Beckers v Road and Traffic Authority of New South Wales

[2006] NSWLEC 717

Land and Environment Court

of New South Wales

CITATION:

Beckers v Road and Traffic Authority of New South Wales [2006] NSWLEC 717

PARTIES:

APPLICANT
Pierre Hubert Beckers

RESPONDENT
Roads and Traffic Authority of New South Wales

FILE NUMBER(S):

30747 of 2004

CORAM:

Jagot J

KEY ISSUES:

Compulsory Acquisition of Land :- compensation - effect of public purpose - highest and best use of land - market value - special value

LEGISLATION CITED:

Land Acquisition (Just Terms Compensation) Act 1991
Roads Act 1993

CASES CITED:

Boland v Yates Property Corporation Pty Ltd and Another (1999) 167 ALR 575;
Bronzel v State Planning Authority (1979) 21 SASR 513;
Castle Hill Brick, Tile & Pottery Works Pty Ltd v Baulkham Hills Shire Council (1961) 7 LGRA 139;
Pastoral Finance Association Limited v The Minister [1914] AC 1083;
Roads and Traffic Authority (NSW) v Muir Properties Pty Ltd (2005) 143 LGERA 192;
Spencer v The Commonwealth of Australia (1907) 5 CLR 418;
The Commonwealth v Milledge (1953) 90 CLR 157;
Turner and Another v Minister of Public Instruction (1956) 95 CLR 245;
Yates Property Corporation Pty Ltd (In Liquidation) v Darling Harbour Authority (1991) 24 NSWLR 156

DATES OF HEARING:

25/9/2006, 26/9/2006

 
DATE OF JUDGMENT: 

11/22/2006

LEGAL REPRESENTATIVES:

APPLICANT
Mr P Beckers (in person)

RESPONDENT
Mr P Tomasetti
SOLICITORS
Clayton Utz

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Jagot J

22 November 2006

30747 of 2004

PIERRE HUBERT BECKERS
Applicant

ROADS AND TRAFFIC AUTHORITY OF NEW SOUTH WALES
Respondent

JUDGMENT

Jagot J:
A. Introduction

1 Mr Beckers owns a property at Nabiac on the mid-north coast of New South Wales, about 25 km south of Taree. Mr Beckers’ property (lot 4 in DP 634927) had an area of 11.5 hectares, and adjoined the western side of the Pacific Highway. Nabiac village, providing a modest range of retail, commercial and community facilities, is located to the east of the highway.

2 On 30 April 2004, the Roads and Traffic Authority acquired part of Mr Beckers’ property for the purposes of the Roads Act 1993 – specifically, to construct the Bundacree Creek to Possum Brush Pacific Highway upgrade. The upgrade involved providing a divided or dual carriageway where, previously, a single carriageway existed. The RTA acquired lot 17 in DP 1059974 from Mr Beckers’ property, an irregularly shaped parcel fronting the Pacific Highway of 3.405 hectares. Mr Beckers retained the residue, an area of 8.095 hectares, known as lot 11 in DP 1059974. Access to Mr Beckers’ property is now obtained by an extension of local roadways constructed as part of the Pacific Highway upgrade. The property retains its irregular western boundary, following the alignment of Candoormakh Creek.

3 In accordance with the requirements of the Land Acquisition (Just Terms Compensation) Act 1991, the RTA offered compensation of $156,600 to Mr Beckers as determined by the Valuer-General. Mr Beckers objected to that offer in accordance with s 66 of the Just Terms Act. Mr Beckers claimed compensation of $1,866,558, subsequently revised to an unspecified total including market and special value of the acquired land, $400,000 representing the loss of value of the residue land, $350,000 representing costs associated with Mr Beckers’ proposed “art and artisan educational project”, a claim for interest from November 1996 onwards, the transfer by the RTA to Mr Beckers of a property at Wang Wauk River, $25,000 for connecting the residue land to the town sewer system, solatium of $15,000, and $5,875 disturbance ($3,000 for valuation fees, $2,000 for accountant’s fees and $875 for legal fees), as well as reimbursement on the stamp duty and legal fees to be incurred with respect to the proposed transfer by the RTA to Mr Beckers of the Wang Wauk River property.

4 The RTA contends that, consistent with the valuation report of Mr Graham McDonald, Mr Beckers is entitled to compensation in the amount of $175,000, and the disturbance items that he has established were incurred by providing invoices to the RTA (namely, valuation fees and legal fees).

5 I must now determine Mr Beckers’ entitlement to compensation in accordance with Div 4 of Pt 3 of the Just Terms Act. In accordance with s 55 of that Act, I may have regard to the matters specified in subs (a) to (f) only. Mr Beckers’ claims need to be placed in context, so that they can be assessed against the provisions of the Just Terms Act.

B. Background

6 Mr Beckers bought his Nabiac property in 1974. In February 1974, he obtained building approval for the erection of a dwelling on that property. He erected the dwelling in accordance with this building approval, but subsequently sold the land on which the dwelling was erected (and some surrounding land) to one of his neighbours in or about 1981 (under a concessional subdivision scheme in the applicable planning instrument at the time).

7 Mr Beckers bought the property for the purpose of establishing an art and craft tourist based development (with a mediaeval theme).

8 Mr Beckers next obtained approval to erect stables on the property in October 1978. The stables complex involved three buildings, including one with a mezzanine floor. All three buildings existed at the date of acquisition, and remain on the residue land.

9 In 1981, Mr Beckers obtained approval to erect a motel of 27 units and restaurant on the land. Mr Beckers did not act on that approval, and it subsequently lapsed. Mr Beckers did not take up this approval because, after he made enquiries, he concluded that the motel would not be viable. He also otherwise came to the view that few tourist developments of the kind he had contemplated were successful. He put his concept of tourism development to one side and focussed his attention on art and craft teaching. He obtained a diploma from the Canberra School of Art in the mid 1980’s, and subsequently used his skills teaching art and creative pursuits in Newcastle and Taree. As part of these activities, Mr Beckers developed his concept of including people within creative pursuits, absent competition, which he found to be successful in encouraging people to maintain their creative interests.

10 Manning Local Environmental Plan applied to the property from 12 June 1982. That instrument zoned the property, and all land within 400m either side of the Pacific Highway, Non-Urban (b), with land outside this strip zoned Non-Urban (a). Under this instrument, the property was zoned part Non-Urban (b) and part Non-Urban (a).

11 On 29 November 1989, Mr Beckers obtained approval to erect a motel on the property, involving three buildings each containing two units. The motel units were approved in an area on the land parallel to the Pacific Highway set back approximately 46m, with access from Candoormakh Crescent.

12 Mr Beckers owned another property at Wang Wauk River. In 1992, he commenced weekend workshops on the Wang Wauk River property advertised as “Camping with Pierre”. This activity drew on Mr Beckers’ experience with respect to creative pursuits, and also involved some activities on the Nabiac property. Mr Beckers ran six weekend workshops to test his ideas for establishing an art and artisan educational project. Mr Beckers had in mind developing the motel (6 units) on the Nabiac property to provide accommodation for participants in his art education programs conducted on the Wang Wauk River property.

13 In November 1992, Mr Beckers obtained a stage one building approval to erect one of the motel buildings (involving two units). Mr Beckers could not carry out the motel development, due to financial constraints. He obtained approval to subdivide 1.2 hectares from the property (being the site of the proposed motel) in 1993, and commenced the motel approval by constructing the footings for the building the subject of the stage one approval, but otherwise did not proceed with the subdivision or the motel.

14 In 1993, the RTA acquired part of Mr Beckers’ Wang Wauk River property for the purpose of “Motorway Pacific” (which I understand to be one of the proposals for upgrading the transport routes north at that time). As a consequence of that acquisition, Mr Beckers anticipated that his Nabiac property would become suitable for his art and artisan education proposal – as the carrying out of the Motorway Pacific development would transform the Pacific Highway into a quiet country road.

15 Mr Beckers carried out extensive landscaping of his Nabiac property involving planting a large number of trees, creating small pathways, seating nooks, ponds and a grass amphitheatre. As part of that activity, Mr Beckers also sought and obtained an amendment to the Manning Local Environmental Plan (which applied to the Nabiac property), allowing its use for the purpose of “art and craft gallery”. The amendment was made on 26 March 1993. About a month later, Mr Beckers obtained building approval to convert one of the existing buildings (forming part of the stables complex) to an art and craft gallery. He held exhibitions in that building on one or two occasions.

16 Greater Taree Local Environmental Plan 1995 came into force on 11 August 1995. Under that instrument, the Nabiac property was zoned 1(b1) Rural Valley Agriculture. In that zone, all development is permissible with development consent other than development permissible without consent (in effect, agriculture) or development “which is not consistent with such objectives of [the] zone as are relevant to the particular case”. Under cl 14(a) of this LEP, the Council may consent to the subdivision of land lawfully used for a purpose other than agriculture, a dwelling or duplex dwelling, despite a general minimum subdivision requirement of 40 hectares. The 1995 LEP did not identify the proposed highway duplication now being carried out, or zone any land for that purpose.

17 In 1996, the RTA apparently abandoned the Motorway Pacific proposal, in favour of upgrading the Pacific Highway. The Greater Taree City Council also carried out a study of rural villages, including the Nabiac rural area (noting that Nabiac Village proper is located on the eastern side of the Pacific Highway and within the local government area of the Great Lakes Shire). Insofar as relevant, the study recommended that the Council not permit any development west of the Pacific Highway at Nabiac “until current planning policies and agreements with Great Lakes Council are reviewed after any highway by-pass of Nabiac in the longer term”. I understand this to be a reference to the prospect, which existed in 1996, that Nabiac would be by-passed to its east, instead of the upgrade generally within the existing alignment of the highway for which purpose part of Mr Beckers’ Nabiac property was acquired.

18 In 2002, NSW Agriculture mapped land in the Greater Taree Local Government area into various classes for agricultural purposes. The land was identified as part class 4, with the southeastern section in class 3. Class 3 agriculture lands are generally regarded as prime crop and pasture land.

19 On 10 March 2004, Greater Taree City Council wrote to Mr Beckers confirming that he had achieved commencement of the motel by constructing the footings. The Council also confirmed that the consent to subdivide the motel site (1.2 hectares) had lapsed. Absent the RTA’s highway upgrade in the area, the Council would have been likely to give favourable consideration to any new application for the subdivision of that land (see the reference to cl 14(a) of the applicable LEP above), and would have supported a manager’s residence in association with the motel. The Council also confirmed that the existing art and craft gallery could continue to be used, and that the Council would consider any application for a dwelling on the residue.

20 The parcel acquired by the RTA encompassed the motel site, and the whole of the area the subject of the lapsed subdivision consent. Otherwise, all buildings, including that approved for the art and craft gallery, remain on the residue owned by Mr Beckers. The residue includes certain foundations laid by Mr Beckers prior to the acquisition in connection with his originally proposed tourist development, based on a mediaeval theme. Mr Beckers uses one of the existing buildings (apparently originally a part of the stables complex) as his home.

21 In summary, Mr Beckers first wanted to proceed with his art and artisan programs using the Wang Wauk river property. The RTA acquired the Wang Wauk River property in 1993 (for the Motorway Pacific proposal), and did not pay compensation to Mr Beckers for that acquisition until 1996. If the Motorway Pacific proposal had proceeded, Mr Beckers anticipated that the Pacific Highway would become a quiet country road, so he could use the Nabiac property for his proposals (which required a peaceful setting, not a noisy highway). But the Motorway Pacific proposal did not proceed, and the RTA announced the proposed Pacific Highway upgrade in 1996. For many years there was uncertainty about whether the highway upgrade would follow the existing alignment or by-pass Nabiac to the east. The uncertainty meant that Mr Beckers put his plans for the Nabiac property on hold. Mr Beckers firmly believed that the highway ought to by-pass Nabiac to the east, making the Pacific Highway a quiet country road. However, the RTA decided to upgrade the Pacific Highway in its existing alignment (leading to the partial acquisition of his Nabiac property), rather than by-passing Nabiac to the east.

22 Accordingly, Mr Beckers considers that the RTA’s acquisition deprived him of the opportunity to exploit the commercial potential of his land for the purpose of the art and artisan education programs. The acquisition removed the site of the proposed motel (to accommodate those attending the programs), leaving insufficient flood free land for any other use, in circumstances where the Council will not approve any other use since the coming into force of the Greater Taree Local Environmental Plan 1995. Mr Beckers considers (alternatively) that the upgrading of the Pacific Highway along its existing alignment (as opposed to a route by-passing Nabiac to the east) removed the potential for his land to be developed by way of residential subdivision, as an extension of the Nabiac Village. Mr Beckers also observes that part of his acquired property was likely to be exploited by the RTA for its own commercial purposes (by way of a highway service centre). In his view, the acquisition removed those three classes of development potential from his land, leaving it as a rural residential property containing one dwelling only and with no potential beyond that use.

23 Mr Beckers also submits that the property had special value given the development consents permitting its use for the purpose of motel accommodation and the art and craft gallery, in combination with his expertise in developing and running art and artisan educational programs.

24 Against this background, Mr Beckers submits that he should be compensated by the RTA returning to him the Wang Wauk River property (no longer required for the Motorway Pacific proposal) and paying the legal fees and stamp duty associated with that retransfer. Mr Beckers considers that the RTA should pay him interest from 1996, when his plans for the Nabiac property were put on hold because of the announcement of the proposed Pacific Highway upgrade and the resulting uncertainty. He maintains that the value of his property should be assessed by reference to its special commercial potential in his hands given the consents in place prior to 1995 (that is, a sum for the loss of profits that he would have realised had his plans not been put on hold by reason of the RTA’s actions) and that the highway should have by-passed Nabiac to the east. Mr Beckers also claims reimbursement of costs incurred with respect to the development of his art and artisan educational establishment on the Nabiac property, various other costs, and disturbance.

25 The RTA submits that the Nabiac property was and remains the site of a rural residential dwelling, used as such by Mr Beckers at all times. The RTA disputes that any claim for special value can arise on the facts - Mr Beckers was not in fact using the property for his art and artisan educational establishment at the acquisition date, the property had no special characteristic yielding any advantage over and above market value and, consistent with Mr McDonald’s opinions, the motel would not have been viable (a proposition with which Mr Beckers agrees, if the motel is considered in isolation). The operation of the motel to accommodate participants in the art and artisan education programs was untested and also unlikely to be viable (a proposition with which Mr Beckers disagrees). The RTA also submits that the various other claims either do not arise in these proceedings or are not contemplated by the Just Terms Act, which is the exclusive source of authority to determine compensation.

C. Evidence

26 Mr Beckers gave evidence generally consistent with the background material and his submissions summarised above.

27 Mr Beckers tendered a report by Mr Passmore, accountant. Mr Passmore prepared a document styled “estimated project accounts” for the art and artisan educational campus from 1996 to 2004. These accounts were based on Mr Beckers’ instructions to assume the use of facilities to conduct weekend art and sculpture classes, with accommodation available in the motel by 1996, housing 30 participants three weekends a month at a cost of $150 per weekend covering all costs and meals, and the motel otherwise being available as ordinary motel accommodation. The assumptions also involved the construction of 21 additional motel units commencing in 1998, to be sold at the rate of three per year from then on. Mr Passmore calculated total earnings from, and Mr Beckers’ equity in, this proposal as exceeding $3,000,000. The notes to Mr Passmore’s report confirm that the factors in these calculations were based on information supplied by Mr Beckers. Mr Passmore commented that he agreed with Mr Beckers that, like a golf course residential development, the venue would have been most attractive to participants and quickly viable.

28 Mr Beckers tendered other documents. These included a report to the Council in response to the RTA’s environmental impact statement in 2001. That report identified that the environmental impact statement represented that the Council was unlikely to allow low density rural residential development on the rural lands west of the highway, irrespective of the upgrade. The report noted that this was accurate in the short term, but not accurate about long-term opportunities, as that land was “well located for long term expansion of Nabiac if needed”. However, the highway upgrade, introducing a complex interchange arrangement at this location, may make it “unwise” to enable such development to occur.

29 Mr Beckers relied on the Tallwoods estate residential and golf development, which commenced in 1996, as an example of the development that could be achieved in 10 years. I inspected hat development as part of the view I undertook at the request of the RTA and Mr Beckers.

30 The RTA primarily relied on the evidence of Mr Palmer, town planner, and Mr McDonald, valuer.

31 Mr Palmer considered the planning and development history of the Nabiac property. He concluded that its highest and best use prior to acquisition coincided with its actual use – as a rural residential parcel. After acquisition, Mr Palmer observed that the motel would not have been viable (relying on Mr McDonald’s evidence), and that all other structures remained on the residue retained by Mr Beckers. Accordingly, he concluded that the highest and best use of the property after acquisition remained as a rural residential parcel. Mr Palmer placed no weight on the fact that the current residential occupation by Mr Beckers appeared not to have been approved by the Council, as he accepted that a dwelling entitlement would probably continue to exist under the relevant planning controls. Mr Palmer did not consider the property suitable for any urban zoning before or after acquisition, and did not accept that the acquisition or highway upgrade had any adverse effect on the development potential of the property.

32 Mr Palmer gave further evidence about the 2001 report to the Council, referred to above. He observed that the report was not a strategic planning document, but a response to the environmental impact statement, marshalling arguments to support the highway upgrade by-passing Nabiac to the east. The 1996 study was the strategic document relied on by the Council. Further, Nabiac village itself contained a number of large parcels, zoned or urban development, which had not yet been subdivided.

33 Mr Palmer also disputed Mr Beckers’ characterisation of his property as having been rezoned for commercial purposes in 1993. Mr Palmer explained that the amendment was an enabling clause, permitting the use of the property for an art and craft gallery, but that the property remained zoned 1(b1) Rural Valley Agriculture.

34 Mr McDonald also considered the planning and development history of the Nabiac property. He concluded that, before acquisition, the highest and best use of the property was as a rural residential parcel with approval for an art and craft gallery, a motel of 6 units and the potential for subdivision of that motel site (of 1.2 hectares). Mr McDonald considered the motel development would not be viable. He had extensive experience in valuing motels throughout New South Wales, and observed that they require considerable capital expenditure and commercial returns. In his experience, there had been few motel developments recently in highway locations for various reasons (development costs, uncertain returns, decreased demand, and competition from alternatives). Mr McDonald considered the art and artisan educational campus proposal analogous to “theme” developments, which have also proven unsuccessful. Based on his inquiries of the Council, Mr McDonald did not accept that the property had potential for residential development or a highway service centre.

35 Before acquisition, Mr McDonald concluded that the property should be treated as a rural residential parcel of 11.5 hectares, with an approved art and craft gallery and approved motel of 6 units, for which the market (if it paid anything extra) would pay only a small premium over and above rural residential value. After acquisition, Mr McDonald did not consider that there would be any adverse impact on the residue property by reason of the highway upgrade. Accordingly, the property remained a rural residential parcel of 8.095 hectares, with an approved art and craft gallery, but absent the potential to attract the small premium that the market might pay for the motel and the potential to subdivide that site. He assessed comparable sales (each of which I inspected) as showing a value of $40,000 per hectare before acquisition and allowed a 20% premium on account of the motel ($550,000). After acquisition, Mr McDonald considered that the property was worth $375,000. Hence, the market value of the acquired land should be assessed as $175,000.

36 Mr McDonald said that he had been unable to identify any particular advantage of this property that would have added to its market value. He also would not make allowance for the cost of sewage connection, as options were available (for on site disposal) that were unaffected by the acquisition.

D. Conclusions

General observations

37 Section 66 of the Just Terms Act provides that any person who has claimed compensation in accordance with Pt 3 may lodge an objection with the Court. If an objection is lodged, the Court is to hear and dispose of the person’s claim for compensation.

38 Section 64 provides that compensation may take the form of land or the carrying out of works if the person claiming compensation and the acquiring authority agree. There is no such agreement in this case. The RTA also paid compensation to Mr Beckers for the acquisition of the Wang Wauk River property. Accordingly, any dealings between Mr Beckers and the RTA about the Wang Wauk River property are a matter for negotiations between the parties, not a matter for order in these proceedings.

39 The terms of s 66 of the Just Terms Act also disclose that Mr Beckers’ views about the merits (or otherwise) of the RTA’s decision to proceed with the upgrade of the highway in its current alignment, rather than constructing a by-pass east of Nabiac, are not matters that may be determined in these proceedings, the purpose of which is to determine Mr Beckers’ claim for compensation in accordance with Div 4 of Pt 3 of the Just Terms Act.

40 Section 55 states that, in determining compensation, regard is to be had to the matters specified in subs (a) to (f) only, which matters are to be assessed in accordance with Div 4 of Pt 3. As such, the statutory provisions confine the task of determining just compensation.

41 In accordance with those provisions, the concept of market value in s 56 focuses on the amount that that would have been paid for the land if it had been sold at the acquisition date by a willing but not anxious seller to a willing but not anxious buyer, disregarding 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. This is the statutory embodiment of the Spencer principles that the seller and buyer must be assumed to have reached a voluntary bargain, both being perfectly acquainted with the land and the circumstances that might affect its value and neither willing to overlook any ordinary business consideration (Spencer v The Commonwealth of Australia (1907) 5 CLR 418 at 441 per Isaacs J).

42 The market value of land is not confined to the use to which the land is being put at the acquisition date. A dispossessed owner is entitled to have compensation assessed on the basis of the highest and best use of the land (Boland v Yates Property Corporation Pty Ltd and Another (1999) 167 ALR 575 at [271]). It is equally fundamental, however, that the land (including all its advantages and disadvantages) must be valued in its actual condition as at the acquisition date, not in some hypothetical condition. Where land has potential over and above its actual use at the acquisition date, “value must be assessed according to the condition of the land as it stood at the date of” acquisition. The potential may not be treated as if it existed at the acquisition, as it is the present value of that potential that must be determined (Yates Property Corporation Pty Ltd (In Liquidation) v Darling Harbour Authority (1991) 24 NSWLR 156 at 175 – 176 citing Turner and Another v Minister of Public Instruction (1956) 95 CLR 245 at 268 – 269).

43 If the market value of land is assessed on the basis of the land’s potential to be used for a purpose other than its current use at the acquisition date, then s 61 of the Just Terms Act precludes compensation being paid in respect of any financial advantage that that would necessarily have been foregone in realising that potential or any financial loss that would necessarily have been incurred in realising that potential. This reflects the principle discussed in The Commonwealth v Milledge (1953) 90 CLR 157 at 164 – 165.

44 Section 57 of the Just Terms Act defines special value to mean the financial value of any advantage, in addition to market value, to the person entitled to compensation, which is incidental to the person’s use of the land. Where there is such an advantage, compensation may not be assessed by reference to the capitalised value of the expected profits or savings from the carrying out of the use creating that advantage, as “no man would pay for land in addition to its market value the capitalized value of the savings and additional profits which he would hope to make by the use of it” (Pastoral Finance Association Limited v The Minister [1914] AC 1083 at 1088 – 1089, cited in Yates Property Corporation at 176). The amount the owner would pay for the land, rather than fail to obtain it, would reflect the present value of the possibility of the anticipated profits or savings (Castle Hill Brick, Tile & Pottery Works Pty Ltd v Baulkham Hills Shire Council (1961) 7 LGRA 139 at 147).

45 For special value to arise, the advantage must be incidental to the person’s use of the land and additional to market value. The advantage must be “something objectively ascertainable derived from the land or some attribute or property of it and cannot be recognised if it rests in mere subjective affection or emotional involvement” (Bronzel v State Planning Authority (1979) 21 SASR 513 at 524). Special value thus arises where there is a “conjunction of some special factor relating to the land and a capacity on the part of the owner exclusively or perhaps almost exclusively to exploit it”. Accordingly, by its nature, special value will infrequently arise, as the value of land to an owner at the acquisition date usually will be reflected in market value (Boland v Yates at [292]).

46 Under s 58 of the Just Terms Act, loss attributable to severance is limited to the reduction in market value of any other land of the person entitled to compensation that is caused by that other land being severed from other land of that person. Mr Becker’s residue is not severed from other land that Mr Beckers owns. Moreover, where the before and after method of valuation is used, it will capture not only the market value of the acquired land, but also any injurious affection of the retained land and loss attributable to severance (Roads and Traffic Authority (NSW) v Muir Properties Pty Ltd (2005) 143 LGERA 192 at [103]–[104]).

47 In accordance with s 60, solatium is only available where a person has had to relocate their principal place of residence as a result of the acquisition, up to the maximum amount of $15,000 or such other amount as the Minister may notify in the Gazette.

Market and special value

48 I must assess Mr Becker’s claims in accordance with the statutory provisions and principles summarised above.

49 Before the acquisition, Mr Beckers used his Nabiac property for the purpose of a rural residential parcel. The use of the gallery for exhibitions on one or two occasions and the occasional use of the Nabiac property in association with the “Camping with Pierre” weekends did not alter the character of that rural residential use, albeit with the capacity to use the property for the purpose of an art and craft gallery, the approval for the use of one of the stables buildings for that purpose, and the approved motel, with capacity to subdivide that site.

50 I accept Mr Palmer’s opinion that the 1993 amendment to the Manning LEP did not have the effect of rezoning the property for commercial purposes. The amendment to the instrument was by way of an enabling clause permitting development for the purpose of an art and craft gallery. The subsequent approval to use one of the stables buildings for that purpose discloses the limited nature of the amendment. Accordingly, at all times the property was zoned for rural purposes, albeit with the various approvals which I have identified above.

51 Mr Beckers agreed that, soon after buying the property, he abandoned the notion of tourist development as it would not be viable, and that the motel in isolation also would not be viable (hence, Mr Beckers’ focus on the art and artisan educational campus proposal).

52 Insofar as Mr Beckers relied on the motel approval, the capacity to use the property for an art and craft gallery and his own programs to develop an art and artisan educational establishment, I accept Mr McDonald’s evidence that such a proposal was highly unlikely to be viable in any conventional sense (that is, financially profitable). Mr Passmore’s report, based on assumptions provided by Mr Beckers, untested in the market, was unpersuasive. The approach of assessing anticipated profits impermissibly treats Mr Beckers’ views about the potential of the property as a fact. For these reasons, analogies to the Tallwoods golf residential development do not support Mr Beckers’ claims.

53 The fact that using the property for this purpose also apparently depended on the RTA by-passing Nabiac to the east (to transform the Pacific Highway into a quiet country road) supports this conclusion. Although I consider that the public purpose constituted the Bundacree Creek to Possum Brush Pacific Highway Upgrade, exploring this issue reveals some of the difficulties in Mr Beckers’ primary case. If the relevant public purpose was upgrading the transport route north, then Mr Beckers’ perception of the potential of the Nabiac property depended on the public purpose itself because it required Nabiac to be by-passed. But any increase in value caused by the proposed public purpose must be disregarded (s 56(1)(a) of the Just Terms Act). If the relevant public purpose was the particular upgrade of the highway in its existing alignment, then the property did not have the potential disregarding that purpose because the Pacific Highway would not be transformed into a quiet country road but would remain as it was. In either case, the proposals for the Nabiac property, consistent with Mr McDonald’s evidence, were not viable.

54 I accept Mr McDonald’s opinion, for the reasons he gave, that the market would not have paid anything other than a small premium for the motel approval and the capacity to subdivide that site from the main property. I am satisfied that this fairly and properly reflects any added value the motel approval might have brought to the property, consistent with the principle that any genuine doubt about value must be resolved in Mr Beckers’ favour.

55 With respect to the special value claim, the property, in common with many other parcels in this locality, is pleasant and the landscaping and related works carried out by Mr Beckers have enhanced its agreeable ambience. However, I am unable to discern any fact or circumstance that constitutes an advantage incidental to Mr Becker’s use of the land in addition to market value as contemplated by s 57 of the Just Terms Act, and the principles that I have summarised above. The claim for special value cannot be sustained, because I am unable to accept that Mr Beckers was in a special position to exploit the property (and its associated approvals) so as to provide to him some financial value not reflected in the market value of the property. Mr Beckers’ obvious desire to use the property for his art and artisan educational campus project does not give rise to special value in the necessary sense.

56 I also do not accept that the carrying out of the highway upgrade has had any adverse effect on the prospects of the property being released for residential development as part of a future expansion of Nabiac village. The report to the Council about the environmental impact statement does not support any inference that there was any reasonable prospect of such a release within the reasonably foreseeable future. Insofar as the acquired land is concerned, a hypothetical buyer would not have had any expectation of higher and better residential uses at the acquisition date. Insofar as the residue is concerned, the references in the report to the Council are an insufficient basis upon which to speculate about any such adverse effect. The context of that report suggests that it involved a marshalling of all available arguments to support a by-pass of Nabiac, rather than a strategic plan that seriously contemplated some future residential release of areas west of the highway.

57 I am unable to discern in the evidence any potential, absent the highway upgrade itself, for development of a highway service centre on any part of the property. Advantages arising by reason of the carrying out of the public purpose must be disregarded (s 56(1)(a) of the Just Terms Act).

58 It follows that I am satisfied that the highest and best use of the property both before and after acquisition was a rural residential parcel. Before acquisition, the property had the advantage of the motel approval and its associated subdivision potential, art and craft gallery approval and the substantial landscaping and related works carried out by Mr Beckers (such as the pathways, seating nooks, ponds, and amphitheatre). After acquisition, the property retained all those advantages other than the motel approval and its subdivision potential.

Other claims

59 Mr Beckers claimed $400,000 for the loss of value of the residue. Insofar as that claim was based on injurious affection as contemplated by s 55(f) of the Just Terms Act, I do not accept it. The residue is well screened from the highway, and (as Mr Beckers acknowledged) the mounding for the interchange has substantially decreased the impacts of noise from the highway. The residue retains its pleasant ambience. I accept Mr McDonald’s approach to this issue. Insofar as the claim may have been based on the perceived commercial potential of the property before acquisition and its rural residential potential after acquisition, I do not accept the claim for the reasons given above.

60 Mr Beckers claimed $350,000 for costs incurred in establishing the art and artisans educational campus. This amount included the costs associated with the obtaining of consents and the amendment to the LEP, fees for surveyors, engineers and solicitors (presumably associated with implementing these approvals), the landscaping and related works, erecting the stables complex, erecting the foundations for the motel building, and planting trees. I am unable to accept these claims both as a matter of principle and on the evidence. These costs are reflected in the market value of the property, one way or another. Insofar as they relate to the acquired land, the costs will be captured in the market value that will include a small premium for the motel and its capacity to be subdivided, consistent with Mr McDonald’s approach. Insofar as they relate to the residue, Mr Beckers retains the benefits flowing from the improvements he has made. None of the costs fall within s 59 of the Just Terms Act, or are otherwise compensable in the circumstances I have identified.

61 Mr Beckers claimed $25,000 for severance on account of the town sewer system. Before acquisition, the property included a strip of land to the north to facilitate connection to the town sewer. That strip was acquired. Apparently, Mr Beckers had in mind residing in a manager’s residence to form part of the proposed motel, which Mr Beckers says would have been built but for the fact that the RTA decided not to by-pass Nabiac. He would have used the strip at that time for a sewer connection. As that part of the property was acquired, he now has in mind building a dwelling at the rear near the location of the foundations of the towers originally proposed as part of his mediaeval theme park. Accordingly, the $25,000 relates to the anticipated difference in cost between a dwelling that could have been built if the RTA had by-passed Nabiac turning the Pacific Highway into a quiet country road and the potential for a dwelling now to be built, in circumstances where in either case the authorities will accept an on site sewage system (which Mr Beckers considers environmentally unacceptable). I am unable to accept this claim as one falling within Div 4 of Pt 3 of the Just Terms Act.

62 Mr Beckers claimed solatium of $15,000. The claim cannot be sustained as Mr Beckers’ place of residence remains on the residue. It is not necessary for Mr Beckers to relocate his place of residence by reason of the acquisition.

63 I accept Mr McDonald’s general approach to the comparable sales, subject to some qualifications arising from my inspection of the Nabiac property and those sales.

64 Mr McDonald considered lot 303 Carefree Road, Nabiac the most comparable sale in the before situation. I agree. Mr McDonald calculated the unimproved value of that sale as $44,291 per hectare (allowing for the improvements), which I accept. Mr McDonald considered the sale slightly inferior in location to the Nabiac property, but with the potential for future residential subdivision (albeit affected by a buffer to the highway). Overall, given the future subdivision potential, Mr McDonald assessed the sale as slightly superior to the Nabiac property. He made a 10% deduction for the Nabiac property before acquisition, yielding a value of $40,000 per hectare.

65 Having regard to the location of the Nabiac property (close to the village centre) and its pleasant ambience, in the context of the balance of the comparable sales as analysed by Mr McDonald, I am not satisfied that a 10% allowance on account of future subdivision potential should be made, particularly given the absence of certainty about the time when such subdivision potential might be realised. Applying the principle that all genuine doubts must be resolved in Mr Beckers’ favour, I do not accept that deduction from the value of the Nabiac property before acquisition.

66 On that basis, the value of the Nabiac property before acquisition was:


11.5 hectares at $44,291 per hectare $509,346.50
20% premium for motel and possible subdivision
(in accordance with Mr McDonald’s evidence) $101,869.30
Total before value $611,215.80

Round to $612,000.00


67 Mr McDonald identified the sale of 13710 Pacific Highway, Nabiac as the most comparable after acquisition, which I accept subject to the observation that I consider lot 303 Carefree Road remains relevant to the value of the Nabiac property after acquisition, particularly given the size of the residue (8.095 hectares) compared to the two sales (10.16 hectares for lot 303 Carefree Road and 6.46 hectares for 13710 Pacific Highway) and the acquisition date of 30 April 2004 compared to the sale dates (December 2003 for lot 303 Carefree Road and August 2003 for 13710 Pacific Highway).

68 Mr McDonald considered that the sale of 13710 Pacific Highway showed a land value of $300,000 (making an allowance for improvements). He assessed the value of the residue as $375,000 having regard to the improving market, the superior location of the residue and its larger size. This assessment yields a value per hectare of the Nabiac property after acquisition of over $46,000 per hectare, which materially exceeds the value per hectare shown by the sale of lot 303 Carefree Road.

69 Although I am aware of the evidence that the highway upgrade has improved the noise situation on the Nabiac property, I must also take into account the proximity of the substantial engineering works constructed as part of that upgrade (albeit well screened from the main parts of the residue) and Mr Beckers’ evidence (which I accept) that low lying parts of the property at the rear, close to Candoormakh Creek, are flood liable, whereas the acquired land close to the highway was flood free (but subject to more highway noise). In these circumstances, the principle that genuine doubts should be resolved in favour of the more liberal estimate points to a lower value of the residue than assessed by Mr McDonald. Having regard to all these circumstances and the comparable sales, I consider that the value of the Nabiac property after acquisition was:

8.095 hectares at $44,291 per hectare $358,535.64
Round to $358,500.00

70 Accordingly, compensation (excluding disturbance items) should be assessed as follows:


Total before value $612,000.00
Total after value $358,500.00

Compensation (excluding disturbance) $253,500.00


71 I am also satisfied on the evidence that Mr Beckers is entitled to the disturbance items he claimed – namely, an amount of $5,875.00 for valuation, legal and accountant’s fees.

72 I do not accept Mr Beckers’ claim for interest on the compensation payable from 1996 (the time that the possible highway upgrade was announced). That claim is not consistent with the provisions of the Just Terms Act - in particular s 49(1) which provides for the payment of interest from the date the land is acquired until the date that payment is made. Although the RTA referred to s 66(4) in its defence (the capacity for the amount of interest to be reduced or cancelled in certain circumstances), that section is not material given my findings.

73 Having regard to the conclusions that I have reached, I am satisfied that Mr Beckers’ claim for compensation should be determined as follows:


(a) market value of the land - $253,500.00; and

(b) loss attributable to disturbance - $5,875.00.


74 Mr Beckers is also entitled to statutory interest on the amount of compensation in accordance with s 49 of the Just Terms Act. If the parties agree the issue of costs, they are directed to file orders consistent with my reasons within 7 days. If the parties do not agree costs, a further hearing date can be obtained. I propose to make directions to that effect.

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