation, Transport for NSW. [4] However, for the purposes of these reasons, it is convenient to continue to refer to the acquiring authority as “RMS” when so identified in the proceedings below, or otherwise as the respondent.

    4. Transport Administration Act 1988 (NSW), s 3C; pursuant to the Transport Administration Amendment (RMS Dissolution) Act 2019 (NSW), the assets, rights and liabilities of RMS were transferred to Transport for NSW: 1988 Act, Sch 7, Pt 29, cl 218(2).

Nature of proceedings on appeal

15. Proceedings for a determination of just terms compensation under the Land Acquisition (Just Terms Compensation) Act 1991 (NSW) (“Land Acquisition Act”) are brought in the Class 3 jurisdiction of the Land and Environment Court. An appeal from a determination is available pursuant to s 57 of the Land and Environment Court Act 1979 (NSW), which relevantly provides:

57   Class 1, 2, 3 and 8 proceedings—appeals

(1)   A party to proceedings in Class 1, 2, 3 or 8 of the Court’s jurisdiction may appeal to the Supreme Court against an order or decision (including an interlocutory order or decision) of the Court on a question of law.

(2)   On the hearing of an appeal under subsection (1), the Supreme Court shall—

(a)   remit the matter to the Court for determination by the Court in accordance with the decision of the Supreme Court, or

(b)   make such other order in relation to the appeal as seems fit.

…

It is also necessary to note the terms of s 61:

61   Manner in which appeals to the Court to be made

…

(2)   An appeal to the Court under this Division shall be made in such manner, and be subject to such conditions, as are prescribed by the rules.

16. In Mir Bros Unit Constructions Pty Ltd v Roads & Traffic Authority of New South Wales,[5] Spigelman CJ, noting that the jurisdiction of this Court was “limited to an appeal on a question of law” further observed that “the jurisdiction is not confined to an error of law.” The point being made was that there may be a question of law governing the proceedings below which was not raised and determined by the primary judge, but which can be the subject of an appeal to this Court. However, it is self-evident that an appellant will not seek to identify a question of law unless there was error in the sense that the ultimate determination could not properly have been made if the law had been properly identified and applied. Further, this Court will only intervene “if the error on a question of law is a material error”. [6]

    5. [2006] NSWCA 314.

    6. Melino v Roads and Maritime Services (2018) 98 NSWLR 625; [2018] NSWCA 251 at [52] (Payne JA); Roads and Traffic Authority of New South Wales v Peak [2007] NSWCA 66 at [152] and Moloney v Roads and Maritime Services (2018) 98 NSWLR 651; [2018] NSWCA 252 at [64].

17. It is self-evident that an appeal so limited will have little prospect of success if the appellant fails to identify (i) each “order or decision … on a question of law” sought to be challenged, (ii) the alleged error in respect of each such order or decision, and (iii) how the error was material to the final determination of the case.

18. The notice of appeal filed by the appellant contained nine grounds, which were sought to be expanded to 10 by an amendment provided only after written submissions had been filed by both parties. Apart from ground 2, which alleged a denial of procedural fairness, none of the grounds expressly identified any question of law determined adversely by the trial judge. The position was not advanced by the written submissions filed for the appellant, which did not expressly advert to the grounds of appeal. These difficulties, adverted to in the respondent’s submissions, were not addressed in oral submissions made for the appellant.

16. The claim of procedural unfairness turned on an alleged failure by the trial judge to consider the appellant’s claim for disturbance costs and losses under s 59(1)(f) of the Land Acquisition Act, and to recognise that the claim was entirely separate from the value of the acquired land or the retained land. In its terms, this complaint was untenable. The judge identified the “foregone royalties’ claim” in identifying the issues; [7] he then returned to address the claim after dealing with the assessment of market value. [8] The judge identified the appellant’s case, which was that the RMS had “one valuable quarry resource for use on the project; that it won it from the applicant’s land; and, had the applicant been able to supply that material, he would have been entitled to a royalty on it.” [9] He then set out the respondent’s response in equally brief terms, namely that the acquisition had extinguished any pre-acquisition rights which the appellant had in the land. Whether the judge was correct or not in his determination of the claim is not in issue under ground 2; it is dealt with at the end of these reasons, concluding that the judge did not err in law in rejecting the claim for royalties. Ground 2, in its terms, was unsustainable.

    7.    Judgment at [31]-[36].

    8.    Judgment at [231]-[243].

    9. Judgment at [235].

Issues on appeal

20. Little is achieved by referring to the contents of the notice of appeal. To understand the nature of the appellant’s complaints in this Court, it is necessary first to identify the matters which the trial judge was required to address and the manner in which he disposed of them. From that exercise it is possible to distill the elements of the appellant’s dissatisfaction with the outcome.

21. Briefly there were two issues, namely (i) the market value of the acquired land, and (ii) a claim for lost royalties said to arise because the respondent had excavated over a million cubic metres from the acquired land and used it in the construction of the highway. The availability of the latter claim turned on the proper construction of the Land Acquisition Act and therefore allowed the identification of a question of law. The former issue involved a number of steps in determining market value, which in themselves turned largely upon factual findings based on the evidence.

22. The nine grounds of the notice of appeal, prior to amendment, appeared to focus on the failure of the trial judge to award compensation calculated by reference to a royalty payable to the appellant for the material extracted from the acquired land, after the date of acquisition. The written submissions, by way of contrast, were directed to error in assessing the market value of the property. The disconnection between the two was noted by the respondent in its written submissions. [10] This led to a last minute proposal by the appellant to amend his notice of appeal in two respects. First, in the opening paragraphs identifying “details of the appeal” the appellant had originally identified the scope of the appeal in the following terms:

“4 The appellant appeals from the part of the decision below in relation to the royalties claim under s 59(1)(f) of the [Land Acquisition Act].”

The first proposed amendment was to add the phrase “the valuation of the acquired land and” before “the royalties claim”.

10.    Respondent’s submissions, 7 February 2020, par 57.

23. The second amendment proposed a new ground 10 as follows:

“10   Moore J erred in failing to consider the market value of the acquired land, including its potential as a quarry, from the perspective of a hypothetical potential purchaser.”

24. As that ground reflected the heading of the critical passage in the appellant’s written submissions, which had been addressed by the respondent in its submissions, leave was granted in Court to allow the proposed amendment. The substance of the complaint appeared to be that the trial judge had erred in approaching the claim on the basis that he was required to carry out a valuation of the acquired land, rather than identifying the amount which would have been paid by the hypothetical purchaser envisaged by the Land Acquisition Act.

Assessment of value of acquired land

(a)   legal principles

25. The starting point considering the legal approach at trial must be the Land Acquisition Act itself. It is convenient to set out the relevant provisions, as in force at the date of the acquisition: [11]

    11. A relevant subsequent amendment added a new subsection to s 59, making the earlier provision, set out below, s 59(1).

55   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.

56   Market value

(1)   In this Act:

market value of land at any time means the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer, disregarding (for the purpose of determining the amount that would have been paid):

(a)   any increase or decrease in the value of the land caused by the carrying out of, or the proposal to carry out, the public purpose for which the land was acquired, and

(b)   any increase in the value of the land caused by the carrying out by the authority of the State, before the land is acquired, of improvements for the public purpose for which the land is to be acquired, and

(c)   any increase in the value of the land caused by its use in a manner or for a purpose contrary to law.

(2)   When assessing the market value of land for the purpose of paying compensation to a number of former owners of the land, the sum of the market values of each interest in the land must not (except with the approval of the Minister responsible for the authority of the State) exceed the market value of the land at the date of acquisition.

…

59   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.

26. Ground 10 (see [23] above) was clearly correct in its premise that the Land Acquisition Act requires the court to determine the market value of the acquired land in accordance with the terms of s 56(1), and, relevantly for present purposes, by reference to the willing but not anxious seller and willing but not anxious buyer. That exercise must be undertaken as at the date of acquisition, in accordance with s 55(a). The relevant date was 19 December 2014.

(b)   approach of trial judge

27. In December 2014, most of the land was bushland (including the whole of the acquired land), other than a quarry and associated works on the north-east corner of the land. It was common ground amongst the valuers who gave evidence in the Land and Environment Court that the most economically rewarding use of the land was either for the extractive industry based on the quarry, or as a bushland block on which a residential dwelling could be built. Different opinions were expressed as to whether these uses were mutually incompatible or, as the judge accepted, whether, at least after the carrying out of the public purpose, development consent could have been obtained to build a house on the southern portion of the land remaining in the appellant’s ownership, whilst the quarrying activity continued on the northern portion. If that were true only after the public highway was built, the southern portion was potentially capable of attracting a higher value than it had prior to the acquisition. Any increase in value would operate adversely to the interests of the appellant, because it would constitute “betterment” to be taken into account under s 55(f).

28. Pursuant to the Coffs Harbour Local Environmental Plan 2013 the appellant’s land could not be subdivided so as to create a parcel of 19ha. Accordingly, although it was necessary to determine the market value of the land as “the amount that would have been paid for the land if it had been sold at that time by a willing but not anxious seller to a willing but not anxious buyer” [12] the calculation could only be undertaken indirectly. The standard method in such cases, adopted by the valuers for both parties in the present case, is to undertake “before and after” assessments of value; the difference between the two will usually reflect the matters identified in s 55(a), (c) and (f), but not (b), (d) and (e).

    12. Land Acquisition Act, s 56(1), chapeau.

29. The possibilities with respect to the northern block were more limited; the assumption was that exploitation of the quarry provided the most economically rewarding use of that land. However, that conclusion gave rise to a number of subsidiary issues. Would quarrying continue at the level of intensity and over the same area as had occurred prior to December 2014? If expansion were proposed, would it extend to the resource on that portion which was acquired land? If some expansion might be contemplated by a prospective purchaser, was there a market for quarry products which would make the expansion viable? Was a purchaser likely to obtain approval for such an expansion?

30. The primary judge found on the evidence before him that (i) disregarding the highway upgrade, there was no available market for quarry products beyond the current level of operation of the quarry; (ii) approval to expand the intensity of quarry operations was unlikely; (iii) if the footprint of the quarry were to be expanded, there was sufficient resource available at the current level of operations to allow the quarry to continue for 50 years without expansion on to the acquired land, and (iv), therefore, so far as the land was to be used for quarry purposes, its value was not affected by the loss of the resource on the acquired land. Nevertheless, the judge accepted that the value of the land for quarrying purposes might have been reduced if it were expected that the quarry would last for more than 50 years, and he allowed a small amount for the discounted cash flow from exploitation well in the future of the resource on the acquired land.

31. Before turning to the alternative basis of valuation, namely as a residential “bush block”, it is convenient to note two grounds which challenged findings relating to the future demand for quarry products in excess of the 17,000 cubic metres per annum permitted by the 1991 development consent. First, alleged that the trial judge “erred by mischaracterising” the position of the appellant’s expert, Mr Gray (ground 6). Secondly, it was said that the judge erred in failing to consider Supreme Court proceedings between the quarry operator, Rixa Quarries Pty Ltd, and the applicant (ground 7). That ground was expanded in the written submissions by referring to the judge’s reliance on a “self-serving affidavit by Louise Cauchi” filed in a Land and Environment Court prosecution of Rixa by the present respondent.

32. With respect to Mr Gray’s evidence, the judge noted that the conditions under which he was expected to give expert evidence included self-defeating constraints, including the absence of any financial statements for the quarry, the absence of any quarry management records, a prohibition on making contact with the quarry operator and a prohibition on his attendance at the quarry, which he visited for the first time when the Court undertook a site inspection. The fact that the trial judge preferred the evidence of other experts when it conflicted with that of Mr Gray was unsurprising. He did not “mischaracterise” Mr Gray’s position. His treatment of Mr Gray’s evidence revealed no legal error.

33. With respect to the other proceedings, the underlying complaint may be summarised as follows, although it was not clearly articulated. During the period when the quarry was supplying material for the upgrade of the Pacific Highway between Sapphire and Woolgoolga, the annual production limits were substantially exceeded. This resulted in successful prosecutions by the Environment Protection Authority of those operating the quarry. A significant volume of material relating to the prosecution was in evidence before the trial judge. It included the lengthy sentencing decision of Sheahan J delivered on 15 May 2015. [13] One of the principals of the company operating the quarry was Ms Louise Cauchi. Ms Cauchi swore an affidavit in those proceedings which was no doubt self-serving in the sense that it sought to explain and diminish the severity of the offending. The trial judge in the present matter extracted from the findings of the sentencing judge the statement by Ms Cauchi that “all the material won and hauled from the quarry in the charge period, except for 18,000 tonnes, was supplied to … the major contractor for the RMS.” [14] The judge also extracted the proposition, again based on Ms Cauchi’s evidence, that there was “presently little or no work for the quarry” as the RMS contract had been completed. [15]

    13. Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78.

    14. Judgment at [152].

    15. Judgment at [155].

34. This evidence was undoubtedly relevant to the judge’s assessment of future demand for the products produced at the quarry. However, the inference to be drawn from the reference to Supreme Court proceedings in 2016 (ground 6) may have been that the appellant was in dispute with the quarry operator and therefore with Ms Cauchi. In oral submissions on the appeal, Mr Elali described proceedings brought by Mr Apokis to evict the quarry operator, which had settled. [16] The trial judge expressly referred to “commercial litigation in the Supreme Court, initiated by the applicant arising out of the recent quarrying operations on the site.” [17] He did so to put the issues to one side. So far as the file number in ground 6 may be relied on, the Supreme Court proceedings were commenced after the conclusion of the prosecutions in the Land and Environment Court. If they provided any basis for challenging the evidence given by Ms Cauchi in her sentencing proceedings, that was not explained. It would be speculative to consider possible reasons why the appellant sought to rely on this litigation on appeal. Ground 6 identified no error of law on the part of the trial judge.

    16.    Tcpt, 27/02/20, pp 13(15), 15(40).

    17. Judgment at [16].

35. Returning to the alternative basis of valuation, the judge noted that the land valuers had considered a pre-acquisition valuation on the assumption that its highest value was as a residential “bush block”, but had discounted the likelihood of that being an available use because of lack of access. The judge was satisfied that access issues had been misunderstood and that the land could enjoy the higher value as a “bush block” having an overall value of $450,000. [18] Apportioning that figure across the acquired and residual land, the acquired land was valued at $112,000. [19] After considering the evidence of comparable values in the area, the judge adjusted the rate to a figure of $6,500 per hectare for bush block residential purposes, which resulted in a value of $124,000 for the acquired land. [20] He also identified a rise in the value of the southern residual portion as a consequence of the carrying out of the public purpose. The “betterment” of $11,000 for the southern portion was taken into account by reducing the market value of the acquired land from $124,000 to $113,000. [21]

    18.    Judgment at [97] and [108].

    19. Judgment at [109].

    20. Judgment at [119].

    21. Judgment at [122].

(c)   did the judge mistake his function?

36. There are many cases applying the Land Acquisition Act, including in this Court, which identify the role of the judge in the Land and Environment Court as that of a “judicial valuer”. [22] That label, which constitutes a gloss on the statutory language, could lead to a misapprehension of the court’s function, if misapplied. However, the statutory language has been understood as encompassing the exercise described by the High Court in 1907 in Spencer v The Commonwealth. [23] Language similar to that adopted in the statute was used in Spencer, in relation to a quite different statutory scheme. Griffith CJ noting that the statutory question was difficult to answer and that to some extent the answer must be conjectural, continued: [24]

“The necessary mental process is to put yourself as far as possible in the position of persons conversant with the subject at the relevant time, and from that point of view to ascertain what, according to the then current opinion of land values, a purchaser would have had to offer for the land to induce such a willing vendor to sell it, or, in other words, to inquire at what point a desirous purchaser and a not unwilling vendor would come together.”

Barton J used language to similar effect, [25] as did Isaacs J. However, Isaacs J expanded on the concept of willing but not anxious parties in the following observation: [26]

“We must further suppose both to be perfectly acquainted with the land, and cognizant of all circumstances which might affect its value, either advantageously or prejudicially, including its situation, character, quality, proximity to conveniences or inconveniences, its surrounding features, the then present demand for land, and the likelihood, as then appearing to persons best capable of forming an opinion, of a rise or fall for what reason soever in the amount which one would otherwise be willing to fix as the value of the property.”

22. See, eg, Roads & Traffic Authority of New South Wales v Blacktown City Council [2007] NSWCA 20 at [6], [39], [47] and [48] (Spigelman CJ); ISPT Pty Ltd v Valuer General [2009] NSWCA 31 at [5] (Allsop P).

23. (1907) 5 CLR 418; [1907] HCA 82.

24.    Spencer at 432.

25.    Spencer at 436-437.

26.    Spencer at 441.

37. The language of Isaacs J was restated in Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Ltd [27] in the joint judgment of Rich, Dixon and McTiernan JJ, as requiring that each of the hypothetical parties “is equipped with knowledge of the existing relevant circumstances. But knowledge does not include uncommon gift of foresight.” The circumstance in question in that case was the valuation of land as at 1 June 1930, described by the High Court as “times of changing and uncertain conditions” at a time “early in the financial depression”. [28]

    27. (1934) 51 CLR 509 at 515; [1934] HCA 41.

    28.    Gold Estates at 515.

37. Turner was applied by Kitto J undertaking a valuation for land tax purposes in Royal Sydney Golf Club v Federal Commissioner of Taxation [29] in the following terms:

“And in doing so I must take into account not only all that was then generally understood or ascertainable but the situation as it actually was in respect both of fact and of law; for the supposition must be made, in order properly to apply the test of value laid down in Spencer v The Commonwealth, that a price is arrived at in bargaining between a hypothetical prudent purchaser and vendor each of whom is equipped with knowledge of the existing circumstances: Deputy Federal Commissioner of Taxation v Gold Estates of Australia (1903) Ltd [at 515].”

29. (1957) 97 CLR 379 at 385; [1957] HCA 31.

39. In Goode v Valuer-General,[30] Wells J, in applying the language of Isaacs J in Spencer’s case, namely the supposition that both buyer and seller are “perfectly acquainted with the land and cognizant of all circumstances which might affect its value”, continued:

“It should follow, therefore, that whatever may be the state of knowledge of the farming community, the hypothetical parties would know the history of the management of the land, including the programme (if any) of superphosphate applications that has been followed.”

30. (1979) 22 SASR 247, 260.

40. In ISPT, Allsop P referred to the cases set out above and noted that the scope of the knowledge which may be expected of the hypothetical parties “may be open to debate” as may be “[t]he extent of the knowledge contemplated by Isaacs J in Spencer”. [31] That doubt is reinforced by the insistence in Walker Corporation Pty Ltd v Sydney Harbour Foreshore Authority [32] that the courts should focus on the statutory language, and not be distracted by cases discussing earlier and differently expressed powers.

    31. ISPT at [4].

    32. (2008) 233 CLR 259; [2008] HCA 5 at [47].

41. Some of the factors which must be taken into account are well established. They include, for example, zoning restrictions on the use to which the land can be put, together with the history of its use. It may also be necessary to take into account the possibility of some variation in those restrictions, on application and the possibility (remote or otherwise) that constraints may be lifted in the foreseeable future. Where it is suggested that the greatest value may be obtained by a use for which the land is not presently fitted (such as subdivision), it will be appropriate to assume that the prudent purchaser will obtain information as to the likely costs of preparing the land for subdivision.

42. More difficult questions arise with respect to facts which are not known at the date of acquisition, but become available later, even as a result of carrying out the public purpose for which the acquisition was undertaken. One such fact in the present case, was the depth of the rock which was being quarried, which was potentially relevant to the availability of the total resource. The scope of knowledge is tested to some extent by the discussion in cases such as Housing Commission of New South Wales v Falconer [33] of the circumstances in which the court can take account of events subsequent to the acquisition. In Falconer, one question was the extent to which foresight of increasing costs of construction could be confirmed by actual increases in costs prior to trial. Hope JA stated: [34]

“There thus has to be considered not what a prudent purchaser in the position of the owner would pay after he had obtained a knowledge of all the circumstances that in fact occurred after the date of resumption, but what a person in his position would pay in the light of knowledge available at the time of the resumption. However, having affirmed this position, the decided cases dissolve into uncertainty.”

33. [1981] 1 NSWLR 547.

34.    Falconer at 557F.

43. Glass JA also accepted the appropriateness of confirming a foresight. Mahoney JA expressed the principle somewhat more guardedly in the following passage: [35]

“In determining the effect which may be given to events occurring subsequently to the date of resumption, it is necessary to draw certain distinctions.

There are some cases in which the theory or principle on which the compensation is to be assessed prevents regard being had to subsequent events. Thus, where the compensation which is to be given is measured by the ordinary market price of the property taken, the principle on which that market price is to be determined prevents (or at least restricts) reference to subsequent events. That market price is the price acceptable to a willing but not anxious vendor and purchaser on the relevant date. Such persons are to be taken to know what an appropriately informed person would know on that date. That being the principle, it follows that such persons (and the court, as determining what they would have done) cannot be seen as knowing more.”

35.    Falconer at 576A-C.

44. There are three propositions which may be derived from this discussion. First, the label “judicial valuer” has both positive and negative attributes. Its positive attribute is that it draws attention to the fact that the judge will not be bound by the evidence of the experts. That may always be so, but in this context it arises from the fact that the judge is required to consider the effect of a range of considerations on the hypothetical purchaser and vendor. The negative attribute arises from the need to determine the hypothetical point of agreement, which must occur as at the date of acquisition, and not an objective assessment of market value as at the date of acquisition.

45. Secondly, the assessment is, as the trial judge correctly noted, an essentially factual matter. Unless he took into consideration some legally irrelevant material, or failed to have regard to evidence which was available and which it would have been legally erroneous to disregard, there will be few opportunities to identify error on a question of law. This proposition was explained in some detail by Dixon CJ in Turner v Minister of Public Instruction,[36] concluding:

“But what matters for present purposes is first that valuation cannot be made to depend entirely on a logical process or formula and second that in any case questions of logical reasoning about considerations of fact are not to be confused with questions of law.”

36. (1956) 95 CLR 245 at 267-268; [1956] HCA 7.

46. Thirdly, in circumstances where there is no marketable parcel of land which is acquired, the statutory test is not capable of direct application. The conventional approach is to value the whole of the parcel of land from which the acquired land is excised by applying the statutory test to the land as it existed immediately prior to acquisition and then applying the same test to the adjoining land or lands after acquisition. The value of the acquired land is assessed as the difference between the two figures. The validity of that exercise was not challenged before the trial judge; indeed, it was precisely the exercise which both parties undertook. Nor was there any suggestion in the submissions in this Court that the exercise was invalid.

47. Whatever one may make of the somewhat colourful phrase “perfectly acquainted”, it is quite unlikely that Isaacs J intended to set a standard which would require an 11 day court hearing to determine the value of a largely undeveloped block of land of less than 80ha. Nevertheless, whatever may have been expected, two factors prevent much being made of that issue in the present case. The first is that the test identified in Spencer, and partly adopted in the Land Acquisition Act, s 56(1), has no ready application to a claim for compensation for the acquisition of a portion only of a parcel of land which could not, in planning terms, be subdivided. Secondly, that feature led to the evidential exercise undertaken in the present case by each party calling experts in land valuation, town planning, geology, mining engineering and quarry valuation. [37]

    37.    In all, 10 experts were called and five joint expert reports prepared.

48. Although it is true that the primary judge did not end his judgment with a statement as to an amount which the hypothetical willing but not anxious purchaser and the willing but not anxious vendor would have agreed upon for the acquired land, that was because the case was not presented in that way. Accordingly, the challenge raised to the assessment of the market value of the acquired land must be rejected.

(d)   was the result unfair?

49. One further observation should be made. It was probably true that, as explained by the appellant’s representative in oral argument, the appellant felt aggrieved by the fact that the respondent had acquired his land at a price which had no regard to a large and potentially valuable resource, which the respondent then utilised by excavating a cutting for the highway. That result was described as “unfair”. The level of dissatisfaction was no doubt exacerbated by the fact that Mr Apokis had obtained royalties from the quarry on the north-east corner of the land, which had been exploited by a company with a licence to operate the quarry for the purpose of supplying quarry products for an earlier section of the highway upgrade.

50. However, the superficial attraction of that complaint rested on a false premise. As the trial judge found, there was no market for the quarrying resource on the acquired land absent the major upgrade of the highway. Yet it has long been the law, as reflected in s 56(1) of the Land Acquisition Act, that the market value of the acquired land cannot include any increase in value caused by the carrying out of the public purpose for which the land was acquired. That used to be identified as the Pointe Gourde principle, after the decision of the Privy Council in Pointe Gourde Quarrying and Transport Co Ltd v Sub-Intendent of Crown Lands. [38]

    38. [1947] AC 565.

51. An early case in this Court dealing with the upgrading of the Pacific Highway, and applying that principle, was Roads and Traffic Authority of New South Wales v Perry. [39] The caselaw, as it stood in 2005, including Perry, was discussed in Sydney Harbour Foreshore Authority v Walker Corporation Pty Ltd. [40] There was further discussion of the relevant principles in the High Court in Walker Corporation, concluding that the proper approach was to address the statutory language in the Land Acquisition Act, and not statements in earlier cases in other jurisdictions. [41] In any event, the trial judge in the present case applied the well-established principles by reference to s 56(1), which required that if any value derived from the public purpose for which the land was acquired, it was to be disregarded. There was no error of law in so assessing the market value of the acquired land; the statute required no less.

    39. (2001) 52 NSWLR 222; [2001] NSWCA 251 (Handley JA, Powell and Hodgson JJA agreeing).

    40. (2005) 63 NSWLR 407; [2005] NSWCA 251 at [32]ff.

    41.    Walker Corporation at [46]-[47].

Royalties for quarry products extracted from the acquired land

52. The only substantive order sought in the notice of appeal if the appeal were allowed and the orders in the Land and Environment Court set aside was an order that “the appellant was entitled to recover compensation for disturbance under s 59(1)(f) in the amount of $1,978,931.48.” This claim was based on evidence that the respondent had removed some 2.5 million tonnes of material in creating a cutting on the acquired land. The claim was rejected by the trial judge.

53. The claim was based upon the requirement in s 55(d) of the Land Acquisition Act requiring that the court take into account “any loss attributable to disturbance”. That term was defined in s 59 to include a number of heads of costs and fees, as set out at [25] above, and, relevantly for present purposes:

(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.

54. This Court has held that some forms of “loss” consequential on the acquisition of the acquired land and relating to the actual use of that land may fall within s 59(f). Whether such a loss properly falls within the phrase “any other financial costs”, having regard to the other forms of fees and costs identified in s 59 is a large question. [42] However, the value which could have been extracted from continued ownership of the land which has been acquired under the Act is not such a financial cost. It is an element which is to be included in the assessment of the market value of the acquired land; however, if the land had value because of the resource, it was a value which the judge held resulted from the carrying out, or the proposal to carry out, the public purpose for which the land was acquired. Accordingly, that value was to be disregarded in determining the market value of the land. [43]

    42. See Roads and Maritime Services v United Petroleum Pty Ltd (2019) 99 NSWLR 279; [2019] NSWCA 41, [50]-[53] (in my judgment, Macfarlan JA agreeing); [74] (Payne JA); [96], [99] (Sackville AJA); [142]-[143] (Preston CJ of LEC).

    43. Land Acquisition Act, s 56(1)(a).

55. This case demonstrates with some clarity the dangers in assuming that the various heads of compensation which may be awarded under Pt 3, Div 4 of the Land Acquisition Act overlap. To the extent that one form of loss naturally falls within a particular statutory provision, which contains a qualification, indicates a statutory purpose that another provision, without the qualification, cannot be relied upon if the result is to avoid the effect of the qualification. The availability of an exploitable resource within the acquired land was quintessentially a value which must be included in the assessment of the market value of the land. If the resource had value, thereby increasing the value of the land, only because of the carrying out or the proposal to carry out the public purpose for which the land was acquired, that value must be disregarded in assessing market value. That result could not be sidestepped by bringing a claim under s 59(f).

56. That conclusion is consistent with the language of s 59(f). The claim did not involve a “financial cost” incurred by the appellant; it was, at best, a loss suffered. Further, the cost was not incurred in relation to the “actual use” of the acquired land, because the acquired land was not being used by the appellant for the extraction of that resource at the date of the acquisition.

57. This approach is consistent with that which has been adopted in a number of recent judgments in this Court. As explained by Jagot J in Almona Pty Ltd v Roads and Traffic Authority (NSW),[44] in a passage approved by this Court in Moloney v Roads and Maritime Services, [45] the reference in par (f) to “the actual use of the land” refers to the actual use by the person claiming compensation, being use of the acquired land at the time of acquisition. The claim under s 59(f) properly failed on the basis of the factual finding that there was no actual use of the acquired land by the appellant at the date of acquisition.

    44. [2008] NSWLEC 112; (2008) 160 LGERA 375 at [60].

    45.    At [76]-[77] (Payne JA).

58. In fact, any loss calculated by reference to the royalties payable for the resource contained in the acquired land did not result from exploitation by the appellant, but from use of the acquired land by the respondent as the new owner. The challenge to the refusal of the claim under s 59(f) must be dismissed.

Orders

59. As noted above, there were two sets of proceedings instituted by Mr Apokis in this Court. First, there was the proceeding commenced by a summons seeking leave to appeal (matter number 2017/388163), which was withdrawn, but not dismissed. That matter should be formally disposed of.

60. With respect to the appeal (matter number 2019/333192), in the absence of objection by the respondent, time to file the notice of appeal should be extended to the date on which it was filed, namely 24 October 2019. Further, the appellant was granted leave to file an amended notice of appeal in the form contained in the orange appeal book at p 73. However, the appeal should be dismissed.

61. In accordance with the usual procedure, the appellant must pay the costs of the respondent in this Court.

62. The Court makes the following orders:

1. In matter number 2017/388163, dismiss the summons seeking leave to appeal.

2. In the appeal, matter number 2019/333192:

1. extend the time within which to file the notice of appeal up to and including 24 October 2019;

2. grant the appellant leave to file in this proceeding the amended notice of appeal contained in the orange appeal book at pp 73-78;

3. dismiss the appeal.

3. Order that Sam Apokis pay the costs of the respondent of the two proceedings in this Court.

63. LEEMING JA: I agree with the orders proposed by Basten JA, and with his Honour's reasons. I also agree with Brereton JA's reasons for judgment.

64. BRERETON JA: I have had the benefit of reading in draft the judgment to be delivered by Basten JA, in which the background to this appeal is fully described, and with which, subject to the following additional remarks, I respectfully agree.

65. The amount of compensation to which a person whose land is the subject of compulsory acquisition is defined by the (NSW) Land Acquisition (Just Terms Compensation) Act 1991, s 54, relevantly as follows:

54   Entitlement to just compensation

(1)   The amount of compensation to which a person is entitled under this Part is such amount as, having regard to all relevant matters under this Part, will justly compensate the person for the acquisition of the land.

66. This means that the fundamental question is, what is just compensation for the acquisition of the land. It directs attention to the amount by which the owner is worse off as a result of the acquisition, which is not necessarily the same as the market value of the land acquired. Although, pursuant to s 55, the market value of the land is a relevant consideration, it is not the only consideration, as that section makes clear: [46]

    46. As at the relevant time; the reference to “solatium” in s 55(e) was replaced in 2016 with “the disadvantage resulting from the relocation”, by (NSW) Land Acquisition (Just Terms Compensation) Amendment Act 2016, Sch 1 [14].

55   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.

67. Where, as is often the case, an acquisition is of a part and not the whole of the owner’s land, and the part acquired could not have been separately sold by the owner, the question is logically and conventionally addressed by first determining what was the value of the whole parcel to the owner before the acquisition, and then subtracting from it the value of the residual parcel after the acquisition, with the difference being the measure of what the owner has lost, and thus the amount of just compensation. This is not necessarily the same as the market value of the land acquired, although there may often be a correlation.

68. As presented in the appellant’s written submissions, his main argument was that his Honour did not have regard to the highest and best use of the land. That submission is not correct. In the context of the “before and after” exercise, the question of “highest and best use” is applicable to the land before the acquisition. His Honour found that, having regard to all relevant factors, including planning permissions and existing use, its highest and best use was as a bush block, with the ability to carry on the quarrying activities which had been established in the northern portion. On that basis, his Honour viewed the land in three components: the northern portion, where the quarry was located; the central strip, which was the subject of the acquisition; and the southern portion.

67. Though the primary judge referred to the notion of “before” and “after”, to evidence of value of the subject property on a “before” and “after” basis, his Honour did not perform the “before and after” exercise in the manner explained above. However, his Honour’s reasons permit the exercise to be undertaken. His Honour found that whatever value the quarrying potential added to the “bush block” was essentially unaffected by the acquisition – it was the same “after” as “before” – so that, but for an allowance of a nominal $1,000, the value of the northern portion was the same “after” as “before”. [47]

    47. Apokis v Roads and Maritime Services [2017] NSWLEC 163 at [120], [199].

68. As to the remaining portions, his Honour found that, before the acquisition, valued as a “bush block” at $5,892 per hectare, the southern portion was worth $101,000 and the acquired strip $112,000 – a total of $213,000. [48] But for the project, the quarrying potential of the strip was of no practical value to the owner; and but for the project, the strip could not have been marketed separately. That, as a consequence of the acquisition, the respondent has been able to exploit it, does not in those circumstances affect what was its “highest and best use” before the acquisition, and is irrelevant to the measure of just compensation for the owner’s loss.

    48. Apokis v Roads and Maritime Services [2017] NSWLEC 163 at [109].

69. After the acquisition, still valued as a “bush block” but now at $6,500 per hectare, essentially because of improved accessibility, what remained – namely the southern portion – was worth $112,000 (a “betterment” of $11,000). [49] That implies that the loss for which Mr Apokis should have been compensated was $101,000, being the difference between $213,000 and $112,000. Rather than adopting this approach, his Honour valued the acquired strip, using the after-acquisition rate of $6,500 per hectare, at $124,000, [50] and deducted the betterment to the southern portion of $11,000, to reach an amount of $113,000. [51] It may well have been an error, in favour of Mr Apokis, to use the after-acquisition rate in this way to value the acquired strip and award compensation on that basis. However, the respondent took no point in that respect, and there was no cross-appeal.

    49. Apokis v Roads and Maritime Services [2017] NSWLEC 163 at [120].

    50. Apokis v Roads and Maritime Services [2017] NSWLEC 163 at [119].

    51. Apokis v Roads and Maritime Services [2017] NSWLEC 163 at [120]-[122].

70. I agree with the orders proposed by Basten JA.

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Endnotes

Decision last updated: 13 March 2020