Ashfield Municipal Council v RTA of NSW
[2000] NSWLEC 117
•06/15/2000
Land and Environment Court
of New South Wales
CITATION: Ashfield Municipal Council v RTA of NSW [2000] NSWLEC 117 PARTIES: Applicant:
Ashfield Municipal Council
Respondent:
The Roads &Traffic Authority of New South WalesFILE NUMBER(S): 30020; 30021 of 1998 CORAM: Sheahan J KEY ISSUES: Compensation :- Market Value - Disturbance - Crown Land - Interest of Council as Trustee - Valuation LEGISLATION CITED: Land Acquisition (Just Terms Compensation) Act 1991 ss 42, 55, 56, 66
Crown Lands Act 1989 s 92-106
Local Government Act 1993 Chapter 6 and Schedule 2
Roads Act 1993 ss 204 and 206CASES CITED: Commissioner for Main Roads v BP (Australia) Pty Ltd (1964) 10 LGRA 423;
Hornsby Shire Council v RTA of NSW (1998) 100 LGERA 105;
Hornsby Shire Council v RTA of NSW [1994] NSWLEC 144;
Hurstville City Council v RTA of NSW [1999] NSWLEC 100;
Prince Alfred Park Reserve Trust v SRA (1997) 96 LGERA 75;
Rogerson v The Minister (1968) 16 LGRA 400DATES OF HEARING: 6/12/99-10/12/99, written submissions 22/12/99 DATE OF JUDGMENT:
06/15/2000LEGAL REPRESENTATIVES:
Applicant:
Mr J Webster (Barrister)
SOLICITORS
Pike Pike & Fenwick
Respondent:
Mr J Ayling (Barrister)
SOLICITORS
Crown Soliictors Office
JUDGMENT:
IN THE LAND AND Matter Nos: 30020/21 of 1998
ENVIRONMENT COURT Coram: Sheahan J
OF NEW SOUTH WALES 15 June 2000
Applicant
v
THE ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES
Respondent
JUDGMENT
Introduction
1. These two Class 3 proceedings were commenced by Ashfield Municipal Council (“ Council ”) on 6 March 1998, pursuant to s 66 of the Land Acquisition (Just Terms Compensation) Act 1991 (“ the JTC Act ”).
2. Each matter is “ an objection to the amount of compensation offered by the authority of the State ”, but one (30020) concerns the acquisition of 5590m2 of land, and the other (30021) the acquisition of an easement.
3. The relevant acquisitions were associated with the construction by the respondent (“ RTA ”) of Stage 3 of the so-called “ City West Link Road ”, which links Victoria Road, Rozelle, to Liverpool Road, Croydon. Stage 3 is a stretch of 1.7km from Balmain Road, Leichhardt, to Boomerang Street, Haberfield, and runs along Dobroyd Parade at Dobroyd Point, near Haberfield, in the north-eastern corner of Ashfield Municipality.
4. These roadworks included the construction of a new bridge crossing of Hawthorne Canal, south of the current bridge, and the consequent realignment of Dobroyd Parade in the vicinity of relevant public reserves and the UTS Haberfield Rowing Club. (See Review of Environmental Factors dated August 1996 in Exhibit R8 , and RTA’s Assessment Report dated May 1997 - Exhibit R12 ).
5. The Council opposed these bridge and road realignment works, and the associated resumptions (see Exhibits R8 and A19 ), and put forward at least one alternative scheme for “ improving ” the Link Road.
6. In the course of the acquisitions, it was ascertained by survey (see Annexure B to Exhibit R1 ) that some of the existing alignment, as well as the proposed alignment, of Dobroyd Parade, actually encroached, to the extent of approximately 2349m2, upon some of the acquired land (see Exhibit A6 ).
7. The resumptions regularise the use by the “ new ” road of the relevant land, but leave certain odd areas of land within the ownership of the RTA (see map in Exhibit A1 , roadworks plans in Exhibits R5 and A6 , and photographs in Exhibits R6 and R7 ).
8. Some of the land is also subject to an easement for electricity purposes, as well as gas pipelines and monitoring equipment. The RTA is responsible for the removal of all affected services.
9. Apart from the areas of land occupied by certain gas installations and by road tarmac, all of the acquired land was, at the time of its resumption, designated for parkland recreation. A cycleway/walking track is located within the boundaries of the land, and some sections were used for carparking, e.g. for the Rowing Club.
10. Exhibit R11 is a collection of maps and Government Gazette notices in respect of the declaration of the relevant road at various stages of its history, firstly as a secondary road (No.2056 - see Gazette 30 November 1960) and now a main road (No.650 - see Gazette 22 January 1993). Exhibit R13 is an aerial photograph of the route of the road as at 29 August 1965, before the first gazetted variation of its route (Gazette 29 April 1966).
11. The hearing was concerned only with questions of Market Value, under ss 55 and 56 of the JTC Act, the parties having agreed on the “ pleadings ” the amounts payable for Disturbance, and no other components of compensation under the JTC Act having arisen in the case.
The lands and interests acquired
12. Matter No.30020 of 1998 concerns acquisition of lots 15, 16 and 17 of deposited plan 868083 “ being part of Reserve 91335 for public recreation ” (“ the reserve lands ”). Lot 15 has an area of 4321m2, lot 16 - 1088m2, and lot 17 - 181m2. Lots 15 and 16 are contiguous with each other and zoned “ existing recreation 6A ”. Lot 17 is on the opposite side of Hawthorne Parade and is zoned “ special uses 5A - drainage ”. (See Exhibits A1-A3 ).
13. The reserve lands are more fully described as follows (Acquisition Notice in Government Gazette 7 November 1997 - Exhibit A5 ):
All that piece or parcel of land situated in the Ashfield Municipal Council area, Parish of Concord and County of Cumberland, shown as Lot 15 Deposited Plan 868083, being part of the land dedicated for public recreation by notification in the Government Gazette of 12 January 1945 on page 61, excepting from the acquisition of Lot 15, the Easement for Electricity Purposes shown on Deposited Plan 638982.
The land is said to be in the possession of the Crown (Owner) and Ashfield Municipal Council (Trustee).
The land is said to be in the possession of the Crown (Owner) and Ashfield Municipal Council (Corporation appointed to manage the affairs of the Reserve Trust).Also all those pieces or parcels of land situated in the Ashfield Municipal Council area, Parish of Concord and County of Cumberland, shown as Lots 16 and 17 Deposited Plan 868083, being parts of Reserve 91335 for public recreation notified in the Government Gazette of 1 December 1978 on page 4997.
14. Matter 30021 of 1998 concerns acquisition of an “ easement for gas pipeline variable width on RTA Plan 0650-010-SS0007 being part of Reserve 91335 for public recreation ” (“ the easement ”). (See DP 268267 in Exhibit A2, and surveyor’s sketch in Exhibit A3 ).
15. The easement is more fully described as follows (Acquisition Notice in Government Gazette 21 November 1997 - Exhibit A4 ):
Full and free right, liberty and licence for the owner of the easement, its agents, successors or assigns to lay down, construct, place, use, operate, examine, re-lay, alter, renew, cleanse, repair, maintain, and remove mains, pipes, and other apparatus (which mains, pipes, and other apparatus are hereinafter called ‘the apparatus’) for the conveyance of natural gas, artificial gas, liquid petroleum gas, oil and other hydrocarbons whether in a gaseous, liquid or solid state and any products or by-products thereof (hereinafter called the ‘substances’) and for purposes incidental thereto in, through, under and across the servient tenement AND for the free and uninterrupted right of flow of the substances through the apparatus in, through under and across the servient tenement TOGETHER WITH right of support at all times of the apparatus as may for the time being or hereafter be in or upon the land affected AND TOGETHER WITH power for the owner of the easement, its agents, successors or assigns for any of the purposes aforesaid or incidental thereto to enter, go, return, pass and re-pass with or without vehicles upon, along or over the subject land and make and sink excavations and cuttings and bring and place thereon and remove therefrom such materials, implements, machinery, plant, tools, equipment and things as may be necessary provided that should the owner of the easement in exercise of its rights aforesaid open or brake [sic] up the servient tenement it shall upon completion of such work restore the surface to its former condition so far as shall be reasonably practicable but the owner of the easement shall not be obliged to restore or rebuild any building structure, roadway, pavement, pipeline, cable, or other improvement erected upon, through or under the servient tenement AND FURTHER no building, structure, roadway, pavement, pipeline, cable or other improvement upon or under the land within the easement shall be erected without the prior consent in writing of the owner of the easement. The person having the right to release, vary or modify the said easement is the owner of the easement, its agents, successors or assigns.
The servient tenement is said to be in the possession of the Crown (Owner) and Ashfield Municipal Council (Corporation appointed to manage the affairs of the Reserve Trust).The site of the easement is designated [A] and shown as ‘proposed easement for gas pipeline variable width’ on RTA Plan 0650 010 SS 0007; being part of Reserve 91335 for public recreation notified in the Government Gazette of 1 December 1978 on page 4997.
16. The two relevant areas of parkland in the vicinity of the relevant acquisitions and roadworks are Robson Park and Richard Murden Reserve (see Crown Lands search annexed to Exhibits R1 and R3 , and the relevant marked-up map - Exhibit A1 ).
17. Ashfield Council was appointed and gazetted as trust manager of Robson Park on 18 October 1996. Lot 15 was part of Robson Park but was somewhat isolated from the bulk of it. Council has been appointed and gazetted as trust manager of the original area of Robson Park (the 1911 lands) on 4 November 1994, but remained trustee of the so-called “ MSB additions ” (the 1945 lands) including lot 15.
18. Richard Murden Reserve is a long narrow strip of parkland along Hawthorne Canal. Lots 16 and 17 were part of that reserve, as was the land over which the RTA acquired the gas pipeline easement, but lots 16 and 17 were contiguous with lot 15, and were more closely associated with Iron Cove than with the Canal.
19. After some debate between the parties, the history of the legal tenure of the acquired lands appears to have been correctly set out in the following paragraphs of the Points of Reply filed on 5 February 1999:
1.1 The Applicant admits that Lots 16 & 17 were part of the lands declared as Reserves for Public Recreation by Government Gazette No. 169 of 1 December, 1978 pp 4985 and 4997 and given Reserve No. 91335. On 4 November 1994 the Ashfield Council was appointed to manage this Trust (called the Richard Murden Reserve Trust) under the provisions of the Crown Lands Act 1989 and asserts that the Applicant’s claim for compensation in respect of these lots arises from its appointment and in its capacity as Manager of the Richard Murden Reserve Trust.
1.2 The Applicant admits that Lot 15 DP808083 forms part of land dedicated for public recreation by notification in the Government Gazette dated 12 January 1945 and is part of the land shown by red tint on Plan catalogued MS11, 653 Sydney referred to in the said Notification. The Applicant was appointed Trustee of the said land by notification in the Government Gazette dated 23 February 1945 and the Applicant’s claim for compensation in respect of this Lot arises from its appointment as Trustee.
20. The total area of Robson Park and Richard Murden Reserve prior to the acquisition of lots 15-17, was 6.140ha, and after the acquisition, 5.581ha.
21. In March 1997 Gregory Piconi , Council’s Executive Manager Works & Engineering Services, responsible for the management of Council’s parks and open space, prepared a detailed report analysing all of Council’s current open space, facilities and usage. That report highlighted the deficiency of the Council in open space, compared with DUAP Guidelines.
22. Piconi has been with the Council for 7 years and, prior to that, he was with the respondent for 14 years. In one of the reports attached to his Statement of Evidence ( Exhibit A11 ), he makes this comment (p116):
Some reserves which are nearby other reserves and/or parks are rarely used. Hence, consideration should be given to the sale of these properties for residential purposes may assist in providing funding for the purchase of additional open space or the upgrading of existing facilities .
The value of the relevant lands
23. The applicant Council relied upon the evidence of Terence Michael Dundas , a Director of Egan National Valuers (NSW). No CV of Mr Dundas is in evidence, but his credentials were admitted by the respondent. Mr Dundas is the author of Exhibits A7-A10 . Exhibit A8 and A10 are reports in reply to the valuations of the respondent’s expert Anthony William Finlay , Regional Director (Metropolitan) of the Valuer General’s office. He qualified in 1965 and has occupied a number of senior positions in that office.
24. Because of the fragmented character of the subject lands, both valuers operated on a “ piecemeal ”, rather than a “ before and after ”, basis in preparing their valuations.
25. Although all the nearby land is zoned 2(a) Residential, the resumed lands really could be utilised only for some active recreation uses. Their “ highest and best use ” is their existing use, i.e the provision of active and passive community recreation space, used for public recreational purposes, including some recreation facilities. In this regard I prefer the expert testimony of Mr Finlay (see Exhibit R2, p2 and p4).
26. The value assessed and compensation offered in respect of lots 15-17, pursuant to s 42(2) of the JTC Act, amounted to $77,000 (market value $72,000, plus disturbance of $5,000), and that in respect of the easement to $1,801 (market value $1, plus disturbance of $1,800).
27. Mr Dundas relied on ten sales, and he also referred to other sales considered by the court on other occasions (see Exhibit A8 p12) and to the values arrived at by the Judges in those cases. In a postscript to his schedule of ten sales he referred specifically to the value of $600 arrived at by Pearlman J in the Prince Alfred Park case (see par 50 below).
28. Mr Finlay relied on eight completely different sales, having looked for “market evidence where land has been purchased for the purpose of public recreation on a basis that it did not reflect a potential for a higher and better use ” ( Exhibit R2, p2).
29. The values per square metre of the 18 properties considered by the valuers ranged from $115.27 to $11,894 for Mr Dundas’s nominees, and from $24 to $134 for Mr Finlay’s. Mr Dundas settled on a unit value of $450 per square metre, and Mr Finlay on $63 per square metre.
30. On its comprehensive “ view ”, the court visited, with both parties, five of Mr Dundas’s nominees, seven of Mr Finlay’s, and the subject site itself. Both valuers asserted that their respective sales were “ comparable ”, and both were subjected to searching cross-examination on their statements of evidence to that effect.
31. None of the 18 properties reviewed in this case, and none of the others referred to by Mr Dundas, appears to the court to be “ truly comparable ” with the subject site, and I think that position was fairly conceded in the oral testimony of both experts.
32. Several of the sales were not market-place transactions, and, as such, had their own history and special features (e.g. the Brighton, Dover Heights, Vaucluse, Gladesville and Randwick lands relied on by Finlay, and the North Ryde lands relied upon by Dundas, were unusual intra-governmental or inter-governmental deals).
33. In several instances the relevant lands had genuine residential potential and their prices reflected that.
34. Several sales resulted from the establishment of open or recreational space in areas where such space had a “ higher ” value and purpose (e.g. the Kirribilli land relied upon by Dundas was acquired for a harbour-side walk).
35. In other cases there was an actual community need, such as shortage of parkland (e.g. the Erskineville and Chippendale lands relied upon by Dundas), or a valuable opportunity presented for the augmentation of existing open space (e.g. the Penshurst and St Peters lands relied upon by Dundas).
36. Several of the parcels had little alternative use, due to the proximity of another use, such as the road in the case of the subject land (e.g. the Cammeray and Sans Souci lands, and possibly also the Penshurst lands, relied upon by Dundas, and the La Perouse and Fraser Park lands relied upon by Finlay).
37. The subject land is alongside the waters of Iron Cove, and the end of Hawthorne Canal, and also alongside what has been and remains a major arterial urban road, and a significant bridge (now duplicated).
38. It is comprised of small irregular lots which the court cannot envisage being developed beyond their use as road reserve, or for fairly passive recreational uses and some recreation-related carparking.
39. The acquired lands certainly could and would not be used as, nor could they be sold as, residential land.
40. Accordingly, the subject land should not be valued as if it could be so used. It should be valued on the basis of what it actually is, namely open space.
41. I have, therefore, concluded that the most relevant, if not genuinely “ comparable ” of the 18 sales before the court, would be the local open space component of the Cammeray sale ($146 per m2), and the Sans Souci ($156 per m2), La Perouse ($63), Randwick ($111), and Belmore ($286.60) sales.
42. Mr Finlay’s $63 figure is equal to the lowest of those per square metre sale prices, and Mr Dundas’s $450 is 1.5 times the highest of them.
43. I have arrived at a market value of the acquired lands on a fee simple basis, of $152.50 per square metre, i.e. approximately the average of the per square metre sale prices of the five “ most ” comparable parcels of land.
44. I should note for the record that of the five parcels of land I have chosen for the calculation of the relevant valuation the court viewed only three. However, the court is familiar with the Cammeray land (and said so as time ran short on the tour of inspection), and is satisfied from the written and oral evidence that the Belmore land, although substantially higher priced that the others, is sufficiently comparable to be included in the calculation.
Applying the fee simple value to the reserve lands
45. The court must now proceed to determine how to apply that valuation to the acquired lands and interests. ( Hurstville City Council v RTA of NSW [1999] NSWLEC 100). The questions to be addressed in that determination are:
(i) Does the Council have an interest as valuable as the fee simple?
(ii) Does the classification of public lands have any impact on compensation?
(iii) Does the existing encroachment of the road have any impact on compensation?
Question (i) - The Crown Lands Act 1989
46. Section 92 of the Crown Lands Act 1989 (“ the CLA ”) provides that the Minister may dissolve a trust or alter its corporate name. Sections 102-103 require the Minister’s consent to any alienation of the trust lands, and s 106 requires any proceeds to go to the State. However, only the trustee can sell, lease or mortgage trust lands.
47. The expert valuers in this case have - I think, correctly - assumed that the positions of trustee and trust manager entail similar rights, powers and interests.
48. Section 100(1) states that, for the purposes of Part 5 (ss 78-128) of the CLA and any by-law made under that part, “ a reserve trust that, but for this section, would not have an estate in fee simple in the reserve has such an estate ”.
49. I accept Mr Ayling’s contention that this means that the Crown holds the fee simple of the trust lands, but vests in the Council, for the purposes of the Council’s exercise of its functions as trustee or trust manager under the CLA, those incidents of the fee simple which the Council needs in order to achieve those purposes.
50. Council’s interest is, therefore, “ limited ”, but it is regarded as an estate in fee simple for the purposes of only the CLA. Such limited interest is, however, an interest for which the Council is entitled to be paid compensation . (Prince Alfred Park Reserve Trust v SRA (1997) 96 LGERA 75).
51. The question before the court in this context is whether, and if so to what extent, the fee simple value should be discounted for the effects of the obstructions/restrictions encountered by Council in “ dealing with ” the reserve lands.
52. The applicant discounts its valuation by only $100,000 out of a gross value of $2.5M (i.e. 4%) for these restrictions, and then only in respect of the situation on the land of gas pipelines and associated equipment, and perhaps the effect of an electricity easement.
53. The respondent relies on cases where discounts of up to two-thirds, or even 75%, were applied for these restrictions. Those cases involved “ community land ”, under the Local Government Act 1993 (“ the LGA ”), (as to which see the next section of this judgment), but Mr Ayling submitted that, even if the constraints imposed on Council by the CLA regime are not quite as comprehensive as those affecting “ community land ”, they are, in general terms, quite significant, and, in the context of these particular lands, quite overwhelming.
54. I have concluded that Council, or a public body like the RTA, is the only potential “ buyer ” or “ user ” of these lands, but Council made “ use ” of them only to provide recreation space, water views, some “ public ” parking, and water-side access for the general public.
55. In those circumstances of public use and enjoyment, it would seem to the court that the Crown would be unlikely to consent to any alienation proposed to it by Council, except perhaps for such public purposes as the making or improvement of public roads. In addition to the withholding of consent, the CLA empowers the Crown to extinguish Council’s interest, dismiss the trustee, and control the proceeds of any disposal.
56. In view of those matters, I believe I should follow the principles laid down and applied in cases such as the NSW Court of Appeal decision in Hornsby Shire Council v RTAof NSW (1998) 100 LGERA 105, and so have regard to Mr Finlay’s opinion that the value should be reduced by as much as 75%. To resolve any ambiguity in favour of the claimant, I intend to apply the discount applied by Bannon J in Hornsby , namely two-thirds, despite Stein JA’s comment, on appeal (at 108), that such may be considered “ generous”.
Question (ii) - The Local Government Act 1993
57. Sections 98(1) and (1A) of the CLA provide that if a Council is the manager of a reserve trust and the reserve is a public reserve, the trust has “ all the functions ” of a Council under the LGA, but no power to classify the reserve as “ operational land ” under that Act.
58. Hence, Council cannot “ unfetter ” its right to deal with trust lands by purporting to reclassify the land as “ operational ” under the LGA.
59. Chapter 6 Part 2 of the LGA, according to its “ note ” (which s 6 provides does “ not form part ” of the Act but is there to “ assist understanding ”), requires that all lands vested in a council (except a road, or, relevantly here, land to which the CLA applies) must be classified as either “ community ” or “ operational ” land.
60. “ Community land ” must be kept for use by the general public and, generally speaking, must not be sold, or otherwise alienated. Exceptions and conditions appear in ss 45-47. Plans of Management must be prepared to govern the use of “ community land ”. Such restrictions do not apply to “ operational ” land.
61. The “ note ” in the LGA comments that classification or reclassification of land under the LGA does not affect Council’s estate or interest in the land.
62. In this case, due to the significance of the acquired lands as public recreation land, which also provides pedestrian access along the foreshore, a lease or licence of the land would seem unlikely to be achieved. Nonetheless, it is feasible that some of the area could be leased, e.g. for carparking at the Rowing Club. “ The possibility of the Council being dispossessed of the land, other than for the purpose of a public works project would seem remote ” (Mr Finlay’s report in Exhibit R1, p16).
63. Section 53 of the LGA requires Council to keep a register of all land “ vested in it or under its control ”, setting out in the register, inter alia, “ whether or not the land is Crown land ”, and any “ classification ” given the land under Chapter 6 Part 2.
64. The Council’s land register ( Exhibit A16 ) records all the relevant resumed lands as “ Crown Land ”, and as neither “ community ” nor “ operational ” land. I regard this as correct, but I note that the effect of cl 6(2) of Schedule 7 of the LGA would seem to require Council to classify all “ land subject to a trust for a public purpose” automatically as “community land ”.
65. However, as the land here is land to which, in my view, the CLA relevantly “ applies ”, it comes within the exceptions. (See Bannon J in HornsbyShire Council v RTA of NSW [1994] NSWLEC 144). As Linda Pearson says in her text “ Local Government Law in New South Wales ” (1994) (p 268):
The extent of the power of the council to manage and deal with public land therefore depends on the origins of the land. If the land falls within part 5 of the Crown Lands Act 1989, that is, Crown land dedicated or reserved from sale for a public purpose, and either the council or another person have been appointed as trustee, the land continues to be land to which the Crown Lands Act applies and is therefore not ‘public land’ for the purposes of Chapter 6 of the Local Government Act. The power to grant leases in respect of such land is conferred by ss 102-106 of the Crown Lands Act and the consent of the Minister for Lands is required; if no trustee has been appointed, and the land is reserved rather than dedicated, the only leasing power is that of a special lease granted by the Minister for Lands under s 34 of the Crown Lands Act 1989.
66. I accept Mr Webster’s submission on this point and can see no basis on which I should reduce the value of the acquired lands to take account of the provisions of the LGA. c.f. Hornsby Shire Council v RTA of NSW (1998) 100 LGERA 105.
Question (iii) - The Roads Act 1993
67. Sections 204 and 206 of the Roads Act 1993 provide as follows:
206 Compensation where council does not have to construct new road
204 Council entitled to compensation if Crown compulsorily acquires public road
(1) A council is entitled to compensation under this Division for a public road owned by the council that is acquired by the Crown by compulsory process.
(2) The provisions of this Division apply in substitution for the provisions of the Land Acquisition (Just Terms Compensation) Act 1991 with respect to compensation.
(1) This section applies except where it is necessary for the council to construct a new public road to replace an existing public road that has been acquired by the Crown by compulsory process.
(2) The amount of the compensation to which a council is entitled under this section is the sum of:
(a) the money (if any) that the council paid for the acquisition of the land, and
(b) the money that the council has spent on the construction of the road, and
(c) the money that the council has spent in erecting or constructing, in, on or over the road, any conduits, poles or structures for use in connection with any water, sewerage or drainage work of, or any trading undertaking carried on by, the council, which, at the time of the acquisition by the Crown, were owned and used by that council in connection with any such work or trading undertaking, but does not include any money spent on the maintenance, replacement or repair of the road or any such conduits, poles or structures.
(3) Compensation is not payable under subsection (2)(c) to the extent to which any such conduits, poles or structures can reasonably continue to be used by the council in connection with any such work or trading undertaking.
68. The applicant submits that as Council is not the “ owner ” for the purposes of s 204, the Roads Act is not enlivened in this case to oust the operation of the JTC Act. Council is only the manager and/or trustee under the CLA and would have needed the Minister’s consent to alienate the land for road purposes. The land encroached by the roadway cannot become dedicated as a road under the Roads Act 1993, by virtue only of some default, and in the absence of some dedication process.
69. On the other hand, the respondent relies on the bundle of maps and Gazette notices in Exhibit R11 , and on the aerial photograph in Exhibit R13 (see par 10 above) to submit to the court that, as the road in the vicinity of the reserved lands appears to date back well beyond 1993, it is taken to be a public road within the terms of the Roads Act 1993, which acts as a code. (See discussion of the law on roads in Xerual Pty Ltd v Auburn Council [1999] NSWLEC 64).
70. I accept Mr Ayling’s submissions on this point. As the relevant road was declared as MR 650 in 1993, all the pre-conditions required by s 206 are present. (See Commissioner for Main Roads v BP (Australia) Pty Limited & Anor (1964) 10 LGRA 423). There is no reason the relevant area of the subject land cannot at the same time lie within a Crown or public reserve for the purposes of the CLA.
71. As s 206 of the Roads Act applies, the question of any compensation payable in respect of 2349m2 of the 5590m2 of land acquired is not a matter for this court in these proceedings. However, compensation for the remaining 3241m2 of the lands is indeed the concern of these proceedings.
Compensation for the reserve lands
72. Accordingly, I conclude that the applicant is entitled to compensation in Matter 30020 on the following basis:
Market Value
3241m2 of land at $152.50 per m2 $494,252.50
Allow two-thirds for effect of CLA restrictions
on Council’s interest in the land
One-third of $494,252.50 = $164,750.83
Plus Disturbance , as allowed by respondent in the
Points of Defence, and not contested by the applicant
in the Points of Reply $5,000.00
$169,750.83
The value of the easement
73. The powers, rights and duties of the Australian Gaslight Company (“ AGL ”), as a statutory, but not Crown, gas undertaking, derive initially from very old legislation, the first AGL Act having been passed by the NSW Parliament in 1837, subject now to the Gas Industry Restructuring Act 1986.
74. The area of land under easement is 339m2, and AGL is able to put apparatus “ in, through, under or across ” the whole of that area of land (wording taken from AGL’s 1858 amending legislation). The easement is a blot on title and sterilises the value and use of the land to some extent.
75. As Mr Ayling put it (in his written submissions par 7), the 1837 statute, as amended, does not limit AGL’s authority to “ do any act or thing necessary for or reasonably incidental to engaging in the reticulation of gas ”, provided the 1986 Act allows it to do so.
76. He, therefore, submits that, as AGL is clearly authorised, by the joint operation of the 1837 and 1986 legislation, to lay pipes in streets and public places, it is exempt from the licensing requirements of the Pipelines Act 1967, and can utilise “ as much or as little of the area of the reserve as it needs to accommodate its apparatus, without the need for any easement ”. Accordingly, under the principles in Rogerson & Anor v The Minister (1968) 16 LGRA 400, “ the easement must be valued as no more than the blot on title it creates ”.
77. In Rogerson , Hardie J dealt with compensation for the acquisition of an easement over an existing sewer main several feet below the surface, and ruled that “a reasonable and fair apportionment of the depreciation in value would be two-thirds to the presence of the sewer main and the statutory rights available to the Board and one-third to the creation of the easement ”.
78. Prior to the acquisition of the easement there were already certain improvements on the land which has been subject to it. They comprised several large metal covered manholes on a concrete slab, together with four 2m high metal pipes, and several smaller manholes, apparently constructed pursuant to the statutory right of easement.
79. Since the acquisition of the easement several large metal kiosks about 1.5m high have been constructed on a concrete slab pursuant to the rights of easement acquired.
80. The market value of the easement was twice assessed by Mr Dundas, on behalf of the applicant, by reference to the decrease in value of the land retained. This process threw up the following components of value:
(a) the blot on title of the easement
(b) the restrictions placed on the use of the retained land under the terms of that easement
(c) the rights under the terms of the easement
81. In his first assessment Dundas allowed for a decrease in value of 25%, on the basis of 2.5% for blot on title, 10% for restrictions on use of retained land, and 12.5% for the rights granted to the owner.
82. The total decrease in value of the affected land, due to the presence of the acquired easement was, therefore, 25% of $150,000 (being 339m2 at $450 per m2, rounded down), namely $37,500.
83. The respondent rejected that methodology, and claimed that the applicant had sustained no loss , and was, therefore, entitled to no compensation in respect of market value. However, the respondent admitted that the applicant was entitled to compensation for disturbance in the amount of $1,800.
84. Mr Finlay considered Mr Dundas’s allowances (totalling 25%) to be excessive. “ The land had already been severely affected by the existence of the utility. The utility not only carried gas in pipes below the surface but also consisted of various unsightly manholes and kiosks at the surface. The acquisition of the easement, it is contended, merely formalise title to the dominant tenement and constitutes a blot on title effect. Whether described as a blot on title or not, the diminution in value would be generously estimated at 10% of the restricted value of the land held by the Council as trustee ”. ( Exhibit R4 , p2).
85. Mr Dundas then in his “ report in reply ” ( Exhibit A10 , p3) accepted Counsel’s advice that Rogerson did not apply. He, therefore, made a second assessment, opining that the value of the affected area decreased by 40% (not 25%), made up of 2.5% for blot on title, 17.5% for restrictions on the use of the land (7.5% existing and 10% potential future), and 20% for rights granted to the owner of the easement (7.5% for present rights and 12.5% for the “ added rights ” under the easement). Thus he amended his figure for the decrease in value of the affected land to be a total of 40% of $150,000 (being 339m2 at $450 per metre2, rounded down), namely $60,000.
86. On the other hand, Mr Finlay opined that the land was worth $5,500 (being 339m2 at $63 per metre2, reduced by 75%). The owner has “ full and free right… ” under its easement, but an obligation to restore the surface, and a right to be asked for consent to any “ building, structure, roadway, pavement, pipeline, cable or other ‘ improvement ’”.
87. Finlay distinguished the present case from Rogerson because the Rogerson pipes were well below the surface and a boatshed was erected over part of the easement area. “ The effect of the easement was to severely restrict further development by the owner within the easement area. However in this case the use of the land had already been severely sterilised by the existence of the works because the utility existed both above and below the surface making the land undesirable for public recreation ”. ( Exhibit R4 , p3).
88. He concluded that the “ blot on title ” effect was no more than 10% of restricted value of the land, so the compensation should be only $550.
89. With respect, I consider that assessment to be unacceptably conservative.
90. Mr Webster submitted that as the easement allowed for full use of the surface, including for the erection thereon of buildings etc, a reduction of 90% was more “ relevant and appropriate ”.
91. I agree with Mr Webster’s submission in this regard.
Compensation for the Easement
92. Accordingly, I conclude that the applicant is entitled to compensation in Matter 30021 on the following basis:
Market value
339m2 of land at $152.50 per m2 $51,697.50
Allow two-thirds for effect of CLA restrictions on
Council’s interest in the land
One-third of $51,697.50 = $17,232.50
90% thereof = $15,509.25
Plus Disturbance , as allowed by respondent in the Points
of Defence, and not contested by the applicant in the Points
of Reply $1,800.00
$17,309.25
Conclusion and Orders
93. The court, therefore, makes the following orders:
(a) In Matter 30020 of 1998:
1. The amount of compensation payable by the Respondent to the Applicant
is determined at $169,750 .
2. The question of costs is reserved.
(b) In Matter 30021 of 1998.
1. The amount of compensation payable by the Respondent to the Applicant
is determined at $17,310 .
2. The question of costs is reserved.
(c) All the exhibits may be returned.
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